A Flomax Market

Discussion in 'Trading' started by stonedinvestor, Nov 12, 2008.

  1. Well I no sooner got done typing one of my brilliant missives and I panic fingered the keyboard a couple key strokes and whoosh it vanished into Elite cyberspace. Pardon me if this version is not as good.

    They play an add for Flomax on Bloomberg TV I guess it's a drug that gets old folks peeing faster, it's side effects are very much on point for this market, dizziness and strange ejaculations. To that I would add a clogged ear.

    We knew this day and set of days were coming we talked about it last week. Hedge Funds will know this Friday how bad the redemption requests are and likely most have overdone the selling already in preparation. Today was worse though because it was the selling of two hedge funds completely out- long side liquidation from the closure of two of Tontine's huge hedge funds. Tontine Capital Partners lost 77% this year through October, while Tontine Partners lost 67%. Closing of doors is far worse than giving some money back.

    In many ways today is also a formal boot to Paulson; congress lost faith in him a ways back, Wall Street just caught on today. I imagine eventually the spin will be at least he finally landed on the right solution. Saving main street not the banks. Consumer issues... this now sets off the very real fear of a round of dividend cuts from the banks. That would cut the remaining reason for holding the stocks. Ugly.

    As obvious as today's action was it was hard to watch. The huge percentage drops lately could sure be indicating a total crash. We need some equally huge up days to balance things out quick.

    Some crooked looking prices today for sure- CITY dipping under $10 Dryships dropping from $110 to $13 GE was weird looking at $16, it is a crash already in a way... MDR last check $8....

    Closing on the October lows & if we were to plunge beneath tomorrow morning and then close ABOVE that would be good enough action to get a move going UP into next Friday and that's what I expect. Shouldn't we have a good rally into next Friday's expiration? if for no other reason than to get option premiums cheaper for shorting again.

    The G-20 meeting will help I hope. It will hold off shorts as they await any announcements and hopefully some will come. Today Merryl and Goldman execs said conditions were like the Great Depression, that didn't help. Everyone was so depressed they didn't pay attention when Jamie Dimon said how great things were (for his firm). We have never had such a global response to a financial crisis and that has got to get the system greased. With free or near free money eventually comes at risk investing. It just takes time and rates down at 1%... A bubble will develop somewhere I just hope it's in my account.

    Rather than climb under the table because of a Best Buy warning... why not focus on Bed bath & Beyond and wait for what they have to say?
    $5,000 TV's no one needs vs sheets and linens? Which is more indicative of the consumer now?
    Goldman upgraded BBBY today by the way. target $26.

    At some point we are being told the same bit of information over and over. A month ago we came to terms with a protracted and long recession, what's changed? Just because Intel after hours says the same thing? We all know orders dried up for everyone; no credit; no sales; earnings reduced; guidance slashed. We get it.

    lets hold our nose and look at some ideas.

    ADM now that I've sold it is getting a Barrons plug and was up today for most of the day. That looks strong.

    GreatBatch did wonderful for us on earnings last week and is holding up great. Looking for a low volume pullback to $23 range.

    PETS has been another great name. apparently recession proof. watching that.

    GE should be at $19 not $16.

    FFIV is a stock to own when tech rights itself. can't find many others. NVDA might get a long look.

    URBN & TRLG & BBBY in retail.

    EBS an anthrax play that's been up every day-

    labcorp LH recession resistant.

    Wellpoint drifting ever closer to buy zone now at $34 was at $38-$39.

    XTO and NOV in Energy space.

    That's my mini action list as it stands now. I was hoping to not have to go to war until next week but we may have to encounter the enemy tomorrow. ~ stoney
  2. I just lie awake from about 3:30 in the morning on thinking about the market now. I got my paper this morning and there it was! A photo finally not of traders holding their heads, or casting their eyes upwards in grief for stocks... but rather a gaggle of happy investors, all women, rushing out the door of the exchange holding their stock certificate proudly in the air, their dentures and fake teeth reflecting the very brightness of their glee....
    Finally someone made money on a stock trade! After further reading I was distressed to learn that these ladies were all marrying each other in Connecticut.

