Sunday, August 31, 2008

TRACKING GUSTAV

Are you ready for $5.00 a gallon gasoline? If Gustav stays on its current path and hits as a Cat 3 or higher, we are going to see $5 gas. This could be terrible for the markets on Tuesday. Did the markets take this storm lightly on Friday or were they factoring it in? That is the question that I will try to answer as the storm approaches the coastline. I don't think we factored it in fully. If we did, that tells me that nat gas would have declined much more sharply had the storm not been approaching with its anticipated stregth.

We will post updates throughout the weekend.

Thursday, August 28, 2008

Are The Bulls Really Back?

I don't know that I really believe in this rally, but I have found a stock that I really like. I saw SWS Group break out today, so I took a deeper look. I like this stock from both the technical and fundamental perspectives. These guys have been in the most downtrodden industry and have had the guts to take advantage of the downturn and make quality acquisitions. They earned 31 cents per share in the quarter, as compared to 25 cents in the year ago quarter. To post that growth in this environment is a real accomplishment. They sold off some of their non-core lines earlier in the year and are adding to their core business. This transition by all accounts appears to be going very well. As the financial sector recovers (I am not by any means trying to call a bottom in the sector) and it will recover a some point---this one should outperform. Now as for the overall rally, I am not bought in and think we will head downward again. My plan is to buy half of my position in SWS now and more as it pulls back. I like the chart and the management.

Natural Gas literally got hammered today and I must admit that I was wrong. I did not see any way that nat gas would go down with the hurricane threat in the Gulf. I am not sure what happens tomorrow, but I will be looking at XTO if it pulls back more. For those of you that asked me during the day if there was a bottom to nat gas---remember this---As natural gas declines, it becomes even more practical for Boone Pickens plan to fuel our automobiles. With alternative energy at the forefront of the political scene during this election year, I think we could see some real government money to flow into creating the infrastructure necessary to fuel our autos with nat gas. So as for nat gas, I don't know where the exact bottom is, but there can and most likely will be more uses for it---so that will provide growth in demand.

One stock that has not participated in the recent rally is Potash (POT). You will need guts and excess capital to short this one, but it could be rewarding. I have thought for quite some time that the fundamental story in the fertilizers is still intact, but you can't fight the market. While this stock has been a "darling" for the past couple of years---the market seem to have moved it to the doghouse for now. I don't have a position in this one, but if I do short it, I will use my stops and let the market take me out if I am wrong.

Dell got slammed after hours. Most of you know that I have been a fan of tech lately. The Dell report did not bother me as much as it bothered the traders in the after hours. I don't intend to buy Dell here, but I think Seagate STX has been unfairly punished as of late. In full disclosure, I own shares of STX and may look to buy more at these levels. I think they are finally going to see some benefit for the Maxtor acquistion. When the deal was first announced, it seemed as though the Street loved the deal. As of late, the Street has punished this stock for its results. I think this one could double over the next year. I am not backing away from my belief that tech will outperform in the coming months. IBM is another stock that could really take off. I would not be surprised to see IBM hit $145 by the end of the year.

I have said that I HOPE we will go up after Labor Day, but I DOUBT it. I think we need to see how this election is shaping up before we can move substantially higher. WE NEED TO LOWER CORPORATE TAXES TO FUEL GROWTH!!!!

Wednesday, August 27, 2008

Three Day Weekend---With A Hurricane??

I was glad to see the market rally today, but I must admit that I was a little surprised with Hurricane Gustave threatening to hit the Gulf hard. We get GDP and initial jobless claim numbers tomorrow morning. I will see how the market reacts to the numbers, but my underlying theme for the next couple of days will be to watch oil and natural gas prices. I don't see many traders wanting to go into a long weekend short oil and nat gas, especially with the potential hurricane.

Every night I make a list of stocks that I like as longs and those that I like as shorts. I have been watching Buffalo Wild Wings and think given where the economy currently stands, this one might be a good short-term short. I agree that this might be the best quarter of the year for the company with football season just around the corner, but I think as the economy slows we will see pain in the restaurant area. We saw Sanderson Farms and others post losses due to higher costs. They ultimately must pass cost increases on to their customers and the rising costs will ultimately land on the bottom line of companies like BWLD.

I would put Chipolte Mexican Grill CMG in the same category. I think these companies are going to get pressure from both the revenue and expense areas for the rest of this year. I will have a longer post later. Wednesday is my travel day, so I usually have shorter posts on Wednesdays. Please make comments---Lets have some healthly debate that makes us all better traders!!!!

