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Over at least the last decade investors in AT&T (NYSE:T) have faced challenges due to secular trends of cord-cutting and the rise of streaming platforms.
From your lips to Ms. Market's ears. This was a classic breakdown. After this morning's drop the bulls took over from about 10:15 until just after 12:30. When the bulls attempted a new high at 1:00 the bears took over and there was a slightly lower high. Then the direction was confirmed with a lower high at 2:00 and a test of support at 2:30. When the bulls failed to get a new high at 3:30 the market moved down quickly. Notice the blip up around 3:40 right at support. When that didn't hold it was straight down.
And where did we stop? Right at the two day support line from early yesterday. I'm not suggesting this was tradable as the return would have been $36 on a $10,000 trade. But I've seen this exact pattern hundreds of times on a daily chart. At that scale, these make very good trades returning 10-15% over 2-3 weeks. When I'm trading I always keep a 1-minute, 5 or 10-minute, hourly, daily and weekly chart up on one of my screens and the trading platform on another screen while I do research on my laptop.
Although somewhat expensive for the version that allows custom conditions and automated market scans, to my mind the best platform for serious traders is DeMark Symbolik. Familiarity with TA and light coding basics is required to make the most of it. I used it for several months while it was in beta testing a couple of years ago and gave it up when they couldn't resolve a bug that created havoc with a couple of my favorite and more complex condition sets. When I have more time I'll get back to it now that it's in full release.
The market hasn't been this sleepy in a couple of years. A few more days like this and we'll be setting a record for lack of volatility. Upper Bollinger band is at 4,184 and the lower band is 4,062. That's an average of under 3%, (two standard deviations), for the last 20 trading days. This was ~9% six weeks ago.
Crickets
And it's getting even sleepier...two day chart below.
Nick, CCI looks good for an income portfolio. I'll have to look at this one much closer.
gfp, I'm only looking at the technical indicators. The real world always intervenes but we can never know what the future holds. Bollinger says the market is uncommonly calm. What we're looking at is JB's 50 years of analysis experience. We can't even say with certainty why this works. It may have been so good for so long that it's written into all the algorithms on Wall Street. I tend to think it's the tail wagging the dog at this point but like all TA it doesn't matter. Most of the folks on Wall Street are maybe half as bright as they think they are. They want to look smart, dump this into their code and now almost everyone is using this trigger and they all look smart when in reality they're just lemmings jumping off a cliff at the same time.
As I've said too many times, TA does not tell me what to buy only when is the most likely time to buy and sell at a profit. TA tells us what Wall Street is doing. With experience it tells us when they're most likely to do it. They are British soldiers marching in columns in a field, we're Native Americans hiding in the forest, waiting to pounce. It's the only advantage we have but it's a damn good one.
Below is a one year chart of the SPX that I've published here previously. For 10 months SPX 3,900 was the mid point for the market. In early April this year the market again moved up and since then has been flat. Not relatively flat, almost completely flat. In the top two panels; PPO and RSI, we see absolutely nothing. In the main panel, the Bollinger Bands and will continue to narrow and begin to move down slightly through the week barring any volatility. In the three panels below we see the VIX falling, accumulation continuing and Bollinger Band width narrowing to a point not seen since December 2021, (not shown on chart).
So what is this telling us? A central thesis of John Bollinger's research is that periods of non-volatility are followed by periods of increased volatility. BBs do not predict market direction, they predict that periods where little volatility is evident will be followed by volatile periods in the market. That is, we can expect either the lower or upper band to be breached and volatility to resume within the next week or two.
Dish Network, (DISH), is a company renting typewriters in the era of computers. A decade ago when internet speeds were measured in megabits per second and not hundreds of megabits per second, DISH and its competitor DirecTV were the kings of high quality media delivery. In 2015 the geniuses in charge at AT&T bought DirecTV for $67B. They would have had more success setting fire to that cash.
Back to DISH. This was a company trading for almost $80 a share when T bought out their competitor. DISH closed on Friday at $6.16 or ~$3.3B in market cap, down over 90% in the last eight years. What got me interested in looking at this longer than the usual corporate funeral procession is that the enterprise value is almost $23B, (all the stuff we got minus all the stuff we owe). It appears DISH is still valuing their $30B investment in wireless spectrum at something close to $30B even though that appears to also be a failed attempt to reform DISH as a VZ, T and TMUS competitor.
So, of course, Wall Street has them as a buy even though they have 2-3 mountains of debt and a very likely over valued group of assets like aging satellites, ground infrastructure, a non-competitive wireless offering and a less than compelling streaming service, (Sling). It appears the market has DISH valued about right but the vultures may be waiting for a BK buyout to ensure most liabilities disappear. Like I did with BBBY, I've got this one on death watch. Traders could read Reddit to find out if this will become the new meme stock before it flames out. After all they are the Game Stop of media delivery.
