Tuesday, November 9, 2010

Thrilled With this Morning's Sales of Silver Wheaton (SLW) - Wish I Had Shorted

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While I am very happy with this morning's exit of Silver Wheaton (SLW), [Closing Silver Wheaton under Parabolic Conditions] I wish I had watched it closer as I could of had the perfect day by exiting at the top and then riding it down.  Can you imagine riding a stock up 29% up and 13% down in the span of 7 days?  That's like hitting for the cycle.  It is down about 13% from its intraday high, and about 12% from where I sold the stock this morning.  This is how parabolic moves end.

Chart from this morning



Chart now



Easy come, easy go in the world of momentum trading - indeed we saw the exact same thing in Las Vegas Sands (LVS) a few sessions ago.

Back to SLW - it's fast approaching that gap at $30, but the whole commodity complex to be is one big Silver Wheaton.  When these trades reverse this market is going to enjoy very ugly skid marks... all shorts have been eviscerated (hence they cannot provide support by 'short covering' i.e. buying on the next downturn) & huge air pockets exist on countless charts.  I can only find one blogger out of about 40-50 blogs I scanned this weekend (ex daytrader types) who is actively shorting this market on the intermediate term...

The farther we go up, in non stop fashion, the higher the risk for people who are buying with no thought process and little risk control.   Maybe the selloff will be from here... or S&P1300 or 1800 or 2500; I don't know because this type of market is foreign to me - but once again we live in an artificial atmosphere, no different from NASDAQ 99 and housing 2006.  The only question is, are these days more like April 1999 or February 2000.   I wonder how many Fed induced wealth destruction cycles we need to go through before anyone not named Ron Paul points at the Fed.  Based on America's destructive policies we can expect another version of 2008 sometime in the next 3-5 years... which is sad to say, especially in light of the cheerleading by certain market types of Ben ... completely parallel to the worship of Easy Al in 2003-2005.  If oil can get to $120+ the fallout is going to happen far sooner than 3 years.  What happens if we have another recession now?  $2 trillion in QE next? What will that do to oil? $250?  Then another $4 trillion in QE to fix that issue? Causing oil $350?  With the world screaming bloody murder.  There is a reason central banks repeatedly fail. Ben is in a box.... inside of an ivory tower.

We're back to testing lows of the days.

EDIT 3:30 PM - I put the same SPY puts on, but in smaller scale (just over 3% exposure) this time around due to overnight risk.  Still hoping to revisit 13 day moving average.

No position Long SPY puts in fund; no personal position


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Bookkeeping: Sold SPY Puts

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Well that *was* the selloff apparently.  Back to your regularly scheduled melt up.

I sold the SPY puts.

I'll try again if we break to new lows of the day, the 13 day moving average is 1201 ... we generally keep pulling back to that level so thats a 17+ point spread.  But since shorting has been such a difficult action for so many months, one gets gun shy of leaving any gains on the table to be erased by the 'urgent buyer'.

No position


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China's Dagong Downgrades US Debt to A+ on Quantitative Easing

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This report on a Chinese rating agency downgrade of U.S. debt seems to be the cause of the (slight) selloff.   It is quite ironic in terms of the Irish piece I posted today.  Frankly, it's a gas that the U.S. still has AAA credit since it is spending like mad, with no end in sight, and no credible plan to take care of long term obligations other than for the Fed to monetize debt.  Which if any other country offered as a roadmap would send them to "Argentina" status right quick.  The power of the reserve currency!

To be fair, this will probably be forgotten by tomorrow (or in 30 minutes if the infamous SPY futures buyer shows up!) but for those of us detached from the Matrix is nice to see someone, somewhere in the world actually cares about reality.   Not that China can do much about it at this point, because we are attached at the hip - they have the jobs, and the production, and the exports, and we send them cute pieces of paper in return.

As for the national credit rating... the U.S. rating agencies are captured and useless as we have seen the past decade (bundle 1000 subprime loans together and you get a 'AAA' security - magic!)... by the way, their charter to rate debt is based on government agency approval.  Does that conflict of interest sound familiar... do you think Moody's is going to downgrade the U.S.? haha.  Do you find it "convenient" Dagong was denied approval to be a competitor to the Moody's and Standard & Poor's of the world?  No one wants truth...

Bigger picture, we are setting up for a future currency war of some type.

[Mar 16, 2010: US, UK Move Closer to Losing AAA Rating's Moody's Says]
 [Feb 5, 2010: Sovereign Risk Chart - Where Would the US Fit in, on Europe's Scale?] 
[Apr 15, 2008: Could the US Lost its AAA Rating?]
[Nov 12, 2008: CNBC Europe - USA May Lose its AAA Rating]
[Mar 29, 2009: CNNMoney: Should USA Still be AAA?]



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Via Bloomberg:

  • China’s Dagong Global Credit Rating Co. reduced its credit rating for the U.S. to A+ from AA, citing a deteriorating intent and ability to repay debt obligations after the Federal Reserve announced more monetary easing.
  • The credit outlook for the U.S. is “negative,” as the Fed’s plan to buy government debt will erode the value of the dollar and “entirely encroaches” on the interests of creditors, analysts at Dagong, one of China’s five official ratings companies, said in a statement. 
  • The U.S. is rated Aaa and AAA by Moody’s Investors Service and Standard Poor’s Corp., the highest credit ratings of the New York-based companies.  (shocker)
  • The downgrade for the U.S. “reflects its deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment,” analysts Lu Sinan and Du Mingyan wrote in the statement. “The serious defects in the U.S. economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency.”
Of course, being the narcissistic folk we are... we denounce anything the Asians do because its either political, or they are not creative, or they are just copying us... what do "foreigners" know anyhow?  
  • "The general market perception is that there’s a risk that the Chinese rating agency is playing a bit more political game than providing independent analysis,” said Ian Lyngen, a government bond strategist in Stamford, Connecticut, at CRT Capital Group LLC, in a telephone interview. “I don’t think it has the same ramification as a downgrade by mainstream rating agencies such as S&P and Moody’s. That said, the reasons that the credit rating of the U.S. may come under pressure are obvious to most people."
But take a step back, and any thought that Japan and the U.S. should be rated higher than countries that actually try to pay their bills, is a bit of a laugh.
  • Dagong, seeking to become an alternative to S&P, Moody’s and Fitch Ratings, ranks China’s debt higher than that of the U.S. and Japan, citing widening deficits in the developed world. 
  • Global ratings methodology is “irrational,” Dagong Chairman Guan Jianzhong said in July, and “cannot truly reflect repayment ability.”
  • In September, the Securities and Exchange Commission denied the application of Dagong to become a Nationally Recognized Statistical Rating Organization in the U.S.

See no evil,. hear no evil.

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Here is the story from Xinhuanet.com

There is definitely some hyperbole here... the U.S. can't default technically so there is no solvency issue.  It can print as much money as needed.  That doesn't mean it should, or it's a good thing, but unless the world abandons the dollar it can print as many as needed... until the world someday says 'no mas'.  (Or its own citizens are crushed under their "Weimar" money)  That's a long ways away.

Bookkeeping: Bought SPY Puts

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I am going to try to tightrope a short side trade with the S&P finally breaking 1220.  Goal would be maximum the 13 day moving average (currently 1200 but moving up fast) but I'll take anything at this moment.  Stop out will be a move back over 1220.

I am using a 5% allocation; I'll be out of part of it before end of day due to size.  Using November SPY 123 puts.

Tons of reversal this morning in the Chinese junk stocks that have been rallying non stop for 5-6 weeks.

Frankly there is no way a market should reverse down like this, and then reverse back up at the end of the day but I expect the unexpected in the abnormal market.

Long SPY Puts in fund; no personal position

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Natural Gas Catches a Bid as U.S. Drowns in Supply; Bernanke Cheers

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On your mark... get set.... speculate!

Since commodities have little to do with actual supply and demand in the physical market (as the world swims in oil, and the U.S. in natural gas), and everything to do with the supply of fiat currencies chasing physical assets, let us see if Bernanke can cause natural gas to take off.  This has been the one huge laggard of the year, as nat gas is difficult to transport and hence reflects the domestic economic situation more than most other commodities.   The commodity has spiked the past 2 days and the ETF (UNG) now sits at $6, just below the 50 day moving average.  With oil peaking its head over its yearly highs yesterday, speculators are in desperate search to find the next hot thing, as driving cotton and sugar limit up every day for 3 months in a row has gotten boring.  The performance of natural gas has not just been bad, but indeed horrid when you consider it is priced in dollars just like every other commodity!


For economic reasons, energy is the most important commodity to watch because while not everyone is going to take a hit if silver jumps $2 a day... we're all going to enjoy the fruits of Berannke's labor if nat gas starts surging (for no fundamental reason) and oil can go on an early 2008 like rampage.

If this does happen, let us prepare for the April 2011 Congressional hearings where we drag the "Big Oil" CEOs up to Capital Hill and watch the politicos berate them publicly for "causing" prices to jump (while meeting with them privately to accept campaign donations) despite the "fantastical economic recovery"....

Meanwhile Bernanke will be skipping in his office a few buildings over sporting the Family Circus "Not Me" T-shirt.