Tuesday, August 26, 2008

Hurry Up Labor Day

I will be so glad to get to Labor Day and get some volume back in these markets. I think that we can see that Europe is in trouble and the Euro is headed downward. The only downside to shorting the FXE is that you have to pay about 4% yield to the owner of the security. The Euro Zone is in more trouble than we are and their currency is headed for trouble. I believe that owning the companies that do well abroad is going to be much less beneficial in for the next few months. I think you are going to see money rolling out of those trades based on the strengthening dollar.

I am basically just sitting still and trying to make quick trades when they become available. I would hope that we might see some bullishness after labor day, but we have a lot of data to digest. I still think the oil trade a fundamentally bullish story---as evidenced by the fact that oil held its own today in the face of the stronger dollar. Natural gas got a much anticipated snap back---I'll be interested to see if it can follow through tomorrow.

I don't think you are going to see the Democrats get a big bump in the polls out of their convention. Hillary Clinton certainly did not give a very convincing endorsement of Barack Obama tonight and I stand by my assessment that the markets will react positively it McCain pulls ahead in the polls.

For those of you that read my analysis of AOC a couple of nights ago, Moods reaffirmed their ratings today, and I think this one will be a winner. We are working on the analysis of several stocks and will have opinions shortly. Thanks for visiting our site!!!!!

One of my favorite ways to generate new ideas is to hear what others are thinking. Feel free to use the comment section to make comments/ask questions.

Monday, August 25, 2008

A SEA OF RED

Today was simply a miserable day on the street. Stocks were down across the board, thankfully on low volume. Fannie and Freddie were both up today on positive comments out of Citi. How stupid must one be to think that these things are not going to zero. I sit here writing this article and watching Ted Kennedy speak at the DNC. I think that if the Dems win we are most certainly headed down down down. The Fed has been running their printing presses at full speed and now the Democrats are going to have to tax and spend to afford everything they are promising. It is absolutely the wrong time and I think you are going to see the market telling you that as the election nears.

Now I believe that oil is going to settle in a range between $100 to $120. So the question becomes "What Companies Will The Market Value in This Range?" I think the answer is with RIG, NOV, CHK, XTO and many others. Yes we have seen multiple expansion in these names over the last year and some contraction as oil has dropped from $147. I think you will see cooler heads prevail when the summer vacation is over. I think you can pick your spots in these stocks in the coming days and possibly get some good buys. If we start to hear the political message that we may open drilling in ANWR and the OCS, then you will see oil fall. When the dust settles, it will be the drillers that benefit, even if they are initially taken down with the price of oil.

I watched Fast Money tonight and most of the traders were much higher on Morgan Stanley than they were on Goldman Sachs. I won't tread in that space at this juncture. No doubt there is volatility and money to be made on short term trades in the space---but it will be hard earned money in my upinion. I did buy shares of EMCOR Group today at $32.95. I like both the fundamentals on this one. I am running a tight stop because of the overall market conditions. I will stop out of this one at $31.40. I would hope to see the market head higher tomorrow, but we need a catalyst and I just don't see one.

Fundamentally, I think you should be looking for stocks with no debt. For my short term trades I am making no debt a HUGE consideration. The credit markets are dreadfully tight and any debt renewals that havae to be done in the next six months are going to be costly. This is the most interesting time I have ever seen in my trading life. The Fed is printing money and the cost of debt is going to hurt many companies earnings this year. My biggest concern is wage inflation. I know many working Moms that have decided that when you combine the cost of child care with the cost of gasoline to get to work, it is cheaper to stay home. This may sound silly, but some people are going to stay home and we are going to see wage inflation. When it hits we could easily see Dow 10,000. Hear our interview with Peter Schiff from a couple of months ago. He says the American Consumer is Done!!!!


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Sunday, August 24, 2008

Last week of "Summer" Trading

Well this is the last week before all of the traders return from their summer homes and try to make sense out of this somewhat insane market. I have been doing a lot of reading and many people are confused because their highly touted correlations are confusing them. For example, inflation readings are at multi-year highs and the "gold" long trade has been anything but a sure winner. The fact is that markets are always changing and these so-called "sure-fire" correlations are not guarantees. If they were, we could all have a simple formula to retire. I personally believe that the "yellow metal" as the inflation hedge days are gone and the days of OIL as the best inflation hedge are here!! Think about it---gold has much less practical use than oil. Gold was a great inflation hedge and you could expect it to move inversely to the U.S. Dollar. What commodity has been moved the most based on the direction of the dollar over the past 6 months? OIL!!

Yes I am an oil bull over the long term, but I do think you can make money with some good stocks in sectors other than energy right here. Now those of you that have been reading my blog for a while may accuse me of being drunk when I type out this next pick, but I assure you that I am not! I like AON Corporation (AOC) and what they have done in acquiring the British reinsurer Benfield Group. I am going to watch and see what is announced on this stock Monday before I buy shares though. Standard and Poors could well reduce its debt rating on AOC because they are paying cash for Benfield and are also assuming some debt. I will tell you that I think this enhances their competitive advantage and I think it was a great time for this buyout. I think this stock heads to $55, but again I will be cautious until I see what damage S&P might do.

