What's hot, what's not

A candlestick update from American Bulls.

AAPL (270.97): "Sell Confirmed"
BIDU (76.19): "Buy If"
C (3.89): "Sell Confirmed"
CLNE (16.17): "Wait"
FAZ (15.05): "Hold"
FCX (65.06): "Hold"
FXE (122.69): "Buy If"
FXI (41.26): "Hold"
GLD (120.95): "Hold"
GLDD (6.14): "Wait"
GOOG (482.05): "Hold"
GS (135.07): "Wait"
LVS (27.04): "Hold"
PKX (105.14): "Sell If"
SBUX (27.32): "Buy If"
SCO (15.06): "Hold"
SD (6.25): "Wait"
SLV (18.18): "Buy If"
STD (11.30): "Buy If"
TLT (99.24): "Hold"
UUP (24.97): "Sell If"
VXX (26.71): "Sell If"
WPRT (17.05): "Wait"
X (44.06): "Buy If"

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.

FINANCIALS
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.

CHINA & HEAVY METAL
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.

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

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

ENERGY
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.

ETN SAFETY
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%).

Flatulent Friday: Are we toppy now?

Dow Jones 10,450.64 +16.47 +0.16%
NASDAQ 2,309.80 +2.64 +0.11%
S&P 500 1,117.51 +1.47 +0.13%

Between quad witching and the overwhelming emotional baggage of 1) BP's Gulf oil disaster, 2) Euro percolation, 3) renewed fears of US housing/jobs/financials fuck ups, 4) China inflation, 5) North Korean shitstinkery and more, the market simply seemed exhausted by today. What little buying there was surely was limited to a minority of issues like AAPL, which closed at an all-time high of 274.07 on 30 million shares traded — roughly 25% more volume than usual.

While there wasn't a whole lot of buying pressure, there was even less selling pressure. There are all kinds of reasons for this, but the main one is simple: With $27 billion outflowing from the market so far this year, it's all been reduced to trading desks, high-frequency trading machines and day traders. No blame to go around from this little tower. We wanted to eat the forbidden fruit of market capitalism, and the food chain developed instantly. Whether it's algorithms or the invention of the wheel, whoever capitalizes on new technology will usually win while the remaining masses howl with fever over disadvantage and conspiracy.

I could easily complain, but I'd rather just get a good night's sleep, wake up at a nice hour like 6 or 8 am Hawaii time, and observe. So I missed a chance to re-enter my beloved AAPL. So what. I'll get another chance sooner rather than later. AAPL run-ups are often met with ridiculously steep sell-offs, or simply continue running, especially after a few weeks of consolidation. It won't bother me to ride AAPL from 280 to 300 at all. If I can get in at 250 next week, better yet.

But this is the world we live in, when a single currency has markets fretting, and Earth's greatest tech retailer ever can be practically felled in one swoop (from 200 to 78 not so long ago) because of a housing/financial crisis.

For the record, the eight stocks I'm watching closely were mostly in the red today.

Up:
• AAPL 274.07 (+0.81%)
• SD 6.86 (+1.78%)

Down:
• CLNE 17.15 (-0.81%)
• CSTR 48.95 (-4.56%)
• GLDD 5.34 (-0.78%)
• TGP 30.03 (-0.07%)
• UNG 8.53 (-2.29%)
• WPRT 18.62 (-2%)

I'm still 100% cash, waiting for the market to settle down (which it has) and provide a clue about direction (which it hasn't).

TECH KINGS

AAPL was at 242 last week Wednesday. This feels like the consolidation months back when shares drifted between 195 and 215 before popping on what became a two-month odyssey that topped out at 272 on that climatic earnings day. Love Apple or not, the iPad and iPhone G4 are ruling the geek universe and the normal world simultaneously.

Next week is a liftoff to 300 or it pulls back to 255, maybe 250. How many stocks keep revving higher in a flat market, seven sessions in a row? I can think of one.

FINANCIALS
GS (137.82 +0.63%) and C (4.01 +1.26%) didn't move as much as their Euro counterparts. I still don't like finnies long term. Too many damned questions.

EURO

FXE was basically flat (123.36 -0.11%) while STD (11.53 +2.31%) lost roughly half of its early gain. Those boys at Banco Santander have balls of steel, calling out the Eurozone (Germany, in particular) by demanding stress tests, then grading out No. 1 in leaked reports. Then STD turns out to be a bullish buyer on both sides of the Atlantic. If Santander were a sports team, I'd be a fan. They take care of their shit.

IRE moved up big, 3.86% to 4.30. NBG lost 1.63% to 2.41, but I have no desire to touch any Greek stocks. Ever.

HEAVY METALS
FCX was flat (65.90 +0.14%) and FXI was equally quiet (40.66 +0.10%). US Steel (X) lost 1.56% to 43.41, ending a very turbulent week with ups and downs. SLV moved up again (18.75 +2.29%).

