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VIDEOBuzz on the Street: Stocks End Week in the Red
By
Terry Woo Aug 27, 2010 4:00 pm
Some of this week's most insightful and timely vibes.
All day and every day, some of the stock market's best and brightest traders and money managers share their ideas, insights and analysis in real-time on Minyanville's Buzz & Banter.
Note: Some links may require Buzz subscriptions.
Monday, August 23, 2010
Expected Upside for Trina Solar
Michael Paulenoff
All of the action in Trina Solar (TSL) off of the July high at 22.45 through today's trading has the right look of a mature (read: nearly complete) bullish coil pattern, which if accurate means that the next significant directional move should be to the upside in a thrust out of the coil towards a target zone of 25.00/50.
Only a decline that breaks and sustains below key support at 21.90-21.60 will damage the coil and morph the pattern into a top rather than a bullish continuation.
TSL, which reports tomorrow and may see some earnings-reaction swings, should benefit near-term from UBS's upgrade today of First Solar (FSLR). In addition, after the FSLR upgrade, Collins Stewart noted: "Trina Solar (TSL) remains a top pick in sector... Trina Solar has one of the lowest cost structures in the industry, a strong balance sheet and strong brand. Shares are Buy rated with a $29 price target."
Finally, there is a China connection to my technical preference for TSL, which is based in Changzhou. China energy costs and demand for cleaner sources of fuel argue strongly for a huge presence in solar in and from China. In addition, the technical outperformance of the China market is a theme to my outlook now and in the months ahead.
Click to enlarge
Minyan Mailbag: COMEX Option Expiration This Week
Lance Lewis
Lance,
COMEX Option expiration is this week on Thursday, so what are your thoughts here on the direction? 1200 seems to be where everybody think it'll go. That or 1250.
-Minyan Lisa
Lisa,
There’s actually not much open interest above us to act as a ceiling this month. The $1220 and $1230 strikes are the largest open interest among the calls that are close, but they aren’t all that large. A dip to $1200 is probably a stretch, but I suppose we could see a dip down towards $1213-ish for the usual pre-expiration dump in order to smoke the $1220s and $1230’s for the expiration on Thursday.
However, the surprise may be that the expiration occurs to the upside for once due to Fed chirping at Jackson Hole about additional QE measures. We shall see…
-Lance
Position in gold, gold stocks.
Tuesday, August 24, 2010
Video: Faber and Schiff on the Bond Bubble
Terry Woo
While yields hit the lowest levels since March 2009, here's a video from last night on the topic of the Bond Bubble with Peter Schiff and Marc Faber.
"This decade is going to be the worst decade for bonds in US history," says Schiff.
Faber chimes in "there isn't much upside potential in treasuries unless it is for the short term." And both refer to the massive flow of funds into the equity markets earlier this decade and warn viewers not to think of it as an intelligent leading indicator.
Click here for the video
Cash is King
Scott Redler
Following up on my last retest/bearish post…
Last week the market couldn’t bounce with any real conviction, and that weakness has translated into four straight days of bearish action. The technical damage was adding up; it was a matter of time before some of the stronger tech names started to crack. The important thing to watch was that important 1056 level in the S&P. Although we dipped below after the housing number, we have rallied back above and gotten back out of the danger zone. A close below 1056 would bring the 1010 lows from June firmly into play, even though this break is happening on a low volume trading week at the end of August.
Tech leaders are getting weaker, with some breaking down out of recent channels. Leader Apple (AAPL), which we often look at for conviction for the market, is weak and teetering near lows of the recent range.
Banks continue to make lower lows and couldn’t even get a small bounce with the rest of the market today.
These economic headlines continue to disappoint, and it’s not pretty. The existing home sales data today was the worst since 1995! Even this week in a light volume tape there are tradable moves and money to be made if you follow rules strictly. Right now, though, it pays to be in cash and flexible, because the market is at an important crossroads.
