Larry’s Look at Today’s Market: 7/14- 1:00 Pacific
July 14, 2008 @ 1:06 pm
Another miserable day for the markets, albeit not quite as dismal as last week. The market opened strong on the heels of a formal announcement over the weekend Freddie and Fannie would be bailed out.
However, about an hour into the trading day they started selling again, and the market hasn’t looked back.
In my view, the market has nearly reached crises proportion, but could be setting up for one of the best buying opportunities since 1987.
It was all quiet in micro land today, with most of my ideas holding at fairly anemic values. I am personally starting to liquidate many of the positions in my trading account- I’m getting liquid out in front of what I believe could be a once in a life time opportunity to buy cheap. There will be easy money made in the first short covering rally. Right now, the shorts totally rule the markets.
The first stock on my earnings watch list from the weekend edition reports after the close today. Genentech- (NYSE: DNA). The market is looking for $.86 per share in earnings.
Let’s see what happens after today’s close. I didn’t take a position as the stock traded down in today’s action. However, that could have been an indication to get short. Hard to say. We’ll see post close.
No position on DNA, but an interest to see how the market responds.
Earnings are out- the missed by $.04- the stock is down about 3 points in after hours trading. The profits were there for the taking.
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Wow Anonymous, your gov policies are the reason we are here and some market speculation. I have seen so many charts that warned of this, of course hind sight is 20/20. Energy is in part demand and the weak dollar. Sub prime is government policies that said banks had to allow everyone the right to own a home, so banks approved loans that they should not have. I’m sure this is over simplified but the truth. Tho only one hurting you is you. We all are feeling pain. My 401K is down, and I guarantee there is no penny stocks there. Question Larry, what do you make of the opening spike in the vix this morning? I see these spikes all over the place and it looks like market manipulation.
Editor: The VIX just barely crept over the 30, which is not enough to get me really excited about a tradeable rally. I’d like to see a spike to 35 or 40. Of course, that’s just one component of a tradeable rally. There are a lot of other factors including oil going down.Now, with the improving market over the last couple of days, it’s back around 25. If you have a trading mentality, I think you wait for a bigger spike to risk a big trade. Perhaps Israel attacking Iran would be the sort of thing that would do it, which I believe could happen. For long term investors- Just tough it out at this point in my view, and keep your money in good sectors. I see alternative energy and health care as being to strong groups for the next year. Good for you on no penny stocks in your 401k. It’s not a suitable place to speculate on high risk situations.
Comment by Bret — 7/16/2008 @ 10:43 am
You are really hurting alot of people.
Editor: On a scale of ridiculous comments, that’s about a 12 on a scale of 1 to 10. I suppose it’s my fault all these sub prime loans were funded, the dollar is falling apart, the banking sector is in crises, oil is over $130 per barrel, and the S&P 500 has been below the 10 day moving average for 28 days in a row, which hasn’t happened in 24 years. Boy, that’s a lot to be responsible for. Here’s the deal- I published SSL on every company I cover. SSL stands for Suggested Stop Loss- if you hold stocks below the levels I suggested selling them and getting out, you are stuck like I am. Now, if you can get past the blame game, and start thinking clearly, you will realize we are closing in on some once in a life time buying opportunity.
Comment by Anonymous — 7/15/2008 @ 12:14 pm
I am out of SPKL. In my opinion the current problems of the US economy will force a lot of investors and shareholder to cash money. I see SPKL going .50, maybe even lower. I accept a 22% los….but not more anymore. Too much lost with those pennygames.
Editor: I believe you are seeing that now. I respect your decision, and there is nothing wrong with raising cash so you are ready to pounce when there is a turn around. However, I would hardly consider it specific to SPKL or micros in general- stocks all across the board are absolutely obliterated- many easily to the same extent SPKL- I am looking at many large cap trading at 1/3 of their value just two months ago. It is not a “pennygames” situation. It is widespread.
Comment by michael — 7/15/2008 @ 8:27 am
I am watching with you
Editor: Watch away. I can’t imagine why anyone would want to watch me. You should be watching the companies.
Comment by al — 7/15/2008 @ 5:04 am
Hey is this buying opportunity or is this company dead in the water! Jim In Kuwait
Editor: As a company, it is far from dead in the water. As a stock that depends on US consumers to do business, it could be dead in the water for a bit longer. The short answer is yes, it’s a buy. If you’re trying to pick the absolute bottom, I would take my cues from the market and say no, it’s too early to call the bottom. When the market stops blowing its brains out, it will be time to see where we are.
Comment by james ardito — 7/15/2008 @ 12:19 am
so I take it your selling off esfs and the pickle
Editor: I haven’t done a trade in either of those in some time, but that’s not to say I won’t. As far as the Pickle goes, I have decided to be long term and I don’t expect to have to sell any for sometime. As EFSF goes, this could be a sources funds for the company as I don’t have as high a level of confidence, and own quite a bit more than I probably should. However, at this price, it’s ridiculous to sell. Since people are rumoring their going out of business, to me it’s way more of a buy right now. It’s so blown out, it could double easily.
Comment by Anonymous — 7/14/2008 @ 2:19 pm