Notes from Barron's: Icahn Enterprises, (IEP) - yeah, that guy, Carl Icahn, stock is down 36%. People own this stock because it pays a massive dividend. Before the company came under attack by other activist investors it paid a 16% dividend. Now that dividend is 25%.
Let's file this under; if it sounds to good to be true, it's probably not true.
IEP trades at 3.2X net asset value, (NAV). That seems more than a bit high for a company that's not growing. So how can they afford to pay a, now, 25% dividend? Here's the magic trick, Carl owns 84% of the company and he takes his 'dividend' in stock so effectively the dividend is 4%, (25*.16). But that's not all folks. He then sells additional shares to pay the 4% owed to other share holders. To say the least, he's massively diluting the share value.
An analyst just published a paper explaining how Icahn can continue to do this: In brief, Icahn has been using money taken in from new investors to pay out dividends to old investors. Isn't there a name for that type of business..:)
The U.S. Attorney’s Office for the Southern District of New York is also trying to understand how Icahn values his company. Carl has been wrecking companies for 50 years. Maybe he'll finally get taken down.
And the operative phrase...have been.
Surprise comrade; you'll be fighting evil on the front lines in Ukraine.
Peloton, (PTON), is another pandemic meme stock that has fallen on hard times. This stock was valued at $57B in early 2021 when everyone wanted to get in some exercise as far away from other people as possible. Today it hit a fresh new low and is valued at $2.4B. PTON loses $300-400M a quarter. More than 10% of the outstanding shares are shorted.
And in more good news for PTON, they've issued a recall on 2.2MM bikes. It appears the seat posts were fine for the biking fitness crowd that still uses PTON but not so much for the millions of average, McDonald's eating, Americans who took it up during the pandemic.
The demise of PTON is not all that surprising but what I find most interesting here is that some entity or entities have been accumulating shares for over a year. TROW owns ~15% of the company. At the current rate, BK or an acquirer seem like the only options. Who can buy them, fold this into other services and make a profit? PTON is already in a partnership with AMZN.
Like all perceived seers, AI will look a lot smarter than it is as long as people believe it can see the future; simply a self fulfilling prophecy. When it really starts working well, market makers will keep as much of this out of the hands of retail investors as they can - for as long as they can. This is how the market has always worked.
Groupon, (GRPN), is a sad tale that took 12 years to tell. Like the character in the Holy Grail, they're not dead yet. They went public in November of 2011 at $20 a share. Moved up to $26 over the next couple of weeks and then dropped to $15 over the next three trading days. Within a year they were trading for under $3. They never really recovered and in 2020 they did a 1:20 reverse split. If you'd have bought $10k in GRPN stock in 2011 it would be worth $85 today. This $13B company is valued at $110M today. I've no idea why it's valued at anything above zero. It's an online version of BBBY. They provide a service where almost no one finds value.
File this one under I'd rather be lucky than smart. I sold Disney, (DIS), for a small gain in early February, (see my post 2/7), because there was trouble on the board and with the streaming business. Also, still no dividend. The mouse just choked on his cheese this morning and they're down over 15% from that sale price. I'm becoming quite happy with my very boring fixed income investments.
Musk is stepping down as CEO of Twitter and there's talk of Space X going public at a $140B valuation. This would include the launch operations and Starlink. Interesting idea. TSLA shares should have a nice bump up in the morning.
Sounds like an interesting strategy for traders. Do you know if it worked for TSLA when it hit $105 at the beginning of the year? Post a chart if you can.
Yes. I'm not sure what the paper versions cost but I'm sure it's much more. I haven't even read a paper book in a decade. It's so easy to annotate and make notes in e-books. Also I like to post some of the articles I read and it's obviously not possible with paper.
That's it exactly. PPO tends to predict what will happen while MACD too often tends to tell you what has already happened. With RSI, BB, A/D it makes for a useful trading tool.
Thanks. You can get the WSJ, Barron's and Marketwatch for $2.50 a week for a year. At the end of the year just say you want to cancel and they'll give you the same deal again. Totally worth it for investors managing their own portfolio. Plus you can write it off if you're managing your own portfolio and itemizing deductions.
Ha ha, as long as it's not a Koi pond..:)
It's an excellent option as long as it's not competing with a land based install which is much less expensive.
Nick, if your software supports PPO, I've found it much more useful than MACD. I switched a couple of years ago.
Interesting, thanks. Also the second link to the NYMag article is excellent. The term I understand one of the FOMC members used sometime after the press conference was "hawkish pause". It makes sense that the Fed will pause in June if the CPE is inline with expectations and the May CPI is also inline or lower. It's no coincidence that the June Fed meeting is June 13-14 as CPI will be reported the morning of the 13th. As they always say; it's "data dependent".
