Tag Archives for " stocks "
Not Even Trump Can Help Twitter!
Yesterday after the close, Twitter (TWTR) announced yet another disappointing quarterly earnings report. On the surface, Twitter has the wind at its back. We just had the craziest Presidential election in history, and the most active global news flow I’ve ever seen. Black Lives Matter. Migrant crisis. Syria. The Brexit. Italy’s No Vote. Right wing nationalist movements rising worldwide. There’s never been more stuff to talk about! Heck, President Trump Tweets so often that you’d think he owns the stock. Plus, Twitter gets a staggering amount of exposure from the media. Athletes and celebrities’ feeds are constantly promoted on the mainstream media. Yet Twitter’s ad revenues DECLINED year-over-year in Q4. Facebook (FB) grew ad revenues by 53%! And Facebook has a revenue base that’s 10 times as big! So what’s the deal here? Aside from the fact that Twitter is not user-friendly and offers little in the way of instant gratification — Facebook has the greatest advertising platform the world’s ever seen. It has in-depth personal information on almost 2 billion people. Think about it. Odds are, Facebook knows: 1) Your full name, age, location, marital/family status, and employment history 2) All of your hobbies and personal interests 3) Your political affiliation 4) What websites you visit 5) What companies you buy from 6) Who you talk to 7) Where you go Twitter surely has some of this data, but it also has some major disadvantages: 1) A smaller user base, and smaller data set 2) More anonymity Speak to anyone in the Internet marketing world, and you’ll know that businesses are tossing huge sums of money at Facebook and Instagram ads. Twitter? Not many folks seem to care.
Continue Reading -->T3’s Take 3: Yellen Goes Hawk, Spikes the Dollar
1) Yellen Goes Full Hawk Today, Federal Reserve Chair Janet Yellen gave a speech at the Commonwealth Club in San Franscisco, and she swung her hawk hammer. Yellen said the Fed is close to meeting its dual mandate of full employment and price stability, and that Fed officials expect a few rate hikes this year. The US dollar immediately ripped on the news, gaining 1.7% against the yen and 0.7% against the euro. The dollar in strength put a hurting on gold, which fell -0.7%. The ever-volatile gold miners ETF(GDX) dropped -1.5%. 2) Stocks Bounce Yellen’s hawkiskhness drove a rebound in stocks, and the S&P 500 managed to squeeze up 0.2% to 2271.89. That’s not exactly exciting, but there were some signs of strength under the hood. The Russell 2000 rose 0.5%, and the Nasdaq Biotech ETF (IBB) rose 0.8%. Yellen’s hawk talk drove the S&P Financials ETF (XLF) up 0.8%, with Regional Banks (KRE) up 1.1%. Retail, energy, and US Treasuries led the decliners’ column today. After the close today, Netflix (NFLX) reported better-than-expected Q4 earnings and surged over $10. 3) Jeff Cooper on Gold This afternoon, T3 Live’s Jeff Cooper issued the following analysis of gold: Yesterday, GLD gapped up into a shelf of resistance from the spring of 2016 around 115. Today, after treading water in the early going, the bears came out to play. GLD is pulling back into the gap window from yesterday. GLD and the miners have done a lot of work and are entitled to inhale. However, GLD is doing something it hasn’t done for many moon: GLD has delivered a Golden Cross with the 50 week crossing above the 200. Click here to learn more about Jeff Cooper’s Daily Market Report.
Continue Reading -->Morning Call Express: 2017 Starts with Green Arrows. Do They Stick?
In today’s Morning Call Express, Scott Redler welcomes us to the New Year. Scott starts things off by looking at the EWG and the big resistance level it is coming up to test and how it compares to the FXI. He also looks at the SPX and QQQ and where they will be opening the new year. Scott also reviews some high beta tech names as well.
Continue Reading -->Happy New Year!