    Ok today we have a very interesting market. traders have I think positioned themselves for a big flush this morning and computers are rigged to buy at some magical point between the interday Oct low and where we are now... As we talked about above, slowly the positive spin is coming out on Paulson's " bait and switch " and let me be the first in print to say I think he did it by accident and it's BRILLIANT! First off he bought the major banks time by having this TARP, the delays in establishing it and any foot dragging by congress are but manna's from heaven... as the days ticked by one assumes these banks have deleveraged QUITE A BIT, in fact since those numbers are known by the fed now... one can be assured of that fact. The threat of the gun appears to have done enough. Let them sort out the toxic stuff themselves as Fink said today from Blackstone most of it is priced as if housing is going down another 40% to 50%... there is upside to many of the contracts.

    Goldman's CEO is out talking about how they are going to great without the use of excess leverage, one wonders what he is smoking.... The truth is using the remaining TARP funds and any new funds in the manner now suggested allows the use of LEVERAGE BY PAULSON! Yes. So whatever funds he has can be multiplied by twenty! Now before we get all our hackles up about the tax payer eventually being on the hook for some unknown amount let's focus on the fact that with private investment being allowed to ride along we are now talking about an amount of dollars that can deal with the housing problem & the consumer credit squeeze. If you were betting against the market because TARP funds were going to run out if your end of world view is based on us not having enough money... I think that goes out of the window now.

    The next question is fair value where the hell is it?
    There is a whole bunch of economists & market pros who think that we have to get into single digit PE's before the pain is over. In 1975 we fell to a trailing PE of 7.28 and in 1980 it sank to 6.84! If we were to take an approximation of S&P earnings of $60 (Merryl Lynch's #) and put a single digit PE on it.... say 7 that would leave us with an S&P of 420 and that's NOT FRIENDLY. In fact that's enough to make me gaze out my third story window in a jump through sort of way. How can that be?

    I'm arguing and hoping that the prolonged ten year's worth of stocks trailing T Bills is some sort of extended heads up about using leverage and bubbles.
    having already withstood such pain. AND having so many stocks at single digit PE's already, Agriculture, infrastructure, drugs, banks, must we undress every stock to meet this criteria? I think mentally we are at a place worse than 1980 and whatever PE we have now feels worse than the 6.84 PE then. Why is that?

    Having fallen from so high and so fast is a first for the market. If we view the whole move as catchup in the bigger picture of 10 years of stagnating stocks... if the plunge was somehow destined, then as long as the world doesn't fall apart here I'm putting the usual 17X on the market, it's average and that ensures stocks at least 10% higher by the end of the year. That way a 40% down year becomes a 30% down year. That may not sound like much but compared to using a PE of 6, it works for me. Also I should add many strategists see S&P earnings down 15% this year and 3% the next... that leaves us next year at Earnings of $70 for the S&P, we are using a bleak $60, so the upside potential is there.

    Since the early 80's have been referenced why not take that a bit further? In 1982 no other than paul Volcker gave up on his inflation fight & stocks went upwards. After bottoming on Aug 12, the DOW gained 16% in two weeks with only one significant pullback. Since Mr Volcker's name is being bandied about now as a Treasury type- perhaps this all could happen again.

    Can we get a G-20 Rally!
    Lower open and reverse HIGHER!

    When is the last time we had an IPO?
    Wells fargo follow-on is probably the only example of a company going to market and not breaking the price of the offering.
  3. Good luck making the bull case with the atrocious jobs data this morning.

    We will soon take out '02 lows on the spooz.

    With all due respect.

    Those Flomax commercials are hilarious: A bunch of old guys who look like they'e just having a blast rafting and shit because they apparently don't have to piss every 10 minutes. They look ecstatic. It makes me wonder if getting high is a side effect of Flomax.
  4. Futures closed higher. Interesting. Could we get a stampede here?

    Hi ByLo yes making any argument for any trades other than short term stuff is very very hard. The 2002 lows? Why? Just because they exist? This always the tricky part of charting, everything is different this time. Including the massive run up and down in oil. I had wrongly felt $60 was a floor for oil heading into the cold weather- this emboldened me to buy. Actually stable to up oil is ironically good for the market now. Today oil is stable to up that bodes well for the market.

    Also I am a star gazer soothsayer type and love cycles and moon worship so consider the full moon today & tonight as a reason for a rally. The last full moon was on Oct 14, the market topped out precisely. 80% of the time full moons are tops. We are in that other 20%, because Full Moons always reverse the prior trend going in! The Moon says UP. also consider a larger FIVE week cycle low is due in this general time frame.

    nice to hear from you!
  5. Well, I just had my first flomax moment of the day.

