Monthly Archives: August 2013

Stock Market Analysis August 30, 2013

 Morning Stock Market Thoughts For August 30, 2013:

Although futures were soaring when I went to sleep, they’ve since settled down and we can expect a relatively flat open. I’ll be watching how gold deals with overhead supply and might try to stalk an entry if the pullback continues.

Trading Thoughts On Stocks I’m Watching Today:

— There isn’t much to report when it comes to my individual stocks. I’m watching for continued follow through in SNV and BRKS. But I’m not looking to deploy much cash into this long weekend…

I imagine most market participants will take a similar approach. Although, you might expect some end of month window dressing in names that have outperformed this summer.

Other Thoughts and Good Articles I’ve Read Today:

– 15 Questions a Good Investor or Owner asks is a great approach to Scuttlebutt

The unofficial guide to Wall Street dress is good for a chuckle.

 

How I Made $2,000,000 In The Stock Market (Book Review)

how i made $2 000 000 in the stock market - book review

Learn how Darvas made $2,000,000 in the stock market…

How I Made $2,000,000 in the Stock Market, by Nicolas Darvas is “The amazing story of a world-famous dancer who trained himself to become one of the most successful investors in stock market history.

With “How I Made $2,000,000” you’re in for a detailed look at the rise of one of Wall Street’s most successful individual investors. The story of Nicolas Darvas is truly impressive. But it’s not unrealistic.

You see…

As you turn the pages of “How I Made $2,000,000 in the Stock Market” you can really feel the momentum accelerating. It moves fast. And you almost feel like it’s your money Darvas is writing about! And here’s the thing:

Since I just finished reading this book, I think you’ll find my book review honest, accurate and fresh. I’ve still got a great taste in my mouth. And I hope this book review will help you determine if “How I Made $2,000,000 in the Stock Market” is the right book for you.

So without further ado…

Here’s Why You Should Read: “How I Made $2,000,000 in the Stock Market”

How I Made $2,000,000 in the Stock Market explains the rise of Nicolas Darvas, a Hungarian born economist turned professional ballet dancer. At the age of 23 Darvas flees Hungary for fear of Nazis and Soviets. The coolest part is…

Nicolas Darvas happened upon the stock market by chance. I don’t want to tell you how it happens, but it’s purely an accident that gets Nicolas interested in the stock market. From there…

You follow along, page-by-page, as Darvas slowly discovers the world of stock trading. You’re a fly on the wall as he rises from his reliance on speculative tips, to meeting his Manhattan broker, to studying fundamentals and finally to his theory of “techno-fundamentalism.”

Darvas reads over 200 books to get himself acquainted with the market. He makes tons of mistakes. And in the process he refines a surprisingly simple methodology for selecting winning stocks.

And that leads me to my next point…

Here’s why I really liked reading “How I Made $2,000,000 in the Stock Market”:

How I Made $2,000,000 in the Stock Market is totally credible. And in the world of investment books that can be a rare quality. Unlike most of the other finance books that populate the best-sellers list, this book is a step by step walk through the experiences of a proven stock market winner.

And since Darvas’ experience isn’t one smooth ride to the top (not to spoil it, but he suffers some serious drawdowns along the way) – his story is more believable, more inspiring and more enjoyable for investors like you and me.

Now if you’re looking to read How I Made $2,000,000 in the Stock Market to learn something, let me show you…

Here’s What “How I Made $2,000,000 in the Stock Market” Teaches Best:

One of the coolest things about How I Made $2,000,000 in the Stock Market is that you get to follow along with Nicolas Darvas as he learns how to profit in the stock market using his own personal capital. For most investors, this is exactly where you are today, and exactly what you want to know!

Darvas tries a myriad approaches before settling on his “techno-fundamentalism.” And it’s very informative how you get to see the shortcomings of each of his different approaches. But the best lesson from How I Made $2,000,000 in the Stock Market is…

Darvas was most successful in the stock market during the time he is traveling the world as a professional dancer. And here’s the kicker:

Since this takes place in 1955, it’s obviously a pretty remarkable achievement! But Darvas is quick to admit that staying away from the buzz of Wall Street is the thing that makes him the most successful.

