Unfortunately right now we are in perhaps the worst garbage of a market I've seen. Hostage to oil on one side and hostage to financials on the other. The fund was up 3% yesterday for no good reason, just like it was down 2% last week for no good reason. Coal stocks are trading up and down 8% a day - for no good reason. Same with fertilizer. Same with natural gas. This is just daytraders and hedge funds run amock and ruining the market. The "very smart money" has such deep thinking algorthims as
"When crude oil price today GREATER THAN crude oil price yesterday by 1.5% buy buy buy everything in commodity space"
OR
"When crude oil price today LESS THAN crude oil price yesterday by 1.5% sell sell sell everything in commodity space"
And for this they are paid the big bucks. It is complete garbage and trends are useless. The value of these things are not changing 7-10% daily - it is simply fast money chasing in and out, in and out, every day and creating havoc. There is no use for logic or sense. Just squeeze out a gain here, and sell it off and scalp daytrades every day - sending billions in this direction one day, and billions in the complete opposite direction the next. Very little joy in this market because using your brain is worthless. My only joy right now is seeing their stupid technology - aka Microgoogle "tech is safe" trade blow up in their faces, along with their stupid healthcare bets (hi Merck) in the face of a Democratic majority also blow up in their face.
Simply wake up every morning and place your red or black chips and then go home after you have "provided value" by pocketing a "scalp" based on if oil is up or down 2% or if Fannie Mae is going to be socialized or not. A lot of "analytical" work being done out there. Not. Our Ritalin era of children from the 80s now are pervading the trading desks of America and we are all "better" for it.
Long Yingli Green Energy in fund; no personal position
13 comments:
ArcelorMittal buys 2nd W.Va. coal operation
http://www.forbes.com/feeds/ap/2008/07/22/ap5238506.html
USO chart broken, UNG chart is a straight line down. These guys arent trading the fundementals they are trading technicals. IMO UNG will run til 46.21 and stabilize and USO will see the upper 90's this week. I am long oil services, coal, fertilizer and metals, but if you look at MOO, DIG, KOL and UYM there is pain ahead. There were double tops in all these formations, I will lighten up on every rally til the charts become smoother. I will miss the turn but I cant take the VOL. Good luck.
passionate, no one cares - its a technical trade. Fundamentals mean nothing. See Q's post. That's how the hot money thinks so anchors away - Mittal is obviously stupid for making such a buy because the charts say coal is awful
;)
I completely agree..this market is a joke. I can see how oil is getting trashed because it was looking bubblish but fertilizer and steel and steel inputs- coal. That’s absurd….declines in gas/oil help fertilizer companies and help steel demand more than they help tech or financials I would think. I mean I don’t think Citi uses natural gas when making loans (I could be wrong) the same way POT uses nat gas to make fertilizers
Wouldn’t lower oil/gas actually HELP the steel trade (for you steel inputs-met coal mostly..bc you invest down the chain more instead of like X,NUE,etc.) I mean if the steel inputs of gas/oil go down then it helps steel co’s margins right? And wouldn’t they then be more willing to pay up for other inputs like met coal because energy inputs costs are down??
This is crazy….they should have a market IQ index…it may have broken below 75 today.
I few years ago Jim Cramer had a radio show, back then there were no blogs or fast money and I loved anyone who talked about stocks. Not like CNBC's Maria's and various hotties, but ideas. Theme's ways to manage a trade or investment etc. Anyway, Cramer used to say " you gotta know what neighborhood you live in". Meaning that if you live in the projects you dont walk your dog late at night. Well, we live in a dangerous hot money neighborhood.
We love the ride up but hate the ride down, no matter what your thesis is for being in these stocks, you have to understand where you live. Take for example MOS:
I have been in Mosaic with a cost basis in the low 60's. Look how painful that chart was (down swings hard and fast), so I had to trimm as it went up the channel and add at the lower ends. Did I do that perfectly? Heck NO! I got in early at times and out too late being the greedy F#$% I am.
Hang in there, thesis will become a thesis again. Protect profits, cant make money without money. IMHO :)
XTO and CHK maybe done going down IMHO, XTO has stronger support, My aug 70 calls and worthless, :~(
you're right on that. Wall Street has become more than ever, a fashion show. That's the street we live in. But at the same time, this volatility does give us (especially the small retail investor) a chance and making a lot of money by being able to buy some great stocks at depressed prices.
Personally, I dislike anything where the underlying commodity is heavily exchange traded like oil and gas. That gives an easy reason to sell down stocks hard. And I still think they have some gains to give back as part of a "normal" correction. On the other hand, fertilizers, rigs and coal operate on long term contracts.
Banks money has been rotating into banks and retailers. Why? You got me. I guess we are out of the recession and interest rates dont need to go up, jobs markets good, oh and forget about the CDO's derivatives that all behind us now. Bad loans what bad loans. RKH will be at major resistence at about 102 by thursday and then hot money will go back to where you and I think it should be until then turn off the computer and watch some tele, :>
i like to put limit orders 20% below market prices, and then go watch TV. Too bad nothing's good on, anymore...
Hi Q,
Watch that BKX
Resistance at 66, let's see how it handles it
this rotation *ahem* is now in day 5-6? I said I'll give it to Friday and then start increasing bets against the junk. The velocity the "good stuff" is being destroyed lends credence to that.
Will be interesting to see how the market treats POT earnings Thursday. if its trashed then maybe the rotation lasts longer.
i think we need to wait until we get a pile of multinationals reporting. That should give some support and let the bleeding stop.
ah yes, trade the perception not the reality.
volatility i feel will only increase from here on out (longer term as well). the removal of the uptick rule really unleashed all hell. add in the fact that more and more quant firms are dominating trading these days, and its easy to see.
I havent been in the market very long, but yeah - the market is a total gong show now. But at least in the "long term", the fundies play out. its a pain that I cant be fully invested in areas I believe in, because a bunch of manic funds haul stocks to the woodshed and have their way with them. But I have to say, if nothing else good comes form this, im seeing alot of value in the Ags.
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