I called Monday's crash Sunday night: http://caps.fool.com/Blogs/ViewPost.aspx?bpid=92110&t=01008631960540474609 I regretfully must call another crash... Congress' insistance on reviving the bailout nonsense will send shockwaves of terror across the bond and currency markets, thus crashing equities again. [more]
We're just a day away from there being no bailout as the markets open Sunday. (Futures and Asia) The market ridiculously pumped itself up last week off rumours of a government throwing money in a foreclosed-on toilet plan. This plan appears to have died a well-deserved death. Now we are up more than 500 points off the rumours of these shenanigans, plus the market is badly overvalued. So at minimum, we take off those 500 points, plus some selling momentum adds in a couple hundred points. Once we punch through Dow 10,000, the selling pressure is going to get harder. While my Dow target has been 9,900 for this year, we could get all the way down to Cramer's 8,300 call for the Dow this autumn. Do you know where your puts are? [more]
Press release posted verbatim: [more]
check this video out. French journalist breaks down the bailout. Even features a gold bug pitching the dollar is done nonsense. However, despite this guffaw, the video is still hilarious and well worth a watch.
No shorting is going to cause a market crash.
The ridiculous gold rally died when it became clear the world isn't ending. Since my post last night, the Swiss pound (my inflation recommendation) dropped 1%, gold dropped 7%. Gold bugs root for economic armegeddon but once again, their dark visions remained unfulfilled. As is always the case, gold gets you beheaded when it turns downwards. As there was no basis other than fearmongering for the gold rally, it plunged, of course, hard and fast. Gold, along with bonds, should continue to fall for the next week as stocks come off oversold. I own GLD puts and intend to sell at $780-$790 gold. We are in a deflationary depression... otherwise known as a disasterous time to own shiny metals. Even gold stocks were mixed to down in spite of naked short selling ban... garbage like Emcore and Sulphco were jumping 25% cause shorts had to cover, but the supposedly naked shorted miners dropped. Bwahaha. GMX will suggest when to go long metals... today isn't the day. [more]
is not gold. One day does not a bull market make. Demand destruction is still the key factor here... commodities are in deep trouble. So, what does one do. The inflation argument is still nonsense, but if you feel you have to diversify into an inflation hedge (not a bad move regardless if you have sizable capital to work with-- don't bother if you're trading 25k or less) you want.... yes... Swiss Francs. The Franc has turned and if it breaks 1.08 support (big if, I think dollar should resume upwards run next week... but this market is irrational) the Franc is heading back to parity. That is a 10% move. You get 10% plus interest if you park in a Swiss money fund... not a bad gain. However, should the trade fail (and I believe it will), you won't get your head cut off like you will in gold. The long-term target on gold is $600... 30% down from here. The Franc has strong resistance at 1.18 (5%) up from here. You make 10% + interest if you are right, 5% loss if your wrong, that's a good trade. Gold, you make 10% up ($1000 resistance is unlikely to go down, and lose 30% (to $600) if you're wrong.) That's a lousy bet. [more]
Today's top stock was KAZ rising 25%. I picked it to outperform and bought 500 shares yesterday. I, of course, sold my stock today, but on CAPS, I am stuck with this pick until next week. I understand the idea of the 7-day rule, but there should be an exemption for crazy moves like this. Obviously I don't like it nearly as much today as I did yesterday. The entire target of the move (I was hoping for $3.75) was reached and more! Let me out CAPS, let me out.
The PPT will save us! The market can't ever crash... can't go down more than 400 points a day. The gremlins over at the PPT are buying stocks with taxpayer money. We'll never crash cause the government wouldn't allow us to with an election coming up. [more]
Here's an update on my thinking on WNR. This is turnng into an earnings/analyst play as the hurricanes are done. The regional gas shortage is gravy, but this stock is going up regardless. It makes a wonderful hedge for all your short positions.
WNR is minting money... yet the earnings estimates for WNR are a paltry 18 cents for the current quarter. They made 24 cents on a lousy crack spread last quarter. They are making, at $75 gulf spread, money 7x as quickly as when the gulf spread was at $10 (most of Q2--the 24 cent quarter). I'd be deeply surprised if WNR doesn't make 50 cents plus... one analyst has WNR making 56 cents... do the math, that means a P/E of 9.
You're going to see either a big spike in analyst expectations... good. Or, you're going to see an absolutely monsterous earnings beat (this is what I'm hoping for... planning on playing a large Out of the money call position into earnings as the analysts are dumber than rocks on this company. There are 7 analysts and no buy ratings! Yet the thing has doubled as the majority of analysts maintained "underperform" and even "sell" ratings. The median price target of the analysts is 6 bucks! One ANALyst has a price target of $2.75--yes that is right, he has a price target down 75% from here! As I said, dumb as rocks! Once the analysts all upgrade the stock en masse... well... plus the short squeeze... the upcoming ban on naked shorting... let's just say my $15 Dec calls will be deeply in the money by the time we get to December.
The outlook for September opex is cloudy. The Sept $12.5's remain a good risk vs. reward play as people do not realize how low inventories will be on Wednesday. Resistance on the stock is at $12.50... this puts your $12.5 calls at the money when we retest resistance on Wednesday, should it break, you can get a multi-bagger. Lower gasoline inventories open the door to a further divergence: oil prices should continue to slide, but gas prices will rise as people see that we have the lowest inventory levels since 2005 (and possibly lower than that.) This widens the crack spread and then the shorts are, so to speak, history. [more]
I quote a large chunk of Marcd77's post. I don't mean to pick on him in particular, a lot of people are confused on this. It figures that the people blaming the government or "PPT" for killing commodities have ratings under 20 while those of us who didn't buy into this nonsense have ratings over 99... but I digress. [more]
Don't. You could pull a Bush and end up driving off a cliff. All key bull market trendlines have been busted. The dollar is flying higher, silver is in the dumps, base metals are even worse, even gold is steadily losing ground towards $750. Your average miner is down 50% or so. The junior miners appear to be heading for bankruptcy en masse. Feel free to buy some call options on some of these names as a swing for the fence idea, but don't hold onto these names forever. A stock like Taseko has fallen from $6 to $2 this year. The company is solid, but you got to use stops... a 70% loss is unacceptable--you need a triple to regain your original capital. You can't buy and hold something like this... this is a fine time to nibble, but say you buy a Coeur D'Alene Mines at $1.48.... it's down from $5, but it may very well go to zero. CDE isn't necessarily cheap now. The P/E is still 26... and that is a past P/E based off much better silver prices. CDE could very well be a zero. If you buy, you gotta set a stop at $1.25 and take your money and live for another day should CDE head to a bankruptcy court. It is quite probably that 50-70% of the mining juniors go bankrupt and leave shareholders with squat as this mining bubble collapses. [more]
I really don't know what else to say to convince you all to buy WNR. I've made my case here (trading then at $7), here (trading then at $8.50), and here (trading then at $9--it would rise 22% the day after this pitch.) I could explain in detail how Ike smacking the gulf as a Cat 4 or 5 hurricane will send Western Refining to $15 or higher as the crack spread, their profit margin, continues to explode higher (link here). However, since I've already made it clear that this is an unusally good buying opportunity, I've decided to make today poetry day. Here is Trycure2's poem about Western: [more]
Unlike everything else in today's oil/commodity crash, WNR continued its steady ride higher. [more]