No position


Irish 10 Year Yields Blow Out to Nearly 8%, 5.6% over German Rate, Lagging only Greece Amongst EU Countries; Market Shrugs

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The global patient is so drugged up with stimulants no amount of facts on the ground matter anymore.  The immune system was built up by the Greece fiasco, and now that there is a central banker buying government bonds in Europe when no one else will, and a bailout package waiting in the wings, stock markets shrug off all crisis because after all, someone will print money and fix the problem.  Apparently the view go forward is there will never be a crisis ever again as world spigots will turn on and money created, therefore the economic cycle has been defeated.  The level of moral hazard created by central banks worldwide is simply astonishing.

If you are a newer reader, the U.S. actually has a worse fiscal condition than Ireland... and barely trails Greece.   [Feb 5, 2010: Sovereign Risk Chart - Where Would the US Fit in, on Europe's Scale?]    But unlike those countries who are avoiding the "Zimbabwe" solution since they are stuck in a shared currency, the U.S. can 'print its way out of every problem'.

Via AP:

  • Shares in Ireland's banks hit record lows and national borrowing costs reached new euro-era highs Monday as the government presented its latest plans for financial survival to the European Union's economic commissioner, who has the power to order changes. Investors are shunning Ireland's government and bank debt in expectation that the country will eventually require a bailout by the EU and International Monetary Fund, as happened to Greece in May.
  • The interest rates charged on the treasuries of Ireland, as well as fellow indebted euro-zone members Portugal and Spain, have been rising ever since German Chancellor Angela Merkel last month said she expected any future EU bailouts to come with new rules requiring bondholders to absorb some losses.
Merkel appears to be the last person with any free market idealogy left ... ironically she comes from a democratic socialist state.  Bondholders taking pain and losses for their bad decision making?  Somewhere Bailout Nation U.S. bank bond holders are doubled over laughing. (while screaming how well the 'free market' is working )

  • The yield, or interest rate, on Ireland's 10-year treasuries rose to another record Monday of 7.87%, breaking the previous record of 7.82% set last week. The spread versus equivalent German bonds also reached an unprecedented 5.6%. In the 16-nation euro zone, only Greece's bonds command a higher premium of 11.%.

So who the heck is buying Ireland's debt??  Ah yes.... the 'free market' solution

  • As the traditional owners of Irish treasuries -- chiefly banks in Britain, Germany, the United States and France -- seek to dump them because of their falling value and increased perceived risk, new sellers can be attracted only by offering higher yields. Traders say the main buyer of Irish bonds in recent weeks has been the European Central Bank.
  • The Frankfurt-based central bank confirmed Monday it bought euro711 million ($988 million) of euro-zone countries' bonds last week. It declined to specify how much of that figure involved Irish treasuries.

Again this is a new role for the ECB instituted earlier this year - not something they used to do.  But when you are running a global ponzi scheme, central bankers have to be innovative.  No one wants to buy bonds because the risk premium does not coincide with actual potential costs in the future?  We'll do it!

  • The cost of insuring Irish debt on the world's credit-default markets also rose to new heights Monday. Credit data agency CMA said contracts to insure Ireland's debt against default jumped to 610 points from Friday's record close of 578 points. Buyers of the derivatives, called credit-default swaps, are betting that Ireland will be ordered to renegotiate debts with bondholders as part of a future EU-IMF rescue package.

So who is going to take the hit during the renegotiation?  Only someone dumb enough to buy bonds today.  Since no one is that dumb... the central bank can enjoy the losses.  But in a central banker ponzi it's "no problem" - they'll just print more.

What does this teach the world?  There is no amount of debt that is too much.  Because central bankers will rescue you.  Hence all these pension costs, entitlement issues, state funding issues in the U.S.?  We should not worry one iota - as the Fed is doing the exact same thing here... in fact we should all get to retire at 35 30 with full pension (at least $100K a year, although in theory it could be limitless since the Fed can monetize all debt) funded by govt.  Indeed, we should call into question the need to work - let other countries do that, and we'll just print money to hand to them for services rendered.  

While I am taking it to the extreme, this is essentially the system we are running... and we're now not the only one.


Bookkeeping: Selling 1/5th of BorgWarner (BWA) on Positive Future Business Announcement

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It is difficult to find points to sell stocks now because things that are overbought just stay that way, go sideways, and then make a new leg up, rather than experiencing any moderate corrections - where I'd normally buy back a portion of the stock I sell along the way.   Hence I am winging it, since I have little context for this type of market.  I am selling 1/5th of BorgWarner (BWA) simply to lock in profit on some good news today on future business. The press release is not affecting the stock much, due to the large run already achieved.



Speaking of the release it speaks to my comments that aside from cyclical recovery in the auto industry, certain companies have very strong secular growth stories as well.  That said, valuations are not cheap anymore.

Via Press Release:

  • BorgWarner Inc. today announced $2.3 billion of expected net new powertrain business for 2011 through 2013, a 28% increase over its previous three-year net new business. Demand for the company's environmentally friendly technologies, such as gasoline and diesel turbochargers, dual-clutch transmission technology, engine timing systems and emissions products, is expected to continue to drive strong growth. 
  • Of the total new business, 77% is anticipated from engine-related products such as turbochargers, ignition systems, emissions products, engine timing systems, variable cam timing modules and thermal systems. The other 23% is expected from drivetrain-related products including the company's fuel-efficient DualTronic® transmission technology and its traditional automatic transmission and all-wheel drive technologies.
  • The European market remains the leader in the adoption of new powertrain technology and Europe accounts for 45% of our expected new business
  • As our expansion in Asia continues, new business sales are expected to account for about 30% of the total in that region by the end of the period. 
  • "Tightening emissions standards and a sharpened focus on fuel economy in the commercial vehicle market is expected to provide additional growth for BorgWarner. The top twenty customers of our three-year net new business include three commercial vehicle original equipment manufacturers. Approximately 15% of the expected new business is related to the commercial vehicle market."

Example of secular growth, even in a staid industry such as auto production:
  • Advanced technology turbochargers account for about 32% of the company's net new business, led by turbochargers for gasoline direct injected (GDI) engines. Turbocharging GDI engines is a key strategy employed by automakers to address the issues of fuel efficiency and emissions reduction while maintaining vehicle performance. The market for gasoline engine turbochargers is expected to nearly triple over the next five years, from about 3.5 million units today to over 10 million by 2015.

Long BorgWarner in fund; no personal position

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[Table] Best Commodity Performance in Past 3 Months

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Not even a month after the first hints of QE2 at Jackson Hole, Wyoming when Bernanke opined only if economic conditions deteriorated "materially" would he unleash the tsunami of liquidity, I penned a piece [Sep 22, 2010: Bernanke Lied to Us] when it became clear via speeches and hints dropped in major papers that Bernanke had found his weapons of mass destruction.  He was going to move ahead, no matter what the economic conditions did... the language he used was just for show.  Indeed, one can argue economic conditions have improved since late August... rather than flattening out or "materially weakened".   Hence, there are again no WMDs but like Bush, he is a man on a mission and facts on the ground won't get in the way of the REAL reasons (laid out in multiple pieces) for this fiasco strategy.

You should be very peeved. Everything in this country is run for debtors, speculators, multinational corporate interests and the banking oligarchy. This is just another one.... under the guise of whatever reasoning is convenient to use.

Now, about 7 weeks later many of the things I predicted have come to be - already!  And actual QE2 has not even begun.  In that piece:

We saw in late 2007 to mid 2008 the effect of food price inflation on 2nd and 3rd world countries. Mud cakes anyone? [Jan 30, 2008: Hungry Haitians Resort to Eating Dirt] But who the hell cares about pricing foodstuffs out of the reach of "those people" [Apr 14, 2008: Food Inflation, Riots Spark Worries for World Leaders]- we have speculators to please in the U.S. The biggest sin in American policy is "making the markets upset". As long as the speculator class can take primary dealer money, lever it up 7:1 (down from 20:1 in 2008) and run up the price of any soft or hard asset - it's all good. [Apr 28, 2008: Wall Street Grain Hoarding Brings Farmers, Consumers Near Ruin] Heck who the hell cares about Americans affordability of food either [Nov 14, 2008: Wall Street Journal - A Run on (Food) Banks]... thats what the food stamp program is for right? [Nov 29, 2009: 1 in 4 Children, and 1 in 8 Americans Now on Food Stamps] [Oct 30, 2009: Costco to Roll Out Food Stamps Nationwide] As long as the banking oligarchy and stock pickers on CNBC are pleased, I am pleased. [Apr 6, 2008: Agflation Hits Rice - Prices Up 50% in 2 Weeks] Cramerica style.

