ChartProphet

Long/short equity, portfolio strategy, commodities, cfa
ChartProphet
Long/short equity, portfolio strategy, commodities, CFA
Contributor since: 2010
Company: Chart prophet capital
Thanks Preston! I guess that's why some call me a "straight shooter" ... FACTS + LOGIC > EMOTIONAL INVESTING
thanks! that's exactly what I aim for!
thanks!! that's exactly what I aim for!
Compared to Tech stocks, probably a better value...but that $1200/oz level is awfully scary!
Very nice comparisons! One day we'll actually find out where this economy is heading
Read my book "Gold Bubble" or watch any of my interviews. Thanks for the question, definitely an interesting topic.
I'd like to know how NFLX plans to pay for this.
One of the most expensive media content, and NFLX already has over $7.7B in streaming content liabilities.
Terrible earnings, but that's why you play these types of things with options.
Small bet, $1.10/share max loss.
Still had an opportunity for a quick 10% gain (30-70% in the options) in a week.
Holding onto the entire position after such a gain is basically greedy.
Definitely doesn't look good for $WTW anymore.
Thanks Pip,
Please see comment above about AAPL.
U01 --
You point out good fundamental reasons for AAPL to theoretically go up, but those facts are mostly factored into the price already (many people already expect that to happen, and therefore the stock price can't go up much because of it).
More importantly, I don't think AAPL will ever make new highs because I think the best days for AAPL are already behind it. Yes, Apple could still be a great company and a huge competitor, but the time of maximum popularity and investor enthusiasm has already happened. It could continue higher, but I think the all-time highs would encounter huge selling pressure if we even got up there.
Ken,
I agree, it's a pretty big range. The 70% probability though is exactly why I said +/- 10% --- most likely it ends up in that range, but when it comes to specific targets I wrote them right below.
I discussed the range just to show that those who are expecting huge moves should pay attention to the possibility that the market may be stuck in a trading range this year. Maybe next year it'll have to make a real decision.
Thanks for the comment
Daniel,
Thanks for the question.
There was in fact a brick wall resistance at the time above the market, which stocks struggled at twice before crossing.
I was pointing out the very bearish developments and risks, which are mostly still around today.
Fortunately, when prices drop below support or above resistance, it helps a smart technical analyst know he/she is wrong for now. Once stocks moved above that "brick wall" I knew I couldn't fight it.
However, as the market continues to go up, it is increasingly important for investors to be careful.
Commodities will generally move with the rest of the market, so investors must watch out if China deteriorates or the US stock market falls.
CAT and JOY look ok for now, but must watch to see if they stay above recent lows.
gbout3:
This is what I said about NFLX on Twitter yesterday:
"$NFLX at a new high...invalidates short-term drop and long-term count, but so many dangerous catalysts out there"
Basically, the fact that it made a new high isn't good for the shorts. Better to see if it falls below the $305 previous high.
I'll update if there's anything urgent. Good luck!
Shmulik -
Excellent point! Cash flow from operations is one of the top things to watch.
Unfortunately, there is even MUCH worse going on at Netflix than just CFO manipulation.
Check out my article that points to a bunch of other potential accounting issues:
http://seekingalpha.co...
Thanks to everyone for the great comments!!
I was afraid when most people agreed with me (usually when too many people agree it doesn't play out), but it seems to have worked out.
There is still so much bad news to come, so we'll have to wait and see.
bdy -
I bought small positions in put options early today.
One is $210 puts and the other is $175 puts. I have about 60 days for it to play out, but it also doesn't have to make it there for it to be a profitable trade.
You're right, but isn't the important part making money?
If some of the gold bugs listened to the warnings, they would have saved thousands, millions, or (in Paulson's case) billions of dollars.
And those that listened to my shorting strategies are up a few hundred percent right now. Me included :)
You still have the chance to do the same, but maybe wait for a bounce.
True Major Miner.
There is so much more to this gold story that will take place over the next few years.
I was just pointing out that most of these gold bears had no predictions or guts when it actually mattered -- before the fall...they simply join the bandwagon after everyone has already accepted that gold is falling.
