October 29, 2009

Emerging Markets ETFs

I was not 100% sure that the top was in in that last post a couple hours ago. I'm leaning much more toward the highs are over now and we've seen the top. I don't think we see new highs anytime this year probably going off what's happening now. I just have to be bearish now. The Russell 2000 small cap index has cracked support. The uptrend is over.

Remember we cracked in July on the major indices and I called it a bear trap which it was and got bullish on the indices. That was a powerful signal. Here are small-caps. For the countries sake I hope they can find some support soon and we trade sideways for some months but this just doesn't look good at all.

Another thing is Shanghai cooled off a long time ago. I guess they will lead us again. EEM is more broad but jeez this kind of sell-off on that kind of volume usually doesn't end well. This is very bad.

Emerging Market ETFs EEM EDZ EDC are at the top of my watchlist. These are some of the most volatile 3 X ETF's right now and I think this will continue for awhile. The bounces should be volatile too.

full disclosure:no positions

October 28, 2009

U.S. Stock Market Analysis

This runs uptrend is still intact but we are getting very close to possibly seeing some potentially dangerous conditions play out. The bull trap I pointed out on financials is not very reassuring when you take what could happen here in the next couple days.

I just noticed some hammers at the bottoms of the last pull-backs. Bulls will want to see some big hammers soon.

There should be a bounce or atleast an attempt to pick up some stocks at this level I circled on the Naz. If not look out! If the Nasdaq closes for a couple days below this support line the rally from the March lows is over. The momentum will be over. How much more downside could play out? I don't know. We could test the March lows or just go sideways. I'd be more inclined towards sideways or slightly down but all this is getting ahead of the next couple days. These next few days are very important. There could still be a new high soon if the support is broken but that doesn't seem very likely to me with the current economic and fundamental indicators today.

Uptrend still intact. Bigger selling pressure today. The bounce could be huge or the attempt could just get slaughtered. I expect some sort of bounce tomorrow.

full disclosure:no position in Nasdaq or S&P 500 ETF's or futures contracts or XLF

October 27, 2009

Nyer Liquidating

Nyer Medical NYER is planning to liquidate after they sell their pharmacies for around $19 million. NYER was a chronic net-net for a long time I looked at a couple years ago. They've only got $5 million in cash on their last balance sheet. Let's say they get the full $19 million that's about $24 mil in cash less a whopping $10 million in total debt. This is assuming nothing changed from the filing date.

The $7.5 mil market cap doesn't seem like much of a spread. They do have $6 mil in receivables. I think a conservative crunch would put liquidation value around $10-12 million but this is just a really quick back of envelope. I don't think the stock even traded that high. It only got to 2.45 or about $9 mil. I don't think I'll be playing this right now but some of you all might want to do some more research and number crunching. It seems like there could be a 15% or so spread there.

The price action is sort of weird for a liquidation news. It opened up the day trading over $2 a share and hit a high of $2.40's per share then steadily sold off all day and closed at 1.86. I imagine the selling pressure was from bitter bag-holders who bought in over the past few years and were happy to dump their shares with the stock up over 100% on the day. That is just market forces based on past price action aka technical analysis.

full disclosure:no position

XLF Financials ETF

I did some TA on the financials with XLF a few days ago. This turned out to be the right read as far as the further breakdown coming. My timing was a a couple days off because I was holding that trade as if the VIX was still over 50. I think this move will probably get a retest of some support if not turn into a short-term major top.

Worst Case For Bulls

That's a possible double top with a failed signal forming if this move prints 13.50. No reason to get ahead though but I am just keeping an eye on that if it happens. I think this down-slide the past couple days might have caught some people off guard after that rebound three days ago...or maybe they're just getting in the Nasdaq leaders.

full disclosure:no position

October 22, 2009

Watch List Adds

Just added these stocks to my watchlists

Long Bias

Short Bias on breakdown

AWSL is looking pretty supernova. Could be good long if continues too along with AUTC

