The game plan this week is rather simple, go back to RF basics. The plan will go back to keeping high cash levels and buy cash rich firms, on scale. I don’t want to be short commercial real estate anymore, only a select few will it work. The short squeeze that went down in CRE on Friday was something I have never seen before and I got caught in the middle. My overall portfolio was in the green but I could have DRILLED FRIDAY if I would’ve stayed away from the Leveraged ETFs. I still own FAZ and some SRS and I wouldn’t be surprised to see both of them to print $2 this week but for some reason, I just don’t care. I might buy calls on the URE or FAS to hege myself. In addition, a big meeting is Wednesday to reinstate the uptick rule (and it will be passed).
Now let me say something on these ETFs, particularly the FAZ. FAZ is technically a ETF but it’s really not in my view. FAZ is a market sentiment indicator in my personal opinion, similar to the VIX. When the market is doing badly, the FAZ explodes, and of course vice versa. However, timing is really the key because I think we are due for a pullback. The VIX is rather interesting right now. It’s below $40 and if that holds, we can see another round of buying very soon. Some VIX future traders say the trade is manipulated and the VIX futures show we are going back to 6800 but I don’t know about that. If you are a Jim Cramer lover (I’m not) he said Friday on the Street.com that the market will pullback 50% and recommends staying on the sidelines. Q1 Earnings come this week and that will tell a lot. The ones I am watching are: Tues – AA, Weds – FDO, and Thurs – JOSB. I took a position in FDO because I think their earnings will beat estimates because they will thrive in this type of environment. $0.60 is the EPS estimate, about 35% growth from a year ago, however, I think they can drill it with the economic slowdown. Hedge funds have been trying to short this and DLTR since 20% ago and just can’t take them down. No lie, I have heard $70 price targets for DLTR, lol. If they miss, it will be ugly because the bear short raids will invade this bad boy aggressively. From a chart standpoint, the stock doesn’t look great but the fundamentals are there and they are hiring for jobs, plus this is the only pullback I have seen in the stock because I have wanted to buy it for a while now. Here is a link to research some analyst views on the FDO (http://finance.yahoo.com/news/Analysts-bullish-on-Family-apf-14830861.html) . Lastly, I am contemplating JOSB. As dumb as it sounds, people are probably buying suits now because they are going on job interviews. JOSB had a 40%+ short interest but that has been reduced because the shorts have been covering, from $19 in early March to about $30 now. The chart on this stock looks incredible, however, I currently have no position.
I am hoping for a JAVA bid as well. I think they can get bought at $9.50-$11. They have about a $1 in net cash per share, so IBM may go $10+ but the problem will be pushing it through antitrust committees. I will be out by then, just doing a trade and boom, I am out. If IBM walks away, the stock is going to $5. I bought some April puts as protection, just in case the deal falls through.
Lastly, I will bring back a Stock Under $10 for tomorrow, my third. The first pick was, TTWO was mentioned and is up 35-40% since then. TIE was the second pick mentioned and is up 25-30%. I will introduce a third tomorrow and hopefully the streak can continue!
Saturday, April 4, 2009
Friday, April 3, 2009
market wrapup
Words can't describe the pain from this today. I sold most of the srs for a 350 loss and my faz position is small anyways so I held it for a hedge. After that some how I ended up today, but I felt like I lossed. Notice the only losses I've had in two weeks come from ERY and now SRS.Leveraged etfs are now manpulated by quants, I truly believe. As for gains, everything shot up, and ill hope for a JAVA bid by monday.
Enjoy the weekend and ill have some postings!
Enjoy the weekend and ill have some postings!
RF BUY - JAVA
Bought 150 shares at $8.30 in Pre-Market. Expecting the IBM bid soon, hoping for $10 a share.
Market Outlook - April 3rd
Futures are slightly up today but the big news comes at 7:30p from the Jobs Report. I think that could control the market, either way. As for the S&P, the RSI is above 50 but not over 70, which shows great strength and NOT oversold territory. My personal indicators show we are overbought but from a technical perspective, we could go to 875.
From the long side, I like Energy, Basic Materials, and Commodity based firms. I like ERX, CVX, COP, FCX, PCU, AA, FDO, DLTR, and AMZN. Stocks under $5, with fair risk/rewards are TLAB, CIEN, and possibly CENX, if you like to take some risk. As for financials, I think they can pause soon, hence my short position. As for option activity, there was some heavy call buying in C around the $5 strike.
From the short side, SRS is really attractive at these levels.
Be back with some posts later, good luck.
