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Market Currents: May 16th, 2012

May 16, 2012 Leave a comment

Uncertainty in Europe has been weighing heavy on markets here in the U.S.  I think once things across the pond get sorted out, we’ll have a much better picture on where we’re heading.

Taking a glance at the S&P 500, it looks like we’re in a downward-sloping trading channel:

The upside to this is that we may be at a short-term bottom.  My thoughts are that we only go up from here.  I envisage a run-up to 1360 where we’ll be met with some resistance.

The AAPL daily chart looks similar in that we’ve been sloping downwards since the April 10th highs.

It’s difficult to say where we’re heading, and it may be safe to sit on the sidelines until a clearer picture forms on what direction it’ll take.  We’ve filled the gaps from March 13th and 14th at 552 and 568, respectively.  Since the gap-up on Jan 25th was a break-away gap, I’m inclined to say this will not fill, so there is no worry about that here.  My gut instinct is to say that we’re heading up from here, however I’m concern that this support at 552 won’t hold.  If 550 is breached, we’re heading to 520 easily.  Buy your Puts if you see prices below 550.  I would like to say 552 will hold and head up to the upward boundaries of the channel around 575/580.  I believe this may be contingent on Macro data and how the Eurozone looks.

My portfolio at a glance:

Holding tightly onto my trading thesis, selecting high growth biotechs, I’ve been able to catch some great run-ups from VRTX and MDVN that are helping along the laggers, such as ACHN, DNDN, and GALE.  I am particularly interested about ACHN.  There’s some great data coming out from ACH-1625.  I’m fairly bullish on Achillion despite their poor stock performance.

Some quick ideas that in no way, shape, or form represent something I’m immediately going after:

Short JCP.  They seem like a mess over there at JC Penney.  Possible short of the year?

Long GRPN (yeah, crazy, but with Facebook IPOing, it’s an interestingly low-priced play.  Even though I’m massively bearish on GRPN long-term)

Long USHS, HD, L — playing the housing market recovery with these is an interesting play.  Think about it, most likely people aren’t going to be buying or selling new houses just yet.  They are probably going to be remodeling or renovating to get ready to buy/sell.  Where do you think they’re going to get the hardware and know-how to do this.  That’s right, home improvement shops like Home Depot and Loews.  Ok, so why US Homesystems?  This is the company that provides the supplies for Home Depot.  Like I said, an interesting, indirect play on the housing market improvement.  Oh, quick plug here, this idea is Leo Leydon over at Financial Focus on Money Matters Boston AM 1120.  You can listen live on the weekdays from 8am-9am EST.

Okay, that’s it for now.  Happy trading!

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Categories: Stock Market Analysis

Welcome to Pi-Shaped!

May 12, 2012 Leave a comment

This being the first post, some introductory words would go well here.  So, welcome to Pi-shaped!

Because I think of readers of a blog as investors (investing time and brain power), and the writer as the entrepreneur (striving for the next good idea and post),  I figure I should present this first post as a pitch.  After all, why should you invest in my blog when there are so many great blogs out there?  There’s a concept floating around about the shapes people adopt.  I consider myself a “T-shaped” individual.  Great depth of knowledge in one specialized area.  Broad base of general knowledge in many areas.  However, I’m on a quest to develop into a “Pi-shaped” individual.  My goal is to present to you, the reader, a not-so-random assortment of posts and musing from the experiences and knowledge intended to allow us both to become just a little bit more Pi-shaped.  Or T-shaped.  Or any-shaped.  In short, let us shape each other into better people.

Since this is a pitch, I should present the backgrounds of the management team, right?

I received my BA in chemistry from a small, liberal arts college where I was encouraged to become knowledgeable in many non science-related subjects.  One of the most important traits I gained was the ability to stay grounded no matter what outside forces were acting on my soul.  Midway through my sophomore year, I was faced with my first, true pivot; organic chemistry, a requirement for my initial neuroscience major track, was too fun to give up and I had to keep doing it.   Hard to believe, I know.

The natural path of being a young 20-something in the sciences led me to graduate school, where I developed my vertical component to my T.  I received my M.S. in organic chemistry, but one of the major themes I took away from grad school is that it really is best to be true to oneself and no one else.  Phew, for a minute there, I lost myself.

With an analytical mind, I’ve continuously sought out the “why” and “how” of events that affect my life directly.  During the overactive hurricane season of 2005, I learned about meteorology, particularly hurricane tracking and forecast.  It is estimated that Hurricane Katrina  cost over $81 billion in property damage.  Lives were forever changed because of large, spinning masses of tropical air.  I had to know why.  I had to know how.  More recently, during 2011 hurricane season, I accurately predicted a Long Island-based landfall of Hurricane Irene a week before while the storm was just north of Puerto Rico.

The current economic downturn has encouraged me to study our financial system.  Our economy has endured the longest recession since the great depression.  I had to know why.  I had to know how.

Which brings me to my goal: to impart any sort of knowledge I’ve gained in the process of asking why and how to you, the reader.  And, hopefully, by doing so, we’ll both learn a thing or two.

So, readers, what shape are you?

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