Shorting Financials

I'm shorting financials over night. I'm long FAZ at 19.85. I had thought about shorting as soon as they filled the gap about two days ago but it didn't seem safe enough then. Financial stocks look like toast here. We've got a bear trap. A really ugly bear trap. A break of support and a shooting star here as it looks like everybody hit the panic sell button or either program trades triggered. When it cracked that support around 15.00s there was a pretty big move and no flag. That's why I feel pretty good holding overnight. I'm not trying to get much more out of it. I should be selling tomorrow if there is anymore weakness. The maximum potential downside for XLF is 14ish though. I like this set-up.

full disclosure:long FAZ

October 19, 2009

Peerless Systems PRLS

I posted on Peerless Systems PRLS really quickly on Thursday after glancing over a couple things. I just wanted to get it out there quickly for whoever might have been interested. Looking more closely there are some more good things here along with the stability in cash. Activist investor Timothy Brog who I had the pleasure of speaking with briefly has gotten on the board of directors as chairman. No doubt, the company is now moving in a better direction. In 2008 they sold about all of their intellectual property to Kyocera-Mita Corporation for a pre-tax gain of $32.9 million along with 38 employees. They have a lot of cash to work with to get value out of the company be it an acquisition or some other means. There definitely looks like there is upside to the stock.

Background from 10Q

"The technology we license has addressed the worldwide market for printers (21-69 pages per minute) and multifunction printers (“MFP”) (21-110 pages per minute). This market has been consolidating, and the demand for the technology offered by us declined throughout fiscal years 2009 and 2008.

The document imaging industry has changed. Lower cost of development and production overseas increasing complexity of imaging requirements has resulted in us not being able to effectively compete in this environment. As a result, we sold our intellectual property and transferred 38 of our engineers and support personnel to KMC. Although as a part of the transaction we have retained the right, subject to certain restrictions, to continue licensing and supporting the imaging technology that we had previously developed and to continue to license third party imaging technologies. We are currently pursuing other potential investment opportunities. The strategy calls for aligning our cost structure with our current and projected revenue streams, maximizing the value of our licensed back technologies and expanding our business through investment opportunities.

Our contract with Adobe expires on March 31, 2010. We have had discussions with them to either extend the contract or enter into a different agreement with them. Our discussions have not resulted in an agreement. In order to maximize the value of our Intellectual Property and relationships with our clients, we are exploring how to transition our customer base that currently utilizes Adobe technology to another technology provider."

Time To Buy Crude Oil?

I was watching crude oil over the last couple weeks but this last week I got distracted with some other stocks like my QDEL buy and I missed the easy oil trade. I wasn't watching for a breakout. Let's go back a second. Well, a week or two ago I saw the same exact pattern forming in oil. Fundamentally oil and gold rise because of inflation.

On this chart below I was expecting heavy volume to come on the first move before a breakout. It wasn't there. Usually when a triangle pops it is on volume like gold was. There were two hammers back to back leading right up to the breakout though that I missed. There actually is a triangle that this move has come off of just not the long one I was expecting.

Time To Buy Oil ETFs?
For the very long-term it's a good idea especially on major dips. But holding oil contracts outright vs ETFs is better. For holding for months at a time the etf USL should track oil better vs USO because of the contracts. USO has underperformed oil because it holds short-term contracts. USL holds 12 month futures contracts.

I doubt there is that much short-term upside left on this move but I wouldn't be surprised to see a couple more days before some consolidation. I'm not sure I will put a position on on another breakout because I play oil with ETFs like the double long DXO and I want to see a lot of clear upside that I can swing trade. Maybe I'll take a stab if bigger volume comes here this week.

full disclosure:no position in DXO or any oil

October 14, 2009

Stock Watches For Earnings

I guess everybody knows this week is a big earnings week. Just to keep the cycle going I'll say how well my last watchlist did like I have been doing and hopefully this amazing streak will continue another day. I mean the streak of me picking four or five stocks and one of them is a top percentage gainer on one of the major exchanges. This has happened atleast three times out of the last seven trading sessions or so. I think the streak is two days back to back even too. ROIAK ran 60% just a couple days after I posted it I think.

