Tuesday, March 29, 2011

Dressing up

12 pm (Hawaii) So is this it? Has the end-of-month/end-of-quarter window dressing begun? When I hit the sack around 5 or 6 am Hawaii time (noonish Eastern), it seemed the market was going to drift in small currents forever. Of course, nothing stays the same in the market for long. The market went bozo bullish as I slept, sending 75% of my watch list to the green side after being inept earlier.

DJIA 12,279 (+0.67%), Nasdaq 2,756 (+0.96%), S&P 500 1,319 (+0.71%). Again, volume wasn't impressive, but it was about 20% higher in the "axis" of stocks, AAPL. Monday was a low in volume for the year. Tuesday saw more action. Wednesday is the 30th of March and Thursday is the end of the month. I'd say odds are 70% that window dressing has begun. By that math, the edge is 40% (70 vs. 30), but am I willing to indulge myself with 40% of my roll in play? Or to be risk-addicted about it, place some bets that allow for 40% swing down? Yes to the former and no the latter. We're still somewhat toppy here and the chances of a) a selloff after window dressing and b) negative news about QE3 would easily send the market down the mountain like a wild eagle pushing goats off the ledge.

For now, however, just about everything finished green today, and big on the win side. WNR gained 1.9% to 17.10 after being in red early. Le Fly wins again on his call for oil refiners to slice through any market turmoil. He's right.

AAPL, which sold off to a hair above 346 early, is at 351.30 in afterhours trading. My position in AAPL at the end of last week was opened at 346.75 and I sold at 350.65, which clearly is a range within the larger range (326 to 365). There are too many AAPL bulls who want this stock to lift, for the PE to hit 25 or 27 or 30, and that would be fair. But with the slowdown due to Japan's tragedy, I really don't see any eye-popping sales numbers in the near term. Demand huge, but customers will have to wait. AAPL will be fine long term, but it just won't hit 400 as soon as I or anyone else had expected.

This is not a bad thing. I could buy at 345 (mid-point of the larger range) and sell at 350 over and over again without extreme concern over risk. I didn't do it today, but it's there. What other stock are you going to ride as comfortably? CHGS? LULU?

CHGS 3.54 (+20.4%), MCP 60.10 (+8.3%), CLNE 15.20 (+4.8%), LULU 89.37 (4.8%), CMG 268.00 (+3.9%), RLOC 20.55 (+3.2%), VLO 30.50 (+3.2%), AMZN 174.62 (+3.1%), EXK 9.28 (+3.1%), YZC 34.50 (+2.9%). It goes on and on. Huge gains for momo stocks. Silver plays. Even coal (YZC). China is in heat. US stocks hot, and that's with crude oil up. UCO is at 54.78 (+1.7%).

It almost didn't matter what people bought today. The bull gored every bear in sight. Big losers on my watch list were TVIX 37.49 (-5.5%), EDZ 19.12 (-3.3%), DG 30.52 (-3.1%), TZA 36.84 (-3%), VXX 29.95 (2.7%), QID 51.65 (-1.9%). Also OPEN 102.90 (-1.3%). OPEN's huge run had to stop for a breather at some point.

I wouldn't be shocked if the market reverses before tomorrow's opening bell. There's still time for hedgies to take it down fast and still re-enter before the end of the month. Unlikely, but entirely possible. I'll be waiting for a unlikely discount on my favorite plays with 100% loaded gunpowder.

Peaks, valleys and necklines

3 am (Hawaii) Examining AAPL and QID from yesterday's afterhours trading and this morning's premarket action, QID is roughly where it was at yesterday's AH close, 52.79.

AAPL, however, is among the bottom-feeders on my watch list so far today at 347.71, down 0.78%. It gives me a little more credence in my theory about the trading range, 326 to 365. The midpoint of that range is 345.5, and though volume and momentum always fluctuate without clear, definite reason, the price tells so much. Price is one of the reasons why I'll check futures and stock prices before I catch up on global or domestic news.

In a skittish, flimsy market like this, we have peaks and valleys often based on nothing more than big-money manipulation. When the hedgies have had their fill at the AAPL buffet line, they dive out of the building after setting the gas lines on fire, and all us little peasants are still in the line, loading up on fattening desserts like the fine gluttons we are. This is why I'm always wary about AAPL above 350 and always willing to consider a position below 345. It's a chickenpoop approach, you might say, but I'd rather manage risk and ride it between 340 and 350 than buy above 350 with such thin volume.

Elephants on melting ice. Bad combination. Everything sinks to the bottom of that cold pond when the elephants dance too hard.