You see:

When he removes himself from the distractions of the street he is better able to maintain his conviction and stick to his guns. Darvas goes to show this approach pays. And I think the same lesson rings very true today.

Warning: Here’s What Isn’t Covered By: “How I Made $2,000,000 in the Stock Market”

Now as I just mentioned, “How I Made $2,000,000 in the Stock Market” does a lot of things well. But sometimes buying a book for the wrong reasons can be disappointing (especially if you figure it out two thirds of the way through!). So…

If you are looking for a complex and high-tech stock picking system… then, “How I Made $2,000,000 in the Stock Market” might not be for you. While Darvas’ book does a great job covering simple techniques he used to make money, it doesn’t have any specific indicators or high tech algorithms you can rely on to pick stocks for you.

Believe it or not, Nicolas Darvas main method of stock selection was to read Barron’s magazine to find stocks trading at new highs before doing more fundamental research. It’s this kind of simple and straightforward approach that made Darvas rich. So…

After reading this book review, do you think you can profit from How I Made $2,000,000 in the Stock Market?

“How I Made $2,000,000 in the Stock Market” – The Final Word…

Whether or not you decide to read How I Made $2,000,000 in the Stock Market, I can honestly tell you that I really enjoyed the book. It’s a very quick read that I finished in two days. There is something about these time-tested stock market lessons that’s really exciting and even more encouraging.

If you’re at all curious about if this book is for you, check out the Amazon Reviews of How I Made $2,000,000 in the Stock Market, and the additional details below…

“How I Made $2,000,000 in the Stock Market” Details and Video Book Review:


Author: Nicolas Darvas
190 Pages
Publisher: Martino Fine Books
Language: English
ISBN-10: 1614271690
ISBN-13: 978-1614271697
Product Dimensions: 0.4 x 5.9 x 8.9 inches
Shipping Weight: 10.4 ounces

Other Books By Nicolas Darvas:

 

 

 

Stock Market Analysis August 29 2013

Morning Stock Market Thoughts For August 29, 2013

This is the first morning in what feels like forever that futures are pointing higher. So can the market follow through on yesterday’s tepid bounce?

To stay informed I will watch IWM closely after the opening bell to try and get a sense of direction. I usually wait and watch the 1 minute candlesticks of the SPY and IWM to see what kind of daily trading range is being established in the first 45 minutes or so. You never want to buy the morning gap up, only to see it fade, right?

One other clue to watch…

Lately the US dollar and US equities have been moving in concert, which is opposite to what is traditionally expected. For exampe: Yesterday the USD was up significantly and this seemed to buoy stocks. The media is calling it a “flight to safety” but I get the feeling that might be the headline du jour invented by the financial news media to explain the strange price action.

— The other things to be aware of this morning are the decrease in US jobless claims and US Second Quarter Growth. Again, while the numbers seem positive for an “economic recovery” you’ll want to watch how the market reacts. Any news or data that lends credibility to FED tapering could be sold. So be on watch for market logic…

Trading Thoughts On Stocks I’m Watching Today:

— SNV had a strong session yesterday and I would be pleased as punch to see it follow through today. I’ll try to avoid cheerleading too hard.

— FMD has been fun to periodically check in on, though I don’t own a meaningful amount of stock anymore. Having watched the price action, I get the feeling FMD is drifting lower until resolution of the IRS tax liabilities. The fun thing is that this stock could explode, either up or down. Are you willing to place a bet? (I’m not).

— BRKS is at attractive prices, but the technical analysis leaves something to be desired. My biggest concern is that instead of rallying higher from the current share price (as it did in April), Brooks Automation is just flopping around – threatening to roll over. While ultimately I think the stock could make it to the $19 range, it could get to $8 first. That’s why I’m building a position slowly.

