Updates - BMO, FSLR, CGP, SRS, VZ

Recently we shorted BMO, Bank of Montreal, and FSLR, First Solar. Today alone First Solar dropped over 16% despite a very strong market, due to the company's poor earnings announcement. We featured charts depicting our techincal view of these stocks and we've been asked to update these charts.



FSLR 3-Year Chart

On the longer-term view above we see the rising trends in green and the downtrend in red.

On the 2-year close-up below we detail the possible emerging "head and shoulders" formation.

FSLR 2-Year Chart

Note the performance since May of this year, despite markets generally rallying nonstop. This stock appears to wish to continue to go down and we believe it will do so, finally reaching levels far lower than any current bull will accept. We would not be surprised to see it trading below $60 in due time, but first the lower green uptrend must be broken and so too the psychologically significant $100 level which is clearly seen to be significant on the chart above.

Of course it's possible that the stock will rally to new highs despite deteriorating fundamentals and increasing competition, as well as world governments increasingly going broke and possibly no longer being able to artificially prop-up this industry.

We hold in the belief that FSLR will soon make new lows however we note that this stock normally reverses to close large overnight gaps in price and that it is currently approaching an oversold level in the short term, so to be safe we'll lower our stop by $20 from $181 to $161 on an intra-day basis thus risking less than a 5% loss should this trade reverse and go against us dramatically. Currently we enjoy a roughly 18% "paper profit" in just a matter of days.



BMO 10-Year Chart

BMO broke down just where we predicted. In the longer view above, we note historical major support & resistance in red.

In the next chart we see the breakdown below the green rising trend. For now we leave our original stop intact at $52.50 representing a roughly 5% loss if triggered.


BMO 3-Year Chart



VZ 25-Year Chart

Above on the 25-year chart of Verizon we see the obvious major trends marked accordingly in red and green. We note also the amount of time the stock has spent between the $20 and $40 levels, staying relatively stable despite very tumultuous markets in the course of that long time.


VZ 2-Year Chart



On the 2-year chart above we see a very well-defined pattern at the end of which the stock should see a major break in one direction or the other. If anything, it looks to be on its way down in the longer term and it faces increasing competition. However we hope for the best, holding long and continue to sell covered calls and enjoy dividends as detailed in this link.



On SRS, the ProShares UltraShort Real Estate ETF, we raise our intra-day stop to $8.95 thus reducing our risk from 12% to under 7%. Its chart as it pertains to this trade is so uninteresting that we don't bother to create one for inclusion here. We enjoyed gains as high as 15% at yesterday's levels, but we're holding on until we may realize much higher profits or we are stopped out.



On the CGP chart below we postulate two possible current uptrends. We already enjoy gains of over 60% from our entry just days ago, and the conservative speculator will have exited already on at least half holdings, or will exit below the upper trendline to secure profits.

We are more aggressive thus continue to hold above the lower trend line, and will be stopping out on any close below $0.10

CGP Chart






We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or for mentioning any stocks or companies in this blog. If we hold existing positions we divulge the fact.

This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

To be notified when this blog is updated :
Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated, not if a blog entry only contains general commentary.

Noteworthy

We share some amusing and illuminating news and links sent to us by readers. When known, we do our best to credit the source.

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Survivalists will especially enjoy facets of this first link, which is recommended reading for anyone who wonders what it might be like when the economic "SHTF", as told from the first-person perspective of someone who lived through it in Argentina. Courtesy of Whiskey & Gunpowder.

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"Bernake : Why are we still listening to this guy?"

Who's "we"? Anyone being wrong half as often as this man would have been fired ignominously long ago. To be fair, it's arguably an important part of his job to lie. At least it sounds to us as if he's lying. We mean that as a sincere compliment to the good Doctor, for to suggest he is not lying is to state that he is woefully incompetent and even stupid.



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The truly puzzling life of Chrysler's deputy CEO. How could a millionaire top executive with a chrome-plated reputation get in such financial trouble? The mysterious case of Jim Press.

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Yet another "surprise". NY Governor: Tax the Rich Failing Badly

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Witney Tilson: Housing Recovery a Costly Mirage

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South Florida condominium prices already have dropped up to 88 percent from their 2006 peak, and the meltdown isn't over yet.

So says real estate consultant Jack McCabe, who has earned the reputation as South Florida's top residential real estate analyst.

He told Bloomberg that condos which sold for $1,000 per square foot in 2006 now command prices of only $125 to $350.

And he says prices could ultimately drop to $100 a foot, less than half the condos' construction costs and a level last seen 20 years ago.

"If you're thinking you can come here and buy and sell condos for a profit in less than five years, you're sadly mistaken," McCabe, whose clients have included Credit Suisse and Pulte Homes, told Bloomberg.

Newsmax

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Auditors find rampant fraud with first-time home-buyer tax credit

A preschool purchaser was just one instance out of thousands of cases of fraud uncovered by investigators looking at how the IRS has handled the tax credit, which is set to expire Nov. 30 but which many believe Congress will extend before then. More than 90,000 out of about 1.4 million returns on which the credit was claimed looked bogus, investigators said.

