Vacation

I’ll be taking the next few weeks off from the market, but I won’t be on any nice vacation. I’ve got a ton of things to do- I’ll be attending an assembly, preparing for sister’s wedding, volunteering at a construction project, prepping for my CPA exam, etc etc. Maybe I do need a vacation.

Anyway, I’ll probably just blog on the weekends, and I won’t be able to go looking for trades, but if one comes to me I just might sneak back to the computer and put in an order.

Summer is here… get out and get some sun! There’s more to life than money.

Tomorrow will be interesting as it will mark the last day going into the first three day holiday of the summer.

Here are some plays I’m looking to make:

– RIMM vs PALM: Looks like RIMM is hurting PALM this time. In the long run I expect this gap between the two to narrow. I still won’t give the trophy to Research In Motion just yet- Palm may have given up this quarter, but they are now a step ahead overseas, especially in China. Still, there’s a lot of nice smart phones coming out (did you see the Motorola Q?! Wow.)

– SABA, got hit hard afterhours, eleminating the entire pre-earnings report rally. It now sits on the first support at $5.80. If stock survives a sell-out to the second support at $5.50, play it long to about $6.

–VVUS, (that’s v-v-u-s, not ‘wus’) is down big -10% afterhours on very low volume, 5,100, where as average volume is about half a million. I do expect a bounce off $3.40.

– AAPL, is targeted for mishandling options. That could be interesting since Jobs gets paid by options not salary. Anyway, AAPL is in a mess when you look at the charts. I would say buy under $55, which is the same as short until $55. Just cover before earnings!

– ANDE just split and have diluted their shares with another 2.3 million offering Thursday. Hmmm. What horrible timing. ANDE’s huge run-up is over, I hope people don’t fall for this. Shorting this until the mid $30s.

After today’s big green monster day, I just wanted to make some comments about stocks on the Mometum Meter page.

• TIE– I’m still overall bearish on this expensive stock. The 6% gain today was weak, with volume coming in at 6 million, which is less than the average 8+ million. Anything above $35 then I’ll switch to bullish.
• PEIX– I think I’m more neutral on this stock now. It has been stuck in the $20-$22 range for a while, despite big moves in the stock market.
• XING– stock can get hot very fast. The volume was big, and I think more people are catching on to this stock. With a teeny market cap at 289 million, I think a correction back down below $10.00 is very soon. Still, the stock is too dangerous to short since they haven’t yet reported.
• MED– closed in the red on such a green day! Definitely still bearish.
• BBC– the “buy-orders” are shrinking, the market cap is a mere 243 million, and the P/E is still high. Hard to compare this company to anything since it’s pretty unique. The 3-month chart shows that this stock is not for everyone. Still bearish.
• ZOLT– I was bearish on the news that Hexcel (HXL), another carbon fiber company, wasn’t going to do so well. Zolt is still popular so I’m more neutral.
• BOOM– more like, “kaBooom!” after today’s big jump. This stock has broken out of the short term consolidating stage, but maybe not for too long after IBD gave a negative article from a trader’s point of view.
• MRVL– looks like it’s filling in the gap quite nicely, but when that gap fills up, I’m probably going to switch back to bearish. My guess is that MRVL will be dumped pretty soon.

What about 2% gains in the stock market? As much as lactose can ruin my day, I must admit, I’m relief-rally-intolerant too. Today was one of the biggest rallies I’ve seen in a while (2% across the indexes), but it was poorly played out- data already showed that interest rates were going to be hiked, so why did the market wait for the FOMC meeting before jumping back in? It was as if this whole day was predtermined. “Bernanke will talk at the end of the month, so I’ll just wait.” So what do we get? A “relief-rally.” We just have all those people waiting on the side jumping back in at the same time- this is not what makes a true reversal. We need some type of tangible catalyst to keep things up. We are still in a heavy downward trend, and the more I look at the charts, the more I believe we’ll be heading into a bear market. For example, the tech sector, which was supposed to fuel the rest of the year, is doing really bad, especially the semiconductors- and it’s only the beginning! The meteoric rise of precious metals has entered in a consolidation stage with gold settling strong below $600 after shooting past $700. Finally, energy costs are rising, which is usually bad in an economy that is slowing down, or that the Fed is trying to slow down. Plus, the big oil companies are making huge investments in expanding (I’ve never seen so much consolidating in oil companies at such high price tags before) which tells me that big bets are being placed in oil profits once again. Remember, the highest paid fund managers put their money in oil last year. I don’t see any reason why oil should be cheaper this year.

Anyway, I’ll have to go back to the drawing board to test different scenarios and see where the market is heading. Just be careful with stocks that rose on lower than average volume today, since those tend to be the ones that fail first.

I never like these “self-determined” rallies. We’ll just see if there’s some follow-through tomorrow.

Well, in a few hours we’ll know what to do with our trades. Most of the smart money is on the side. Even the big-time-bloggers like Trader Mike and Kirk are taking these days off. As for me, I’m sitting on half cash, two shorts, and a long, which is pretty ironic since I’m expecting some sort of relief rally.

Keep it tight. Tomorrow there will be blood on the street. We just need to see if it will be the shorts’ or the longs’ blood.

Here are some bad trades I made in the past few weeks. I actually thought some of these trades were obvious picks.

• SEPR– I shorted this stock on a run-up caused by “rumors” of a buyout by Pfizer. The buzz was longer than I thought (investors continued to buy in on this rumor). I should have covered when I found out the bulls owned this one.
• OSTK– went long on this battered stock. It’s definitely over-shorted, but that doesn’t mean it’s going to turn around just yet. Like SEPR, I should have realized that the shorts owned this one.
• FMCN– Shorted this on a large decline, playing the technicals. Then I discovered there was a serious “market-maker” playing with the bids. For example, a huge buy order was placed below market, then as smaller bids brought stock up, the same buy order would reset to a higher price below the market! Who tries to buy a stock at a higher price? This would happen throughout the day, and only works on “green days.” Stay away from these manipulated stocks.