I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
2,859 Blog Posts

Ford Gets All Political and Decides To Oppose Trump’s Refugee Ban

Heaven forbid we scrutinize arrivals from barbaric countries like Syria for one quarter.  The horror of spending a few hours in the airport answering questions.  The tragedy of modifying your life itinerary temporarily.  It’s all too much to bear for Ford Motor Company.  The company’s CEO Mark Fields and chairman of family nobility Bill Ford had to issue a statement opposing the President’s executive order.

They had to.  They could not just run their business and focus on building cars and selling them to car dealerships.  Nope, they had to venture into politics.

Their insolence towards our authoritarian leadership puts them at the front of the line for swift punishment.

Perhaps Fords is bitter for being totally screwed by the federal government during the Great Recession—and event they came into so well prepared they could have been the only surviving American auto maker.  Maybe that’s why they’re picking Trumps pretty chill, temporary block of immigrants from terrorist infested nations like Libya, as their chance to stand against the asshats occupying Washington.

Whatever their motives, it was a mistake.

Ford shares [ticker: $F] have been downgraded from their neutral position, the one earned after an entirely uninspiring 4th quarter performance, to BEARISH.

Just like the Detroit Lions, Fords will lose in a most pathetic manner—when it matters most—with a sub par, distracted, effort.

Sad, really…they really could have been something.

Ford motor company is more interested in playing politics than operating their auto manufacturing business.  By condemning the very temporary immigration ban they will find themselves once again on the wrong side of history, just like when Henry Ford supported the Nazis and Hitler in World War II.

At least they’re consistently wrong.

Bearish.

 

Comments »

YOU’RE FIRED: Tempur Sealy Loses Major Contract with Mattress Firm Holdings, Shares Plummet

Losing a major customer is bad for business.  In the world of bedding, good contracts are hard to come by.  So when Tempur Sealy made the surprise announcement Monday morning that Mattress Firm has terminated ALL contracts with the Kentucky bed maker, all hell broke loose.  Shares of $TPX were off by -30% premarket.

According to the newswire, Mattress Firm Holdings was demanding considerable changes to their agreement, including significant concessions. 

An accord could not be reached.  A formal termination of the contract was delivered to Temper on Friday, January 27th.

The news sent analysts into action, doing their part to add insult to injury.  Stifel, Raymond James, SunTrust, Nomura, and PiperJaffray all downgraded Temper Monday morning.

Bedding is a tough business where the core objective is to occupy as much showroom space as possible, thus improving the likelihood that a consumer will choose your product.  Losing a major contract means way less floor space.  Mattress Firm is the biggest bedding retailer in the United States by far.

Meanwhile, companies like Tuft & Needle are offering a comparable product at significantly lower prices, using an online format—effectively challenging Temper in what is essentially a commoditized space—and operating in a manner that is far less reliant upon contracts with brick-and-mortar retailers.

Shares of $TPX are trading at levels unseen since November 2013, effectively wiping out more than three years of capital appreciation in one fell swoop.

BEARISH

Comments »

NASDAQ Comes into The First Important Week of 2017 Gap Down

NASDAQ futures are gap down heading into Monday trade after an overnight session featuring normal range and volume.  Price worked lower on a balanced session, with most of the downward action coming in the form of a globex gap when trade was opened at 6pm Sunday evening.  A bit more selling came in just after 8:30am, just after the Personal Consumption Expenditure data came out in-line with expectations.

Also on the economic docket today we have Pending Home Sales at 10am, and at 11:30am the US Treasury is auctioning off both 3- and 6-month T-bills, $34 and and $28 billion dollar’s worth respectively.

There are key earnings out this week from NASDAQ-moving companies including Apple Tuesday after-market-close (AMC), Facebook Wednesday AMC, and Amazon Thursday AMC.

There is and FOMC rate decision Wednesday, and Non-farm Payroll Friday.  This is a busy week.

Last week price worked higher across all major US indices.  We had a down Monday that caught a responsive bid and worked higher by midday.  This set up a trend day Tuesday, and then a big gap up Wednesday.  We spent the rest of the week marking time.  The performance of each major index can be seen below:

01292017_IndexPerf

On Friday the NASDASQ printed a normal variation down.  After opening gap up and briefly trading to a new high, price worked lower in the morning, 1-ticked the initial balance low just after 10:30am then resolved the week with side-ways action, ramping higher near end-of-day.

Heading into today my primary expectation is for sellers to press off the open, trading down through overnight low 5140.25 to test 5131.75.  Buyers show up here and two way trade ensues.

Hypo 2 buyers work into the overnight inventory and close the gap up to 5162.  While doing so they take out overnight high 5160.50.  Look for sellers right around 5162 and two way trade to ensue.

Hypo 3 strong sellers sustain trade below 5130 setting up a test below the Wednesday low 5123.50.  Look for buyers down at 5110.75 and two way trade to ensue.

Hypo 4 strong buyers sustain trade above 5161.25 setting up a test of current swing high 5167.50.  Stretch target is 5193.75.