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Back in early to mid 2008 I was writing a lot of pieces on the damage being caused by the 'speculator' class, backstopped by immense leverage in the hedge fund community (this was pre Lehman, Fannie, Freddie) in the developing world.  Much of the world still devotes the majority of its income on food and energy, especially food. (in many cases 50-60%)  It is not *as much* of an issue in America because food and energy are a relatively smaller part of the budget, generally 20-30% depending on income strata.  The one exception (per a piece by Jim Bianco) is the bottom 20% of Americans.  In his research he found that group spent as much of income (60%ish) as most "3rd world" country type people.   But our modern soup lines (known as the food stamp program) are/is hiding it.  Screwflation is alive and well, and frankly the scary thing is we have not even embarked on the actual QE2 yet.... everything thus far has been a front running of the program, both in dollar and commodities.  [Oct 19, 2010: Doug Kass Unveils "Screwflation"]

To that end, while there is no inflation in the Fed's eyes because food and energy is 'volatile' and hence not to be used as part of their base case, it is real for actual humanoids who don't live inside of an ivory tower textbook.  And with the lag between when commodity prices rise.... then producers lose their hedges.... and then try to pass the costs along to consumers - the full effects of what has ALREADY happened have not even begun to be seen.  This will be a Q1-Q3 2011 issue... and again, that is if commodities stop in their tracks today.  And we have not even seen a real run out of oil, which will be the most regressive tax on an economic system.    

Anyhow at this time the market could care less about the ill effects - someone is going to have to eat these costs (no pun intended) - and with a hobbled consumer, I find it hard to believe all these cost increases are going to be taken by the end user.  Hence producers will see margin compression (net negative for stocks), and/or they will begin to layoff people to make up for their increased costs (which goes opposite for the public reason the Fed says QE2 is necessary - to try to help employment).   Truly this reminds me of Fannie and Freddie when I had a litany of posts in 2007 through mid 2008 on how these things were going to blow up.  As the housing market degraded, rather than act in more conservative nature to try to stem the coming disaster you'd see new rules passed by our housing powers that be (and Congress) to put even more pressure onto these 2 entities as they loosened guidelines to try to kick the can down the road.  Some examples


Instead their actions worsened the situation, and there were not enough fingers to plug the bursting dam.  " [Sep 7, 2008: Bailout Nation Continues - Fannie/Freddie Now Owned by You  So what does FanFredron have to do with the Fed?  It's the same line of thinking - the eternal kick the can down the road, and only 'successful' by ability to print money and never face the music.  So just as then, I'll write posts on the internets and they will be ignored as those who live in textbooks go about their merry ways, blowing things up in their ever so predictable pattern.

Here is a table of performance the past 3 months with most major commodities - again, before QE2 even is instituted. 

[click to enlarge]



The top winners:




Bookkeeping: Closing Silver Wheaton (SLW) Under Parabolic Conditions

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I am selling the last 1% exposure in Silver Wheaton (SLW) under parabolic conditions in the stock.  This last batch has gained 29% in 7 sessions, when I began the position. [Oct 29, 2010: Bookkeeping - Restarting Silver Wheaton]  Not much more to say about this market - NASDAQ up 20 out of 23 sessions, S&P 500 up 185 straight points, market cannot sell off for even a full day, etc.



No position


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Monday, November 8, 2010

Coal Stocks Join the Party as Coal India Parties Like it's 2007

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In case you missed, Coal India IPO'd last week to great success.
  • Coal India Ltd. surged 40 percent on its first trading day to become the world’s second-most valuable coal miner after investors bid for 15 times the shares sold in the country’s largest initial public offering.
  • “There’s a lot of money coming into commodities and emerging markets after the Fed action yesterday,” said Niraj Shah, a Mumbai-based analyst at Fortune Equity Brokers Ltd., who had a price target of 318 rupees for the miner. “Coal India is a near-monopoly supplier in India and energy demand will only continue to increase. I wouldn’t be surprised if the share hits 400 rupees.”

Printing press + capital flows from western central bankers into emerging markets + near monopoly status?  Priceless.

  • “We had expected some gains on listing and had built that into the price,” Chairman Partha Bhattacharyya said in an interview. “But we didn’t expect this much gains.”
All thank you notes may be sent to Federal Reserve building....

Perhaps with their war chest, Coal India can buy out a few major U.S. players ... we're happy to give away all resources to the highest bidder, unlike those socialists in the Great White North. ;)

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As speculators run to find the next great sector which has not ramped, coal has seen great success the past few days.  Can steel be far behind, despite lagging results, cost pressures, and tepid demand? (fundamentals are so 1996)

[Massey Energy is up on rumors of a buyout offer... but some of the names being used as rumor bait as the bidder are also running up - it's all good]

Boo yah.







If Chinese coal is more your thing, you are in luck there too.... remember, just throw a dart and win.  No company specific knowledge needed anymore.





No positions

Hot IPO - SodaStream (SODA)

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Looks like the hours long selloff is almost erased... thankfully, this reign of bears (all few hours of it) appears to be stopped.  Their cockiness is astounding after 5 hours of "wins".... I'm hearing things like "I see daylight... maybe... but my eye is swollen shut from repeated battery."  What arrogance.

A name that crossed my radar today is SodaStream with the cute ticker SODA.  Never heard of it until all the clucking today about it is the next Hansens (HANS) [which for those who have been around for more than 2 years, was the Netflix of beverages in 'the day']   Or for those who have been introduced to the "non stop winning nature" of stock markets more recently, it can be loosely compared to Green Mountain Roasters (GMCR).... whatever the case just find a hot stock that had a huge run in the past decade that deals with beverages and do a comparison to justify buying at any price. It IPO'd last week to great success, with a price of $20 and opening day surge of 21% to $24.12.  But it hasn't stopped there.  It is up another 40% in the 3 days since (as I type) but was as high as 60%ish earlier today.

SODA! SODA! SODA!



Ironically...speaking of bubbles...that's what SodaStream makes!  In the privacy of your own home.... anyone can be their own Bernanke or Greenspan.

  • Sales at SodaStream, whose soda machines transform tap water into sparkling water and carbonated soft drinks, increased 50 percent to $93.4 million in the six months ended June, the filing showed. Profit rose almost ninefold to $5.67 million.

To be fair the company is growing nicely, and even has a solid profit - all perfect ingredients to run the stock up 50% from IPO.  Wait, that's already been accomplished.  I suppose we're going for 150-250% in the current environment.  Valuation?  Forgeddaboudit!

Renaissance Capital, which tracks IPO had this to say about the company.

Headquartered in Israel, SodaStream International (SODA) is the world's leading provider of home carbonation systems, which allow customers to make their own sparkling water and all-natural soda. The company offers soda makers ranging from $79 to $199, as well as consumable products, such as CO2 refills, reusable bottles, and over 100 added flavors including cola, root beer, grapefruit and lemonade. With an average household penetration of 5% to 15% in its established Western European markets, SodaStream is now turning its focus to the US, where it recently began a nationwide launch at retailers such as Bed Bath & Beyond (BBBY), Macy's (M) and Crate & Barrel.

The major risk to SodaStream's vision of transforming the $234 billion global carbonated beverage industry is the resistance it could face from both retailers and consumers to changes in the status quo. For example, a handful of US retailers have declined to participate in SodaStream's cylinder exchange program, which allows customers to turn in their empty CO2 cylinders in exchange for full ones, paying only the price of the CO2. In addition, the average US consumer may be unwilling to make the switch from convenient store purchasing to a do-it-yourself approach, particularly if the cost savings for basic cola is likely to be marginal at best.

The knight master of bubble creation had the CEO on his show; see video below.






If the stars align for SodaStream, Cramer said Wednesday, this beverage company could be the next Hansen Natural, or maybe even Green Mountain Coffee Roasters, delivering near four-digit returns or greater for investors who get in on the ground floor.

Sodastream makes blender-sized soda makers, sold at Williams-Sonoma and Bed Bath & Beyond, that turn water into seltzer. In addition to the carbon dioxide refills needed to run the machine, SodaStream also sells more than 100 mix flavors. The device saves you money on store-bought soda—one $4 mix bottle makes 12 liters, or 33 cans, of soda—it’s environment-friendly, and the flavors carry two-thirds fewer calories than the leading soft-drink brands.

Sure, SodaStream might see the meteoric growth of Hansen which soared nearly 1,000 percent between 2004 and mid-2006, or Green Mountain which saw huge gains of 1,173 percent after acquiring single-cup coffee brewer Keurig in May 2006 up until Sept. 30 of this year. But then again, this company could go the way of Jarden, maker of the Jimmy Buffett Margaritaville frozen-drink maker, a stock that “hasn’t done a lot in a long time,” Cramer said.

That’s why he didn’t want investors rushing in just yet. SodaStream IPO’d on Wednesday, opening at $24.75, or 24 percent higher than the $20 offering price. But a successful public offering doesn’t necessarily make for a successful public stock. To do that, the company will in the very least need to find the same success it’s had in Europe here in the States as well.

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You know things are out of control when even Cramer is cautious on a stock, and it ramps past his guidance. ;)

No position


Polypore International (PPO) with an Impressive Reversal

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I wrote last week we are seeing atypical technical moves that are simply obliterating bears of every stripe.  This reversal by Polypore International (PPO) is just another one that defies explanation.  While I felt the selloff was overdone based on an "in line" earnings report, to see a huge red candle like that mean absolutely nothing, and the stock to reverse and break back over support and fill a gap, in a span of 2 market days is simply jaw dropping.  I can't add much more that I have not already said - this market is punishing anyone who hedges, shorts, or thinks stocks can actually break down when support is broken.



No position


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Bookkeeping: Restarting VMWare (VMW)

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There are hundreds upon hundreds of stocks making new highs, as momo robots chase stocks ever higher in unending fashion.  It would be too easy to just buy a basket of those, come back in a week, take half off the table, and secure 20-25% gains across the board.  Anyone* can do that.

