Thursday 31 October 2013

FB - wild swings on good earnings

With good earnings, Facebook (FB) soared around 15% in Wednesday AH, to the $56/57s, but opened a rather bizarre 4% lower, flooring at $46.50. There was a fierce push higher to $52, with the stock settling +2.5% @ $50.24. Broader trend remains very much to the upside, $ year end.

FB, daily

FB, 5min


It has to be said, Q3 earnings were indeed a lot better than just about anyone had expected, and it was no surprise to see the stock soar in AH to the 56/57s.

The reversal that we saw yesterday in AH is probably just the usual nonsense that most of the momo stocks see from time to time.

The fact FB opened -4%, but still managed to close +2.5%, was again testament to the underlying upside pressure.

The $60s look very likely before year end, not least if the main market is trading in the sp'1800s.

Wednesday 30 October 2013

GRMN - knows where it is headed

Whilst the main market saw moderate declines after the FOMC annoucement, Garmin (GRMN) saw some interesting intra-day swings. With good earnings, GRMN opened 5% higher at a new historic high of $50.39, but profit taking came in, with the stock settling +0.4% @ $48.27.

GRMN, daily


GRMN remains an extremely profitable company, with superb net margins of around 20%. On any basis, the company looks great, with zero debt, reasonable cash reserves, and it even pays a dividend.

see key stats @ Yahoo! finance

A near term pull back would be understandable. Downside support looks to be around $46/45, where the 50 day MA will be lurking across November.

Assuming the main market holds together, with further upside into spring 2014, GRMN should be in the $60s..if not even higher.

Tuesday 29 October 2013

GDX - miners on the edge

Whilst the main equity market continues to battle ever higher, the precious metal miners are looking a little shaky ahead of the next FOMC announcement. The Gold miner ETF closed significantly lower, -2.8% @ $28.79. immediate trend is higher, the $28s would confirm a mid-term trend change.

GDX, daily

GDX, monthly


The miners were indeed particularly weak, relative to the main market today.

The bigger monthly chart remains weak, and the past five trading months could merely be a very large bear flag.

In the near term, GDX needs to break into the 28s to break the mid term down trend. Even more important though, until GDX can clear above the monthly 10MA - currently in the $30s, primary outlook for the miners remains..weak.

*if the FOMC can inspire the precious metals to surge more than 2% (spot gold +$30/35)..then the miners will have a real chance at a key trend break to the upside.

Monday 28 October 2013

TSLA, NFLX - two struggling momo stocks

Whilst the main market continues in algo-bot melt mode, a few of the big name momo stocks are still on the slide. Tesla (TLSA) and Netflix (NFLX) both closed lower by just over 4%. Near term trend for both looks weak.

TSLA, daily

NFLX, daily


Suffice to say, both of these hysteria surrounded momo stocks look very weak. NFLX has of course already had Q3 earnings, whilst earnings for TSLA are not due until next week - Tue' Nov'5.

Near term targets: 

NFLX looks vulnerable to $305/295 - where there are a few supports, inc' the 50 day MA.
TSLA, if we see a break into the $150s, the door is open to a very severe decline down to the 110/100 zone, where the 200 day MA is lurking.

Both should prove to be very interesting stocks to watch for the remainder of the year.

Friday 25 October 2013

TVIX, UVXY - a week of minor chop

Despite the equity market seeing a third consecutive weekly gain, the VIX managed a fractional net weekly gain of 0.4%. The 2x bullish VIX instruments of TVIX & UVXY mostly trundled sideways in price. The issue of decay remains a key problem with a VIX that is effectively flat lining in the low teens.

TVIX, daily

UVXY, daily


First, an update on the weekly VIX

Clearly, the VIX has already seen the bulk of the drop in the current multi-week down cycle take place. The only issue now is how many weeks until the next VIX spike..and whether the next spike will be yet another low high.

Considering the continuing QE and underlying mainstream mood, it'd be surprising to see the VIX break into the 20s in the remainder of this year.

If that is the case, those holding TVIX/UVXY across multiple weeks will likely experience significant losses through the old problem of statistical price decay...even if the VIX can eventually battle into the upper teens.

The 2012 VIX high was 27, and frankly, that looks next to impossible to surpass in the remainder of this year, which is pretty incredible to reflect on.

Thursday 24 October 2013

DRYS - failing to hold $3

Whilst the main market continued to broadly climb (not least the Transports), Dry Ships (DRYS) continued to fall, closing -2.9% @ $2.83. Near term trend is accelerating to the downside, and a full retrace to the original breakout zone in the low $2s now looks viable within a week or two.

