TAKE PARTIAL PROFITS ON WAL-MART (WMT)
May 17, 2012
This post was just published on ZYX Buy Change Alert
Consider taking profits on a 5% tranche on WMT right here at $62.10.
Tags: WMT
WAL-MART (WMT) REPORTS BLOWOUT EARNINGS
May 17, 2012
This post was just published on ZYX Buy Change Alert
Wal-Mart (WMT) reports $1.09 vs consensus of $1.04; reports revenues of $112.3 billion vs consensus of $110.54 billion. WMT sees Q2 EPS $1.13 – $1.18 vs consensus of $1.16. Commentary in the earnings release is positive. In the pre-market, the stock is trading up $2 to $61.19.
What To Do Now?
Those in the position may continue to hold.
Those not in the position may wait for a signal on the Real Time Feed to initiate a position.
Tags: WMT
THE BEST CHINA PLAY: APPLE, GOOGLE OR FACEBOOK?
May 16, 2012
It is not an exaggeration to say that all roads of growth lead to or through China. The obvious question for some of today’s most popular growth stocks is, “Out of Apple, Google, and Facebook, which company will do better in China?”
The Facebook (FB) IPO is upon us Friday, and the last Apple (AAPL) earnings conference call was remarkable in its description of astounding growth in China. Google (GOOG) is the main competitor of Apple in mobile operating systems, and commentary on valuation of Google vs. Facebook has become quite popular.
The biggest mistake I have seen gurus make in analyzing such a question is not fully comprehending that China is very different from America or Europe. Let us start out by developing a better understanding of China.
Communist Capitalists
In spite of all the progress China has made, the economy is still tightly controlled by an authoritarian communist regime. The first priority of the regime is its own survival. This is the paramount consideration any time China deals with a large enterprise such as Apple, Google, or Facebook.
The inherent nature of Google and Facebook is to empower the masses, which runs counter to the survival instincts of the regime. On the other hand, Apple does not threaten the regime.
On this count Apple wins.
Memory of Back Stabbing is Still Fresh
Google got an early foothold in China by agreeing to Chinese censorship of Google search results. Later on Google’s founders had second thoughts about Chinese censorship. Unnerved by Chinese hacking of Google’s computers, Google criticized Chinese censorship….Read more at Forbes
3 WAYS TO PLAY FACEBOOK
May 16, 2012
In my 30 years in the markets, Facebook FB is one of the most anticipated Initial Public Offerings (IPO) I have seen. The stock will start trading on Friday if it gets all approvals.
Here is a game plan investors may consider.
Back up the truck and buy in the IPO
For some time now I have been advocating that investors should back up the truck and buy all the shares they can get in the IPO. For those who are able to get shares in the IPO, buying Facebook with both hands is a no-brainer proposition. Demand is simply far higher than the supply. This is remarkable considering the size of the IPO. Facebook is likely to offer as many as 388 million shares. The price range is $28 to $35 and may be raised. At $35/share, the company will raise about $13 billion and will be valued at $100 billion. This will be the largest technology IPO in the United States. In history, only Visa V +1.38% and General Motors GM +3.97%have been larger IPOs.
Those who cannot get shares in the IPO
Many retail investors are likely to rush to buy shares in the open market. This is akin to gambling. The reason is that it is foolhardy to buy until a trading pattern is established.
Potential buyers should ask themselves a simple question to ascertain if they are investors or traders.
At this time there is no way to know where the stock will open. Those who consider themselves investors may consider buying, but only a very small quantity, if the stock opens below $55…Read more at MarketWatch
TAKE MORE PARTIAL PROFITS ON GOLD (GLD)
May 15, 2012
This post was just published on ZYX Short Sell Change Alert.
Consider taking partial profits on a 5% tranche on GLD right here in the after market at $149.75. The equivalent in gold futures is $1542.
