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Investor Chat for the week of June 17th through June 21st

Sonny:

Bob, TEX going down today, your old favorite.

Monday June 17, 2013 10:12

 

Alan Levit@AlanHHI

I’m continue to stay away from $LINE. The distribution from $VNR is almost as high, and the stock is not under attack.

Monday June 17, 2013 10:19

 

Whitevend:

Would like to see the assault on LINE end soon.

Monday June 17, 2013 11:49

 

Robert Marcin:

for those of you with an interest in maxwell tech, i worked all day friday attempting to chase down the reasons for a 9% drop on heavy volume. from the street analysts and the company, all i heard was that biz fundamentals good and nothing on the reg/legal or headline risk out there. perhaps someone mistakenly expected its deletion from russell micro cap index and front ran the move. if one was waiting for a buyable pullback, this is it.

Monday June 17, 2013 12:52

Robert Marcin:

sunny, they blew another quarter. i am long a non fan. disagreed w ceo decision to sell mining equip biz at bottom of cycle. thought it was crown jewels. and they return 0 cash to shareholders. its been a bust.

Monday June 17, 2013 1:22

 

Guest:

Thanks Robert! Will buy some MXWL then.

Monday June 17, 2013 1:22

 

Robert Marcin:

re mxwl, its got some issues to chew thru, accounting and legal. neither should impact biz in 2014. but just remember that i have it as a growth stock in waiting.

Monday June 17, 2013 1:23

 

Scott Rothbort:

Good opportunity to execute a buy-write dividend capture for LVS today. Buy LVS for 57.70 today, get the 35 cent ex-dividend accrual tomorrow and sell covered the Jul 57.50 calls for $1.90 or the Jul 60 calls for 95 cents

Monday June 17, 2013 1:43

 

Scott Rothbort:

Long LVS

Monday June 17, 2013 1:43

 

Alan Levit@AlanHHI:

@wstreetallstars Robert, thouhts on$INTC? It seems to be starting it’s push to mobile, and the stock hasn’t moved much since the Galaxy win

Monday June 17, 2013 1:50

 

AlanHHI:

@Robert I don’t have a position in MXWL, but I saw the same kind of thing (big drops for no reason, along with big rises for no reason) with SIMO and ZAGG. I learned that I personally can’t take those kinds of swings and I got out with a very small loss. I learned that it’s just as important to know my own risk tolerance as to know the details of the stock.

Monday June 17, 2013 1:54

 

Scott Rothbort:

There is a nice buy-write dividend capture opportunity for LVS today. Buy LVS now at about 57.80 – get to capture the 35 cent ex-div tomorrow, sell the July 57.7 calls for $1.90 or the July 560 calls for 94 cents.

Monday June 17, 2013 1:54

 

Jordan Kahn:

We still own some LINE. Too low to sell here, imo

Monday June 17, 2013 1:55

 

dashofinsight:

Little change in today’s ratings from Felix. IGN, EVX, and ITA are all around 15, which is a positive expectation and near the bottom of our buy range. The inverse ETFs have moved lower.

Monday June 17, 2013 1:59

 

dashofinsight:

The increase in volatility has relegated many sectors to the penalty box. Felix knows nothing about Fed meetings, POMO, or the Empire State index. Felix just follows price and volume — but does so in a very sophisticated fashion.

Monday June 17, 2013 2:00

 

Jordan L. Kahn, CFA@KAM_Advisors

Doug Kass Quits Twitter: ‘Too Many Haters’ fb.me/2O2GhjBjT

Monday June 17, 2013 2:01

 

dashofinsight:

In our smaller trading universe we continue with no equity positions. Our short bonds, long gold holdings have lost a little on rally days and helped a little on down days.

Monday June 17, 2013 2:02

 

dashofinsight:

The “enhanced yield” approach, where we sell short-term calls against a group of stocks with solid but modest dividends, continues to do very well — and with much less volatility than the overall market.

Monday June 17, 2013 2:03

 

Alan Levit@AlanHHI:

Pfd stocks decimated last week. Now all is forgiven. Hard to believe, but I actually bought a little more last week, letting some go now.

Monday June 17, 2013 2:07

 

Sonny:

Jeff, your enhanced yield method works with popular ETFs like SPY or QQQ?

Monday June 17, 2013 2:42

 

dashofinsight:

@sonny SPY and QQQ don’t really fit the profile. I am looking for about 3% yield, attractive valuation based on long-term PE, solid balance sheet, reasonable payout ratio, and good liquidity in the options. I sell an option that is 1-4% OTM and never more than seven weeks to expiration for maximum time decay.

Monday June 17, 2013 2:49

 

Alan Levit@AlanHHI:

@tdgraff @FinancialTimes What’s annoying about FT is they didn’t even claim to have a Fed source. Hilsenrath did, and very probably does.

Monday June 17, 2013 3:19

 

Robert Marcin:

alan, intc remains a string hold. still cheap should they execute migration into mobile/tablets. but at high end of range and execution not assured. i am holding for 2 more years and $3ish in eps power and a $35-40 stock.

