Oil Stocks Selling Off And A Decent Bear Market Will Lead To A Much Better And Easier Chance To Make More Money Later On; It Is Hard Now, But It Will Not Be Forever
July 23, 2008
Despite the fact that I have not been doing much the past week-plus thanks to Doctors orders to stay off my feet, there has been one event that has happened that makes me very happy, yet sad. Oil stocks coming off their highs on huge volume signals that we might have seen the top for oil stocks. I hope so personally as it would just be a lot healthier for the world markets if the stock market of the USA was doing well. The fact that there is weakness world wide will eventually lead to some great buying opportunities. As long as we have population growth, in the future, we should be moving higher as we go along our little lives.
Those that have just recently gone long in the oil arena needs to realize they are going long a sector that has been in a cyclical uptrend since 2001. We are almost eight years into a very long bull market for oil stocks. It does appear that the top has come with the recent selloffs on the huge volume across the board on stocks like XOM and NBL. Even the speculative beauties like PDO and REXX have lost that special luster. This should be bullish for equities in the future. Not any time soon but eventually. Right now, there still is more work that needs to be done.
Right now, at the most bullish of cases I can make is that the new leaders in medical is where the momo money should be placed. Stocks like NABI prove to me that the biotech group is going to get the money flow while we wait for the new bases in new stocks to setup. I still don’t see anything setting up out there. They would be in my BOP scans and the fact those scans are still very dry at this point in the downtrend from the start in November 2007 proves that we are no where near being ready for the next leg up.
If we were, like I have said before, we would have more leadership other than medical related stocks, I might get more bullish. Too bad that really isn’t the case. There are a few other defensive groups like food and insurance that are doing well in a poor market but right now everything is suffering with an oh-so-uncomfortable and under performing market.
One of the problems recently has been intraday EOD weakness that was preceded by strength. Today was no exception with the Nasdaq up at one point 2% intraday. By having itself to a 1% gain it shows that the bulls do not have control of the market at all. This makes it an environment very difficult for growth investors to actively work in. Instead of trying to fight the market, I must say that raising cash will be significantly more beneficial to the new investor who has not been in a market environment like this. Only the best and strongest survive. I am going to survive. Are you also? Please, stick with this game. Realize that this too shall pass and that a new bull will one day arrive on our doorsteps. I will not miss it. Right now though this looks nothing more than a dead cat bounce off the most recent lows. I would love to build on these gains but I need to see more leadership before I will get too excited right here.
Cash is king. I will continue to say it till the day it doesn’t need to be said anymore. My job, right now, is to protect you from losing money in this market. My job before November and even during the short uptrend from March to June was to make you money on the best possible candidates. Right now, the charts are ugly. When they are this ugly I recommend waiting for them to fix themselves. I don’t adapt my style. I know better. However, when my style is out of favor I know when NOT to press it. Now is not the time to press it on the long side.
The short side is just as dangerous as I have seen some massive short squeezes the past week in a few names. I sure would have hated to have been long those. Maybe the most interesting play is going short MOS, POT, and CLF here as those charts look to be failing on some volume around these most recent levels. It is too much of a gamble for me. I like more “for sure” odds/trades. My time is yet to come. I have time to wait. Time is on my side. Aloha and I will see you in the chat room.
Confluence of Factors Boost Dollar Wednesday
July 23, 2008
Grace Cheng submits:
The US dollar continues on its second day of rally in the forex markets, particularly against the Euro, Swiss franc and the Japanese yen, on the back of Philly Fed chief Plosser’s hawkish remarks yesterday. Today Plosser also repeated his words on Bloomberg TV, saying that the current accommodative rate stance may need to be reversed sooner than later and even if home prices fall further or mortgage rates rise.
Although there are people who say he is just one voice and hence his remarks won’t be helpful to the USD, you should note that any change in interest rate expectations, whether they are “correctly” priced in or not, will result in big moves in the forex markets.
Confluence of Factors Boost Dollar Wednesday
Debunking the SEC’s Fear Mongering on Naked Short Selling
July 23, 2008
Gary Weiss submits:
Media coverage of SEC chairman Chris Cox’s "naked short selling" publicity stunt has suffered from the usual shortcomings of SEC coverage: naiveté, credulousness, and a tendency to accept pronouncements from our toothless watchdogs at face value. Nothing really terrible, just mediocrity and lack of skepticism.
