Wednesday 31 July 2013

JCP - systemically failing

J C Penney (JCP) saw a very severe collapse wave in the afternoon, closing -10.2% @ $14.60. The snap lower was caused on news that a commercial lender (CIT) has stopped supporting companies delivering to JCP stores. Long term price trend remains...dire.

JCP, 5min

JCP, daily

JCP, monthly, 20yr historic


With the main market failing to break into the sp'1700s..and instead seeing downside to sp'1685, it was no surprise that JCP fell, but with the news that a key industry lender has cut support to companies associated with JCP, the stock saw a pretty severe latter day collapse of 10%.

**See Zerohedge story for further details..and the usual 'feisty' comments.

Bigger trend is one of systemic failure

Now, there is little reason why the maniac bargain hunter/knife catchers won't be buying JCP across the next few days, but still, the monthly charts are clear..JCP is in dire trouble. It is pretty amazing to recognise that JCP was $40 just over 18 months ago, never mind the $70s in 2007.

From a chart perspective, JCP looks set to challenge the 2009 low of $12.55. If that fails to hold...and I'm guessing it will FAIL, then JCP will then proceed to the 2000 low of $7.17..if not all the way to zero.

JCP faces massive competition, within an industry that has always struggled with low profit margins. Considering the 'economic recovery' - as weak as it has been, JCP is still struggling to stay afloat.

see key stats @ Yahoo! finance

From a balance sheet and profit-margin (lack of) perspective, JCP is simply...dire.

Sears...not much better than JCP

The same 'systemic' issues are arguably also inherent within Sears (SHLD), it remains to be seen whether Sears will implode before JCP. I have to think, it will be rather amazing if either JCP or SHLD are still around after the next business cycle peaks in 2015/16.

Regardless, from a trading perspective, JCP is sure to see some wild price action in the coming days. 

Tuesday 30 July 2013

FB - testing the IPO level

Whilst the main market is holding together with moderate gains, Facebook (FB) continues to soar, climbing another 6.2% @ $37.63 - having peaked @ $37.96. It has taken FB an embarrassing fourteen months to get back from what was a debacle of an IPO.

FB, daily


Underlying pressure remains strongly to the upside, although there can't be that many shorts left to cover now.

We're probably seeing renewed waves of 'chase it higher' buyers...perhaps arguably 'panic buyers', for what is a stock still surrounded by media hysteria.

As many have noted - even on clown finance TV, as FB moves back to the $38 IPO, there is likely to be increasing waves of selling as the bagholders from May'2012 start to offload for breakevens.

FB remains one to watch...if only for pure entertainment purposes.

Monday 29 July 2013

AAPL - upside to the 200 day MA

Whilst the main market indexes saw moderate declines, Apple (AAPL) was one of the bright spots, closing +$7 @ $448. Near term trend is bullish, and a test of the declining 200 day MA in the $470s looks very viable within the next 3-10 trading days.

AAPL, daily


Another 1.6% higher for AAPL, and its continuing a pretty strong run since the late June low in the low $390s.

If the main market does see some significant weakness - back into the sp'1600/1550 area in late Aug/early Sept', it will be interesting to see if AAPL can hold the very important mid April low.

Best guess...yes. Baring a secondary wave lower in Oct/November, AAPL looks to have a good chance to close the year back in the 500s.

Relative to the main market..AAPL is grossly mispriced.

Friday 26 July 2013

FB - holding the gains

Facebook (FB) ended the week -1.0% @ $34.00, but that makes for some good initial price consolidation after the hyper-gains of Thursday. Near term trend looks broadly bullish, the IPO level of $38 is the next obvious upside target.

FB, daily


All things considered, FB is holding its massive gains from Thursday, exceptionally well.

Even if FB  just trades sideways for the next few days..or even weeks, that will be a major achievement.

As many recognise, there will be significant sell side pressure once FB nears the IPO level of $38, as original IPO buyers will start to sell into continued strength.

Thursday 25 July 2013

BIDU - breaks to the upside

With good earnings, Baidu (BIDU) soared, closing +11% @ $125. Trading was somewhat choppy though, and BIDU closed below a spike high of $132, but above the intra-day low of $120. Despite the closing black-fail candle, BIDU looks outright bullish.

BIDU, daily


BIDU continues to have some of the best profit margins out there, and it is no surprise to have seen it break the old resistance.

With the break above the Jan' high of $114, BIDU is very unlikely to stop at current levels.

In terms of key price targets for the (6-9 month) mid-term: 135, 150, 160.

If the main market rallies 'broadly' into spring 2014, there is little reason why BIDU won't comfortably be testing the 150/160 zone.