    I messed up. I had researched to death AMAG and it was $18 yesterday and I was on the phone about to buy it and I got distressed with every purchase being down the next day and I gave up.
    They slipped in a quick FDA response date in on me today... that's good for a smooth $14.

    No matter what I do today and tomorrow I won't make up for missing that. Oh boy. Well time to wash the seat here a bit, feeling dizzy too.~si
  6. Alright here is the early turn UP.

    Can we accomplish three things?

    1> get a major hedge fund to begin buying.

    2> panic the shorts with some G-20 verbiage today?

    3> Pluck tech out of it's funk? Intel, Dell... we need a big Apple rah rah.

    Thinking about Chipolte Grill for no good reason it just popped in my head... ~si
  7. .......steak burrito bowl with "the works"!..............:cool:
  8. HATE TO BE AN I TOLD YOU SO! :) :) :)


    G-13 is a powerful head, I know...
    How HIGH will G-20 let us go...

    who would of thunk it!? ~ stoney
  9. The ole' 700 point reversal brought to you ladies and gents by a man in his underwear. Think about it. A whole lot of you are being too quiet. How about a shout out now and then! Are we not fiddle masters!!!!

    ~ WOW. ~ stoney

    make that 800 point reversal they just can't stop it.
    RUNAWAY TRAIN time. If only we had 15 more minutes in the day!!!!!
  10. Good Morning.

    it's easy to feel good about yourself when near everything is up on a huge day... but lets dig through some of our names...

    GREATBATCH... (GB) We told you to look for a low volume pullback into $23... we got exactly that...
    Bam it's over $25. Did I listen to my own advice? No. I've gotten a few of your emails, so I know ET'ers were listening and buying I just wish I was one of them. Stk is certainly heading into the $40's. Mistake there by me.

    Instead I rode PETS for a buck and dumped. Weak display by me. In fact all day yesterday I didn't have my mojo, I was so scared of the whole market and making the right interday call with some Dow index stuff, that individually I had trouble sorting the wheat from the whatever stock by stock... Instead of big thinking I was sort of throwing money at stuff.

    In doing so you can at least get a feeling for what stocks are acting well and not... It's almost instinct to run and by POT whenever the market roars... it's worked every time to varying degrees, I would note this degree was one of the smallest, I guess it went from $68 to $74 but I only got on at $70... this is a stock that usually moves $8 or $9 so bit of a warning signal there.

    As well RIMM, I did not buy it but if you hold it, I'd be worried, just not getting that old thrust.

    Natl oil varco is another weird name. You buy it and immediately feel like your on Fast Money or Cramer, it's just sort of a blind buy in the sector something you do because everyone tells you too. I ran away. I like the natural gas plays best.
    $2 swing trade mismanaged by me down to $1.60. More bad form.

    My big play was in URBN which I've been fawning over hear at ET for weeks, great numbers, 11:00 conference call down stk in a market about to turn up... almost too good a set up to believe, a nimble buy point of $14.80 leads to $16.66. Will probably fill in here and buy more today...

    Some stks worth watching-
    LDK in solar. & SOLF... I have not been a big SOLF guy but one thing is they hedge currency better than the others and tend to give greater earnings beat than the others. They have yet to report, thinking about it, although LDK is already through the scary process of reporting and it looks pretty good.

    Mitsubishi MTU has been on my desk ever since a Barron's piece on Japanese banks a while back. They are basically trading at cash on hand. Huge Currency issues that have to be waded through but I keep coming back to this name as a potential long term hold-

    Staying Japanese. Really thinking about the ADR of NINTENDO today... they had very strong sales up 50% and of course a stk down 50% too. Again the currency is killing them... but just in a general sense one can trace this stks decline as we got to DOW 10,000 and since the next 2K for us... these guys have looked steady. And you are buying it just a few dollars above when all the hooplah about Wii came out.
    Another interesting idea here. I'll add some general Video game sales numbers to this post in a bit. NTDOY.

    Today I will walk around the city and check a few Chipolte Grills out and check on crowds. Thinking about that stk and BBBY- I'll check their big 5th ave store- but maybe in this consumer discretionary space I should just be happy I covered URBN so well and leave it at that. ~ stoney
    #10     Nov 14, 2008