Monday June 17, 2013 3:19

 

Robert Marcin:

a recession or failure to get share in mobile/tablets would keep the stock around $20-25 imho.

Monday June 17, 2013 3:20

 

Alan Levit@AlanHHI:

@wstreetallstars Robert, Thanks

Monday June 17, 2013 3:21

 

dashofinsight:

So you could certainly sell calls against SPY or Q’s but I have not really tested it in the same way. I created the program about two years ago when so many started saying that investors should just buy dividend stocks. I thought that I could do a lot better with this approach, and I have.

Monday June 17, 2013 3:36

 

Scott Rothbort:

I just got up – my body is jet lagged from the surgery. Off the pain meds for two days. Added to F yesterday. Took profits in PHM. Adding to URI today.

Tuesday June 18, 2013 10:50

 

Scott Rothbort:

Will try to resume My Gut Feeling tomorrow

Tuesday June 18, 2013 10:50

 

S_Currencies:

Scott, get well soon!

Tuesday June 18, 2013 11:10

 

dashofinsight:

For Bob and others concerned about debt, it is important to look at debt service, not just absolute levels. Today’s good news on that front is that household debt service is back to the level of 30+ years ago: http://www.calculatedriskblog.com/2013/06/fed-household-debt-service-ratio-near.html

Tuesday June 18, 2013 11:32

 

Jordan Kahn:

@Scott: We added URI recently also. Looks like it could be bottoming today :)

Tuesday June 18, 2013 11:48

 

Jordan Kahn:

LINE could be putting in the elusive bottom today. Hearing that there have been 3 notable insider buys recently. (long LINE)

Tuesday June 18, 2013 12:39

 

Robert Marcin:

jeff, thanks for the link! debt service is fine if you can afford to pay it off. but we keep taking down debt that becomes problematic. like the mortgage debt bubble and now the student loan debt bubble. much of this debt, now at low costs to service, was used for personal consumption expenditures. this gives a false sense of true demand and mucks up the economy when it fails. just sayin…

Tuesday June 18, 2013 12:44

 

Robert Marcin:

no one is against debt when used responsibly and productively. however, when its used to pull forward demand or fill a hole in real income for ordinary consumption,or used to speculate in financial assets, it can become a problem. we have seen debt become a major problem with the credit crisis. it will become a major problem with the insolvent euro banking system. trust me. its when not if. and it will become a problem w the real economy in china. these are my problems with debt jeff.

Tuesday June 18, 2013 12:48

 

Robert Marcin:

as for debt service, if we took consumer loan rates to 2% we could triple up the total debt level from here and still have low debt service. hey!!! maybe the fed should pin consumer loans at 2% and buy trillions w QEi!!! i am a freaking genius w this idea.

Tuesday June 18, 2013 12:50

 

dashofinsight:

@Bob So let us suppose that we agree that debt must be addressed. We might disagree about timing. But there should be some way of measuring progress. I have provided links that debt is lower, debt service is lower, and personal wealth is higher. This is improving on the personal front — which is all I mentioned. What level of lending would be OK with you? How should we measure it?

Tuesday June 18, 2013 12:50

 

Robert Marcin:

jeff, since leverage is a destabilizing factor and procyclcial, the fed as overseer of systemic financial risk should have some leverage ratios on the different sectors of the economy it should shoot for. clearly we got way overlevered into the housing bubble. but the debt bubble also found its way into financing speculation and income production from low interest rates. i would like to see the banking and shadow banking system less levered, the household sector less levered, the government sector including state and local less levered. and the corporate sector seems ok. the total economy can support 2 turns of leverage, maybe a little more. but 3.5x’s is too problematic and results in financial repression and asset price manipulation in order to support collateral.

Tuesday June 18, 2013 1:27

 

Robert Marcin:

the fed needs to jawbone and use banking system oversight to promote lower levels of debt, imho.

Tuesday June 18, 2013 1:27

 

dashofinsight:

Felix has a new candidate today. GDX has popped out of the penalty box with a rating of 48. IGN and ITA are also both over 15 and somewhat improved. The inverse ETFs have moved lower.

Tuesday June 18, 2013 1:54

 

dashofinsight:

Our own Felix trading positions still have no equity ETFs. We hold short bonds and GLD. We selected this for the shorting trading list (along with USO) since the commodities seemed to respond better than the related stocks. Often the movements are parallel.

Tuesday June 18, 2013 1:55

 

Sonny:

Jeff, does your Felix model adjust for volatility? It seems missing out the big move up in stocks during past few days, no?

Tuesday June 18, 2013 2:09

 

Lu:

Robert, I was reading yesterdays comments and was wondering if you would hold intc, mxwl and others through the second half of the bradley chart if it started to look like the market might be going that way. Your strategy please.

Tuesday June 18, 2013 2:10

 

dashofinsight:

@sonny — Volatility is a key factor. When there is high volatility, the normal predictive methods are not as good. That is part of the penalty box. I’m sure you have noted the comments of many top traders saying that the market of the last few weeks has been exceptionally difficult to trade.

