Post by Savant on Sept 29, 2004 10:01:22 GMT -5
Stocks Begin to Stage Strong Rebound
The interesting thing about sensing the end of a short term decline, especially, in what amounts to be a continuing bull trend against a backdrop of a strong economy and what appears to be a very firm undertone. Some of this strength became particularly evident over recent days as stock began popping higher or in some cases literally exploding higher in a sense heralding a turnaround which clearly began to emerge yesterday and took on some upward force and momentum as giant Caterpillar CAT, reported unprecedentedly strong performance and unprecedented demand in all of its divisions. As the World's No. 1 maker of earth-moving equipment, with incidentally a very strong presence in Asia with some 15,000 employees in that region, there is probably no better weather-vane of future trends in the Global economy, than perhaps General Electric GE which reported its best performance in 20 years a while back, and since 20 years ago, GE was a minutia compared to what the 100 times sized conglomerate it is today, prompted us to write our special report: The Best Economy Ever Parts 1 & 2. Today with Caterpillar firing on all 16 Cylinders like many of its renowned World beating products it just doesn't get much better and underscores again and again what we have been proclaiming all year.
Unprecedented means without precedent. It means this has never happened before. Further proof: This is the "Best Economy Ever".
If you happened to watch renowned award winning economist, (24 years straight #1 Economist on Wall St), Ed Hyman on Wall St week with Louis Rukeheyser last Friday, he was as close to saying this is as Nirvana as we are likely to get and went on to point out on several occasions that in his view, we are still only in the third year of what might be a decade long recovery, which has been our mantra all along, having concluded what now seems like eons ago, that the three year bear market at the turn of the 21st Century, was akin to the three year stumble that hallmarked the turn of the 20th Century, noting that the market rose almost 1000% thereafter.
Judging by the kind of hypergrowth going on in China right now, this viewpoint is beginning to take on increasing validity and the whole picture is starting to come together, especially when a broadly similar scenario, to what we have been espousing is presented so very eloquently by one such distinguished economist as Ed Hyman. Our strong views on the extremely positive impact of low interest rates were further endorsed by his emphasis on the fact that we are almost in a period of unprecedented opportunity, going as far as to say cash yields are so low that the worst investment idea of today is "cash" and that this realization would force investors to put cash to work to achieve much higher and albeit riskier returns and that this was extraordinarily bullish for business and stocks. The closest analogy to conditions today are the nostalgic '50's, when unemployment was at all time lows, productivity was high and the economy grew steadily for years in a post war boom.
Are we in a war to post war boom? There are some similarities. If 9/11 was our Pearl Harbor, three years later the War on Terror is well advanced though not yet through and may not be for some time, but to some extent we are also already in the 50's and the most important thing to understand is, in spite of recent rate hikes, (a bad idea in our view, more later on this subject in a future issue), there is definitely some kind of weird anomaly going on in the U.S. Treasury Bond market that looks completely at odds with the Fed. Notwithstanding, interest rates remained relatively low for 16 straight years straddling the decade of the 50's and conceivably are set to remain relatively low for the foreseeable future. A very positive omen indeed for future World growth as long as the Fed cooperates.
Stocks Starting to Pop like Champagne Corks
A few weeks back as the market was in the sweet spot of our "Market Defies Gravity" rise, some notable traders pointed out that we were ready for a fairly significant stockmarket surge, because the undertone of the market was so strong beneath the surface and it was really being masked by the indices which were underperforming stocks and the market as a whole and emphasized that the Advances over Declines in the market was net positive a sure sign of underlying strength and another very bullish omen has been transport strength.
Over the past few days, the various stockmarket indices appeared to decelerate to the downside, appearing to find support and late last week some stocks began to erupt higher. Like cream floating to the top, these stocks were popping over the past few days.
Readers will know that our system was down for a number of weeks that prevented us from writing more frequently and also postponed the launch of our proposed "Real Time Advisory Service". Whilst we are still not ready to go for a full 100% launch, we are approaching that time and we have begun a work-up by advising a few select clients with some of our best investment ideas over recent days:
Outline of Recent Performance
Some issues we recommended over the past several weeks along with some that were also highlighted herein have performed spectacularly: Some time back we highlighted BHO at $8 as an extremely undervalued situation and it spent quite a while wallowing around with little or interest being given it, when suddenly and partly as a result of an even more spectacular run in a related high growth shipping company named Excel Maritime Carriers EXM, that just over a year ago was selling for $1 per share, in August this year it began a tear from a pullback price of $7.10 following an earlier in the year run to $15.65, it took off on a relentless run to $65.85 high reached last week, pulling BHO along with it almost as rapidly, all the way to $33.10, close to where we concurred with another advisory's take profit sell recommendation at around $32.00.
Some weeks back, Onyx Acceptance Corp - ONYX was also highlighted here at CT and on September 22 just after the opening bell, thought there was a bad tick or bad data reflecting a price of $27.10, when the market closed at $16.30 the previous day.
It wasn't a bad tick...