Last Sunday I posted up CMLS and it was a top percentage gainer on Monday. I Forgot the run? I think it was 30%. YONG was nice to. On Wednesday I posted on MMG and it ran 60% Thursday. On Thursday night I posted the set-up on Sunrise Senior Living SRZ and it ran 44% on Friday. The combined gain of Fridays watches was 69%. I don't think I mentioned it in a post but RAME a stock I put on my Twitter popped big double digits a day or two after I posted it a week back or so. I think there are others but anyway here are my top watches for Monday.

EDIT: LEE 18% on day. CMTP 18% on day


lower priority but still high watches

full disclosure:no positions at time of writing

October 10, 2009

Swing Trade Set-Ups

My gold stock watch MMG from yesterday popped 60% today. I don't expect most of these to pop over 20% in one day soon but who knows. Net-Net FSII just broke out again and has some good technicals going for it. Most of these watches below are suited for a swing trade with the stop loss right below the trend lines or fairly loose. Ideally these might be good entries on slight pull-backs if they happen to come quick or on the next push up depending on the next move.

This is a flu play. They sell point of care flu tests. I think EPS guidance maybe isn't taking fully into account the swine flu panic by offices ordering more product.
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The ticker is CEMJQ formerly CEM I believe
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I've talked about this baby boomer retirement play a lot in the past year. Very bullish chart.
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Trades in a clear trading range. 16.90s is sell target
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Same stock longer-term
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A watch for breakout from this trading range.
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You know the bulls are in control when consumer fashion apparel stocks like American Eagle AEO are breaking out on gaps on huge volume. No doubt retail sales results had a hand in this. It's the direction the market goes on the news that is important. Hey, so what if it is from 0% rates and trillions in stimulus. I'd be happy to long AEO on retest of gap about 17.40ish if it holds. It might just take off though tomorrow but I doubt it. It still would be a spec swing trade though.
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full disclosure:no positions

October 6, 2009

Follow Up On Stock List

That was some list from yesterday. Chinese agriculture stocks like YONG must have all had a good day. YONG had the gap up and run I was looking for. CMLS was a top gainer today etc. Other watches were amazing like ROIAK I've had on watch ran 46%. This shorter trading list for the week wasn't quite as impressive as my hand picked watches. I'm not sure which scans to give my priority now. I'll probably continue to have a lot on my watchlists. I think using call options on some of my top set-ups might do really well.

I think maybe there is a couple people interested in these watches, I don't know. I might put up new lists this week if I make any.

full disclosure:no positions

Gold Stocks List

Gold has just reached new highs of $1,043. I predicted the breakout on gold in early September and presented my thesis for anyone who reads the blog. Like I was looking for and said,"Any congestion would be bullish." Gold did congest around the former highs and that was the signal along with the triangle that telegraphed the move.

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Gold Stocks List
Some gold stocks to buy possibly I am looking at for potential quick trades soon are as follows. The following list is stocks I have picked out solely because of their technical price action. This is a gold correlated stock list but they don't always mimic the price of gold.

GRS had a breakout gap on volume.
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Steady riser
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New Gold also had a gap on volume but it needs to hold $4.30 to look like a buy.
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Metalline Mining looks like it might be late to the party. Looks good on a technical breakout.
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Why buy gold stocks? Gold is a commodity that usually has an inverse correlation with the United States dollar. If the dollar falls because of inflation or hyperinflation its purchasing power thus falls and any safe haven for capital is attractive to invest in. This is why you would want to buy gold stocks. The last time the United States experienced hyperinflation was during the 1970s. Gold went on a tear and was a great investment vehicle during those times.

More gold penny stocks for trades possibly.

full disclosure: no positions in any stocks mentioned at time of writing

October 4, 2009

Chinese Agriculture Stocks

I used a new scan and found some pretty good stocks in play. Check out the volume spikes on these. TTNP from an earlier post is still one of my top watches.

Chinese Agriculture Stock YONG
YONG hit the trend line 3 times and this last time somebody really showed their hand. Looks like a long on breakout. Might not retest that trend line anytime soon. There's no resistance on this chart to.