*(including small animals)

Indeed, the only challenge left in this market is to see if you can make gains in atypical ways.  Ways that do not include a dart board.  Hence, for mental stimulation only I restarted a position in VMWare (VMW).  Much like the financials which finally have begun to break out in the "everything must go up" market, the algo's are now chasing in the last remaining stocks which are not up 40-60% in 2.5 months.  Normally I'd write things such as "when even the stocks left behind rally this must mean we're getting late in the move" but I write stuff like that every week, only to be POMO'd and QE'd.  So I'll spare you.

Instead we now just ask the simple question, will I make 10%, 20%, 30%, or 40% on this purchase in the next few weeks.  We shall see.

On the outlier event the market can pull back for more than 4 hours and in a sum greater than 1.5% I will stop out below today's lows of $78, which would coincide with a 2.5% loss.  But the probability of that has been calculated at a number far too low to publish.  I have started with a 2.3% stake - a move over $82 would most likely me adding more.



Long VMWare in fund; no personal position


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Bookkeeping: Selling Another 50% of Silver Wheaton (SLW) Ahead of Earnings

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My foray into Silver Wheaton (SLW) has been beneficial.  In just a short week, I was able to take 25% off the table late last week for a double digit gain.  Today said stock is up another 4% and my gains in a under a week and a half now hug nearly 20%.  Don't try to annualize that at home - your eyes might pop out.  My only mistake was not to put 25% of the portfolio into such a fine stock.



The company reports tonight, so I'm taking half of what remains off the table here to lock in another win, in a market that is making every long only fund manager look genius.  We're all Peter Lynch now.

(The only disappointment is the Monday morning melt up has failed for only the 5th? 6th? instance in the past however many months)

Long Silver Wheaton in fund; no personal position


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Bookkeeping: Weekly Changes to Fund Positions Year 4, Week 14

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Year 4, Week 14 Major Position Changes

To see historic weekly fund changes click here OR the label at the bottom of this entry entitled 'fund positions'.

Cash: 60.9% (v 69.0% last week)
22 long bias: 38.3% (v 27.6% last week)
3 short bias: 0.7% (v 3.4% last week)

25 positions (vs 22 last week)

Weekly thoughts
"The only thing we have to fear, is missing out on free money created by Federal Reserve backstop."  Another remarkable week in a streak of remarkable weeks since the national accounting board changed the rules on how banks have to value their assets (under political pressure), QE1 was launched, and Obama told us (within days of the market bottom in March 2009) that buying stocks would be a good idea.  The structure and nature of the market has evolved to a computerized ETF driven melodrama over the past 4-5 years, but aside from a few months late spring through late summer 2010 (between QE1 and the restart of Fed purchases to rollover MBS runoff), the market has acted quite abnormal or at best, atypical.   Within that window I remember saying to myself for the first time since mid 2007 "wow this feels normal"... but alas it was but a short respite.

Now the grand game of central banker risk taking chicken is back upon us, with higher stakes on each iteration.  Savers are being denigrated, and those seeking to preserve their wealth (not to mention grow it) are being herded like cattle into riskier assets with the 'secret handshake' that Bernanke will underwrite all risk.  The infamous Greenspan put is now the Bernanke put cubed.  Much as the implicit put behind Fannie and Freddie had to be exercised and hence turned from implicit to explicit in 2008, the market's implicit Greenspan wealth creating put, has now become explicit with a remarkable admission by the Fed in the past few weeks (the apex being an opinion piece by Bernanke himself) that the Fed's mandate now includes manipulating asset prices - upward of course.  This was of course this writer's viewpoint many moons ago, when the Fed was instead offering lies other reasons for the need for additional QE.  I wrote that Greenspan had said multiple times that inflating the stock market would be a far better stimulus than anything coming out of Congress - and Bernanke has pounced.   I am preparing a piece, showing how these 'wealth effect' gains will fall to a much smaller percent of the populace than conventional wisdom currently allows but frankly that is a moot point, other than to dispute dogma.  If the great proportion of gains from Fed action go to the top 2, 5, 10, or 20% - so be it... "trickle down" economics is the national ethos of the past few decades, and despite an abject failure in lifting the middle class - the country is increasingly run for the top sliver of society, and everything else is just details.

As to our backstopped stock market, the VIX imploded last week as risk is now off the table.  Despite discounting QE2 and "positive election results" for some 2 months, the market still bought the news.  Each day of the week the market was up, even Thursday as poor weekly jobless claims had no effect under the rush of ever more liquidity.  Indeed, news has not mattered for months as everything is about POMO / QE2.  The pattern in the S&P 500 has become quite 'easy' as the PhD algo programs are led premarket after premarket err..day, through multiple resistance levels.  Just last week the market closed a point over the 200 week simple moving average one day... to be followed by a point over yearly highs the next day.  As if someone had an agenda and knew all the key technical indicators necessary to create constant technically oriented buying by computers gone wild.   Thankfully we have a free and open market, so no need to have a discussion from a grassy knoll.

The S&:P 500 is now bought at every dip to the 13 day moving average.  It can be sold roughly 2.5% above which is near where we were Friday.... only to be bought again on the next dip to the 13 day. It is a 'risk less' trade since the market "can't" have a meaningfully selloff anymore (per countless CNBC guests the past few weeks).  Because after QE2, we prepare for QE3 next July.  Falling to the 20 day moving average?  Don't talk like that.  What is striking (and similar to action throughout 2009) is how the market sliced through multiple key resistance areas as if they are not there.  Atypical... at least within the context of pre 2009.   So the great game of chicken... or musical chairs is reborn.  The Fed is the Pied Piper and the flute is blowing, and a nation of speculators follows in it's path, happy to drink Kool Aid - every day is Christmas under a Ben Bernanke regime.



Just don't ask how the market priced in a 'currency that cannot be printed' is doing.



The NASDAQ has suffered essentially one >1% loss in close to 50 days now... risk is just a 4 letter word.  While seemingly overbought... that appears just a state of mind nowadays.


Emerging markets and commodities are the obvious targets for the newest Federal Reserve backed bubbles as capital can move across borders instantly once the primary dealers have their goodies.



All is well ... errr...as long as your savings are not priced in U.S. dollars.  (granted for many Americans the question is "savings? what savings?")



The dollar broke below low $76s which shook me out of a long position Thursday, but recovered Friday on the "good" employment data.  With Europe slowing down economically the past 2 months (completely ignored under the reign of liquidity) and now facing a rising currency, there is a potential risk... err nevermind... we don't use that word anymore.

Oil stands at the precipice of breaking to new yearly highs as Americans are rewarded with gas prices back over $3 in a booming economy....



and the precious metals - especially that of a silver kind - have gone parabolic.



Commodities of all types (not named nat gas) we actually need to eat, clothe, and energize ourselves have also gone parabolic but that's ok - the Fed sees no evil, and hears no evil as long as you are in the lower or middle class.  The key is catering to the upper end, and hence we will offset the inflation non inflation in commodities by making the investor class rich via fake valuations.  Worked like a charm in 1999 and 2006 so don't worry - it will work again.  Just don't ask about how those who don't have substantial assets to be inflated by manipulation will handle the rising prices - because those rising prices are not really there, per Federal Reserve (ex food and energy) analysis.  Hmmm... glad to see those average healthcare premium increases of 11% are apparently not real.  Tuition hikes?  Imaginary as well.  Plus college is not needed in the new paradigm economy where daytrading will be the source of wealth for all those "house flippers" from 2006.

------------------------------------------

Economics

Normally this is where I list a calender of economic events, but it's become moot.  No one cares about data - it's become ignored the past 2+ months.  Same for earnings reports - the market only had 1 day of selling off the entire earnings season and even that was one whole day of duration.  So no need to list it at this point since data is just an academic exercise.  QE2 + POMO is all that matters.

In Europe, Irish spreads are blowing out but does it matter?  Everything is backstopped ... the IMF stands ready to do a rescue.  And the ECB will buy the Irish bonds.  Did I mention QE2?

In short, moral hazard is at a 52 week high.

POMO schedule for the week is November 8th, and then the next round will be announced November 10th. I have yet to go see if the QE2 schedule is up but assume that will also be released on the 10th... but bottom line $75B a month of QE2 and $20-$30B of POMO, until the Dow is 36,000 or above it appears.  In this backwards environment, front running the Fed is more important than economic data or earnings data; it's the new paradigm.  In case you were wondering, I wrote last week we are approaching a level where the Fed will be running out of debt to buy since it is crowding out the private market.  There was a self imposed limit of a 35% maximum of owning any duration bond, but the Fed has had to relax that as well since it now has made the stakes so big .... it's all surreal, in an Argentina sense.

---------------------------------------------

Portfolio

What a week.  Every news event was bought.  Apparently nothing was priced in the market after all.  ISM data? buy the news.  QE2 announcement? buy the news.  Elections?  buy the news.  Bad weekly claims? buy the news.  "Positive" monthly employment data? buy the news.  The S&P 500 gained every day of the week as dart throwing becomes an art form circa 1999.  Both the 200 day simple weekly moving average and yearly highs were taken out in back to back days, by about 1 S&P point at each level.  The "invisible hand" of the market is quite precise.  So it's a pick your pleasure market - are you going to get rich in risk free manner by buying stocks A, B, and C ... or with stocks X, Y, and Z?