From the long side, I like Energy, Basic Materials, and Commodity based firms. I like ERX, CVX, COP, FCX, PCU, AA, FDO, DLTR, and AMZN. Stocks under $5, with fair risk/rewards are TLAB, CIEN, and possibly CENX, if you like to take some risk. As for financials, I think they can pause soon, hence my short position. As for option activity, there was some heavy call buying in C around the $5 strike.
From the short side, SRS is really attractive at these levels.
Be back with some posts later, good luck.
Thursday, April 2, 2009
Market Wrapup - RF Technicals are at pivtol point
Sorry for the late delay, been really busy. The market rallied huge today, monster gains across all the indexes. I didn't buy anything into the rally, only some ultrashorts, to hedge myself and keep my gains (and hopefully expand them).
As for the market, we are at a pitval point. My indicators show we are officially overbought; however, with the DOW arounds 8000, mutual fund managers may come in and start buying. According to the RF test, I think we can retrace an easy 10%; however, if cash comes in off the sidelines, this day markets the beginning of the buying and zoom we go. I bought some FAZ and SRS today because I think a pull back is in need; however, we may not get it and its a tiny percent of my portfolio, in case we rip higher.
Going forward I will keep my long inventory in: PCU, TTWO, NTGR, and IBKR.
In the longer-term, I will build positions in select Financials, Energy, and Commodity based names. For the short side, I will aim at commercial real estate and select oil service names.
My asset allocation is right now (in this order):
1. Cash
2. Long
3. Short
4. Fixed Income (Long Treasuries)
An ideal porfolio in this market condition if you have to be fully invested is (in my view):
20% long treasuries or short-term corporates (like berkshire, GE, or Utilities)
30% short (Com RE, Oil Explorations Firms)
50% long (Financials on a dip, Energy, Tech, Industrials, Basic Materials)
I think we will catch a short-term dip in financials, then I will buy them. I would avoid Citigroup due to the broad dilution of shares, from the government cash injection. The firm has limited upside in its equity because of this, in my view. BAC is an interesting one. They had a great bank to begin, bought Countrywide, which had junk but also some good stuff, and one of the best brokerage houses in the world, in Merill Lynch. I might buy some of this on the dip as a speculative financial; however, JPM will be the best of breed. I like high teen's, low $20's for entry points in JPM. Jamie Dimon (CEO of JPM) bought $15 million worth of stock at $22, so I would try to get below that for an entry.
As for the market, we are at a pitval point. My indicators show we are officially overbought; however, with the DOW arounds 8000, mutual fund managers may come in and start buying. According to the RF test, I think we can retrace an easy 10%; however, if cash comes in off the sidelines, this day markets the beginning of the buying and zoom we go. I bought some FAZ and SRS today because I think a pull back is in need; however, we may not get it and its a tiny percent of my portfolio, in case we rip higher.
Going forward I will keep my long inventory in: PCU, TTWO, NTGR, and IBKR.
In the longer-term, I will build positions in select Financials, Energy, and Commodity based names. For the short side, I will aim at commercial real estate and select oil service names.
My asset allocation is right now (in this order):
1. Cash
2. Long
3. Short
4. Fixed Income (Long Treasuries)
An ideal porfolio in this market condition if you have to be fully invested is (in my view):
20% long treasuries or short-term corporates (like berkshire, GE, or Utilities)
30% short (Com RE, Oil Explorations Firms)
50% long (Financials on a dip, Energy, Tech, Industrials, Basic Materials)
I think we will catch a short-term dip in financials, then I will buy them. I would avoid Citigroup due to the broad dilution of shares, from the government cash injection. The firm has limited upside in its equity because of this, in my view. BAC is an interesting one. They had a great bank to begin, bought Countrywide, which had junk but also some good stuff, and one of the best brokerage houses in the world, in Merill Lynch. I might buy some of this on the dip as a speculative financial; however, JPM will be the best of breed. I like high teen's, low $20's for entry points in JPM. Jamie Dimon (CEO of JPM) bought $15 million worth of stock at $22, so I would try to get below that for an entry.
RIMM
Just destroyed estimates, if u owned the 50 calls ull be up 1000% from the post recommending them at .90 cents
Jobs Data
Terrible! Trying to take down futures, may the bulls win!
Update. Sold 250 JASO at 3.90 in pm, 140 profits, 18% gain. Still have 400 shares
Update. Sold 250 JASO at 3.90 in pm, 140 profits, 18% gain. Still have 400 shares
Wednesday, April 1, 2009
Market Outlook - RF Wins!
Today is the big day with FASB leading the charge. I think FAZ might seriously die today, along with many hedge funds that were short. I bought hard into the dips and it looks like it'll pay off, actually, futures up 2%+ for all indices.
As for the mark to market trade, the UYG calls should easily double. I still own about 18 contracts on the UYG $3 calls, which I bought at $0.15. I sold my other 17 yesterday for some safety but right now its at $2.90 in premarket (up $0.21) so lets hope it holds.
