Posts Tagged ‘Sell Off’

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Netflix (NFLX) of which was a $300.00 Stock back in July 2011, is not trading at a $114.00.

Shares of Netflix obviously were overvalued, and it has showed have been overbought for sometime.

Netflix is currently at a Price now most people would want to take a look at for a long term investment however I tend to disagree. Not only do I think that Netflix has not seen its Bottom. Netflix is a stock to stay clear of until it starts to establish a better Video Portfolio. Another thing to look for is, when will Netflix start streaming in Blu-Ray. I recommend that people stay Clear of this Stock as any bad news will Rock, it. If Netflix can establish themselves in the Streaming of Blu Rays, and signing some better Movie Companies, and TV shows it will then open my eyes for a possible investment. Do not forget that Microsoft has now announced it will be entering the streaming of content, this may hurt Netflix Long term.

If or When Netflix starts trading under $80.00 will I look to a possible investment in the company. However it also would rely solely on good news such as an announcement of New TV show Releases, and the Streaming of Blu Ray content.

 

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As I stated back on September 7th -8th the Bulls were still in full force of the Market. I also stated that we were possibly showing signs of  a 1987 Crash.

The Dow Jones Industrial Average opened on September 8th at 11,462.66, and closed at 11,295.81

It than continued lowering until bottoming out mid day on September 12th at 10851.74

The Bulls in the Market continued to rebound the market back up to a high of 11,536.49 on September 20th

Shortly after the talk of Europe and its Default news

The Dow dropped to 10,635.85 on the 22nd

Finally closed on September 23rd at 10,771.48 with hopes Europe would find an answer to its default issues.

The facts are simple, there is no real answer to what will happen with the Europe Defaulting, and it is totally beyond our control. I firmly feel the Government, and the ones talking of the issue are holding back from the truths on how Serious it really is.  Dont Risk it, if you need it, and make wise decisions.

In the Brink of a Bear Market of which has happened 3 times in August alone a ETF of which could potential help you during these down times is Direxion Daily Finan. Bear 3X Shs(ETF) (FAZ).

Sell Offs Last Month!! August 2011!

August 1st, to the 5th, resulted in a jump from $49.00 to a high of $79.00 in 4 days! +$30.00 or 38% jump

August 17th-22th, resulted in a jump from   $57.56 to a High of $71.27 + $13.71 or 19% jump

Sell Offs already this Month! September 2011!

September 1st-6th, resulted in a jump from $51.29 to a of $66.42  +$15.13 or 22.8% jump

 

With (FAZ) currently around $55.00 it might be worth your penny to buy a few shares and bet that the market will have another big drop.

Another ETF to add to your watch list is (EDZ)!
Disclosure – Currently I hold a Position in (FAZ), but not (EDZ) and do not plan to initiate another Position within the next 72 hours.

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As today marks the day for Job reporting to come out I expect there to be a bit of sell off. As the White House has recently downgraded its outlook for the economy, and forecasting unemployment averaging around 9% in 2012 many investors may be eager to sell today, and take there gains since there has been a solid rebound since August 18th. The White House also announced that there is slower then expected growth for the coming years ahead.  Even though the Labor Department has reported Thursday a lower number of people claiming new jobless benefits from the week prior, it does not surprise me. Many may of been unable to file due to the storm in the Carolina s, and the North East as there is still upwards of 400,000 plus still without power, and Million Plus out of power from Saturday into Wednesday. In the end I predict if today’s job reports show anything under 20,000 new jobs the market could see another volatility day.
To stay safe I recommend buying (Direxion Daily Emr Mkts Bear 3x Shs (ETF) (EDZ). This is a wonderful ETF to buy when the market has big sell offs or sell offs for multiple days. If the job report does not meet Wall streets Expectations and there is a 600-1000 point drop in the next few trading days (EDZ) could easily jump back to the $25.00 Range. Currently (EDZ) Closed at $20.40, and in Aftermarket increased to $20.59. If a sell off happens (EDZ) will pop! There is no question about this. (EDZ) could easily eclipse $22.00 + in pre-market this morning. I currently do not recommend Buying anything right now, I would stay clear of Stocks, Hold positions of which you are in for long term, and Buy (EDZ) for some quick gains. There is an easy 13% upside here, and this would be if (EDZ) only pops to $25.50.

 

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This week added to its 3 week tear on sell offs and marked for the S&P’s largest sell off since March 2009. With global news being the biggest concern many are worried since the worlds largest banks have slashed economic growth forecasts.