— Speaking of bottoms: STLY may be carving out a bottom too. If it can remain above the $3.40 level I will see this as constructive. You’ll remember the stock sold off hard after it’s last earnings miss. Patient investors recognize the intrinsic value of the company and are willing to hold on a few more quarters to see if the company can benefit from it’s ERP updates, new showrooms and improved service staff.

— If markets are strong today, there might be a pullback in gold, and consequently IAG. I’m interested in an entry on the long side, but haven’t been able to get one to my liking, just yet.

Other Thoughts and Good Articles I’ve Read Today:

Maps of the escalating Western presence around Syria. But: No Clear Signs for US Military Action, yet.

— Something is up with Euro vs. Dollar option pricing. If these indicators are on the money… and the correlations between USD and SPY mentioned above continue… well… wouldn’t that be an interesting turn of events.

Free Video: “After Hours With The Option Addict” – Check out this great educational video to learn how the ultra-successful Option Addict banks coin.

— If you’re looking for some long weekend reading, check out my recent stock market book reviews: A Random Walk Down Wall Street (Book Review) and Confessions of a Street Addict (Book Review).

Back with more after the open!

Stock Market Day In Review: August 29, 2013

I’ll keep this short, as I was in meetings most of the afternoon. Things started out pretty well..

But that was about as good as it got. While small caps (IWM), home builders (XHB) and even technology (QQQ) held up pretty well, the mega-cap DOW names continued with their less than impressive performances. For example…

The action in XOM alone is enough to discourage you from adding risk. My positions in BRKS and SNV both also gave back early gains. I wasn’t able to add to IAG, but the end of day drawdown in gold caught my eye too.

And maybe that’s the take home message…

In the early part of the year, you’ll recall that markets often gapped down and then would rally up into the close. Today, the action feels almost opposite. The morning euphoria fades as traders and investors seemingly come to their senses and reduce risk exposure into the close. That’s not what you want to see in a bull market.

So what is a diligent stock picker to do?

I’m continuing the boring path of carefully averaging into stocks with strong fundamentals. If I can stay disciplined with my buying, there might even be chances for some swing trading scalps. But at this point, with the spectre of war, the possibility of tapering and strong performance year-to-date, I’m hard pressed to chase risk at these levels. I’ll buy conservative lots of stocks that have a margin of safety as they come down to technical resistance. And I’ll sell on any quick rips. But most of all, I’m watching and waiting.

Long patience.

Confessions Of A Street Addict (Book Review)

Confessions of a Street Addict Book Review

Confessions of a Street Addict Book Review

Confessions of a Street Addict by James J Cramer is “The most candid look at Wall Street Since Liar’s Poker.”

With Confessions of a Street Addict you’re in for a fast-paced look at one of Wall Street’s most successful hedge-fund-manager-turned-talking-heads. It’s also the first Wall Street biography I ever read…

And regardless of what you think of Jim Cramer today, his rise to the top (as documented in Confessions of a Street Addict) contains valuable lessons for anyone interested in financial markets.

And since this one of the first investment books I ever read, I think you’ll find my book review honest, accurate and insightful. To disclose my position ahead of time, let me just say: I’ve bought Cramer’s book for a couple of my close friends. And…

I hope this book review will help you determine if “Confessions of a Street Addict” is the right book for you too.

So without further ado…

Here’s Why You Should Read: “Confessions of a Street Addict”

Confessions of a Street Addict details the rise of Jim Cramer, from his Philadelphia upbringing, to his days at Harvard Business School, to interviewing and working at Goldman Sachs, to running an incredibly successful hedge fund and even to taking TheStreet.com public in an IPO.

Yup, Confessions of a Street Addict is a blow-by-blow account of how Cramer got to where he is today. And here’s the real kicker…

Even though Cramer sometimes annoys me on Mad Money, his successive moves up the rungs of the financial industry ladder are incredibly impressive, I don’t care what you say. Plus, the book is action-packed and moves very quickly, so you will definitely have trouble putting it down.

