Ironically, my sarcastic post literally called the top... to the exact day. [Aug 19: Best Stock on the Planet: UAL] The question will be, will this support level hold. With hurricane Gustav causing hedge fund computers to go into overdrive and buy all the natural gas stocks they've been selling relentlessly for 2 months, it's probably too early but I am still keeping these on the radar (sorry could not resist) in this "trading market" where what is awful one week is the market's favorite 3 weeks later. With the hurricane being "priced in" by Friday/next Tuesday, I'd expect the quantitative hedge funds to start selling off all these nat gas stocks they are buying now for a quick gain, and then return to the normal trend. We'll see. If it works out that way, then they will rotate into the airline stocks - and so we go in the current era of "investing".UAUA down 33% from peak
AMR down 38% from peak
DAL down 25% from peak
NWA down 30% from peak
CAL down 26% from peak
Keep it mind "peak" was 2 weeks ago or less for these "playthings" of the hedge funds.
[Aug 22: USA Today - Airlines Emerge from Profit Killing Oil Slick]
No position
8 comments:
When oil was clearly extended, it was easy to make a case for airline stocks. At these levels, not sure why anybody would touch them. A homebuilder or quality retailer makes more sense if you think the consumer rebounds and oil falls. Not sure why anybody touches them.
Is there any airline that has actually made money consistently over time (SouthWest/Jetblue?)? It seems like such a tough business to make work.
Stone,
I wish it had been obvious to me 2 months ago
Michael,
LUV does (Southwest)
but their hedges for fuel are coming off now to so they are going to be hit too
its just not a business that works, as is, at $120 oil.
I think airline stocks will do good next week because Cramer said yesterday "do not buy airline stocks"
lol MiMi,
You are starting to catch on.
Actually Cramer is a bright guy and knows how this market works. When he has his suit jacket on I recommend listening to him. Once it comes off he turns into "entertainer" and it starts to get shaky.
He called Jul 15th the bottom, now he is hedging it by saying, well he assumed government interventions aka bailouts would happen. So if they don't happen he won't stand by his bottom. That's his typical spiel of late - I assume he wrote it when his jacket was off :)
airlines doing good today....
Yep
they are the inverse to oil
if you can tell in advance each day what oil will do you can make a lot of money
yesterday everyone thought oil would go up with the storm approaching
instead they go down
just showing you this market likes to make the fools of the most amount of people possible.
They should take the names off the sides of these airplanes and just label them "Anti-Oil Trade"
That's all they have become.
Not trading on their own business
When Cramer says buy...you sell and when he says sell...you buy!
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