Tuesday June 18, 2013 2:13

 

dashofinsight:

We can all look at a stock chart and imagine that we would have called the tops and bottoms. The key technical guys I follow have not done anything special. They have either been leaning wrong or just gotten out.

Tuesday June 18, 2013 2:15

 

Robert Marcin:

lu, i want to make this very clear. if the market follows the 2013 bradley forecast, i will probably establish hedges, but not sell my cheap tech shares. i have already admitted that unless they spike short term, i was harvesting them in 2014 good season, where i hope they would be much fairer valued

Tuesday June 18, 2013 2:16

 

Robert Marcin:

jeff, any quick comments on my debt post?

Tuesday June 18, 2013 2:17

 

dashofinsight:

Felix is momentum-based with a three week time horizon and a few creative additions to filter out noise. Vince did not design it with day trading in mind. You can do similar models for any time frame. The HFT people operate in nano-seconds.

Tuesday June 18, 2013 2:17

 

Robert Marcin:

here we go! a dovish bernank just might get us up to 1700ish by june 22, a bradley turn date. i know it sounds wacky, but i have been holding back my hedging to see if we got one last leg up into end of month. i figured we had some serious window dressing punching mo-mo leaders higher into 3rd week of month. lets hope for another 40 points on the benchmark in the next week of trading!

Tuesday June 18, 2013 2:49

 

Robert Marcin:

at that point i intend to lay out some hedges anticipating a top. i will use tight stops and cover if wrong by a percent or two. not gonna get run over if rally continues thru summer as most expect.

Tuesday June 18, 2013 2:51

 

Sonny:

Bob, June 22 is triple switching date. The day after is ex-dividend of many major ETFs. It could be the D-Day.

Tuesday June 18, 2013 2:52

 

Jordan Kahn:

@Bob – I wouldn’t be suprised to see PMs put money to work right into quarter end. I’m looking for an early July top and a summer correction. fwiw

Tuesday June 18, 2013 2:55

 

Robert Marcin:

omon ben, spike the punchbowl even more! taper, shmapir! unemployment is close to 6.5% so I want $100 billion a month through year end. my MITE stocks need the lube to make even higher highs. what about food and energy inflation you ask? hah, they only matter for losers. the stock market is the country and the country is measured only by the stock market, so go to it. we need more punchbowl prosperity and a dow 20,000!!!

Wednesday June 19, 2013 9:11

 

KAM_Advisors:

Yesterday I posted that it looked like a short-term bottom was in for shares of LINE. The stock was around $30 at the time. This morning it’s a full 10% higher to $33. Nice pop. The stock got some positive analyst comments and upgrades. If you traded it yesterday – kudos. (long LINE)

Wednesday June 19, 2013 10:20

 

Jordan L. Kahn, CFA@KAM_Advisors:

what do you think the Bernank will say today? fb.me/2LgXJMiAs

Wednesday June 19, 2013 10:35

 

Robert Marcin:

“i want to pose to you that Hewlett Packard represents the ultimate value trap.” jim chanos, july 2012. we will see jim, on the anniversary of that call we will see.

Wednesday June 19, 2013 10:45

 

Robert Marcin:

isn’t it funny how old tech is just roaring these days, led by cardinal cramer spiritual leader of The church of whats working now. not long ago, he condemned the same stocks. amazing what a little mo-mo will do!

Wednesday June 19, 2013 10:51

 

Robert Marcin:

speaking of chanos, how’s that huge Seagate short treating you jim?? i guess since you went on national tv, the position was very large and seasoned. that puts the loss at around 50%. ouch. tell me where i am wrong jim.

Wednesday June 19, 2013 10:57

 

Robert Marcin:

i am taking the over or upside to share prices on the fed news. i know it makes sense for the fed to talk taper. but i think the bernak will surprise everyone with a very dovish tone. and that stocks will respond positively to the fed’s comments. and this will give us the late june high i expected. its embarrassing that investing has been reduced to the machinations of the fed and their perpetual money machine, but that’s the biggest factor in the equity markets today. don’t hate the player, hate the manipulation game.

Wednesday June 19, 2013 11:36

 

Robert Marcin:

since that chanos declaration as hpq as the ultimate value trap, hpq stock has gone form $18.80 or up 37%. the deliveringalpha conference on july 12 had the snp5 at 1330 or up some 24%. not only was hpq not the ultimate value trap, it rose 37% and smoked the market. looks like the ultimate value trap is chanos. he should shut his trap.

Wednesday June 19, 2013 12:19

 

Robert Marcin:

pardon the rant on chanos and hpq, but i got to watch that bullsheeter pitch that hppq short all day on the cnbc delivering alpha conf commercials.

Wednesday June 19, 2013 12:30

 

Sonny:

Bob, I’m here… just waiting for the Big Ben…

Wednesday June 19, 2013 1:14

 

Robert Marcin:

we all dat

Wednesday June 19, 2013 1:15

 

Robert Marcin:

grains on fire. did anyone see a corn forecast from dennis gartman that had corn at $4?