In an environment like this, issues like CHGS go flying to the moon. CHGS (China Gengsheng Minerals) was up more than 20% earlier in PM but has pulled back a bit and is now at 3.45. CAUTION advised. Don't get caught in that tsunami now that the early traders have begun booking big profits. You could get swallowed up and pummeled a loss far larger than you ever feared. If you go XL on CHGS, please for mercy's sake have the sense to hedge your bet with puts. Protect your ass. The market never will do so much for you.

LULU is also up, 2.15% to 87.10. Another sign that this market is in risky territory. A LULU top is often followed by a painful pullback for those who are all-in.

UCO flat. EXK, PASS, SLW, SLV all flat. GLD and NGD are fractionally down, too.

Times like this, in between earnings seasons, media has little to do but dwell on danger spots. There is no catalyst in the short term for AAPL or any other substantial mover. Daytraders will move in and out quickly, sending the CHGS and LULU stocks of the world soaring, then right down off a cliff.

Still 100% cash and watching with another wondrous piece of technology.

Necklines? I know it's not just me noticing that CNBC has Mark Haynes off-air (vacation?) and in his place is a blonde anchorwoman with big hair and a seriously low neckline. Probably the most boobage seen on CNBC since that Hugh Hefner special. Or that porn industry documentary. Comparing ratings today versus when Haynes is on air would be interesting. 

Some Amanda Drury photos off Google. 

Maybe she doesn't mind being eye candy. Otherwise, at what point does she tell the producer, "Bugger off, bitch!" 

Monday, March 28, 2011

Marlboro Monday

11:30 am (Hawaii) This is the kind of session that would have a grizzled old trader taking occasional smoke breaks, leaning against the wall of an aging walk-up, peering at the empty parking lots across the street, contemplating the taste of a fine Scotch brandy on his taste buds.

It was that kind of a day, it seems. I got up around 8 am Hawaii time (2 pm Eastern) after a tiring Sunday to see the market teetering on low volume. Then AAPL nosedived from 353 to 350 in minutes. QID zoomed. I thought about a quick trade in QID, but it was already at 52.50 by then. It moved up close to 53 before the close and is now at 52.82 afterhours.

End-of-month window dressing is coming, but that's not for another day or two (or three), so I'm guessing the hedgies bailed out late today, looking for cheaper prices later in the week. Then it'll be a rush to get back into AAPL, NFLX, etc.

LULU took off like crazy, gaining 10.1% to 86.59 as the indices all fell into the red. Lululemon Athletica announced a 2-for-1 split, which is nice. It's a great move in anticipation of a market breakdown, which could happen if there's no QE3. Other gainers were EGPT (+3.3 to 15.97), NFLX (+3.2% to 237.30) and China coal play YZC (+2.6% to 33.52). CLNE, PSUN, TVIX and OPEN were other gainers on my watch list, which is overall 37% green and 63% red in AH.

Silver took a beating today: EXK (-3.1% to 9.00), PAAS (-2.5% to 36.28), SLW (-2.2% to 42.82). UCO also got slammed (-3.1% to 54.14). Another crude oil play, refiner WNR (-1.4% to 16.79), was red.

Volume is thin ice and there are a lot of elephants still out there skating under a hot sun. One small fart and the stampede could kick in. I'm 100% cash and watching from far away with a magnificent telescope.

Friday, March 25, 2011

A what-next weekend

11:23 am (Hawaii). Most stocks pulled back before the closing bell and the market finished fractionally higher. DJIA +50.03 (+0.4%) to 12,220. Nasdaq +6.64 (+0.2%) to 2,743. S&P 500 +4.14 (+0.3%) to 1,313. Despite all the tragedy globally, a fairly positive week for bulls.

AAPL closed at 351.59, ensuring that I didn't sell at the top, but that price was still off its high near the close above 352. Shares traded below 352 in afterhours until the last few minutes, when some wild and crazy guys took it to 352.44 on predictably scant volume. AH is a great time to throw out a preposterous ask price and get hit on it by a desperate or foolish (or both) buyer. I actually thought about re-opening a position before the bell as AAPL sold below 352. Ruled against it, though. Not worth the risk if it's only going to add another buck. And the prospects of chaos over the weekend is not what I want hanging on to any bag of shares.

Then again, iPad 2 global mania will be at a peak, and with no negative news over the weekend, AAPL could gap up on Monday morning. Still a few hours until afterhours trading is done. I'd consider a buy at a cheap, cheap, cheap price. Otherwise, I'm content to be 100% cash going into window-dressing next week. If the hedgies take the market down temporarily on Monday (for any "reason"), I'll be ready for the discount.

