SHLD - Flat May...falling into June

Sears (SHLD) effectively traded sideways for May, but the last two trading days are certainly hinting at a new wave lower.


SHLD, daily

Summary

We've had two days of solid downside, and it looks like a bearish start to June is due. First target remains the big support level in the 42-40 zone. A break under 40..and we're likely looking at a full retracement all the way down to 30/28.

There remain serious structural problems in this company, and I'm bearish all the way to zero.

RIG - sinking...into an Oceanic trench.

Transocean (RIG), suffered significantly today for two reasons. First, the main equity market was down over 1%, but also Oil prices were smashed over 3% lower.


RIG, daily

Summary

First target is 38.25 - the December'2011 low...then 35. If a 3-6 month period of deflation occurs this year - with the sp'500 at least down to 1100..then I believe RIG will not only hit 35..but probably collapse to around $25.

At that price..it sure will be a tempting buy. Today's 5% break lower is a clear warning,.and is probably just the re-start of a down wave that started at $59 in early March.

FB - the entertainment continues

Over valued, over hyped, and over bought - that remains the wonder that is the Facebook (FB).


FB, daily

Summary

It remains highly amusing that FB managed to form a bear flag in its first full trading week, and that flag was confirmed today with a break below the big $30. The next target zone is 26/24 - by this Friday.

Long term 'real world market' target remains $12/10 by end of this year.

My 'Fair Value' for FB is $4, although frankly, I'd not be a buyer unless I saw it under $1.50. I just can't tolerate companies that don't pay dividends, have an unreliable income stream, and a customer base that could switch to a superior new product at ANY moment. Ohh, and the P/E ratio of around 100 was of course the ultimate sick joke on Mr Retail Trader.

The mainstream media/analysts appear to seem resigned to FB levelling out in the 25/20 range, a few have mentioned 15/12.
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An interesting consideration is that if the monthly index charts are correct - with Sp'1100, then FB in the mid teens seems very possible by late July/August.

TVIX, UVXY - ready to snap up

A choppy week in the equity markets, with indexes closing moderately higher overall. Yet the VIX held up very well, and both TVIX and UVXY similarly suggest a bullish outlook for volatility next week.


TVIX, daily

UVXY, daily

Summary

Both the TVIX and UVXY are presenting bullish pennants to close this week. With the VIX closing at 21.76, there is plenty of potential upside next week and into June. A VIX move to around 27/29 would probably equate to around 40-60% for the 2x leveraged VIX instruments.

First target on TVIX would be the recent high of 11.50..and then 15.
UVXY, first target 25, then 30/35.

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*both of these VIX instruments are chronically susceptible to statistical decay (as both these charts clearly show), fees, and even being shut down at any given point. Arguably...only for day-traders, who are willing to tolerate loose stops of 5-15%.

ANR - the perfect bear flag

Alpha Natural Resources (ANR) has been suffering greatly, along with the rest of the mining/Coal sector for many months. The recent problems with a (possibly defaulting) customer of Patriot Coal (PCX) have only added to the concern that its seemingly impossible to make money in the mining sector.


ANR, daily

Summary

From a chart perspective, that is one perfect bear flag. We're now at the daily 10MA, a break lower..first target would be the big $10 level. That is no historical precedent for these low levels in ANR. Might ANR become a 'penny share' , sub $5 stock this summer? That would seem very viable is sp'1100 with even lower commodity prices.

ANR is certainly something to watch in the months ahead.

Dell - who buys a desktop these days anyway?

Dell (ticker DELL), took a battering today after lousy earnings report last evening AH. Such bad numbers are not that surprising considering the overall desktop market is still in a long term decline.


Dell, daily

Summary

Wednesdays loss of 17% to $12.46 was the largest decline in a few years. The next key level is the $12 to 11.50 zone. A break under that...and DELL would be in trouble of going the way of RIMM.

There is of course still a market for desktops - and other related standard peripherals, but surely we're never going to return to the glory days of the late 90s and early 2000s?

yours truly..
    ...typing via a custom non-Dell desktop.

FB - $7 down..only another $27 to go

Another lousy day for Facebook (FB) stock holders.


FB, daily

A kooky 3 candle daily chart to be sure. It was especially pleasing today whilst browsing a number of finance sites/blogs to see other writers/analysts suggest targets ranging from around $10 to $3.