Today’s low provides a tradable pivot, and if we break, then I'll certainly carry forward a bias short. If we can get a bounce with conviction we can start seeing which stocks held in best.
Click to enlarge
How Predictive is the VXO?
Todd Harrison
Toddo,
What's your take on the VXO? I've read several people suggest that stocks dropping without a VXO spike is bullish, but couldn't it also mean that we just have a lot more room to fall?
Also, I've read many people suggest bearishness is too high right now, but I saw last night that the put/call actually fell yesterday to .39, the lowest since April 13 when it hit .33. I dunno what that means, if anything, but we all know what happened after April.
Thoughts?
Minyan JB
MJB,
There are always two sides to every trade; anecdotally, I'll tell you the rush of negative headlines -- not to mention the "depression chatter" on CNBC -- and the widespread Hindenburg sightings are part of the reason I covered up my short side risk (and actually took some intraday upside stabs today). I might be over-thinking myself again -- so it's said, I do believe we're in the midst of a "prolonged period of socioeconomic malaise entirely more depressing than a recession" -- but I was entirely more comfortable with that posture when it was a variant view.
That said, I'll be watching for the weekly bearish sentiment readings tomorrow and I do believe the VXO has upside, so I'm content to hit it to quit it (both ways) in my trading bucket while keeping my long-term nest egg stashed in cash for a rainy day. That's not news -- it's been that way for for a few years -- but since you asked, I'm happy to communicate. After all, my therapist told me communication is the key to all healthy relationships... right before she ran out of the room to go find her therapist.
Fare ye well into the bell.
R.P.
About that low put/call ratio from Monday...
Jason Goepfert
There was an unusually large drop in the put/call ratios yesterday, which automatically triggers the assumption that traders are trying to buy the dip.
However, more than half a million call options were traded on Activision (ATVI) yesterday, which greatly skewed the put/call ratios. If not for that single stock, the Equity-Only Put/Call Ratio would have gone from the reported 0.39 (suggesting extreme optimism on the part of traders) to 0.58 (not suggesting anything in particular).
I'm not a fan of making excuses for indicators, but this is one of those times to make an exception because it was so wildly slanted by that one issue.
Note: Some links may require Buzz subscriptions.
Monday, August 23, 2010
Expected Upside for Trina Solar
Michael Paulenoff
All of the action in Trina Solar (TSL) off of the July high at 22.45 through today's trading has the right look of a mature (read: nearly complete) bullish coil pattern, which if accurate means that the next significant directional move should be to the upside in a thrust out of the coil towards a target zone of 25.00/50.
Only a decline that breaks and sustains below key support at 21.90-21.60 will damage the coil and morph the pattern into a top rather than a bullish continuation.
TSL, which reports tomorrow and may see some earnings-reaction swings, should benefit near-term from UBS's upgrade today of First Solar (FSLR). In addition, after the FSLR upgrade, Collins Stewart noted: "Trina Solar (TSL) remains a top pick in sector... Trina Solar has one of the lowest cost structures in the industry, a strong balance sheet and strong brand. Shares are Buy rated with a $29 price target."
Finally, there is a China connection to my technical preference for TSL, which is based in Changzhou. China energy costs and demand for cleaner sources of fuel argue strongly for a huge presence in solar in and from China. In addition, the technical outperformance of the China market is a theme to my outlook now and in the months ahead.
Click to enlarge
Minyan Mailbag: COMEX Option Expiration This Week
Lance Lewis
Lance,
COMEX Option expiration is this week on Thursday, so what are your thoughts here on the direction? 1200 seems to be where everybody think it'll go. That or 1250.
-Minyan Lisa
Lisa,
There’s actually not much open interest above us to act as a ceiling this month. The $1220 and $1230 strikes are the largest open interest among the calls that are close, but they aren’t all that large. A dip to $1200 is probably a stretch, but I suppose we could see a dip down towards $1213-ish for the usual pre-expiration dump in order to smoke the $1220s and $1230’s for the expiration on Thursday.