Wednesday June 19, 2013 1:41

 

dashofinsight:

@bob In meetings all morning. Good time in the quiet before the Fed :)

Wednesday June 19, 2013 1:56

 

dashofinsight:

Fed outlook seems to be a bit stronger than the market was expecting. Since all anyone cares about is the level of QE, that is the focus of all discussion. If the outlook is a little stronger, that implies that QE reductions might come sooner. That is the reason for slight selling in stocks, strengthening in the dollar, and increase in rates.

Wednesday June 19, 2013 2:20

 

dashofinsight:

It is all pretty thin as a basis for inference. We’ll see if we get more clarity from Bernanke, but I would not count on it:)

Wednesday June 19, 2013 2:20

 

Scott Rothbort:

Sounds like the FOMC was tweaking economic numbers and we should not expect any significant move in rates till 2015 or later. Economic picture continues to improve slightly. All told – a non-event. Let the trading and fading begin

Wednesday June 19, 2013 2:22

 

Jeff Miller@dashofinsight:

Flash!! Bill Gross thinks it is time to buy bonds. Agrees with Gundlach. Why am I not surprised?

Wednesday June 19, 2013 2:29

 

Jeff Miller@dashofinsight

Bill Gross confuses net new issuance of bonds with “available supply.” The Fed is less really than 1% of the market. oldprof.typepad.com/a_dash_of_insi…

Wednesday June 19, 2013 2:36

 

Tim Duy@TimDuy Retweeted by Jeff Miller

My first reaction to the FOMC statement: economistsview.typepad.com/timduy/2013/06…

Wednesday June 19, 2013 2:37

 

Robert Marcin:

a leading talking head asked where in the economy there was strength mocking the potential for economic based tapering. here’s my cut: ag is strong, aerospace is strong, oil/nat gas is strong, auto strong, housing strong, entertainment services are strong, mobile technology is strong, big data and social media are strong, business services are strong. etc etc.

Wednesday June 19, 2013 2:47

 

Robert Marcin:

whats not strong is employment as companies push for major productivity gains. but bond buying doesn’t create jobs,

Wednesday June 19, 2013 2:48

 

Sonny:

Bob, small business is still struggling.

Wednesday June 19, 2013 2:48

 

Robert Marcin:

true. small biz is still not getting enough credit. buying bonds doesn’t help that either

Wednesday June 19, 2013 2:49

 

Robert Marcin:

the retail and health care sectors are doing well.

Wednesday June 19, 2013 2:49

 

Robert Marcin:

even though i believe there is an element of unsustainability in current demand, i myself am surprised at the state of many sectors.

Wednesday June 19, 2013 2:50

 

Robert Marcin:

i lost a bet on the size of the fy 13 deficit, party from better than expected tax receipts.

Wednesday June 19, 2013 2:51

 

Scott Rothbort:

Lots of Fed babble – if the weather was nicer I would go swimming

Wednesday June 19, 2013 2:52

 

dashofinsight:

We’ll probably have a better sense from Felix tomorrow, but today’s ratings show little change. GDX is still on top. ITA and IGN are also still in the buy range. EVX has been fading.

Wednesday June 19, 2013 3:37

 

dashofinsight:

In our trading accounts we still have no ETF equity positions. The short bond position is obviously doing well and is profitable since we started it. GLD is still a marginal buy, but it has not been profitable so far.

Wednesday June 19, 2013 3:39

 

Whitevend:

Dump a TBT long or hold?

Wednesday June 19, 2013 3:53

 

dashofinsight:

@Whitevend I don’t include leveraged ETFs in the model, but presumably Felix would like it as much as TBF, our current holding. Volatility would be higher and Felix does not like volatility. The bond gurus all think the current price is a good buy, but they have not been very accurate and are all talking their book.

Wednesday June 19, 2013 4:08

 

Scott Rothbort:

As our old friend Brian Reynolds put it today ….. Circular Thinking Won’t Persist Forever. Stock investors sold stocks at the start of QE3, and later on the prospect for the end of QE3 – Spock would hate it as it is illogical

Wednesday June 19, 2013 4:51

 

Robert Marcin:

I don’t get the infatuation w bonds. I guess it pm’s talking their business. 10 year paper at 2% is hardly the most hated piece of paper in the world. at that priced , id say its worshipped. if it puts me opposite gross and gundlach so be it.

Wednesday June 19, 2013 5:58

 

Whitevend:

Thanks. It dropped like a rock when I went long over a year ago. Was thinking about selling for a small loss as it hit a 52 week high. Think I’ll just hold it a while longer.

Wednesday June 19, 2013 6:59

 

lu:

thanks Robert. I don’t hedge but probably should because the pros all seem to. I’m guessing you would primarily sell covered calls against them. Is that right?

Wednesday June 19, 2013 10:37

 

FFredbaro:

good gut opener scott and good advice

Thursday June 20, 2013 7:11

 

Robert Marcin:

well I guessed wrong on the berank. he clarified the plan to unwind QEi thru next year. the markets are taking it on the chin, esp precious metals and bonds. ouch. glad to see the gold bugs getting squashed, they had become so arrogant. being in the bad season for stocks, i will be selective in adding longs until we get a decent correction. my new buy list only at 30-40 names and that’s a sgin of market top. as i have posted, the average stock is a sale.

