Market Playground

The Short Trade Is Getting Crowded

Posted 20 May 2012 — by Jeff Pierce
Category Copper, Investing, Market News, Sectors, Stocks, Technical Analysis, Trading

By Jeff Pierce

We are seeing some extreme readings on the put call ratio and we need some time to work off these oversold readings. Remember that the crowd is mostly wrong. Given the the Facebook (NASDAQ:FB) IPO was a flop and expectations so high we may see more follow through on the downside at the open on Monday but I suspect we’re close to some sort of bounce.

Let’s be clear. Any bounce is that we get will be an opportunity to add more shorts in my opinion. There are so many oversold sectors that if the market bounces we should see a lot of great short trades. Read More

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Market Watch: Are We There Yet?

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Posted 20 May 2012 — by All About Trends
Category Basic Materials, Chemical Manufacturing, Investing, LQDT, Market News, Retail (Catalog and Mail Order), Sectors, Services, Stocks, Technical Analysis, Trading, VAL

By All About Trends

We’ve talked for a long time about us being in an ABC down pullback and that has been exactly what’s happened over the last few weeks, albeit the last two days throws the whole subject of this being just a pullback into question. Especially when one looks at all the damage done to individual names out there. That ABC is also the reason we’ve been sitting with a cash position of 75% for quite some time.

The thing with down legs (C wave) or even up legs (like the one we saw from January thru April is that one just never truly knows how far they are going to go. That is always going to be the case. As far as the C wave of an ABC pullback goes? One could say that was/is about it as the rubber band is stretched pretty far in the short term. HOWEVER, the amount of damage done to market leaders and the go to names over the last few months (particularly Thursday’s and Friday’s growth names that were thrown out with the bath water) is NOT going to be repaired overnight. Most of those names are going to need MONTHS if at all to repair themselves. Read More

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Weekly Stock Watch: FB, NBY, DNDN, AMPE, PFE, HGSI, ACTC, SGYP, IRWD, CTSO, CVM, TTNP, KERX, CELH, SIRI, MCD, AGEN, BIEL, BVTI, ABPI, AMZN, NFLX, IMSC

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Posted 20 May 2012 — by VFC's Stock House
Category ABPI, ACTC, AGEN, AMPE, AMZN, BIEL, Biotechnology and Drugs, Broadcasting and Cable TV, BVTI, CELH, CTSO, CVM, DNDN, Economy, FB, GERN, GSK, Healthcare, HGSI, IMSC, Investing, IRWD, KERX, LMCA, Market News, MCD, NBY, NFLX, PFE, Sectors, Services, SGYP, SIRI, Stocks, TEVA, Trading, TTNP

By VFC’s Stock House

As expected, all eyes were on the historic Facebook, Inc. (NASDAQ:FB) IPO last week, although continued economic trouble in Europe probably deserved more attention and should prove to be a whole lot more relevant to the markets from here on out.

Although having only one full day of trading in the history books, Facebook (FB) is already starting to look like a dud to any investor not already on the inside leading into the IPO. Emotion and investing don’t mix, and those that excitedly predicted swift increases in the FB share price when they flooded the Nasdaq market were thoroughly disappointed on Friday as the closing price was not even a percentage point higher than the open.

The most hyped IPO ever looks just like that right now — all hype and little substance, and with shares trading for a cap of 100 times earnings, it’s going to take a whole lot more hype to keep the FB share price afloat. Read More

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Robert Reich: The Commencement Address That Won’t Be Given

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Posted 20 May 2012 — by Robert Reich
Category Economy, Education, Employment, Government, Market News, Politics

By Robert Reich

Robert Reich

Members of the Class of 2012,

As a former secretary of labor and current professor, I feel I owe it to you to tell you the truth about the pieces of parchment you’re picking up today.

You’re f*cked.

Well, not exactly. But you won’t have it easy.

First, you’re going to have a hell of a hard time finding a job. The job market you’re heading into is still bad. Fewer than half of the graduates from last year’s class have as yet found full-time jobs. Most are still looking. Read More

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Market Watch: We Are In Oversold Territory (Video)

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Posted 20 May 2012 — by Jeff Pierce
Category Investing, Market News, Technical Analysis, Trading

By Jeff Pierce

With that said we are also entering crash territory. We are getting in a grey area where a crash could happen, but those always have a small odd percentage. I’d say 85% we bounce and 15% we crash. Every day we’re down I would say subtract 5% from the bounce category and add it to the crash one. Bottom line…bulls need to step up now before this gets ugly.

To be honest I’m fine with it either way. I only want the markets to bounce so I can establish more shorts. Read More

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The Time to Short Stocks is Ending

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Posted 20 May 2012 — by Covestor
Category Banking, Currency, DIG, Energy, ETFs, Financial, Investing, Market News, Materials, Sectors, SLV, Stocks, Technical Analysis, Trading, Utilities, WFC, XLE, XLU

By Michael Tarsala

Michael Arold

One of Covestor model managers I think has an excellent feel for the markets is Michael Arold, who runs the Technical Swing model. He says he’s now backing out of his short positions.

“The direction of the trend is still down, but oversold conditions are telling me that a bounce is coming, then it could be time to keep shorting again.” Arold told me this week.

