Monday, July 29, 2013
Indices closed down .24% to .39%......
Indices paused today & closed slightly lower.
S&P 500 @ 1685.33
RSI @ 61.48
CMF @ 0.309
Internals were :
Down volume led by 2.09 to 1 in NYSE & 1.88 to 1 in Nasdaq
Declining stocks led by 2.33 to 1 in NYSE & 2.13 to 1 in Nasdaq
Net new 52 wk highs were leading by 51 in NYSE & 69 in Nasdaq
VIX UP 5.27% @ 13.39
Oil @ $104.55
Gold @ $1328.40
AH ER :
HLF UP 5.81%
X Down .37%
AH Futures UP
AH Asian Markets Mixed
AH Oil & Gold Down
About market, market internals have deteriorated suddenly which is a red flag for this aging bull. Carter Worth is not constructive on this market & expects a "major correction". Correction do start with negative internals.Please monitor internals for future trades.
BLOG does NOT give buy or sell.
Saleem
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16 comments:
Hey Saleem,
Check out POT and MOS this morning on the potash story:
***
Potash, Mosaic sink after Uralkali stops sales through Belarusian
Russia’s Uralkali, one of the world’s largest potash producers, said this morning that its board has decided to stop its export sales through Belarusian Potash Company and direct all export volumes through Uralkali Trading. The company said, "Unfortunately, we should state that our cooperation with our Belarusian partners within BPC framework has come to a deadlock. It has always been Uralkali’s position that export activities of both producers should go through the unified sales network. This fundamental principle of partnership was violated by the Decree No.566 issued by the Belarusian President on 22 December 2012, which cancelled the exclusive right of BPC to export Belarusian potash. Following the issue of the Decree, Belaruskali has made a number of deliveries outside BPC." Uralkali expects global potash prices to drop below $300 a ton following the changes to its trading policy, Bloomberg reported, citing comments from CEO Vladislav Baumgertner on a phone call. Shares of Potash (POT) and Mosaic (MOS) are trading significantly lower in pre-market trading following the news, while Agrium (AGU) and CF Industries (CF) are down as well. :theflyonthewall.com
***
I have no idea if there is opportunity here. The price reaction is huge...
Stocktrader
Hey Saleem,
Very informative, detailed market outlook from ACI:
***
Market Trends
Arch believes currently depressed metallurgical coal market trends are unsustainable over the long term. Global crude steel production is forecasted to increase 35 percent between 2012 and 2020, reaching 2 billion tonnes by the end of the decade. Increased utilization at existing steel plants and the projected build-out of new steel capacity will drive future metallurgical coal demand. Moreover, capital spending for future metallurgical coal supply projects is being curtailed and supply rationalization at existing metallurgical coal operations is underway.
"Even with a near-term cautious outlook on global metallurgical coal markets, we're confident that supply will decline and demand will rebound over time," said Eaves. "Metallurgical coal output and capital spending levels industrywide are in the process of significant rationalization, setting the stage for the next market upswing as global economies begin to improve."
The outlook for U.S. thermal coal is improving. Year-to-date through May 2013, domestic coal use for power generation has increased 10 percent compared with the same period last year. For 2013, Arch expects thermal coal consumption in the U.S. to rise by 50 million tons versus 2012 levels. Moreover, according to Mine Safety and Health Administration data, U.S. coal production has declined more than 20 million tons year-to-date through June 2013. Increased demand and decreased supply are reducing coal stockpiles at U.S. power generators. Internal estimates suggest that customer coal stockpile levels declined to roughly 170 million tons at the end of June 2013, representing a 15 million ton reduction since the beginning of the year.
Arch's outlook for global thermal coal markets remains constructive despite current price softness. Arch expects that U.S. coal exports will remain above 100 million tons in 2013 but will not keep pace with levels shipped in the first half of the year. "We are seeing the beginnings of a rebound in domestic thermal coal markets," said Eaves. "Additionally, higher coal consumption trends across Europe should be incrementally positive for U.S. coal producers, with higher thermal coal imports projected in Germany and in the U.K. in particular. These trends should continue to support U.S. exports into the seaborne coal trade over time."
