Weekly Market Outlook, Star Scientific (STSI)

On August 30th, after having been correctly bearish during the previous few weeks, we wrote:

"Markets are closed Monday per the Labor Day holiday in North America, and we remain longer-term bearish while still expecting a near-term bounce.  That bounce 'should' begin Tuesday..."

That Tuesday a rally began which took the DJIA 850 points higher over the following dozen trading days. 

The rally ended mid-day on September 18.  Earlier that morning, we offered some short sale ideas and wrote:

"Currently equities are very overvalued and sentiment is stretched to multi-year bullish extremes by some measures."

Over the following thirteen trading sessions, the market fell almost 800 points from the September 18 high.  Many have said this was due to concern over the so-called government shutdown in the U.S. but that's false.  The market was overdue for a fall as we'd asserted and it would've happened no matter what, just as it happened despite the continuation of QE announced on the 18th which shot the market much higher intraday.

Scoring our short sale suggestions, GMCR fell as much as 19%, Z fell as much as 18%, BBY fell 5% while TSLA has gone higher and well above our suggested stop.  We did participate in all of these ideas, mostly utilizing put options, and on net have come out well ahead.  As of yesterday, Monday the 7th October, we've closed these effective shorts as we now expect a market bounce. 


One of our long-term holdings is Star Scientific Inc. (STSI), which has not previously been diarized in this blog.  We hold it at an average cost, adjusting for profits from a few swing trades, of $1.37

We'll offer no opinion of the company's operations, product, claims or finances. If it interests you, read up on the company. It has a compelling product and big-name endorsers along with plenty of fans, touts, foes and naysayers, and has had a wild ride since going public in early 2000 just as stock markets began an epic tanking.  

Our interest here is purely technical:

Note the year-long downtrend broken and the current consolidation around $2.00  Typically such a pattern eventually continues upward. 

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 publicly traded 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.


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