Friday, November 27, 2009

Testing The Oil Break Out

Crude oil has fallen back down through the 75 level now. Potentially erasing the break out seen from the the ascending triangle pattern in crude at $75. Sometimes these patterns see throw backs so violent they actually get halfway down in the ascending triangle base and then snap back up. Keeping the pattern valid. At the current moment with the Dubai news shaking the world markets crude finds itself trading in the high 73s. SCO should be the big beneficiary from this action during Friday's shortened trade. We'll have to see if 75 becomes resistance now in crude going forward.

UCO / USO / UHN / ERX / DIG should get hammered Friday.

SCO / ERY / DUG should move up nicely, and potentially trend for a few sessions.

Monday, November 23, 2009

DE : A Buck In It's Rut

MS put a "rare opportunity" target of 64 on DE. I missed that earlier today. However, that's the measured move out of this ascending triangle break out we saw at 48. First line of resistance is at 55. New box between 50 and 55 now. Major moving average resistance above on the weekly could keep this one contained for a bit longer giving ample time to grind toward's the measured move target. This one is a buy and hold candidate to be bought on the dips going forward for another 10$. Earnings on Wednesday before the open.

Morgan Stanley (MS) says :
" Deere & Co. was upped to overweight from equal-weight by Morgan Stanley, which lifted its price target to $64 from $48. "Demand for U.S. farm equipment is growing as customers add acreage, a secular phenomenon that is widely underestimated. Cyclical factors are also more favorable than most believe, with corn likely higher into 2010 and the potential for recovery in Brazil. We see this as a rare opportunity where consensus is too conservative on both cyclical and secular factors, making DE risk reward highly favorable vs other machinery stocks," the broker said."

Wednesday, November 11, 2009

GRRF 3Q 09 EPS

I decided to hold this one through their earnings ( a highly risky proposition) and it has paid off. Closed normal hours trading at 4.92 after it was pinned flat all day. Trading 5.60 here in the after hours. Showing a 24.26% gain on this trade now. Shorts are trapped here, and they could gap this one yet even higher in the morning. A very key level is the 23.6% retracement which sits at $5.27. I would like to see that level hold in as support. Holding that level would be very positive going forward. Failure to hold that level will cause me to get flat in this name. Tomorrow's action will bring in a lot of day traders, so there is most likely going to be a shake out several sessions down the road. TSTC also reports on Friday, so we have another catalyst as they are in the same sector.

The IBD investor in me thinks that this one could be a 15$ stock at some point in the future as it hits more radar screens. I don't want to make a mistake similar to STAR and get out before the full potential is met. However, these Chinese stocks are slippery as to "when the music stops" regarding accounting standards. Price and volume will guide us as to our ultimate decision. Tangible book value is reported as being 8.95, so to a value player this one is still cheap.


http://finance.yahoo.com/news/China-GrenTech-Corporation-prnews-4077980183.html?x=0&.v=1


Third Quarter 2009 Financial Highlights
-- Total revenue increased by 85.8% year-over-year to RMB394.9 million
(US$57.8 million).(1)
-- Revenue from wireless coverage products and services increased by
97.9% year-over-year to RMB309.3 million (US$45.3 million).
-- Revenue from base station RF products increased by 52.4%
year-over-year to RMB85.6 million (US$12.5 million).
-- Gross profit increased by 67.4% year-over-year to RMB105.2 million
(US$15.4 million).
-- Operating income increased ten-fold year-over-year to RMB29.8 million
(US$4.4 million).
-- Net income attributable to the equity shareholders of GrenTech was
RMB20.1 million (US$2.9 million), compared to a net loss attributable
to the equity shareholders of GrenTech of RMB8.4 million in the third
quarter 2008.
-- Basic and diluted net income per ADS(2) were RMB0.85 (US$0.12) and
RMB0.84 (US$0.12) respectively.