For the fund I basically gave up the ghost after the 200 week simple was broken as that is a massively important level.  While I recognize gaps on indexes normally fill within 2-3 months, and we are past the 2 month level, I speak from a point of a normal functioning market.  This one is abnormal.  My one major hedge  - the US dollar - was taken out by the whoosh down Thursday.  The fund had a split decision on 2 short positions, with a small net benefit... but of course all the real gains were on the long side as I've regained 'genius' status that I last held in 1999.  Every stock on the long side of the portfolio is up, many in egregious fashion... and that does not include the "F5 Networks" and "Pricelines" and "Netflixes" and "Las Vegas Sands" I've since purged from the portfolio.  (which can also only go up)   As for specifics... well a bunch of stocks rampaged up - their names are meaningless ... because almost all stocks now go up.  I took some profits, but expanded the long exposure by about 10% by adding new names or additional exposure elsewhere.  Until the market can break the 13 day moving average or (dare I say it) the 20 day moving average, it's a non shortable market other than for daytraders.   Indeed aside from those moving averages we now have the 200 week simple moving average as another support.

On the long side:

  • Monday, I restarted a substantial (>4%) position in Apple (AAPL) near support at $300 figuring there is no way the greater market goes up without this stock.  It bounced nicely the rest of the week, to test all time highs. 
  • Tuesday, I sold half of Polypore International (PPO) ahead of earnings to lock in about a 35-40% gain.  The stock was trashed on an "in line" earnings report, causing technical damage, so I sold the rest Thursday for a gain somewhere in the 20-25% level. 
  • Atheros Communications (ATHR) stalled at the 200 day simple moving average, so I cut half the stake with the intention of buying back *if* it broke over that level.  That indeed happened on Thursday morning melt up, so I bought back the half
  • Sold half of Spreadtrum Communications (SPRD) as the stock was up 10% on the session.
  • Sold 25% of Riverbed Technology (RVBD) just to not be egregious as the stock was up 32% from entry. 
  • Thursday morning Bernanke forced my hand as the indexes surged over the 200 week moving average.  I closed out Las Vegas Sands (LVS) as I could not stomach a new purchase anytime soon as the stock was incredibly extended.  I added to existing purchases in HDFC Bank (HDB), Acme Packet, and Atheros (see above).   New positions were created in Blackstone Group (BX), TRW Automotive (TRW), DSW (DSW), and Cummins (CMI).
  • Thursday, Home Inns & Hotel Management (HMIN) was closed as it was acting poorly in a big up day; I retained a 3% gain in the 2/3rds of the original position... the stock went on to implode later in the day, down nearly double digits..
  • Late Thursday, took some light profits in Silver Wheaton (SLW), Ford (F), and Magna International (MGA) ahead of earnings. 
  • Friday, I sold another third of Magna International (MGA) on the earnings spike. 


On the short side:

  • Tuesday, I shorted Equinix (EQIX) (2.8% exposure) and Lender Procession Services (LPS) (2.1% exposure) - simply to create an appearance I am being 'sophisticated'.  I placed odds at 90% I would lose money in both trades, since the market can only go up.  Well, the market only did go up - so I lost my 2% in LPS in under 24 hours as I was stopped out, but made 2.5% in EQIX which I closed out Friday.   A small net positive, but mostly a moral victory to see that money can still be made on the short side, but its akin to a root canal.
  • Powershares Bullish US Dollar (UUP) was closed as a hedge due to a break to new (recent lows) Thursday. 

Sunday, November 7, 2010

New 52 Week Highs Everywhere

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Below is a massive list of new 52 week highs reached Friday, some 400 names with the following characteristics.

Limiting factors
  1. Average volume: 200K
  2. Market cap > $300M
  3. Stock price >$10

At the bottom of the page is a similar list for ETFs only - some 50 of them.

Neither of these lists include stocks like Apple (AAPL) which are fractionally below their 52 week highs.  As David Tepper said "everything will go up" due to the lovely gift of QE.

Sorted by industry group, and within industry group by market cap.  If one is a technical trader, just about any of these names is a 'buy buy buy'.


