Ag.com vs Tech.com

The International Herald Tribune quotes Tobias Levkovich, Chief equity strategist for City group Investment Research in reference to his analysis of the agricultural equities as saying:

"Some of these stocks are up 15-fold in the last couple of years, and people are saying they look cheap," he said, referring to commodity producers. "We're telling people to move away from these stocks." to read more

This is a Deja vue. Only 8 years ago the tech bubble burst and how quickly do people forget the "irrational exuberance of those days" and the carnage that followed.

I am sure many Canadians remember Nortel Networks or is it Nortel Who?

Many other Canadians also remember Ross Healey calling the top on Nortel and yet they shrugged him off. Turns out those who listened saved their hide and hold a lot of respect for the man including yours truly.

The Ag bubble will burst like any other bubble. A lot of people will either praise Tobias Levkovich for his foresight or hate him for having burst their bubble. While they are at it, they might as well blame him for the housing bubble, which incidently also burst.

If I were thinking of buying and holding some of these stocks I would absolutely stay away. However, if I am a trader, the price movements of some of these stocks represent excellent opportunities for quick returns. But you won't catch me holding those stocks overnight.

POTASH

On April 16th I wrote

"Going forward I would watch POT like a hawk its curve is turning parabolic. Maybe some crazy money is moving in."

(Link to the globeinvestor.com to view the Chart ).

Pot has since re-traced. Is it retracing back to its upward trend line? Will it bounce off its 50 Dma? or would its holders be spooked by a strengthening US dollar along with the other commodities?

It is not looking good especially that its volume on the down trend is higher than average.

I would set a strategy to protect the down side and continue to watch it like a hawk.

It is not the time to go to sleep with this stock stashed in a drawer. This stock represents a commodity and some analysts have estimated the world known reserves of Potash to be good for 300 years.

Technical Analysis

Some of my friends consider technical analysis to be no less than bull. They believe that only fundamentals should guide the investor.

I believe that every active investor must comprehend technical analysis and use it as a tool to help in buying and selling stocks at appropriate times.

Technical analysis books are a dry read, but if you want to learn some about technical analysis and how you could apply to your investing, you could watch Larry Berman's call on BNN every Monday at 11:30 or link to http://watch.bnn.ca/bermans-call

Larry's presentations are easy to follow, very informative and he does not down play the importance of fundamentals.

Each of the aired programs ends with an educational segment which is quite interesting.

PS: Markets Bull has no interest in Larry Berman's aired programs. I just believe that he is one of the best I listened to and this is No Bull.

What happened with apple

I lost some sweat.

What a ride from the time Apple announced last night to the close today.

After all the gyrations last night, at the open it took off but it stayed below my short point, then it plummeted, then bounced back and lingered for about an hour. It tried to go below $162 three times but it failed. That's when my guardian angel said get the hell out.

I think Apple is going to be range bound for for a while. It will hit a lot of resistance at $170 and it will find support at $150.

Will I short apple again? Not in this crazy market. Neither charts nor fundamentals seem to work anymore.

What will Apple do Tonight

Let's walk through this.

Texas Instrument missed. Nokia tanked.

The market is counting on the i-phone for results. I think the last I heard the i-phone is still a consumer electronic product and until it is up and running for business, Apple remains at the mercy of the consumer.


The i-phone is a product captive to the US consumer.


Well, the US consumer is in bad shape. Home values took a bad hair cut, the stock market went on a severe diet and gas prices went through the roof. Will people buy a fancy looking phone or buy gas to go to work? I think the phone will go first.


what if I am wrong? I'll have to cover the short and probably lose some dough.

Nothing ventured nothing gained.

Just For Laughs -Take 2

This fellow in the picture must have shorted Google on Thursday.

Hope he has money to buy a new monitor.

Don't despair we only started the crazy season.

Have a good weekend.

Simple Math

If you have a $1000
You lose 50% , you are left with $500
You need to make up100% of the money left and some to pay for taxes to get back to $1000.