DRYS, daily


Suffice to say, price momentum has increasingly turned bearish, and with the second daily close <$3-00, DRYS looks vulnerable to a few more days of significant falls.

Near term prime downside target is $2.25, where the 200 day MA will be lurking in the days ahead.

As ever, DRYS will react largely to the Baltic Dry Index (BDI), which is -10% so far this

BDI, weekly

So long as the BDI does not collapse below the 1200, the mid-term trend should continue to the upside, along with a broadly rising equity market.

DRYS will most definitely be a tempting target in the low $2s.

Wednesday 23 October 2013

TLSA - on the edge of a breakdown

Whilst the main market is broadly still climbing (not least the Transports index), Tesla (TSLA) is having major problems, closing -4.1% @ $164. Near term trend looks weak, and a break into the $150s will open up the 110/100 zone, where the 200 day MA will soon be lurking.

TSLA, daily


Suffice to say, TSLA is having real problems, and a break into the $150s will open the door to the 110/100 zone, where the 200 day MA will be lurking in November.

As ever, the hysteria-surrounded stocks are a minefield to be meddling in, but they sure make for some entertainment during most trading days.

So, if $160 fails to hold...we should see much stronger downside pressure, on the order of a 10/15% decline in a single day. 

Tuesday 22 October 2013

NFLX - major reversal on heavy selling

Netflix (NFLX) posted better than expected earnings, and saw a very strong opening in the $390s, yet with very heavy selling, NFLX swung 20% lower, settling -$32 (-9.2%) @ $322. Today's closing candle is one hell of a reversal candle, and offers more downside in the immediate term.

NFLX, daily

NFLX, 5min


A classic black-fail candle on the open, warned of major trouble..and trouble NFLX most certainly saw. With huge sell side blocks of 500,000 to 1million in size in early morning, NFLX saw one of the most dramatic opening reversals for any stock we've seen this year.

Crazy valuation

With a price of $400, that is a PE of 200, which is simply insane. Even $200 would be PE 100, and that is clearly over-priced on any 'fair value' basis.

The problem for NFLX equity bears, the underlying main market is trending higher, and given a few days.. NFLX will probably get another chance to level out, before making another run to the upside.

Considering the huge reversal and heavy selling, $400 this side of Christmas..looks very difficult to achieve, but certainly not for next spring.

Monday 21 October 2013

DRYS - retracement complete?

Whilst the main market saw minor price chop, Dry Ships (DRYS) saw a very sharp decline of 10% to $3.08, on falling shipping rates, and renewed negative media attention. Near term trend is weak, but DRYS has arguably completed a natural 25% retracement, having doubled from $2 in August.

DRYS, daily


The shipping stocks are often a volatile bunch. Since the explosive ramp from August, we've now seen a very significant retracement of 25%

Yet, despite the current negative news postings across the web, the recent 3-4 week decline is probably just a natural retracement after the initial break and snap higher.

The shippers are still struggling to turn a profit since the 2008 commodity bubble popped. DRYS is no exception

see key stats @ yahoo! finance

*next DRYS earnings, Nov'12.

BDI - on the slide, BDI, weekly

DRYS trades pretty closely (as it should) to the BDI. Baring the BDI breaking under 1300/1200, I'm going to guess that the BDI is indeed starting some kind of multi-year increase, maybe as high as 6000 by 2015/16.

If that is remotely correct, DRYS will be in the 15/20 zone, if not even higher.

Both DRYS and the more important BDI are to be closely watched in the months ahead.

Friday 18 October 2013

TVIX, UVXY - another cycle of disaster

With the uncertainty of the debt ceiling out of the way, and the sp' breaking into the 1740s, the VIX has effectively collapsed across the past 8 trading days, falling from 21.34 to 12.34. a drop of almost 50%. For the leveraged bullish VIX instruments of TVIX and UVXY, it has been another disastrous trading period.

TVIX, daily

UVXY, daily


First, a reminder on the VIX, on the bigger weekly cycle...

With the VIX collapsing almost in half, it is no surprise to see the 2x bullish VIX instruments of TVIX and UVXY effectively cut in half since last week. Indeed, in some ways, its almost surprising they aren't lower!

Many in the trading world appear to agree that the VIX will likely remain low for some weeks, if not into early next year. Certainly, we'll likely see the VIX in the mid, maybe even the upper teens by year end, but the 20s look out of range.

If that is the case, we'll surely see huge problems of decay in the leveraged bullish VIX instruments. Perhaps on the order of 90/95% by Jan/February. As ever, what remains clear, such 'things' are for short term holds only, with damn tight trading stops!

