GNK - almost on the sea bed

Genko (GNK) shipping is not far off zero. Its been in a decline for over a year, today's 8% drop is yet another nasty wave over the deck for the SS GNK.


GNK, daily

Summary

I don't expect GNK to last this next deflationary collapse wave. I'd guess someone will either launch a bid in the next 6-12 months - at a price of $2 to $4, or merely wait to pick up the scraps after what might be eventual bankruptcy. The latter is a bold assertion, but then GNK is still not profitable, some 4 years after the financial collapse supposedly ended.

See financial stats on GNK  A market cap <100 million, with debt of 1.7bn or so. Not good at all.

Other shippers like EXK, OSG, and DRYS, all have charts broadly the same. They remain one of the ultimate warnings that 'this global economy remains SICK'.

CSTR - headed for the low 40s

Coinstar (CSTR) posted results which disappointed the market last Thursday evening. There was a major drop last Friday - on strong selling volume, and today offers no hope to those who were trying to 'catch a bargain'.


CSTR, daily

Summary

CTSR was in renewed trouble today. Its attempt to hold together last Friday (a long legged doji candle) - whilst the indexes soared, but today, you can see the follow through with further weakness - a 5% drop.

Next key level is $41, which now seems likely within the next few weeks.

FB - lousy results, on its way to Fair Value of $4

Facebook (FB) posted results that initially met expectations, but underlying the headline earnings/revenue numbers, there was renewed concern about just what sort of future this web based company has.

It remains entirely insane that just a few months ago the clown channel finance TV talk was all about 'ohh, FB is valued at $100 billion...maybe it can eventually be valued more than AAPL, and go to 1 trillion?'.

The Facebook hysteria/delusion broke from day'1 of the stock IPO, and FB might never see $38 ever again.


FB, daily

Summary

Very little needs to be added. FB remains over-valued on any basis.

First target remains somewhere in the low teens...perhaps $10/12..if the market can get a wave lower into the sp'1100s later this summer/autumn.

True 'fair value' remains no higher than $4...and I would only consider being a buyer around $1.25

The Financial historians of the late 21st century will be as bemused at the social media stock hysteria, as we are today of the Tulip mania in the 17'th century.

For the bears...FB is the gift that keeps on giving. There remains a long way down yet to go.

NFLX - going to zero?

With Netflix (NFLX) posting lousy results, the market is again displeased with what was once the ultimate momentum stock. The July 2011 peak of $300 now looks even more incredible in retrospect.


NFLX, daily

Summary

Another 5% lower today, after the Wednesday fall of 25%. As I noted late last summer (not in these pages though)..the ultimate target remains somewhere in the 40s. I suppose 20s are possible, hard to guess, but whether the floor is 40 or 20..its at least 80% lower than last summers peak.

It has been pretty amusing to see a number of people also consider the possibility that NFLX will cease to exist within a few years. The underlying business model has some severe issues, and there is some stiff competition from AMZN.

Whether NFLX eventually implodes to zero, seems unimportant right now. What is clear, critical levels have been broken..and the 40s - that some were touting last year...are now within reach.

It does indeed seem very possible that in the 2020s...people won't even remember the 'Netflix'.

BTU, ANR - coal miners still digging deeper

Whilst the main indexes showed some attempt at a rally today, the coal miners again showed severe weakness.


BTU, daily

ANR, daily

Summary

Peabody Energy and Alpha Natural Resources are two fine examples of the devastating state of the coal mining stocks. Of course, stocks like PCX and JRCC are in even worse shape!

There seems no likely end to the current decline, there is still a likely 20/25% further to go for the sector.

At some point, they will be incredible valuations, and great for the long term..but for now....they are merely to be watched from the sidelines.

GDX - miners back on the decline

With the main indexes showing renewed weakness, the miners were certainly not going to evade the bear party today. GDX lost almost 2.5% at the close, and there remains no sign of a turn higher.

GDX remains on a multi-month decline, with even high quality miners like FCX still likely to decline a further 20/25% across the next 2-3 months.


GDX, daily

GDX, monthly

Summary

Primary target has already been hit, and now I'm seeking the miners to floor somewhere between 35 and 30. I would assume 35 equates to at least sp'1200, and GDX 30 might equate to sp'1125 or so. Note that my primary index target remains the low sp'1100s, so I am inclined to seek GDX in the very low 30s in Sept/Oct.

CMG - finally..a little bit of reality sets in

Chipotle Mexican Grill (CMG) felt the hammer of a disappointed market today, falling $86.88 - a huge 21.5% decline.


CMG, daily

Summary

Even though the earnings were actually still 'good', they missed the estimates of the analysts in market-land, and it was gapped lower by 20%.

