Stez

This Week's Recap: Goldman's Sucker Punch

Looking at the weekly S+P charts the market hit it's head on the top of the yearly downtrend line.

It then has lodged at the bottom of this year's uptrend line.

It makes an asymetrical triangle and now we wait as the lines squeeze together which way it breaks.

This should be decided in the next ten days.

We also have to remember coming to the end of the year people want to book those gains.

My bias is a downdraft to around 900.

Though it can do this slowly rising each time to the top of the yearly resistance lines (sucking in money) and then falling lower with the muti year trend.

The Economy Is Bipolar: Get Used to It

I love it a lousy 2.9% GDP growth predicted.

Gordon Brown would sell his wife into slavery for that number.

Bemused by GDP Figures

As David Rosenberg pointed out the OECD survey states that the stimulus increased GDP by 5%. Work out the sums from there when looking at GDP.

We have the PMI figures tomorrow and the ISM index Monday.

They will provide the initial spur for either a rally back and over the previous high or a continuation of the fade.

Today was a snap back from short term oversold conditions.

The other problem is that the volume in the market has been falling from the last four to five months. We need a substantial increase in volume to smash forward.

The question is there this much vaunted cash waiting on the sidelines? Or as the volume decrease shows has it been allocated and now reaped?

The Liquid Upside for Energy Recovery's Desalination Technology

Problem is the stock is pricey and the earnings have been going solidly down.

They need some strong contracts to ignite attention. This stock has had a lot of great coverage and more disappointments for many investors.

A good company bought at the wrong price does not make a great investment.

Time to Invest in Tech Stocks

You have IBM on your strong buy list.

But in an earlier article you had it on your list of over leveraged companies.

What has made you do an about turn, if you regard it too highly leveraged?

Jobless Claims Stuck at 570,000

You take a 26 year high in unemployment at 9.7%. You have a shadow market of 16% unemployment and retail figures massaged like crazy.

Then key pivot points at 1006 and 1010 taken out you know there is some incredible Kool Aid being pumped into the stock market machine.

CNBC came out with the huge positive that the 10k less then expected lost jobs showed the market was powering.

El-Erian may be a bond guy but when he talks, of the equity sugar rush on CNBC, he should be referring to the crack pipe that everyone seems to be smoking when they cheer these numbers.

The stock market has been rising on bad and selling on good.
So we should be at 1100 at the end of the month after this reaction.

Five Reasons the Market Could Crash This Fall

Enzio Von Pfiel was putting forward precisely this proposition on CNBC.

Take a wild guess how that was received.

He stated trading desks have made their money on the upside.
Now they will not be able to make such large sized gains here and the programs will be taking it to the downside and when they do it will be a violent sell off.

The idea was greeted with total bemusement.

October will tell the tale the key is not being the fish that got hooked.

The Consumer Is Not Back, But Thanks for the Markup in Stock Price

It is best to have no math skill. As Oscar Wilde stated education tarnishes the bloom of ignorance.

Looking at the reports most of these superior results were created on declining sales. Right now margin management is the new mantra.

Before it was the reflation trade that was linked to the stimulus trade that went before it.

You know where we are going after that back to the stimulus trade.

The daisy chain is intact.

Bottom line it's perception that masters reality as the greatest investor of all pointed out - Gordon Gekko.

He was real and he lived unlike the wonderful Caterpillar results that burst out the page.

Potash and Agrium: Possible Agriculture Shorts?

This sector is so volatile you need nerves of steel.

Maybe using some option play is best.
The index etf's are obviously not anywhere near as volatile.

Buy-write's come to mind maybe a small position long term on the stock and sell the index. May not earn a lot from it but can just chip away and brings down the aggregate cost of the stock. While potential losses should be kept within discernable limits.

Potash's Negative Price Implications

Slightly counters RBC's call for potash prices to remain elevated.

Pick your analyst and takes your choice is the old adage.

Long term ie five year time horizon POT and AGU at these prices are interesting entry points. We have to be aware of possible further cuts in earnings.

Countering that agricultural inventories are at historical lows and they will proceed to get worse, Malthus's mathmatical formula regarding agriculture and population increases will come into play.

Within the next twenty years we have another billion mouths to feed while the agricultural land available for development even with the felling of the rainforests has decreased by over 8% in twenty year time period. It will decrease further as China and India develop.

Agriculture is most definitely the sector for the long term. It is Green Gold.

Amazon Earnings Preview: How Long Before the Jig Is Up?

If you want to short why not buy a long dated out of the money put.
Thereby you set a stop with regard the amount of money
you have at risk. At some point they will be found out and gap lower
and you have a time frame to exploit it if you are right.

Its the method that Nick Taleb (Black Swan) uses so that when some sense returns to the market with regard this stock's valuation you make some money if correct.

Value Your Stocks Thoughtfully

There was a study on Seeking Alpha demonstrating that low Book Value stocks were under performing the market.

Like low PE stocks taken out of context they can lead to value traps.

Generally stocks with good cashflow and strong returns on Investment outperform then market.

It's important point to make isolating single metrics can lead to real problems in performance.

Possible NYSE Euronext Options Trade

Some really interesting ideas from both you and Ed.

With regard the dividend is this a relatively safe one?

The Slippery Slope of Declining Petrochemical Demand

For the moment petro chemical demand will fall. Baker Hughes rig count has shown a strong contraction in the drilling market.

However the fact that exploration projects are terminated means that we will see prices increase as supply is limited. Oil sands will no longer be a viable supply source as the price of refinement is too high.

My view is the market will be range bound. However 18 months time we will return to 70 dollar oil.

Honda are doing amazing things with hydrogen cars however those developing economies like their oil and are going to retain their fossil fuels for a decade or more at the very least.

Here We Go Again: Another U.S. Bad Bank Plan

This plan proves the old adage correct.

You can fool some of the people some of the time.
But it's better when you try to fool all of the people
all of the time.