Thursday June 20, 2013 8:55

 

Scott Rothbort:

@ Fred -thx

Thursday June 20, 2013 8:56

 

Robert Marcin:

i remain committed to old tech and turnarounds-in-waiting. other than that, i got nothing that’s down and cheap on good fundamentals. give me 3 months.

Thursday June 20, 2013 8:57

 

Robert Marcin:

oh, and i believe, b/c of the seasonality combined with fed withdrawal of liquidity will flip the market into a sell the rally mode until some type of correction is complete.

Thursday June 20, 2013 9:00

 

Scott Rothbort:

Never rely on pre-market futures to make an investment decision. My gut says there is a 50% chance we trade into the green and 35% chance that we close in the green today

Thursday June 20, 2013 9:02

 

Robert Marcin:

scott, i will take the red side of that assertion in a wager for lunch. i say we stay in the red all day. too much big red in foreign markets, bond markets, and commodity markets. while some of that is catchup to our stock market yesterday, id be shocked if we closed green. do we have a bet?

Thursday June 20, 2013 9:05

 

Robert Marcin:

snp500 stays red all day for lunch.

Thursday June 20, 2013 9:06

 

Robert Marcin:

i would really love for the bond market to get slaughtered. say 3% on the 10 year. that would lose the stupid yield premium for shares and give us a chance to purchase yield at much lower prices.

Thursday June 20, 2013 9:07

 

Robert Marcin:

and one wants to buy MITE on the dip if bullish. they tend to do ok when mid cycle correction happens from decent economy leading to fed tightening.

Thursday June 20, 2013 9:12

 

Robert Marcin:

i guess not

Thursday June 20, 2013 9:31

 

Jeff Miller@dashofinsight

Those saying that 10-yr yield from 2 to 2.50 is bad for stocks? Did they say the opposite when yields went the other way? Just sayin’…

Thursday June 20, 2013 9:31

 

Robert Marcin:

jeff, stocks soared when bonds went to 2%

Thursday June 20, 2013 9:31

 

Robert Marcin:

we had a golden age. all assets soared on first decline in rates. cept cash, that was trasg

Thursday June 20, 2013 9:32

 

Robert Marcin:

jeff, how many bought bonds at 2% that will post big losses if they go to 3%. then what happens? do they sell??

Thursday June 20, 2013 9:33

 

FFredbaro:

any opinions on fcx

Thursday June 20, 2013 9:35

 

dashofinsight:

@robert — I know what has happened to stocks. I am talking about pundits who are now warning about higher rates. These are the same perma-bears and bond salesmen who encouraged bonds over stocks as rates declined. Their opinions do not change with the data.

Thursday June 20, 2013 9:37

 

dashofinsight:

Most people own bond funds and they are about to see the first of a string of losses on their statements — after a 20+ year period where they enjoyed capital gains as well as yield.

Thursday June 20, 2013 9:37

 

Robert Marcin:

jeff, isn’t that the wild card. what all the weak hand bond fund buyers do as bonds post losses? you are correct. bond holders will get spanked and we don’t know if selling will beget more selling and an overshoot in rates.

Thursday June 20, 2013 9:39

 

Robert Marcin:

whats your best guess on how far long rates could back up in an overshoot from selling?

Thursday June 20, 2013 9:39

 

Robert Marcin:

3% for the 10 year? 4%?

Thursday June 20, 2013 9:40

 

dashofinsight:

I have done research on bond yields versus stock prices. It is curvilinear. Below 4% or so the very low yields reflect deflation fears and skepticism about earnings. 4% yield is a much healthier environment. http://oldprof.typepad.com/a_dash_of_insight/2010/12/why-the-market-multiple-will-be-higher-in-2011.html

Thursday June 20, 2013 9:42

 

Robert Marcin:

is that the 10 yr or 30 yr?

Thursday June 20, 2013 9:42

 

dashofinsight:

10 year.

Thursday June 20, 2013 9:43

 

dashofinsight:

One of our summer projects is updating this research, but I have been following it closely.

Thursday June 20, 2013 9:43

 

Robert Marcin:

and this sell off is still orderly. don’t use the panic bottom argument for me on stocks. gold maybe, but not stocks.

Thursday June 20, 2013 9:44

 

dashofinsight:

This is certainly not panic. It is barely a blip in stocks. It is much more serious for the bond and gold guys. The bond move is dramatic in the context of that instrument.

Thursday June 20, 2013 9:45

 

Robert Marcin:

jeff the treasury market is the wild card. if rates overshoot from weak handed owners panicking out of bonds, it could cause more problems with assets than many recognize.

Thursday June 20, 2013 9:45

 

dashofinsight:

I hope everyone read Scott’s excellent Gut Feeling this morning. It is good to have him back.