Its not like CMG holders not had plenty of warning though. The stock - along with the main market, has been suffering some moderate declines since the Spring time highs.

On any basis CMG is still over-valued by around 60% or so. Of course, it could easily take a year for such further declines to pan out - much like the decline of NFLX last year.

Good company...but no company deserves to be rated with a PE of 45 (as of today's close).

Ohh, that reminds me...AMZN have earnings at the close of next Thursday. Hmmm...now that has been my ultimate target in these pages since day'1.

--
*today was opex, and 'some' of those July puts were up 16,000% or so. A few amateurs who were shorting at the Thursday close had a dream come true today. Congrats to them all !

UAL - breaks below the cloud deck

United Continental (UAL) was highlighted just recently, and the unknown issue was which direction would it break  We've now seen UAL change course...to the downside. Today's decline was confirmation of the initial move.


UAL, daily

Summary

First target is the 200 day MA of $21, and then secondary of $20.

If the SP and main market starts to unravel in the next few weeks, UAL is set for a major crash dive into the mid teens again.

TZA - has it found a floor..and ready to leap?

TZA - Direxion ETF, representing the Rus'2000 small cap. It looks like its still able to comfortably hold the floor from late March/early July.


TZA, daily

Summary

First target is a clear break out of the current declining channel, >$19

Secondary target, a new short term high >$24.50
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Bears trading this ETF can put in a simple short-stop at the recent low, around the $16.50 area.
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*As ever, statistical decay is a problem with the 3x leveraged ETFs.

RIG - giant bear flag..primed for big move lower

Transocean (RIG) has rallied over 15% since the June low of sp'1266. Its effectively moving around 2x the main indexes.

Despite the big ramp from 39 to 46, RIG has now formed a giant bear flag..and is ready for a major move lower.


RIG, daily

Summary

First target is a break of the recent low of 39, and a move to 35. Secondary targets are 30 and 25 - which would of course be huge declines.

If the sp' can hit 1150/00 within the near term, then RIG should have a pretty good chance of moving down to $30.
--

Transocean is a good company, but.if the main market gets whacked in the coming weeks - as some believe, then RIG is set to lose at least 30% of its market cap.

FB - breaks below the bull flag

Facebook (FB) had rallied strongly from the $25 level, but had gotten stuck in the 33s. Today's 8% decline represents a VERY major break below what was a reasonably secure bull flag.

There really isn't any support now until a re-test of the $25 low. I don't expect that to hold.


FB, daily

Summary

First target is $25, where we may see a minor bounce, but it won't hold on a multi-week basis. Secondary target is the big $20, that too seems like it will fail to hold- assuming SP breaks <1200 by late August.

FB in the mid teens by mid September is now the target low for 2012.

Even at $12/15, FB is over-valued by a factor of 3.

Fair Value is $4, and I wouldn't be a buyer unless I saw <$1.50.

I'd rather buy one of those dirty coal miners!

HPQ - relentless decline

Even though the main indexes had a very strong up day, Hewlett Packard declined again. This is without doubt a further renewed sign of underlying severe weakness.


HPQ, daily

Summary

Primary target remains $15, I have high confidence this level will be hit within the next 3-5 weeks. The only remaining issue is whether $10 is possible later in the year.

To hit $10, we'll probably need to see the sp<1100, probably 1050/950 in the late Autumn. That of course is a great unknown, and much will be dependent upon the actions of the Bernanke.

In the meantime..$15 is coming.

UAL - set to soar..or nose dive?

United Continental (UAL), - the airliner is all set for a huge move. The only question is which direction!


UAL, daily

Summary

The targets are pretty clear...

Bulls need to see $25..which opens up $30
Bears need to see a break under the wedge floor of 23, which opens the door to a return to Nov'2011 lows of $16.

From a MACD cycle perspective, UAL is marginally negative, but direction is not clear right now.
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There has been a fair bit of talk on the clown networks today about the airlines. After all, oil prices are significantly lower than some months ago, and with the economy weak, lower oil prices for the carriers should be a real boost to profitability for the rest of 2012.

Yet, if the US economy is slipping back into recession, one of the first things to be cut back on by customers will be any non-essential air travel.

I'll be keeping an eye on UAL in the days to come, the direction it takes..could be a key tell for the sector as a whole.

TVIX, UVXY - another rough day

Even though the main indexes closed marginally red, the VIX still closed lower by around 3.5%...and that did not do the 2x VIX intruments any favours.


TVIX, daily

UVXY, daily

Summary

With declines of around 6%, another lousy day for the volatility players - well, except those who were shorting such things!

If the main indexes do one further minor up cycle to around 1375/90, that will probably knock another 15/20% off both TVIX and UVXY.