Marketwatch

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We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or for mentioning any stocks or companies in this blog. If we hold existing positions we divulge the fact.

This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

To be notified when this blog is updated :
Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated, not if a blog entry only contains general commentary.

Surprised ?

"A surprise drop in new home sales sends market lower."

Click the link above to read the article, which also includes this (non) surprise :

"GMAC Financial Services is looking for a third bailout from the Treasury Department, according to a Wall Street Journal report. The lender is seeking between $2.8 billion and $5.6 billion, according to the Journal."

We are not at all surprised and we hope readers of this blog are not surprised either.

Nor will we be surprised when the national debt "ceiling" is again raised dramatically. We've lost count how many times this has happpened, by trillions, in recent years. It will soon be raised by trillions more again.

Why is it called a "ceiling"? What kind of "ceiling" is constantly raised? Is there truly no limit on this scam? We believe there is, because all Ponzis fall apart eventually, and Madoff is just a small-time piker compared to government.







Conspiracists may consider that Madoff was finally brought down as part of an effort to desensitizing people to massive cons, so they are not surprised to discover that what they thought they were due as pension and Social Security monies has instead vanished in an orgy of colossal fraud, waste, and greed. We are not among the conspiracists because we do not believe those in government are smart enough to think of it.

We will write more tomorrow on disappearing pensions as the possible catalyst for a market crash and major U.S. Dollar rally.

For now, click this link to marvel at an utterly disingenuous letter from U.S. Treasury Secretary Geithner to Congress on the topic of the debt ceiling.

This man understands completely, so we'll let him speak for us on this issue :



For those unaware, this is the broken window fallacy to which Mr. Schiff refers.

We will not be surprised if home "credits" are extended. Another misnomer, as using the term "credit" almost makes it sound benign. Let's call it what it is - theft. It is theft from those who pay their bills and taxes and only buy what can be afforded.

Everyone is supposedly equal before the law, but only some get the housing credits, bailouts, and cash for clunkers, while the rest get again robbed by government to pay for it all and suffer artificially inflated pricing due to this brought-forward and subsidized demand on houses, autos, equities, etc.

Clunkers: Taxpayers paid $24,000 per car. Auto sales analysts at Edmunds.com say the pricey program resulted in relatively few additional car sales.

Whether it be those in office, those who re-elect them, or those who go about their days in a deliberate ignorance of the Truth, some sheeple never learn.

How long before we wake from our stupor and demand, if not force, a stop to this?

For how much longer will it be the Land of the Fleeced?






We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or for mentioning any stocks or companies in this blog. If we hold existing positions we divulge the fact.

This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

To be notified when this blog is updated :
Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated, not if a blog entry only contains general commentary.

Moody's Mulls BMO Downgrade

Good news for BMO shorts. Click here to read the article.


Announcing a new feature on this blog. Notice to the right that there now exists the facility to read this blog via a "feed".







We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or for mentioning any stocks or companies in this blog. If we hold existing positions we divulge the fact.

This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

To be notified when this blog is updated :
Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated, not if a blog entry only contains general commentary.

shorting BMO, FSLR

Do bears always hibernate in winter? Maybe not this year, as far as the equities markets are concerned. Prevailing market trends often end in October.

We short BMO, Bank of Montreal, and FSLR, First Solar.


Not feeling wordy today, we make the case in graphic form which we hope clearly illustrates the technical ideas behind these trades.





The fundamental cases, we believe, are obvious, and these stocks have shown relative weakness for awhile now as the general markets have made new highs amid increasing diverging indicators. Something's gotta give, and in case that something is us, we limit potential losses with stops.


BMO last traded at $49.80 and we'll cover for a 5% loss if it trades over $52.50 intra-day.

FSLR last traded at $153.94 and we'll cover for a 17.5% loss if it trades over $181 intra-day.


We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or for mentioning any stocks or companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

To be notified when this blog is updated :
Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated, not if a blog entry only contains general commentary.

buying CGP, housing due to tank further, sold DUG -2.5%

Click this text for dire predictions from a source worth considering

We concur with these estimates, believing housing will generally bottom at the earliest in 3-4 years after falling another 15-25% on average.


With gold holding over $1000 and general markets still rallying, the so-called "silly season" has returned for highly speculative penny stocks in the resource sector.

It could end tomorrow or two years from now, however we believe that the greatest risk is in not taking a risk so we'll begin with the purchase of CGP, Cornerstone Capital Resources on the Canadian Venture Exchange which last traded at $0.115

We like the recent volume and price action, and cross our fingers for its prospects. We've been holders (not diarized on this blog) for some months with an average cost circa $0.07 and we now add on this break-out and pull-back and make it an "official" position.


On September 23, we guessed correctly on oil and were exactly right about when it'd make its move, and soon enjoyed as much as a 12.5% gain on the DUG purchase. However with the U.S. dollar sliding oil turned around and broke above its recent resistance and we were stopped out with a 2.5% loss on DUG, per our previously-stated stop level. Always a shame when a winner turns loser, but luckily the stop was tight.



We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or for mentioning any stocks or companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

To be notified when this blog is updated :
Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized, not if a blog entry only contains general commentary.