Levels:

01302017_NQ_MP

Volume profiles, gaps, and measured moves:

01302017_NQ_VPgapsMeasuredMoves

Comments »

Model Engaged: Stays Bullish Through Month-End, into FOMC Rate Decision

A full month of bullishness is set to reach a crescendo of sorts, come Wednesday, when we embark on the second month of trade under our new political regime.

It also comes with a Fed rate decision.  Consensus down at the Chicago Mercantile Exchange is for no change in rates (96% probability).  However, and with the stroke of her pen, the venerable Janet Yellen, backroom leader of the free world, could send a chill down the collective spine of investors by unexpectedly raising rates.

This would be bad because, for more than a year now the Fed has been boringly predictable.  That’s a good thing, in case you’re wondering.  It would be a shame to destroy all the goodwill they have built.  According to the “Dot Plot” chart, we only need to nudge a touch higher from our current benchmark rate to be in the happy blue zone:

blue-dots

The NASDAQ, according to ticker symbol $QQQ is up about 6% in the month of January.  How does that compare to other January performances?  Best since 2012.

qqq-jan-seas

Remember 2012?  2012 was really bullish, man.

So let the common man scuffle in the streets, complaining about this or that, wasting their time in a feeble attempt to share their two-cents on the current state of affairs.  Your time and money can be better used foxing around, capitalizing on all the otherwise neglected opportunity.

This week’s model scores support remaining in the bullish labor camp.  Laboring away, with dollars allocated to three and four letter acronyms.

Exodus members: the 116th Edition of Strategy Session is live.  Go check it out for more details on what we expect from the upcoming week.

 

 

Comments »

Cruising: NASDAQ Futures Come into Friday on Top of The World

NASDAQ future are heading into Friday trade gap up after an overnight session feauting normal range and volume.  Price chopped around overnight, briefly trading below the Thursday cash low before traversing the entire range early this morning—mostly after 6am.  At 8:30am GDP and Durable Goods orders data were both below expectations.

Also on the economic docket we have the final January reading of U of Michigan Confidence at 10am and the rig count at 1pm.

Yesterday we printed a normal variation down.  Price chopped sideways, mostly, after extending all-time highs.  At the end of the day sellers spiked onto the tape.

Heading into Friday my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5146.75.  Buyers defend around these prices and we work higher, up through overnight high 5160.75 and probe above the Thursday high 5163.25 before two way trade ensues.

Hypo 2 gap and go, take out overnight high 5160.75 early on and sustain trade above Thursday high 5163.25 setting up a week-ending rally.

Hypo 3 sellers close gap down to 5146.75 then take out overnight low 5139.25 setting up a move to target 5131.75 before two way trade ensues.

Levels:

01272017_NQ_MP

Volume profiles, gaps, and measured moves:

01272017_NQ_VPgapsMeasuredMoves

Comments »

Ford Finishes 2016 With Low-Energy Performance, In-line With Expectations

Ford Motors reported earnings Thursday morning and they were so uninspiring that the stock opened up lower—shares in Fords (sic) are down more than -3% in early Thursday trade [ticker $F].

They beat analyst expectation on the top line:

Ford Reports Q4 Rev. $38.7B vs. Est. $35.2B

Digging through the obfuscated accounting, and using a bit of elbow grease, the company reported bottom-line earnings in line with analyst expectations:

Fourth-quarter net loss attributable to Ford was $783 million or $0.20 per share, compared to net income of $1.87 billion or $0.47 per share in the prior-year period.

The latest quarter’s results were impacted by special items totaling $0.50 per share, including year-end pension  and OPEB remeasurement loss.

Ford had said earlier in January that it expects to record a pre-tax remeasurement loss of about $3.0 billion in the  year ended December 31, 2016 related to pension plans and other post-retirement employee benefits or OPEB plans.

Excluding items, adjusted earnings for the quarter were $0.30 per share, compared to $0.58 per share in the same  period last year.

On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.31 per share for the quarter. Analysts’ estimates typically exclude special items.

Being invested in the once great FoMoCo has been a dead-money endeavor for the last three years, aside from a tiny dividend:

F-3yearperf-2017jan

Despite being well-shoed heading into the Great Recession, and potentially being in a position to benefit from the insolvency of their two biggest competitors (Government Motors and Chrysler), they were boned by the ‘too-big-to-fail’ mentality.

So despite doing everything right, equity holders have been bag holders through this whole kerfuffle.  It does not seem to be a trend that’s changing anytime soon.

OVERALL–Neutral, better investments exist in the auto industry

 

Comments »

NASDAQ Achieves New Highs Overnight; Pairs Gains Ahead of Thursday Open

NASDAQ futures are coming into Thursday gap up after an overnight session featuring normal range and volume.  Price worked more than 20 points beyond Wednesday’s high before sellers stepped in and neutralized the market.  A spatter of data was released at 8:30am including Advance Goods Trade Balance, Wholesale Inventories, and Initial/Continuing jobless claims.