One stock that I have on my radar screen for a "short" trade is Almost Family (AFAM). Now this is a good company and I am basing this trade on the simple fact that this stock seems ahead of itself. It broke out and is in a sector that is seeing a lot of buying at present. The recent action is in my opinion, a classic example of the momentum driving a stock faster than the fundamentals should support. Now I will look for it to show some weakness to make sure that I am not fighting the momentum. I don't mind missing a little of the move to increase the probability that I am on the right side of the trade.

Back to energy, most of the action we have seen has been based on the action of the dollar---at least according to the mainstream media. I think Bernanke's comments that inflation will moderate with the price of oil is a desperation move in my opinion. First, Ben has said many times in the past they he is concerned with core inflation. Now he seems to be banking on relief from the headline inflation number---and I heard one Fed Governor today talk about how much that would help with consumer confidence. It seems like all of these guys have gotten their stories stratight before making public statements. I agree that if energy prices come down, it will help the economy and most certainly consumer confidence, but our real problem is inflation caused by our monetary policy---the Feds prinitng presses have been running at full-speed far too long. Inflation is a monetary problem and will have to be contained by monetary policy.

I still think that oil goes up in the long term. Stay tuned!!!!

Saturday, August 23, 2008

Russia/Georgia and that SILVER TONGUED DEVIL---BEN BERNANKE

Was Russia's so called pullout of Georgia on a headfake? See this article and make up your own mind (well this blogger will not allow me to insert the link but go to yahoo news and search Russia Georgia Port City) and you will see the article.

They are not done in Georgia and it will absolutely impact oil prices. I will have much more later. We are working to produce a show this weekend.

If anyone believed what Bernanke had to say yesterday then they are totally asleep at the wheel. Why would you think that Bernanke would say anything other than inflation is moderating? If he stoked those fears he would be in a much more difficult situation than he already is. Inflation is real and everyone knows that once it is ignited it is very, very difficult to extinguish.

More later!!!

Thursday, August 21, 2008

THE CONSUMER, SYSTEMIC RISK, AND THE DOLLAR

If you really want to know what is going on with Russia, they are waging war on the U.S. economy by their occupation of Georgia. The Russians know that their actions are going to cause the price of oil to rise. They aren't going to pull their troops out of Georgia tomorrow. They are going to continue to drive the price of oil up and they have a better chance tomorrow because no one wants to be short oil over the weekend with the geopolitical risk. The Russians know that they can stay put and drive the price of oil up and the dollar down. While the weaker dollar has definitely been good for exports, we must have a stronger dollar so foreign investors will feel confident enough to BUY OUR DEBT. We must have a place to finance our debt and the Russians now know that they have a chance to really hurt us economically. I still think that the safest place right now is oil and gold.

I heard a couple of the mainstream media talking heads today saying that if you just pull out the financials, earnings are great. What hocus pocus. If you have been watching our show, you have heard economist John Williams say that we have not yet felt the monetary inflation. You have also heard many of our guest talk about how the consumer is hurting. As the consumer's plight gets worse, SO ARE EARNINGS. I can't see how anyone can say that the consumer's outlook is anything but worse in comparison to last quarter. We had several retailers report after the bell today and I didn't hear one report that had a really positive outlook in the short term.

We have HUGE systemic risk right now and I don't think anyone really understands how bad it really is. Ask youself this quesion "What happens if the government has to step in and backstop Fannie or Freddie----or both?" Suppose they backstop one of them and we see another Bear Stearns---Do they let the next troubled investment bank fail or do they put taxpayer money up to finance it? At what point do we say that the government can't do anymore? Or do we find that they can't do anymore after they have put up the funds and then we can't sell government debt? I believe that it is a real possibility. I made a comment on another blog about gold being ready to turn when it was below $800 and got some hate mail over the comment.

Most of you know that I have a ton of respect for Charles Payne (who will be back on our show in the coming weeks) and I heard Charles call Aluminum Corp of China (ACH) this morning on his Fox show. I have taken a look at the stock and think that Charles in on to something here. This one has faced some headwinds with the Chinese market getting hammered as of late, but it offers some growth potential.