As is always the case, such falls are always hard to make up for in the next up cycle.
--

I still expect VIX to break into the 30s late July/early August, that will doubtless send TVIX/UVXY sharply higher. Perhaps they'll even double up.

Yet, TVIX was $8.00 just three weeks ago. Today, its half that. So even with a 'double', we might only be talking about a return to those levels of mid June.

A reverse split for both..can't be far away. Urghh !

JRCC - the next miner due to vapourise

James River Coal Company (JRCC) looks set to follow Patriot Coal (PCX) which filed for bankruptcy yesterday at the close.

JRCC, daily

Summary

JRCC lost almost 25% today, and is very much looking - at least from a chart perspective, like PCX has in recent days. That is not to say that JRCC is about to implode imminently, but its not looking good. I do not expect this company to be around for more than a few more months.
--

meanwhile..the other coal companies (and indeed broader mining sector) are again getting smashed lower...

BTU, daily

FCX, daily

Both FCX and BTU are superb companies, but as repeatedly noted, they are both set for further declines, perhaps as large as 25%. The support/resistance levels are clear, the price targets are clear, and with the market set to fall to at least sp'1200 in the next few weeks, the miners are still looking dire.

PCX - a farewell to one of the miners

It appears Patriot Coal (PCX) will be no more 'imminently'. Rumours of PCX filing for bankruptcy are all over the place, and it is now fully reflected in the stock price which fell around 75% today.



PCX, daily

All those who were chasing PCX higher last week just got nuked today, many of them doubtless did not use stops, and will have lost almost everything. They even had a warning in the trading action last Friday of a possible Monday massacre. 


--

The problems in PCX, and the lousy wider economy are continuing to adversely affect the other coal miner stocks.


ANR, daily

BTU, daily

Summary



A company that can't make money..is doomed to failure. That is obvious to say of course, but its bizarre how many seem to forget that, and keep chasing cheap 'bargain' stocks, even though the companies haven't made a profit in years.


Of course, the vultures will be circling the mines of PCX tonight, and will be able to pick them up for pennies on the dollar.


--

The other coal miners, such as ANR, BTU, will be around for years to come. Today's price falls sure make them look tempting, but further declines are expected, somewhere in the range of 30% - with sp'1150/00 later this year.

HPQ - long term decline continues

Hewlett Packard (HPQ) was one of the weakest DOW components today, the next target remains $15 later this summer, possibly $10 if the market breaks under sp'1100 at any time later in the autumn.


HPQ, daily

Summary

The original trend outlook was indeed correct, we've seen the price cluster zone of 22/20 broken under, and the next very obvious target is $15 - as seen via a longer term chart (not listed).

Whether HPQ fails to hold the mid teens, is dependent upon two main things. Primarily, whether the main market can hold the sp'1100s later this summer. Secondarily, whether HPQ can manage to at least 'keep things together' for this year. However, the underlying structural problems remain in the company (much like SHLD, JCP, and even AMZN).

HPQ...continues its slide.

JPM - confirms the bear flag

As noted last week, J P Morgan (JPM) is having some serious issues, and the stock looks very vulnerable. The move today confirms the bear flag, and JPM is now on its way down to make an attempt to break the multi-tested low of 27s


JPM, daily

Summary

Primary target remains 27, if fails to hold, then 20s later in the year.

The next quarterly results will probably be a huge reminder to Mr Market that all is not well with the commodity meddler.

FB - on the slide..again

Facebook (FB) had a strong bounce from the 25s to the 33s, yet now it does indeed appear to be on the slide again. It struggles on every intra-day bounce.


FB, daily

Summary

Regardless of near term action, mid-term 3-6 month outlook remains a target in the low 20s. If the market gets rattled, and sp 'somehow' breaks <1100 later this autumn, then FB looks set to hit the first target zone of $12/10 by the end of this year. Even at that price its still overvalued on any basis by a factor of 3.

FB remains one to watch, and laugh at the delusion and blind stupidity (complete lack of 'fair value' appreciation) of the masses.

F - Ford breaking key support

Ford (F) is really suffering despite the major market ramp since last Thursday. There is increasing chatter in the market about Ford, if the market starts to slip..the downward pressure on price will only increase.


F, daily

Summary

The spring 2011 peak of $19 now looks a very long way up. With the break of the big psy' level of $10 recently, Ford is slipping away now.

First target is $9, then 8, and that takes it to my primary target - within 3-6 months of $7

If the market falls apart (sub sp'1100) by end 2012, then Ford will be around $5 or so.

The 2008/9 collapse wave low for Ford was $1, I don't ever expect to see that level again, but if the doomsters are right about the underlying economic secondary deflationary wave, then Ford in the 5s..even $3s seems possible.

Ford is unquestionably a good company, and unlike both GM and TSLA, it won't be going bankrupt any time soon.