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Dr. Kris
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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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  • Intraday Market Notes: The Pause That Refreshes Or Down For The Count? -- Sept. 14 3 comments
    Sep 14, 2012 5:18 PM

    4:15 pm ET: There's so much happening in the market right now that I don't know where to begin. The QE mania that ignited stocks, foreign currencies, and commodities yesterday appears to be fizzling out. Whether this is the end of the "irrational exuberance" (my interpretation) or just the pause that refreshes is the burning question. Perhaps the reason that everything is selling off is that nobody wants to be long over a weekend likely to be fraught with more anti-American sentiment and unrest. This fear could very well be the main reason for today's rise in the VIX.

    A brief run-down on the market: Metals extended their gains with platinum (PGM, PTM, PPLT) and palladium (NYSEARCA:PALL) leap-frogging over gold (GLD, IAU) while silver (NYSEARCA:SLV) brought up the rear (surprisingly). The big winner again today was lead (NYSEARCA:LD), up a breath-taking 11%. (Caveat: If you're interested in getting into this fund, please note that its average daily volume is only 600 shares making for a big gap between the bid and the ask prices, so please use limit orders.)

    Oil, oil services, oil explorers, and oil producers all shot up again today. Financial media pundits are predicting Texas tea to reach $150 a barrel, especially if tensions in the Middle East continue (thus disrupting production). The prospect of increasing oil prices was just the boost that alternative energy stocks needed. This industry group has been in the dumpster lately and even the highly battered coal mining stocks are seeing some love. Alternative and green energy funds breaking out today are: GEX, PBD, PUW, PZD, QCLN.

    In sector news, the banking etf (NYSEARCA:KBE) broke out to a new high following yesterday's breakout of the financial etf (NYSEARCA:XLF). It's no surprise that the IT etf (NYSEARCA:VGT) hit a new high as did Apple (NASDAQ:AAPL) its largest holding (19%). However, I'd be cautious about jumping into either of these issues as the topping tail on Apple could be a sign of temporary buying exhaustion.

    In short, the picture for the "risk-on" trade appears rosy, but there are potential upcoming pitfalls that should be not be neglected. The first is the growing tension in the world, especially in the Middle East and in other muslim countries where Uncle Sam is getting kicked in the shins. The second is the economic uncertainty surrounding the upcoming presidential elections, and the third is the projected slowdown in third and fourth quarter corporate earnings. I don't mean to rain on the bulls' parade, but carrying an umbrella "just in case" might not be such a bad idea.

    Have a good weekend! Go UCLA Bruins!!!

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Comments (3)
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  • TruffelPig
    , contributor
    Comments (4078) | Send Message
     
    Hey Kris, I didn't know you were a Cheerleader! Prof. TruffelPig wishes a nice weekend without clouds.

     

    Btw, always when I have an umbrella it doesn't rain. Until I forget the umbrella - pours down in buckets then. The market should wish a buy an "umbrella" - it would always go up. I recently tried to short Qihu......woah.......
    14 Sep 2012, 10:45 PM Reply Like
  • Bob de'Long
    , contributor
    Comments (696) | Send Message
     
    One measure risk of up versus down, is to ask: "Are we nearer to the top or nearer to the bottom?"

     

    The answer should provide a clue not only to the direction, but also and more importantly, to magnitude of a potential move.

     

    I don’t see much upside potential in the overall markets, and I see plenty of downside, say +5% to -25%.

     

    It’s not much fun to flee toward cash when many are screaming “Go team, go, go.” But 50% of football teams lose their games. Right now I think odds of a market loss outweigh gains.
    15 Sep 2012, 01:44 PM Reply Like
  • Dr. Kris
    , contributor
    Comments (322) | Send Message
     
    Author’s reply » TF: Yup, I was a cheerleader.

     

    It was a great weekend for college football--USC LOST!!!! (Thank you again, Stanford!) And UCLA won (though not looking nearly as good as last week against Nebraska). Coach Mora had better shape them up for their first conference game next weekend against Oregon State.

     

    Shout out: Hey Trojans, whose house is it now? You not 'da man in town any more.

     

    It would have been a trifecta if Cal had managed a victory over Ohio State, but just like the stock market, you can't win 'em all. Still, an SC loss and a UCLA win will keep me glowing for the next week.

     

    Kris
    16 Sep 2012, 07:21 PM Reply Like
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