Silver plays were mixed. SLW +0.33 to 43.95 afterhours. EXK down, PAAS down, but PHYS and SLV up. 

UCO up 0.76%. WNR finished at 17.05 (+3.6%), pulling back from a 6% gain early on. That Mr. Fly. What a freaking genius. If there's one play I would feel somewhat comfortable holding over the weekend it would be WNR. TSO was up 2.1%. Big, small ... oil refiners are stealth in this environment. Even if the Middle East suddenly went pacifist, Japan still needs to import energy in a big way for a long time. 

Sold out of gas in Ichinoseki, Northern Japan (Mar. 17, 2011)
(photo: AP)

Friday fun

5:35 am (Hawaii). Every time I start to hunch that AAPL will give back a chunk of today's gain, buyers step in and keep shares up in the clouds. AAPL up 1.8% to 351.19, a bit off its high, but holding up with strength. The market is up nicely so far, but some of the early gainers like WNR have lost some footing. WNR had been up more than 6% earlier and is now +4.1%, still the leader on my watch list.

The watch list is fully bullish at 75% green. Volatility is almost non-existent, but the skeptic in me says this might be the calm before the storm. Or is this lull in global tragedy going to extend after the recent crises?

Speaking of clouds, the North Carolina data center of Apple is becoming more interesting by the day. Is this about iTunes and the "locker"? Or will the A5 chip provide gaming on a whole new level? Both and more, probably. The long term looks solid for Apple. The short term for my position is undetermined. I may be 20 bucks late or 20 bucks early. I might close it in a minute. Maybe the hedge funds empty out and lock in profits, then get back in cheaper next week before end-of-the-month window dressing. I'm looking for any sensible reason to sell and book a decent profit on yesterday's AAPL buy, but it won't let me yet.

Update 7:13 am (Hawaii). Sold the AAPL position at 350.65, well off the HOD (351.84), but I wanted to lock in a decent (small) profit (7/10ths of 1% of my roll). It's purely psychological. Good confidence builder whether I want to acknowledge the fact or not. I like the way my electronic broker hangs on and gets me a good price both on the buy (346.75 yesterday afterhours) and sell while asks and bids are working against me.

AAPL drifting, probably on stop-loss orders, down to 350.42 now. Not swaying one way or the other on a possible re-entry. Even with the nice run this week, AAPL is roughly in the middle of its near-term trading range. iPad 2 global mania vs. Japan nuclear crisis + Middle East burning ... can anyone really hold over the weekend? Hat's off to the long longs in AAPL, the people who bought at 20 or 40 when bankruptcy talk was common. They have no problem holding over the weekend.

(photo: Tim Wimborne, Reuters, Sydney, Australia)

First in line for iPad 2 in Dublin

He flipped an iPad 2 for a €200 profit

iPad 2 stock out but lines remain in Dublin

Reuters: Line-ups in Vancouver, around globe for Apple's iPad 2 (Mar 25 2011)
9 to 5 Mac: Firemint's Real Racing 2 HD to run on your TV at full 1080p without upscaling (Mar 25 2011)
Barron's: Kodak jumps 10% awaiting possible AAPL, RIM patent review (Mar 25 2011)
Robert Sinn: The great silver bull and the curious case of PSLV (Mar 24 2011)

Thursday, March 24, 2011

International lover (of Apple)

iPad 2 line in Australia
(photo: Beau Giles/Flicker)

2:02 pm (Hawaii). Might be feeling queasy in the morning. Opened a position in AAPL afterhours. Catalysts are not massive, but added together, worth the risk: 1. RIMM choked on earnings today, 2. iPad 2 international launch tomorrow. Rumor of QE3 is just a rumor. I'm not relying on that. Between the short-term low (326) and high (365), AAPL is right about in the middle of its trading range. I don't consider this much of a timely position, not much edge. But I like the advantages just enough.

Ruled against entering WNR for now. Today's small pullback was an opportunity, but it could get better in the morning. Or worse. Willing to wait. Same with silver plays. Though the big picture is still bullish (SLW, EXK, PAAS, SLV), the short-term yanking is too much pain. The selloff could continue overnight and beyond tomorrow's opening bell. I'm 33% cash now.