But…

Here’s why I really liked reading “Confessions of a Street Addict”:

Cramer’s “Confessions of a Street Addict” was a really eye opening book for me. I first read it during my undergraduate years, when I was majoring in biochemistry. It wasn’t until a fourth-year elective class that I realized how cool (and profitable) the stock market could be. My sister gave me Confessions of a Street Addict for Christmas… and I was amazed…

That’s because:

Cramer’s book provided a very clear roadmap for how you can succeed in the financial industry. He gives you a lot of insight into each part of his career, including the make or break moments. I really like the chapters where he describes how he made enough money to start his hedge fund. I tell ya…

For someone interested in professional money management, these lessons are incredibly instructive. And since I wasn’t very exposed to trading or investment banking when I read Cramer’s book, I really appreciated how Confessions of a Street Addict spelled out exactly how you could advance your career in the financial industry.

Here are some of the things I liked best about Cramer’s book…

What “Confessions of a Street Addict” Teaches Best

Confessions of a Street Addict does a really good job explaining both the ups and downs of a high-intensity career in the financial industry. Cramer is up-front and honest about the stress that his professional success put on his family and personal life.

I don’t want to ruin it for you. But…

There are some pretty jaw-dropping scenes in Confessions of a Street Addict. If Cramer’s wife (referred to as The Trading Goddess) wasn’t also in the financial industry, I wonder if things wouldn’t have been a little different for Cramer on the personal front.

Another thing Confessions of a Street Addict made clear was the “intangibles” required to make it in the financial industry. Regardless of what you think of Cramer’s eccentric personality today, his biography makes it clear that character, grit and goals are required to succeed in the financial industry. It’s refreshing to understand that even “celebrity” financial news media had to put in their hours to rise to the top.

Here’s What Isn’t Covered By: “Confessions of a Street Addict”

Now as I just mentioned, “Confessions of a Street Addict” does a lot of things well. But sometimes buying a book for the wrong reasons can be disappointing (especially if you figure it out two thirds of the way through!). So…

If you were hoping for an active approach to picking stocks… then, “Confessions of a Street Addict” might not be for you. While Cramer’s book does a great job covering what it takes to be a successful money manager, it’s not focused on how you can pick stocks for yourself.

(Cramer’s other book, Real Money, is much more focused on teaching you how he picks stocks. I’ll do another review on that book soon).

So has this book review helped you get a better picture of Cramer’s book? Should you read “Confessions of a Street Addict” or not?

“Confessions of A Street Addict” – The Final Word…

It’s really up to you! I enjoyed “Confessions of a Street Addict” a lot, for the reasons described above. But don’t let me speak for you! Invest in your knowledge today! Buy Confessions of a Street Addict On Amazon.

“Confessions of a Street Addict” Details and Video Book Review:


Author: James J Cramer
352 Pages
Publisher: Simon & Schuster

Other Books By Jim Cramer:

 

Stock Market Analysis August 28, 2013

Morning Stock Market Thoughts For August 28, 2013

Future are flat, to slightly positive. And while I’m happy to wake up and see that the wheel’s haven’t completely fallen off the wagon overnight, yesterday’s damage still looms large. So I don’t know about you but… I’m largely on the sidelines here.

I’ll be watching the open carefully to keep my finger on the pulse. I’m not ruling out day trades should we see things start to snap back. But my buys will be nimble, with tight stop-losses.

Home sales data is coming out at 10am as well, so be careful about making any big bets before that number is released (as it could be an excuse for a market move, one way or another).

Trading Thoughts On Stocks I’m Watching Today:

— SNV was taken to the woodshed yesterday. Financials were hit hard and this small-cap regional bank took a beating. I’m still bullish on this company and will add to the stock, should it move lower in the coming weeks (something that wouldn’t surprise me).

— TINY is at new (seemingly impossible) lows. If you want to understand why, look no further than the TINY Yahoo Finance Message Boards. It’s hard to get excited about a company that isn’t going to make money for 5 years.

— IAG is still looking interesting to me. The gold miners (GDX) look like they’re dealing with some overhead supply, so we might see more of a pullback before the entry.