More than anything right now, there is NO sign of a turn higher yet. This overvalued and post-IPO hysteria nonsense stock could easily fall into the mid 20s within a few days. At some point the buyers WILL come in, and we'll see some huge surge.. Yet we could easily fall another 20% before the big money is willing to get involved.

FB Fair value: $4

TVIX - the pain returns

With the VIX falling 12% today, and the main market appearing to be starting a new multi-day bounce, the 2x leveraged short-term VIX futures ETN - the TVIX, was smashed 19% lower today.


TVIX, daily

Summary

We saw a clearly big nasty red daily candle for the TVIX today. All trend indicators on the daily chart are now warning of major trouble this week.

The next soft support level for TVIX will be the 10MA of 8.16 - which is some 9% lower from current levels.

Considering the statistical decay -and other problems with this ETN, it would not be surprising if TVIX put in new lows this June. TVIX in the 4s...or 3s...is entirely viable.

As ever...READ the prospectus!

FB - A weak start

Facebook (FB) had its IPO today, the gap open was much lower than the much touted 50/55 level - with the official IPO price being $38. The close was weak..and the FB underwriters had their own PPT in full force all the way across the day, to protect the 38.00 level. Heaven forbid there be real price discovery for this stock, at least not until the big institutional holders have offloaded everything they wish to the retail trader.


FB, 1min intra-day action

FB, daily

Summary

FB got the big black candle that I had expected, although the peak was indeed much lower than I had thought likely. The action of the FB PPT today was of course to be expected, but it remains a lousy way for what is supposed to be a 'free market'. Clearly there will be no free market in FB trading for some weeks, even months to come.

With a PE of around 100, this valuation is a joke. Even the very best stocks in these economic times are not worth more than a PE of 25/30...so Fair Value 'best case' $12, at worse $4.

FB will remain a fascinating stock to watch this summer. At some point the novelty value will completely wear off, and even the clown channel cheerleaders will come to realise that its just another company. In this case...an extremely over-priced and over-hyped one.

NUE - Industrials falling hard

Nucor (NUE) is one of the better industrial stocks out there, but, along with the broader equity market, it is suffering in this current 12 day down cycle.


NUE, daily

Summary

It is interesting that Nucor is now at key support in the 34s - this goes back all the way to the November 2011 lows (when Sp'1160). If 33s are seen, then a move to the 29s would seem a fair guess. Would that imply Sp' has a lot further to go in this down cycle?

A good company...but if the broader macro-economic picture deteriorates in the US, this company is going to suffer greatly.

PCX - From bad...to really bad

Patriot Coal (PCX) had a really bad trading day yesterday. News of a potential customer default sent its stock collapsing, and larger concerns about the coal sector added to the woes.


PCX, daily

Summary

The horror continues for PCX. I shorted this last July at the grand level of $24. The basis then was that it was a loss making coal company....one year later...nothing has changed.

I think eventually it'll be a fun speculative buy for me, but only at sp'1100, and then maybe PCX will be around $2, or even in the mid 1s. As it is, there is nothing enticing right now about this dirty coal company.

JCP - earnings miss

Just reporting after hours, J C Penney (JCP). Q1 loss much worse than expected, worse of all...JCP cancel their dividend!


JCP, daily

Summary

Not much to add, JCP will be an interesting one to follow in the weeks ahead. Next real support is around 24, some 20% further lower! Its certainly improving itself more than SHLD though, but hey, if the US economy is going to slip back into recession later this year, the retail sector is probably one to avoid.

HL - the little miner...suffering

Hecla (HL) is suffering due to the double bearish hammer of weak commodity prices, and broad main market weakness.


HL, daily

Summary

Still a profitable company, but HL will probably be posting some 'worse than expected' numbers for the rest of 2012 and into 2013.

I'd still guess HL falls to at least somewhere in the mid $2s this summer. Whether HL will retrace all the way back to $1.00 (the late 2008 collapse wave low) by early 2013..we'll just have to see. For the moment, the broader mining index looks set to fall a further 25% across this summer- not least due to weakness in Gold/Silver prices.