SELL APPLE TO BUY FACEBOOK? SMART IDEA
May 14, 2012
The initial public offering of Facebook is one of the most eagerly awaited events that I have witnessed in my 30 years in the market. In the same 30-year period, I have seen very few companies accomplish what Apple has accomplished.
I’d say that the probability is very high that Facebook will beat Apple hands down where it counts–return on investment–and that Facebook stock purchased in the IPO may beat the return on Apple over the next four years.
Let’s compare the two
Recreation
Sometimes a unique set of events give birth to an enterprise in a manner that it cannot be recreated. Facebook is one of those enterprises. Given any amount of talent and money, Facebook cannot be recreated.
Google (GOOG) has proven the point with Google+. Google has the talent and the money. Google+ is very well done. In my analysis, the design of Google+ is better than that of Facebook in several respects.
Since Google is still the predominant search engine, there is a significant incentive for those who want to show up in Google searches to be an active member of Google+. Facebook simply cannot match this incentive. All of this has helped Google+ to attract about 125 million members in a very short period of time. Even with all of its advantages, Google+ is an online ghost town compared to Facebook.
Apple is unique in many ways but not in the aspect of recreation. Samsung is nipping on the heels of Apple. Several competitors are capable of making offerings on par…Read more at Forbes
STAY SHORT ON GOLD
May 14, 2012
This post was just published on ZYX Short Sell Change Alert.
Gold plunged through support at $1565 on really bad news from Greece. This shows that trading in gold is still in the hands of the momo crowd.
Long term investors tend to buy gold on bad news not sell. Clearly selling by the momo crowd is overwhelming buying by the long-term investors. Our data shows that momo crowd has incurred huge losses in gold and silver this year and now they are in the stage where panic may ensue. It panic ensues, $1450 is the next target.
The track record of the momo crowd is that they buy on good news and sell on bad news which is contrary to the behavior of long-term investors in gold. There has been a lot of bad news over the last 10 days. It is not unusual for streak of bad news to be broken by good news. If there is any good news, momo crowd will start buying gold again and can easily run gold up to $1620 area.
What To Do Now?
Those short in gold and have been taking partial profits as we have been recommending may stay short on the remaining position.
Those who are short and have not taken partial profits may take partial profits here in gold at $1560 or $151.49 in GLD.
Those who are not short gold at this time may wait for a signal on the Real Time Feed.
WEEKLY MARKET DIGEST: AMERICA’S GOLDEN BOY STUMBLES
May 12, 2012
(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
AMERICA’S GOLDEN BOY STUMBLES
May 11, 2012
The CEO of JP Morgan, Jamie Dimon, has long been known not only as America’s golden boy, but also the most esteemed CEO in the world of banking. He had the reputation of being the best risk manager in the world.
Yesterday after the market close JPM reported a sizable loss from a derivative hedge trade. Dimon calls the loss egregious and self-inflicted.
Financial markets are shocked and risk aversion is the fashion of the day.
Risk rises and gold stumbles. Weak leveraged investors in gold and silver continue to be slaughtered.
Gold futures are at $1581, silver futures are at $29.65, and oil futures are $95.67.
S&P 500 resistance levels are 1348, 1358, and 1368; support levels are 1339, 1330, and 1324.
DJIA futures are down 92 points.
THE WORLD DOES NOT END AS SPAIN TAKES STAKE IN BANKIA
May 10, 2012
Part of the market weakness over the last few days has been driven by the deteriorating condition of Bankia, a large bank in Spain. There have been concerns that Spanish government bond yield would shot up if Spanish government came to the rescue of Bankia.
Spain is converting state aid worth $4.5 billion into 45% of outstanding ordinary shares. Yields in Spain have not shot up. The stock market in Spain is up very strongly.
Gold is bouncing from a very over sold short-term condition.
Weakly jobless claims in the U.S. were about as expected. Market seems to be relieved that there is no deterioration.
Gold futures are at $1598, silver futures are at $29.25, and oil futures are $97.37.