(photo: Asher Moses/Sydney Morning Herald)

(photo: Asher Moses/Sydney Morning Herald)

(photo: Asher Moses/Sydney Morning Herald)

The Australian: Young and old queue in Sydney heat for Apple iPad 2 (Mar 25 2011)
TUAW: iPad 2 lines across the globe (Mar 25 2011)
The Guardian: While you were sleeping... Australians end long wait for iPad 2 (Mar 25 2011)
Flicker/Beau Giles: iPad 2 Australia launch (Mar 24 2011)
Seeking Alpha/Jason Schwarz: Apple's run poised to resume (Mar 24 2011)
Bloomberg: Japanese stocks climb for first time in 3 days (Mar 24 2011)
Asher Moses/Sydney Morning Herald: iQueue test for Apple fans who line up overnight for iPad 2 (Mar 24 2011)
Apple Insider: International iPad 2 lines form (Mar 24 2011)
9 to 5 Mac: NZ, Australia show 2-3 week shipping estimate (Mar 24 2011) US shipping adjusted
Eric Jackson/Forbes: 6 things analysts are missing about Apple (Mar 24 2011) 100M iPad 2 sales? North Carolina data center? China? NFC payments rev stream?
Asymco: Analysts: Apple's growth next year to drop to half of what it could obtain during the recession (Mar 24 2011)
Seeking Alpha/Michael K. Dawson: Another day, another Apple NFC rumor (Mar 22 2011)
Seeking Alpha/Paul Zimbardo: Apple: A better buy due to AT&T acquiring T-Mobile (Mar 21 2011)

And "way back" with Apple bear Reggie Middleton ...
Huffington Post: Empirical evidence of Android eating Apple (Aug 17 2010)
BoomBustBlog.com: Dissecting the Apple flash crash (Sept 29 2010)
"Apple is a company that derived 70% of its profit from one single product (iPhone) that is beseiged by very capable competition from all sides. ... Even with Apple firing in all cylinders, margins are bound to come down due to Android's success."
BoomBustBlog.com: Reggie Middleton wasn't the ONLY openly Apple bear in the blogosphere, was he? (Oct 18 2010)
BoomBustBlog.com: Reggie Middleton takes the challenge to Goldman Sach's Apple proclamation one step further (Dec 15 2010)
BoomBustBlog.com: The tablet pricing wars have commenced (Mar 7 2011)
BoomBustBlog.com: Shorting Apple and why software developers can make more money on Android (Mar 16 2011)

Feeling QE queasy?


(8:29 am, Hawaii) I can understand AAPL's run, crude oil rising and even precious metals gaining ... but everything else? Not so much.

Less than two hours left in the session and the glorious ride of the past few days is beginning to stall. More than 80% of my watch list was green earlier, but now it's just 47%. Precious metals have reversed field. SLW, PHYS are among the silver plays that are now in the red as silver futures tumbled from a HOD of 38.38 to 37+. Still a nice run.

Crude oil is flat, fractionally down, which means WNR is down 1.8% and UCO is null today (+0.02%). CRR is up 0.2%.

Japan is stabilizing somewhat. The yen is down fractionally an, as is EWJ.

SBUX continues to roll (+2.6%) and AAPL is up 4.80 (+1.4%) to 343.98. Yesterday, while the market exploded, AAPL was slightly down. Today, AAPL rolls. International rollout of iPad 2 is tomorrow.

Molycorp (MCP) continues its amazing run. It was at 45 two days ago, now 55.82, up 7.9% today. OPEN is now at 98.10 (+3.1% today). Le Fly's call for OPEN at over $100 was dead-on. Other big winners today are LVS (+6.6%), F (+5.5% to 15.10), AMZN (+3.8% to 171.53) and ... EGPT (+3.2%).

Update, 9:40 am (Hawaii). 20 minutes to the closing bell and the market feels skittish. Sure a lot of stocks are up. Indices are up. But gold and silver have plunged since hitting highs at mid-day. Could be a no-big-deal moment in the big picture. Nothing goes up in a straight line, not even silver. But this is not the time to enter. Chasing not allowed.

AAPL hit 346 earlier and was above 345 a few minutes ago. The chaser in me wanted in at that point, but the technicals said NO. So I waited, ate a bagel, returned and found AAPL at 344.72. A great non-chase. No risk management, no longevity.

Zero Hedge: Someone leak something? (Mar 24 2011) Play the QE3 rumor or not ... not hating the player.
Turd Ferguson: The BS PM 'market' (Mar 24 2011) Turd is pissed!
Fortune/CNN Money: Airplay's hidden agenda: Apple TV sets (Mar 24 2011)
Louis Yamada: 8 stocks poised to break out (Mar 23 2011)
Business Insider: How the U.S. seized $30 billion of Quadafi's funds in less than 72 hours (Mar 24 2011)
MSN: Drugstore.com shares explode on Walgreen buyout (Mar 24 2011)

Wednesday, March 23, 2011

Barely up?

