Saturday, March 31, 2007
Three Pump Chump
My approach starts with a look at the big picture --- see my first post for views on the XOI --- then look to individual names with a favorable technical setup combined with a clearly defined risk profile.
My first short idea is VLO (64.49). As you can see VLO is at a major technical juncture. The uptrend from January has recently been repelled by some serious resistance at 66. Wednesday's reversal day was marked by heavy volume. Not-so-coincidentally this area (marked by the arrow in July '06) is where the selling last began in earnest. The series of lower highs as evidenced by the downtrend line from May 06 is also an impending sign of weakness -- hence the name Three Pump Chump.
Should VLO break below the 64 level, I would expect the selling to accelerate as the stock works its way back to the bottom of its range in the upper 40's. I would be a seller all the way up to 68 but suspect the stock will have difficulty exceeding the 66.02 high printed this week. As I see it there are four points of downside risk (a weekly close above 68.4 negates the thesis) and sixteen points of upside reward (downside target 48).
Fat Bastard Day
In honor of the second "holocaust of chickens" aka the NCAA Tournament Finals, I proclaim today to be Fat Bastard Day.
Friday, March 30, 2007
F- T. Boone Pickens
Looking at the above 3 year weekly chart of the Amex Oil Index is it noteworthy that despite the Iran headlines and $3.50 move in Crude this week, the index was unable to exceed its previous all-time high of 1242. Also worth noting is the weekly candlestick could represent a key reversal if we see continuation on the downside next week.
Drilling down to a 1 year daily time frame one can see that the index reversed the past two days' gains with today's ugly stick and made a weekly close below the critical 1220 level - a level where XOI failed in August and December of last year.
These potentially bearish clues are supported by underlying weakness in many individual oil names as evidenced by the declining Bullish Percent trend in the Energy Sector (below).
The weakness in the CRB Index is also noteworthy. My belief is the index will reverse lower en route to a low in the 265-270 area.
The 3-year chart below is of the US Dollar Index. Note the potential double bottom forming here and the higher lows relative to 2005. I am looking for a move above 85 to confirm the double bottom thesis.
WHAT IT WILL LOOK LIKE IF I AM WRONG
A move above the November high of 322 in the CRB Index will negate the thesis if accompanied by a weekly close below 82 in the US Dollar and/or a close above 1242 in the XOI. The beauty of this setup is the risk profile is clearly defined and the indices only have to move a small amount before having to reassess. The market action next week may be choppy due to the holidays so I encourage some patience.
Tomorrow's post will outline trading strategies for my two short ideas. I welcome any feedback and suggestions. This is one of my first posts of my blogging career so please bear with me as I obtain the experience and tools necessary to make a compelling technical argument (trend lines and annotations coming soon!).
Finally, in conjunction with The Fly's success investing in companies that cater to the the poor dietary habits of Americans, check out my blog tomorrow http://www.50kto5m.blogspot.com/ and help develop the thesis on my Fat Bastard Pick.
Smashing Pumpkins: I Of The Mourning Music (Live)
No CC's today. I will be busy with end of the quarter accounting. So far, it appears I was up more than 13%.
Position Updates: BWLD, HANS, CENX, NTRI
However, the truth of the matter is, I invest in companies who sell products I believe in. I don't play with fucking charts or throw darts at the Wall Street Journal or IBD, like most of you internet daytrading asshats.
In closing, feel free to thank me for being so "generous" with my "fuck you shorts, you're dead" stock picks.
NOTE: "The Fly" has just been served a giant bowl of oatmeal. Watch out shorts.
Quick Alert: U.S. Lawmakers Are ShortSellers
Although the market's weakness in the past half hour coincided with the Commerce Dept's announcement that it will apply new duties on chinese imports, we also thought we'd pass along another item regarding tensions with Iran that could make the rounds today. Debka reports that "US financial sources in Bahrain report American investors in Bahrain advised to pack up business operations and leave... The advice came from officers with US Central Command 5th Fleet HQ at Manama, who spoke of security tension, a hint at an approaching war with Iran. Arab sources report the positioning of a Patriot anti-missile battery in Bahrain this week; they say occupancy at emirate hotels has soared past 90% due mostly to the influx of US military personnel..."
