Trucharts.com Blog week ending 01/09/2015 - HELE, TWTR, SCO, USO
What a volatile first trading week of the year. We were negative for the year and then after the huge move up with the VIX above 20 - traders came in drove the market up over 500 points. And then on Friday we had the consolidating pull back. Even stocks like MU which guided lower revenue forecast to the analyst estimates for Q1 rallied after falling sharply. There was expectation that EU zone will unleash a QE and with nterest rates going negative in some of the EU countries - the markets rallied. In addition, we still have the Russian ruble crisis and the oil drop is definitely hurting the Russian economy, and the Venezuelan economy. The talking voices and experts on TV keep telling us that the drop in oil is due to lower demand and supply glut - I call that complete BS. This drop in oil is a politically driven - there is no way oil can drop 50% unless economies around the world are crashing - it is like saying 50% of the cars and oil consumers around the world suddenly stopped driving and the oil supply jumped by 100% - does this this sound reasonable at all. I believe oil will stabilize around 45 and move up to 70 from this very oversold rally - keep an eye on SCO the oil short ETF which is very extended - we woud look to buy puts on this ETF - check out the chart - www.trucharts.com/stockview.aspx?TICK=SCO.
We are long USO, LINE and look to go longer in oil stocks or ETFs. We will wait for the signal. There is too much negative sentiment on oil. Surprisingly - gold and gold stocks and gold ETFs moved up last week - we think this was driven by a run to safety and the falling dollar from the extended move up.
During the rally, Advancers vs Decliners was almost 8:2 on the NYSE and the NASDAQ. Here are the numbers for the A/D and volume from Friday close:
Advances & Declines
NYSE
|
AMEX
|
NASDAQ
| |
Advancing Issues
|
1,163 (36%)
|
202 (50%)
|
913 (33%)
|
Declining Issues
|
1,975 (61%)
|
187 (46%)
|
1,785 (64%)
|
Unchanged Issues
|
92 (3%)
|
15 (4%)
|
101 (4%)
|
Total Issues
|
3,230
|
404
|
2,799
|
New Highs
|
152
|
11
|
77
|
New Lows
|
63
|
8
|
54
|
Up Volume
|
985,074,941 (29%)
|
52,720,491 (60%)
|
606,206,477 (36%)
|
Down Volume
|
2,335,614,656 (69%)
|
32,671,019 (37%)
|
1,034,281,930 (62%)
|
Unchanged Volume
|
49,081,860 (1%)
|
2,604,305 (3%)
|
24,354,296 (1%)
|
Total Volume
|
3,369,771,4571
|
87,995,8151
|
1,664,842,7031
|
This week is start of earnings week with AA (Aloca reporting tomorrow) - check the earnings calendar on our site at: www.trucharts.com/earningsview.aspx.
Here is an excellent article on the PE and the markets this week:http://www.zerohedge.com/news/2015-01-10/permabull-throws-towel-stocks-are-massively-overvalued-key-multiples-are-post-war-re
Here is an excellent article on the PE and the markets this week:http://www.zerohedge.com/news/2015-01-10/permabull-throws-towel-stocks-are-massively-overvalued-key-multiples-are-post-war-re
This article tells us that we are at a critical juncture in the markets - we highly
recommend taking some profits.
On our stockview page - you can see the earnings date on the top right hand side of the data box for any particular symbol. We closed our YHOO position last week and we have been watching and keeping an eye on the utility stocks. The financial stocks like BAC and others pulled back - we have no positions in these stocks.
Our long positions are AMKR, USO, LINE, WSM, CYBR, K, and TWTR. Our short positions are GM,F,IBB,DAL.
We like the following stocks for next week:
TWTR - we think the rumors of a buyout are driving the stock higher - we went long on Friday - here is the chart: Charts:
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