However, the surprise may be that the expiration occurs to the upside for once due to Fed chirping at Jackson Hole about additional QE measures. We shall see…
-Lance
Position in gold, gold stocks.
Tuesday, August 24, 2010
Video: Faber and Schiff on the Bond Bubble
Terry Woo
While yields hit the lowest levels since March 2009, here's a video from last night on the topic of the Bond Bubble with Peter Schiff and Marc Faber.
"This decade is going to be the worst decade for bonds in US history," says Schiff.
Faber chimes in "there isn't much upside potential in treasuries unless it is for the short term." And both refer to the massive flow of funds into the equity markets earlier this decade and warn viewers not to think of it as an intelligent leading indicator.
Click here for the video
Cash is King
Scott Redler
Following up on my last retest/bearish post…
Last week the market couldn’t bounce with any real conviction, and that weakness has translated into four straight days of bearish action. The technical damage was adding up; it was a matter of time before some of the stronger tech names started to crack. The important thing to watch was that important 1056 level in the S&P. Although we dipped below after the housing number, we have rallied back above and gotten back out of the danger zone. A close below 1056 would bring the 1010 lows from June firmly into play, even though this break is happening on a low volume trading week at the end of August.
Tech leaders are getting weaker, with some breaking down out of recent channels. Leader Apple (AAPL), which we often look at for conviction for the market, is weak and teetering near lows of the recent range.
Banks continue to make lower lows and couldn’t even get a small bounce with the rest of the market today.
These economic headlines continue to disappoint, and it’s not pretty. The existing home sales data today was the worst since 1995! Even this week in a light volume tape there are tradable moves and money to be made if you follow rules strictly. Right now, though, it pays to be in cash and flexible, because the market is at an important crossroads.
Today’s low provides a tradable pivot, and if we break, then I'll certainly carry forward a bias short. If we can get a bounce with conviction we can start seeing which stocks held in best.
Click to enlarge
How Predictive is the VXO?
Todd Harrison
Toddo,
What's your take on the VXO? I've read several people suggest that stocks dropping without a VXO spike is bullish, but couldn't it also mean that we just have a lot more room to fall?
Also, I've read many people suggest bearishness is too high right now, but I saw last night that the put/call actually fell yesterday to .39, the lowest since April 13 when it hit .33. I dunno what that means, if anything, but we all know what happened after April.
Thoughts?
Minyan JB
MJB,
There are always two sides to every trade; anecdotally, I'll tell you the rush of negative headlines -- not to mention the "depression chatter" on CNBC -- and the widespread Hindenburg sightings are part of the reason I covered up my short side risk (and actually took some intraday upside stabs today). I might be over-thinking myself again -- so it's said, I do believe we're in the midst of a "prolonged period of socioeconomic malaise entirely more depressing than a recession" -- but I was entirely more comfortable with that posture when it was a variant view.
That said, I'll be watching for the weekly bearish sentiment readings tomorrow and I do believe the VXO has upside, so I'm content to hit it to quit it (both ways) in my trading bucket while keeping my long-term nest egg stashed in cash for a rainy day. That's not news -- it's been that way for for a few years -- but since you asked, I'm happy to communicate. After all, my therapist told me communication is the key to all healthy relationships... right before she ran out of the room to go find her therapist.
Fare ye well into the bell.
R.P.
About that low put/call ratio from Monday...
Jason Goepfert
There was an unusually large drop in the put/call ratios yesterday, which automatically triggers the assumption that traders are trying to buy the dip.
However, more than half a million call options were traded on Activision (ATVI) yesterday, which greatly skewed the put/call ratios. If not for that single stock, the Equity-Only Put/Call Ratio would have gone from the reported 0.39 (suggesting extreme optimism on the part of traders) to 0.58 (not suggesting anything in particular).
I'm not a fan of making excuses for indicators, but this is one of those times to make an exception because it was so wildly slanted by that one issue.
No positions in stocks mentioned.
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