#CoalStocks – thinking about shorting BTU, CLD…again.

Just thinking about it. This is a heads up. Don’t quite have the triggers I’d be comfortable with yet.

But unless the stocks surprise further to the upside, the prospects for shorting them again are getting closer day by day.

These stocks have been rallying in recent months on the desperate hope President Trump will do something to revive the industry. There is no chance of that happening. He is paying lip service, but is hardly interested or able to do anything else. Remember these stocks, long term, have fallen faster than dead canaries. This is an industry slammed by cheaper cleaner natural gas and it is facing an inevitable death at the hands of renewable energy.

CLD, once the stock dropped below $5 a share, could easily fade to dead money around $1, and maybe even go off the board like so many others in this sector – Patriot Coal, Walter Energy… BTU has already been through a bankruptcy, taking out decades of shareholder equity, and now has restructured and emerged to try to do it again.

I’m not one for fundamentals but this industry blow happened just yesterday:

LAST COAL PORT PROPOSAL ON THE WEST COAST DIES

Businessmen, especially coal executives, always complain that environmentalists never let them do anything. That is not true. Environmentalists don’t let them do stupid things. All of coal, once an evil necessity, is now a stupid thing.

So, trading-wise, I’m looking for more signs of weakness, negative candles, breaking supports, indicator divergences before sealing the shafts (see the charts below). Call it waiting for the bloom to come off the black Trump rose.

(click on each chart for a larger view)

All information, presentations and discussions on this site are no more than a journal of my personal stock market thinking and trading. This site is for entertainment purposes alone, and nothing here is to be construed in any way as direct investment advice.

$KBE – Are these banks or the walking dead?

Long-term market breadth has been rising for nine days.  That usually takes most stocks in the same direction.  After all, if a stock isn’t rallying when it has the entire market on its side, when is it going to rally?

So, consider the banking sector…

JPM, BAC, GS, WFC, DB, KBE (the ETF for the sector) are all falling while breadth is positive (see the rising green in the middle of each chart below), and now all of these stocks have broken support falling out of their respective consolidations (see the blue boxes on the charts below).

Don’t those boxes look a lot like coffins?  So is this out of the coffin and into the grave like “out of the frying pan and into the fire”?

Enough fiddling around.

If you’re a bull this is not a sector you want to see lagging, let along falling apart.  So here’s the heads-up, they’re likely going down.

(click on the chart for a larger view)

 

 

#IPOs – $ZKIN and others…

Today, let’s take a look back at a couple of recent stock IPOs and a new one on a buy from yesterday.

As has been stated in a previous post here, buying into an IPOs is actually one of the easiest decisions in stock investing but never let a broker con you into doing it the day of the offering.

Instead, note the high price and the low price on the first IPO is traded. Those are the lines in the sand or the Darvas box around the first day of trading (see the charts below).  The time to buy, invest, is on a close above the high of the first day with a stop loss below the high of the first day.  That is usually a low-risk trade since the real good news comes when the stock proves it can move up from all the hype surrounding the offering itself and if it falls back the stop to exit is close by.

Applying this to the newest offering here,  ZKIN (ZK Intl Group) would have created a buy on yesterday’s close (9/5) at 9.49 above its first day high of 8.68.  Today it closed at 10.27 up 8.2%.  The stop-loss is a close below 8.68 but with an 8.2% leap in profits already in the stock one might want to at least put in a break-even to avoid any loss.

These are purely technical signals.  I have no idea what that company does except it is Chinese.

To sum up the other IPOs here that have given recent buy signals, ZEAL is up 7.1% and RNGR is down 2.6% from its buy.  RNGR at 14.53 is close to its stopping point at 14.50.

(click on the chart for a larger view)

 

A $ZEAL for investors…

Investing in an IPO is actually one of the easiest decisions in stock trading but not on its first day.

But it is an IPO’s first day of trading that gives a clear look at when to buy the stock.  Simply note the high price and the low price on day one of the IPO. Those are the lines in the sand (see chart 0f ZEAL below). The stock is a buy on a close above the high of the first day with a tight stop loss below the high of the first day.