Thursday June 20, 2013 9:46

 

Robert Marcin:

scott, i assume we go no wager. no free lunch? lol

Thursday June 20, 2013 9:46

 

dashofinsight:

Fred — FCX is getting caught in gold sale although it is mostly copper. The economic data this morning is also a little weak. The stock is now about a point below where I bought last week, allowing for the dividend. It is a good play on a more normal economy.

Thursday June 20, 2013 9:47

 

Robert Marcin:

howz that for a contrary call??? the bond market craters from modest growth as latecomers panic out of bond funds and that has real and financial repercussions. any thoughts as to an out of control long bond wreaking havoc?

Thursday June 20, 2013 9:50

 

FFredbaro:

thanks jeff

Thursday June 20, 2013 9:56

 

dashofinsight:

@Robert I did not ask what stocks did, I asked what pundit advice was. It was bad then and is bad now.

Thursday June 20, 2013 10:01

 

Guest:

Never rely on pre-market futures to make an investment decision. My gut tells me we have a 50% chance to trade in the green and 25% chance to close green today

Thursday June 20, 2013 10:01

 

Guest:

Don’t make any investment decision based on premarket futures. I put a 50% chance we trade into the green today and 25% chance we close n the green.

Thursday June 20, 2013 10:01

 

Guest:

@ Fred – thx

Thursday June 20, 2013 10:01

 

Robert Marcin:

jeff, we are bonds are bad. the question now is what that means for stocks.

Thursday June 20, 2013 10:02

 

dashofinsight:

I’m on the record concerning stocks. As the economy improves, bonds move higher, grandma stocks move lower, tech/cylclical/financial stocks improve. And yes, profit margins will gradually compress with P/E multiples moving significantly higher. A significant rotation.

Thursday June 20, 2013 10:08

 

Robert Marcin:

jeff we agree

Thursday June 20, 2013 10:09

 

Robert Marcin:

but i am not buying anything yet. i expect a real correction while markets adjust to higher rates and worse global macro.

Thursday June 20, 2013 10:10

 

dashofinsight:

@bob — Maybe. I am not very good at predicting the timing of corrections — which we all know will happen. In 2011 my forecast of a debt ceiling deal at the 11th hour was perfect. I did not predict the massive decline in consumer and market confidence from those that thought we needed an instant fix on debt. That was wrong, but it took a few months for the message to become clear.

Thursday June 20, 2013 10:14

 

Scott Rothbort:

Bob – need odds

Thursday June 20, 2013 10:20

 

Scott Rothbort:

The 1% trading rule is normally negated by central bank action. Today is such a day.

Thursday June 20, 2013 10:22

 

Scott Rothbort:

On the other hand, if the frenzy to put index puts that occurred at the open subsides then we will move higher after 1030

Thursday June 20, 2013 10:23

 

Robert Marcin:

jeff, its hard to predict corrections i agree. many bulls never predict em, all bears predict too many. lol

Thursday June 20, 2013 10:29

 

Robert Marcin:

scott, its lunch an i am on a diet. no odds w food.

Thursday June 20, 2013 10:29

 

Scott Rothbort:

Adding to TBT. First buys a few weeks ago were spec. Today’s buys are spec/hedge

Thursday June 20, 2013 11:51

 

dashofinsight:

St. Louis Financial Stress Index is a touch higher at -0.383 from -0.75 a month ago. This is for data ending last Friday, so it will probably be higher again next week. VIX is one of 18 elements and many credit spreads included. This is still well below the danger level, but always worth monitoring.

Thursday June 20, 2013 12:22

 

dashofinsight:

Fred, Kim, Scott and others interested in FCX. Turned CNBC mute off long enough to learn that they will discuss FCX in a bull/bear discussion in a few minutes. Might be interesting.

Thursday June 20, 2013 12:25

 

Jordan L. Kahn, CFA@KAM_Advisors

Has The Summer Correction Started? fb.me/EOAajeCq

Thursday June 20, 2013 12:43

 

Scott Rothbort:

Heading to LOD. Sell a little if you must but just let it play out

Thursday June 20, 2013 2:45

 

Robert Marcin:

average stock a better sale than buy imho. getting spanked in small/mid caps as expected on ugly day. will keep all posted on how many names on new buy list, but i am thiking its quite a way down before it gets populated with some quality merchandise.

Thursday June 20, 2013 3:14

 

Robert Marcin:

48 names on buy screen after 40 point drop in SnP5 today. thats still a sell signal.

Thursday June 20, 2013 3:15

 

Robert Marcin:

up the escalator and down the elevator.

Thursday June 20, 2013 3:15

 

dashofinsight:

GDX, IGN, and ITA are still rated at 20 or higher in today’s report from Felix. I would not be surprised to see GDX back in the penalty box pretty soon.

Thursday June 20, 2013 3:16

 

dashofinsight:

In our Felix trading accounts the short bond position has done very well. The GLD position has been a big loser and earned a ticket to the penalty box today. GLD was faster to become both a buy and a sale than GDX.

Thursday June 20, 2013 3:20

 

dashofinsight:

Our trading accounts have no equity ETF positions. I suspect that Felix has been handling the recent swings a lot better than most.