Also on the economic docket today are several low-impact economic releases including Markit Composit/Services PMI at 9:45am, and both New Home Sales and Leading Indicators at 10am.  There is also a 7-year Treasury Note auction at 1pm.

Yesterday we printed a stretched normal variation up.  Price opened gap up, out of balance, at all-time highs and after an open auction buyers stepped in and initiated risk.  They continued doing so throughout the session resulting in a slow ascent into closing bell.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5146.25.  From here sellers continue lower, down through overnight low 5144.25 setting up a move down to 5131.75 before two way trade ensues.

Hypo 2 buyers defend an attempt back into Wednesday high 5148.50.  Buyers then work higher to target overnight high 5168.50 and probe above it before two way trade ensures.

Hypo 3 choppy, two-way trade along the Wednesday high 5148.50.

Levels:

01262017_NQ_MP

Volume profiles, gaps, and measured moves:

01262017_NQ_VPgapsMeasuredMoves

Comments »

Rumor: Kandi Cars Ordered To Halt Sales of Their Electric Toymobiles

Touted as a legitimate competitor to Tesla Motors by some, recognized as a glorified golf cart assembler by many, the Kandi Car Company [that name, SMH, ticker $KNDI] is allegedly being ordered to halt production and suspend sales of eight, I said eight, of their branded cars.  This rumor is being spread by the newsletter pumpers at GeoInvesting [link not found] that somehow made its way onto the news wires.

The Chinese government is bearing down on Kandi cars ahead of the New Year, in hopes of cleansing their republic of this bedraggled excuse of a car company.

kandi-car

Shares of KNDI are down more than -40% over the last year.  Let this be a lesson to all of you—you don’t dabble in electric wheels and come out alive.  Elon (all Praise and Glory to The Leader) will work incessantly, and he will destroy you.

Aside–a great man (Henry Ford) once said, “You can have the Model T in any color you want, as long as it’s black.”  The moral is clear—keep your product line simple and mass produce it.  How has Kandi amassed 8 different models?  They’re like the Alibaba of cars.

As for this rumor, and the short-sellers behind it, take it with a grain of salt.

Overall–BEARISH

Comments »

Onward and Upward: NASDAQ Futures Extend Tuesday Gains with Uninterrupted Ascent

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume.  Price worked higher all night long, working beyond the Tuesday high by 8pm and continually drifting higher throughout the Globex session.  At 7am MBA Mortgage Applications data came out better than last week.

Also on the economic docket today we have House Price Index at 9am, crude oil inventory at 10:30am, a 2-year floating rate note auction at 11:30am, and a 5-year note auction at 1pm.

Yesterday we printed a double distribution trend day.  The day began with a gap up and early rally attempt that was rejected by responsive sellers (a common feature going back the prior 5 trading days).  Then, after filling the overnight gap to the tick [5063.25] price began to rise.  The rally accelerated through lunch—pressing to new all-time highs and continuing to rally for the rest of the day.

Heading into today my primary expectation is for sellers to work into the overnight inventory and work a half-gap down to 5109 before buyers step in and work up through overnight high 5124.75.  No stretch targets available, open air.

Hypo 2 test down to Tuesday high 5104, buyers reject a move back into the range and we continue working higher.

Hypo 3 sellers recapture Tuesday high 5104 then press a gap fill down to 5096.  They press down through overnight low 5095.75.  Look for buyers down at 5092.25 and two way trade to ensue.

Hypo 4 strong sellers sustain trade below 5092.25 triggering a liquidation down to 5069.50.

Levels:

01252017_NQ_MP

Volume profiles, gaps, and measured moves:

01252017_NQ_VPgapsMeasuredMoves

Comments »

NASDAQ Drifts Higher Overnight; Sets Stage for Tranquil Tuesday

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range on abnormally low volume.  Price worked higher overnight, slowly, taking out the Monday high just before cash open.

The economic calendar has a few low/medium impact events to be aware of today.  At 9:45am Markit will announce the Manufacturing PMI number, at 10am Existing Home Sales, at 11:30am there’s a 4-week T-bill auction, and at 1pm a 2-year Note auction.

Yesterday we printed a normal variation down.  Price started the week gap down.  Sellers quickly pressed higher, closing the gap (and then some) before a responsive seller stepped in and reversed prices lower—down through last Wednesday’s low before a responsive bid stepped in.  We then formed a sharp excess low and buyers spent the rest of the day reclaiming much of the morning sell off.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5063.25.  This sets up a move to take out overnight low 5060.  Look for buyers down at 5053 and two way trade to ensue.

Hypo 2, fifth consecutive day to start with a sharp spike higher early on, up through overnight high 5072.25 and a test above swing high 5083 before reversing the entire move and trading down to 5053..

Hypo 3 buyers work higher, up through swing high 5083 and sustain trade in this region, setting up a rally.  Stretch target is 5095.75 then 5100.

Hypo 4 strong sellers press down through 5053 and sustain trade below it setting up a move to 5041.

Levels:

01242017_NQ_MP

Volume profiles, gaps, and measured moves:

01242017_NQ_VPgapsMeasuredMoves

Comments »