For those of you that heard my radio interview last week, I did promise to provide some additional information on my Chesapeake (CHK) call. CHK is a major player in the Haynesville Shale find, touted to be one of the largest national gas finds in history. If the Haynesville shale plays out like many of the experts think, CHK is going to be a HUGE WINNER. The stock had gotten to over $70 and has come down dramatically based on couple of major factors. First, the price of natural gas has come down from $13 per million cubic foot to about $8. Next, the company held a secondary offering to raise funds. They did this to finance the leases that they have been signing in the Haynesville Shale area. In my opinion, the secondary offering was a great strategy. They bride the gap between the time of leasing to the time of production with perhaps a lesser share price, but with SUBSTANTIALLY LESS DEBT than they would have had if they had financed all of the lease payments. Obviously, the shale needs to be a huge success for this strategy to pay off. From early indications it is going to be, as the first wells have had monster production. I still like CHK.

So how do you play a Friday? I am going to play energy and forget about everything else unless Russia surprises me and withdraws from Georgia during the night tonight. Our visits are growing, and we are committed to bringing you a great site with more great interviews. Tell your friends. The more visits we get, the more interviews we be able to produce!!!!!!

Wednesday, August 20, 2008

SOLAR HEAT

We are seeing volatility with a positive bias in the solar names. We also had a very good day in the energy names. I traded XTO energy today and that stock was very strong. I like the commpany and think that they are headed into the $60's.
I am still an energy bull and you know how I like to play it---RIG,DO,NOV,CHK, and now XTO. I think the situation with Russia is really going to impact the price of oil in the coming days.

I am so tired of hearing about Fannie and Freddie. They just need to pack it in because I don't see any way that these stocks are going to be left with any value. If I had to buy some stocks in the financial space, I would take a look at Northern Trust (NTRS) and Schwab (SCHW). Now my friend Ryan Krueger was the one that mentioned these stocks on the show a couple of weeks ago. I have been following both since my conversation with Ryan and I like how these have been trading. I am following Goldman Sachs with great interest. I think you will see strong support right above $150, but if it breaks that support it could go to $135. I would look to be a buyer in the $135 area.

I have had several emails from people telling me that I keep beating the same drum with the energy play. I don't disagree, but that is the safest play that I see given the current economic environment. If there is anyone out there that can make a decent case for economic recovery by the first quarter of 09, please make a comment and give me your side of the story. I would love to hear it. As a country, we are overleveraged and this is going to take some time to unwind. Every time that I go to the grocery store, I pay more for the basic items such as milk and bread. This is going to take its toll on the consumer!!!!!!

McCain took his first lead in the polls today and I think that (if it continues) will be good for the markets. The last thing that we need now is higher corporate taxes and an increase in the capital gains tax. I think that the pharmaceutical industry has been held back due to election anxiety. One stock that I think is particularly undervalued is Sanofi (SNY). They pay a decent dividend and have the kind of things in the pipeline that I really like, namely VACCINES. If you look at their pipeline, you will see that they are as well positioned as any company in the industry. The stock has been trading around $35 and I think a post election pop could propel this one to $42-45 by the end of the year. This is a very well run company that is going to serve the baby boomers very well.


I will have much more tomorrow---I have been travelling today. We hope to announce our new interview lineup this weekend.

Tuesday, August 19, 2008

FLY TO QUALITY-------BUT WHERE?

How many times in this type of turbulent market have you heard the term "FLIGHT TO QUALITY'? I have heard it over and over. Where do you find quality these days? We got "hot" PPI numbers today and while gold did go up about 2%, we did hear some analyst today put a $600 price target on gold. He cited speculators being forced out of the market as a reason for his prediction. I submit that oil will become the new gold. Now I know that gold went up more than oil today on a percentage basis. My prediction is that in the coming months "Flight to Quality" will become synonymous with "Flight to Energy".

Now lets examine where the markets go from here. I usually hunt for quality stocks to buy. Right now I am hunting for stocks to short. I don't see a catalyst to drive these markets higher. The only real catalyst would be a significant decline in the price of oil, which I don't think you will see.

The first stock that I think is a decent short is Life Time Fitness (LTM). Now this is not a sexy pick and you aren't going to see stellar returns in one day on this one, but I think this one heads lower over time. If I had a gym membership, it would be one of the first things to go as the household budget gets tighter. The stock is trading at $33.40 and I think it could well see a new low around $25. Again, those of you that read my blog on a daily basis you know that I think the worst is yet to come for the consumer. Many analyst like this stock and many others say that it is a perfect way to play the obestity trend. I think shorting it is a good way to play the consumer's thinning wallet.

While I don't usually like to short stocks trading under $30 per share, I will make an exception for Carmax (KMX). Many analyst have really liked this stock because of their ability to generate cash flow. While they have done well in the past, I am concerned about how they will fare in the declining economy. One aspect of their business is FINANCING. I looked at their financials and saw increasing notes due in the short term. If the consumer gets hammered, this company could get caught with increased inventory and declining cash. Not exactly what I am looking for in a stock. Again, I have nothing against the way this company has been run in the past, I just think they are going to get hurt by the economy. They closed today at $14.95 so a run down to $11 would give you a nice percentage gain.

