Today was a choppy day as everyone waited to hear Bernanke talk about rate hikes. Next thing you know it was China who said they’ll be increasing rates. Bwa! That was totally bad news for metals and building/construction/materials stocks because China is a huge consumer of these products. It’s kind of ironic that I invested in China & metals as a hedge against the U.S. market. Oooops.
ECONOMICS 101
Here is a generic correlation you should know…
U.S. interest rates higher —> borrowing is lower –> economy slows down –> stock market goes down —> dollar goes up —> gold goes up
[vice-versa if interest rates stop or go down]
China interest rates higher —> (same as U.S. scenario except… —-> gold goes down.
Timet’s First Down Day In 2 Weeks
It’s been a while now for TIE to close in the red, but I guess we knew it was coming. Of course, the rate hikes in China did not help. There appeared to be a breakdown in intraday trading when the news hit:
So the thousand dollar question is: “A speed bump? Or a melt down?” Well, that’s a very tough question for high flying momentum stocks like TIE. I just can’t figure out where to go pricewise… Unfortunately, looking at TIE’s 2 month chart, we see that there is no support or resistance, so it’s impossible to find an exit point at the time.
So, I guess what it comes down to is your expectations for TIE the “stock price”, not TIE the company (which is solid). I’m “selling” TIE from the Intuitive Traders portfolio just because it triggered a one-day 5% stop loss that I’ve been keeping in my head. I’m pretty sure a lot of others are taking some profits off the table. I guess we’ll only know tomorrow if today was a buying opportunity.
Marketwatch/Articles I’m Reading
- Bernanke says rate hike may slow down. I thought otherwise. Oh well, stocks go up.
- Get ready to trade drugs! The big guns showed a lot of ammo.
- China raises rates.
- Metals down… because of China.
- Intel talks about turnaround. Repeat after me: “Leaps!”
- I played a “stranggle” on Intuitive Surgical (ISRG). Hopefully it worked. An analysis will be made on my TradeNotes.
- Gold cools off.
- A silver ETF is coming!
Intuitive Traders ScoreCard- April 25, 2006
Link to today’s quotes.
- Titanium Metals (TIE)
Call: 3/16/06
Cost: 42.36
Last: 67.61
Change: 59.61% - Andersons (ANDE)
Call: 3/28/06
Cost: 71.82
Last: 110.94
Change: 54.47 % - Pacific Ethanol (PEIX)
Call: 3/28/06
Cost: 20.11
Last: 33.00 (April 24)
Change: 64.09% - Fronteer Development Group (FRG)
Call: 4/3/06
Cost: 4.45
Last: 5.99
Change: 34.61% - Biodisen (BBC)
Call: 4/13/06
Cost: 17.75
Last: 15.00
Change: -15.49% - Eldorado Corp (EGO)
Call: 4/25/06
Cost: 5.16
Last: 5.06
Change: -1.94%TOTAL: 26.25% (w/o “sold items”, current holdings only)
……….32.55% (ALL)
ethanol productionhttp://www.ethanol-stock.infoThe statistics of sanity is that one out of four Americans suffer from a mental illness, think of 3 best friends if they are ok, then it’s you.ethanol production