3:25 am (Hawaii). For your Thursday morning pleasure, strap on those seat belts and hold on for the ride. Premarket is 25 minutes in and only 22% of my watch list is in the green. 57% is red, and there's 21% that haven't traded yet.
GMCR is still riding its momo from yesterday, as is HGSI (FDA approved their new drug). SBUX is up, as is AZK. But everything else that's up is money running to safety: EDZ (+3.9%), TVIX (+3.1%), VXX (+2.7%), TZA (+2.4%), QID (+1.6%).
Silver plays are scraping the bottom of the barrel. SLW (-3.8%), SLV (-2.4%), PAAS (-2.8%). Gold plays like NGD (-1.3%) are also struggling along.
If the S&P 500 peels back half of its two-year gain (from 666 to 1333), that would take it back to 1,000. That's a 25% crash if the house of cards falls again. Are you prepared for that possibility? I am. I'm still all cash, paranoid but willing to dip in for a quick trade here and there.
If this is simply a 5% or 10% pullback, so be it. It was going to happen sooner or later. When NFLX and LULU finally burst their bubbles, what else did the market need to tell us? LULU ran wild about three or four years ago, marking the inferno of that run. NFLX at 247 was preposterous, and now at 192, it seems far more reasonable. As the old saying goes, if you're going to get out, get out fast or don't get out at all.
If you are certain QE3 is coming, it would make no sense to sell anything that was bought at the recent top. Unless you're also certain that equities are going to fall much, much more (and give you a cheaper re-entry price) between now and the end of June.
EDZ trading at its high of premarket (21.17, +4.3%). Tempting, but I'll wait.
AAPL? Inching back toward its premarket low (below 350).
Update, 3:40 am (Hawaii). El Stinky. Futures are all over the place. Crude oil has been driven down below 103 after being near 105 early in the morning. Gold has started to rally after being beaten down, but silver has been punished mercilessly, hovering just above 35. Copper, meanwhile, has rallied after taking a pummeling this week.
The three worst performers on my watch list are now all silver plays: EXK (-4.8%), SLW (-3.5%) and PAAS (-2.9%). UCO is right there, too, down 2.5%.
21% green, 68% red on my watch list. That's astounding, considering the number of contrary plays involved. It's been awhile since an early Friday selloff turned around by the closing bell. As always, watching from the rafters with superpowered technology for my sight. Keeping my cash buried in its treasure box nearby.
Update, 4:13 am (Hawaii). This is downright ugly. 19% of my watch list green. 70% now red. Egad.
TZA keeps climbing higher, now up 3.9%. Just an hour ago, it was up "only" 2.4%. Interesting fact: Two years ago, in March of 2009, TZA traded at a "translated" 1,494, or more than 37x its current price of 40.13. I can't imagine any catastrophe that would send TZA to that level again, but it's amusing to think about. Unless you're short TZA. Then today sucks.
Update, 11:49 am (Hawaii). Dow Jones -228.48 (-1.87%). Nasdaq -50.70 (-1.84%), S&P 500 -24.91 (-1.89%). Where was Big Brother? Maybe it would've been worse without him putting a floor under the market. But suggestions that tomorrow, the Day of Rage in several Middle East nations, will have no POMO support for the US market is intriguing. If this is true, why is UCO down 1.5% today? True, UCO is off its LOD of 52.91 after Saudi Arabia opened fire (non-lethal weapons) on protestors today. But at 54.02, is Day of Rage already baked into this level for crude oil? Is there really plenty of supply domestically? Or is something else going to keep a lid on the price?
Crude oil futures went from 101.50 or so to 104+ in a span of 15 minutes when the shooting began. Now trading at 102.45. I've always believed that the Fed can and will put a ceiling or a floor on any market for the best the interests of America. No different here.
Afterhours, 30% of my watch list is green, a nice improvement from earlier levels (17%). GMCR is up 41.4% on the news of its deal with Starbucks. SBUX up 8.8%. HGSI is up 12.7% and NFLX made a run (+3.6%) after the recent beatdown. OPEN (+1.6%), CLNE (+1%), BIDU and CMG all showed signs of life.
EDZ (22.10, +8.9%) and TZA (41.89, +8.4%) were bulldozers. Triple-short ultra ETFs aren't exactly my preference, but both finish much higher than they opened (gap ups). TZA (small-cap bear) gained another 6% from where I first saw it in premarket. Can EDZ (emerging-cap bear) change direction while Day of Rage begins in hours? Hard to chase something almost up 10%; Few stocks can maintain momentum past that level of gain no matter how hot.
TVIX (49.63, +11.2%) and VXX (34.02, +5.5%) ran well today. QID (53.86, +3.1%) was another gainer.
AAPL is at 347.45 (-1.4%) afterhours after a low of 344.90. Silver plays were pillaged, to no surprise. SLW (40.85, -5.9%), EXK (8.82, -5.7%), PAAS (35.39, -4.5%), SLV (34.42, -2.4%) all sucked, but after huge gains in a short time, that's the nature of the beast. Can the regular retail trader/investor really beat JP Morgan and the Fed? The smart, willing puppets traded in and out on the momentum before this week's dip. Stubborn puppets are being toyed with. SLW dipped all the way to 40.22; a drop below 40 would be a major psyche-out move and spook out remaining weak hands.
I want to believe in a resumption of a silver explosion, especially when so much of the demand is driven by China. But if China inflation continues, will it continue hoarding silver or simply take a pause? How dangerous would it be for silver longs if China silver imports stalled or pulled back? Silver has doubled in the past year, which had even silver bulls cautioning newbies about consolidation. It's a fascinating tale to watch unfold. But I remain 100% cash here.
No matter how realistic the perspective, even if you've made good trades within the vortex of negativity via stuff like TZA or EDZ or TVIX, even hungry bears will claw and devour each other when there is no other prey. The market needs to bounce at least a little at some point before things get too lopsided to one end of the ship. Are NFLX and BIDU telling us the worst is over for this week? There isn't a positive catalyst in sight unless NATO gets involved ... it seems.
AAPL 6 month, daily
Update, 12:52 pm (Hawaii). I like it when professionals talk in practical terms. Pete Najarian (Fast Money) noted that AAPL touched its 50-day moving average today, and that's where he stepped in. Is iPad 2 mania*, which will be unveiled at 5 p.m. Eastern tomorrow, going to kick start the next trading range for AAPL? Can AAPL defeat Day of Raaaaaaage??
Thursday Evening News
Jesse's Cafe Americain: Blythe strikes back (Mar 10 2011) "The greatest curse is an early and easy success, and the euphoria of thinking we are greater than we really are. ... Take your positions and hold them, without leverage, and with realistic expectations."
CBS/WFRV-TV: Wisconsin majority leader receives death threats (Mar 10 2011)
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