As for stocks under $5 dollars, look at BIOS and GU. These maybe longer plays but are worth a look. We are going to rip higher and I have been saying this week that I think 777 is the floor (at least for the short-term). In addition, look for smallcaps to rip today. I will sell some stuff today to book some winnings, so good luck, chant UYG for me!
Update I (7:20a): Juan Villarzu, former head of world's larget copper company , Codelco, said yesterday that Copper will climb 34% to 61%. “I expect within no less than six months, the copper price is somewhere between $2.50 and $3.00 per pound.”
Right now it's around $1.80, PCU and FCX can rip on this!! My biggest current position is in Copper, via PCU and JJC. Remember, FCX and PCU used to both sell of $100, it copper rips and supply gets tight (they have slowed mining so its possible) these names will rock much higher.
As for the mark to market trade, the UYG calls should easily double. I still own about 18 contracts on the UYG $3 calls, which I bought at $0.15. I sold my other 17 yesterday for some safety but right now its at $2.90 in premarket (up $0.21) so lets hope it holds.
As for stocks under $5 dollars, look at BIOS and GU. These maybe longer plays but are worth a look. We are going to rip higher and I have been saying this week that I think 777 is the floor (at least for the short-term). In addition, look for smallcaps to rip today. I will sell some stuff today to book some winnings, so good luck, chant UYG for me!
Update I (7:20a): Juan Villarzu, former head of world's larget copper company , Codelco, said yesterday that Copper will climb 34% to 61%. “I expect within no less than six months, the copper price is somewhere between $2.50 and $3.00 per pound.”
Right now it's around $1.80, PCU and FCX can rip on this!! My biggest current position is in Copper, via PCU and JJC. Remember, FCX and PCU used to both sell of $100, it copper rips and supply gets tight (they have slowed mining so its possible) these names will rock much higher.
Market Wrapup
Sorry guys, no wrapup today, got a busy nite. Ill be back early am with a solid outlook and some stocks under $5.
Peace
Update I: Commodities King Dennis Gartman says the "Spring Trade" is Buy Copper and Shippers! He must of looked at the blog yesterday (jk) because your boy RF bought mad copper plays (PCU and JJC) and I have been playing shippers (GNK and DRYS).
Top Copper Plays: FCX, PCU, JJC (copper index fund)
Top Shipper Plays: DRYS, EXM, and GNK
Peace
Update I: Commodities King Dennis Gartman says the "Spring Trade" is Buy Copper and Shippers! He must of looked at the blog yesterday (jk) because your boy RF bought mad copper plays (PCU and JJC) and I have been playing shippers (GNK and DRYS).
Top Copper Plays: FCX, PCU, JJC (copper index fund)
Top Shipper Plays: DRYS, EXM, and GNK
RF BUY UYG CALLS (M2M Play)
Bought April $3 calls on UYG for $0.15
May be worthless but "I like to roll the dice on occasion"
May be worthless but "I like to roll the dice on occasion"
Terrible Jobs Data
Terrible job data, I may add short exposure for help. Looking at oii and bas
Also if u think we will bounce, play short squeezes. Ill have a list in a bit
Also if u think we will bounce, play short squeezes. Ill have a list in a bit
Market Outlook - April Fool's Day
Today will be very interesting. Futures are down about 9 points right now but we have tons of economic data, coming out today. MBA applications is due out this morning, as well as some pending home sales data, so I am hoping for some good numbers. Yesterday's late day selloff really hurt technical indicators that I monitor, particularly the accumulation/dist. measures.
We are in a tough zone, so if you trade, I'd play small. The bears are still pulling on weak economic data, like jobs, as well as this GM bankruptcy. This auto stuff can really give the shorts some pull. On the bull side, we can hope for some good data today, as well as the meeting tomorrow. I really don't believe many hedge funds will be short into tomorrow, so I really think we could rally today or tomorrow, on short covering alone. I will use this rally, to sell some select longs and maybe build some short exposure, in case we retrace.
As for picks, it's hard to say. I bought some HA for a technical breakout but normally speculative picks get nailed when we go down. I will hold them for a while until the pain gets too bad. If you play leveraged ETF's, I would play small, just because of the mood swings of the market. I personally like the TLT for a less risk play and I believe we can get $5-$15 points of upside. In addition, I still like firms like NTGR and IBKR. Netgear has really held up well, I want it to come back to $10, so I can back up the truck but I think she is gone. Netgear has no debt and $6 of cash per share, great value play! IBKR has a great business model and a amazing balance sheet. I don't calculate cash per share ratios on financials because it can be misleading (cash may from brokerage holdings than real cash). One of these two will be my top holdings in due time.
