Wednesday, June 23, 2010

Wax Off Wednesday

Dow Jones 10,298.44 +4.92 +0.05%
NASDAQ 2,254.23 -7.57 -0.33%
S&P 500 1,092.04 -3.27 -0.30%

Nothing like wiping the slate no matter what the baggage or overload may have been. Lessons are much better learned by remembering what was fundamentally wrong, no doubt, but letting go and starting over are mandatory. Every sports fan has a last-to-first story to remember.

With today's drastic statistics in housing data, plus a market that was overbought, a decline is unavoidable in the market. AAPL is not the only barometer, but it's true that when it can't hold gains after a nice run, it's likely to drop and/or consolidate again. We've seen AAPL trade between 231 and 279 in the past month or two, and for a moment or two last week, it appeared AAPL was ready to break out in spectacular fashion. But even the news of 3 million iPads sold couldn't push AAPL higher and shares closed down today at 270. For traders, a ride from 273 down to 267 to 274 was plenty of opportunity today. For investors, a pause to recalibrate and consider new strategy.

I don't know for sure, but if you bought at the two-year bottom and held, it's got to be tough changing the plan after riding AAPL from 78 to 279.

Another puzzler is GLDD, which was poised to build barriers off the shores of Gulf states, only to see the Fed pull the plug on that plan. According to this report, concerns about endangered areas will require sand berms to move further out to sea by two miles. How much this affects GLDD, I don't know. Shares finished up 0.33% to 6.14. Still bears watching, no pun intended.

Banco Santander gained a few pesos (0.44%) to 11.30 and continued upward in afterhours trading (11.42). IRE gained 1.8% to 3.95, but most finnies were down. GS was up 0.21% (135.07), but C (3.89 -1.27%) and NBG 2.37 (-1.66%) struggled.

There's a lot to like about STD, but it's been a significant gain since it traded below 9 three weeks ago.

FXI gained 0.76% to 41.26, though FCX (65.06 -0.20%) traded lower. US Steel (X) gained 1.08% (44.06) and BIDU finished higher (76.19 +0.67%).

Between rising labor costs and Big Brother's iron fist, this is an amazing spectacle. Workers in the People's Republic are more informed than ever. They understand China's status in the economic universe. They want a piece of the pie and they'll get some of it as wages increase across the Middle Kingdom gradually.

Posco (PKX) of South Korea gained 2.77% to 105.14, following X's lead. Or vice-versa.

FXE gained a fraction (0.25%) to 122.69. The US dollar (UUP) dropped 0.40% to 24.97.

GLD lost 0.41% to 120.95 and SLV dropped 1.3% to 18.18. TLT gained 0.68% to 99.24.

SCO (inverse oil ETN) picked up 4.95% to 15.06 as US Oil Fund (USO) gave up 2.17% to 35.24. BP, really, doesn't trade like the rest of the sector anymore. It trades like an outcasted entity drifting in space. Shares dropped just one penny to 29.67 after sitting above 30 earlier in the day.

Only eight of my Nat Gas 40 managed gains today. DPTR, a penny stock, picked up 3.09% to 1.00. KOG rose 2.05% to 3.48. The group as a whole lost 1% and is now up just 4.85% since Obama's clean energy speech nearly three weeks ago.

PETD, which was up today 1.2%, is the overall leader with a 25.2% gain. Former leader WPRT is up just 16.07% following a massive selloff the past few sessions. Westport was up more than 30% at one time.

The initial rally, post-Obama, was tremendous, and his follow-up comments early last week helped, but the sector needed something substantial, something with legs to stand on. That catalyst has not happened and shares have sold off to no surprise. Compounding the risk was Pennsylvania's legislative call to ban natural gas production in wake of some recent disasters.

Still, this could be the beginning of a new opportunity to enter clean energy, but I suspect the market is ready to balance out. I'll wait for WPRT to pull back to 16 before I consider a small position.

VXX dipped below 25 last week, and the candlestick analysis (American Bulls) called for a buy (25.48). Very solid perspective; VXX has been strong after falling to these levels in recent months. Shares closed at 26.71 after an intraday high of 27.74. Shares ran up again in afterhours trading to 26.92, but I'm skeptical of that price holding overnight. Often, VXX readjusts before morning trading and can be bought cheaper.

Nice gainers among ETNs include DTO (75.33 +4.85%), DUG (65.55 +2.01%) and TYP (8.21 +1.23%).

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