We have mixed/quiet markets around the world as we close out the year. Europe is flattish and has a very tight pattern. It looks ready to rally. We’ve been long EWG calls in RAA since the Italian Referendum, and EWG/FEZ look like they’ll give more gains. In Asia, the landscape is a little different. The Nikkei had a big run and needs to digest. The Hang Seng has been choppy to the downside, though it was up 1.0%. The Shanghai was up +0.4%, but it needs time to show its hand. SPX futures are up 4-5 handles. Yesterday, most sectors hit new weekly lows but rallied back a bit to close off the lows. We saw a few Red Dog Reversals as some sectors traded below Wednesday’s lows and reclaimed them Thursday by day’s end. I’m not sure what today brings. The action may depend on whether we have any leftover rebalancing to work through. At this point, there are multiple scenarios to consider for the New Year. We’ve seen a little give on the post-Trump Trade, but not much. The USD came in a bit and Treasuries rallied. Some strong sectors tested the 21 day and held. Do new funds come in the first five days and drive the indices to new highs fast? Do traders book gains to push taxes out to 2018? Do some January effect-type trades take place in beaten-down names and sectors? We will have scenario A, B, and C. Whatever you do today, don’t let it ruin your holiday. Just focus on starting 2017 on the wrong foot. There will be more than enough time to figure out new relationships, correlations, etc. as the first few days develop. For today, see if the upside gap holds or gets sold. SPX has 2242 as pivot support for today and to start the year. If this holds, it would bring in new money to lift stocks in January. If they hit stocks fast in January, the important level will be the prior breakout area at 2193-2210. If they buy them fast, the first level to clear and hold above is 2262ish with the high of the range at 2277. A close above this and the door to 2325 opens for the first quarter. SPY put a low in at $223.84 yesterday. That will be your pivot support for today and to start the year. If they hit them fast, this needs to get taken out with a close below the 21 day. Then perhaps it can see $220ish. For today, see if SPY holds yesterday’s high of $224.89. For the bulls to come out quick in January, they need a trade and hold above $226.30 as the first step. Then the high of the range is $228.34. A close above this in the first few days of the year and the door to $232.50 is open. I will have a very extensive note to start the year on Tuesday morning as a lot can change between now and that open. For today, keep it light and get ready for the holiday and get your head ready for 2017. Remember, your time frame matters. Have a long-term plan with a 401k/403b/IRA/529 because over the long run, the bull market wins. But to participate, you must have a process that works for you. Never invest and live above your means. If you swing trade and trade for a living that’s different. It takes a routine, time, and commitment to a process. Combine that with discipline and humility, and you can win. Most importantly, live life and enjoy the time you have with your family and friends. A little fitness doesn’t hurt either. Don’t sweat the small stuff as it ends up being meaningless when you’re faced with the big things. Thanks for being a part of my community. Having friends like you on my team gave me a mission instead of a job. Happy New Year!
Continue Reading -->Morning Call Express: Fear Trumps Greed
In today’s Morning Call Express, Kurt Capra talks about the selloff yesterday and what may have been behind it. He also looks at the financials for clues as well as where GLD may be headed before truly reversing. Kurt also points out some of the retailers that may have additional downside today and points out an interesting pattern in AMZN.
Continue Reading -->Daily Recap: The Last Mile is the Hardest
In today’s Daily Recap, Scott Redler and special guest Lulu take a look at the action today which may have caught some by surprise. He also talks about how he navigated today in light of coming into today mostly long.
Continue Reading -->Chart Attack: SPX, FAS, AMZN and ACIA
Once again, quiet markets as we have 3 days left in 2016. This is a nice upper flag type pattern that usually leads to positive resolution. You can be long vs. 2256 or 2248 and, if you are quick, perhaps add above 2273 for a move to all-time highs at 2277. We’ll see if there is enough juice this week, or does it need new January 2017 flows to ignite it. Either way, a nice tight pattern to trade verse. Banks have been the best sector with multiple set ups along the way. Some are alread in the FAS vs. $41. If you think we get DOW 20,000 this can probably be a grab when it clears $42.25 for a move to clear highs of $42.83. Use Goldman Sachs (GS) as an indicator. AMZN has been consolidating since missing last quarters earnings. This pattern is tight. With the best selling holiday product and a huge online retail season electronically, I think this wedge resolves upwards. I am long and looking to add with a high volume move above $774.70 for a quick move towards $780 then to fill the gap up to $820. ACIA, last years high flyer, was cut in half. Two sell signals helped us get out of the way. Now, it’s tight and could see a January effect type move. It will need a high volume move above $68.30 to help trigger a day 1. I am long small and looking to add if it triggers and holds. The first target is $72 which is the 50 day.