Capital One announced they were acquiring Onyx Acceptance Corp. for a 70% plus premium of $28 per share of $191 Million.
TRM Corporation TRMM was also highlighted here a while back in the low teens and we reiterated this issue as a super strong performer last Wednesday at around $18 as it exploded higher briefly touching $19.75 before pulling back a bit and now appears poised to break through the $20 barrier with some authority.
Yamaha Gold AUY was also recently highlighted herein and has performed well over the past few weeks rising over 20%. Again VSEC was highlighted around mid-August in the mid-high teens.
As the market began to incline to move into higher gear late last week, on Friday we highlighted: World Airways WLDA at $6.20 at 10.15.
INTV, NRD, CATT, RRGB, CMTL, AIRT and ECSI were also highlighted at this time and we added DHB, AH and LLL at 10.38 & 10.39.
On Monday September 27 at 0953 EDT, WLC TMR ARTM ONXX ROYL DDN HBP FTO ASH were highlighted in addition to above.
On Monday September 27 at 1002 EDT OPMR highlighted at $8.56 STTX at $22.89 MIND at $6.08 GMXR at $6.87 UBH at $25.25
NSTK was also mentioned Monday as a strong performer. At 12:30 Monday, PER NOBH WRLS highlighted and WRLS reiterated.
Tuesday 28th 10.15 Elected to sell the following issues: WLDA VSEC PRSW NSTK AIRT MIND STTX WRLS OPMR INTV CMTL
Round Noon added BHO and EXM near their respective lows - Added BLDP, FCEL, CNC and LIPD and at 1520 added ESMC
Lipid has a very interesting and dynamic chart formation. Whilst it pulled back a bit. It is worth holding for possible major upmove.
Other Trading ideas and Updates
As of eariler this morning, we are already out of most of the above issues, but still hold ESMC, NRD, CATT, LIPD and have stops protecting remaining issues which we will update in due course.
Our Coffee trade of a few weeks back worked out well, but could have performed better if we had not been stopped out. Basically, this meant only making some $8000 instead of a possible $12,000 plus we could have made if we just held tight for another week or so.
We also mentioned how Gold had been acting better in recent days and continues to do so as does Silver and Copper, which we also called for strong upmoves in. The Dollar is beginning to look vulnerable to that continuation move to the downside we also spoke about a while back but can't quite bring itself to break down significantly. US Treasury Bonds continue to look like they may be nearing their highs at this time. Grains are trying to find a bottom, but this may still evolve over the next few weeks.
Again Hope you are having a great Wednesday
Trade Well and stay safe
Savant
The interesting thing about sensing the end of a short term decline, especially, in what amounts to be a continuing bull trend against a backdrop of a strong economy and what appears to be a very firm undertone. Some of this strength became particularly evident over recent days as stock began popping higher or in some cases literally exploding higher in a sense heralding a turnaround which clearly began to emerge yesterday and took on some upward force and momentum as giant Caterpillar CAT, reported unprecedentedly strong performance and unprecedented demand in all of its divisions. As the World's No. 1 maker of earth-moving equipment, with incidentally a very strong presence in Asia with some 15,000 employees in that region, there is probably no better weather-vane of future trends in the Global economy, than perhaps General Electric GE which reported its best performance in 20 years a while back, and since 20 years ago, GE was a minutia compared to what the 100 times sized conglomerate it is today, prompted us to write our special report: The Best Economy Ever Parts 1 & 2. Today with Caterpillar firing on all 16 Cylinders like many of its renowned World beating products it just doesn't get much better and underscores again and again what we have been proclaiming all year.
Unprecedented means without precedent. It means this has never happened before. Further proof: This is the "Best Economy Ever".
If you happened to watch renowned award winning economist, (24 years straight #1 Economist on Wall St), Ed Hyman on Wall St week with Louis Rukeheyser last Friday, he was as close to saying this is as Nirvana as we are likely to get and went on to point out on several occasions that in his view, we are still only in the third year of what might be a decade long recovery, which has been our mantra all along, having concluded what now seems like eons ago, that the three year bear market at the turn of the 21st Century, was akin to the three year stumble that hallmarked the turn of the 20th Century, noting that the market rose almost 1000% thereafter.
Judging by the kind of hypergrowth going on in China right now, this viewpoint is beginning to take on increasing validity and the whole picture is starting to come together, especially when a broadly similar scenario, to what we have been espousing is presented so very eloquently by one such distinguished economist as Ed Hyman. Our strong views on the extremely positive impact of low interest rates were further endorsed by his emphasis on the fact that we are almost in a period of unprecedented opportunity, going as far as to say cash yields are so low that the worst investment idea of today is "cash" and that this realization would force investors to put cash to work to achieve much higher and albeit riskier returns and that this was extraordinarily bullish for business and stocks. The closest analogy to conditions today are the nostalgic '50's, when unemployment was at all time lows, productivity was high and the economy grew steadily for years in a post war boom.
