Monday, July 20, 2009

EARNINGS, BABY, EARNINGS...

As we continue to plow through a very robust earnings season, we can see the power of the almighty TREND.

Stocks continue to get ramped and reramped up into earnings. CAT got upgraded today with earnings due out tomorrow (shocking coincidence, I am sure!).

We need to watch closely as we run through the season, if you pick the right spots you can pick the right stocks. It took me a small while to catch up but now we're looking at some rushes into earnings as more and more stocks "beat" their deflated #s, giving rise to hope that things are getting better.

Perhaps they are, perhaps they are. Let's hope so. I have to say I feel almost naked not being short anything at all, its like someone took all my clothes off and since clearly no one would do that, I must be dreamin'!

Want to thank Lisa Chase for having me on her Political Chick show, was way cool and glad some of you called in. I love doing live radio, its very cool and a lot of fun.
Maybe I'll do my own show soon, ya never know.

I don't have much commentary here other then watch MS early in the day for a potential move into the close into earnings. The stock, however, is trading VERY weak and is trading VERY suspect in terms of how it just can't bust out despite GS earnings and JPM, etc. LM blew out and was up nearly $2 after hours and still MS didn't budge. So...we'll see. $30 is a very key level for MS. It's just not showing any strength here and instinctually I tend to stay away from stocks that trade like this into earnings. I own some, but any spike and I am way gone. See, stocks will often give you "tips" and you need to heed them. Fighting the way a stock trades can be hazardous to your health.

I will say that it's quite disheartening to me that it appears we are setting up for the same situation as we just got out of. JPM and GS are now fast becoming the behemouths and certainly "too big to fail". I thought the idea was to change things so that that doesn't happen again. Guess not. Apparently its great that two firms are sucking up the profits and the glory and that one of them was at least partially responsible for what happened. It's quite amazing that we continue to reward the bad behavior of the banks and that they were bailed out and now many are giving crazy bonuses. Did someone say the American people are suckers? If not, they should cause babies that's what we all are here with this. Astounding.

I wanted to also just comment on trading in general. I get asked a lot "Michael, is it really "THAT" easy to trade? My answer? Yeah, it is, its very easy to learn to trade! What its not that easy to do is make money consistently and to limit your losses. Losing is a BIG part of trading, in fact I said it tonight on air radio that if a good trader makes a million dollars it may often mean that he lost $2 MILLION! HOw can that be you ask? Cause simple math, if you make $3 MIL and lose $2 MIL then you NET $1 MIL.

I never stopped to figure that piece out for myeslf but I am quite sure that I've lost many many millions, but am still millions ahead of the game and in the black. This is a marathon folks, let's not forget that. this market ain't easy. Sometimes the market is like raining money, this isn't one of those times, though if you pick your spots you can do quite well. Quite quite well, and that's ultimately what we aim to do, we aim to pick our spots and try to capitalize on the moves as they happen, rather then after they happen. Trading isn't horseshoes, its not an "almost" business, its very real and its very exact, or at least as exact as losing $2 MIL and making $3 MIL can be!

let's keep the steady market going here, if you stick to the plan you have opportunities and thats all the market ever really promises. There are no sure things in life, or trading. Peace.

See ya on the other side,

RULE!

Waxie

7 comments:

In Debt We Trust said...

Waxie, you must talk about China and how they are printing even more money than Bernanke.

http://zerohedge.blogspot.com/2009/07/some-weekend-thoughts-by-john-mauldin.html

This is going to be a huge problem for them (and us) further down the road. Potentially worse than TARP or mark to myth accounting.

john said...

Waxie, great commentary as always. Quick question: Do you believe that the markets are still in for a real hurting? Do you still believe we could see Dow 5000 over the course of the next couple of years?

Thanks

john said...

Waxie, great commentary as always. Quick question: Do you believe that the markets are still in for a real hurting? Do you still believe we could see Dow 5000 over the course of the next couple of years?

Thanks

mj said...

where are you Waxie? we need your market commentary to navigate this constant melt-up. I miss the insight. Hopefully you're on vacation and will return. Hope all is well and I look forward to your posts. See Ya MJ

Markus Eilers said...

Hey Waxie,

I have been reading your blog ever since I bought my first copy of "rule the freaking markets".

Now I am returning since July, 20st to find out, whether you started posting again.

Take your time, but come back and talk to me !

Cheers,
Markus

c said...

Where are you Waxie? Hope you are well. Miss your updates on your blog.

c said...

Where are you Waxie? Hope you are well. Miss your comments on your blog.