Friday June 22, 2012
Most commodity plays are now overbought on the daily charts. It would be advisable to place a succession of orders under the market for your favorites.
The Market Perspective Wednesday June 20, 2012
Well we were certainly right about that one!
When I was a kid, my Mother would take us to downtown Houston. Foley's was the big department store. This was in the 1950s before such stores had branched out to the suburbs. Foley's was that same sort of multi-story affair featured in Jean Shepherd's Christmas Story. Recall the scene where Ralphie waits in line to ask Santa for his beloved BB gun. The different floors were connected by escalators. Basically the higher one went in the building, the higher the merchandise (perceived quality ?) was priced. (The psychology works the same and opposite way on Wall Street. Higher Prices mean perceived quality, lower prices scare buyers off. I don't see any other analysts recommending XES today.)
But he 'bargains' were actually below ground level, in the basement. To emphasize this the displays did not have the same ordered arrangement, things were just stacked on tables, one had to search for the right size and color amid a sign that might say, all items 30% off on this table.
One still sees this in some discount stores on Black Fridays, the day after Thanksgiving. Sometimes the media will cover actual fights that break out among shoppers, many of whom line up or spend the night outside stores. Stores will open at absurdly early times like 5:00 AM to further emphasize the idea of getting there early. Specials are heavily advertised, and usually in short supply, often by the hour. The ads all emphasize the same thing, if you are not here at say 6:00 AM those $9.99 blenders will be gone in short order!
Yesterday it was just the opposite on Wall Street. Indeed shoppers were fighting one another to get out of positions, many of which they had just taken. Had any fundamentals changed? Of course not, but the atmosphere of panic, re enforcing the bearish views of so many like the guys who write for stock charts, seized the crowd.
We were quite correct in our assessment of a sell off, the idea of taking a profit Thursday was too late, but the Wednesday idea of placing more orders was correct. And there are still bargains around today.
Central Fund closed 1.5% above its NAV yesterday.
XES Energy Service
The $2. drop in a few hours amounts to 6% off the price, not a bad sale. This is tough to do when every media outlet from CNBC to Bloomberg is shouting, oil drops under$80, now down $30. But the Texas economy is literally on fire because of the Energy Service business in West and South Texas.
We noted that oil still lacked a fifth wave low, that appears to be happening now. Below is the US Dollar, oil moves opposite the dollar. At far right note the dollar is beginning to fall, the trend is not broken but....with oil back to the August and October 2011 lows, and opinion uniformly negative on oil, this has to be the time to buy XES. Conoco Phillips, a well run international, dropped 3.09% yesterday.
XME What is realy happening
Most of the plays we have discussed here simply returned to their uptrend lines begun since the June lows. this pattern of higher lows is opposite what is happening in the Dollar and bonds. Such one day routs are designed to let the better investors snap up bargains from those easily frightened out of the trade.
Attention Wall Street Shoppers, buy now, the bargain basement will shortly be closing, once the inventory is gone at these prices, it won't be back. Shopping begins at 8:30 AM CST.