Sector Spotlight: Trannies
Right now, everything is on fire. Fund managers are diving in head first. The bulls are saying "go long, fuck it," while the sellers twiddle their thumbs in a nervous state of stupid.
DELL is a fucking joke. Michael Dell has no fucking idea what he is doing. I mean, why did quit being CEO in the first place? He is young, smart and has a lot of fucking money riding on the stock, right? Instead of building DELL and solidifying their position as #1 PC company in the world, he handed the company over to some hatfucker who wrecked it. Nice.
Aside from DELL rants, I like the Trannies today, specifically ACLI, RAMS, UTIW, CSX and DRYS.
Finally, I understand MVIS is meeting with Fidelity and other mutual funds in Boston, today. Hopefully, Tokman will bring his A game and convince the giants over at Fidelity to start buying some stock, again.
Asshat of the Week Award: Joel Sendek
Hence, he gets this week's "Asshat Award."
I quote (Via Briefing):
"Firm believes that the complicated nature of the application, including secondary statistical analysis, may require a longer review period at the FDA. They continue to believe that the FDA will require data from the ongoing D9902B trial, prior to approval. Firm continues to expect approval in 2009 contingent upon survival data from D9902B, a trial that they view as more straightforward in design than previous studies."To make matters worse, Joel had a fucking "buy" rating on AGIX, prior to this swan dive.
Also, it's worth noting, after AGIX fell 60% in one trading day, Joel decided to downgrade the stock to "hold."
Finally, I have to mention, DNDN's prostate cancer vaccine was approved yesterday, nowhere near Joel's 2009 target date. What the fuck? And, the stock is up 300% today.
NOTE: Liisa Bayko of Next Generation Equity Research and Paul Latta of McAdams Wright Ragen both downgraded DNDN, prior to the FDA approval and deserve an "honorable" mention-- when discussing important matters, such as "Asshat Awards."
Thursday, March 29, 2007
Slick Rick: Hey Young World
As you know, tomorrow is the last day of the quarter. Look for window dressing to rule the day, as dicktarded fund mangers put the finishing touches on their marketing brochures. Winners go up, while losers go down. Classic "fund-fucker" trade.
Also, I don't want to chase Energy stocks here. The premium on oil is due to political tensions. Should the tensions abate, oil will get axed to the tune of $10 per barrel.
Bottom line: We are going higher, bitches. Saddle up.
NOTE: Congrats to DNDN shareholders. That stock is going to fucking rip. And, does IAAC ever go down?
Fly Buy: BRCM
Fly Buy: ATHR
Position Updates: FMCN, NTRI
NTRI on fucking fire, despite Ducati's dire warnings.
Asshat Awards fucking pending. Stay tuned.
Late Day Thought
Quick Alert: Time to Take a Nap
My natural reaction is to buy the dips. However, my "calculator brain" senses a shift in sentiment, which may lead to the market getting ball and chained.
In short, I spit on this tape. I want no part of it and will spend the rest of my day eating cashews and drinking milk shakes.
Raw Footage of "The Ducati"
He has a cellular mobile device.
Position Updates: ALCO, BWLD
The bear case for a company like BWLD is high gas and chicken wing prices (chickens eat corn you dumb fucks). Forget about gas. I do not believe the people who swallow whole chickens at BWLD are that destitute, to be affected by $3.00 gas prices. Also, regarding chicken wing prices, the company has been able to pass the cost along to their fat fucking patrons.
However, if you are the worried type, I suggest taking a look at DBA. DBA is an agricultural commodities futures fund. Currently, it consists of 27% for corn, 25% for wheat, 26% for soybeans, and 22% for sugar.