— BRKS looks good to me at these prices. My only hesitation is that the stock could continue to drift lower for another month or two. The company is well positioned for the long term but their short term revenue is dependent on the semi conductor producer order schedule, which seems to be taking longer to ramp this year than usual.

Other Thoughts and Good Articles I’ve Read Today:

— I know you might be getting tired of my links to ChessnWine, but the update on broad market divergences is incredibly helpful. I keep coming back to his work because it’s the most objective technical analysis I can find, and it always reminds me to take a step back and listen to what prices are telling me.

— I’m a sucker for info-graphics. As things heat up around Syria, this map shows the tightening noose around Damascus.

— I may have posted this before, but Scott Bleier’s: “The Story Goes Something Like This…” is always worth a re-read, especially for any non-finance types lurking around.

What are you reading this morning?

Stock Idea: A Quick Look At BRKS…

It looks like BRKS caught an upgrade from Northland Capital Markets this morning. The stock is rated outperform with an $11.00 price target. I think this is conservative but sometimes analysts like to move their price targets up as the stocks go, rather than make a big call. Anyway…

I haven’t heard of Northland before so it’s not the best endorsement of all times or anything. But their commentary on how they see revenue progressing at the end of the year is worth checking out. BRKS has a lot of fundamental value, both in terms of competitive advantage, macro-economic trends, dividends and balance sheet.

The volume is thin though, and I don’t expect a sustainable move in the stock until seeing some signs of more revenue. But if you’re in it for the long term I don’t think the stock is overvalued at these prices. I’m seriously thinking about adding to my own position if the stock gets support at yesterday’s highs. Remember, you can also read this in-depth analysis of BRKS I wrote a few months ago (there’s a video too).

My only real worry is the stock could linger for awhile or grind lower on general market weakness. That’s not really any way to live though. So I’ll keep you posted if I make any moves.

And a note on $BRKS from reader @TimWolfgang

That’s all for now! I’ll be back with more for you later.

(Disclaimer: do your own research too, don’t just read mine).

Stock Market Day In Review: August 28, 2013

It almost felt like the market “had” to slip into the close. I had my eye on the 1-min IWM candlesticks for the last half hour of today’s session, and seemingly on cue the market started to fade. While we closed green, the high volume end of day fireworks aren’t alarmingly bullish either. Nonetheless:

I added a small amount to my long-term BRKS position. Last time it was at this price levels it “v-rallied” higher. Now it’s threatening to roll over but I’m willing to make a small buy and add again if BRKS falls to $8.40.

Other than buying BRKS, I was sitting on the sidelines for most of the day. It was nice to see SNV bulls wrestle the stock higher. But a lot more work needs to be done to reclaim new highs…

While XOM finally caught a meaningful bid, CAT continued to linger. Along the same lines, GOOG and AMZN failed to make any meaningful highs. And the homebuilders clunked along in the mud. Now don’t get me wrong…

I’m a patient guy. And I realize on the longer-term the market is still in a very robust uptrend. But in terms of immediate price action, there isn’t much to be encouraged about. So with that in mind…

I’ll continue to build a buy list and add to my core positions as opportunities arise. I was happy to see IAG retreat today and hope that the follow through continues tomorrow. I missed out on the run last week and am interested in a “pilot buy” to get some exposure to the name.

What’s your game plan?

A Random Walk Down Wall Street (Book Review)

A Random Walk Down Wall Street Book Review

“A Random Walk Down Wall Street” (by Burton G. Malkiel) Book Review

A Random Walk Down Wall Street by Burton G Malkiel is “The Time Tested Strategy For Successful Investing.”

A Random Walk Down Wall Street is a classic introductory market text, originally published in 1973. The 9th edition (published in 2007) shows you…

How to navigate the turbulence on Wall Street and beat the pros at their own game, giving individual investors the information they need to manage their money with confidence.”

And since this one of the first investment books I ever read, I think you’ll find my review honest, accurate and insightful. So let me tell you what the premise of the book is about and the important lessons I learned reading it. I hope this will help you determine if “A Random Walk Down Wall Street” is the right book for you.