Wednesday 24 July 2013

FB - soars in AH on good earnings

Whilst the main market closed with moderate declines, Facebook (FB) soared in early AH trading, on very good earnings. FB closed up 1.3%, but in AH has already hit $31..a gain of around 18%. The moderately bullish trend has turned into a moonshot explosion.

FB, daily


So, the Facebook has managed to greatly surpass market expectations, and has now seen a hyper-snap in AH trading.

Next key level is the late Jan' the 32.50s.

Considering the 31s have already been hit in AH trading, the 32s look well within range for an early Thursday morning hit.

Monday 22 July 2013

GDX - miners soar on rising metal prices

The Gold miner ETF of GDX soared today, after Gold broke above the big $1300 level, with Silver also up almost a full dollar. GDX closed +5.7% @ $27.33. The recent bear flag has now been negated, and there is open upside to long term declining resistance - around $32.

GDX, daily

GDX, monthly


With big rises in the Gold and Silver commodity market, naturally, the Gold/Silver mining stocks all soared - on what was a rather dull day in the main equity market.

It does look like GDX now has a free ride to $30/32, and it will be at that point, where things get interesting again.

Certainly, the monthly chart looks like an intermediate turn is in. So long as GDX can close July in the 27s, it should see further increases in August.

First target is the rapidly falling monthly 10MA..currently in the 37s, but that will be in the 35s in August, and 33s in September

Friday 19 July 2013

TVIX, UVXY - into the depths of hell

With the main indexes holding together - despite some bad earnings data, the VIX was smacked 8.9% lower into the weekend. The 2x bullish VIX instruments of TVIX and UVXY saw further significant declines of 3.4% and 4.1% respectively.

TVIX, daily

UVXY, daily


First, keep in mind the weekly VIX chart...

With the VIX declining by 9.4% across the week, it was naturally a very rough week for those holding TVIX/UVXY across multiple days.

The VIX closed Friday -8.9%, but the 2x VIX instruments actually held up 'relatively', although that was clearly due to further out 'vix futures' not decaying as much.

Awaiting the next wave higher in volatility

Another equity down wave seems likely, no later than mid August, but where will the VIX be then? With VIX now in the mid 12s, VIX11s, even 10s now look viable if sp'1700s next week.

So, further declines in TVIX and UVXY look likely in the immediate term, but it would seem the 'worse is over' least in terms of the current equity up cycle.

*As ever, all such leveraged instruments are only viable trades for the short-term. Holding more than a few weeks - even when the trend is in favour, is not advisable - as the prospectus states..rather clearly!

Thursday 18 July 2013

BIDU - powering higher

With the main equity indexes continuing to battle higher, Baidu (BIDU) is no exception, and closed up another significant 2.4% @ $111.20. It would seem BIDU will make an imminent test of the January high in the $114s.

BIDU, daily


A mere two weeks ago, BIDU was $89 ! Today's close in the $111s, makes for a clear $22 gain, that's roughly 25% in TWO weeks. Absolutely incredible.

Relative to the main market, the company has some of the best profit margins out there.

BIDU looks set to test 113/114 in the next few days. A daily close >114..and there is open air to $135.

Wednesday 17 July 2013

UAL - snaps to the upside

Whilst the main US market closed just a touch higher, United Continental (UAL) was one of the strongest gainers - on heavy volume, closing +8.1% @ $33.69. Near term trend now looks bullish, and the original H/S price formation should now be dismissed.

UAL, daily


*I've no idea why UAL surged today. No doubt 'some' of the gain was due to a significant amount of bears covering in the $33s, but still..8% is a very significant gain, and the door is now wide open to a test of the $35 highs of mid May.

The problem the airline stocks have are higher Oil prices. If WTIC Oil puts in a July close >$110, it will put considerable pressure on margins on UAL...and all the other airlines out there.

One to watch in the weeks ahead.

Tuesday 16 July 2013

BIDU - jumps higher on an acquisition

Whilst the main indexes closed slightly lower, Baidu (BIDU) closed significantly higher, +4% @ $105, after an opening peak of $108. Near term trend remains to the upside, although the stock is clearly getting somewhat overbought - along with the main market.

BIDU, daily


BIDU has been battling higher - along with the main equity market, from a recent low of $88.

Today's daily candle, is a bit of a weird one, an 'island candle' I guess it could be called. Yet, the primary price trend looks comfortably to the upside.

Super profitable

BIDU is an extremely profitable website based company, with net profit margins of a rather astounding 44%.    see key stats @ Yahoo! finance

Today's announced acquisition of a Chinese app' maker is the primary reason for the price jump, but still..BIDU remains one of the best tech-software companies out there.