I will be back, if I make any posts, good luck today
We are in a tough zone, so if you trade, I'd play small. The bears are still pulling on weak economic data, like jobs, as well as this GM bankruptcy. This auto stuff can really give the shorts some pull. On the bull side, we can hope for some good data today, as well as the meeting tomorrow. I really don't believe many hedge funds will be short into tomorrow, so I really think we could rally today or tomorrow, on short covering alone. I will use this rally, to sell some select longs and maybe build some short exposure, in case we retrace.
As for picks, it's hard to say. I bought some HA for a technical breakout but normally speculative picks get nailed when we go down. I will hold them for a while until the pain gets too bad. If you play leveraged ETF's, I would play small, just because of the mood swings of the market. I personally like the TLT for a less risk play and I believe we can get $5-$15 points of upside. In addition, I still like firms like NTGR and IBKR. Netgear has really held up well, I want it to come back to $10, so I can back up the truck but I think she is gone. Netgear has no debt and $6 of cash per share, great value play! IBKR has a great business model and a amazing balance sheet. I don't calculate cash per share ratios on financials because it can be misleading (cash may from brokerage holdings than real cash). One of these two will be my top holdings in due time.
I will be back, if I make any posts, good luck today
Tuesday, March 31, 2009
Financials Update
The world's top financial analyst, Meredith Whitney, came out today and said "she would NOT be short financials going into earnings"
RF Top Bank Pick: JPM
RF Top Bank Pick: JPM
Market Wrapup
This market is flat out crazy. The tape is really choppy and the battle between bulls and bears is growing. The bulls feel like the bottom is in and see the sp to 1000 by summer while the shorts are shorting because of the gm bankruptcy and Q1 earnings due out soon.
I made some buys and sells today. I bought some copper based stuff, as well as HA on a technical play. I sold my RBY and a third of JASO stake,around the time of the update. The price action is wild in these names but with obamas plan and chinese subsidy, I like solar (its very volatile though).GNK is a loser, so ill dump very soon.
The weak close surprised me but not really. I'm about 60% cash and have treasury exposure, no short exposure. We shall see about tomorrow, adios!
I made some buys and sells today. I bought some copper based stuff, as well as HA on a technical play. I sold my RBY and a third of JASO stake,around the time of the update. The price action is wild in these names but with obamas plan and chinese subsidy, I like solar (its very volatile though).GNK is a loser, so ill dump very soon.
The weak close surprised me but not really. I'm about 60% cash and have treasury exposure, no short exposure. We shall see about tomorrow, adios!
Computer shorts
BIO. PH. CAN. WLK. AMSF
Not from me, just my system pick short sell picks. Forgot to post at 10a
Not from me, just my system pick short sell picks. Forgot to post at 10a
JTX update
If u got in at $3.80 with me, hold half even at these levels at $5.50. Take over chatter is high, liberyt tax took a 9% stake!
U heard it hear first
U heard it hear first
JASO update
Printing $$$ for now be careful, its moody
UpdateII: At $3.60 we are rolling! I'm long 1000 will cut a third soon. Fun just starting here
UpdateII: At $3.60 we are rolling! I'm long 1000 will cut a third soon. Fun just starting here
Market Outlook - March 31st
Futures up today, I hope they hold. I have no short positions because I am betting on a rally going into Thursday's mark - to - market meeting. I think the FASB will alter alot of rules; however, suspending mark-to-market probably won't happen. If it does, we will rally 400+ pts in a given day.
As for financials, FAS under $5 is rather an eye look because hedge funds don't want to be short going into this meeting. I would hope for a bigger pullback closer to $4 then scale in (if you want to buy 500, buy like 200 first and avg down to improve cost basis). We might not get to $4 and as of 6:00a today, it was up 8%.
Stocks you want to watch, include:
RIMM - Report earnings Thursday but everyone I am hearing is saying by it into earnings. I have to admit, everyone I see has a blackberry and their estimates are conservative; however, its a 50-50. As for some inside information, Goldman Sachs is telling clients to buy it ahead of earnings on Thursday (I don't make investment decisions based on Goldman, but they sent a note to their clients).
DLTR and FDO - These "dollar" retailers are so hot and continue to smoke. I will try to catch them on a pullback and hold into earnings. These estimates seems too conservative as well.
BKE - Has high cash levels, with high short interest. Niche retailer but you may know more about the retailer than I do.
SNDA - Chinese video games.
SHORT SELL IDEAS:
High debt oil firms: HERO and BAS are probably going to $0. If you want to short, short these on rips.