In other words, if you are long restaurant stocks, like CMG (corn tortilla's) or BWLD, DBA can serve as a protective hedge, versus higher food prices.
As for ALCO:
They own a variety of agricultural businesses, such as sugar plantations and orange groves. Another excellent way to play the farm boom.
Sector Spotlight: Telco's
Following the strong Asian and European sessions, I suspect we will close up nicely today, as everything seems to be working.
Very early on, I have impressive gains in NTRI, NYX, CENX, GD, GILD, FMCN and PNRA.
However, the big winners are in the Telecom sector, due to KKR's monster bid for BCE. Right now, a variety of Telecom stocks are ripping higher. I like the action in CN, TLK, GLDN, CHU, TU,TKG, S, TLS and NIHD.
Worst case scenario, the market reverses and starts bleeding red. Should the sellers manage to pull it off, I would refrain from buying the dips-- at least for today's session.
Finally, I am hearing good things about NTRI, regarding the quarter and rumors of LBO interest. Either way, I want to buy the stock, all quarter long. My goal is to have a nice position in place, prior to the next quarterly earnings announcement. After all, the fat fuckers want to lose weight. NTRI sends food to their house. Who's better than them?
Wednesday, March 28, 2007
The World is Waiting For the Sunrise: Benny Goodman & Red Norvo
Like a fucking champion, I bought AAPL yesterday, only to have my face ripped off today. I must say, one of you cryptic lunatics warned me over a "hanging man" formation on AAPL. However, as usual, I ignore such advice and labeled it "tom foolery" or "internet bear shit."
Nonetheless, eventually AAPL will print $115.
Today, the market rolled over, with staggering losses in the Homebuilders and the Semi's, to a lesser degree. However, it's worth mentioning, the market was up huge last week. So, a small decline, based upon rumors of war, is somewhat natural.
With my money, I will look to buy CENX, HANS, ADY, FMCN and NTRI on dips.
Regarding interest rates, NO FUCKING WAY THE FED TIGHTENS. Furthermore, anyone who believes the Fed will raise rates, is a fucktarded, dickless asshat, with delusional fantasies of a market collapse.
Finally, on down days, I like to screen for strong stocks. Typically, if a certain stock shows strength in a bad tape, it is generally a good idea to take a second look at that company, in order to see what's cooking.
The following stocks outperformed today:
MVIS, IAAC, NYX, SPTN, MFW, WBD, HANS, CPO, VMI, DLB, TNH, IPSU, BAY, BOOM, PDLI, ELOY, TFSM, GMKT, AVCI, LMRA, EXFO, FFIV, CIEN, GOT, GME, EBHI, TWTR, BRLC, ATVI, MSCS, OPSW, SNDA, SLAB, VIMC, NTTL, CN, NOIZ, VIP, EXC, CLAY, CBEY, FUL, NTY, IDSA, VYYO, DNDN, ARNA, GRZ, KRY, UPG, and ULTR.
Position Updates: MVIS, ATHR, BRCM
My only shorts, ATHR and BRCM, look like they are heading "sea-worthy." In a fucktarded bear tape, ATHR will knife lower.
Bottom line: I view my shorts as prisoners, being held in a bull camp. I keep them because I like looking at them and hope they will one day surprise me.
Fly Buy: GD
Disclaimer: If you buy GD because of this post, the next time you go camping, you will be sprayed by a skunk. And, you may lose money.
Fly Sell: NYX
Sector Spotlight: Energy
So, on one hand, I think to myself: "fuck, these people are always wrong, I'm going to be destroyed holding all these longs." However, my guts tells me: "fuck it, go long. You're gonna tell your grandchildren about how much money you made in 2007."
Before I "delve" into today's trading, I would like to copy and paste a quote, written by lazy man Woodshedder, which was found within the pornographic confines of TG.
"Although I do think HANS is a laggard."