Even a pull back to test the now broken 200 day MA of 97/98 will do nothing to negatve the primary upward trend.

Monday 15 July 2013

GRMN - challenging the 200 day MA

With the main market holding together in the sp'1680s, Garmin (GRMN) excelled, closing +1.6% @ $36.90. Garmin is now about to make its first serious attempt to put in a daily close above the important 200 day MA - currently @ $37.16.

GRMN, daily


Today was the fifth consecutive daily gain for GRMN, and its now challenging the high from May.

On a fundamental basis, GRMN remains exceptionally profitable, with net margins of 20%, which is giving a forward PE of 15 - which is broadly in line with the main indexes.

see key stats @ yahoo! finance

So long as GRMN can maintain current margins, it should be able to break the 200 day MA, and make a play to test the Jan' high in the 42s.

If equities broadly rally into spring 2014, GRMN should (in theory) have a reasonable chance of a major ramp to $50

Friday 12 July 2013

GDX - just another bear flag

Despite the main indexes all at historic highs, the mining sector ETF - GDX, remains near to historic lows. Despite a small bounce - closely related to a similar bounce in Gold/Silver, GDX looks weak, and remains within a very broad mid-term down trend.

GDX, daily

GDX, monthly


There is really no reason to believe that the recent two week bounce is anything other than another bear flag.

With reference to the monthly chart, metal/mining bulls can't really get confident until a monthly close (or two) above the 10MA - which is currently a VERY long way up @ $37.14

I'm guessing Gold and Silver will fall for some months to come, and if that is the case, then the mining stocks will NOT be rising..even if the main indexes keep pushing upward into year end.

At some point, the miners..and indeed Gold/Silver, will be buys of a generation, just doesn't seem like we have a floor in place...yet.

Thursday 11 July 2013

AAPL - climbing with the main market

With the main indexes rallying on the comments of the Bernanke, Apple (AAPL) was part of the party, closing +1.6% @ $427. Near term trend looks moderately bullish, next target is the 50 day MA @ 433. If AAPL can clear that, a run to the 200 day MA @ 489 looks very viable.

AAPL, daily


Suffice to say, the bigger picture for AAPL still looks somewhat weak, but there is no question that the near term outlook is somewhat leaning on the bullish side.

A few daily closes in the mid 430s, and AAPL should at least get to test the early May high of $462.

Baring a non-stop hyper-ramp for the rest of the ENTIRE year, I would expect some very strong resistance for AAPL at the declining 200 day MA.

Wednesday 10 July 2013

UAL - losing cabin pressure

Whilst the main market closed flat, United Continental (UAL) significantly declined - no doubt due to relentlessly rising Oil prices, closing -3.9% @ $30.74. Near term looks weak, and if the H/S formation is correct, the 200 day MA will be tested within the next few weeks.

UAL, daily


With WTIC Oil on the edge of breaking into the $107s, the Airline stocks are starting to feel the pain.

Today's decline was an important close below the daily 10MA, but even more so, it was another trading day below the important 50/100 day MAs

It would appear UAL has a very significant chance of testing the 200 day MA (still rising) in the 26s, within the next few weeks - certainly by end August.

If UAL fails to hold the 200 day, then there is a very significant risk of losing all the gains since last November, when UAL was battling to break into the $20s.

Tuesday 9 July 2013

BKS - CEO gets the kick

With the main market rising, Barnes and Noble (BKS) similarly continued its rally, and indeed accelerated on the 'good news' that its CEO Lynch has got the kick, with BKS closing +5.4% @ $18.61. Near term trend looks moderately bullish, next key level is around $20

BKS, daily


So, the CEO has got the kick (regardless of whether some might argue for the term 'let go', 'moved on' or 'replaced', after having been paid $4 million in 2012.

As many recognise...bad work at the CEO/CFO level still results in good pay/benefits. If that doesn't inspire you with hope for the 'new capitilism', I don't know what will.

Seriously though, BKS remains a loss making and dreadfully managed company. Every book sold results in a loss to shareholders, and there is ZERO sign that management are going to address the underlying lack of profitability any time soon.

Indeed, their utterly failed foray into E-books was a classic example of a group of people meddling in a separate industry, for which they had zero expertise/understanding.

BKS remains a failing company, and until they either reduce their costs, and/or increase prices, they are in long term...trouble.

Monday 8 July 2013

AMZN - set for the $300s

With the main US equity market still on the rise, Amazon (AMZN) is similarly still climbing, closing +1.6% @ $290. Near term trend looks bullish, and the big $300 threshold looks set to be challenged this month. Underlying price-valuation though, remains in the 'insane' category.