Politics are running this market folks. It's crazy, news from Washington has moved the markets for the past two Mondays, in dramatic ways. Keep an eye on the auto situation because that is the biggest killer on the market. As for my portfolio, I plan on holding the TLT, NTGR, TTWO, and IBKR for a long period of time. The rest, I will probably cut on a rip. NTGR, TTWO, and IBKR have amazing balance sheets and will be nice longs (in my view). I may take a stake in RIMM, unsure, perhaps maybe calls. I like the April $50 calls selling around a $1.
Good luck out there, hope you make a killing.
As for financials, FAS under $5 is rather an eye look because hedge funds don't want to be short going into this meeting. I would hope for a bigger pullback closer to $4 then scale in (if you want to buy 500, buy like 200 first and avg down to improve cost basis). We might not get to $4 and as of 6:00a today, it was up 8%.
Stocks you want to watch, include:
RIMM - Report earnings Thursday but everyone I am hearing is saying by it into earnings. I have to admit, everyone I see has a blackberry and their estimates are conservative; however, its a 50-50. As for some inside information, Goldman Sachs is telling clients to buy it ahead of earnings on Thursday (I don't make investment decisions based on Goldman, but they sent a note to their clients).
DLTR and FDO - These "dollar" retailers are so hot and continue to smoke. I will try to catch them on a pullback and hold into earnings. These estimates seems too conservative as well.
BKE - Has high cash levels, with high short interest. Niche retailer but you may know more about the retailer than I do.
SNDA - Chinese video games.
SHORT SELL IDEAS:
High debt oil firms: HERO and BAS are probably going to $0. If you want to short, short these on rips.
Politics are running this market folks. It's crazy, news from Washington has moved the markets for the past two Mondays, in dramatic ways. Keep an eye on the auto situation because that is the biggest killer on the market. As for my portfolio, I plan on holding the TLT, NTGR, TTWO, and IBKR for a long period of time. The rest, I will probably cut on a rip. NTGR, TTWO, and IBKR have amazing balance sheets and will be nice longs (in my view). I may take a stake in RIMM, unsure, perhaps maybe calls. I like the April $50 calls selling around a $1.
Good luck out there, hope you make a killing.
Monday, March 30, 2009
RF Position Update - Equities
With a day like this, I want to give an update of my holdings and the reasons why I hold them (I think this is a good process for anyone).
NTGR (Bought around $11) - Solid tech company with a great brand. The business is a bit cyclical right now; however, they are a dominant player and will guide the storm. The main reason why I owe this firm is because of the great balance sheet. The firm has nearly $5.80 in cash per share (represents 50% of the current stock price) and has no debt. Liquidity will not be an issue and these cash levels will attract fund managers. Only down $0.25 today, not bad.
TTWO (Bought in low $6's) - Great video game maker, with good partnerships. The firm has one of the best video games in the world, Grand Theft Auto, and that game is their cash cow. Analyst's believe it will sell 50% more copies than last version; however, the downside is that the game comes out 4Q of 2010. This year, they will not be profitable, which may reduce their cash per share level; however, I believe their estimates are too conservative. The stock has about $2.50 of cash per share and a great balance sheet. This could be a takeover candidate.
TLT (Bought today around $105) - This is my "hedge" so to speak. I believe this and the dollar will be the safe havens if we continue to fall. In addition, the fed will be buying long treasuries, which will drive up the prices of bonds, while simutaneously dropping yields and borrowing costs (bond prices and yields are inversely related). Therefore, if prices of treasuries increase, the TLT will increase. I see $115 possible here and is a short-term play.
JASO (Averaged around $3.30) - This is about 20-30% from the high on Wednesday, so I initiated a position. The 52 week high is $26 and 52 low is $1. I like the risk reward here; however, risk is high here. China also announced a solar subsidzing plan that could stir these stock up, really high. The plan has not been released in full; however, if it pans out, all solar will trade higher. I like this as my spec play but it carries a lot of risk and can drop from these levels in a bad market.
IBKR (Bought at $15.68) - This is an interactive broker business with a great model. They offer professional brokerage services and market maker business, that is very low cost and extremely profitable for the firm. This is more of a long-term play; however, I will build into this name.
GNK (Bought at $14) - This is a tiny position and has done nothing. Shipping has been improving, as well as the baltic dry index; however, these are very volatile and can hurt a portfolio. I may kick this name; however, if the market takes off, so will this. I believe the story is fair but I came to dance to early.
RBY (Bought at $1.49) - This is a very tiny position as well, on a gold miner. Basically, they stumpled on a huge gold discovery and I took a position to see how buyers would react. I honestly think the firm could get a takeover bid, based on this discovery but I am not betting on it. I will keep at $1.35 stop and kick it but it's holding up well, so I can't complain.