Thursday 17 October 2013

GDX, ANR, BTU - miners trying to push higher

With the main equity market continuing to battle higher, the miners did especially well, as metal prices jumped sharply higher - not least due to a significantly lower USD. Despite the daily gains, GDX - along with the coal miners (ANR, BTU) still remain in general mid term down trends.

GDX, daily

BTU, daily

ANR, daily


The price action in the miners was particularly interesting today.

We saw arguably the best coal miner out there - BTU, make an attempt to break its 200 day MA. It failed..but still, the attempt itself was a good initial attempt, and BTU still closed with significant gains of almost 4%.

The Gold/Silver miners did even better, with GDX holding gains of around 5% into the close.

Near term trends for the miners look positive, but on a bigger weekly/monthly time frame, the primary trend remains strongly bearish.

Monday 14 October 2013

FCX - the best miner trying to breakout

With the main indexes recovering from opening declines, Freeport McMoran (FCX), had a particularly strong day, closing +1.3% @ $33.87. The break above $33.50 is pretty significant, and next key target is the 200 day MA at $36. A weekly close in the 36s..or higher would open up $40 in Nov/Dec.

FCX, daily

FCX, weekly


Suffice to say, a good day for some of the mining stocks.

FCX is unquestionably one of the better resource stocks out there..although it should be kept in mind that FCX is also now involved in the Oil and Gas service industry.

*if the main market can continue to rally into year end - with sp' in the 1800s, then FCX will surely be in the $40s.

Friday 11 October 2013

TVIX, UVXY - back on the slide

With the VIX breaking to 21.34 this week, the 2x bullish VIX instruments of TVIX/UVXY were back in favour. Yet..once again, we've seen equities snap back..and the VIX has been smashed lower. Since the Wednesday morning peak, TVIX/UVXY have already collapsed lower by around 30%.

TVIX, daily

UVXY, daily


First, a reminder of the VIX weekly chart, which saw net weekly declines of 6%.

Once again the equity bears were teased with a test/brief break of the VIX 200 weekly MA, but volatility has quickly collapsed back  It is such a disappointment, not least for the volatility players this week.

Considering the daily/weekly VIX charts, both TVIX and UVXY look set to decline for a few more weeks, and with the decay issue...we'll likely be looking at new lows next week.

As ever...such leveraged instruments are for short-term trading only.

Thursday 10 October 2013

FB, NFLX - momo stocks back in favour

With the US market soaring on the assumption of the debt ceiling can being kicked at least for 'some weeks', the momo stocks soared, with most up 2.5% to 5.0%. If equities can rally into the weekend, FB, NFLX..and all the other usual suspects, will be close to breaking new highs.

FB, daily

NFLX, daily


A crazy day in the main US market, with a combination of huge short-covering, bulls chasing, and borderline hysteria that 'everything is going to be fine again'.

For the momo stocks like FB and NFLX, today saw very natural very strong gains of around 5%.

With the main market looking like it has put in a short-term floor, the momo stocks will have a real chance of breaking new highs in the coming days..which is frankly.. a really bizarre realisation.

Wednesday 9 October 2013

DRYS - significant retracement underway

With the main US equity market still rattled by the ongoing US Govt. shutdown/debt ceiling concerns, Dry Ships (DRYS) is on the slide, and closed -2.5% @ $3.31. Near term trend is weak, and some further downside looks very probable. Next downside target is $3, around 10% lower.

DRYS, daily


*the BDI - upon which the shippers are heavily affected by, is holding up very well. Regardless of the current market weakness, the recent ramp in the BDI is suggestive of some strength in world trade.

BDI, weekly

DRYS on the slide

In terms of price action for DRYS, first support is the psy level of $3, with the 50 day MA quickly rising in the $2.70s.

Certainly, $2.50 or lower seems very unlikely..even if the main market falls to sp'1600/1590 next week.

Along with the BDI itself, DRYS is one to watch in the current market pull back.

Tuesday 8 October 2013

FB, NFLX, AMZN - momo stocks hit hard

With the main indexes slipping lower again, the momentum (momo) stocks were hit especially hard today. Many of the usual suspects saw declines of over 5%. With the main market set to fall further in the coming days, the momo stocks are set for a further significant declines.

FB, daily

NFLX, daily

AMZN, daily


Suffice to say, it was very amusing to see the momo stocks snap to the downside this morning - as the sp' failed to hold the 1670 low.

