UYG/SKF

Discussion in 'Stock picks and trading strategies' started by TheChartGuru, Jul 18, 2008.

  1. TheChartGuru

    TheChartGuru Active Member won weekly contest 7x won sept/08 simulator won feb/06 simulator won jan/08 simulator won may/06 simulator won mar/08 simulator

    Both getting ready to reverse their trend.

    The Guru
     
  2. John Law

    John Law Member weekly contest winner

    Would that it were true.

    Picked up some SKF at 135, ready for a nice bounce.
     
  3. PhoMan

    PhoMan Member

    I am waiting for further earning directions from BAC. This morning's C earning result really makes me think twice about picking up SKF yet. BAC earning is coming out 07/21/2008 15:30 ET.

    GL JL, I hope BAC miss earning big time like MER.
     
  4. Supreona

    Supreona Member weekly contest winner

    Indeed, they could miss, but who knows? Then again they could blow it out of the water. I'm watching BAC and UB results.
     
  5. John Law

    John Law Member weekly contest winner

    I think everyone knows this rebound in financials isn't justified, so it's only a matter of time before financials tank once again. SKF is a good buy here, and would be an ever better buy lower. If you can get in lower, good on you. I'm not worried that banks are going to suddenly start making money hand over fist though. The rug has been pulled out and it can't be put back in a couple of months. This thing is going to last several years at a minimum. SKF will be a good trade all during that time, anytime it takes a big dip.

    Good luck.

    JL
     
  6. john_for_u80

    john_for_u80 Active Member

    Guru, I would love to see that, I am in!

    Where do you think SKF might reach on upside?

    Thanks!
     
  7. englishman26

    englishman26 Active Member won weekly contest 6x

    This is a change of tune on yesterday TCG! ;)

    Anyway - I had to double down on the SKF today and I feel pretty vulnerable here!! Lesson here: when the SEC decides to manipulate the market - probably better to out of the way!!

    Since this financial stress is still very bad, lots of debt downgrades again today, I don't know how the SKF can not go up - even with the SEC stomping on the shorts! I would love to be in the UYG when that starts a longterm uptrend - but this wasn't the start of it. I hope we can successfully play both sides of this from now on in a way that I have so far failed to do!! GLTA!
     
  8. BuyOnDips

    BuyOnDips Active Member

  9. John Law

    John Law Member weekly contest winner

    That's something I forgot to mention, MER and others were downgraded (bonds) yesterday as well. THese downgrades and writedowns make profitability an uphill battle, making debt issues more expensive. Financials will swing up and down, but I will stay on the sell side because I think they have the stronger case for some time to come.
     
  10. Jelly

    Jelly Member

    What about the FHA bailout? Putting a backstop behind the housing industry will wrongly prop up the mortgage mess once again.
     
  11. John Law

    John Law Member weekly contest winner

    THe backstop has been implied all along; it hasn't stopped financials from tanking before. There's only so much these deficit riddled politicians can do at this point. They are running out of money to throw at the problems.
     
  12. Jelly

    Jelly Member

    All I know is that I'd be rich right now if it wasn't for the FED. Is there an indicator that predicts weekend raids against the free market?
     
  13. talaat

    talaat New Member

    I don't think so. The good news is you'll be so used to this behavior you won't be shocked when during half time of the next Super Bowl game the refs give the trailing team some bonus points to keep it an equal match.
     
  14. Jelly

    Jelly Member

    I don't think they'll even wait. Wrong penalties and such will keep it close. Then, if their butt buddies are still writing off......oh, I mean losing the game, then you have an easy way to fix it. What with the blinder business in full swing, they don't even have to gamble on public outcry. Just a game, broha, just a game.

    In terms of recent info I've been reading, an analogy would be go for it in Football, an all American game. They tend to believe officials. But make it a Soccer game and oh baby, there will be some fireworks.
     
  15. TheChartGuru

    TheChartGuru Active Member won weekly contest 7x won sept/08 simulator won feb/06 simulator won jan/08 simulator won may/06 simulator won mar/08 simulator

    My opinion on UYG and SKF have not changed. I said that I expected UYG to pull back and SKF to bounce. However, I don't see UYG going below $15 or SKF going above $200. SKF should have a nice bounce to around 165, then selloff to $90. UYG should bounce from around $15 and slowly climb to around $35(this climb can take months however).

    The Guru

     
  16. john_for_u80

    john_for_u80 Active Member

    Guru, That means, market is due for pullback then DOW will rally as you mentioned UYG goes to 35.

    Also how you made a decision on UYG to 35? Did you see anything(indicator)?

    Do you think market has bottomed?

    Thanks!
     
  17. John Law

    John Law Member weekly contest winner

    Chart Guru, you said a few months ago that SKF could go all the way to 200 and my opinion at that time was that the FED and the Treasury would probably not let that happen. Well, you were right then and you could be right now, but there would have to be a rather large change in sentiment and probably earnings too, to get back to 90 from here, bounce or no bounce. JPM forecasted further difficulties, and a lot of people have read about the Alt-A resets starting in January, to say nothing of the impending credit card crisis that is nigh upon us, according to some. Foreign investment is also drying up quickly, and with banks being rated down by the credit agencies and foreclosures continuing to rise, I just can't see the banks rebounding in a meaningful way for at least a few years.

    If SKF did go down to 90, I would probably pawn my guitar and my wedding ring to get in on that. :)

    YBIC,

    JL
     
  18. wallstreetsedge

    wallstreetsedge Active Member won weekly contest 2x

    i def agree with SKF heading to $165, not 100% sure about that being the top but i think it def hits it over the next 1-2 weeks
     
  19. TheChartGuru

    TheChartGuru Active Member won weekly contest 7x won sept/08 simulator won feb/06 simulator won jan/08 simulator won may/06 simulator won mar/08 simulator

    The last time time UYG touched the upper bollinger band(20) was around $35 in May 08. If you look at UYG's weekly chart, you will notice how the RSI(14) has formed three higher oversold lows while the price has been going lower. This is positive divergence. The weekly RSI(2) was at all time low of .423. This tells me UYG is going higher, not lower. I still think the DOW goes to 10,000. It just crossed below the weekly MA(200). This is extremely bearish.

     
  20. pedrom727

    pedrom727 Member

    I think you're right on guru, Im buying SKF this morning on the good news from BAC because all of the good earnings are mostly priced in by now, and I don't feel optimistic at all over what Wacovia or Wamu will say. Also short term overbought readings on most indicators and even if it is the new bull market in financials you could easily get a 50% retracement before going higher. I'm just curious, after this bounce (in SKF) do you really feel the DOW can tank while financials rally? Sector rotation setting in at a bottom? I'm not too sure as I'd like to see more fear than we got on the down 240 reversal day (I think it was Wednesday?). Usually after we break right through a support level like the BSC one (1273 S&P) there's a good 10% or so of downside and usually a intraday rally which takes us slightly over that prior support. Still would like to see a capitulation day before becoming a buyer, granted I've been stubborn and lost a bit on my shorts lately but I'm still looking for 1200 on the S&P before anything over 1300.
     

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