I heard one trader make a very interesting comment today. He speculated that the run up in the price of oil was short covering ahead of tomorrows inventory numbers, as we have seen a "pop" the last three weeks after the crude inventories were reported. It will be interesting to see how crude fares into the close tomorrow. I think we are beginning to see price stablization at these levels.

I saw another "talking head" on Cavuto saying that he sees oil at $30 a barrel in two years. I am going to send an email to the major networks with some outrageous comment and see if I can get on TV. Don't listen to these radical calls. You need to be listening to what is really happening in our economy. Fed Funds rates are low, but the cost of capital is rising. YOU HEARD ME--THE COST OF CAPITAL IS RISING. Companies are being forced to pay higher interest rates. This is going to be bad for our economy. I can see the DOW sitting at 10,000 if we don't get some stability in a hurry in the credit markets.

If I have to be bullish on any sector, it would be technology. Cisco has beaten the street this quarter and after hours Hewlett Packard (HPQ) beat the street. I also like IBM. I am not ready to buy either of these just yet. I want to see the overall market strengthen before I commit capital to any new longs. I do think that tech rebounds first---but we have to see a real rebound, not just bear market rally.

We have many great interviews scheduled, so keep checking back. If you have a guest that you would like to hear----make a comment and we will try to line up the interview. Or email us webmaster@stockshotz.tv

If you like our site---tell your friends. If you don't send us an email and let us know what you are thinking!!!!!

Monday, August 18, 2008

TECH TICKER CHALLENGE

I am issuing a challenge to Tech Ticker and Henry Blodgett. See their video below and how their guest not only tried to call the bottom of tech---HE CLAIMS THAT HE KNOWS THE EXACT MINUTE. Why do they show that utter crap on yahoo. My challenge is that over the next 30 days if the price of oil goes up on a percentage basis higher than his financials---specifically the XLF, then he has to PUT STOCK SHOTZ VIDEOS ON TECH TICKER FOR ONE MONTH. If he wins, I will appear on Tech Ticker and APOLOGIZE!!!!!! See our interview with Jim Rogers from May. Cut and Paste this link and watch the ridiculous interview from Tech Ticker

http://quote.yahoo.com/tech-ticker/article/48212/Financial-Stocks-Have-Bottomed-Meredith-Whitney-Wrong?tickers=ubs,bac,jpm,gs,wb,c,leh


Here is our interview with MR JIM ROGERS From May. You will hear as Mr. Rogers talks about the dire straits of our economy.

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Let me tell you why I am really concerned. Lets think about what is happening in the retail sector. If you heard our interview with Hitha Prabhakar, you know that she was very unimpressed by the last retail numbers as she did not think they had been adjusted for inflation. I concur with her analysis. Further, we see that Wal Mart and McDonalds have seen sales growth. Now before you think I am totally crazy, follow this mindset. Wal Mart and McDonalds stand to do well as the economy declines. Where some were buying their Starbucks coffee for $4 a cup---they are now getting coffee at McDonalds for half of that because they have less money in the budget. The same goes for Wal Mart. Instead of going to the higher end retailers---people are shopping at Wal Mart to stretch their dollars. This is a strong sign to me that the AMERICAN CONSUMER IS REALLY FEELING THE PINCH. As I said in an earlier post, the last numbers were not real as we were seeing the stimulus checks being spent.

I read an article tonight that was talking about how banks are having to pay higher interest to sell their notes. What does this mean? They are going to reign in some of these loose credit card limits---thus contracting credit. The Fed Funds rate may be low, but if banks can't find cheap ways to sell their paper----CREDIT WILL TIGHTEN. Yes, I am saying that regardless of what Ben Bernanke has done with the lowering of rates, the free markets are CAUSING CREDITS TO CONTRACT. So now we are faced with a real problem. The consumer is not making seeing his paycheck keep pace with inflation, and the bank is tightening his credit limits. The consumer accounts for 70% of our economy. I think that we could see some really unusual trading over the next couple of weeks. BE CAREFUL AND STAY TUNED

MAKE COMMENTS ON TECH TICKER AND TELL THEM TO TAKE THE STOCK SHOTZ CHALLENGE!!!!

Saturday, August 16, 2008

A New Cold War???

With the recent Russian offensive against Georgia, we are hearing about a potential new Cold War and I think that is exactly where we are headed. Everyone knows that Putin is still in control in Russia and his popularity comes from Russia's economic growth under during his tenure.