(8:49 am, Hawaii) Just back from some early-morning work and didn't log onto the world wide web until now. Though the indices are barely positive, commodities are roaring. Silver is sky high. I see SLW up massively (+5.3%) to 44.75. SLV is up 2.4% to 36.38. EXK is at 9.90 (+4.3%). Silver plays all show fair volume with more than an hour left in the session.

Crude oil spike is making happy shareholders of WNR (+5.8% to 16.89) and UCO (+1.5%). CLNE is at the top, up 6.7%. Meanwhile, the indices are all 0.6% up or less. So what gives? With volume at this level, it's not like Monday's soft turnaround. Traders are getting braver, following the money trail. POMO, QE2 ... they're kicking in big while Japan, Libya, Bahrain, Yemen, Portugal, Ireland all give no sign of the "all clear."

So, while precious and industrial metals gain (X is up 2.3%, FCX +5.2%), momo plays like BIDU (+5.1%) and NFLX (+3.8%) are rolling. OPEN is up 2.1% to 94.58. Amazing. LULU, my favorite tell as a momo indicator, is up 3% to 79.51. Funny money rules once again!

While 68% of my watch list is green, there are some red duds. AAPL has fluctuated between 335.95 and 339+ today, currently 339.11 (-0.6%). EGPT is down 8.3%. TVIX (-7.1%) and VXX (-3.6%) are near the bottom. So are EDZ (-4.1%) and PSUN (-3.5%). Everything else red is mostly fractionally negative.

Still 100% cash here. Hindsight: A position in WNR would've been prudent for the past week. Of all the stocks tumbling or gaining since the disaster in Japan, WNR was and still is a winner in most future scenarios as an oil refiner. I sold SLW and EXK recently, taking small losses while both consolidated near new highs. I sold EXK at 8.55, a small position, but didn't have the conviction to hold.

Watching here. Market is still on thin ice, and as more skaters approach, the breaking point nears.

Tuesday, March 22, 2011

Lay, lie, die ... or not

(9:01 pm, Hawaii) Lies, lies, lies. What else could come out of Japan now that this debacle has ensued? Bloomberg: Fukushima engineer says he covered up flaw at shut reactor No. 4.

And now, some perspective, which is often well provided by James Altucher: Was Greece just nuked? 

Alutcher says: "It's a scam. The pundits need something to talk about. The media needs something to make you panic and scared. The larger institutional investors need mom and pop to sell their retirement portfolio to them at cheap prices. So they all scare you to save their own lives and businesses."

Who needs a helmet anyway?

(2:45 am, Hawaii) AAPL was trading below 341 when I got home a little while ago. 43% of my watch list was green. Not bullish, not bearish. Just drifting. But 10 minutes ago, volume entered AAPL in premarket and boosted shares to a high of 343.43. AAPL was at 330 just two sessions ago (Friday), so this is something to ponder.

At the same time AAPL, NFLX and GOOG were showing some strength in premarket, the rest of my list began to sink. It got as low as 33% green. SLW slightly down. Crude oil down. Yen slightly up. Japan slightly down. AAPL now back below 343. What does it all mean?

I'm not sure. Therefore, I won't be chasing AAPL this morning, not after yesterday's 10-dollar gain on low volume. After all, Charlie Brown has no business believing Lucy's lies unless he gives it another try while wearing a helmet or some kind of protection (hedge with QID?). Let her go fool some other clown.

In the meantime, WNR is fairly durable in this choppy market. Oil refiners are almost bulletproof in this environment. Aaaalllllmost...

(Update, 9:30 am, Hawaii) 30 minutes left in the session and it's a sea of red. Just 33% of my watch list is green. It's ugly out there. NFLX is holding on to most of its gains thanks to the thumbs up from Credit Suisse. Every time CS gives a stock the double thumbs-up, it rockets. Writing fiction was never so easy. NFLX is the leader in its sector, but come on ... if you own NFLX, more power to you, though. The shorts are getting freshly squeezed.

UCO is also powering higher, up 4% as crude oil tops $104 a barrel. UCO was in the red when the opening bell sounded, but is up 2.15 to 55.31. AAPL has held on to some of its gain, well off its HOD above 342, now at 340.94. I don't see that holding much longer given this backwards momentum and yesterday's lack of conviction. Yes, even in a $10 move, there wasn't much volume. Only 10M shares traded in AAPL so far today.

