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Dr. Kris has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her satisfaction), she decided to tackle something even more difficult—the stock market. Applying the scientific method along with an insatiably... More
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  • Market Notes: Old Tech Seeing New Life -- September 8

    Lately, the market has been trying to decide which way it wants to go--one day it's up and the next day it's down. Although market internals are leaning towards the bears' side of the seesaw, the fact that the market-leading Dow Transports have been able to advance last week while the others stagnated is a big plus in the bulls' favor. September is historically a lackluster month for stocks but this market has shown a unique ability to defy the odds. While it's tempting to play the contrarian, I do think valuations are becoming quite heady and I think that being selective is the best course of action in this indecisive market.

    Today's commodity highlights: Of metals, miners, and currencies
    1. There's some bifurcation in the metals with the Base Metal exchange-traded vehicles (DBB, JJM) both breaking out of year and a half bases. This is a very bullish sign for a rally continuation. (Note that volume on JJM is extremely low (only about 4k/day) compared with that of DBB (around 180k/day).)
    2. While base metals shine, precious metals continue to lose their luster. Leading the pack to the downside are the gold miners. Both the Gold Miner etf (GDX, $24.19) and the Junior Gold Miner etf (GDXJ, $37.26) have broken support levels and seem determined to test their next support levels which are $22 for GDX and $33 for GDXJ.
    3. Not only is Oil (OIL, USO) continuing to break support levels, but so are Oil Services (OIH, XES) with many individual drillers sliding to new yearly lows (RIG, FI, KEG, DRQ).
    4. Scotland's threat to secede from the UK sent the British Pound (NYSEARCA:FXB) and the Euro (NYSEARCA:FXE) plummeting and the US Dollar (NYSEARCA:UUP) soaring. Several weeks ago we noted the breakout in the UUP along with the breakdown in the FXE and suggested it as a viable long/short pairs trade. Currency traders who initiated this trade at the time are probably dancing around the Maypole.

    Today's stock highlights: "Old tech" breaking out
    Yahoo! (YHOO, $41.81) shareholders are shouting for joy as the stock rallied 5.6% on five times normal volume to a high not seen since 2000. The reason is because the company stands to gain around $8.8B (before taxes) in cold hard cash on the heels of the Alibaba (proposed symbol: BABA) IPO. It remains to be seen, however, if the company can put all that cash to good use...

    Two other bright spots in the "old tech" space: Microsoft (MSFT, $46.47) and Nokia (NOK, $8.49) both broke out to new highs on heavier than normal volume today. Mr. Softie was recommended as a long pick to our *Blue Plate Specials* subscribers on 3/31/14 at $40.99. Since then, it's rallied over 13%.

    Sep 08 7:34 PM | Link | Comment!
  • Market Notes: Foreign Stocks Getting Some Love -- September 2

    One would think that Putin's sabre rattling would send investors fleeing from risk assets (aka stocks) and into the traditional safe havens--bonds, precious metals, and oil--but guess what? We're getting the exact opposite reaction. Sure, most of the major averages began the first trading day of September on a low note, but the market-leading Dow Transports refused to participate in the mid-session sell-off and ultimately managed to not only stop the hemorrhaging in the other indices but to coax them back into the green by the closing bell. The rally in the DTX was so intense that it closed the day at its all-time high.

    While this is an extremely bullish indication of a continuation in the rally, not all of the market internals are on the same page. VIX volatility (as measured by VVIX) has been trending in an upward channeling pattern since May. While the VIX appears to be settling back down, the VVIX doesn't. In fact, it appears that it's continuing the next leg up off of its channel low put in on 8/15. While there's no call for alarm--yet!--it is a cause for some concern.

    Market Highlights: Brazil continues to heat up We've been noting the bullish action of Brazilian banks BBD, BDORY, and ITUB. All of these stocks continued their winning streaks today on decent volume. Following in their footsteps has been Brazil oil producer Petrobras. Both classes of its stock, PBR and PBR.A, advanced more than 5% on heavy volume. All of this bullish movement helped the Brazil country fund (EWZ, $54) to break out of a ten month base recently. Based solely on technicals, the stock has plenty of room to run to the $70 level where it will retest its previous high.