So without further ado…

Here’s Why You Should Read: “A Random Walk Down Wall Street”

A Random Walk Down Wall Street is based on the premise that low-cost index funds will outperform actively managed mutual funds over time, every time. That makes sense right? But for people like you and me who want to manage their own money, it might be a little bit discouraging.

But here’s why I really liked reading “A Random Walk Down Wall Street”:

Malkiel’s classic investment text presents a lot of very compelling data to disprove a lot of common market myths. And like almost all good investment books, A Random Walk starts with a discussion of crowd psychology and probability. Because while trading tactics and investing styles go in and out of style, human nature remains the same. And…

This stark, objective look at how these factors manifest in the world of finance is incredibly illuminating. When you read A Random Walk Down Wall Street you start to understand all the objections of your potential clients, and the whispers of your skeptical friends. And as an active money manager, having a firm understanding of what your critics are saying is a great way to stay educated. It also reminds you that if you don’t bring your A-game (as in alpha), an index fund will eat your lunch.

Thus, if you’re looking to get educated about all the active rebuttals against active money management (and the data to support it), “A Random Walk Down Wall Street” just might be for you!

Here’s a little more information on some of the core concepts…

What “A Random Walk Down Wall Street” Teaches Best

A Random Walk Down Wall Street does a very good job highlighting the academic data supporting the efficient market hypothesis. If you don’t know, the efficient market theory postulates that markets are excellent at analyzing and integrating information into the price of stock. The gist of the efficient market theory is thus that stock prices perfectly represent all prices and all information known about stocks. I know this sounds a little hard to believe in this era of insider trading. But A Random Walk builds a compelling case with over 40 years of historical data.

I particularly like investment books that give you actionable ideas you can take straight to the stock market. Some of the actionable ideas I really appreciated from “A Random Walk Down Wall Street” were…

    • Five Asset Allocation Principles: A detailed look at risk, reward and how different balances of equities and debt can help round out your portfolio.
    • Risk Distinctions: Understanding the difference between your attitude toward risk, and your capacity to endure market risk.
    • The No Brainer Step: Easy instructions for investing in index funds.

And believe me, these three points are just scratching at the surface. A Random Walk contains a plethora of information you can use to objectively evaluate the investment ideas you’re already investigating. Don’t you see how that might save you some money?

Here’s What Isn’t Covered By: “A Random Walk Down Wall Street”

Now as I just mentioned, “A Random Walk Down Wall Street” does a lot of things well. But sometimes buying a book for the wrong reasons can be disappointing (especially if you figure it out two thirds of the way through!). So…

If you were hoping for an active approach to picking stocks… then, “A Random Walk Down Wall Street” might not be for you. “A Random Walk Down Wall Street” does a great job covering the reasons for indexing your money, and debunking stock selecting techniques that don’t work… but it’s not meant to focus on how you can pick stocks for yourself.

Does that make sense? I hope you’re getting a clear picture of how you might benefit from this book. So should you read “A Random Walk Down Wall Street” or not?

“A Random Walk Down Wall Street” – The Final Word…

It’s really up to you! I enjoyed “A Random Walk Down Wall street” a lot, for the reasons described above. But don’t let me speak for you! Invest in your knowledge today! Check out the reviews on amazon, and the additional details below…

“A Random Walk Down Wall Street” Details and Video Book Review:


Author: Burton G. Malkiel
436 Pages
Publisher: W.W. Norton & Company Inc.
Published: 1973, 1974, 1981, 1985, 1990, 1996, 1999, 2003 and 2007

Other Books By Burton G. Malkiel:

  

Stock Market Analysis August 27, 2013

Morning Stock Market Thoughts For August 27, 2013

— Futures are decidedly lower this morning. And they show no sign of looking up, as market participants try to understand the ramifications of war. At first, glance this is decidedly “risk off.” But is war really a bad thing for stocks?

It looks that way for now. And interestingly enough on the currency front, The Japanese Yen is looking strong as capital moves to safer grounds, consistent with a reduction in risk. Emerging markets have been getting hammered, especially middle eastern stocks.