JPM - the meddler makes a mistake

Last evenings news that a J P Morgan trader/dept lost around $2bn gave JPM holders a real scare today. Of course 2bn in the world of JPM is not that much, but its getting a lot of negative attention from the mainstream, and this story could yet develop into something at least a little bigger.


JPM, daily

Summary

From a price perspective, we are not far from the big 200 day MA of 36.26, a break under this opens up a move somewhere between 34-31. If the main market does slip to sp'1270 in the coming month or so, then JPM would surely have a chance of testing last Octobers low of $28.

CSCO - a warning of trouble ahead

Cisco (CSCO) had good numbers in its Q1 earnings issued last evening, yet the guidance for Q4 was warning of trouble ahead


CSCO, daily

Today was a relative massacre for Cisco holders, you rarely see a Dow'30 stock fall 10% in a single day. Considering that the results themselves were good, you'd think the stock might even be up, but of course, Mr Market cares little for the past...and is forever living in the future.

The next primary support for CSCO is clearly the low from last Octobers high 14s. That is still another 12% or so away. Anyone buying CSCO today, or in the next few weeks is probably going to be real disappointed at the lack of a consistant and strong bounce/recovery. The stock would appear set to struggle for the rest of the summer, not least if the main market is weak, and breaks below sp'1300.

From a bigger macro-economic perspective, CSCOs warning is more ammunition to the Permabears who are suggesting the USA will - contrary to mainstream opinion, follow both Japan and the EU, into a new recession by Q4. Of course, we won't have that confirmed until Q1 of 2013.

INTC - reversal candle...time to go up?

Intel put in a reversal candle today, a sign the wider tech' index and main market about to start a new up cycle?


INTC, daily

Summary

A red hollow candle is usually a pretty good sign of a floor. From a pure price perspective, Intel is looking like it may have floored today. Clearly, the big money will have stops at today's low of 26.75. Down side to the channel line is around 26.25. If that fails - in a major market snap through sp'1340..immediate target would be 25.50.

From a MACD (blue bar histogram) cycle perspective, Intel is day'5 down, it could certainly see a further 2 or 3 days lower.

ADBE - due for a bounce

Adobe managed a good turn around today, - along with the main market. closing almost 0.5% higher.


ADBE, daily

Taking into account the wider market, a bounce to around 34/35 is anticipated. Assuming the main market does break lower after May opex, first target would be 30/29...and then 26 - assuming sp'1270/1200.

Good company, but will suffer in any future market down turn.

UAL - benefiting from lower Oil prices

United Continental recently broke to the upside, and after a minor pullback, had a strong day this Monday - battling against the main market weakness. This rally is almost certainly due to the recent weakness in Oil prices.


UAL, daily

Summary

Even the Cramer on clown channel is completely adverse to meddling with the airline companies. Their profit margins are usually too thin, and they are subject heavily to crazy price ramps in Oil. From a MACD (blue bar histogram) cycle perspective, UAL is due to go + cycle tomorrow. First upside target would be the recent high of 25.50, some 7% higher. Only a break below $19 would be the next sell trigger/signal.

I've seen a few times over the last few years where one of the standout sectors during major market declines is often the airline industry. Again, this is likely to lower oil prices, during a typical equity/commodity market down turn.

GE - a good example of the main market weakness

General Electric (GE) remains in its bear flag, and is set to break considerably lower this coming week.


GE, daily

A break below $19 opens up the low 18s, if that fails to hold, then a further dollar loss to $17 - which is the low from mid-December.

From a MACD (blue bar histogram) perspective, GE is due to go negative cycle at the Monday open. That should in theory be a sell signal to those nasty algo-bots, and so weakness should be seen in both GE and the broader market early this Monday.

The bigger bear target - and GE is certainly a good example, would be <17, a break of that level would open up the October 2011 low of $13.50 - around 25% lower than current prices.

Keep an eye on GE this week, it'll likely be a large sign post as to which direction the wider markets are headed.

AAPL - primed to break $580

Apple sure got a kick back upwards after earnings, but even that day closed weak with a small black doom-candle - a real warning that the earnings jump would not hold. Indeed, the ramp (minor wave'2 ?) has not held, and we're now around $40 lower in the span of just 7 trading sessions.