I believe that the difference between this oil price crisis and the oil crisis of the 1970's is that we have realized that we must do something about our dependence on foreign oil, even if prices decline rapidly in the short-term. We should and probably will open up domestic drilling like never before. I get so sick of hearing people like Alan Colmes sit in their network seats and tell people that increased drilling in the United States will not impact prices. That is utter BS. If we announced that we were going to open up ANWR on Monday, it would have an immediate impact on the price of crude. If you believe anything else, then you have not been watching markets for very long!!! The price argument aside, why would we buy oil abroad and transfer wealth to our enemies when we can drill on government land and increase governement revenues? WE NEED TO DRILL AT HOME!!!!!!!

For those of you that have emailed me questions about my RIG pick, I still like the stock and would use a $119 stop. I have said that I believe that this company can make good profits with oil anywhere north of $80 per barrel. Now throw my price target out and ask yourself this question "Given all of the events in the oil markets in the past 24 months, do you think we are going to drill less in the next 36 months? No way---so as long as we are drilling demand for the services of companies such as RIG and NOV are going to be very good. Further ask yourself the question "Is a potential cold war renewal going to reduce oil prices given the amount of oil and natural gas that Russia controls?" AGAIN THE ANSWER IS A RESOUNDING "NO".
Finally, ask yourself the question, is global demand going away? AGAIN "NO"!!
Volatility in the oil markets is guaranteed and money management will be job 1, but if you pick your points and focus properly, you should be able to make some good money in these stocks.

I was interviewed on "The Friday Market Monitor" yesterday and was asked what my general sense was on where the markets are headed. My comment was that I am basically in neutral mode. I think we are still in a bear market, but I think if McCain begins to gain in the polls we could see some pockets of strength. I don't think the markets are going to look favorably on Obama's plan to increase taxes on corporations, especially given where our economy is at the time!!

I am looking at several companies, including some that are good short candidates. I will have updates throughout the weekend.

Thursday, August 14, 2008

I'd Like Some Salt With That Shoe

Did I ever put my foot in my mouth with my energy call last night. I WAS WRONG!!! At any rate, I saw what was unfolding this morning and made a nice trade in HUBG. As the market improves and oil prices decline, I like the transports. My Applied Materials call went nowhere, but I think that the story is still a good one.

I will usually have longer posts, but tonight I am preparing for my first live radio show tomorrow.

We had a great interview this morning with Carley Garner. She has a great handle on the markets and I learn something each time I speak with her. Please visit her website at www.decarleytrading.com



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Wednesday, August 13, 2008

Wednesday August 13, 2008

For those that sent me emails knocking my energy and gold plays, I will wait a day or so before I say "I told you so". I want to see a follow through on my plays tomorrow, but I feel like we are going to get it. Volatility will most certainly continue, but I think we trend higher.

I have owned Applied Materials (AMAT) for a long time---too long, but now it looks like this one may finally make me some money. I like the stock right here. The "talking heads" are really touting AMAT's exposure to the solar industry. Some say that by 2010, solar will account for 25% of their sales. Many of the highest flyers in the solar space right now are not even profitable. AMAT already has a solid business that looks like it is turning around, so if you throw in prospects for stellar growth from solar, I think you could see this one double in a couple of years. This stock was once a high flier and could be again if this recent attention continues.

As promised, I am posting the interview with Trader/Coach Denise Shull of http://www.traderpsyches.com/ I apologize for the quality of this recording. This is not the typical quality audio that we produce. This was recorded about 60 days ago and we have since upgraded both our recording setup and our software. At any rate, I felt that it was appropriate to post this interview during this time of VOLATILITY. If you like our site--visit our sponsors. If you don't send us an email webmaster@stockshotz.tv and tell us what improvements you would like to see us make.



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Tuesday, August 12, 2008

Fashion Of The Day

Well you have heard me say that I thought we had more pain for the financials and we got it today. Today was the day to downgrade Goldman Sachs GS if you were a high profile analyst. When they hit the best of breeds -- Goldman and JP Morgan JPM it makes things tough for the bulls. I wouldn't go near the financials right now. I think this round of pain will last for quite some time.

When I look at the overall economy, I see some things that I like. Commodities prices are coming down rapidly and this will most certainly help margins as we go forward. The thing that concerns me is the fact that this market won't even let you be successful buying quality. Last night Flour blew away both earnings estimates and revenue estimates---oh and they also set a record for backlogs. They were trading over $80 in the after-hours and I was feeling like I was smarter than the average trader. In the premarket this morning they were over $80 again and it looked like a new all-time high would just be a few weeks away. And then---the regular session opened and after a brief visit over $80 the street started selling it like there was no tomorrow. The stock traded down intraday to just over $67 and I was in shock. I was stopped out at $71.75. Why do I tell this story? It is certainly not because I want to re-live this trade for one second. It is simply to say that I am not sure that you can even buy quality in this market. An announcement that FLR got another $3+billion dollar project didn't seem to help. I will probably be sick that I sold the stock, but I had to follow my money management principles. I went to mostly cash today and just plan to see what opportunities present themselves in the next few days.