Gizmodo: New photo shows how they are cooling down Fukushima (Mar 22 2011)
CNN Money: Netflix buys its first original show (Mar 22 2011)
Fast Money: Netflix to become cable company to the world? (Mar 22 2011)
Fast Money: Crude oil could spike to 110 (Mar 22 2011)
Bloomberg: All clear sounded as markets shrug off multiple black swans (Mar 22 2011)
Bloomberg: Radiation found in sea as work goes on to restore power (Mar 22 2011)
Business Insider: Water at Reactor #4 is heating up (Mar 22 2011)
CNN Money: Nikkei up 4.4% (Mar 22 2011)
Reuters: Stocks extend gains in EMs (Mar 22 2011)
Benzinga: Credit Suisse upgrades Netflix to outperform (Mar 22 2011)
Reuters: China rare earth prices explode as export volumes collapse (Mar 22 2011)
Business Insider: Hedge funds bought the dip (Mar 22 2011)

Monday, March 21, 2011

Apple is bigger than any moon

(photo: dailydesktop.eu)

(8:11 pm, Hawaii) The supermoon came. The supermoon went. No mass destruction of civilization occurred on Saturday. Doesn't mean there was no interaction or relationship between Earth's tectonic plate(s) and the supermoon. After all, the first signs of divorce don't occur in the court of law, but somewhere along the way, around Blowout Argument No. 121 or something like that. Plates shift, shit happens not long after.

But it's Apple that occupies my mind at this moment. The store at Ala Moana closes in about 45 minutes. I can't help thinking how pleasurable it would to visit before the doors close for the night. Then I wonder, is there someone, somewhere, who is having a miserable life lately. Someone who bought a ton of AAPL shares two or three years ago. Maybe a decade ago. Never sold one share. Well, maybe a few to pay for this or that, but most of those tasty morsels are still in his or her hands. And every time misery knocks at the door, he heads down to the Apple Store, enjoys the sight of children and old folks and everyone in between playing with the world's coolest toys. It's enough to take his mind off the misery.

So is the poignant reminder that his shares are anywhere worth 3x to 18x what he paid for them. That's cool, too. It's enough of a thought to take his mind off supermoons and earthquakes and divorce. It's enough for him to realize that life isn't just about money, though having plenty of it takes a load off. It's enough to know that people actually like quality. They like precision. They like wondrous magic at the tips of their fingertips.

That's what Apple is. Cooler than any supermoon, and in many ways, much more powerful. Even to those of us who didn't hang on to those shares from 2009.

Daily Mail: How did a British polytechnic graduate become the design genius behind Apple? (Mar 20 2011)

Monday bull party

(11:30 am, Hawaii) Talk about complete melt-up. At one point, when I wasn't sleeping through the session, my watch list was 83% green. That's basically bullish to the extreme since the other 17% are mostly bear plays.

DJIA +1.5%, Nasdaq +1.8%, S&P 500 +1.5%.

Volume wasn't great in AAPL (14.7M), but the 2.7% run from 330.67 (Friday) to 339.73 (afterhours today) is incredible. The 100-day moving average was tested three days in a row (Wed/Thur/Fri) before bouncing today. Will the 50-day MA (346+) prove to be a ceiling?

Everything with a pulse move up, from BIDU (+3%) and GOOG (+2.6%) to Japan (EWJ (+2.2%). The yen softened; FXY slightly down (-0.4%).

LVS gained 6.4%, while other recent gainers like OPEN (+2.4%) and HAIN (+2.5%) rose.

Precious metals roared. SLW gained 5.9% to 42.25 (afterhours). EXK +5.1% to 9.62, PAAS +3.6%, PHY +2.4%, SLV +3.2%. NGD +3.4% and GLD +0.7%. Great day for the metal bugs. SLW and EXK ranked second and third on my list of gainers.

WNR, Le Fly's favorite oil refiner play, gained 4.4% to 21.59. UCO gained 1.1% (53.33).

Big losers were TVIX (-15.4%, 44.85), VXX (-7.5%, 32.70), TZA (-7.1%), EDZ (-5.1%) and QID (-3.6%). PSUN also sold off again, down 1.9% to 3.62. C also fell 1.6% to 4.43. Interestingly, X dropped 0.6%.

I'm content to stay in cash here until the puzzle is solved. Which is probably never going to happen. AAPL is my vehicle of preference, and if the runway clears for a flight to new highs, I'll get a ticket. Until then, this is a range-bound titan, from 326 to 360, and there is money to be made in that space. Hat's off to those who bought at 330 on Friday.

Bloomberg: Tokyo Electric says Fukushima fuel rods damaged, leak to sea (Mar 21 2011)
Reuters: Oil lifted by Mideast unrest, Libya conflict (Mar 21 2011)
Bloomberg: Japan futures, nuclear stocks advance as reactor crisis eases (Mar 21 2011)
Business Times: AT&T's big deal lifts Wall St (Mar 21 2011)
AP: Developments in Japan's disasters, nuclear crisis (Mar 21 2011)
Business Insider: What about the Plutonium MOX? (Mar 21 2011)
The Guardian: Google accuses China of interfering with Gmail system (Mar 21 2011)

Friday, March 18, 2011

Weekend reading

This is tonight's supermoon.