Ticker Company  Market Cap Industry
AFL AFLAC Inc.        27,220 Accident & Health Insurance
OMC Omnicom Group Inc.        14,080 Advertising Agencies
MWW Monster Worldwide, Inc.          2,575 Advertising Agencies
HON Honeywell International Inc.        38,447 Aerospace/Defense Products & Services
GR Goodrich Corp.        10,828 Aerospace/Defense Products & Services
BEAV BE Aerospace Inc.          3,933 Aerospace/Defense Products & Services
CF CF Industries Holdings, Inc.          8,705 Agricultural Chemicals
CMP Compass Minerals International Inc.          2,690 Agricultural Chemicals
EXPD Expeditors International of Washington Inc.        10,982 Air Delivery & Freight Services
AAWW Atlas Air Worldwide Holdings Inc.          1,584 Air Services, Other
BRS Bristow Group, Inc.          1,494 Air Services, Other
LTD Limited Brands, Inc.        10,268 Apparel Stores
ROST Ross Stores Inc.          7,740 Apparel Stores
FL Foot Locker, Inc.          2,586 Apparel Stores
DSW DSW Inc.          1,687 Apparel Stores
TLEO Taleo Corp.          1,290 Application Software
RNOW Rightnow Technologies Inc.             875 Application Software
SMSI Smith Micro Software Inc.             519 Application Software
BEN Franklin Resources Inc.        27,908 Asset Management
BAM Brookfield Asset Management Inc.        18,145 Asset Management
TROW T. Rowe Price Group, Inc.        15,504 Asset Management
AMP Ameriprise Financial Inc.        13,643 Asset Management
IVZ Invesco Ltd.        11,200 Asset Management
LM Legg Mason Inc.          5,476 Asset Management
KKR Kohlberg Kravis Roberts & Co.          2,715 Asset Management
TICC TICC Capital Corp.             302 Asset Management
KMX CarMax Inc.          7,274 Auto Dealerships
AN AutoNation Inc.          3,904 Auto Dealerships
GPI Group 1 Automotive Inc.             911 Auto Dealerships
F Ford Motor Co.        55,751 Auto Manufacturers - Major
TTM Tata Motors Ltd.        16,991 Auto Manufacturers - Major
JCI Johnson Controls Inc.        24,803 Auto Parts
MGA Magna International, Inc.        11,220 Auto Parts
ALV Autoliv, Inc.          6,745 Auto Parts
BWA BorgWarner Inc.          6,741 Auto Parts
WBC WABCO Holdings Inc.          3,226 Auto Parts
DAN Dana Holding Corporation          2,121 Auto Parts
ARM ArvinMeritor Inc.          1,742 Auto Parts
MOD Modine Manufacturing Company             702 Auto Parts
AZO AutoZone Inc.        10,705 Auto Parts Stores
AAP Advance Auto Parts Inc.          5,531 Auto Parts Stores
LKQX LKQ Corp.          3,262 Auto Parts Wholesale
FMX Fomento Econ        99,081 Beverages - Brewers
TAP Molson Coors Brewing Company          9,352 Beverages - Brewers
STZ Constellation Brands Inc.          4,242 Beverages - Wineries & Distillers
JAZZ Jazz Pharmaceuticals, Inc.             556 Biotechnology
PAY VeriFone Systems, Inc          3,017 Business Equipment
FISV Fiserv, Inc.          8,373 Business Services
WXS Wright Express Corp.          1,739 Business Services
NTSP NetSpend Holdings, Inc.          1,349 Business Services
ABM ABM Industries Inc.          1,249 Business Services
ADP Automatic Data Processing, Inc.        22,609 Business Software & Services
TIBX Tibco Software, Inc.          3,343 Business Software & Services
QSFT Quest Software Inc.          2,411 Business Software & Services
LFT Longtop Financial Technologies Limited          2,355 Business Software & Services
NTCT NetScout Systems Inc.          1,022 Business Software & Services
EBAY eBay Inc.        40,240 Catalog & Mail Order Houses
IACI IAC/InterActiveCorp.          2,869 Catalog & Mail Order Houses
CVC Cablevision Systems Corporation          8,611 CATV Systems
VMED Virgin Media, Inc.          8,580 CATV Systems
TXI Texas Industries Inc.          1,099 Cement
DD EI DuPont de Nemours & Co.        43,983 Chemicals - Major Diversified
APD Air Products & Chemicals Inc.        18,417 Chemicals - Major Diversified
CE Celanese Corp.          6,082 Chemicals - Major Diversified
FMC FMC Corp.          5,577 Chemicals - Major Diversified
PM Philip Morris International, Inc.       109,662 Cigarettes
MO Altria Group Inc.        54,513 Cigarettes
RAI Reynolds American Inc.        19,474 Cigarettes
LO Lorillard, Inc.        13,303 Cigarettes
DAR Darling International Inc.             864 Cleaning Products
DHR Danaher Corp.        29,428 Conglomerates
PPG PPG Industries Inc.        12,988 Conglomerates
CBE Cooper Industries plc          9,041 Conglomerates
FCX Freeport-McMoRan Copper & Gold Inc.        49,321 Copper
SCCO Southern Copper Corp.        39,636 Copper
DFS Discover Financial Services        10,298 Credit Services
EZPW EZCORP Inc.          1,277 Credit Services
NTAP NetApp, Inc.        19,673 Data Storage Devices
M Macy's, Inc.        10,808 Department Stores
SKS Saks Incorporated          1,950 Department Stores
WMT Wal-Mart Stores Inc.       200,738 Discount, Variety Stores
COST Costco Wholesale Corporation        28,274 Discount, Variety Stores
DLTR Dollar Tree, Inc.          6,726 Discount, Variety Stores
FDO Family Dollar Stores Inc.          6,097 Discount, Variety Stores
NSR NeuStar, Inc.          1,984 Diversified Communication Services
MOTR Motricity, Inc.          1,117 Diversified Communication Services
IBM International Business Machines Corp.       182,528 Diversified Computer Systems
TEL Tyco Electronics, Ltd.        14,676 Diversified Electronics
CODI Compass Diversified Holdings             744 Diversified Investments
PNNT PennantPark Investment Corporation             374 Diversified Investments
CMI Cummins Inc.        19,067 Diversified Machinery
IR Ingersoll-Rand Plc        13,294 Diversified Machinery
PLL Pall Corp.          5,164 Diversified Machinery
IEX IDEX Corporation          3,086 Diversified Machinery
ATU Actuant Corporation          1,628 Diversified Machinery
CYD China Yuchai International Limited          1,014 Diversified Machinery
RBN Robbins & Myers Inc.             999 Diversified Machinery
ED Consolidated Edison Inc.        14,818 Diversified Utilities
AEE Ameren Corporation          7,150 Diversified Utilities
NVE NV Energy, Inc.          3,311 Diversified Utilities
WR Westar Energy, Inc.          2,846 Diversified Utilities
SHPGY Shire plc        13,695 Drug Manufacturers - Other
RDY Dr. Reddy's Laboratories Ltd.          6,732 Drug Manufacturers - Other
ALXN Alexion Pharmaceuticals, Inc.          6,580 Drug Manufacturers - Other
WPI Watson Pharmaceuticals Inc.          6,421 Drugs - Generic
PRX Par Pharmaceutical Companies Inc.          1,323 Drugs - Generic
SO Southern Company        32,276 Electric Utilities
DUK Duke Energy Corporation        24,491 Electric Utilities
EIX Edison International        12,452 Electric Utilities
XEL Xcel Energy Inc.        11,194 Electric Utilities
CNL Cleco Corporation          1,926 Electric Utilities
IDA IdaCorp, Inc.          1,830 Electric Utilities
UIL UIL Holdings Corporation          1,533 Electric Utilities
UNS Unisource Energy Corp.          1,320 Electric Utilities
EE El Paso Electric Co.          1,133 Electric Utilities
EDE Empire District Electric Co.             911 Electric Utilities
CAT Caterpillar Inc.        53,023 Farm & Construction Machinery
DE Deere & Company        33,527 Farm & Construction Machinery
JOYG Joy Global, Inc.          7,780 Farm & Construction Machinery
ITUB Ita       118,798 Foreign Money Center Banks
BFR BBVA Banco Frances S.A.          2,442 Foreign Regional Banks
GGAL Grupo Financiero Galicia S.A.          2,028 Foreign Regional Banks
ENI Enersis S.A.        16,515 Foreign Utilities
OKE ONEOK Inc.          5,444 Gas Utilities
ATO Atmos Energy Corporation          2,741 Gas Utilities
AWI Armstrong World Industries, Inc.          2,883 General Building Materials
CBI Chicago Bridge & Iron Company N.V.          2,774 General Contractors
CCL Carnival Corporation        36,666 General Entertainment
PCLN priceline.com Incorporated        18,817 General Entertainment
RCL Royal Caribbean Cruises Ltd.          9,229 General Entertainment
AU AngloGold Ashanti Ltd.        18,036 Gold
BVN Compania de Minas Buenaventura SA        13,828 Gold
AEM Agnico-Eagle Mines Ltd.        13,411 Gold
GFI Gold Fields Ltd.        11,901 Gold
HMY Harmony Gold Mining Co. Ltd.          5,296 Gold
NG NovaGold Resources Inc.          3,011 Gold
CBD Companhia Brasileira de Distribuicao        10,269 Grocery Stores
HNT Health Net Inc.          2,794 Health Care Plans
FLR Fluor Corporation          9,749 Heavy Construction
MDR McDermott International Inc.          3,744 Heavy Construction
MTZ MasTec, Inc.          1,135 Heavy Construction
DY Dycom Industries Inc.             442 Heavy Construction
WSM Williams-Sonoma Inc.          3,828 Home Furnishing Stores
AYI Acuity Brands, Inc.          2,290 Home Furnishings & Fixtures
EC Ecopetrol SA       104,399 Independent Oil & Gas
CEO CNOOC Ltd.       102,484 Independent Oil & Gas
EPD Enterprise Products Partners LP        28,227 Independent Oil & Gas
NBL Noble Energy, Inc.        14,993 Independent Oil & Gas
PXD Pioneer Natural Resources Co.          8,861 Independent Oil & Gas
NFX Newfield Exploration Co.          8,647 Independent Oil & Gas
LINE Linn Energy, LLC          5,328 Independent Oil & Gas
FST Forest Oil Corp.          3,871 Independent Oil & Gas
ROSE Rosetta Resources, Inc.          1,539 Independent Oil & Gas
PVG Penn Virginia GP Holdings LP          1,029 Independent Oil & Gas
TGA TransGlobe Energy Corp.             979 Independent Oil & Gas
GPOR Gulfport Energy Corp.             800 Independent Oil & Gas
XTEX Crosstex Energy LP             707 Independent Oil & Gas
PETD Petroleum Development Corporation             692 Independent Oil & Gas
HNR Harvest Natural Resources Inc.             452 Independent Oil & Gas
TRGL Toreador Resources Corp.             400 Independent Oil & Gas
ETN Eaton Corporation        15,800 Industrial Electrical Equipment
ROK Rockwell Automation Inc.          9,429 Industrial Electrical Equipment
AME Ametek Inc.          6,037 Industrial Electrical Equipment
TNB Thomas & Betts Corp.          2,362 Industrial Electrical Equipment
GTI GrafTech International Ltd.          2,314 Industrial Electrical Equipment
BEZ Baldor Electric Co.          2,096 Industrial Electrical Equipment
AOS AO Smith Corp.          1,824 Industrial Electrical Equipment
ENS EnerSys          1,356 Industrial Electrical Equipment
EMR Emerson Electric Co.        43,098 Industrial Equipment & Components
PH Parker Hannifin Corporation        13,182 Industrial Equipment & Components
TTES T-3 Energy Services Inc.             462 Industrial Equipment & Components
GWW W.W. Grainger, Inc.          8,853 Industrial Equipment Wholesale
WCC WESCO International Inc.          2,183 Industrial Equipment Wholesale
AXE Anixter International Inc.          1,959 Industrial Equipment Wholesale
BHP BHP Billiton Ltd.       256,351 Industrial Metals & Minerals
BBL BHP Billiton plc       222,408 Industrial Metals & Minerals
TCK Teck Resources Limited        29,316 Industrial Metals & Minerals
YZC Yanzhou Coal Mining Co. Ltd.        23,909 Industrial Metals & Minerals
BTU Peabody Energy Corp.        15,572 Industrial Metals & Minerals
CCJ Cameco Corp.        13,072 Industrial Metals & Minerals
ACI Arch Coal Inc.          4,598 Industrial Metals & Minerals
SWC Stillwater Mining Co.          1,981 Industrial Metals & Minerals
GSM Globe Specialty Metals, Inc.          1,264 Industrial Metals & Minerals
GEOY GeoEye, Inc.          1,008 Information & Delivery Services
MMC Marsh & McLennan Companies, Inc.        14,088 Insurance Brokers
BRO Brown & Brown Inc.          3,285 Insurance Brokers
AJG Arthur J Gallagher & Co.          3,056 Insurance Brokers
SINA Sina Corp.          3,617 Internet Software & Services
IBKR Interactive Brokers Group, Inc.             806 Investment Brokerage - National
TIF Tiffany & Co.          7,191 Jewelry Stores
SIG Signet Jewelers Limited          3,174 Jewelry Stores
TMK Torchmark Corp.          4,789 Life Insurance
DFG Delphi Financial Group, Inc.          1,540 Life Insurance
MAR Marriott International, Inc.        14,406 Lodging
HOT Starwood Hotels & Resorts Worldwide Inc.        11,304 Lodging
TKR Timken Co.          4,307 Machine Tools & Accessories
KMT Kennametal Inc.          2,885 Machine Tools & Accessories
PTR PetroChina Co. Ltd.       241,771 Major Integrated Oil & Gas
SSL Sasol Ltd.        31,922 Major Integrated Oil & Gas
HOGS Zhongpin, Inc.             796 Meat Products
VAR Varian Medical Systems Inc.          7,906 Medical Appliances & Equipment
VOLC Volcano Corporation          1,348 Medical Appliances & Equipment