Lastly, I have some option plays and about 70% in cash. Cash is key and the "lean" for the market is to the downside. I really don't think we will break 777 but its looking very possible. My best advice is to keep high cash levels, so if stocks falls, you can scale in for a good cost average.
NTGR (Bought around $11) - Solid tech company with a great brand. The business is a bit cyclical right now; however, they are a dominant player and will guide the storm. The main reason why I owe this firm is because of the great balance sheet. The firm has nearly $5.80 in cash per share (represents 50% of the current stock price) and has no debt. Liquidity will not be an issue and these cash levels will attract fund managers. Only down $0.25 today, not bad.
TTWO (Bought in low $6's) - Great video game maker, with good partnerships. The firm has one of the best video games in the world, Grand Theft Auto, and that game is their cash cow. Analyst's believe it will sell 50% more copies than last version; however, the downside is that the game comes out 4Q of 2010. This year, they will not be profitable, which may reduce their cash per share level; however, I believe their estimates are too conservative. The stock has about $2.50 of cash per share and a great balance sheet. This could be a takeover candidate.
TLT (Bought today around $105) - This is my "hedge" so to speak. I believe this and the dollar will be the safe havens if we continue to fall. In addition, the fed will be buying long treasuries, which will drive up the prices of bonds, while simutaneously dropping yields and borrowing costs (bond prices and yields are inversely related). Therefore, if prices of treasuries increase, the TLT will increase. I see $115 possible here and is a short-term play.
JASO (Averaged around $3.30) - This is about 20-30% from the high on Wednesday, so I initiated a position. The 52 week high is $26 and 52 low is $1. I like the risk reward here; however, risk is high here. China also announced a solar subsidzing plan that could stir these stock up, really high. The plan has not been released in full; however, if it pans out, all solar will trade higher. I like this as my spec play but it carries a lot of risk and can drop from these levels in a bad market.
IBKR (Bought at $15.68) - This is an interactive broker business with a great model. They offer professional brokerage services and market maker business, that is very low cost and extremely profitable for the firm. This is more of a long-term play; however, I will build into this name.
GNK (Bought at $14) - This is a tiny position and has done nothing. Shipping has been improving, as well as the baltic dry index; however, these are very volatile and can hurt a portfolio. I may kick this name; however, if the market takes off, so will this. I believe the story is fair but I came to dance to early.
RBY (Bought at $1.49) - This is a very tiny position as well, on a gold miner. Basically, they stumpled on a huge gold discovery and I took a position to see how buyers would react. I honestly think the firm could get a takeover bid, based on this discovery but I am not betting on it. I will keep at $1.35 stop and kick it but it's holding up well, so I can't complain.
Lastly, I have some option plays and about 70% in cash. Cash is key and the "lean" for the market is to the downside. I really don't think we will break 777 but its looking very possible. My best advice is to keep high cash levels, so if stocks falls, you can scale in for a good cost average.
Market Wrapup
I got lit up across the board today, but not as bad as I thought. The bears ran with the ball today but a rally is coming. I bought IBKR today, solid firm with a great business model and balance sheet. Bought some JASO to give me some juice as well. Banks need to rally to scare the bears but the put buying in some banks like WFC is scary. I'm about 70% cash and will buy long but rather not short on big down days.
Ill be back late tonight, just brush off today and if u owned FAZ, celebrate
Ill be back late tonight, just brush off today and if u owned FAZ, celebrate
Solar
I bought some JASO today and buying more now. Just know solar and biotechs can rip 40% either way in a day. I like JASO but also know I can get hit hard but its a tiny part of the portfolio.
Market Update
I am taking hit today, straight up. I hedged myself with the SRS but sold it for a quick profit. I bought some TLT to get a little treasury exposure, with the fed buying long-term bonds, this should increase because the prices of the treasuries will increase (while yields drop). I bought a little JASO today also, for some solar fun.
The market is tanking because of the fear of the big automakers going bankrupt. Personally, I don't think they should have fired Wagner, the problem isn't him, its the UAW chokehold. Until that is fixed, they will have issues. As for market movers, nothing is up really. Capital One (COF) is tanking, down 17%, so I wished I would've shorted that Friday. Finanicals as a whole are getting smacked but that might change, with the mark to market meeting coming up Thursday.
I may look to buy more today and I will post. I'm not a market predictor but I don't think we will go through support at 777 and with the Thursday meeting, many hedge funds will not want to be short.
The market is tanking because of the fear of the big automakers going bankrupt. Personally, I don't think they should have fired Wagner, the problem isn't him, its the UAW chokehold. Until that is fixed, they will have issues. As for market movers, nothing is up really. Capital One (COF) is tanking, down 17%, so I wished I would've shorted that Friday. Finanicals as a whole are getting smacked but that might change, with the mark to market meeting coming up Thursday.