March 11: Not a supermoon
(photo: EarthSky)

(new) Reuters: Obama woos Brazil while Libya air assault unfolds (Mar 20 2011) The U.S. is taking a keen interest in the deep-sea oil reserves that Brazil is starting to tap off the Rio coast.
(new) CNN: Libyan ruler defiant as airstrikes by coalitoion forces enter 2nd day (Mar 20 2011)
(new) iBankCoin: U.S. whores itself for Libyan oil reserves (Mar 19 2011)
Howard Lindzon: The Internet 'Black Swan' (Mar 19 2011)
Steve Blank: New rules for the new Internet bubble (Mar 18 2011)
Reuters: U.N. envoy sees military action after summit (Mar 18 2011)
Business Insider: Tepco says power line connected (Mar 18 2011)
Cain Thaler/iBankCoin: Long Uranium (Mar 18 2011)
EarthSky: Did a supermoon cause the March 11 earthquake in Japan (Mar 17 2011)
Dave Fry: Gadhafi does a head fake (Mar 18 2011)

(new) Rays of demolition
Le Fly noted that $56.9 million worth of missiles just landed in Libya. That makes Raytheon alluring. Since the Middle East madness began, RTN ran from 44 to its current range of 49-53. Maybe it opens at 54 on Monday morning.

Somebody's got to provide the weaponry

Silver Moon Madness?
I have to take a look at what happened in silver and EXK this week. I held EXK briefly on Wednesday, taking a very small loss as it stalled and slumped to 8.10. By Friday, EXK gapped up above 8.70 and closed at 9.15.

Silver futures pop through short-term resistance

EXK: Midweek consolidation? 

Gap up for EXK, but still in trading range

SLW's fall from the top may have finally leveled

Where does SLW go from here?
Best guess: sideways

Sour Apple
The long swings in AAPL have been massive to the upside, but the downside can seem almost as wild. 

Buy and hold? Not exactly

Buy and hold is not a great idea with AAPL at these levels. I've been in and out with moderate success over the years. Holding from 100 or 200 was great if you had the stomach for market turbulence. The past 10 days have been wickedly bad for longs. I got out a few weeks ago at 360 when rumors about Steve Jobs' health (i.e. a visit to the doctor) surfaced after hours. Since then, even with the launch of iPad 2, the stock has been bashed by hedge funds emptying out. Every gain during the past week was met by selling pressure, taking AAPL to 330 today. 

50-day moving average was violated this week.
Now the 100-day MA is being tested with 
200-day MA possibly next.

An 8-10% pullback from this level — another global crisis or worsening of situations in Libya or Japan — is possible. If the Steve Jobs resignation rumor is true, 10% down takes AAPL to 300, which is the next level of support. Difficult to see a plunge any lower than that, not with huge profit margins and the iPad 2 in heavy demand. Problem is, until the parts supply issue is solved (Japan), getting back to the high will happen later rather than sooner. Guess here is that best-case scenario (Jobs stays on as CEO) has AAPL trading between 326 (near-term support) and 360. Worse case: 300 to 326 until earnings (April 19). 

Snail-mail scams

Open up the mailbox. Charity stuff. Coupon stuff. Junk mail. Junk mail.

And this: SENY 600% jump in 2011...1,500+% in 2012?

Snail-mail scammers:
I f--king hate you

What the fuhhhhhhhhhhhhhhh...? I never asked for snail-mail crap, yet there it is, every week. A pump on precious metals. Gold, usually. Now it's wind energy.

William Hope's "Alternative Energy Report" arrives and I wonder how. I never signed up. I don't care for alt energy stocks. Yet it's a circus act of giant headlines on an 8x11 pamphlet. I see photos of the proprietors of Sauer Energy. They look like they have a nice small business going. Working hard. But do they deserve to become the next pump-and-dump penny stock? Did they sign up for this? I dunno. I don't really care enough to find out. I just don't want this crap showing up in my mail.

Does T. Boone Pickens know that he's on the cover of this "report"? I don't trust anything that is as one-sided and biased as this, whether it's a goldbug website or a wind-energy scam stock. I don't think the company is a scam. But once any company becomes meshed with the world of penny stocks, it's all about handing the bag of crap to the next guy and running off with all the profits.

Page 2 asks in the top headline: "The next Google?"

