Wednesday, July 19, 2006

On the Road Again

Two versions, Willie Nelson and Canned Heat, my favorite, Canned Heat as it came on the radio as I was driving across a bridge into Montreal in the summer of 1971, starting a two-month journey across the Trans-Canada highway to Vancouver, then down the coast to San Francisco, then back across the US to Ann Arbor. Wait, it get's worse, we were camping and eating only brown rice and vegetables. "We" also ended, somewhere east of Salt Lake City. If you ever need to get out of a mistake, take a road trip together.

Next week, another road trip to the Southwest, this time with both daughters. So let's cover some things now, in case I don't get to it in the days ahead.

First of all, Cramer sold a lot of his tech stocks near the lows of this most recent market debacle. Compared to the S&P 500 which is flat YTD, Cramer's portfolio is down 7.5% YTD. Let's take his selling of tech stocks as our first sign that the lows are in.

Second, keep an eye on NNVC. The company seems to be at the beginning of a public relations blitz that may conincide with it's getting off of the Pink Sheets and onto a bona fide exchange. I would be a buyer of strength here, if it's accompanied by decent volume.

Finally, about the geopolitical stuff, I read a pretty convincing analysis once that wars coincide with the end of market declines, not the beginning of declines. This dovetails with the Cramer moves and previous analysis by Dent, Wolanchuk and Dines. In other words, there may be some opportunites on the Long side here, notwithstanding the rockets' red glare.

A

Thursday, July 13, 2006

Don Wolanchuk

From the best market timer I know, posted Thursday AM:

CLX students....if you notice......in the Sept SnP large contract there are 2 gaps left open under the market ...1258 and 1241.......the 1258 gap is rite at the 75% retrace off the swing low of 6/28 and the 1241 gap is just below the 78.6% retrace off the 6/14 low.....clx offsets will turn favorable on both the 30 and 10 day around monday or tues...sentiment on this 2nd wave pullback should get white hot....notice the equity pc ratio was at its highest in many moons yesterday 84% acually hit 102% at the opening.....and vix pc ratio at 7% the lowest ever....so far however the 38.2 retrace off the 6/14 low at 1266.66 tho penetrated has not seen a close below it. For a change we are seeing down gap openings ...a plus......and there are now gaps above the market...a huge plus.....1282.30...1288.20..1299.10 ...1305.90...1322.90....and 1339.20


A

Wednesday, July 12, 2006

Automobile Advice

Has anyone ever gone from a BMW to another automobile and not regretted it?

Here is my delimma:

I promised my youngest daughter my BMW X3 (small SUV) when I was through with it. She now says I will be through it before school starts up for her in late August. My first choice for a replacement vehicle for myself is the BMW 330xi, their award winning state-of-the-art all-wheel drive luxury sport sedan. I've driven it and it is exquisite. It would be my third BMW in a row and my second 330i. Is there any reason to put myself through the ordeal of entering other automobile dealerships, Infinity, Lexus, Mercedes, Accura, you name it, and drive their sport-luxury offerings?

We all know the enemna-like experience of buying a new car. Since I seem to know what I like and want, I can short-circuit the whole enchilada, well most of it, in about an hours time. On the other hand, if there is a vehicle out there that is the equivilent, or better, then the 330xi sedan, maybe I should check it out. I read all the reviews, nothing appears to have overtaken this car in its class, though apparently Lexus and Infinity have worthy but not better competitors in their lines.

So, from your own personal experience, any thoughts on this quandary would be most appreciated.

A

Jim DInes -Interim Update

I received an INTERIM WARNING BULLETIN from Jim Dines last night. It was noteworthy for it's certainty, so I'm passing along the gist of it here.

1. Uranium is in a huge Bull Market, Buy, Buy, Buy!

2. Recent Buy signal in US stock market is looking better every day;

3. Gold is also still on a Buy.

FWIW,

A

Monday, July 10, 2006

IDIX

First, the hype: http://tinyurl.com/o2d99

Second, the company: IDIX

Third, our history with this Hype-Pop-Scalp:

http://allallan.blogspot.com/2006/05/sgmo.html


I'm easing into IDIX today, maybe next few days as I review the facts. Last time, SGMO ran from about $5.00 to about $8.00 in the days surrounding the "news."

A

Saturday, July 08, 2006

Tale of Two Timers

Below are the very latest market timing thoughts of two market timers, Harry Dent and Bob Brinker. I picked these two because their underlying methodologies could not be more different, Dent using social demographics and Brinker using textbook macro economic and fundamental analysis. Yet their outlook for the market going forward is virtually identical.

Harry S. Dent, July 3, 2006:

"Stong Summer Rally Very Likely Now"

"We saw everyday investors 'give up' on the markets to the greatest extreme back in April 2005, and now investment advisors have thrown in the towel to extremes here. This tells us that the markets have done their job in raising pessimism (without a big external event) and that we should be ready for a strong sustainable advance-the beginning of the next stock market bubble."

Bob Brinker, July 7, 2006:

"The mid-term off-presidential election year correction that began on May 10 has produced a pullback of 7.7% at its lowest closing level to date as measured by the Standard and Poor's 500 Index close of 1223.70 on June 13. So far the magnitude of this correction has been totally consistent with our expectations.....we regard the current mid-term off-presidential election year correction as a normal occurence within the context of an ongoing cyclical bull market. In our view, the stock market is attractive for purchase on any weakness that may occur in the vicinity of the S&P 500 Index 1250 level or lower. We expect the final closing low to be within a few percentage points of that level.

"When the 2006 correction process is over, we expect the cyclical bull market to resume with substantial additional gains which should carry the market to new recovery highs."

Stock Updates

I see a lot of questions from readers about individual stocks that I have written about in past blogs. Stocks I mention here are of two types, one consists of low cap, low-price-niche stocks that have huge upside potential either on their own or as part of the Stock Market Bubble, Part II that Dent writes about. For the most part, I own those stocks, in relatively small lots, tucked away in accounts and I do not monitor them very closely. If I did, it would be so tempting to trade in and out of them and take the risk of missing the big pay-off should it come. So I just don't follow them closely enough to comment on every dip or pop. My advice is still to put together a basket of a dozen of these names and see if one or two pay-off big time in the coming years.

The other type of stock I occasionally write about are very short term trading opportunities, usually triggered by a quality insider purchase of shares, or by some news event. Although my time line on these types of trades can range from minutes to hours or even a few days, that isn't to say that a longer term position trade isn't the best way to play these. A good Insider-Buy can sometimes support a stock for six months or longer.

The common thread in both types of stocks that I write about is that they are ripe for immediate purchase, but that exiting the positions are a subjective determination that varies with indiviudal trader/investor temperament, finances, goals, greed and thresholds for pain. In other words, I'll post an idea, you run with it as far as you care to, or not at all, whatever makes sense to you. That way, I can post trading ideas here freely, without remorse for trades that fail and you can pick and chose among those ideas and then manage them according to your own personal situations.


As you know, the frequency of these blogs has decreased in the past month. Apart from the market blood-bath in May-June that didn't inspire me to chronicle the agony our accounts, there was personal stuff, travel and some significant R&D on my own trading system that has had me pretty much occupied. Even this little snippet of Saturday morning ramblings has taken me 90 minutes, what with all the copyright infringement, spell checks and excuses for stocks that have tanked on us. But, hang with me, as I'm guessing along the lines of our two guest timers, that the some exciting market fireworks await us in the months ahead.




A