NXTM Nxstage Medical, Inc.          1,103 Medical Appliances & Equipment
HRC Hill-Rom Holdings, Inc.          2,567 Medical Instruments & Supplies
LH Laboratory Corp. of America Holdings          8,440 Medical Laboratories & Research
PCP Precision Castparts Corp.        20,625 Metal Fabrication
IVR Invesco Mortgage Capital Inc.             862 Mortgage Investment
JNPR Juniper Networks, Inc.        17,922 Networking & Communication Devices
PWE Penn West Energy Trust        10,760 Oil & Gas Drilling & Exploration
CXO Concho Resources, Inc.          7,683 Oil & Gas Drilling & Exploration
ERF Enerplus Resources Fund          5,271 Oil & Gas Drilling & Exploration
MWE MarkWest Energy Partners LP          2,892 Oil & Gas Drilling & Exploration
OAS Oasis Petroleum Inc.          2,169 Oil & Gas Drilling & Exploration
NOG Northern Oil and Gas, Inc.          1,064 Oil & Gas Drilling & Exploration
EVEP EV Energy Partners LP          1,042 Oil & Gas Drilling & Exploration
VNR Vanguard Natural Resources, LLC             681 Oil & Gas Drilling & Exploration
SLB Schlumberger Limited       103,229 Oil & Gas Equipment & Services
NOV National Oilwell Varco, Inc.        24,635 Oil & Gas Equipment & Services
FTI FMC Technologies, Inc.          9,345 Oil & Gas Equipment & Services
DRQ Dril-Quip, Inc.          2,919 Oil & Gas Equipment & Services
RES RPC Inc.          2,474 Oil & Gas Equipment & Services
CPX Complete Production Services, Inc.          2,071 Oil & Gas Equipment & Services
LUFK Lufkin Industries Inc.          1,540 Oil & Gas Equipment & Services
ENB Enbridge Inc.        21,620 Oil & Gas Pipelines
SE Spectra Energy Corp.        16,006 Oil & Gas Pipelines
ETP Energy Transfer Partners L.P.          9,706 Oil & Gas Pipelines
PAA Plains All American Pipeline LP          8,772 Oil & Gas Pipelines
MMP Magellan Midstream Partners LP          6,301 Oil & Gas Pipelines
EPB El Paso Pipeline Partners, L.P.          5,261 Oil & Gas Pipelines
RGNC Regency Energy Partners LP          3,712 Oil & Gas Pipelines
NGLS Targa Resources Partners LP          2,169 Oil & Gas Pipelines
HES Hess Corporation        22,988 Oil & Gas Refining & Marketing
SSCC Smurfit-Stone Container Corp.          6,203 Packaging & Containers
BLL Ball Corporation          5,834 Packaging & Containers
PKG Packaging Corp. of America          2,659 Packaging & Containers
SLGN Silgan Holdings Inc.          2,639 Packaging & Containers
UFS Domtar Corporation          3,478 Paper & Paper Products
BKI Buckeye Technologies Inc.             787 Paper & Paper Products
KS KapStone Paper and Packaging Corporation             688 Paper & Paper Products
WTW Weight Watchers International, Inc.          2,613 Personal Services
RGS Regis Corp.          1,215 Personal Services
CAJ Canon Inc.        59,331 Photographic Equipment & Supplies
DCI Donaldson Company, Inc.          3,893 Pollution & Treatment Controls
TTMI TTM Technologies Inc.          1,091 Printed Circuit Boards
MKC McCormick & Co. Inc.          5,942 Processed & Packaged Goods
CPO Corn Products International Inc.          3,307 Processed & Packaged Goods
HAIN The Hain Celestial Group, Inc.          1,131 Processed & Packaged Goods
PLCM Polycom, Inc.          2,992 Processing Systems & Products
AIG American International Group, Inc.        30,434 Property & Casualty Insurance
TRV The Travelers Companies, Inc.        26,367 Property & Casualty Insurance
ACE ACE Limited        20,962 Property & Casualty Insurance
PGR Progressive Corp.        14,648 Property & Casualty Insurance
PRE PartnerRe Ltd.          6,116 Property & Casualty Insurance
CINF Cincinnati Financial Corp.          5,003 Property & Casualty Insurance
RE Everest Re Group Ltd.          4,887 Property & Casualty Insurance
AXS Axis Capital Holdings Ltd.          4,441 Property & Casualty Insurance
WRB W.R. Berkley Corporation          4,144 Property & Casualty Insurance
RNR RenaissanceRe Holdings Ltd.          3,423 Property & Casualty Insurance
AFG American Financial Group Inc.          3,413 Property & Casualty Insurance
VR Validus Holdings, Ltd.          3,290 Property & Casualty Insurance
AWH Allied World Assurance Company Holdings Ltd.          2,504 Property & Casualty Insurance
ENH Endurance Specialty Holdings Ltd.          2,209 Property & Casualty Insurance
THG The Hanover Insurance Group Inc.          2,153 Property & Casualty Insurance
PTP Platinum Underwriters Holdings Ltd.          1,770 Property & Casualty Insurance
TWGP Tower Group Inc.          1,105 Property & Casualty Insurance
BPO Brookfield Properties Corporation          9,321 Property Management
MHP The McGraw-Hill Companies, Inc.        12,068 Publishing - Books
KSU Kansas City Southern          4,774 Railroads
FOSL Fossil, Inc.          4,176 Recreational Goods, Other
PII Polaris Industries, Inc.          2,434 Recreational Vehicles
SBNY Signature Bank          1,838 Regional - Northeast Banks
NAL New Alliance Bancshares Inc.          1,407 Regional - Northeast Banks
LUV Southwest Airlines Co.        10,601 Regional Airlines
ALK Alaska Air Group, Inc.          2,009 Regional Airlines
PSA Public Storage        17,719 REIT - Diversified
RYN Rayonier Inc.          4,376 REIT - Diversified
STWD Starwood Property Trust, Inc.             989 REIT - Diversified
VTR Ventas Inc.          8,655 REIT - Healthcare Facilities
OHI Omega Healthcare Investors Inc.          2,325 REIT - Healthcare Facilities
HR Healthcare Realty Trust Inc.          1,587 REIT - Healthcare Facilities
HST Host Hotels & Resorts Inc.        11,401 REIT - Hotel/Motel
PLD ProLogis          8,291 REIT - Industrial
AMB AMB Property Corp.          5,077 REIT - Industrial
BMR BioMed Realty Trust Inc.          2,521 REIT - Industrial
EXR Extra Space Storage Inc.          1,516 REIT - Industrial
LRY Liberty Property Trust          3,961 REIT - Office
AVB Avalonbay Communities Inc.          9,665 REIT - Residential
UDR UDR, Inc.          4,375 REIT - Residential
CPT Camden Property Trust          3,528 REIT - Residential
ESS Essex Property Trust Inc.          3,519 REIT - Residential
SNH Senior Housing Properties Trust          3,191 REIT - Residential
AIV Apartment Investment & Management Co.          2,977 REIT - Residential
BRE BRE Properties Inc.          2,942 REIT - Residential
ACC American Campus Communities Inc.          2,228 REIT - Residential
HME Home Properties Inc.          2,117 REIT - Residential
MAA Mid-America Apartment Communities Inc.          2,082 REIT - Residential
CLP Colonial Properties Trust          1,512 REIT - Residential
AGNC American Capital Agency Corp.          1,147 REIT - Residential
AEC Associated Estates Realty Corp.             485 REIT - Residential
SPG Simon Property Group Inc.        30,980 REIT - Retail
MAC Macerich Co.          6,433 REIT - Retail
REG Regency Centers Corporation          3,667 REIT - Retail
DDR Developers Diversified Realty Corp.          3,522 REIT - Retail
WRI Weingarten Realty Investors          3,121 REIT - Retail
TCO Taubman Centers Inc.          2,743 REIT - Retail
CBL CBL & Associates Properties Inc.          2,550 REIT - Retail
EPR Entertainment Properties Trust          2,289 REIT - Retail
SKT Tanger Factory Outlet Centers Inc.          2,063 REIT - Retail
PPS Post Properties Inc.          1,612 REIT - Retail
CAR Avis Budget Group, Inc.          1,418 Rental & Leasing Services
URI United Rentals, Inc.          1,214 Rental & Leasing Services
LVS Las Vegas Sands Corp.        34,345 Resorts & Casinos
WYNN Wynn Resorts Ltd.        13,965 Resorts & Casinos
CMG Chipotle Mexican Grill, Inc.          7,136 Restaurants
DRI Darden Restaurants, Inc.          6,670 Restaurants
CBRL Cracker Barrel Old Country Store, Inc.          1,263 Restaurants
PFS Provident Financial Services, Inc.             833 Savings & Loans
WAT Waters Corp.          7,113 Scientific & Technical Instruments
TRMB Trimble Navigation Limited          4,529 Scientific & Technical Instruments
CPHD Cepheid          1,310 Scientific & Technical Instruments
RSTI Rofin-Sinar Technologies Inc.             841 Scientific & Technical Instruments
GEO The GEO Group, Inc.          1,293 Security & Protection Services
CHKP Check Point Software Technologies Ltd.        10,580 Security Software & Services
TXN Texas Instruments Inc.        36,951 Semiconductor - Broad Line
ADI Analog Devices Inc.        10,591 Semiconductor - Broad Line
AVGO Avago Technologies Limited          6,073 Semiconductor - Broad Line
ATML Atmel Corporation          4,745 Semiconductor - Broad Line
CY Cypress Semiconductor Corporation          2,498 Semiconductor - Broad Line
SWKS Skyworks Solutions Inc.          4,318 Semiconductor - Integrated Circuits
IRF International Rectifier Corporation          1,908 Semiconductor - Integrated Circuits
MSCC Microsemi Corp.          1,759 Semiconductor - Integrated Circuits
OVTI OmniVision Technologies Inc.          1,509 Semiconductor - Integrated Circuits
SMTC Semtech Corp.          1,411 Semiconductor - Integrated Circuits
MCRL Micrel Inc.             770 Semiconductor - Integrated Circuits
ALTR Altera Corp.        10,393 Semiconductor - Specialized
LLTC Linear Technology Corp.          7,425 Semiconductor - Specialized
KLAC KLA-Tencor Corporation          6,276 Semiconductor Equipment & Materials
LRCX Lam Research Corporation          5,858 Semiconductor Equipment & Materials
NVLS Novellus Systems, Inc.          2,763 Semiconductor Equipment & Materials
XXIA Ixia          1,104 Semiconductor Equipment & Materials
KEX Kirby Corporation          2,407 Shipping
SFL Ship Finance International Limited          1,716 Shipping
TOO Teekay Offshore Partners LP          1,605 Shipping
NMM Navios Maritime Partners L.P.             799 Shipping
VLCCF Knightsbridge Tankers Limited             560 Shipping
SLW Silver Wheaton Corp.        11,335 Silver
PAAS Pan American Silver Corp.          3,697 Silver
SVM Silvercorp Metals Inc.          3,477 Silver
SSRI Silver Standard Resources Inc.          2,020 Silver
SNA Snap-on Inc.          3,080 Small Tools & Accessories
PSYS Psychiatric Solutions, Inc.          1,930 Specialized Health Services
LYB LyondellBasell Industries NV Or        16,018 Specialty Chemicals
SIAL Sigma-Aldrich Corporation          7,926 Specialty Chemicals
IFF International Flavors & Fragrances Inc.          4,256 Specialty Chemicals
ROC Rockwood Holdings Inc.          2,731 Specialty Chemicals
MEOH Methanex Corp.          2,706 Specialty Chemicals
GRA W.R. Grace & Co.          2,448 Specialty Chemicals
SOA Solutia Inc.          2,356 Specialty Chemicals
CBT Cabot Corp.          2,322 Specialty Chemicals
FOE Ferro Corp.          1,280 Specialty Chemicals
SBUX Starbucks Corp.        22,847 Specialty Eateries
TSCO Tractor Supply Company          3,040 Specialty Retail, Other
BID Sotheby's          3,034 Specialty Retail, Other
SBH Sally Beauty Holdings Inc.          2,378 Specialty Retail, Other
RVI Retail Ventures Inc.             756 Specialty Retail, Other
TITN Titan Machinery, Inc.             370 Specialty Retail, Other
CAB Cabela's Inc.          1,568 Sporting Goods Stores
RIO Rio Tinto Plc       138,899 Steel & Iron
SQM Chemical & Mining Co. of Chile Inc.        13,873 Synthetics
ALB Albemarle Corp.          4,862 Synthetics
NLC Nalco Holding Co.          4,160 Synthetics
SNPS Synopsys Inc.          3,839 Technical & System Software
CNQR Concur Technologies, Inc.          2,806 Technical & System Software
PMTC Parametric Technology Corporation          2,619 Technical & System Software
KBR KBR, Inc.          4,088 Technical Services
VZ Verizon Communications Inc.        94,499 Telecom Services - Domestic
CHT Chunghwa Telecom Co. Ltd.        23,512 Telecom Services - Domestic
CTL CenturyLink, Inc.        12,833 Telecom Services - Domestic
ALSK Alaska Communications Systems Group Inc.             475 Telecom Services - Domestic
TMRK Terremark Worldwide, Inc.             770 Telecom Services - Foreign
RL Polo Ralph Lauren Corp.          9,550 Textile - Apparel Clothing
UA Under Armour, Inc.          2,558 Textile - Apparel Clothing
NKE Nike Inc.        40,194 Textile - Apparel Footwear & Accessories
COH Coach Inc.        15,623 Textile - Apparel Footwear & Accessories
DECK Deckers Outdoor Corp.          2,419 Textile - Apparel Footwear & Accessories
TBL Timberland Co.          1,331 Textile - Apparel Footwear & Accessories
PCAR PACCAR Inc.        20,144 Trucks & Other Vehicles
WTR Aqua America Inc.          3,010 Water Utilities
AMX America Movil S.A.B. de C.V.        96,013 Wireless Communications
PCS MetroPCS Communications, Inc.          4,148 Wireless Communications