Are you forking kidding me? SENY traded down to 97¢ today, off its high of the week, 1.11. It was at that 1.11 price, roughly, when the "Alternative Energy Report" was distributed. Somebody pulling the strings sold their shares at the peak while lemmings read this bullshit and bought in the peak, only to watch their SENY lose more than 12% of their investment in a couple of days.

Freedom is great, but this is a ridiculous manipulation. I don't support it. At all.

Rip Van Apple

12:16 pm (Hawaii). After sleeping through most of the session, I arose to find the markets generally flat for the day, if positive. I also found AAPL hovering at 330 despite opening around 338. Support is at 326, which AAPL tested earlier in the week. As I lie here in bed with my (not brand new) MacBook Pro, it is a true WTF moment. I checked headlines. Nothing. Then I explored forums and learned that CNBC has reported rumors of Steve Jobs' resignation.

That would explain the incredible avalanche of selling during that 45-minute stretch in the morning. Possibly with the problem of the supply chain (Japan), a lot more people had stop-loss orders on their shares. eBay listings have iPad 2 available anywhere from $600 to $1,400 today. In other words, a buy-and-trade on an iPad 2 was a better profit than the stock this week.

From here, it's all about AAPL refuting (or not) the rumor, and updates on the Fukushima nuclear reactors. The rest of the market, I'll take a look at later. But as I get the cobwebs out, this is all that really matters in today's session to me. If Thomas Edison had run his own publicly-traded company and turned gravely ill, would it have been bigger than this to his shareholders? I theorize that it would have been of equal scale. Not necessarily of equal importance, but the scale of Jobs' status is like no other individual in the market. If the rumor turns up true, I expect a selloff of about 8-10%. That could take AAPL down to the next support level of 297-300. AAPL has been undervalued even at its highs in the 360s. At 300, it would be a pure buying opportunity, global events pending. If the rumor is not true, better yet. I'd rather see Steve Jobs healthy and with us for decades to come, more than anything for his family's sake.

I'm still 100% cash here. Binoculars at my side.

Michael Schulman: The new buy and hold stock: Apple (Mar 14 2011)

Good morning

It's Friday. Futures are green. 54% of my watch list is green. 28% red. 18% neutral. Weirdly, several are showing green but haven't traded yet, like WNR. AAPL is up to 337.54, mocking my decision late yesterday to take a pass. But it's early, odd things happen and remember, this is options expiry.

The news abroad, though, is fairly positive. Japan is seemingly gaining some control of the nuclear crisis, and Libya is now under serious watch.

Topping the list: CLNE, UCO, SLW, HGSI, SLV, USO all on low to almost zero volume.

Update, 6 am (Hawaii). DJIA is up 108 points (+0.9%). S&P 500 up 8.84 points (+0.7%) and Nasdaq (+7.87 points, +0.3%) is somewhat quiet. AAPL is teetering, down 1% to 331.29 after bouncing of a low of 330.00. AAPL had touched 338 after the opening bell, hung around 336 before barfing for a 30-minute stretch all the way down to 330. Had to be a few hedge funds unloading like drunken sailors.

Banks are giving out dividends again. Cisco (+2.2%) is paying a dividend for the first time.

Yen is down, as coordinated by the G7, while EWJ is up 1.1% to 10.21. They're still working on the nuclear reactor situation in Fukushima. The market has been merciful lately after the initial concerns about the reactors and the lack of info from authorities.

Business Insider: 10 things you need to know before the bell (Mar 18 2011)

Thursday, March 17, 2011

Mapping it out

1:57 pm (Hawaii). AAPL trading at 334.20 as afterhours trading winds up. That's more than a 50% retrace from today's high since yesterday's close. A number of charts look interesting. Examining the candlesticks is a healthy way to view the market and sectors, eliminating whatever emotion or bias that may exist.

AAPL reaching toward 50-day MA (rope of hope)
after dipping to the 100-day MA

Selling pressure in AAPL the past two days

Since the initial dip, EWJ has hovered around 10

The Fukushima disaster had EWJ at support;
another setback could test 8 or lower

Yen is king for now
FXY at historic highs

FXY 10 day

CRR benefits from Middle East chaos

CRR benefits from Japan's nuclear energy shutdown
but talk about wild swings to the upside

UCO's wild roller coaster ride

Few have told a market top tale like LULU

NFLX, another overbought stock
The upgrade this week saved its ass

Since doubling in less than 6 months, 
SLW has been range-bound

TVIX is live dynamite in your hands
Last to hold gets kablooeyed

Food inflation is bad for peasants (me) but
good for MOS, which is at support

MOS 5 day is a daytrader's fun toy