(click on chart to enlarge)
CHART AU COURANT: This chart of SLV, the silver tracking stock, shows several compelling reasons to buy it in this price range. 1) stochastics are extremely oversold on this daily chart, as well as equally oversold on the weekly chart (not shown). 2) there is an elliott wave labeling that can count the entire decline from the $21 peak in March as complete or nearly so. And 3) the price is plunging under the 3 standard deviation band, which last happened in Aug 07 and launched a doubling in price in 8 months. I'm taking a buying long position here at 10.75 and adding at 7.75, which will require further plunge under the 4 standard deviation band, which is very, very rare. I'll look to sell between 14 and 16 in the next 6 months, which would result in a gain of 25%-45%. If 7.75 is reached, I'll triple my position. So, if I buy 100 shares now, I'd buy 200 additional at the lower price. That is how rare this situation is.
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MARKETS: The government takeover of Freddie and Fannie is the latest attempt to act "too little, too late", and will NOT bottom the economy or the market as is hoped. By definition, the government NEVER enters into a bailout trade at the low. If you check the last 100 years, they have been early each time. Therefore, there is NO reason to think they got it right this time, especially considering their mistakes of the past 5-25 years are what got us into this mess. Expect lower stock, housing, crude, and euro prices eventually, even if each of these has a very temporary bounce.
INTERESTING PLAYS TO LIGHTEN UP ON OR SHORT SELL (this list is about to get very large): IBM above 130 or below 126 (entered 125.99 on 8/11, exited 115.40 9/10, +8.4%), GE above 30 or below 27 (entered 30.18 on August 11, exited 27.98 9/10, +7.2%), AMGN above 55 (entered 62.08 on July 28, exited 59.64 on 9/9, +3.8%), RIMM above 130 or below 114 (entered 132 on August 11, exited 116.98 on Sept.2, +11.3%), AMZN above 90 (entered 90.18 on August 11, exited 76.70 on 9/10, + 16%), AAPL above 174 (entered 174.18 on August 11 exited 150.44 9/10, +13.6%), CSCO above 24 or below 21 (entered 24.18 on August 11, exited 22.18 on 9/4, +8.2%), INTC above 26 or below 24.19 (entered 24.18 on 8/18, exited 20.18 on 9/10, +16.5%). As suggested above, "buy TWM at 68.50 or better" (entered 63.90 on 8/14, using breakeven stop as of 9/10. Exited 72.50 on 9/11, +5.8%...didn't like pattern) is a negative bet, or short side play, on the Russell. As the Russell falls, TWM's price will increase. Therefore, I'll track it here in the "sell or short" section.
INTERESTING PLAYS TO ACCUMULATE OR BUY (if you have to in a dangerous environment): See August 11 posting for profit taking on a lot of former trades. MSFT under 23, adding under 18, YHOO under 20 or above 22 and adding under 13 (entered 19.82 on August 11), GOOG on break back above 475 or under 461 (entered 460.99 at 9a on 9/3) and adding under 400 (added 407.50 on 9/11, exited 437 on 9/12, +7.3% still adding under 400), EBAY on break back above 22 (lower from 24 on 9/15) (entered 21.99 on 9/15) and adding under 17, SNDK under 12 or above 15 (entered 15.01 on 9/5, using breakeven stop as of 9/10), GRMN under 30 or above 36, DELL under 13 and adding under 8.50. Entered crude at $112.99 on Aug. 12, adding into $98 (we exited on a stop at 120.99 after crude spiked to $122 on Aug.21, +$8, or 7%). We'll buy again on move above 122 or back below 114 (re-entered 113.99 on 8/24 and stop raised to 117.99 on 8/27, exited 117.99 same day +$4, 3.5%). Our exit last week was precient, and we remain out. We will buy any test of 100 +/-2 or a break above 112 now (entered $101.78 on 9/10). Again, this bounce is a relief rally, and we see a certain test in the 80's coming in the coming 3-8 months. OPEC issued a small production cut, so the battle is on. Last issue we showed a long Euro "gamble" at 1.4680 or better. I took a fill at 1.4650 while using a stop at 1.4550. Any print above 1.5050 will cause us to cash out, perhaps lower, depending on the pattern. Exited 8/28 at 1.4784, +1.34 handles or $1675. Re-entered 1.4439 @ 8a on 9/3 and will add between 1.4100 and 1.3700 (added second entry 1.3899 on 9/11, exited second entry only 1.4189 on 9/12, +2.9 handles or $3625 per contract). I'll add second entry back if under 1.4050, and I will exit above 1.5000. SMH (entered @ 25 on 9/15 at market open) adding under 21, using 43 as my initial exit.
INTERESTING PLAYS TO ACCUMULATE OR BUY (if you have to in a dangerous environment): See August 11 posting for profit taking on a lot of former trades. MSFT under 23, adding under 18, YHOO under 20 or above 22 and adding under 13 (entered 19.82 on August 11), GOOG on break back above 475 or under 461 (entered 460.99 at 9a on 9/3) and adding under 400 (added 407.50 on 9/11, exited 437 on 9/12, +7.3% still adding under 400), EBAY on break back above 22 (lower from 24 on 9/15) (entered 21.99 on 9/15) and adding under 17, SNDK under 12 or above 15 (entered 15.01 on 9/5, using breakeven stop as of 9/10), GRMN under 30 or above 36, DELL under 13 and adding under 8.50. Entered crude at $112.99 on Aug. 12, adding into $98 (we exited on a stop at 120.99 after crude spiked to $122 on Aug.21, +$8, or 7%). We'll buy again on move above 122 or back below 114 (re-entered 113.99 on 8/24 and stop raised to 117.99 on 8/27, exited 117.99 same day +$4, 3.5%). Our exit last week was precient, and we remain out. We will buy any test of 100 +/-2 or a break above 112 now (entered $101.78 on 9/10). Again, this bounce is a relief rally, and we see a certain test in the 80's coming in the coming 3-8 months. OPEC issued a small production cut, so the battle is on. Last issue we showed a long Euro "gamble" at 1.4680 or better. I took a fill at 1.4650 while using a stop at 1.4550. Any print above 1.5050 will cause us to cash out, perhaps lower, depending on the pattern. Exited 8/28 at 1.4784, +1.34 handles or $1675. Re-entered 1.4439 @ 8a on 9/3 and will add between 1.4100 and 1.3700 (added second entry 1.3899 on 9/11, exited second entry only 1.4189 on 9/12, +2.9 handles or $3625 per contract). I'll add second entry back if under 1.4050, and I will exit above 1.5000. SMH (entered @ 25 on 9/15 at market open) adding under 21, using 43 as my initial exit.
For what it's worth,
Ken
