DOW 7000 Soon ?

Here's a short audio interview with David White of David B. White Financial. We have no prior knowledge of the man or his record.

These type of increasingly severe bear calls are worrisome to us, but not because they might come true. In our view, the scenario of a Greek default followed by drastically rising, yes rising, stock markets becomes increasingly likely the more bearish people become. That would require us to be bullish, which is much tougher in the current global economic environment than being bearish. Luckily we have our proven methods to trade by, so we'll likely be properly positioned and profitable in any case and no matter our personal biases.

It is worth considering that doomsayers have been dead wrong for many months now, even years, so maybe their time has come. We'll see.

For now, his closing assertion that we'll know when equities are safe again by the look of the economic landscape seems preposterous. There's been nothing but economic threats and unrest for years now and the DJIA is at its highest level of the past 4+ years, and not far off its all-time highs. The stock of Starbucks and Apple are at their all-time highs, and that's hardly a sign of economic malaise. If correlations between markets and economic situations exist, we're hard-pressed to find them consistently in the extensive market history we've studied so we're highly dubious of anyone that makes such assertions. It's just never that simple.

That said, we hope he's correct in his predictions. We'd make a killing on the shorting and get that much farther ahead of the typical investor and speculator as they have no real hedging strategies or diversification. It'd also result in far cheaper gold and silver, indeed most if not all assets would cost far less, for those who want to buy at lower prices and prudently preserved the buying power to do so.




We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the positions we do, or for mentioning any positions 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.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only and not to be taken seriously in any way. Just like "real" analyst proclamations. Thank you.

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 Best Buy, BBY

We enter Best Buy, ticker BBY, short.

We believe it's a good time for a hedge on the short side, and that Best Buy is a very compelling candidate. We've been watching this stock and following the company and sector for some time now. Here's our thinking on the situation.

Chartists will note obvious long-term downtrends in place, and the 200-day moving average has clearly been an important line of support and resistance. It's currently circa $27.30

We suggest shorting Best Buy, BBY, at current levels or higher. It closed today at $25.02 We suggest covering the position for an effective loss of approximately 14% on closes above $28.50 which is slightly above a level of key resistance in our view. That's the level which proved supportive in April and June of 2011, where the stock broke down from in late July of last year, and where the highs were put in during November and December.

Shorts must factor that Best Buy pays a dividend, which of course short sellers are on the hook for should we hold it through a dividend declaration. On average, that's $0.14 share quarterly. Next dividend declaration should be circa mid-late March. BBY's next earnings announcement is scheduled for March 26th.

The other other obvious technical points of note include the long-term downtrend in RSI (Relative Strength Indicator) peaks, and we find that the RSI has very recently peaked and apparently turned down from that downtrend.

In the MACD (Moving Average Convergence & Divergence) we see that the current levels correspond to long-term peaks and a possible downturn beginning in that indicator too.

The business itself, as well as the overall sector is weak. In general people have spent and borrowed far more than they can afford, and have all the electronic gadgets and large televisions they "need". For several quarters now, Best Buy has been disappointing vs. analyst estimates. We expect that to continue.

On a relative basis, BBY is extremely weak. Since early July it is down 22% while the DJIA is slightly higher and gold is about 15% higher over the same period. Since January of 2008 the DJIA is essentially flat, gold is up 96% and Best Buy is down 46% We believe this relative failure will continue going forward.

Lastly, general equities markets are up signficantly since early October and there is material overhead resistance. By contrast, Best Buy is relatively flat since then, and if & when markets falter we think BBY will drop at least to its December lows cirica $23 and over time we'd frankly not be at all surprised to see the stock below $10.







We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the positions we do, or for mentioning any positions 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.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only and not to be taken seriously in any way. Just like "real" analyst proclamations. Thank you.

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.

VIX calls opened

Per the last update, with the DJIA above 12740 this morning we did buy VIX $25 April calls at $3.00


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.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only and not to be taken seriously in any way. Thank you.

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.

selling GS, Goldman Sachs +16% in two weeks

GS is up over 16% from our entry the morning of January 6th, just two weeks ago.

Brilliant, so we'll book it as markets enter an overbought condition with material overhead resistance not much further above.

A compelling bet to us currently is the VIX ("volatility index") $25 April calls, which last traded at $3.90 If the DJIA gets above 12740 we'll pick up a bunch.


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.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only and not to be taken seriously in any way. Thank you.

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.

long GS, Goldman Sachs

For our first trade of 2012, we go long GS.

Based on a look at the stock's chart, we've reasons to believe support below $90 is strong and that a protracted upward move is due. If that happens, it'd almost certainly correspond with general equity markets worldwide moving higher.

We're currently hedged for market downside via shorts in gold, silver, and China, as well as via a levered long position in the U.S. dollar via UUP. We've got TBT, which usually goes up if the market does, but we could use another long position and that'll be Goldman Sachs which last traded at $94.53

We'll stop out on any close below $84 which is a level not seen since early 2009. The stock's worst closes in 2011 were $87.70 in December and $87.89 in November, so it'd take serious weakness to close below $84. The lowest intraday trade in 2011 was $84.27

We believe GS is due for a large and protracted move within the next few weeks, hopefully in our favor, but in case this becomes a long-term position that continues to generally move sideways as the stock has for months now, we note that based on the current price of the stock GS's quarterly $0.35 dividend equals roughly 1.5% per annum.

Wildcard : GS announces its earnings on January 18th, at which point things could get volatile for good or ill. This is another catalyst, perhaps "the" catalyst, for a big near-term move.



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.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only and not to be taken seriously in any way. Thank you.

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.

Gold & Silver

Eight months ago, equties hit their highs as did many commodities.

Since then, gold is dead flat and dropping fast. Silver, the so-called "poor man's gold", is down over 40%.

Equities in North America are down less than 5% over the past 8 months, and the U.S. dollar is considerably higher.

Over the past six months, the dollar and equities were quite profitable long holdings while both gold and silver were relatively big losers.

The recent trend, to us, is self-evident and we believe will continue throughout the New Year.

We go into 2012 very short, already very profitably, gold and silver. Going forward we're much more likely to see ZSL over $50 than silver. Gold should prove more stable, but still drop.



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.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only and not to be taken seriously in any way. Thank you.

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.