In my book:

Rule no 1: Conserve Capital
Rule no 2: Use strategies to limit losses

Buy & Hold are you Nuts

Do you think the markets are volatile?

Blame it on the Nintendo kids.

Well, we baby boomers created them. Every time they pushed that control button they expected Mario Bros to instantaneously jump. When the game didn't workout, they crashed it and started all over.

Time flies, those kids are adults now. Some of them trade the stock market with the same intensity they used to play Nintendo. Except this is real life with real consequences.

Add to this, real time charts and quotes, point and click trading , computer triggered orders, real time news, pre and after hours trading ..etc.

This tells why I think it is nuts to buy and hold for the long haul. Not for the average investor. Not anymore.

Opposite to what I said in my previous posting if Google reported a miss that stock would have tanked, may be more than $79.

Has the world gone Crazy?

3 minutes after Google reported its results the stock jumped to $500 from the close of $449. As I write this it is trading at $528. This is $79 above the close.

Of course Google is a growth company but it is also an advertising company. Advertising companies take a beating in a slowing US economy.

What is going on with the world these days? People use their homes as an ATM machines and the stock market as the big mother of a casino.

I am glad it is not my money especially when the whole thing turns out to be a bear market rally or to use a more common term, a sucker's rally.

Some people say the rest of the world will keep the profits up so things are going to be alright.

I think this is Bull.

For example: In Canada people talk about the decoupling of our economy from that of the US. Well, home resale took a hair cut of 13% year-to-date.

And guess what, the BRIC economies will follow suit. What is going to happen to China when the Olympics are over. Or may India when food pricing keeps on rising. Don't forget the speculator have taken hold of oil and they are driving its price higher and higher.

Stay tuned for my thoughts on why I don't believe in "The buy and Hold Strategy"

Sell on Stop ? or Buy a Put

Recently this guy calls into a talk show and asks the analyst "I hold Potash (POT) and I am making money what is your opinion, should I hold or sell?"

The chart pops on the screen and the analyst hums and beats around the bush and finally says " I would sell".

Looking at the chart (Link to globeinvestor.com to view the curve).
Wow. I wish I held this thing.

I wouldn't Have sold there. This is Bull

At that time when the fellow called, POT was trading at $160 and it followed a nice curve inclined 30 deg. It bounced off its 50day moving average (yellow line)and was well above its 200dma (red Line).

At $160 POT faced a lot of resistance and to be fair to the analyst if the traders let go of it POT would have dropped. But hey this is a commodity and it moves on news. As it turned out the competition came in with good numbers and POT broke out. Today it closed almost at $200

Still not knowing all this I would have done one of two things:

1. Bought puts at 160 if it finally let go and tanked below the 50dma I'd then exercise my option and pass my stock to someone else at $160 of course less the premium. If it moved up well, I'll have $40 more per share again less the premium.

2. Or I would have placed a sell on stop order slightly below the 50dma. If it drops to that limit then I am taking out and I keep most of my profit. If it moved up, which it did I keep all my profits

Going forward I would watch POT like a hawk its curve is turning parabolic. Maybe some crazy money is moving in.

Sell on stop orders once triggered they become a market order. With super movers like RIM on the TSX which trades substantially lower volumes than RIMM on the NASDAQ the order could be filled at much lower level than the trigger point. Been there, done that.

Just for Laughs

As reported in the Ottawa Citizen, Traders who are high on testosterone outperform those with less of this stuff running through their veins. They are not talking about sex here. They mean making more money.

It is also a medical fact that bald men have more testosterone than those other guys with a full set of hair.

Well in conclusion, and for women looking for a rich stud:

Look for the bald ones in the crowd. Not too hard to find, especially on a nice sunny day.

Listen to them talk. The one you hear talking about the stock market don’t let him out of your sight. He is probably rich enough so you could buy him a nice headpiece to transform his visual.

So, for you men with a full set of hair, watch out.

How about shaving your head?? Don’t even think of it. That will not work

Stay tuned for more Market Analysis : -)