In the short term, Arold thinks stocks are oversold. The put-call ratio, as well as other indicators, are at extremes. As a result, he has trimmed short positions to about 15% of the portfolio, down from 25% a few weeks ago. And he is 85% in cash, with nothing long right now.

Here are five other timely insights from Arold:

1) Volatility is not that high in the big picture. While sentiment readings are very oversold, the VIX, for example, is not at a historical extreme. He would be more bullish if the VIX were higher than it is right now. Read More

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Melanoma Awareness Month Investment Opportunities: AMGN, ONCS, PVCT

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Posted 18 May 2012 — by Amy Baldwin
Category AMGN, Biotechnology and Drugs, Healthcare, Investing, Market News, ONCS, PVCT, Sectors, Stocks, Trading

By Amy Baldwin

May is officially melanoma awareness month. Affecting more than 65,000 new patients and claiming about 11,000 lives annually, melanoma treatment represents a huge unmet need. Studies have confirmed that sun exposure is responsible for the development of about two-thirds of all melanoma cases. Like many diseases, prevention should be key in fighting this disease with common-sense approaches such as reducing exposure to sunlight (and specifically the UV portion of the light spectrum) by minimizing the time in the sun especially between 10 a.m. and 4 p.m. when the sun is the highest in the sky and the most UV rays penetrate the atmosphere. Wearing sunscreen, sunglasses, hats and other sun-protective clothing to cover your body is also important.

Early detection is most important in skin cancers and melanoma as well as other cancers. A lifestyle of excessive exposure to the sun or a genetic predisposition means a more diligent approach is necessary to early detection via self inspection and more frequent visits to your physician particularly if any changes occur in size or coloration of any blemishes, warts or moles. With summer rapidly approaching, early preparation is essential and can spare potential cancer patients the ravages of the current melanoma treatment regimen including chemotherapy and radiotherapy side effects as well as the accompanying scarring and disfigurement associated with surgery. Read More

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Portfolio Manager, Know Thyself: RSH, DVN, CHKR

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Posted 18 May 2012 — by Covestor
Category CHKR, Dividends, DVN, Economy, Energy, Investing, Market News, Oil and Gas Operations, Retail, RSH, Services, Stocks, Trading

By CJ Brott

CJ Brott

I recently read a client letter by Barton Biggs that was very enlightening. Mr. Biggs and I are both macro investors and have both been investing professionally for over 40 years. So much of what he had to say sounded very familiar. The gist of his thinking deals with the two battles all investment managers fight: understanding the investment process and understanding themselves.

In this client letter he dispenses quickly with the investing process itself, instead focusing on a detailed discussion of the destructive power market swings have on a manager’s investment psychology. Read More

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The Facebook (NASDAQ:FB) IPO: Don’t Believe The Hype

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Posted 18 May 2012 — by VFC's Stock House
Category FB, GOOG, Investing, IPOs, Market News, Services, SIRI, Social Networking, Stocks, Technology, Trading

By VFC’s Stock House

No doubt Friday’s Facebook (NASDAQ:FB) IPO marks an historical moment in the history of the tech and financial sectors, but that’s all that this much-anticipated event might turn out to be — a moment in time that, at the end of the day, means little in the grand scheme of things, other than that a great campaign of hype can spark enough emotional momentum to create an insane amount of wealth for those involved in the hype campaign. Read More

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Robert Reich: How Odd that Mitt Romney’s Smitten with Bill Clinton

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Posted 18 May 2012 — by Robert Reich
Category Economy, Government, Investing, Market News, Politics

By Robert Reich

Robert Reich

Mitt Romney is full of praise for Bill Clinton even as he heaps scorn on Obama.

“Almost a generation ago, Bill Clinton announced that the era of big government was over,” says Romney, “Clinton was signaling to his own party that Democrats should no longer try to govern by proposing a new program for every problem.” By contrast, President Obama has “tucked away the Clinton doctrine in his large drawer of discarded ideas.”

It’s politics at its stupidest. Polls show Bill Clinton with higher favorability ratings than Obama, so Romney does what any vacuous opportunist politician does — try to associate himself with more popular, and maybe bring along some of those white males who voted for Clinton in ‘92 and ‘96.

But it won’t work. It might even backfire.

I was in Bill Clinton’s cabinet. I was in charge of Clinton’s economic transition team even before he became President. I’ve known Bill Clinton since he was 22 years old. Read More

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No Rush to Buy Precious Metals

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Posted 17 May 2012 — by Jeff Pierce
Category Basic Materials, Gold and Silver, Investing, Market News, PAAS, Precious Metals, Sectors, Stocks, Technical Analysis, Trading

By Jeff Pierce

There are 2 major views on the metals right now.

the bull is dead
the bull is hibernating

I’m in the 3rd group. The bull is still alive, but I would not be in any rush to buy any miners until there is a significant flush out. Let these two groups fight it out and stay safely on the sidelines until some decent trading opportunities arise. I suspect we’re getting into the range where one can expect a bounce but it’s not the sort of bounce that you buy because there really is no support below. If we were to bounce I would watch the RSI on the daily chart and if it gets back near 60 then that is the area that would represent a good shorting opportunity. Below are the stocks I’m focusing on.

That should take us to new lows and hopefully a landslide, capitulatory sell off which would be an amazing buying opportunity because at that time I can see anybody that will be stepping up to the plate to buy gold/silver stocks. Read More