Thursday June 20, 2013 3:22

 

Jeff Miller@dashofinsight

@steveliesman When you report as you just did “..the Fed’s cash coming into the market” what do you mean? Can you explain how that happens?

Thursday June 20, 2013 3:29

 

Robert Marcin:

brutal down down 2.5%. what if we got another 10x’s?

Thursday June 20, 2013 3:32

 

Robert Marcin:

brutal down day obvi

Thursday June 20, 2013 3:33

 

Robert Marcin:

jeff, i dont get that either. from what i understand, the banks buy the treasury issued debt, then the fed buys the bonds from the banks. so the treasury gets funded from the fed and then spends the money on everything the treasury does like social security, air craft carriers, and amtrak. is that right?

Thursday June 20, 2013 4:18

 

Robert Marcin:

so we r gonna see how much conviction the bulls have! the bears had their test for 2013. good luck bulls.

Thursday June 20, 2013 4:19

 

Traderbarn@Traderbarn Retweeted by Jeff Miller

@dashofinsight @steveliesman Ben calls Dimon and Blankfein and says, “now!” ???

Thursday June 20, 2013 4:45

 

Robert Marcin:

feels to me like gold going back to $1000. then the goldbugs will have been humbled enuf to buy the metal.

Thursday June 20, 2013 4:45

 

Robert Marcin:

to paraphrase ZH, wasnt this market all about fundamentals and not the bernak?? well bulls, what say ye?

Thursday June 20, 2013 4:55

 

dashofinsight:

@Robert — For the long term investor, this sort of action has nothing to do with the fundamentals — which have not changed. And ZH provides the most expensive free advice on the Internet. If you have followed them since inception, you have been absolutely buried while they have profited. Selling fear and conspiracy theories is a booming business.

Thursday June 20, 2013 5:11

 

Guest:

@Robert It is tricky. The Treasury borrowing and spending would be taking place anyway. Those selling bonds to the Fed had to buy them first, so they are only making a spread. The Fed “printing” becomes a credit for dealer banks who have greater deposits in their accounts at the Fed, for which they get paid 25 bps. If they were stepping up lending, there would be an increase in liquidity, but the M2 and MZM growth rates have not matched the balance sheet.

Thursday June 20, 2013 5:20

 

Sonny:

Bob, your screen’s SELL signal was quite timely.

Thursday June 20, 2013 5:21

 

dashofinsight:

The “guest” post to @Robert was my answer to his question about the Fed. I switched computers and was not logged in.

Thursday June 20, 2013 5:53

 

Jeff Miller@dashofinsight

Should Investors be Scared Witless?: Are you an investor or a trader? It is an important question I raise each… bit.ly/16RmzK7

Thursday June 20, 2013 11:21

 

Robert Marcin:

thanks sonny, that sell signal worked perfectly. however, I was waiting for a confirming II sentiment sell and we got very close but no 40% point differential. I have been cautious on shares esp defensive and yielders for a few months. these stocks are well into correction mode now. however, too many stocks are 15-18x’s eps and that’s still too expensive for me.

Friday June 21, 2013 9:10

 

Robert Marcin:

multiple times i posted that i would ride out my old tech position as valuations were too low to harvest. also, i swapped some new highs for turnaround in waiting names, much closer to 52 week lows. but themes got spanked yesterday with the rout. my new buy screen is still only 45 names, and that suggest caution. all of my new buys were on the list.

Friday June 21, 2013 9:13

 

Robert Marcin:

what a hypocrite is larry kudlow, whining about the fed’s tapering plan. where in “free market capitalism is the best path to prosperity” does mandates perpetual fed intervention to support financial asset prices?? in a published and broadcast piece, he slammed the fed for tapering plan. what a joke is this guy. i loathe that type of hypocrisy! he’s a free market hypocrite, only free when its suits his book. he must be long a lot of stocks to beg for free money support for shares.

Friday June 21, 2013 9:18

 

Scott Rothbort:

The index expiration effect has unwinded

Friday June 21, 2013 9:53

 

S_Currencies:

@dashofinsight Jeff, quite enjoyed and appreciated your last night’s piece (“Are You Scared Witless?”). Thank you!

Friday June 21, 2013 10:07

 

dashofinsight:

Thanks, S_Currencies.

Friday June 21, 2013 10:25

 

Jordan L. Kahn, CFA@KAM_Advisors

This isn’t getting a lot of media attention, but it’s important– fb.me/IhvT7oXq

Friday June 21, 2013 10:32

 

Downtown Josh Brown@ReformedBroker Retweeted by Jeff Miller

I ignore 99% of the uninformed taper opinions I hear and just read @calculatedrisk, here’s what he thinks: calculatedriskblog.com/2013/06/four-c…

Friday June 21, 2013 10:33

 

Ryan Avent@ryanavent Retweeted by Jeff Miller

My blog post-script to the print analysis of the Fed’s meeting: economist.com/blogs/freeexch…

Friday June 21, 2013 10:39

 

Alan Levit@AlanHHI

@ScottRothbort Any thoughts on why $RCL has fallen out of bed while $CCL hasn’t?

