While I believe the fundamentals do support this move, the charts for the fertilizer stocks are now reaching parabolic stage, after massive moves last week [
71 Stocks Returning 7%+ Last Week] so I am going to continue to reduce my exposure and await a pullback (let me emphasize many traders on Wall Street buy charts like this, not SELL - they love buying 52 week highs so I am taking a contrary stance). These moves in
Potash (POT) and Mosaic (MOS) and CF Industries (CF) have been breathtaking (along with another 4-5 fertilizer stocks I follow which I do not have in the portfolio). I am cutting back on all 3. That doesn't mean they cannot go up another 30% straight from here. It is just getting a bit too hot and heavy for my taste and I can see a line of lemmings about 7 miles long to pile into these names at this point.
Potash does report next week...
My
Ultrashort Basic Materials (SMN) "Insurance" is whacking the portfolio today but as I said when I bought it... if its hurting me, that means the rest of my portfolio should be doing well.
Long all names mentioned in fund; long Mosiac, Ultrashort Basic Materials in personal account
7 comments:
Mark: As you may already know, the parabolic moves in the ferts today comes on the heels of the $400 price increase just announced between Canpotex and China.
--From marketwatch: "(MarketWatch) -- Canpotex Ltd., the offshore marketing company for Saskatchewan potash producers, and Sinofert Holdings Ltd. agreed to a $400-a-ton increase in 2008 potash prices over 2007 levels, Potash Corp. of Saskatchewan Inc. said on Wednesday.
Sinofert is a major potash producer in China. Potash Corp., the Saskatoon fertilizer giant, reiterated that Canpotex has prorated China's 2008 volumes, "and as a result of the timing of this settlement and unprecedented demand in other markets, [Canpotex] has only 1 million tons that it can commit to Sinofert through the remainder of this year." --
This is of course ontop of the price increase announced recently with India.
If the ferts pull back it pays to be nimble and add quickly as they are likely headed much higher.
Oh they'll think of something to incite panic sometime in the next few weeks or months
input costs - natural gas, blah blah
China slowing down - blah blah
Commodities are a bubble - blah blah
Ethanol subsidies at risk as people die of starvation and governments potentially fall - blah blah
Not much has changed from 3-4 weeks ago - we knew China would be promising; it is just more promising than expect in terms of price. But the prices were much lower. I prefer to sell into euphoria and buy the fear. Most people like to buy euphoria and find someone even more euphoric to sell to.
I am fully confidant we'll have more fearful moments coming :)
hey mark,
do you think the market mantra has changed? before january, when we were still in bull market mode, it was buy high, sell higher. then we went into bear market mode where you sell the rips and take gains when you have them.
i'm looking at some charts of the companies that i've sold into since early april and its depressing. i remember in one of your post that this pattern has been so evident that it will be exploited. well i'm getting violated. is it time to readjust strategy?
Well you need to discrern between the markets and certain sectors. When I read my blog I'd think we are in a massive bull market because so many of the stocks are ripping - we've been in the right price. But it's the same 50-75 stocks doing all the heavy lifting. About 2000 other stocks are completely dead. So if you are in the wrong sectors the market is doing nothing right now.
I have no idea about the future. All I know is when people start to feel antsy and chase things they usually lose money. Further, the farther a move goes without a pullback to any even minor support, the larger and more severe the fall.
The indexes are still broken, but the good stocks with good fundamentals are getting all the attention. But the market really needs to broaden into more sectors for anything sustained to happen longer term.
Last, the economic backdrop continues to degrade. What people focus on are the large US multinationals who have major foreign exposure. They are ignoring all the smaller stuff that is getting beaten up. Most stocks are doing nothing because they have US exposure - the indexes are holding up relatively well since its chock full of multinationals.
umm how on earth is anybody going to think we are in a massive by reading your blog?? i think you have been drinking too much kool-aid :)
Sorry, i didnt mean the content which is uniformly negative on the economy ;)
I mean the stock picks lol
yeah if this is what bullish mark sounds like, bearish mark needs to be locked up and the keys thrown away! :)
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