Of the three stocks listed above, ironically, I'd be inclined to say FB is most likely to do well when the market - as it will eventually, turn back to the upside.

Regardless. the momo stocks are always worth keeping an eye on, if only for pure entertainment reasons.

Monday 7 October 2013

AMZN - failing at resistance

With the main market again weak, it was no surprise to see Amazon (AMZN) similarly weak. AMZN closed -2.8% @ $310. Key resistance in the 320s has held, and AMZN is vulnerable to further downside, at least to the $300 threshold, where the 50 day MA is also lurking.

AMZN, daily

AMZN, weekly


Amazon is perhaps the most bizarrely valued stock in the US equity market. Despite failing to make any decent profits for some years, the stock price just keeps on broadly rising.

There is no doubt it has a superb worldwide customer base, but simply put...AMZN is just not charging enough for its service/products.

The current profit margin remains marginally negative..which is frankly laughable considering they have annual sales of $61bn.

see key stats @ Yahoo! finance

Near term price action is certainly one of being rejected at long term trend/channel resistance. There should be very strong support around $280, if not the bigger $300 psy level. Only if AMZN breaks into the $260s - or lower, can equity bears start to consider a possibly bigger trend change. Until then...the primary trend remains very much to the upside...despite lack of profits.

*Q3 earnings are issued at the close of Oct'25

Friday 4 October 2013

DRYS - reacting to the rising BDI

With the Baltic Dry Index (BDI) rising from the 1200s to the 2000s since August, the shipping companies have likewise jumped, with Dry Ships (DRYS) almost doubling up. DRYS closed the week +1.7% @ $3.78. Near term trend remains starkly bullish, with soft support around $3.70/60.

DRYS, daily


*first, a few charts on the BDI, which is absolutely important to keep in mind.

BDI, weekly, 3yr

BDI, monthly, 7yr

The first chart more clearly illustrates the recent jump in the BDI, but still..the bigger chart puts things in a rather stark context. The BDI is still over 80% lower than the previous cycle highs of 2007/8.

The problem for anyone considering getting involved in DRYS - or most of the other shippers, is that DRYS is still struggling to make a profit.

see key stats @ yahoo! finance

DRYS remains a very speculative stock, and ever since the 2008/9 collapse wave, endless message boards have regularly highlighted it.

DRYS - still in dry dock

When you see DRYS on a monthly chart across the past seven years, it remains a stock that has NEVER even begun to recover/bounce. In many respects, until DRYS can break back into double digits, the stock is indeed still flat lining.

Yet, with the BDI finally starting to increase..perhaps now is the time to keep a more closer eye on DRYS.

Thursday 3 October 2013

FB - following the main market lower

With increasing weakness and volatility in the main equity market, even the momo stock of Facebook (FB) has started to slip, closing -1.9% @ $49.32. Mid term trend remains very bullish, but if the main market unravels, first downside support is a long way down at the 50 day MA in the low $40s.

FB, daily


FB has doubled up since June, and the recent few days have been forming what might be at least a short term top in the $50s.

First downside target is the 50 day MA, currently $41, and which will be in the $45s within 2 weeks.

If the main market can hold - and rally from the critical weekly low of sp'1627, then FB should comfortably hold the mid/low $40s, before a renewed power-ramp into the yearly close.

Best case upside for the FB bulls....$60/65.

Wednesday 2 October 2013

STX - soon to break new historic highs

Whilst the main market saw some choppy action, Seagate (STX) opened significantly higher, and built gains across the day, closing +2.8% @ $45.94. Mid/long term trend remains very bullish, and a break above the July high in the $47s looks very likely within the very near term.

STX, daily


Just a brief update (see more detailed post from last week).

Despite a somewhat weak main market, STX is excelling, and continues to look very strong.

If the main market can build new gains across this month, then STX could spike into the $50s, as it increasingly attracts more attention from the mainstream. Indeed, even the Cramer on clown finance TV was highlighting STX this morning.

Tuesday 1 October 2013

AAPL - set for the mid $500s

With the main indexes closing moderately higher, AAPL was a particularly strong stock, closing +2.4% @ $488. AAPL has managed to hold above the 50 day MA for the seventh day, and looks set to challenge the recent $513 high of mid August.

AAPL, daily


With the main US equity market appearing to have started to turn back upward, AAPL is leading the way, and today's gain from the 50 day MA is a very positive sign.

First target in the immediate time frame is the big $500 psy level, that seems very likely, and then a challenge of $513.

My main market target zone for Oct/Nov is sp'1750/75, which might equate to AAPL in the 540/550s.