One of my trader friends and I have had differing views on oil and natural gas for the past 15 months. He was gloating today and giving me his plans to make money as oil goes under $100. My argument is that we should find STRONG SUPPORT BEFORE we drop BELOW $100. What is the trade if my theory holds? National Oilwell Varco NOV is one that I have been watching. I think you can buy it hear and stop out if it closes below $66.30. If oil finds support, this one could take you into the mid-seventies in a couple of days.

I also think you can look for Transocean (RIG) with a stop on a close below $119 to be a decent play.

I don't buy into the "Dollar Will Never Go Lower" theory that most of the talking heads on televisions are pitching. Now I have heard Guy Adami say that gold goes up the steps and goes down the elevator. I think that gold may find some stability at $800 and if it does Freeport McMoran (FCX) should be a good play. I like FCX's chances to hit $98.

How would you like to be Ben Bernanke? I wouldn't. I love to be critical, but he is going to find himself in a tough spot if the inflation reading is lower over the next 60 days. We have had several guests on the show that have argued that we are going to see rampant monetary inflation. I don't disagree with them, but I think we are seeing a slight delay because the domestic banks are causing a slowdown because they are so reluctant to loan money. The short version is that the consumer is hampered from accessing the dollars that the Fed has been printing---but this is a temporary phenomenan. If Bernanke lowers (which is out of the question) or stays put (which is likely) he will be criticized when the inflation reading begins to heat up. If he tightens, he will be criticized as well because we are in a real slowdown. What is a Fed Chairman to do? I would start putting real pressure on the Chinese to tighten further. Chinese inflation was very high and if we need their participation to slow global growth.

Here is a thought---Lets DRILL AT HOME. It will create jobs for Americans, keep wealth at home and despite what some of the TALKING HEAD JACKASSES SAY----IT WILL LOWER OIL PRICES. I am so sick of the morons in the media saying it would take 10 years to get it out of the ground. The mere announcement of the lifting of domestic drilling bans will send oil and gas prices DOWN.

STAY TUNED---WE WILL POST AN INTERVIEW TOMORROW!!

Monday, August 11, 2008

SOFT LANDING???

Do you believe that we have the worst behind us and everything is going to be smooth from this point forward? I DON'T. I know that traders are excited over the drop in oil and the much needed strengthening of the dollar. I just think that we are over reacting at this point. A good case in point was Fluor's (FLR) earnings report today after the bell. They showed excellent growth and were trading up about $5 in the after-hours session. This stock had been unfairly punished while oil was falling. Yes, FLR did break records with their oil and gas segment, but as I have said before, they are going to continue to see robust demand with oil prices anywhere above $80. In full disclosure, I own shares of FLR.

Just a short month ago, the question on every traders mind was "HOW HIGH CAN OIL GO?" now all of the talking heads on television are asking how LOW it can go. I am not fighting the selling, but I do believe that it is going to get overdone and there will be another time to buy the energy sector and make good money. I mentioned in my post yesterday that I was looking for stocks that had been unfairly punished and Transocean (RIG) was high on my list. I must say that I almost pulled the trigger on this one a couple of times today. I think we are getting close to a good point, but patience and discipline are paramount at this stage in the game. Knowing when NOT to trade saved me money today. At any rate, RIG is still on my radar screen.

Now as for why I don't think it is smooth sailing from here. First of all, we still have oil prices are still above $115. If I had asked anyone 24 months ago what would happen if we had an extended run of oil prices above $115, I don't think anyone would have told me that we would be ready to move up significantly. Second, we have not really had a decent reading on the consumer over the last couple of months. The results we have seen have been tainted by the "stimulus" checks. We need only point to mammoth Wal Mart (WMT) to see the struggles ahead the retailers. I was totally shocked that at their recent revenue numbers. I expected Wal Mart to benefit greatly from the stimulus checks, but we just didn't see it. I think that when we see retail sales for the Christmas season of this year, we are going be sadly dissappointed.

I have talked to several traders that disagree with my view. They argue that the markets have already digested most of the bad news in the financials and these traders are quick to point out that we are not seeing $10 spikes in the price of oil at the mere mention of a adverse geopolitical event. They also argue that the cause of the latest decline in the price of oil due to demand destruction at home and abroad. I agree that we have SOME demand destruction, but I don't see that causing the sudden drop in the price of crude. If you believe that when the U.S sneezed, the rest of the world catches a cold---then you don't believe that demand destruction will last very long do you? I believe that the global growth story is still intact, even though it may have hit a bump in the upward road.

Given my thoughts on the global groth story, I am watching Freeport McMoran (FCX) for the same reasons I am watching RIG. I think this one has been overblown to the downside based on falling copper and gold prices. I think this one could give you a quick return if you wait for this rotation out the sector to slow.