ETFs


Ticker Company  Market Cap Industry
SPY SPDR S&P 500        80,812 Exchange Traded Fund
GLD SPDR Gold Shares        57,484 Exchange Traded Fund
EEM iShares MSCI Emerging Markets Index        43,772 Exchange Traded Fund
IVV iShares S&P 500 Index        23,903 Exchange Traded Fund
VTI Vanguard Total Stock Market ETF        16,014 Exchange Traded Fund
IWF iShares Russell 1000 Growth Index        12,238 Exchange Traded Fund
MDY SPDR S&P MidCap 400          9,907 Exchange Traded Fund
DIA SPDR Dow Jones Industrial Average          9,105 Exchange Traded Fund
IJH iShares S&P MidCap 400 Index          8,471 Exchange Traded Fund
SLV iShares Silver Trust          7,870 Exchange Traded Fund
GDX Market Vectors Gold Miners ETF          7,707 Exchange Traded Fund
XLE Energy Select Sector SPDR          6,883 Exchange Traded Fund
VNQ Vanguard REIT Index ETF          6,383 Exchange Traded Fund
IVW iShares S&P 500 Growth Index          5,523 Exchange Traded Fund
DVY iShares Dow Jones Select Dividend Index          5,329 Exchange Traded Fund
DBC PowerShares DB Commodity Index Tracking          5,092 Exchange Traded Fund
VUG Vanguard Growth ETF          4,546 Exchange Traded Fund
EPP iShares MSCI Pacific ex-Japan          4,285 Exchange Traded Fund
VB Vanguard Small Cap ETF          4,128 Exchange Traded Fund
IAU iShares COMEX Gold Trust          4,075 Exchange Traded Fund
SDY SPDR S&P Dividend          4,071 Exchange Traded Fund
EWC iShares MSCI Canada Index          3,964 Exchange Traded Fund
VIG Vanguard Dividend Appreciation ETF          3,586 Exchange Traded Fund
EWT iShares MSCI Taiwan Index          3,386 Exchange Traded Fund
IYR iShares Dow Jones US Real Estate          3,336 Exchange Traded Fund
IWO iShares Russell 2000 Growth Index          3,264 Exchange Traded Fund
XLI Industrial Select Sector SPDR          3,190 Exchange Traded Fund
IWS iShares Russell Midcap Value Index          3,175 Exchange Traded Fund
IWV iShares Russell 3000 Index          3,056 Exchange Traded Fund
ILF iShares S&P Latin America 40 Index          2,986 Exchange Traded Fund
IWP iShares Russell Midcap Growth Index          2,915 Exchange Traded Fund
VO Vanguard Mid-Cap ETF          2,864 Exchange Traded Fund
EWA iShares MSCI Australia Index          2,806 Exchange Traded Fund
IJK iShares S&P MidCap 400 Growth Index          2,486 Exchange Traded Fund
ICF iShares Cohen & Steers Realty Majors          2,449 Exchange Traded Fund
XLB Materials Select Sector SPDR          2,380 Exchange Traded Fund
RSP Rydex S&P Equal Weight          2,363 Exchange Traded Fund
EWH iShares MSCI Hong Kong Index          2,323 Exchange Traded Fund
OEF iShares S&P 100 Index          2,278 Exchange Traded Fund
EWS iShares MSCI Singapore Index          2,212 Exchange Traded Fund
SSO ProShares Ultra S&P500          2,058 Exchange Traded Fund
XLY Consumer Discret Select Sector SPDR          1,849 Exchange Traded Fund
IJT iShares S&P SmallCap 600 Growth          1,645 Exchange Traded Fund
SIL Global X Silver Miners ETF          1,349 Exchange Traded Fund
SMH Semiconductor HOLDRs          1,249 Exchange Traded Fund
EWM iShares MSCI Malaysia Index          1,026 Exchange Traded Fund
XME SPDR S&P Metals & Mining          1,014 Exchange Traded Fund
IYM iShares Dow Jones US Basic Materials             937 Exchange Traded Fund
IYZ iShares Dow Jones US Telecom             730 Exchange Traded Fund
EZA iShares MSCI South Africa Index             677 Exchange Traded Fund
XRT SPDR S&P Retail             634 Exchange Traded Fund
IYT iShares Dow Jones Transportation Average             614 Exchange Traded Fund
XOP SPDR S&P Oil & Gas Exploration & Prod             534 Exchange Traded Fund


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