Combine all of the above with a possible reversal in housing stocks, and it’s hard to get too excited about the state of the markets. Home prices increased in June, but will it be enough? The always-insightful Cain Thaler thinks housing is a dead end. And he puts a pretty compelling argument together, too.

Trading Thoughts On Stocks I’m Watching Today:

I’m hoping that my stocks will be insulated from the morning sell off due to their “margin of safety.” All the stocks I own are at reasonable P/E’s and trading near or under their intrinsic value. On the other hand, investors can get quickly get irrational, especially when

As usual I’ll keep an eye on the IWM, SPY and ITB intra-day candlesticks this morning, while watching the action closely for hints and clues. XOM looks ready to keep rolling over and CAT looks weaker than ever. Maybe war is just what these large-caps need. I’ll continue to take things one day at a time and watch the stock market patiently for the first 45-60 minutes to see if a trading range establishes itself.

Other Thoughts and Good Articles I’ve Read Today:

— Cain Thaler asks “Since When Is War Bad For Stocks?

— Business Insider speculates on what a strike on Syria might look like.

Bill McBride remains optimistic on the US Economy.

Back with more later

Stock Market Day In Review August 27, 2013:

I warned you…

That was at 10:30am and things only got worse from there! While treasuries were able to muster a bounce, just about everything else was sold off hard. The market tells we’ve been watching lately (namely IWM and ITB) led the way lower, and didn’t stop going down until the close.

So where do we go from here?

Well, as usual it helps to take a step back and get some perspective. For technical analysis I always suggest you watch Chessnwine’s video market recap for a consistent and objective review. In today’s analysis: Pay particular note to the IWM head and shoulder topping pattern and the bearish wishing wedge breakdown in GS that Chess points out. Scary stuff.

So…

I for one am keeping cash levels healthy and sitting on the sidelines.This sell off had teeth and I will wait for markets to strengthen up a bit before catching knives. My SNV position got smoked today and if I’m going to add I want to be careful and patient.

In the interim, I’ll be watching market internals, Scott Bleier’s twitter stream and any other insightful analysis I can find.

What’s your plans as the market pulls back?

Stock Market Analysis August 26 2013

Morning Stock Market Thoughts For August 26, 2013

Futures are pointing slightly lower this morning. But with bonds stabilizing pre-market, there might be room for an up-day. We’ll have to wait and see. IWM and ITB/XHB will be the first things I look at.

In times like these it usually pays to way 45-60 minutes to see if an intra-day range can emerge. Let others set the pace and then jump in when you think it’s safe to do so.

Trading Thoughts On Stocks I’m Watching Today:

— If there is broad market strength, or strength in XLF, then I expect SNV to stay strong. The fundamental narrative is pretty good and if the bank can keep growing revenues then a multiple expansion will at some point become justifiable. Until we get more news I’ll be watching the price action in Synovus Financial closely.

— A low volume pullback in IAG would be something to grab my interest. Larger gold miners like ABX might be a more conservative play on the same idea. It’s hard to call a bottom in gold here (as bottoming can be a long and arduous process with lots of sharp bear market rallies). But over the long term I like the price of the value here and might try a “pilot buy” in one of the above-mentioned.

— TINY is getting thrown in the basement. Wake me up when it starts to move.

— I think BRKS is oversold as well and, I might even stalk an entry in this company. I really like the long term prospects for Brooks Automation. Once the semi-conductor manufacturing cycle ramps back up, BRKS should fly. Until then, I think the stock might drift lower, or bounce around a narrow range. I’m apt to slowly start building a position.

Other Thoughts and Good Articles I’ve Read Today:

— As usual there are some good posts over at iBankCoin this morning. If you haven’t already, check out “The Fly On Interest Rates” … And Option Addict’s Weekly Watchlist is rife with actionable trading ideas!

ForexKong points out: Something smells funky with the Australian Dollar.

— Over at Business Insider, Joe Weisenthal is raising the alarm about the debt ceiling.