Are we in a war to post war boom? There are some similarities. If 9/11 was our Pearl Harbor, three years later the War on Terror is well advanced though not yet through and may not be for some time, but to some extent we are also already in the 50's and the most important thing to understand is, in spite of recent rate hikes, (a bad idea in our view, more later on this subject in a future issue), there is definitely some kind of weird anomaly going on in the U.S. Treasury Bond market that looks completely at odds with the Fed. Notwithstanding, interest rates remained relatively low for 16 straight years straddling the decade of the 50's and conceivably are set to remain relatively low for the foreseeable future. A very positive omen indeed for future World growth as long as the Fed cooperates.
Stocks Starting to Pop like Champagne Corks
A few weeks back as the market was in the sweet spot of our "Market Defies Gravity" rise, some notable traders pointed out that we were ready for a fairly significant stockmarket surge, because the undertone of the market was so strong beneath the surface and it was really being masked by the indices which were underperforming stocks and the market as a whole and emphasized that the Advances over Declines in the market was net positive a sure sign of underlying strength and another very bullish omen has been transport strength.
Over the past few days, the various stockmarket indices appeared to decelerate to the downside, appearing to find support and late last week some stocks began to erupt higher. Like cream floating to the top, these stocks were popping over the past few days.
Readers will know that our system was down for a number of weeks that prevented us from writing more frequently and also postponed the launch of our proposed "Real Time Advisory Service". Whilst we are still not ready to go for a full 100% launch, we are approaching that time and we have begun a work-up by advising a few select clients with some of our best investment ideas over recent days:
Outline of Recent Performance
Some issues we recommended over the past several weeks along with some that were also highlighted herein have performed spectacularly: Some time back we highlighted BHO at $8 as an extremely undervalued situation and it spent quite a while wallowing around with little or interest being given it, when suddenly and partly as a result of an even more spectacular run in a related high growth shipping company named Excel Maritime Carriers EXM, that just over a year ago was selling for $1 per share, in August this year it began a tear from a pullback price of $7.10 following an earlier in the year run to $15.65, it took off on a relentless run to $65.85 high reached last week, pulling BHO along with it almost as rapidly, all the way to $33.10, close to where we concurred with another advisory's take profit sell recommendation at around $32.00.
Some weeks back, Onyx Acceptance Corp - ONYX was also highlighted here at CT and on September 22 just after the opening bell, thought there was a bad tick or bad data reflecting a price of $27.10, when the market closed at $16.30 the previous day.
It wasn't a bad tick...
Capital One announced they were acquiring Onyx Acceptance Corp. for a 70% plus premium of $28 per share of $191 Million.
TRM Corporation TRMM was also highlighted here a while back in the low teens and we reiterated this issue as a super strong performer last Wednesday at around $18 as it exploded higher briefly touching $19.75 before pulling back a bit and now appears poised to break through the $20 barrier with some authority.
Yamaha Gold AUY was also recently highlighted herein and has performed well over the past few weeks rising over 20%. Again VSEC was highlighted around mid-August in the mid-high teens.
As the market began to incline to move into higher gear late last week, on Friday we highlighted: World Airways WLDA at $6.20 at 10.15.
INTV, NRD, CATT, RRGB, CMTL, AIRT and ECSI were also highlighted at this time and we added DHB, AH and LLL at 10.38 & 10.39.
On Monday September 27 at 0953 EDT, WLC TMR ARTM ONXX ROYL DDN HBP FTO ASH were highlighted in addition to above.
On Monday September 27 at 1002 EDT OPMR highlighted at $8.56 STTX at $22.89 MIND at $6.08 GMXR at $6.87 UBH at $25.25
NSTK was also mentioned Monday as a strong performer. At 12:30 Monday, PER NOBH WRLS highlighted and WRLS reiterated.
Tuesday 28th 10.15 Elected to sell the following issues: WLDA VSEC PRSW NSTK AIRT MIND STTX WRLS OPMR INTV CMTL
Round Noon added BHO and EXM near their respective lows - Added BLDP, FCEL, CNC and LIPD and at 1520 added ESMC
Lipid has a very interesting and dynamic chart formation. Whilst it pulled back a bit. It is worth holding for possible major upmove.
Other Trading ideas and Updates
As of eariler this morning, we are already out of most of the above issues, but still hold ESMC, NRD, CATT, LIPD and have stops protecting remaining issues which we will update in due course.
Our Coffee trade of a few weeks back worked out well, but could have performed better if we had not been stopped out. Basically, this meant only making some $8000 instead of a possible $12,000 plus we could have made if we just held tight for another week or so.
We also mentioned how Gold had been acting better in recent days and continues to do so as does Silver and Copper, which we also called for strong upmoves in. The Dollar is beginning to look vulnerable to that continuation move to the downside we also spoke about a while back but can't quite bring itself to break down significantly. US Treasury Bonds continue to look like they may be nearing their highs at this time. Grains are trying to find a bottom, but this may still evolve over the next few weeks.
Again Hope you are having a great Wednesday
Trade Well and stay safe
Savant