I may look to buy more today and I will post. I'm not a market predictor but I don't think we will go through support at 777 and with the Thursday meeting, many hedge funds will not want to be short.
RF Take On Selloff
I believe this sell off is well needed and we will go farther, however, not too much. My gut and charts tell me that we will pullback to 777 then bounce but its just my take.
Stocks to Watch
Possible spec plays:
YRCW, JASO, HA, LMC
Shorts:
HAL, OII, RIG, WRI, MAC
My system picks will be up at 10ish
YRCW, JASO, HA, LMC
Shorts:
HAL, OII, RIG, WRI, MAC
My system picks will be up at 10ish
RF BUY - SRS (Premarket)
Bought 40 SRS at $57
Update: The voices in my head were right, looks like we are opening at 797 on the S&P.
Update: The voices in my head were right, looks like we are opening at 797 on the S&P.
Sunday, March 29, 2009
Strategy for This Week and Rest of Year
I am going to take the time and kind of lay out my strategy here, to just give you an idea of my gameplan for the next few months. With the market rallying about 25% since March 9th, we should and I hope we get a strong pullback. The timing of this is key though. From studying the options market and various other indicators, we are in a weird zone. My technical indicators show we NOT fully overbought; however, this rally is very strong and happened soon, for a few reasons. One is that the market was “overshorted”. Many hedge funds were in negative territory and did not keep a lot of longs because of the fears of redemptions; therefore, the only way they could make returns is by shorting. When the “Doug Kass” rally took off, many hedge funds went all on in the long side and drilled the trade, which took us higher. Its rather interesting the rally was called after all the Q1 redemptions were done…just a thought. Then the “second leg” of the rally was driven by the people in cash who didn’t want to miss the rally and kept buying to drive up the market more. Friday in my view should’ve been a strong day and it wasn’t, because profits were being taken. The reason for this is obvious, Financials are up 40% in 3 weeks, Industrials up 25%, and Tech is now near positive territory for the year.
Right now my portfolio is 80% cash and 20% equities/options. If we get another rally, I will PROBABLY sell all of my longs and go 100% cash. However, I really don’t want to do that because I already have a 80% cash position, but I want to keep current returns. On the short side, I own various put options on MAC. The returns are at even for some strikes, others up around 50%. I will hold them and if we continue to sell off, they should expand. As for my longs, I own TTWO, NTGR, WTSLA, GNR, and RBY. Most of these are speculative, so I will kick them soon; however, I will say that I like the names but will also admit I may be a little early. I’m not a market predictor by any means but if I had to guess, we are going to pullback soon (don’t know when) and I will buy back the big dip and ride it all the way home. Economic indicators are improving, so a second half of 2009 rally is in the making; however, timing is the key. I want to see the housing inventories to drop some (we are seeing some hope) and I want to see unemployment rates drop. Alot of states are in severe trouble, I just read today that SC has an 11% unemployment rate. Jobs is my top economic indicator, so if jobs don’t improve, how can people spend?
My strategy will be rather aggressive here soon. Eventually, I will get 100% in the market and have various derivative trades. Again, I will position my longs to firm’s with solid balances sheets. Keep in mind, even if a firm has no debt and a lot cash on their books, I try to understand their business model and estimates because if they have quarterly losses or inventory write-offs, their cash levels deteriorate, causing the firm to be less attractive. Secondly, I will loaded up on more aggressive “junk” stocks that have been crushed this year, calculate various “ranks” to based around cash levels, price to book, volatility, etc. and buy them up. Stocks like SWHC, CENX, and SLW were stocks I bought in depressed times and made 25-100% returns in a month. I make most of my money being long stocks, not leveraged etfs. The risk is trying to catch them at the right time because you think, “they have to go lower…right?” but that is when scale buying comes in, so if they take off, you got some chips on the table and if not, you can cost average down. Lastly, I will look to short (with scale) certain things. I will focus on oil services/exploration, commercial real estate (getting a little crowded), currencies, and certain banks. In addition, I built my first trading “system”: its called “Daily Shorts”. I will test it this week. Basically at 10a it will tell me select stocks to short based on a “RF Test” and I will short them. If it’s a huge success, I will sell it to someone, leave the blog, and go move to Fort Lauderdale. Nevertheless, I will post these shorts at 10a and if they work to the close, it will be very cool. If not, I will destroy the “system” and build another gadget (in the process of building day trade longs).