As I've said previously my take on the April CPI numbers is that they were higher than the March numbers, (all items), and the same as the March core items. We seem to be stuck at 4-5% unless people stop spending. Also, wages are still catching up with inflation.
Cell phone traffic in downtown San Francisco is 70% lower than before the pandemic. Commercial buildings are following a similar trend. This reminds me of New York 30 years ago. I'm sure they'll rebuild but investors should be very careful with commercial REITs.
Absolutely will be but I wonder what the lag time will look like. It took close to a decade before the Internet really began to payoff WRT productivity. Maybe AI won't require as much infrastructure but it could require a lot of social change. It will be interesting times.
Could be the new driver of productivity
Good day for you Nick as the bulls and bears on Wall Street fought it out all day. It's not unusual for this type of battle to break out when a clearly defined short term wedge forms. We went way up, way down and then the bulls finally took over. All that said, we're still in the middle of a 200 point channel.
Lyin' George is innocent I tell ya. Plus he's too entertaining to lock up. Cryin' Kevin says he's concerned, but Lil' G is innocent until proven guilty. You can't make this stuff up.
I thought Uncle Joe was the market whisperer when he went 14th Amendment in his speech yesterday. So far market makers just used it as a selling opportunity. Apparently a .4% April CPI, (4.8% on an annual basis), trumps Biden..:) Sorry, I couldn't resist.
As you likely know, I don't trust any market makers. I much prefer outside analysts, fundamentals and TA. TA will show you what WS is doing not what they say you should do.
Technically speaking you should have a very short leash on a classically downward channel breakout. Price will often follow the upper channel line downward after the breakout. I don't follow CWH but here's my quick take on it.
Over the last two quarters they've made a total of 4 cents a share while disbursing $1.26. Expected earnings for upcoming Q2, always their biggest quarter are 81 cents, down from $2.16 last year and $2.51 the year before. It appears someone is eating their lunch; Dick's Sporting Goods?
It also appears the dividend isn't terribly safe as it was 2X as much in 2020 and 2021 and it was 4X as much in 2022. Maybe a pandemic meme stock? It's been falling since June of 2021. I would listen to the last annual meeting and the first quarter meeting to get a feel for how management is characterizing the issues. During the pandemic we traveled across the country twice to get to our boat. Once in 2020 and once in 2021. Both times we camped all the way. We sure as hell aren't camping now..:)
Another sanity check I use for any stock is price before the pandemic. This was a $13 stock. Fell to $3 and moved up to $34 by August. My take: We weren't the only people camping and avoiding airplanes and hotels.
Wall Street has CWH as a buy, Zacks a hold and Seeking Alpha a strong sell. I didn't look at their debt profile or their cash flow. I would be very cautious with an industry that appears to be consolidating after the camping, RV and boating rush - The how can I enjoy myself without being around other people rush.
My advice more generally, would be to initially put together a spreadsheet of everything you do before you buy a stock. This took me about 15 minutes but it was a no for me after 2-3. It doesn't fit my profile for a SWAN type investment. If I had liked what I saw it would take me the rest of the day to get close to a decision. Now I'm going to have to put this one on my watch list to see if I'm right, LOL! Hope this was helpful.
My concern with this is the cost and availability of debt. Future earnings are heavily discounted in a high rate environment. The Fed only has two mandates; keep unemployment and inflation low. As long as one is low and the other high, they only have one job. We'll know more after the June 14 meeting announcement. Is MSFT worth 33X in this environment? I'm not so sure.
Not sure I mentioned it on this board but I moved 80% of my investment funds to fixed income a couple of weeks ago. The other 20% is in preferreds. I'm sleeping much better now..:)
Morning Nick. I'm watching this chart of the SPX this week. We've been in a channel since the 1st of April with two wild swings caused by the so called banking crisis which is more about the FDIC living in the 20th Century while companies with millions or billions in uninsured funds are able to pull all of their money out of an institution in a few minutes. While it will be a pain we need to re-regulate the mid-size banks so these funds can be insured.
Back to the chart. There is a clear upper and lower bound but more interesting to me is that Wall Street has been accumulating shares during all of this nonsense and the VIX shows no fear. The two red lines exhibit a classic squeeze. Both VIX and A/D are pointing to a breakout to the upside most likely before the end of the week.
To anyone else, don't bet the bank on this. TA only points to the most likely outcome.
Nick, I told Ms. Market you need some volatility to make real money. So far, it's similar to watching paint dry.
The entire point of a well regulated militia as defined in the 2nd Amendment to the Constitution is to defend the US against an insurrection. This is not difficult to understand.