S&P 500 resistance levels are 1368, 1380, and 1400; support levels are 1358, 1348, and 1339.
DJIA futures are up 58 points.
CRISIS DEEPENS, GOLD PLUNGES
May 9, 2012
Crisis in Europe deepens as the yield of 10 year Spanish bonds reaches 6.03%. 6% is considered the danger mark.
As the crisis deepens, gold plunges through yesterdays low of $1597.25.
We have been telling you that there was a 65% probability of a correction to the zone of 1299 to 1311 in the S&P 500. We have also been stating that there was a 75% probability of S&P 500 hitting 1330 to 1344 zone. Now S&P 500 is on top of the support zone.
The question is, “Will 1330 – 1344 hold?” The answer lies in how the media reports communication between Germany’s Merkel and France’s Hollande.
Gold futures are at $1582, silver futures are at $28.73, and oil futures are $95.96.
S&P 500 resistance levels are 1358, 1368, and 1380; support levels are 1339, 1330, and 1324.
DJIA futures are down 90 points.
GOLD AND SILVER PLUNGE THROUGH SUPPORTS
May 8, 2012
Gold plunges through previously strong support at $1625 and silver plunges through previously strong support at $30. The plunge was caused by a statement attributed to Greece’s Syriza leader Tsipras. Tsipras wants to nullify the bailout agreement.
The statement from Greece is bad news and deepens the crisis. The violent down spike in gold and silver on the statement demonstrates what we have been telling you all along — gold and silver are in the hands of momo crowd who buys on good news and sells on bad news. This is contrary to the traditional role of gold and silver to act as a hedge against bad news.
Gold futures are at $1616, silver futures are at $29.43, and oil futures are $96.92.
S&P 500 resistance levels are 1368, 1380, and 1400; support levels are 1358, 1348, and 1339.
DJIA futures are down 50 points.
SOCIALIST WINS IN FRANCE, PRO EUROPE PARTIES COLLAPSE IN GREECE
May 7, 2012
France has a socialist president. In Greece pro Europe parties were trounced in the elections.
political uncertainty in Europe caused euro to trade as low at $1.2964, but now has recovered to $1.3037. $1.30 is the battle line.
Last night DJIA futures were down over 150 points. but have recovered this morning.
Of note, is that gold and silver are falling slightly on uncertainty in Europe.
Gold futures are at $1639, silver futures are at $30.20, and oil futures are $98.68.
S&P 500 resistance levels are 1368, 1380, and 1400; support levels are 1358, 1348, and 1339.
DJIA futures are down 31 points.
APPLE RUNNING ON TV RUMOR FROM CHINA
May 11, 2012
This post was just published on ZYX Buy Change Alert where Apple (AAPL) stock was recommended at $131 and is still being held.
China News is reporting that Foxconn CEO has stated they are preparing for Apple (AAPL) TV. Both AAPL stock and NASDAQ are running on the report.
What To Do Now?
Those in the position may continue to hold.
Those not in the position may wait for a signal on the Real Time Feed to initiate a position
Tags: AAPL
TAKE PARTIAL PROFITS ON GLD
May 11, 2012
This post was just published on ZYX Short Sell Change Alert.
Consider taking partial profits ob a 5% tranche on GLD right here at $154. Consider continuing to maintain the rest of the position short.
Our models continue to show that gold may go lower in the medium-term. However in the short-term, gold is very oversold and it is best to book some profits in keeping with the ZYX Change Method.
JP MORGAN CEO CALLS UNEXPECTED LOSS EGREGIOUS
May 10, 2012
JP Morgan (JPM) recommendation is being withdrawn.
JP Morgan reports unexpected big investment loss in the range of $800 million to $2 billion.
JP Morgan’s CEO calls the loss egregious and self-inflicted. JP Morgan now sees more portfolio risk than they recently disclosed in their earnings call.
This appears to be a two quarter problem.
The conference call with JPM is in progress. The stock is trading at $38 down about $2.70 at the time of this writing. This information was disclosed by JP Morgan after the close.