I am urging CAUTION at this point. Now I did buy some September QQQQ calls today, just in case this rally catches more legs. I like the technology names as a whole and think they will outperform the DOW. I used the options to limit my downside risk.

USE YOUR MONEY MANAGEMENT PRINCIPLES IN THIS MARKET. DON'T ENTER UNLESS YOU HAVE AN EXIT STRATEGY. MONEY MANGEMENT IS THE NAME OF THE GAME IN THESE TIMES OF VOLATILITY.

Sunday, August 10, 2008

The Week Ahead

I sat and listened as the TALKING HEADS in the mainstream media called the bottom this weekend. As much as I would like to believe that we are at the bottom, I just can't. Lehman is still looking to sell assets and oil (while it has rapidly declined) is still over $110 per barrel. I don't think that we have had a real reading of the consumer as the last couple of months have most certainly been distorted by the goverment stimulus checks.

And there is that I-word worry. Inflation is almost a given based on the printing presses at the Fed running at full-speed over the past few months. Now while a lot of talking heads will disagree with me, I do believe that over the short run we have seen much wealth evaporate---BEAR STEARNS SHARELHOLDERS come to mind. I do believe that will slow inflation, but only for a short period of time.

I will admit that when oil prices first started to pull back, I didn't think that it would cause a major rotation out of the drillers and service companies. I WAS WRONG. I am still watching some of the better companies in the space. Transocean (RIG) is one that I really have my eye on. Now I have learned not to fight the market, but RIG will make good money with oil at much lower prices than we have right now. We will see more volatility in this one and being early is equivalent to being wrong, so I won't get over anxious---but I am looking for a decent entry point on this one.

We will release at least 2 shows this week. Trader/Coach Denise Shull of traderpsyches.com is first up this week. She talks about the great assest of DISCIPLINE. I really enjoyed my visit with Denise and this topic is something that every trader should hear. We will have trader Carley Garner on the show later in the week. Carley has great insight and is a great resource!!!

Thursday, August 7, 2008

Tuesday, August 5, 2008

FED LEAVES RATES UNCHANGED---WAS THE MARKET REALLY SURPRISED??

By the action of the market today, you would have thought that it was a great surprise that the FED was going to leave rates unchanged. I can't buy into this rally. I will say that the declining price of oil has been much needed for the market, but my common sense approach tells me that we are still at almost $120 per barrel. Given that we are still at huge year-over-year percentage increases in the price of oil, I just don't think that the declines should be driving us back into a bull market. Just as I have said that the drillers RIG, DO, etc will make huge money with oil North of $80, I believe that oil over $115 for a sustained period will hamper margins and adversely impact the consumer.

For those of you that have listened to my recent interviews, you know that I have been focusing on not only the decline in oil prices, but the recent (and violent I might add) roll-over in the agricultrical sector. Potash POT got hammered again today. I have been trying to analyze why the market is reacting so negatively to NOV, POT, FLR, and CMP here lately. Now I understand that these stocks are levered to the commodities plays, but it has been interesting to watch the market punish them not for their earnings, but simply for their multiples. This is simply a case of multiple contraction based on the broader outlook. This pendulum is almost certain to swing too far, but being patient is tough. I got stopped out of my original trade in NOV yesterday and am close to my stop in FLR. I think there will be a point in the next few days where these stocks may provide us an entry, or reentry in my case, point but it could be substantially lower.

Many have written and asked me if I am still a believer in CHK. The short answer is yes. I think they may have more on the downside, but I am a believer in the natural gas play and you have to like CHK in that space.

I am hearing many in the mainstream media talk about how the rally in the financials is going to lead us out of this bear market. If you listen to them they make a compelling case, but I remind you that these were the same folks who were quantifying the sub-prime problem and saying that it really couldn't hurt many companies by more than 15-20%. YEA RIGHT. Tell that to the BEAR STEARNS SHAREHOLDERS. At any rate, I don't think we are going to see a return to a bull market until we can go a quarter with average oil prices below $115 per barrel. I think that some financials have some more pain to share with us so I won't be buying the financials right now.

Our interview with FINANCIAL ARMAGEDDON AUTHOR MICHAEL PANZNER WILL BE POSTED ON THURSDAY.

Monday, August 4, 2008

Ryan Krueger Interview August 1, 2008

Hear as on of the best in the business today talks oil, natural gas, financials and more...


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Sunday, August 3, 2008

July 25, 2008 Interview with Price Headley of BIGTRENDS.COM

Please visit our website at http://www.stockshotz.tv/


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Listen as 2007 Trader Hall of Fame Inductee and Founder of BIGTRENDS.COM, Price Headley discusses the recent market activity. Is the uptrend in oil over?

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