See what I am saying? HANS up a buck in the ridiculously bad tape today.
As for today's trading:
I'm buying more MVIS. I can smell the "future money" that will fill my safety deposit boxes ("The Fly" does not trust banks). Also, I hate to agree with Eric "The Oil Barrel" Bolling, but oil looks great.
Iran is doing all types of crazy shit, which will keep the price of this God forsaken commodity (oil) higher. Although, I disagree with "The Oil Barrel's" wild claim that "Iran can shut down the Straits of Ormuz." Not a chance, gas man. I could destroy the entire Iranian navy, with one grenade launcher. What do you think our fucking carrier fleets will do?
Good times to be long the U.S. Navy.
Finally, within oil, I like SU, UPL, VLO, HOC, IOC, CEO, GMRK and GMXR.
Why I am a Bull
Nothing to see here, carry on.
Tuesday, March 27, 2007
Despite a weak market, I had big dicked gains in BWLD, NTRI, MVIS, CLWR, IOC, GME, NYX, BRCM (short) and several others.
After today's "can't go wrong, because I am a genius" rally, I am up a whopping 13.5%, YTD.
Aside from my positions, I was impressed with the action in select Networkers, such as LMRA, ORCT, SDXC, AVCI, TERN and NETL.
Also, I took down an initial position in THS-- great play on private label food products.
Finally, I plan to start buying, in size, select defense contractors, like GD, LMT and NOC. Seasonally, April is the best month to own Defense stocks, due to the allocation of big military contracts. In short, it makes sense to lock in some hard fought gains and plug away some fucking war stocks.
Fly Buy: NTRI
Disclaimer: If you buy NTRI because of this post, the next time you visit a little league game, a foul ball will destroy your windshield. And, you may lose money.
Fly Buy: THS
Disclaimer: If you buy THS because of this post, your neighbor will shovel his fertilizer onto your front lawn. And, you may lose money.
Quick Alert: Fly's Food Analyst Confronts Two BWLD Short Sellers
Trust me, this guy is serious about his research.
Fly Buy: GD
Disclaimer: If you buy GD because of this post, a tornado will destroy your favorite hot dog stand. And, you may lose money.
Fly Sell: BWLD
Fly Buy: AAPL
Disclaimer: If you buy AAPL because of this post, you will lose your biggest client. And, you may lose money.
Position Updates: BWLD
I think not.
Buffalo Wild Wings trades to new multi-year highs after breaking above Mar consolidation highs this morning... also hearing some LBO chatter too (61.14 +0.95) -Update :
Fly Sell: LOCM
Sector Spotlight: Retail
Generally, the market is weak today, with pockets of strength in Software and Semiconductors names. It's not a surprise to see ADBE strong, considering the stock always goes higher in March and April.
Also, I am very pleased with the video game geek-tards, sending shares of GME through-the-fucking-roof. GME is a core holding of "The Fly."
Right now, within Retail, I like GME, JCG, URBN and PLCE.
Finally, as the fucktards in Iran poke around with U.S. and U.K. heavy bombers, I feel Defense stocks are a buy, such as: GD, LMT, NOC, ASEI, UIC and IVAC (parts for night-vision).
NOTE: Please take the new "Fly Survey." Are you bullish or bearish on the markets?
Position Updates: MVIS
UPDATE: I will eat the livers of those short MVIS, sometime today.
7:05AM Microvision to develop innovative displays with a global automotive tier 1 supplier (MVIS) 3.53 : Co announced that it has entered into a product development agreement with a second global Tier 1 automotive partner. Under the agreement, Microvision will work with this "world leading Tier 1 automotive supplier" to create innovative projection-based display solutions based on PicoP, an ultra miniature full-color laser projector powered by the company's Integrated Photonics Module technology. For confidentiality reasons, the name of the Tier 1 supplier and other details of the contract were withheld.
A Mole Inside Fly's Operations?