I checked out some of this companies fundamentals. They are...

into the research and development, manufacturing, and distribution of fulvic acid based liquid and powder nutrient compounds for plant and animal feed used in the agriculture industry in the People's Republic of China.


You would imagine Chinese agriculture stocks doing pretty well in the future. They grew earnings per share 18% this year and are looking for 46% next year. EPS for next year is 1.00 per share and has just been boosted which is good. So we've only got a PE of 8 and very strong growth coming likely in the years ahead. The longer term PEG ratio is something like .30. Very attractive. The balance sheet is healthy with a current ratio of 3 and total debt to equity is just .47.

The only thing I don't like about this stock is it is already up a ton this year. On the other hand the valuation should still look cheap to a lot of people.

If you look closely at this chart and the next one you can see how usually every time it gaps up it runs. Let's keep an eye out for another gap breakout.
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Media company CMLS. Probably a set-up for a buy on breakout. I missed the two hammers back to back off trend line on flag. This volume spike looks pretty telling somebody will take it over resistance I think.
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Mining stock LVCA. Big volume on breakout. I think the spread will be decent and the chance of follow through on this move looks very good.
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full disclosure:no positions

October 2, 2009

Stocks To Play Falling U.S. Dollar

Fundamentally the US dollar is weak. Technically, it is even more weak. As you probably know the dollar has been in a long-term down trend. Well, on the last leg up it formed a double top and has been crashing ever since.

PowerShares DB US Dollar Index Bearish (UDN) trades inverse to the dollar. It's a decent trading vehicle for short exposure as far as a stock goes. Keep in mind the chart below is the dollar short ETF. Click on it to enlarge it. There was recently a breakout gap to the downside. I feel very confident this ETF will test this resistance around 28.50s. I feel confident it will hit mid 29's probably 29.50 as well. So there is still some gain to be had if one was say looking for an addition to a diversified portfolio or swing trading account. I think there is still a good entry right now with a great re-load if there is any pull-back.

I will be putting up more stock plays over the future as the dollar continues to weaken.

full disclosure:no position in UDN

Watch List

I added a couple of stocks to my watchlist. I added ROIAK DANR TTNP. I put a conditional buy order in for DANR. If it hits $.19 I hope to get filled.

TTNP looks like it might have a pop over $1.75 coming. TTNP couldn't go over $1.75 three times. Any pure funnymentals guys/gals. count it. Random chance or an emotional, important price level? Once it breaks over this resistance level I am betting it will be in play. I probably will put a conditional buy market order for $1.80 in here sometime before the market opens. The ascending triangle helps to. Almost always volatility after a triangle.

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full disclosure:no positions at time of writing

October 1, 2009

Short Stock Market With An ETF

I chickened out on my idea to short real-estate with SRS. I was spot on though on the further downside that seemed to be coming after the flag I was looking for to get short. I feel like going here with an ETF to short an index again. I like the volatility in SRS. It's prudent to wait though for more fundamental signals and technical breakdown though. So, I think I will. I think my valuation thesis makes sense and that as economic numbers will probably continue to show that this housing depression and economic recession are different than any in recent history. In other words it's hard to just get back to normal after a credit and housing bubble that lasted for many years. The only problem with a short trade for a couple days or so though I think is it could be possible that when the S&P and other indices finally correct a little the downside might be limited and they just trade sideways for weeks and months.

I was surprised and glad to see that Ben Bernanke said that businesses must be allowed to fail. I don't think he has the right framework for stopping them from becoming systemic though. I haven't read or seen his whole presentation today but it seems like he just thinks if you raise capital requirements and regulate to big to fail can be avoided? He needs to study some history if he thinks investment banks and commercial banks can exist together without major consequences to the system. Long Term Capital Management should have failed in 1998. Breaking up these ridiculous giants like Wells Fargo and Bank of America is the kind of reform that can allow firms that leverage up to fail. There's a reason my 1907 crash paper is second in a Google search for '1907 crash' only to Wikipedia.

I think our system is set up to fail now probably unfortunately though. I might post more on this as time goes by. Not sure if I should buy gold and silver bags or prepare for bartering when we can't afford these interest payments and/or they get raised.

full disclosure:no positions