Some of the S&P’s stocks of which were hit the hardest this week included

Alcoa Inc. (AA) since August 1st, has dropped from $14.75 to $11.23. Loss of $3.54 or close to a 24%

Hewlett-Packard Co. (HPQ) since August 1st, has dropped from $34.94 to $23.60. Loss of $11.34 close to a 32%

Caterpillar Inc (CAT) since August 1st, has dropped from $100.99 to $79.97. Loss of $21.02 close to 21%

Alcoa Inc. (AA) is talked to of fallen because of economic growth forecasts. With this being said this does not look great for Alcoa Inc. (AA) with the fact that 80% of their revenue is based solely on aluminum and alumina if their is a decline in the demand for these products this could hurt them. Personally I do not think their will be a Huge loss in the demand for (AA) Aluminum. With the fact that Alcoa Inc. (AA) operates in 31 countries if a few countries lower demand some of the other countries of which they have involvement with may increase demand which would balance it back out.

Hewlett-Packard Co. (HPQ) plunged 27% of the 34% just this week. This being the worst loss or drop for (HPQ) since October 1987 and the market crash. What caused all of this, their was talk of confidence, and a shift in strategy looking forward. Personally it may be investors catching on that the Cloud may rid of the Computer. It may also be their may be concerns of (HPQ) continuing to have flat numbers.

Caterpillar Inc. (CAT) also plunged because economic fear that the demand will not be there.  The fact is (CAT) has performed almost all predictions the this past year. There EPS was phenomenal, and Revenue Sky Rocketed. The reason I think there was such a large sell of was because there may be a bit of time before they hit those numbers again. This does not mean that they cannot or they are losing Market share because they are not. If anything I think Caterpillar (CAT) is in a wonderful position right now. I would not put it past (CAT) to still beat Analysis predictions even if the economy slows down for a bit. If anything this will give them opportunity to find more ways to stay in the forefront of this sector.

The sell off may continue for sometime however do not be discouraged overtime the stock market will reemerge not to mention. August 15th Warren Buffet made these comments

“I like buying on sale,” said Buffett, Berkshire’s chief executive officer. “Last Monday, we spent more money in the stock market buying than any day this year.”

Disclosure – Currently I do not hold a position in any of the above stocks, nor do I plan to hold a position within the next 3 trading days.

Since Last week to this week it seems as ever single market has been hit, and hit bad with this major sell off. Most of the reason being blamed on the fact that S & P downgraded the United States from a AAA to an AA+. (Can someone explain in reality what the heck the difference is??, because to me 2 A’s is obviously better than 1 A, and 3 Better than 2 A’s However being AA+ does not mean the world is going to come to a end. As of late the Market has been getting crushed with pathetic news. Most of the time I see some of these articles, and I am like how can that even be 100% legit. (What I am retorting to is that their is bullshit articles printed daily to stir up things.) Anyways sorry to get off of subject.

Sell off Will Continue

Personally the sell off to me is not even close to being completely over. I figure by the end of October and as we head into the winter months is when the markets could see their worsts.My reasons on feeling this way are simple, once Q3 comes it is for sure that there will be negative numbers in the Job Growth area, and this could continue all the way threw January. Oil ,and Gas are another KEY factor in the economy, and could have huge effects on the Market.

Oil Will Rise

I firmly believe there is two theories of which can happen with oil.

Oil will rise if there is a huge increase in the demand for it.

Oil will continue to rise weather we lay off the pump or not, because the increase in demand for Oil is still there.(Let me Explain)

See the fact that gas/oil are Natural Resources is what makes it such a pickle. Not to mention the fact that the world was so reluctant to find other alternatives 50 years ago has a burden on us. No matter what we do, regardless if 200 million USA drivers lets say drivers cut there driving by 5,000 miles a year. With an AVG of 20 Miles a gallon @ $4.00 a gallon

In a year that would be around 250 gallons a person *  $4.00 a gallon = $1,000.00 a year * 200 Million = $200,000,000,000 in savings just in the USA.

However lets say even with us cutting at the pump

Other European, and Third world countries continue to develop,prosper and use Oil.

Lets just make up a number here and say that this year there will be 100 million new drivers in these 3 rd world countries. From this lets say Each driver used 500 Gallons, and from the countries developing trucking because more dependent and 10 million new drivers hit the road to delivery food, and goods to the prospering cities. These trucks use 4000 gallons a year on gas. With all this at $4.00 a gallon this would be

500 Gallons * $4.00 =  $2,000.00 a person * 100 Million new drivers = $200,000,000,000 in Oil

4000 Gallons * $4.00= 16000 Gallons * 10 Million =$160,000,000,000

In the end regardless if we try to conserve Oil & Gas or not the world consumption will continue to rise, and we will continue to get lower and lower, on are Natural Resources of this Oil Demand, and in the end the price will Climb the ladder.