It's similar to those who said they "love gold" when it hit $1400+ on the way up, when in fact they missed the $1000+ move starting in 1999.
Let me just remind everyone that when I said gold was going to $700, NO ONE was even close to saying gold was going anywhere below $1200.
Then, AFTER gold started falling, everyone came out with "brave" calls that it would fall to $1000, $800, and now $500.
http://amzn.to/13zgS2D
What an excellent article!! Great points, great charts, and insightful warnings to be careful here. I agree!
Great article James!
I hope the 2012 rally hasn't dissuaded you from being a bear. If anything, like you said, we're at the same binary position in the economy and the market (same old issues and uncertainties), but this time stocks are even higher!
We'll know relatively soon hopefully if the market can continue the rally and stay above all-time highs, or whether all-time highs will prove to be a very strong overhead resistance on our way back down.
Completely corrupt company. It's all in my book
Interesting point that funds are allocating less than the NASDAQ 100 weighting, but most funds track the S&P500 (not the Nasdaq 100) so they actually have a HIGHER allocation than the overall market.
If funds were to allocate based on market, they should allocate closer to 5%
QE is supposed to boost inflation and gold prices, but deflationary forces and a potential recession could lead to falling gold prices, as commodity prices fall -- as they did in 2008.
Thanks for the CP hat-tip.
Market looks dangerous -- from a fundamental, technical, and behavioral point of view.
You tell people to avoid the crowd, which is very smart...but then you recommend gold? One of the biggest crowds around right now is the gold bugs.
It's probably not exactly 50-50, but I think it's a toss up (even in Bernanke's mind).
This QE was announced at a market top, not a bottom like for QE1 and QE2 -- so the danger and downside are much greater.
Yes, QE1 and 2 worked in pumping markets...but it all relies on QE3 now -- if it doesn't start to work and boost the economy, it'll be considered a failure.
Still possible that QE3 will work, but we'll see. I don't think anyone really knows the answer.
If we have a double-dip recession then deflationary pressures will be greater than in 2007-2008.
Plus, gold has extended its run much more since then, the bubble has inflated much more, and the downside is much bigger now. The bottom in 1999-2001 was $250, so I don't think a $700 target is unreasonable if my scenarios play out.
I've publicly (on CNBC) claimed that I expect the $700 target to be reached within 5 years. The last bear market in gold (from 1980 to 1999) lasted 19 years, so a long bear market is not out of the picture.
However, as you already know, the Fed and central banks around the world are doing everything they can to delay recessions or support economies by printing more money. We are yet to see if this strategy will work, but I expect gold to fall regardless.
We are still under the $1900+ peak in September 2011, and even if we see a new high - the price will fall sharply and lose MANY investors and gold bugs a lot of money.
I did expect the markets to make a decision a bit sooner than they have (and there's still many risks and unsolved problems left to be resolved), but I still stand by my claims that gold is in a bubble and will burst.
If the economy improves and stocks keep rising, people will get out of gold and look for other ways to make money (no longer the need for the "fear hedge" if we recover).
On the other hand, if the economy gets much worse and stocks fall, I expect the deflationary pressures to drag gold down with them (asset prices for commodities and others fall during recessions -- as gold did in 2008).
Yes, perhaps it's taking longer than most have expected, but gold is to be avoided. My earlier calls were also a warning to investors --- it's the average investor that gets crushed by getting in near the top.
Called it on June 21st on BNN Television:
Skip to 7:44
http://bit.ly/MXZ61F
I definitely know what you're talking about! They have done that to me too, coming up with "reasons" why certain articles don't fit their criteria. Most of the time it's just excuses because they refuse to post articles that don't fit their point of view or that may be too contrarian.
They definitely play favorites. Keep doing your thing though, and hopefully when they see articles they like they'll publish them.
Good luck
Weird that a top US automaker will be front and center on the UK's biggest sports franchise?
Good article Chris. I like the charts that prove your point.
Keep it up!
Why isn't this a published article though?