So in conclusion, I would raise some cash this week. The “voices” in my head are telling me we will break 800 on the S&P this week but I am trying not to listen. Keep your new trades small and cut your losers. Be ready because I think the S&P will be 950+ by December (RF prediction – first in blog history). Be selective shorting because if you get caught, your returns will be damaged and could wipe your year out. Lastly, remember the Ben Graham theory on the market (summarized by RF). Mr. Market is nothing more than a manic business partner. He comes to you daily and offers you prices for companies, he wants us (you and him) to invest in. He changes his mind every second and wants you decide quickly. He changes his prices based on greed and fear, so keep that in mind. And lastly remember, the market is there to serve you, not guide you into a decision.” In short, I made the most money buying things no one wanted, at times no one wanted to buy them.
I will post some picks tomorrow A.M.
Right now my portfolio is 80% cash and 20% equities/options. If we get another rally, I will PROBABLY sell all of my longs and go 100% cash. However, I really don’t want to do that because I already have a 80% cash position, but I want to keep current returns. On the short side, I own various put options on MAC. The returns are at even for some strikes, others up around 50%. I will hold them and if we continue to sell off, they should expand. As for my longs, I own TTWO, NTGR, WTSLA, GNR, and RBY. Most of these are speculative, so I will kick them soon; however, I will say that I like the names but will also admit I may be a little early. I’m not a market predictor by any means but if I had to guess, we are going to pullback soon (don’t know when) and I will buy back the big dip and ride it all the way home. Economic indicators are improving, so a second half of 2009 rally is in the making; however, timing is the key. I want to see the housing inventories to drop some (we are seeing some hope) and I want to see unemployment rates drop. Alot of states are in severe trouble, I just read today that SC has an 11% unemployment rate. Jobs is my top economic indicator, so if jobs don’t improve, how can people spend?
My strategy will be rather aggressive here soon. Eventually, I will get 100% in the market and have various derivative trades. Again, I will position my longs to firm’s with solid balances sheets. Keep in mind, even if a firm has no debt and a lot cash on their books, I try to understand their business model and estimates because if they have quarterly losses or inventory write-offs, their cash levels deteriorate, causing the firm to be less attractive. Secondly, I will loaded up on more aggressive “junk” stocks that have been crushed this year, calculate various “ranks” to based around cash levels, price to book, volatility, etc. and buy them up. Stocks like SWHC, CENX, and SLW were stocks I bought in depressed times and made 25-100% returns in a month. I make most of my money being long stocks, not leveraged etfs. The risk is trying to catch them at the right time because you think, “they have to go lower…right?” but that is when scale buying comes in, so if they take off, you got some chips on the table and if not, you can cost average down. Lastly, I will look to short (with scale) certain things. I will focus on oil services/exploration, commercial real estate (getting a little crowded), currencies, and certain banks. In addition, I built my first trading “system”: its called “Daily Shorts”. I will test it this week. Basically at 10a it will tell me select stocks to short based on a “RF Test” and I will short them. If it’s a huge success, I will sell it to someone, leave the blog, and go move to Fort Lauderdale. Nevertheless, I will post these shorts at 10a and if they work to the close, it will be very cool. If not, I will destroy the “system” and build another gadget (in the process of building day trade longs).
So in conclusion, I would raise some cash this week. The “voices” in my head are telling me we will break 800 on the S&P this week but I am trying not to listen. Keep your new trades small and cut your losers. Be ready because I think the S&P will be 950+ by December (RF prediction – first in blog history). Be selective shorting because if you get caught, your returns will be damaged and could wipe your year out. Lastly, remember the Ben Graham theory on the market (summarized by RF). Mr. Market is nothing more than a manic business partner. He comes to you daily and offers you prices for companies, he wants us (you and him) to invest in. He changes his mind every second and wants you decide quickly. He changes his prices based on greed and fear, so keep that in mind. And lastly remember, the market is there to serve you, not guide you into a decision.” In short, I made the most money buying things no one wanted, at times no one wanted to buy them.
I will post some picks tomorrow A.M.
Get Your Short On - Oil Services & Currencies
In my view, oil services is a short. Crude at current levels has caused many firms to cancel drilling projects and rigs are not being leased. In addition, I don't believe some of these rich valuations are justified, given Q1 2009 Earnings coming up. Below is a list of shorts, study up and I will be back tonight with my strategy going into this week.
TOP SHORTS: OII, DRQ, BAS.
BIGGER NAMES TO SHORT: RIG and HAL look weak here.
As for currencies, I will short the Euro or the Pound (or both)
Short Euro: Buy the DRR (double short on Euro)
Short Pound: Short the FXB
TOP SHORTS: OII, DRQ, BAS.
BIGGER NAMES TO SHORT: RIG and HAL look weak here.
As for currencies, I will short the Euro or the Pound (or both)
Short Euro: Buy the DRR (double short on Euro)
Short Pound: Short the FXB
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