Monday, September 10, 2007

Picks

The market condition is getting really bad, even the big gurus are getting confused. They have no ideas if market will go up or down. Economic numbers came out on Friday, usually it's a bad news becomes good news situation, unemployment is up - gives Fed's reasons for a rate cut. But they can not ignore the fact that we may be headed for a recession. While nobody knows for sure, it's important to check the smart money. They have the most information, the fastest computer, if they find it out, make a move, we just follow, as simple as that. So please check with me later, the smart money info-outlet.

Previously Fed was really reluctant to cut rate, people blamed them for cutting the rate to save a few rich guys, the hedge funds, betting the wrong way on subprime. Funny, the big guys can be wrong too, Santa Claus went wrong, what can you say. Well, now Fed has evidence that subprime is spreading to average folks. Now the rate cut is a sure thing. They only debate whether it's a .25 cut or 0.50 cut, or some even expect 0.75 cut, will put fuels in the economy. But because the employment picture is so bad (give me a break, can it be worse than 911? Totally psychy!) the market had a hudge shock! So Dow went down 250 points. VIX got a nice gap up, as said before the gap will be filled, that's when market rally. In other words, market over-reacted the "good news" of fed sure cut, will get a rebuttal, the question is when?

Now Swimmer Warren Buffett longs are:

PTR, C, JCI -- you should not trade on these, buy and hold for long time, these companies won't go bankrupt even economy goes sour.

Swimmer Research longs: these you trade, short momentum:

CLN

Swimmer short (short term as well):

SWN

Nice day!

3 comments:

Unknown said...

good info swim looking and not jumping in yet things seem fishy especially with options friday around the corner-market really confused- i see a lot of retail investors going for it and that spells trouble to me cause the big boys like to take the money and run-caution is my feeling -wish i could be bold sitting on sidelines in cash mode waiting-eyeing APPL????????????????-look at options and institutional tracking for me if you could also BRLC gives earnings tomorrow-BC looks to go to crapper if fed does not cut rate-i feel market is full of crybabies who dont want to see their profits evap into the bears hands-very cautious time to buy if its a bottom-but if fed does not cut rate market will selloff! look out below!!!!!!!!!!

Unknown said...

i shrted apple today-i might get burned-maybe not-whaddya think?

Mkt swimmer said...

hott,

I just came back, sorry did not answer earlier. Apple is actually a strong growth stock, I personally like Steve Jobs (is there 2 b's?), he is really an innovator as far as I am concerned. But let me add AAPL to my spreadsheet to see what's coming out.

Okay, AAPL has a trail PE of 38, forward PE of 31. Good growth, but a little pricy. EPS of $1.52, upside surprise 28%. One month ago analyst est. next earning of $0.83, but recent est. of .81, so the trend goes down, not so good.

Technically, today it bounced off the 13 Day EMA, up 3.57%, also RSI bounced > 50, which means more buys than seller. However, my second Tech indicator STA is 55, below it's trigger line of 63.3, so it's in a down trend. Usually 14D STA goes from 80 down to below 20 before it bounce up. Because of the conflict, my spreadsheet doe not issue a buy signal. I used 3 sets of shorting criteria, it does not trigger and sell signal either.

Inside story: When I check institutional ownership, big guys own up to 40% of float and they are selling like hell. They sold 11 million shares in the last a few month.

Also, there are a lot of more call buyers than put buyers, meaning general public is too optimistic about AAPL's future. For every buyer there is a seller, guess who is the call sellers? -- the big guys. They have the power to push down the AAPL price before the expiration date, make the most of call worthless. Right after the expiration date, when the price is low enough, they will buy back all the shares they sold to push down the price. A round trip make them a lot of money.

To sum up, I wouldn't sell AAPL myself, because I have a lot of candidates which meet all the criteria I set out. But there is a potential for AAPL to go down further. But my prediction is tomorrow will be a up day, especially for AAPL. In that case it will go up.

You see, investing is not simply a betting game, you have to consider all the factors. Not a single one can 100% determines the outcome. I wouldn't buy or sell on it. I would wait till it's over sold and when the market conditions getting better, I would go long on this thing.

Good luck,

Mkt Swimmer