Normally, in real life, I'd have him run over by a yellow school bus. However, since it was done via the internets, I'll just link to his "spy-fucking" website and continue to trade Asian stocks.
Apparently, Ducati's Asian & Australian enemies, overwhelmingly, voted against him-- effectively poleaxing him into oblivion.
Despite demands for a recount or wild claims, such as: "your poll is as fucking stupid as your website," it will stand. Democracy "lives on."
Hence, "The Ducati" is fired.
Yes: 51% (59)
No: 49% (56)
NOTE: New weekend blogger applicants should contact me, at my earliest convenience, starting now.
Monday, March 26, 2007
The Polls Close at Mid-Night (NYC Time)
With a record turn out (93 votes), "The Ducati" holds a 53%-47% advantage.
UPDATE: It's a nail biter. As the polls open in Asia, Ducati's lead is withering away, now up by a mere 2 votes. I assume he has enemies in Asia and Australia.
No CC's today. I have a meeting to attend. Don't forget to take my "Fly Survey." Ducati's employment is at stake.
Fly Buy: DIVX
Disclaimer: If you buy DIVX because of this post, your important mail will arrive with coffee stains. And, you may lose money.
Late Day Thought
Fly Buy: MVIS
Disclaimer: If you buy MVIS because of this post, the next time you are on a hot date, your toupee will fall off. And, you may lose money.
Position Updates: MVIS, NYX, HANS, BWLD, AAPL, DIVX, NTRI,CLWR
MVIS Longs Fix Bayonettes
The naked shorts are getting mowed down, sort of like this scene.
Sector Spotlight: Networkers
Call it luck, call it fate, but my fucking stocks are ripping higher, despite broad market weakness. So far, there is a big appetite for MVIS. I'm telling you, as sure as I sit here with Monster in hand, MVIS is going to work. However, it's worth disclosing, I have been "mushroom clouded" on retarded concept stocks like this in the past. Nonetheless, I remain stoically bullish.
Seriously, how did the Brits allow themselves get "kidnapped" by the Iranians? Fuck, if that was me, I'd take my rocket launcher ("The Fly" is fond of rocket launchers) and destroy the entire Iranian navy, right there. Then, I'd invade Iran and force them to eat oatmeal and drink Monster Energy soda. If it were up to me, dark times would befall the ancient civilization of Persia. Many nations would get "machine gunned" and several would get "poleaxed," while I destroy all their "asshatteries," from the luxury of 20,000 feet in the sky.
Anyway, as a result of new Iranian tensions, Gold, Silver, Euro and Oil are strong. You know, the world is coming to an end trade. Fuck that. The Oil play is long in the tooth. I am not touching those oil fuckers here.
I want to stay with crazy man Tech stocks.
Furthermore, the Networkers are my favorite way to play Tech. Today, there is strength in ANTP, VOCL, RRGP, ONSM, INPH, BRCD and SONS.
Again, my favorites are DIVX, MVIS, EQIX, CLWR and BBND. Also, I want to own ADBE going into April, its best month seasonally.
Finally, I am hearing great things on NTRI. The quarter seems to be on track, while rumors of private equity interest makes its rounds around Wall Street.
Sunday, March 25, 2007
Wings, Democracy and the Important Issue of Ducati
First, I will address my beloved BWLD.
No, their accounting is not aggressive. They have no debt and a piddly $65 million in the bank, which is yielding approximately $3.0 million in interest, per year. Just to compare, CMG has more than $150 million in cash. Trust me, having cash is one of those good problems. Furthermore, every analyst under the sun has baked in interest income-- into their EPS models. Therefore, it's a non-issue. However, I do anticipate the company will start paying a dividend, sometime soon.
Second, all this talk of "high flier" and "go-go stock" almost made my fucking head explode. Look, when analyzing any company, it is necessary to compare it to similar companies with comparable growth rates. To just copy and paste an industry wide average P/E, P/S or P/B ratio is pure, unadulterated, asshattery.
