WINNERS
BABY ( +6.56% at 24.7, bought at 23.18)
PCX ( +6.13% at 110.12, bought at 103.68)
FCX ( +11.21% at 87.33, bought at 78.52)
LOSERS
HK ( -9.05% at 28.50 bought at 31.96) – partial and completed
CURRENT HOLDINGS
APWR -13.28%
BOH (short) -8.26%
EDU -0.56%
FXP +7.60%
GMXR -0.70%
MEA -6.34%
Trader notes:
This week was just like last week… choppy! But that’s normal for a week full of economic news. Right now, my portfolio looks nasty, but I did however make a lot of good day-trades this week. (Hat tip to Danny and Ragin for trading with me over on GoogleTalk. We nailed FCX! Sorry if you guys missed it, but we executed that trade with 3 minutes left to the close.)
The week closed with a strong +300 day on the Dow, but once again on the fall of oil. Oil had 3 big declining days, which signals we are getting capitulation here. That’s good news for me because I know we are approaching a medium-term energy bottom (I am a contrarian investor when it comes to extreme levels of market volatility, and we’re seeing that in oil at this moment).
Right now, I would not get aggressive long. I am simply waiting for the Vix to get under 20 so I can begin shorting all these sectors I’ve been featuring this past week. As for this week’s trading… I am off my game in the swing-trading department. I had a few bad exit points in PCX, TBSI, and HK. I covered PCX, then it fell 18%, I covered TBSI then it fell 16%, and I sold HK then it went up 12%. Sheesh! Lol. Nevertheless, I did close TBSI and PCX with gains, and my HK was only 1/3 position sized. And I am very pleased with how I handled hedging my portfolio while it was getting attacked. For example, although my portfolio has a strong commodity-bullish bias, I am not afraid to short the weakest energy stocks for a day trade to limit my losses. At one time I was hedged 6:1 AGAINST my commodity stocks on Tuesday, and I actually ended up with a gain! 😉
Jot these down! I’ll be swing trading and day trading these sectors for the rest of August…
– Short solars if FSLR cannot get over 260, cover shorts at 265-270 level. CSIQ, FSLR, YGE, JASO, SPWR, STP. Get long beaten down CSIQ if FSLR above 270 + CSIQ above 29.
– shippers will attempt to consolidate this bottom next week. Try to catch a bounce if it succeeds. Same for China-stocks… I’m waiting for one last bull-rally before the big O.
– Energy! The best way to play energy here is to short the airlines if you are bullish on energy, or get long the airlines if you think USO will continue to slide. UAUA, CAL, HA. Also, in the event energy does bounce, load up on SKF in addition to you airline shorts. (Be careful drunken bulls! An energy relief rally will crush this rally!)
… well, that closes out my first week at iBankCoin! It sure is great to be trading with you all! This weekend, I’ll be playing soccer again. We got called out for a rematch, and from what I heard, they’re recruiting more players. Bring it!! I’m going shopping for cleats.
ALoHa!
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The best way to play energy here is to short the airlines if you are bullish on energy, or get long the airlines if you think USO will continue to slide…
Generally yes, however some airlines and energy producers were / are hedged long. LUV, CHK come to mind. If they made enough on the bull to affect the bottom line, the reverse may also come into play. In general I agree though, and most are trying to boost revenue anyway they can, so that could be a good play going forward. All bets are off after the election.
P.S.: Have you thought about the major network conglomerates going into the election cycle? GE, VIA, T, NWS, TWX, etc.? With the money they’ll all be spending and X-Mas looking tough it might be a decent play.
Locutus, I like your thinking, and thanks for adding LUV to my airlines list. The reason energy-airlines have an almost perfect inverse correlation is because airline’s profits is linked to the cost of oil. Airlines have been HEAVILY shorted for months now, and we are seeing a squeeze here. But, for airlines to push this sector rally further, they will have to do it with earnings not just via commodity prices (which they cannot control). Right now, charging more for baggage is NOT what I want to hear as their strategy to boost earnings.
As for the network conglomerates, I rarely trade those because I am a momentum trader, and the market cap in this boys are too big to catch a nice wave. However, it seems like you know a lot more about them than I do so keep me updated! Honestly, I know very little about this sector, but I’ll look into it because I do have a bearish-bias on retail stocks.
