Monday, April 21, 2008

Ole MOMO and the traders lament...

It's earnings season in a momentum based market, so what do ya do?

Buy the MOMOOOOOOO, baby, buy da momo!

I mentioned AAPL last night here. BIDU, FSLR, and all the metal stocks are FLYING into earnings.

FSLR should see $320s into earnings. We got the V call options today early and we sold 1/3rd already for better than a 25% gain! SUUUUUUWEEET!

If you pick your spots here in this market and forget about the overall market daily gyrations you should do VERY well. Of course you'll do even better if you're in our chat room, so you should join us for a trial run if you haven't already. We are indeed kicking butt, I don't remember when the calls have been hotter than they are now. Well, ok, maybe back in 1999!

This market is a GREAT traders market and it's only going to get BETTER. It's interesting, does anyone think that anyone but traders and a minority of investors are making money in this market? Yeah, if you own the hottest sectors, the Ags, the Solars, yeah, you are rocking. Otherwise you're just treading water or worse more than likely cause for every winner you have you probably have a loser to balance it out.

We called ICO today at $8.40s, it was $9.30s after hours. Stock reports earnings Wednesday after the close it appears, stock looks like it wants to test $10.00 into that, or higher. Cheap coal stock, I had to do ittttttt!

Doubt we hold it over earnings, but it sure looked like a good setup INTO them and we took the trade. The options action on the stock showed some nice volume and again, its in a very hot sector and its a real company and its under $10, you figure it out!

In the meantime let's see what shakes here. The banks are in trouble, folks. Several are going to go under. I still like SOV to see under $5 sooner rather than later. I think best case for it is that it gets same type of take UNDER deal as WM and others have gotten. And, I still love C short to below $10 this year or within the next 12 months latest.

I would not be an investor here. I think we still may get my High of Year target, but we'll chop around now for a while and see what shakes. Market is trying to figure out if we're really at a "bottom" (we're not) or if we're gonna "retest the lows". We won't, we'll break them at some pt this year more than likely. It's so silly, really. Who cares? If you're in the financials you're crushed and if you're in the hot sectors you're elated. This is a split market, folks, it means you have to pick your spots and not get too invested in what you're doing for more than a short period. Sorry, the days of buy and hold are over if you want to make a real return on investment.

Today we have a VERY red hot IPO - IPI, a Potash stock. Booyah talked about it ad infinitum on his show today after hours and thus it'll be even hotter. SOMETIMES when you get a very hot IPO in a very hot sector it marks a near term top. Will it this time? I doubt it, but we'll see. Reality is, I am NOT in the camp that there is a commodity bubble. I think the US stock market is in much more of a bubble, and in fact I would argue that the BANKING sector and BROKER sectors are in a BUBBLE!

A bubble implies overvalued, right? Well, everyone is going to need to eat and build and grow. There are more and more people on the planet, we have shortages everywhere. Sorry to inform but there isn't a commodity bubble. It'll pull back at some pt, but this is like Solient Green. Unless we start to eat dead people, unfortunately there is going to be a very big food problem around the globe. It's amazing to me that no one deals with that issue but they pass a gazillion initiatives to save overpriced homes, many owned by richer than most people, and they all worry so much about the price of oil, but very little is mentioned about a world food shortage!

That's most unfortunate, don't ya think? And, frankly rather sad commentary on our priorities.

If I was in charge?

BAN ethanol production using food products (corn/soy). I'd raise the price of gas to $7 to $10 a gallon NOW and make it less worthwhile for most people unless they absolutely have to drive, to drive.

If the government then wants to really help the people who need the help, they can offer a subsiduary via a gas credit. If there is a big cutback in driving then much less will be used and the Middle Eastern countries that export oil to us would be forced to cut prices.

The gas credit money would not cost taxpayers anything, nor the government. It would come via a kickback from the oil companies/gas companies back to the government. That money could be closely monitored by a REAL non-political oversee committee so that the money doesn't end up in anyone's pocket, other than where it's supposed to go.

There are, in my opinion, a lot of creative ways for the govt to handle these kinds of issues. Yet we sit idly by and watch oil go up every freakin' day and go "oh, we can't do a thing about it, it's all because the dollar is weak!"

Ah, no, sorry, its because you are making it possible for the producing nations to do whatever they want, instead of taking the "power" away from them. The buyer should always name the price, that's how our stock market works, that's how ANY market works. If you make it a lot more expensive to drive then you will have less drivers and you will then have less of a need for the oil (It's oil, not gas, sorry,it's late!)

But, hey, what do I know? Oh, yeah, another benefit is that you'd have less green house gas effects which would help with global warming tremendously which would help in terms of crop growth which in turn would help quality of life.

It's really scary that no one seems to really have a clue. Maybe I don't either, but it would be nice to here someone come up with something outside the box for once.

The single dumbest idea our government has had in the last decade is ETHANOL. It hurts us in so many ways its absurd, yet the government still talks about it at times as though its part of a viable plan to curn oil consumption. All it really does is consume FOOD that could be used to help feed our poor, and help us contribute to the world around us and perhaps go back to truly being the "good guys" that people respect, not fear.

But, hey, I'm just a trader, so I'm sure my ideas are dumber than the door nails that stick me in the head everytime I hear certain things on CNBC or other media.

See ya in the am, let's rock! Futures are DOWN as of now, about 30 pts on the DOW and smaller % wise on Nasdaq. We shall see what we shall seeeeeeeeeeeeeeeeeeeeeeeeeee!


Michael "Waxie" Parness

Feel free to post comments, folks. I'm lonely!


Mario D'Agostino said...

Waxie, man you are the best!!! Your blog is great, soylent green yes, that was awesome. I decided to reread your book, change my trading tactics (less daily trading) and go to your trend plays. Great book and program (cd's). Q: is your Option Trader a daily call on option plays before the trading day starts? Also weekly and monthly? One last question, are you playing a straddle again on Apple this time? In your book you don't play earnings, but Goog you could have taken the long shot and won big. Or do you just trade it the next day? Come to Naples, FL, and I'll help you set up a seminar.

Jeanne Mancuso said...


Your blog is very interesting and you're a great writer. Keep it up! It's refreshing to hear some potential solutions instead of just problems.

Are you affiliated with a charity that donates food to the needy. If so, which one?


voyager said...

Dear Lonely,

Nice rant last night. Reminded me of how much I miss hanging in the chat room watching you go off for 45 min on a dude chasing some stupid stock. Most of all I miss northpik screaming at JNPR...DIE DIE DIE...Ah the bear market madness. But really I miss your insights into the market, your humbleness; I have always known that you understand that the wisdom you think is yours is nobodies, it is nothing, it doesn't exist...and that is why you trade as well as you do.


Waxie said...

Just remember - solient green is DEAD PEOPLE! Maybe we should IPO SOlient Green, it would ZOOM!

Options Trader service is intraday usually. 1 - 15 calls a week.

I've given to a lot of charities. Usually inner city or charities associated with abused kids.


You da man, how the hell are ya, dude? Voyager one of the original Trendfunders, glad to see you are alive and kickin'

Jeanne Mancuso said...


Sorry I wasn't clear. I know you're a charitable kind of guy...I saw it in your bio. I was just wondering if you would recommend one for some of MY charity money. For example, I like Feed the Children Charity and feel free to give them your money. :) If you'd rather not that is fine too.