SAFE PLAYS

GLD up again (122.83 +0.76%) and gets a lot of headlines for all-time highs in the metal, but really ... so what? Sure, it gains quite a bit from a 2- or 3-year perspective, or a 5- or 10-year perspective. It's a hedge against inflation, against dwindling currencies ... and unless you hoard bars of the pretty yellow metal, your paper ownership can be "confiscated" by Uncle Sam in times of dire need.

I like gold/GLD as a small piece of the portfolio, nothing more.

TLT also flat today (97.69 -0.16%).

ENERGY
USO up 0.77% to 35.41. BP had another "boring" day with a 0.16% gain to 31.76. All BP shareholders are hoping for plenty of these quiet days.

My Nat Gas 40, a collection of the first 40 sector plays I found on the day of Obama's clean energy speech (15 days ago), was up 0.02% today. As a whole, the 40 are up 12.19%, staying flat the past few days.

Bronco Drilling (BRNC) had a massive gain of 9.84% to 4.24 today and is now up 21.8% since Obama's talk. PQ (+4%), PETD (+3.15%), NGS (+2.57%), GDP (+2.48%) also had nice moves today. In all, 18 of the 40 were in the green today.

My favorite natty gassers, WPRT (18.62 -2%) and CLNE (17.15 -0.81%) were down. UNG sold off 2.29% to 8.53. It remains a buy below 8.00 and a sell above 8.75. It's one of those notorious plays that traders love and investors hated and still hate due to its incredible lack of strength. At this level, though, it's playing fair. It just trades so freaky compared to the sector so often. It'll gain massively while the entire sector is in the red that day. Then it'll tank as high fliers with tiny floats move up, up, up.

Overall, however, this is probably as stable as the industry has been in the market for some time. All because of BP, and all because of Obama, who reiterated his stance on clean energy earlier in the week. That staved off what would've been inevitable mass selling after several natty gassers hit 20%-plus gains in less than two weeks.

Eventually, though, the sector needs another catalyst. Obama can stoke the fire only so many times. The industry needs some real roots into America's energy grid. Question is when.

Happy Father's Day weekend, everybody. Aloha!

Options madness is over ... is this market finally topping out?

Homework: GLDD

On April 22, 2010, shit hit the fan. The Gulf has not been the same since. At the time, GLDD was just another little stock struggling to stay above that 5-dollar mark. But with 65 million barrels — or maybe they're all lying and it's more like 500 million barrels — of raw crude oil bringing toxins to the entire Gulf sooner rather than later, GLDD is taking on an unexpected role. 


Man-made barriers are part of the company's capabilities. Man's butchery of Mother Nature gives GLDD shareholders a chance to actually see a paper profit. The stock plummeted from 6.01 to 4.01 in a cataclysmic four-day span in late February. On April 22, GLDD closed at 5.56. It dropped to an intraday low of 5.02 on May 25, but the bulls have taken control since. GLDD now trades at 6.39 and is on the verge of breaking through prevailing resistance at 7.18.

The candlestick analysis reads that it's late to buy shares here, and I agree. Best to wait for profit-taking and a slight decline. But if GLDD keeps doing its thing, barring a miraculous cure to BP's unprecedented destruction of the Gulf, those man-made barriers will be in high demand.

Here's a PR release about GLDD signing on with the State of Louisiana to build sand berms off its coast. Here's a report on GLDD's barrier work on the South Carolina coast.

Great Lakes Dredge & Dock Corp.
June 17 (closing): 6.39
Key Statistics
Profit margin: 3.22% 
Operating margin: 7.48%
Return on Assets: 4.2%
Return on Equity: 7.95%
Revenue: 604.44M
Quarterly Revenue Growth (yoy): -9.9%
Quarterly Earnings Growth (yoy): 27.50%
Total Cash: 20.92M
Total Debt: 170.06M
Shares Outstanding: 58.56M
Float: 54.14M% 
% held by Insiders: 6.9%% 
% held by Institutions: 84.2%
CEO: Douglas Mackle 1.09M
Candlestick analysis: "Sell If" due to Bearish (Doji) Star Pattern (American Bulls)
Summary: Fairly decent numbers. Even the debt isn't as daunting with the revenue stream at $604 million annually. The small float has made this a fast mover from lows (March 2009, March '10). Looks like some upside is still there, but it may be a week or two late to get a decent entry price. For a longer-term trade, it's a mystery to me. Man-made barriers and islands ... maybe I won't be surprised if and when GLDD is at 10 in a few months. 

GLDD 1-year chart (daily)

GLDD 5-day chart (15-minute bars) vs. BP

GLDD 1-day chart (1-minute bars) vs. BP

GLDD 3-year chart (weekly)

Photos: GLDD website