AMZN, daily

AMZN, weekly


So, the company that still can't make a profit - despite global annual sales of $61 billion, is making a play to break into the $300s.

Forward P/E is in the 90s, but that assumes the company will make a fractional profit this year. Based on the past few quarters, a profit - even a small one, seems rather unlikely.

see key stats @ yahoo finance!

Good company, but crazy valuation

Without question, AMZN is one of the worlds leading highest quality online retailers, is there anyone who doesn't regularly use it? Yet, it simply is not able to make a profit.

The notion from many analysts that 'don't worry, it will at some point', is simply not acceptable in my view. Yes, it is investing heavily in a great deal of distribution infrastructure (across the globe), but you'd think management might still want to be making 3-5% a year for shareholders.

Instead, AMZN is a loss making company, pays no dividends, and has one of the highest valuations out there.

How high with the momo chasers take it?

If the main US equity market holds together into spring 2014, where will AMZN be trading then, how about the 400s...hell, why not the 500s? After all, if you're one of the worlds biggest retailers, since when did making a profit matter?

Sunday 7 July 2013

F - cruising higher

With the main indexes climbing into the weekend, Ford (F) was no exception, settling +1.6% @ $16.70. This was the seventh daily gain out of the last nine trading days, and it has taken Ford comfortably above the early June high. Next target are the low $18s.

Ford, daily


Ford is very much still generally following the trend of the main equity indexes, but is certainly excelling above the average stock.

Ford is now only $1.40 (8%) from breaking the highs of early 2011.

It is arguably a clear warning to those equity bears seeking some form of autumnal collapse. If Ford can put in a monthly close in the $20s this year..and that might lead to the 30s....spring 2014?

Friday 5 July 2013

TVIX, UVXY - just another day of pain

With the equity indexes climbing into the weekend, the VIX naturally saw another smack down  - especially in the closing hour. The 2x (bullish) VIX instruments of TVIX and UVXY saw significant declines of 9.4% and 10.3% respectively. Near term outlook looks somewhat dire.

TVIX, daily

UVXY, daily


First, keep in mind the weekly VIX chart...

With the VIX dropping over 11% this week, the equity bulls are back in control. VIX looks set for lower levels next week, perhaps the 12s.

The big question is whether Bernanke will upset the markets next Wed/Thursday - as his last two 'little chats' have done.

Weekly index charts are suggestive of broad upside into the low/mid sp'1700s by early August. If that is the case, VIX in the 11s...even 10s looks viable.

As ever...such leveraged VIX instruments are for short- term holds only. Even a week or two of sideways chop is enough to knock TVIX/UVXY down by 5-10%, purely via statistical decay.

Wednesday 3 July 2013

TCK - weak, weak...WEAK

Despite the main indexes holding together, Teck Resources (TCK) declined a little more, closing -0.9% @ $20.36. Near term trend remains dire, and there really is no support, aside from the usual psy' levels of 20, 15, 10.

TCK, daily


TCK is actually one of the better miners out there, but from a simple chart perspective, its a busted company.

With the failure to hold the $24s last month, there is simply no real price support.

We're seeing rather consistant continued downside. There is a clear 6 day bear flag, and that broke just a few days ago.

Will be interesting to watch this one, and see if it does indeed fall all the way down to the 2008 low of $2.46, that is around 85% lower.

Tuesday 2 July 2013

FCX - still broadly very weak

Freeport McMoran Copper & Gold (FCX) saw yesterdays black-fail candle confirmed, with a significantly lower close, -1.9% @ $27.73. Near term trend remains weak, and there is very strong downside pressure from the bigger weekly/monthly cycles. Next target are the $25s.

FCX, daily

FCX, weekly


The miners continue to suffer on a multi-month basis, and even the largest/most profitable - like FCX, are seeing broad declines.

The broad price formation for FCX is very much almost identical to the Copper chart. Copper itself looks set for the low $2s at some point within 6-12mths.

If that is the case, then FCX looks set to hit a multi-year floor, somewhere in the 15-10$ range, which is of course a horrifically long way down.

Monday 1 July 2013

CNX - a rare positive close

With the main US markets closing moderately higher, the miners are seeing a little more upside, with Consol Energy (CNX) closing +1.5% @ $27.50. Mid-term trend however remains severely to the downside.

CNX, daily


So, an up day for many of the mining stocks, but still, the main trend remains deeply bearish. With the break of trend/channel support

The important daily 10MA is declining at waterfall - arguably 'crash' speed, and will be a real barrier at $28 by the end of this holiday week.

Even if CNX can break back into the 28s by the end of this week, its going to face extreme resistance at the big $30 psy' level.