Fund flows are extremely negative. Very light Smart Money buying is taking place right around $38.
A billion dollar loss is nothing to scoff at, but it is pocket change for JPM. Of concern is that there is more risk in JPM portfolio than even the management thought.
This debacle is likely to result in a great investment opportunity in the near future. JPM is the best bank from an investment perspective in the whole wide world. AN opportunity to buy JP Morgan on the cheap may be near.
We will be closely following JPM in the ZYX Buy Change Alert and plan to issue a buy signal on the Real Time Feed of the ZYX Buy Change Alert when all six screens of the ZYX Change Method are met.
Tags: JPM
TAKE PROFITS AND EXIT VSI
May 9, 2012
This post was just published on ZYX Short Sell Change Alert.
Consider taking profits and exiting the trade right here at $53.02. Another massive short squeeze seems to be underway.
Tags: VSI
STAY SHORT ON GOLD (GLD) AND SILVER (SLV)
May 8, 2012
This post was just published on ZYX Short Sell Change Alert.
Gold just broke $1600 support and is now at $1596 as of this writing. Both gold and silver are very oversold in the very short-term. A bounce can happen any time.
Next support is $1565 to $1575 on gold, and $29 on silver. Silver is at $29.16 as of this writing.
What To Do Now?
Those short GLD may continue to hold short. Those holding more than the recommended quantity may take partial profits right here.
Those not short gold may wait for a signal on the Real Time Feed.
THE SECOND TARGET ON VSI
May 8, 2012
This post was just published on ZYX Short Sell Change Alert.
Consider entering a limit order to take profits on the rest of VSI position at $49.02
Tags: VSI
TAKE PARTIAL PROFITS ON VSI
May 8, 2012
This post was just published on ZYX Short Sell Change Alert.
Consider taking partial profits on VSI right here at $50.50.
Tags: VSI
NEW IDEA ON VSI
May 8, 2012
This post was just published on ZYX Short Sell Change Alert.
VSI reported good earnings and claimed they do not have much exposure to potential FDA recall. In any case the upside is overdone. Short selling a 30% tranche at $53.75.
Tags: VSI
WEEKLY MARKET DIGEST: ECB HOLDS ITS FIRE AHEAD OF FRENCH WILD CARD
May 5, 2012
(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
TAKE JOBS REPORT WITH A GRAIN OF SALT
May 4, 2012
The U.S. Department of Labor reports that unemployment rate fell to 8.1% vs 8.2% consensus.
Non-farm payrolls increased by 115k vs 162k consensus. The whisper number was about 120k. In any case this is a negative number.
On the positive side March non-farm payrolls were revised to 154k from 120k.
The rest of the data in the report is also mixed. There is ammunition in the report for both bulls and bears.
Economic data from Europe is weak. Mario Draghi, the ECB chief expects gradual eurozone recovery in the second half of 2012.
There were hopes among market participants that today’s data would provide clarity on the U.S. economy. In reality the data adds more confusion.
Bulls and bears will battle and the momentum players will jump on which ever side seems to be showing early signs of winning. It is impossible to call the market direction for today in advance. There is no change in our medium term model indicating 65% probability of a correction.
As of this writing gold is not showing much reaction.
Gold futures are at $1635, silver futures are at $30, and oil futures are $100.61.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are down 43 points.
ECB HOLDS ITS FIRE AHEAD OF FRENCH WILD CARD
May 3, 2012
Even as the European economy is beginning to falter, the European Central Bank (ECB) has left official interest rates unchanged at 1%. The upcoming French election that has the potential to reshape ECB’s role may have been the real reason behind inaction by ECB.
In the U.S., initial weekly jobless claims came at 365k vs 375k consensus. This is a leading indicator with heavy weight in our models.
There is high anxiety in the markets ahead of tomorrow’s jobs number.