Friday June 21, 2013 11:10

 

kim:

@jordan I missed the CNBC spot on FCX yesterday. anything good said?

Friday June 21, 2013 11:14

 

dashofinsight:

@kim Actually, I was the one highlighting the CNBC FCX discussion. Stephanie liked the stock because of the valuation (both absolute and to the peer group), strong balance sheet, diversification away from just copper, and 4.5% yield. Josh Brown says that the sector is hated and the stock has broken support. Falling knife. Here is the link: http://video.cnbc.com/gallery/?video=3000177116&play=1

Friday June 21, 2013 11:46

 

dashofinsight:

long FCX

Friday June 21, 2013 11:47

 

scott:

Sometimes it is just unexplainable and random which is the case here.

Friday June 21, 2013 11:50

 

Guest:

ORCL ruining rally for NASDAQ stocks

Friday June 21, 2013 11:51

 

Eddy Elfenbein@EddyElfenbein Retweeted by Jeff Miller

Promise not to tell anyone but Street estimates for 2014 S&P 500 earnings have been going…up. Now over $123.

Friday June 21, 2013 11:57

 

kim:

@jeff, sorry about that. thanks for the recap and the link. long FCX as well. added to positions in the last few weeks…

Friday June 21, 2013 12:22

 

scott:

The market is acting as it should but is frustrating people. We had theindex expiry unwind at the open and a market bounce. That get sold, as bearsget emboldened and test the market. This is normal and frankly welcome. Nextwill be another rally attempt.

Friday June 21, 2013 12:58

 

scott:

Eddy – I expect 2013 earnings to get adjusted up by $2 – $3 after 2q12earnings from the current $112 – $113 levels.

Friday June 21, 2013 12:58

 

Robert Marcin:

still chillin. get close on a couple fert names. i like the consumable commodity names more than specialty chem.

Friday June 21, 2013 1:37

 

Robert Marcin:

there is a Canadian integrated fertilizer co that’s down a lot, cheap, w decent fundamentals. another 5-10% pullback and i am a big buyer.

Friday June 21, 2013 1:38

 

Robert Marcin:

aapl looking wormy. any news? or just the same old concerns? i keep getting asked if its a deep enough value. and my answer is the same. depends on the future normalized margins after google smacks the handset pricing structure.

Friday June 21, 2013 2:20

 

scott:

Bob – Are you talking about buying some, shall we say weed? If so, that onehas been a heartbreaker for years. – Scott

Friday June 21, 2013 2:20

 

Robert Marcin:

new buy screen up to 64 names. not even close to green light.

Friday June 21, 2013 2:21

 

Robert Marcin:

sonny i am circling agco. i expect lower prices over time so i don’t mind waiting to purchase at lower levels.

Friday June 21, 2013 2:22

 

Robert Marcin:

i don’t know how that becomes weed

Friday June 21, 2013 2:23

 

dashofinsight:

Felix has only two ETFs rated at 15 or higher — ITA and IGN. GDX was our feature last night in the weekly update, but I noted that it might be scheduled for a quick return to the penalty box. That prediction was accurate.

Friday June 21, 2013 2:33

 

dashofinsight:

There are still several ETFs in positive territory but still in the PB, so we might be doing some buying next week. the inverse ETFs are only slightly higher than the positive market versions, so the picture is still neutral.

Friday June 21, 2013 2:35

 

Robert Marcin:

sonny, pardon me. i meant agrium. that’s the fert i like. agco is the ag equipment stock i am circling. i expect botht o be decent positions in the next quarter or two.

Friday June 21, 2013 2:35

 

dashofinsight:

In our Felix trading accounts we sold both GLD and TBF (the short bond position) yesterday. GLD went to the PB, so that was a mandatory sale. TBF ratings had fallen to single digits after the big run in a short period, so it was an optional sale. We currently have no positions in trading accounts.

Friday June 21, 2013 2:36

 

dashofinsight:

Those who have been following the Felix discussion (whether trading on it or not) should have observed by now that it is not strictly a momentum model. The filters and penalty box feature add a lot of value. Also, the ratings dwindle on sharp moves that may not have near-term staying power, like that in TBF.

Friday June 21, 2013 2:38

 

Alan Levit@AlanHHI:

@ScottRothbort I assume unexplainable and random applies to $RCL. Please confirm, thanks

Friday June 21, 2013 3:00

 

Robert Marcin:

million dollar question. will the bond market overshoot as bond fund holders see losses in statements. we know a lot of people forced into bond funds from zirp. how we they handle paper losses in fixed income???

Friday June 21, 2013 3:08

 

Sonny:

Bob, does your Bradley cycle have a turning date today June 21?

Friday June 21, 2013 3:40

 

scott:

I rolled my calls to the July 100 strike

Friday June 21, 2013 3:44

 

Scott Rothbort:

Bob – I was referring to Potash, a Canadian fert

Friday June 21, 2013 3:44

 

Scott Rothbort:

Yes Alan RCL – scott

Friday June 21, 2013 3:44

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