When sizing up BWLD, compare it to companies with great growth, such as CMG, TXRH, BJRI, PNRA and RRGB, not old staid companies like DRI, MCD or OSI. All of the high growth companies mentioned enjoy growth rates in excess of 25%, with an average FPE (Forward Price to Earnings ratio) of 29. BWLD's FPE is 28.98, not at all expensive. Also, BWLD has a growth rate of 32%, putting their PEG ratio under 1. Traditionally, PEG ratio's are good indicator's of value versus froth.
Moreover, it's worth noting, BWLD has 435 restaurants, with the majority (81) in the God forsaken state of Ohio.
Look, this company, as stated, will expand to over 1,000 restaurants, within the next two years. They are targeting California, Virginia and NYC as prime destinations. Furthermore, the company has been coining money, despite the fact that chicken wing prices have been fucking sky rocketing, thanks to the corn feed fuckers. I feel the estimates are too low and BWLD can easily beat them, effectively making their FPE even more attractive. Think multiple expansion.
So, any relief from the corn front-- and BWLD's margins will explode. Right now, chicken represents 24% of sales, while alcohol stands at 29%. As far as I am concerned, the "cult-like" popularity of BWLD will only increase, as they open up restaurants in the affluent area's of NYC and Los Angeles. Hence, I feel the stock price will appreciate, substantially, over the next two years or until saturation.
Finally, I want to touch on the important issue of Ducati. I mean, the man is an aristocrat and a gentleman. Some of you crudely told him to "fuck off," and all he had to say in reply was "jog on." How can anyone get mad at a guy like that? I would have fucking teed off on your heads, like the steroid abundant Homerun derby.
However, I will say, the TELOZ pitch almost made me send an internet laser beam, in order to "mushroom cloud" Mr. Ducati's website.
In closing, I am unsure whether to fire or keep this Ducati. Normally, I scoff at democracy, like Amazon jungle tribesmen. However, regarding "The Ducati," the internets shall seal his fate.
NOTE: Please take the new "Fly Survey." Should I fire Ducati?
UPDATE: Holy shit! "The Ducati" is out out to destroy me. He just did a hit piece on HANS. What's next, MVIS?
An interesting opportunity
Right, the previous two posts will always be construed as negative by the bullish fraternity, so in my last post of the weekend I shall highlight a possible buy.
As I am bearish on the market currently the opportunity of income that will continue safely through a bear market is important.
For you to find this opportunity attractive you will need a viewpoint on the following;
*Oil prices and their possible future direction
*Chevron as a company possessing the financial fortitude to weather storms in the next 10yrs
Having crunched the numbers on CVX I feel as reasonably confident as one can trying to predict the future. The company has a strong Balance Sheet, solid Cashflow and the Income statement doesn't seem unduly manipulated. There are Reserve issues, but there are always Reserve issues with oil stocks. Having said that, they do not seem threatening to the company's solvency.
This is not to say it is perfect, but it is solid, and avoiding Chapter 11 is the issue here.
The opportunity resides in TELOZ.
TELOZ is a Trust that has invested in CVX stock and derives all of it's revenues from CVX, thus the importance of the financial stability of CVX.
Think of TELOZ as an Income Bond.
Income Bonds only pay a coupon when the coupon has been earned, and therefore pays a variable yield, higher or lower dependant upon earnings.
TELOZ is the same, except it is a Trust that trades as a common stock, and has a payout ratio of 100%.
Currently selling for $10 and change with a payout ratio that yields 24%
Therefore if you feel that oil will trade in a range of $30-$40 you will accrue a 24% yield as long as you hold the stock.
If oil rises, the dividend and yield will rise[at todays purchase price], with the added bonus of possible capital appreciation in the stock.
Of course the possible downside is that oil falls to $5-$10/barrel and TELOZ trades lower, a double whammy.
Until next weekend, jog on