AAPL, daily

Key bearish targets

A break under 580, will open up 560, 520, then the huge $500 level. Right now, a move under $500 - even across a few months looks 'difficult'. However, a number of prominent chartists do agree that the 200 day MA - currently $449 (and rising) would be a very natural crash level for AAPL to retrace to. There is also a very prominent gap at the 440 level - so 440/450... that would be the 'doomster' target level for this summer.

Right now, only a break back up the recent high of $644 would make me bullish on AAPL. It remains some 40% undervalued compared to the main market, but..since when did the market take account of 'fair value' these days?

GDX - miners still digging deeper

The mining sector was again under pressure today, not least due to related concerns in the Coal sector, and weakness in the precious metals/commodity markets.


GDX, daily

GDX, monthly

Summary

There remains a large delusion amongst the clown channel TV hosts that 'everything is fine, stock market is going to keep soaring across 2012', yet many of the economists/analysts guesting today were actually deeply bearish. Some were very clear in their gloomy outlooks, noting that most of the EU is now in recession, and that the USA will suffer to some extent later this year. The USA is NOT immune to the deep recession in already re-starting in Japan, UK, and the wider Euro-zone.

The mining sector was the first big sector to implode in 2008 - along with the main commodity bubble. GDX continues to be in a serious down trend, and shows no sign of levelling out. In fact, a snap candle of -10% is very possible this May or June.

First target of $40 is still around 12/15% away, so there is plenty more downside available.

ACI, ANR, PCX - Coal Companies...urghh

A very minor/flat day for the main market, yet the coal sector got smashed today. Where will the horror end? Here is a trio of a market sector which I very attentively follow...


ACI - Arch Coal, daily

ANR - Alpha Natural Resources, daily

PCX - Patriot Coal, daily

Summary

The above 3 companies are a fine example of the horror that is already out there. Many are down 75, even 90% from their 2008 peaks. If the main market does weaken to around sp'1150/00 across the coming summer, the coal sector is sure to lose another 25-40%. Stocks such as Patriot, Arch, and Alpha Natural', they might all be in the penny share category of sub $5.00 within 3-6 months.

For the doomsters out there who believe serious underlying economic problems are again rising to the surface, I guess some might say... 'Talk about the Canary in the Coal mine...'

SHLD - short term bounce..probably

Sears released results 'better than expected' today, and we saw one mighty huge 'cover shorts at ANY price' event - much like BKS saw on Monday.


SHLD, daily

An early 20% bounce did fade a little, but still a 15% gain is a major move. Interestingly, it was held by the upper bol' line and the 50day MA at $66. Is that the max' for this cycle?

Bears could in theory short with a stop at $67..or tighter 63.
Bulls arguably should at least have a stop at the rising 10MA of $54.
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It remains the case that Sears faces some severe issues in the coming few years. Can it update itself to survive in the fiercely competitive and ever evolving retail sector.
SHLD remains one to watch.

GNK - the sinking shipper, still taking on water

Genco is a good representation of the Global shipping industry. Yesterdays results were dire, and the stock is reacting accordingly.

GNK, daily

Summary

The company does not make money, hopefully it will survive any 'global economic collapse wave'2', but it sure needs to reign in its operating costs. Right now, its future is in serious doubt. At the moment, it looks like it'll end up turning into a '$1 lottery play' later this summer. Probably not quite down to $1...but $3 seems probably, if not $2.

BKS - the ultimate black-doom candle

With the news of Microsoft looking to do a business deal with Barnes and Noble with the 'Nook', we saw one crazy opening gap up at the open.


BKS, daily

I've never seen a better example of a black-doom candle. BKS opened at $26 (although I believe it hit $27/28 in pre-market). Yet 26 failed to hold and we saw some consistent selling across the day. The close a little under $21 is some 40% lower than the opening level!

This is NOT the sign of a healthy stock. There was no decent follow through on BKS, and the obvious issue is now a giant gap all the way down to the 10MA at $13

Now, I'm certainly not expecting - or would target $13 as the next cycle low, but....I'd guess BKS will be under $20 within a day or so. A break of $20 should open up at least a test of the November'2011 high of $18..or more likely $15.

A great company, but BKS is not yet charging enough for their great books! They are still losing money on every sale. Unless they reduce their costs and/or increases prices, this will not end well.