With ZEAL that buy would have been at 18.95 on the open of August 28 (after its close above the high of the first day at on August 25).  The stop loss is on any close below 18.69, the high of the first day.  ZEAL backed off for a couple of days and retested its breakout above the IPO-day high but did not trigger its stop loss.  Today it is, at the moment, turning up again at 18.90 (UPDATED: 18.80 on the close), again with a stop below 18.69.

This is an an opportunity for investors to buy and hold.  This is not for traders.  With a good-till-cancel stop loss order in, with very little short-term risk, it is a buy it and forget it with the hope it will appreciate over time.

(click on the chart for a larger view)

 

Watching $BID for a market top

Sotheby’s Holding (BID) has so often been a market bellwether.

And at tops at that!  A rare thing in the world of calling market direction. Bottoms are easier to see and sometimes obvious but tops…”calling” tops has killed many a market prognosticator and killed many a bear.

So let me say right off I’m not calling a top here.  Just trying to pay attention…

And when BID quits rallying and/or diverges with general market, it is time to pay attention.  BID was down a bit on its monthly chart in September.  That is a lower high for the stock while the S&P 500 and Nasdaq drifted higher.

What’s it mean?  Maybe nothing.  Yet.  But take a look at the chart action showing BID with the SPX on the chart below in 2000 and 2007.  One might say, as BID goes so goes everything else.

And this time, so far, BID has not even crawled up to the top of its long-term price range, which is rather ominous going forward.

(click on the chart for a larger view)

bid_2016-10-03_0749

 

This market could scream higher…

Call this a perspective on my Nifty-Fifty stock list.

Yesterday, there were 44 of the 50 stocks on sell signals.  That usually marks either the beginning of a bottom or the bottom itself.

On the up day today (however small) one has to lean to the idea this is the bottom itself.

Ask me, this is hard to believe since the market virtually has not gone down at all. So it seems this is a sideways move that will vault (scream) to new highs again soon. Maybe tomorrow.

Note on the chart below the past instances of 40 or more sells on the Nifty-Fifty.  Hard to believe but pretty plain to see.

(right click on the chart for a larger view)

NFTY50_2016-08-18_1435

#Greed top could lead to #SPY stumble

CNN Money’s “Fear and Greed Index”, a calculation of seven key market indicators in order to gauge the primary emotions underlying the stock market, appears to have put in a double top at an extreme greed level.

Historically, this pattern has led to significant sell-offs in the general market as investors’ and traders’ greed, fueled by the market’s recent rally, cycle down once again to a prevalent fear level.

There is really no way to tell how far the S&P 500 index (SPX, also the SPY ETF) will fall but the last time this down cycle took place the SPY fell from a high of 211 to a low of 185 (about 250 SPX points, a 10% or so correction). There is no guarantee it will stop there.

Regardless, this is an excellent shorting opportunity across the face of the stock market, just as it will eventually lead to an fine buying opportunity later on.

Market timing.  They say it can’t be done but a study of the chart below should make it rather obvious “they” don’t know what they are talking about.

(right click on the chart to view a larger image)

FEAR_AND_GREED_2016-04-11_1609

#NYSE Margin Debt

This may be too simplistic but every time I look at this Doug Short chart, I think at least 800 SPX points down before this finishes unraveling. It takes time, of course, but this time that would put the S&P 500 somewhere in the 1400s.

These numbers from the NYSE are a month old so the current record rally is not in them yet but I suspect when it is, it’ll look similar to that little blip up in 2008 just before the real tumble continued.

For Doug Short’s article GO HERE.

(click on chart for a larger view)

Nyse Margin Debt 2016-04-02_1114

 

#Banks – Someone said there’s a rally?

Since February 12th the stock market has been rallying strongly.

So what’s with these guys?

And to top it off, Bloomberg had an article this morning on CEO compensation at the biggest banks.  Now we know where all the QE went.

(click on image for a larger view)

Banks_2016-03-17_0844

 

When in doubt buy solar…

Said it before but bears repeating: when in doubt buy renewable energy…

Simple as that.  Solar stocks will fluctuate with the market and with fossil fuel stocks but one day on some market swing (maybe this one) they will leave the fossil fuels companies withering in the sun, so to speak.

Recently oversold, here are a selection of solar stocks today:

(right click on chart for a larger view)

solars_2016-02-16_1216