(1) The Company's reporting currency is Renminbi ("RMB"). The translation
of amounts from RMB to United States dollars is solely for the
convenience of the reader. RMB numbers included in this press release
have been translated into U.S. dollars at the noon buying rate for U.S.
Dollars in effect on September 30, 2009 in the City of New York for
cable transfers in RMB per U.S. dollar as certified for customs
purposes by the Federal Reserve Bank of New York, which was
US$1.00=RMB6.8262. No representation is made that RMB amounts could
have been, or could be, converted into U.S. Dollars at that rate or at
any other rate on September 30, 2009.
(2) Each ADS represents 25 of the Company's ordinary shares.

Wednesday, November 4, 2009

FOMC Statement for 11/4/09

Release Date: November 4, 2009

For immediate release
Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to pick up. Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. The amount of agency debt purchases, while somewhat less than the previously announced maximum of $200 billion, is consistent with the recent path of purchases and reflects the limited availability of agency debt. In order to promote a smooth transition in markets, the Committee will gradually slow the pace of its purchases of both agency debt and agency mortgage-backed securities and anticipates that these transactions will be executed by the end of the first quarter of 2010. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

TCM Notes : 11/4/09

Well first off let me say to the few of you that actually read my scribblings that I'm sorry for not having anything posted for the past few weeks. I've taken on a new consulting job, and it has been eating into my "analysis" time in the evenings. That said the bulk of all my market calls are being made in a chat room and thoroughly explored instantly with 400+ active traders during the day time. If interested it's a paid for site run by Daniel J. Zanger. It's $78 per month, but for an active trader it can be considered a value. www.chartpattern.com is where it's at. My handle in the room is "spm." By the time I've finished the day I'm typed out. Enough with the excuses though. Let me update.

By luck or perhaps by skill I was able to spot a gap island reversal on the XLF, UYG, and FAS charts during the session of 10/13 - 10/16. This sent a huge red flag up for me that the financials had stalled, and may very well roll over. I wanted to make sure it wasn't a fake out, so I sold only half of my position in UYG on 10/20 for 6.05. Well, the next day the other half got sold out as UYG violated it's 20ema. I was out. Now the next two sessions that followed I wasn't looking too smart, but I knew I would get back in if the resistance gap was filled. Which it did not. What's gone on since for the past 9 sessions is very bearish and could continue on for some time. Financials are offering up tremendous intra day bounces, but the swing long set up I'm looking for has not shown itself yet. This is the fourth instance that I've identified the gap island reversal in real time trading (CHK, DBA, DAG being the others) and it generally stays in place and determines the trend for some time to come.

SPY remains below it's 50ma as the DIA has been propped up by it's 50ma for the past few sessions. The moving averages I use have begun to cross down over one another as prices compress. They are now offering temporary support levels as the market comes down into them for a test. Only to then offer resistance once support gives way. It's going to take some very powerful action to get these averages moving up sharply again. The scenario I see playing out is a choppy grind lower where the averages all "tie up" and converge at some point. Then we will see which way this market really wants to break. For the moment long trades look capped to the upside.

With BRKa making a 44 billion move for BNI one would think the market would've been sharply higher Tuesday. It was not. A market tell perhaps. What it did do though was to goose the transports which have been steadily moving lower after their recent double top. IYT gaped higher reclaiming it's 86ma and closing above it's 9ema. With only the 20ema and 50ma sitting above it, the transports could re trigger another Dow Theory Buy Signal. Keep in mind a Dow Theory Sell Signal was issued shortly after the double top. This is the type of sharp, choppy action we are navigating these days as "owners" of real assets continue to restructure (bankruptcy), reassemble (sell off divisions/cut work forces), and reassert (new jobs/ipo issuance) themselves back into the economic landscape.

Still holding a small stub of GRRF as they head into earnings Nov 11. Louis Navellier issued a buy on them on 10/20 as well sending the volume and price dramatically higher. Since then I think we've seen a sufficient shake out of the hot money that was chasing it higher that day. This is an exploratory stake, and the reaction to earnings is what will determine what comes of this one.