Continue Reading -->4 Real-World Investing Lessons You Need to Know
After 13+ years of looking at the market on a daily basis, and flushing a whole bunch of cash down the drain on idiotic trades, I’ve grasped a few realities about how money moves in the real world — far away from the textbooks and theory pushed at your average business school. Here are 4 of them 1. What You Know, Everyone Else Probably Knows, Too. Investors have a tendency to overestimate the uniqueness of their ideas, even though we’re all drinking from the same information cup. Furthermore, the presence of social media outlets like Twitter (TWTR and Facebook (FB) have drastically accelerated the speed at which investable information is distributed. That means that with few exceptions, everything gets priced into the market pronto. So if you’re thinking of buying bank stocks because The Fed’s about to raise rates, or shorting Apple (AAPL) because of slowing revenue growth, slow down and take a deep breath. It’s important to understand the past and present. But to be a successful investor, you’ll have to predict the future — a far bigger challenge than skimming through 10-Ks and listening to earnings calls. In other words, focus on examining not where the fundamentals and newsflow are, but where they may be going. Remember, when a guy on TV tells you a stock is good because it’s trading at X times earnings and has Y in cash on its balance sheet, he’s simply repeating the bare minimum of what the market knows. As men wiser than me have said, “What the market knows is not worth knowing.” 2. Timing Is Everything. When looking at the market,it’s important to understand not only “the what,” but “the why.” But the more I think about it, the more I’d argue that “the when” trumps both those considerations. Let me tell you a story. I once interviewed at a hedge fund that was making a major bet on its prediction that the then-growing housing bubble would implode. Smart money, right? However, that interview took place in early 2003, right before the Housing Index (^HGX) doubled. Likewise, a lot of folks were short FitBit (FIT) year as it crashed and burned from that $51.90 high hit last August. But a lot of bears got smashed on the 73% rally that precded the drop. So when you have an investment thesis in your mind, ask yourself, “What makes now the right time to bet on this?” Furthermore, if the S&P 500 is skyrocketing, it is entirely likely that junky companies rally big-time. Likewise, if the market’s in meltdown mode, even the best of the best can get smashed. Apple (AAPL) closed out 2007 at $198.08. But in 2008, even in the face of enormous earnings beats and the halo of the iPhone’s unprecedented success, Apple finished the year at $85.35 — a drop of 57%! You may be smart, but remember: Sometimes Mr. Market just does not care about what you think. 3. You Are Probably Suffering From Confirmation Bias. The Oxford Dictionaries defines confirmation bias as “the tendency to interpret new evidence as confirmation of one’s existing beliefs or theories.” Translated into financial terms, it means that if you’re bullish on gold (GLD), you interpret everything you see as bullish for gold. I know the power of confirmation bias from a horrible experience with a former tech highflier called Rackable Systems, which changed its name to SGI (SGI) after it acquired Silicon Graphics in 2009. In 2006, Rackable Systems was a momentum King — kind of like newer names like Acacia (ACIA). It was pulling in boatloads of money selling energy-efficient servers to major data-center operators like Microsoft (MSFT), Amazon, and Yahoo (YHOO). And then — let me point out that I had complete knowledge of this — competitors like Hewlett-Packard (HPQ) decided they wanted some of those data-center dollars. Maybe I should have imagined what would happen if Rackable lost Microsoft (34% of revenues) or Yahoo (26% of revenues) as a customer, or at the very least, the margin pressures that could be introduced in a more competitive server environment. However, I viewed the new competition as nothing less but confirmation that Rackable was on the right track. And then Rackable crashed from $56 to under $10 as earnings collapsed. It is impossible to stay perfectly objective when performing research. But you can stay one step ahead of your own bias by regularly asking the question, “Am I just telling myself what I want to hear?” 4. In Isolation, Valuation Ratios Are Useless. Investors often take a simplistic view of valuation ratios, automatically assuming that if something is “cheap,” it’s good, and if it’s “expensive,” it’s bad. But you’ll often see cheap stocks get cheaper and expensive stocks get more expensive. How many times has someone told you that Salesforce.com (CRM) is overpriced? Next, look at the stocks’ chart since it went public: A P/E ratio, like every other valuation ratio, is 100% meaningless in isolation. It is far more important to examine how the “E” part of the equation is changing. (Or sales for EV/S ratios or EBITDA for EV/EBITDA ratios, etc.) A company trading at five times earnings can look awfully expensive following a bad quarter that destroys future earnings expectations. That’s how a stock like GoPro (GPRO) can go from $98 to $50 to $9 in the blink of an eye. It also works the other way around — a high-priced momentum stock can suddenly look cheap if earnings come in ahead of expectations and forward estimates rise.
Continue Reading -->Daily Recap: Lots of Divergences
In today’s daily recap, Scott Redler talks about the action in markets over this past week and how things are looking ahead of tomorrow’s Jobs report. He also discusses the various divergences that have been playing out over the recent week. In addition, Scott recaps the action in names like JP Morgan (JPM), Goldman Sachs (GS), Facebook (FB), Amazon (AMZN), and others.
Continue Reading -->Morning Call Express: December to Remember?
In today’s Morning Call Express, Scott Redler welcomes us to a new month and updates the action in the SPX. He also looks at the recent move in oil and some of the levels to be watching heading into today’s action.
Continue Reading -->