    Brazil isn't the only place where there's some interesting international stock action. Today, shares of Swiss drug maker Novartis (NVS, $94) leapt over resistance to hit an all-time high on nearly six times average volume on good clinical trial results of its new heart drug. Analysts believe this drug could be a block-buster and if you want to get in on the action, don't wait too long before taking a position! The stock has options and it is interesting to note that there was a huge volume spike in the September 90 calls on Friday (before the official announcement).

    Other foreign stocks that have been in rally mode include the following: Lenovo (OTCPK:LNVGY), Biosyent (OTCPK:BIOYF), DHX Media (OTCPK:DHXMF), SK Telecom (NYSE:SKM), ITV (OTCPK:ITVPY), and Lynden Energy (OTCPK:LVLEF). It's also interesting to note that ever since the latter company, Lynden Energy, was profiled in a Seeking Alpha Pro article on August 2nd, the stock has been under very heavy accumulation.

    Sep 02 7:29 PM | Link | Comment!
  • Market Notes: Trade Ideas For The Week Ahead -- 9/1/14

    Well, I do hope everyone enjoyed their Labor Day holiday! My apologies for not getting this out earlier but I, too, wanted a couple of days of R&R. Lest you think I'm shirking my duty, okay, I am--to some extent. But on the other hand, I'm honestly not sure where the market will be heading in the next few days.

    Essentially, the market has been moving sideways for the past week or so and the Dow Transports (DTX), the generally acknowledged leader in market direction, has been quiet. For now, the bulls are still in control. Here are some recent market mentions that continue to shine:
    1. Brazilian banks (BBD, BDORY, ITUB), highlighted here recently continue to jump.
    2. The currency pairs trade--long USD (NYSEARCA:UUP)/short euro (NYSEARCA:FXE) is still on track. On Friday, the USD remained stagnant but the euro broke to the downside

    In brief, here's what is on my radar list for the next couple of days. Note that I am neither recommending buying them nor shorting them--most are speculative ventures and should be treated as such. They have all been exhibiting excellent upward momentum:
    1. Imageware Software (IWSY, $2.65) is a provider of image-related security software to law enforcement and businesses. The stock has been rallying off a relative low put in a year ago and has been under accumulation for the past several months. It broke above $1.40 resistance and pushed ahead 10% on heavy volume on Friday.
    2. Synthetic Biologics (SYN, $2.62) is a biotech focused on irritable bowel syndrome. The stock has been trending up but was seeing resistance at $2.40. On Friday, it motored well above it (+14%) on a good drug report that is incomprehensible to me. Those of you into biotechs should look into this as many in the know on Seeking Alpha like the company's prospects.
    3. Veeva Systems (VEEV, $29.97) soared over 20% on Friday on seven times normal volume following a great earnings report and the news that the company is hiking full year 2015 guidance. Although the stock jumped considerably, it wasn't able to pierce minor resistance at $30. Should it do that on volume conviction, it could easily run to its next resistance levels at $34, $36, and $40.

    Sep 01 10:26 PM | Link | Comment!
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  • Intraday support/resistance: $SPX 1979/2006, $DTX 847/860, $DJIA 16985/17175, Nasdaq 4500/4570, $RUT 1141.5/1154.5; $VIX 12.85/14.55
    about 1 hour ago
  • Intraday support/resistance: $SPX 1978/1986, $DTX 849.3/854.7, $DJIA 16950/17040, Nasdaq 4498/4567, $RUT 1144/1160; $VIX 13.55/14.25
    1 day ago
  • Joy in Mudville!!! USC loses to Boston College & UCLA (sans Hundley w/an impressive Neuheisel) wins over Texas. Happiness to the nth!!!
    3 days ago
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