Market Logic is in full effect: “The numbers were disappointing this morning, but maybe we’ve returned to one of those odd situations where bad news is good for the market in terms of the Fed tapering,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

Back with more later!

Stock Market Day In Review August 26, 2013

This morning we talked about how the debt ceiling could be the next item to trigger a “risk-off move.” This piece of news isn’t a surprise. It’s been on the calendar for months. But it’s a good example of market logic… and, “how things don’t matter until they do.” Couple that with a war on Syria and you get:

And then…

So while we’re quoting Zerohedge (something I try not to do too much of), you might be wise to keep an eye on the “war rotation.” Gold miners are looking more interesting than ever. Well, the other reason for that is…

Stocks in general were quite weak into the close (like I need to tell you). But the fades in GOOG, IWM and ITB were disappointing. XOM is trading at is almost trading at it’s Graham Number. And Seth Klarman is doubling down on BP. Both of these oil giants are almost neutral YTD. Will they finally wake up if things in Syria finally reach a boiling point (re: western intervention)?

 

Stock Market Analysis August 23, 2013

Morning Stock Market Thoughts For August 23, 2013

— Happy Friday! After yesterday’s impromptu half-day of trading there isn’t too much to say. Futures are basically flat this morning and I’ll be watching the open to see if the bears or bulls come with control.

If prices are going to march higher, I’m hoping to see some TLT stabilization and good price performance out of IWM and ITB/XHB. I’d also like to see XOM stop the bleeding. I’m cautiously optimistic but will be careful to let market action be my guide.

Trading Thoughts On Stocks I’m Watching Today:

Without a clear trend direction, I will continue to accumulate strong businesses at fair prices. By shopping for small cap names with robust balance sheets I’m relatively able to insulate myself from a broad market correction (to an extent). And even if names like SNV and TINY get sold off hard, I’m familiar with the fundamental economics of their respective businesses and will consider averaging down.

On the other hand, many stocks are over-priced after this 10 month market run. And I’d be happy to see a pause, or even a reset, to some more realistic earnings multiples. I’m continuing to stalk an entry in BRKS and watching the FMD saga with one eye, just for kicks.

Other Thoughts and Good Articles I’ve Read Today:

July new home sales data are due out in the U.S. at 10 AM ET. Economists predict sales fell 2.0% to 487,000 units annualized last month after rising 8.3% to 497,000 the month before.

The cost of taper talk: Market reactivity to the remarks of Chairman Bernanke are astounding. I’m not sure how much stock you can put in the unemployment and other recovery data. So it sure will be interesting to see how things go should the Fed reduce purchases.

Afternoon Stock Market Analysis August 23 2013:

Stock Market Analysis August 22, 2013

Morning Stock Market Thoughts For August 22, 2013

— Futures are pointing higher for now. And we’ll see if they can hold up at the open. I’ll also be looking for stabilization in TLT. There is a lot of weakness under the surface. So although I’m quite long, I’m watching the damage closely. The XOM chart alone is enough to have me worried.

— Weekly jobless data also came in this morning, higher than expected. I don’t know if this is good or bad in the grand scheme, so as usual, I’ll let price be my guide. It’s the only thing that pays, right? (I hate when people say that)

Trading Thoughts On Stocks I’m Watching Today:

Due to my modest cash reserves I’ll be cheerleading my stocks and seeing how they act at the open. I’m in a “wait and see” mode – but if the downside follow through continues I may need to cut some losers.  Stay tuned for updates.

— SNV started off strong but ran out of gas. I’ll check back at the close to see where the traders are jockeying.

— The market has lost any expectation of TINY making any money, ever. Short term this is bad. Long term this is… mediocre. I still think the idea of the company is cool. Too bad Doug can’t make it work for HHVC shareholders.

— Tech and the IWM are still holding up pretty well. ITB looks weak, which obfuscates the picture somewhat.

Other Thoughts and Good Articles I’ve Read Today:

— In the meantime, you might enjoy a video Chessnwine found: Jack Schwager Hedge Fund Market Wizards Trading Techniques.