ELN Sold @ $13.25

“They” had fun and gunned for the stops on Elan Corporation, plc (ADR) [[ELN]] this morning. Got stopped out at $13.25. My basis was $10.33.

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Let me break it down for you, comrades:

As I pointed out in a previous post, the dollar is rallying and now appears to be on the way to challenging the long term downtrend in the near term. However, it still has a way to go before I would ring the “all clear” bullish reversal in the dollar.

Gold has failed to rally, again—a good sign for the dollar. Therefore, it behooves people to be selling out of gold and beginning to go long the dollar, if they haven’t already. At the very least, exposure to gold should be reduced. A breakdown of gold below $800 continues to build a stronger case for a long term dollar rally.

Also, with the dollar strengthening, the focus now is away from international stocks and back to the good ol’ USA. The foreign developed market countries are breaking down and emerging markets are already broken.

And, while we’re at it, the housing market has been putting in a bottom, as evidenced by the rally in the homebuilders.

Stop with all the denial.

The chart of [[XHB]] shows that the bearish resistance line has now been violated, meaning that investors are starting to believe that the sector appears poised for a recovery. I say appears, because nothing is stamped in cement. Remember, the market is a forecasting mechanism, representing the outlook of the investment collective.

In summary, this has been, and continues to be, a difficult environment in which to invest. It is dark, and wrought with many dangers and pain. As they say, it’s always darkest before the dawn—that hour between 3 am and 4 am.

But, it’s also an environment that is laboring to give birth to a new bull market. Ask any woman who has gone through childbirth what it was like just before her beautiful baby was born.

Just saying…..

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As of yesterday, 97% of the companies in the S&P 500 have reported earnings. And thus far, we’ve seen a  decline in earnings of -29%, year over year. That’s more than double the drop that Street analysts had predicted. While the analysts got it wrong, 67% of the companies reporting got it right, beating analysts estimates. Only about 9% of companies missed earnings estimates.

What’s interesting to note is that, were it not for the asshat bankers in their pin-striped suits, S&P earnings would have seen +3.2% year over year increase. Not great, but not terribly bad. Still, not much solace

The forecasts that I’ve seen peg S&P earnings for Q3 at +4.3% year over year, which includes financials. What’s intriguing is that over the past three quarters, S&P earnings have dropped over 30%, but are +8% if you carve out the financials.

And, are you sitting down for this?…..

Analysts estimate Q4 earnings at +62% increase year over year!!? Methinks that number should be coming down, don’t you?

To overlay all this, Bloomberg had an article that highlighted how analysts accuracy dropped to the lowest level in 16 years.

Who can we trust?

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I took advantage of today’s market action and bought Symantec Corporation [[SYMC]] , @ $21.78.

The stock has formed a nice breakout pattern from a huge base and has pulled back a little from its recent highs.

Buyers of this stock shouldn’t worry about the economy. Security software is a given—-a spending priority.

Profitability is on the increase and operating cash flow increased year over year by 18% to just over $413 million last quarter. Revenues increased 15% yoy for enterprise security products and services. No slow down there.

Disclaimer: This information is not meant to be the basis for your investment decisions. Trading and investing involves risk. You could lose all your money, your “stash”, home, cars and bullshit collection of pewter spoons from the Franklin Mint. Do your homework before investing.

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Joe Biden is an ass.

That is all.

 

Off to play mountain man.

Have a great weekend.

Alpha

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In a previous post, I shared with you my current “top-down” asset allocation. Unlike the conventional brokers and financial talking heads who preach a “strategic asset allocation”, I do nothing of the sort. 

I favor a tactical asset allocation strategy, that is dynamic and changes with major shifts in the economy and the market. The standard, conservative 50% stocks / 50% bonds allocation, might be fine for grandma and uncle Stan, but what happens to that allocation in a high inflationary environment? Would you still keep 50% of your money in bonds, just because “the computer said so”?

See, the market is like a band of retarded goat fondlers who flit about, to and fro, hoping to catch people off-guard, with no goats. Finding zero goats on your property, they then proceed to try to rape you, water buffalo-style (it’s not pretty).

I figure if “they”, (aka “the market”) are coming for me, I might as well be a moving target, instead of letting them push me face down into a rice paddy. Better still to manoeuver [sic] around with a “short” kick to the groin here or there using inverse ETFs. But I’m getting ahead of myself.

As I said before, currently, I have about 25% in cash, 20% in bonds, 40% in equities/ETFs, and 15% in “alternatives”. When you’re a responsible investor, with enough liquidity to treat everyone in Guatemala to a Happy Meal, you do shit like allocate your money to different investments and asset classes–just to beat up on the retarded goat fondlers, so to speak.

Let me give some examples of what I mean:

Cash – (Duh)….cash, meaning money market funds, Einstein.

Bonds – [[MUB]] , to help mitigate the tax bill each year. I pay an aggravating amount of income tax, which vexes me to no end. I also have a stable of individual munis from TX, CO, WY, NE, SD, ND, MN, IA. The lands between the river and the mountains. Fuck CA and FL—they’re bankrupt, destitute and populated by a high percentage of women with fake boobs.

Equities – I have both a long term and a shorter term trading accounts. In my long term account, I hold stocks like…Apple Inc. [[AAPL]] , Chesapeake Energy Corporation [[CHK]] , Gilead Sciences, Inc. [[GILD]] and Chevron Corporation [[CVX]] . Average holding period: six years.

In my intermediate trading account, I have “fuckus stocks” like Agrium Inc. (USA) [[AGU]] , Axsys Technologies, Inc. [[AXYS]] , Big Lots, Inc. [[BIG]] , Cleveland-Cliffs Inc [[CLF]] , Flowserve Corporation [[FLS]] , Fording Canadian Coal Trust (USA) [[FDG]] , Potash Corp./Saskatchewan (USA) [[POT]] , Walter Industries, Inc. [[WLT]] , Weatherford International Ltd. [[WFT]] . 

In the short term account, Elan Corporation, plc (ADR) [[ELN]] ,  [[IBB]] , State Street Corporation [[STT]] , Cullen/Frost Bankers, Inc. [[CFR]] , SVB Financial Group [[SIVB]] ,  Johnson & Johnson Johnson & Johnson [[JNJ]]  to offer up some names. I’m staying away from the market ETFs and instead, playing the sector ETFs with stuff like [[FDN]] , [[IBB]] , [[XLE]] , [[FIW]] and [[FAN]] .

This kind of market rewards stock pickers, not closet indexers.

Finally, “alternatives” include things like: [[USO]] , [[DBA]] , [[FXP]] , [[SKF]] , [[SRS]] , [[QID]] …basically, stuff that will help me hedge my other bets.

This is not an all-inclusive list, but you get the picture.

Tomorrow, I will be on the road headed for the high mountain country in Colorado. It will be a “green” weekend for me, no doubt.

 

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