Hello Gio,
Personally the conglomerates all have lending losses or debt. they always take a hit somewhere else even if the network ad revenue comes in strong. I think old Rupert has an ace up his sleeve though…
If u r a mo mo guy what r your thoughts on WFMI? TGT?
Did you catch a piece of X this spring? I was touting X on here in Jan. when everyone was a woolly bear. LOL
I forgot to ask if you were mostly momo long or both.
BTW, watch CLF for any weakness, that was my grandpappie’s old company, but OMG!
Locutus.. WFMI is trading right at the 52-low and it had no bounce today. I wouldn’t want to get long that. TGT, on the other looks like a good stock to ride this rally if you believe in it. I think I will be buying HANS next week and hold until this rally dies.
As for X… I’m still waiting for steel to bottom, and would like to get long X. For now, I am long MEA which is somewhat correlated. If X makes a bounce, MEA should have a huge wave from X’s ripples.
Hello Gio, Jeeze, I’m just lurking here. No dude, sorry, I meant short VFMI & TGT. I should make myself clear, also short CLF and HK. X was last spring’s trade. I’m really quite low on long ideas. I don’t trust this rally at all. I think it only has one more month, tops. Maybe SPX 1350 then down to 1150. I have very few positions and generally don’t risk very much. I mull stuff over until it’s too late usually. I am looking to go long the big caps at some point, but like houses the time frame keeps getting pushed out. Almost all short term treasuries. I do like to kick it around though…
Just for the record at the close of 8/8/08:
TGT 48.75
WFMI 18.65
CLF 90.26
HK 29.61
Haha. cool. you should get a blog.
Yeah, I’ve got a couple blogspot blogs, none of them financial. Re CLF: The iron ore business is tough. Very energy intensive. All the open pits fill with water and must be constantly pumped out. Then there is the mining operations, then the refining into taconite pellets. Then they used to ship them across the great lakes to the foundries, which use nothing but huge amounts of high quality coal for smelting. CLF was trying to acquire a coal company so they could secure that end of the equation but some rich shareholder is fighting them. I think he is afraid of getting over-extended. I expect slowing demand, a push toward recycling. Throw in an election which may be unfriendly to coal and mining – long term I don’t see how they can maintain what they are doing now.
BTW, nice chart on BABY. He he, you may have got out at the exact top. 🙂
The first bubble to break was the financial, then the credit then the oil and now this last bubble is the consumer. That’s 72% of GDP. So, I just needed some confirmation that the DOW next leg down would end up near 9200-9600
Gio:
How can we amateurs participate in the GoogleTalk?
yeah that was fun we should do that again
Some of Nebraska Beef’s products were sold by Whole Foods Market, which also announced a recall Friday. Whole Foods is recalling fresh ground beef sold between June 2 through Aug. 6 because of worries about E. coli contamination.
A Whole Foods spokeswoman said it had received reports that seven people in Massachusetts and two people in Pennsylvania who shopped at Whole Foods Market became ill…
Just a warning re the airlines from OEW:
>> Crude has had quite a correction from the July $148 high, as it hit $115 on friday. It’s currently in the middle of our $110-$122 support zone, and has nearly reached the 34 wma at $114. Expecting this wave 4 downtrend to end shortly. <<
Rather add to energy, short airlines and buy SKF around 100 as the talking heads have all been proclaiming a bottom this weekend.
Next Thurs – Fri WMT ANF JWN KSS JCP report earnings.
I think the DOW goes to 9600 in one day ( and they have to halt the market three times) just kidding.
Those earnings are going to be closely watched.
I’m 50-50 coin toss on what the market will do.
Hey Gio—
Gary justs NAILS commodities longer term, next nine month’s out__You’ll have to email him to get the one time only free newsletter—you won’t be sorry.
http://slopeofhope.com/2008/08/the_risk.htm#comment-1146851
Zenprofit, I just signed up for GoogleTalk as bocabankscoin (they wouldn’t let me use just boca, too short). I guess we could always message each other.
boca:
See that you’re set up now. How many can be on the same “call”. I have been using Skype for 3 years for all of my US and Canadian telephone calls. GoggleTalk seems the next step. I have OK’d you as a GoogleFriend too.
OK, I’m using the Googletalk “gadget” so I’ll go login now.
Hey googLe talkers… i’ll be creating a googleTalk account just for ibankcoin. I think we need a chatroom for iBC. maybe in the future?