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Don't Say It
Forsyth, Tan, Barry, and Abelson (lead writers for Barron's) could not make it past the first paragraph without saying "Fiscal Cliff". It was hard reading the whole issue as that was the bottom line of most articles and commentaries.
Don't get me wrong, it was a good issue and Abelson did a good job of pimping 1,800 dollar gold, Tan reminds us that liquidity should keep the big bad wolf from blowing down our doors, Blumenthal points out high end retailers should be watching AMZN, McTague takes some guesses on the next Treasury Sec, Salzman tells you why MW Men's Warehouse might suit you next year, Bary gives us the 10 favorite stocks to own next year (NO I WON'T TELL. THAT WOULD BE TACKY), Bennet recommends a bit bite for CAG, and one of most interesting reads was by Shirley Lazo explaining how higher capital gains taxes might not be as taxing as we might think.
Now I have a choice to either explain my Spiketrade pick of the week or give you my prognostications on what will happen this week in the market. Since sound bites from tweedle dee and tweedle dumb (we will let you determine which is which) will drive the markets next week versus technicals or fundamentals, we will not waste our time.
(In Summary, my guess is 2% down for the week.)
Short Walk On A Pier
On the long and winding ride to and from Utah, as many of you know, I executed my non-scientific economic examination of the market by looking at the number of trucks on the road and how "heavy" they were. (You can usually tell by looking at the back springage.)
The roads were unusually empty. Dennis and I noted driving for several moments and not seeing ANY vehicles for several miles. This occurred more than once.
We did see a surplus of Walmart Trucks, but they have a huge distribution center north of St George, so I can not put much deductive reasoning into that observation. I just took it all in and started playing whirling blender with the observations.
It was not till Friday when I was looking at some of the companies reporting earnings this week that an idea hit me. PIR, Pier One Imports will report on Wednesday. In doing the homework on the equity, the market is expecting 24 cents a share. There is a Whisper Number floating around indicating a miss to 23 cents.
Part of the reason the roads were so void of trucks was the huge Port Authority Strike in San Pedro. (It was resolved on Thursday.) Now there has been a strike and slowdowns for quite a while in San Pedro. PIR brings a lot of stuff in through San Pedro, Los Angeles, The Bay Area, and Seatac. Sympathy slowdowns in other ports are not uncommon during labor disputes (though I could find no evidence they occurred.)
While fundamentals might be slipping a bit, the techncials are showing more short term bear set ups than bull set ups. RSI, WilliamsR%, MACD weakness, and Momentum indicators are lining up for a disappointment.
This had me pick PIR for a drop this week. We are shorting PIR by trying to get in at 20.25 with a sale. We will immediately protect that with a limit buy at 21.25. We will be looking for a drop to 18.85 by the end of the week.
SELLING SHORT REQUIRES A MARGINED ACCOUNT AND INVOVLES EXTREME RISK IF YOU DO NOT UTILIZE A PROTECTIVE LIMIT BUY AND THEN EVEN THAT DOES NOT GUARANTEE A WELL PLANNED OUT IF THE STOCK GAPS ABOVE YOUR STOP.
That is my Spiketrade Pick for the week. Wish me luck.
This swing/day trading has forced me to beef up my technical skills and so I dusted off an oldy but a goody. Here is the review I submitted to spiketrade.com last night.
New Concepts In Technical Trading Systems
By J. Welles Wilder Jr.
The title may be a bit misleading with the utilization of the word "New". Written in 1978 and referenced by Dr. Elder in "Trading For A Living" (TFAL references a 1976 edition?), this book has been owned but not referenced as much as by myself than it should have been.
After joining Spiketrade, reading strategies, and buying Dr. Elder's books, I knew it was time to dust off this collection of worksheets and charts and learn or relearn many of the basic and advanced concepts vital to identifying interesting buy points and more importantly defining exit points that allows us to minimize risk.
This is not a cheap book, and when you first open it you might feel that you are about to build a nuclear accelerator, but in time and in congruence with the conversations in Spiketrade land, you will discover this is the Rosetta Stone to better defining ranges, trends, relative strength indicators, and capital management.
Many of the concepts and math are presented in support of Wilder's Directional Movement System and along the way he introduces us to many of our familiar friends like ATR and RSI. (Note that Wilder uses unique smoothing averages in many of his calculations.)
This is a great reference for many of the daily linguistic and calculative hurdles we come across in spiketrade.com and other technical analysis resources.
Pricey, but invaluable, at times.
Salve Lucrum
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Since 11/25/2012