Investors are taking some chips off the table in gold and silver ahead of tomorrow’s number. Gold investors are also discouraged because ECB did not ease.
Gold futures are at $1644, silver futures are at $30.38, and oil futures are $104.91.
S&P 500 resistance levels are 1410, 1415, and 1424; support levels are 1380, 1368, and 1358.
DJIA futures are up 5 points.
THE U.S. JOB GROWTH STALLS
May 2, 2012
ADP employment change 119k vs 170k consensus. ADP is the largest payroll processor in the United States. The data shows that employment growth in the U.S. is stalling. We pay attention to this number because the market pays attention to this number; this is a lagging indicator and therefore this is not an important part of our models.
Now the market will be focused on the employment data to be released by Department of Labor Friday morning.
Gold futures are at $1657, silver futures are at $30.49, and oil futures are $105.76.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are down 52 points.
THE U.S. STOCK MARKET REMAINS VULNERABLE
May 1, 2012
New money pours in the stock market on the first day of the month. Such money usually props up the market on the first two or three days of the month.
U.S. stock market remains vulnerable to a correction. Our models are predicting a 75% probability of S&P 500 hitting 1330 to 1344 zone. The models also predict a 65% probability of hitting 1290 to 1311 zone.
One of our favorite leading indicators is Institute of Supply Management compiles ISM Index. This index is based on a survey of the purchasing managers regarding their acquisition of goods and services. This index will be released at 10:00 am ET. The consensus is 53.
Gold futures are at $1672, silver futures are at $31.22, and oil futures are $104.84.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are up 15 points.
MARCH CORE PCE AT O.2%
April 30, 2012
The core Personal Consumption Expenditure (PCE) is our favorite inflation indicator. PCE is a component statistic for consumption in Gross Domestic Product (GDP).
Even though food and energy prices are rising, this data shows that core inflation is rising only slightly above the target set by the Federal Reserve.
Now Spain meets the technical definition of recession, it is not a surprise.
Gold futures are at $1650, silver futures are at $31.20, and oil futures are $104.22.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are down 9 points.
PIZZA NEWS HIGHLIGHTS WAYS TO MAKE DOUGH
May 3, 2012
Earnings news from two pizza chains vividly shows how to consistently make money in the stock market.
Papa John’s International Inc. (PZZA) +2.24%reported earnings and shares spiked about 20%. Domino’s Pizza Inc. (DPZ) +0.06%reported earnings and shares promptly fell about 9%.
Metrics
The two companies are similar. Both companies trade at a PE of about 21. Sales of both companies are growing at about 6.1%. Domino’s net margin is 5.4% compared to 5% of Papa John’s. Revenue of Domino’s is $384.6 million compared to Papa John’s $331.3 million.
Earnings
Papa John’s reported earnings of 69 cents a share compared to consensus of 55 cents. Domino’s adjusted earnings were 47 cents a share compared to consensus of 49 cents.
Strategies that lost money
Trend following technical strategies lost money.
Momentum strategies lost money.
Strategies that linearly extrapolate EPS growth lost money.
Strategies that made money
Strategies based on using sentiment as a contrary indicator made money. Going into earnings, the sentiment on Domino’s was extremely positive. As a contrary indicator this was flashing a red signal.
On the other hand, going into the earnings sentiment was negative on Papa John’s. This is the reason for an oversize reaction on the upside to the earnings surprise.
The old-fashioned tape reading strategies were successful. Of course, the tape reading strategies of yesterday have now been replaced by computer algorithms.
At The Arora Report we slice and dice every tick to figure out what smart money is doing…Read more at MarketWatch
TAKE PARTIAL PROFITS ON GOLD (GLD)
May 3, 2012
This post was recently published on ZYX Short Sell Change Alert.
Taking partial profits on gold (GLD) right here at $158.58.
ADDING TO GOLD (GLD)
May 1, 2012
This post was recently published on ZYX Short Sell Change Alert.
Adding a 5% tranche to the short position on GLD right here at $161.40.