There have been, however, some reassuring exceptions over the past couple of days.
Debunking the SEC’s Fear Mongering on Naked Short Selling
Experts Tell Congress: To Consumers, It’s a Recession
July 23, 2008
Trader Mark submits:
CNNMoney.com: U.S. Middle Class ‘On the Edge’ This article sounds vaguely familiar 
I’m glad the ‘experts’ are catching on and telling the leadership what it is really like for those not in the upper 3rd of the country. [Dec 8: Do the Bottom 80% of Americans Stand a Chance?] We used the first half of the decade using our homes to cover the shortfall [house ATM] that has been slowly growing (erosion of living standard) - now it’s the credit cards. Once that goes - so will come the rise in personal bankruptcies (which Congress has also made much more difficult to declare on behest of lobbyists group of financial corporations - it’s all quite circular).
Experts Tell Congress: To Consumers, It’s a Recession
23 Jul 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
July 23, 2008
| Intraday Unusual Volume - Top 5 Up |
| Symbol | Volume % Change |
Price % Change |
News | |
| PHLY | 1883% |  58.43% |
news | |
| VTNC | 514% | 17.92% |
news | |
| NWPX | 466% | 56.70% |
news | |
| MICC | 391% | 79.67% |
news | |
| EPAX | 367% | 18.52% |
news | |
|
||||
23 Jul 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
Boston Properties Inc. Q2 2008 Earnings Call Transcript
July 23, 2008
Boston Properties Inc. (BXP)
Q2 2008 Earnings Call
Boston Properties Inc. Q2 2008 Earnings Call Transcript
5 Key Quotes from UPS on the Freight Industry and the Economy
July 23, 2008
Here are five key quotes from UPS (UPS) conference call:
Wednesday Options Outlook: BJ, ORCL, XHB, DTV, SGMS, NRG, AET, WFC
July 23, 2008
Rebecca Engmann Darst co-authored this article.
Costco (BJ) – Costco’s profit warning
earlier today showed the discount retailer left with the short end of the
wishbone, having kept prices low on a bet that bargain-hungry shoppers would
boost traffic at its store locations but finding that energy prices were
causing shoppers to sharply economize store trips. The surprise move sent
Costco shares down 10.7% and implied volatility on its options more than 24%
higher on the session. Option traders turned shrewdly to volatility plays in
its sector peer BJ’s Wholesale Club, whose shares lost 9% to $37.03
today. The Costco news sent implied volatility in BJ’s Wholesale Club
options 12% higher to 51.5%, making it one of the day’s top implied
volatility gainers. Options are trading at 5 times the normal level, adding up
to the equivalent of more than a third of its open interest, concentrated
mainly at the August 35 line, where we’re seeing what looks like buyers
as well as sellers of this straddle, priced to reflect about 15% of BJ’s
share price ($5.75) in the balance between now and August 15. Traders who think
that’s overpriced are likely selling this position, while those who
believe that there’s more choppiness to come in the weeks before its own
August 20 numbers (or even a profit warning of its own) are buying into it.
Option traders only hold about 19,000 total positions in BJ’s Wholesale
Club, with more than twice the number of puts as calls.
Wednesday Options Outlook: BJ, ORCL, XHB, DTV, SGMS, NRG, AET, WFC
A Long Housing Boom Won’t Yield to a Brief Recovery
July 23, 2008
Scott Almeida had a problem.
Fresh out of jail and in need of some money, Scott needed to find a job quick. Florida’s housing market was red hot in 2002, so he thought he’d shoot for a mortgage license. Scott liked shooting things—when the cops busted up his cocaine trafficking business, they’d also found a large stash of assault rifles and ammunition.
A Long Housing Boom Won’t Yield to a Brief Recovery
Robust Outlook for Investment-Grade Corporate Debt - S&P
July 23, 2008
Despite tough economic conditions and rising default rates, Standard & Poor’s sees a robust outlook for corporate debt issuance, at least in the investment grade sector.
Amid a stumble in the U.S. economy, unprecedented commodity-price pressure and a lender community still skittish after the turmoil seen throughout the credit markets, it may seem logical to prepare an epitaph for corporate debt issuance. Standard & Poor’s Ratings Services’ review of various industries and sectors suggests otherwise.
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