***
Although I'm not so positive on domestic coal due to constant pressure on domestic natural gas from supply, I do agree with the met coal outlook almost exactly and helps explain my purchase of WLT yesterday.
Stocktrader
Hey Saleem,
Combing through WLK's report this morning, margins showed a huge improvement based on the lower input costs throughout their product line. Revenue was a little less than expected due to lower feedstock and ethylene sales to other companies.
Going forward, they expect better sales as the economy continues to improve, and have projects being completed in Q4 and 2014 to enhance profitability further.
I see no reason to sell.
Stocktrader
Hey Saleem,
The CMI report was a clean beat and raise (guided to flat revs for 2013 vs -2% decline expected). Strength in North America and market share gains in medium duty trucks offset some international weakness. The recently increased dividend and ongoing share repurchase program speaks to management's confidence in the future.
They proved themselves the leader in the industry today so I don't see a reason to sell, although valuation is getting trickier.
Stocktrader
Hey Saleem,
So far ACI's comments are quite positive about the outlook. They are really calling a bottom in steam coal saying utility demand is increasing and stockpiles are low.
Stocktrader
Hey Saleem,
They backed off that strong language a little bit, but still positive on supply/demand dynamics for steam coal with natural gas at $3.40-$3.50. Part of this is that Central Applachian coal is extremely challenged here and will see even more shutins. They are also getting strong interest from Asia for steam coal although they admit they don't like the prices currently.
Stocktrader
Hey Saleem,
Listening to WLK's call now...
Many end products already have industry-announced price increases for Q3 so I expect earnings momentum should continue nicely.
Stocktrader
Hey Saleem,
Trimmed MODN @ 24.26 after a nice run.
I may sell SODA today pre-earnings tomorrow morning. The chart action looks horrible recently, but I struggle because we are close to a positive MACD crossover. My biggest fundamental fear is weather impacting US drink sales, weak European sales, and lack of "new idea" spending by US consumers during the quarter.
Stocktrader
Hi Stocktrader,
Sorry..i was away this AM.....
Lots of notes from you, mostly positive.
POT story is extremely negative...need to wait & find support.
Good move in booking profit.
SODA is a tough one.
Saleem
Hey Saleem,
Yes, I was looking at MOS pre-market and it's already $5 off those lows. I guess that was the opportunity--I wouldn't mess with them now.
Listening to HLF conference call currently--strong business and massive cash/cash flows. Since they are not M&A related, they plan to continue their long-standing history of returning cash to shareholders, mostly in the form of share repurchases. I don't see how this turns out well for Ackman...
X conference call at 2:30 EDT. I'm definitely looking forward to this one.
Stocktrader
Hey Saleem,
Sold SODA @ 58.98 due to reasons I talked about above. At worst, there may be a retest of any post-earnings pop as I'm sure there's many investors underwater right now. At best, I've avoided a 10-15% drop.
Stocktrader
Hey Saleem,
One analyst blurb that struck me yesterday was the fact that all the cell phone service providers are switching to these "fast upgrade" cell plans, started by T-Mobile's push. This could dramatically improve the prospects of the "smartphone saturation" fears that were starting to really weigh on Apple/Samsung and their providers.
I've started looking at CRUS again and will have to listen to a replay of the conference call. I'm sure there are other good providers too, but I've been focused a lot on materials lately so haven't come up with a good list to investigate. (Just thinking now maybe INVN, which coincidentally reports after the bell today.)
Stocktrader
Hi Stocktrader,
I will avoid CRUS as they are too AAPL dependent.....
Try to look @ SWKS......
Saleem
Hey Saleem,
Bought a speculative position in HLF @ 63.42.
Stocktrader
Hi Stocktrader,
HLF is doing well despite Ackman & CNBC fabous hack....
Why is CLF down today..any idea?
Saleem
Hey Saleem,
I'm assuming it is in sympathy with the rest of the commodities complex, including specifically X. Iron ore spot prices were weaker in China overnight for the first day in many, but still up 20+% in <2 months.
I really think segments of X's business are doing better in the US and they might call stabilization for Europe. I will be interested to see the end-of-day X price action after the conference call starts.
Stocktrader
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