Why do I get the feeling (now that I bought a very small stake near $13 on Friday) that this thing is in trouble? If China blows a gasket, all the iron ore producers will get flushed down the toilet. The BRIC countries all look very weak and the tapering by our Fed is supposedly making things worse for them. I might have to re-think this one. Somehow, PetroBras looks better to me as it produces oil rather than iron. I own a tiny stake in PBR that I bought for $10.75 and I'll keep that play on, but I might have to cut VALE loose. Iron just looks lousy to me but oil always seems to stay high. Its the one commodity that just doesn't seem to want to drop.
as we submarine for the next lower low. Since breaking the old low of $12, we've hit $10.63 so far, but we could see $10 or even $9 before this current decline from $18 is over. At some point we'll get another good bounce off the new lower low. Last bounce from $12 to $18 was a darn good pop. PBR has been an accumulate whenever it hits a lower low for years now, but just on a bounce. The past four years have been a brutal bear. If anything ever goes right with PBR, this thing could easily double, but its best not to bet on something going right with this dog until we see the pattern of lower highs and lower lows stop. All we're doing right now is establishing the next lower low (currently $10.63). No bounce yet indicates we could have a little further to drop. We'll see.
It usually rhymes, but looks a little different on the chart each time. Panic lows are the only time to go long for a bounce trade. Until the bear market pattern of the past four years changes, its hard to go long on the pull-backs.
All I know is every time we hit a new panic low (for four years running) it has been a time to accumulate and sell on the bounce to the 200 dma. This has been the profitable long strategy for years. As the old low of $12 is broken, we'll see what the next new low turns out to be (currently its $10.63 and I bought a small stake at $10.75) I would love to get some more shares if we go towards $10 or even $9. 200 dma currently is 14 1/2 and falling. Last bounce was from 12 to 18 for nearly a 50% increase off the low. Wouldn't be surprised if we see the next bounce from 10 to 15 or 9 to 14. You just gotta be willing to buy when there's blood in the streets! Not many are!
and another bust. Maybe its time to see if the new lower low of $10.63 is just in process and has further to go before the next low is set. It definitely could, but probably not much more than to $9 or $10 imo before the next bounce. Lower on the report tells me we might very well have another crack at breaking $10. Sentiment is still sucky even if it did bounce a feeble amount off the $10.63 low.
I think when Potash prices start to rebound we definitely see the mid $40s. but we'll probably need to see some fundamentals improve before the stock price gets a pop to that level.
At $15, we're looking at a PE of 30 times 2015 estimates. Based on future growth projections, that certainly seems reasonable. I do think the arctic weather and gov't shutdown hurt sales in Q4 and will also hurt Q1 2014 sales. Where PBPB stock bottoms is anyone's guess, but those who feel the restaurant chain will see profitable growth ahead have to like it more near $19 than they did near $34 (from a valuation perspective). I hate to try and catch a falling knife that doesn't have established trading ranges, but I am thinking about a small buy when the dust settles. I've always liked restaurant chains in general.
Coke tends to trade at 15-20 times earnings, or $33 - $44 per share based on current estimates. Coke used to trade at much higher PEs but its much more in line with the overall market now. Pepsi also trades more in line with the overall market now. Any share price weakness in either that lets you buy at a PE of 15 or less is like a gift because earnings continue rising and you inevitably see a higher PE later on. $37 isn't cheap but its not a bad place to start. If it drops to $33 as I nibble at lower prices, I will become more aggressive in purchases. Somehow, I don't see much downside in Coke but every once in a while Mr. Market gives you a gift.
Not sure how such as high PE is justified. I thought restaurants trade closer to 20 times earnings. Not a bad restaurant, but its not really new or rocket science food. But hey, at $30 it was trading at 60 times next year's estimates. Personally, I prefer Panera but so do a bunch of others.
Could be just what we need to set another new panic low around $9+ to $10+ to ready us for the next 40-50% bounce off the low. I say bring it! Bought a few earlier at 10 3/4 and I'll add a few more around $10 and $9+ if allowed. This thing is the definition of blood in the streets but the panic selling and new lower lows always get nice bounces. We'll see this bear market pattern repeat itself until the bear is done.
I bought a few today and will accumulate more if we go lower. KO will get some bounces going forward and I'll split the difference on any drop below 37 1/3. The valuation becomes more compelling in the low $30s. I simply don't see KO breaking $30. Low risk/reward but definitely playable.
When potash goes from $300 to $400 a ton, POT will jump more than 20% and faster than the potash price per ton. POT drops from $60 to $30 and it'll just shock some investors to think it could bounce back to $40. Have you seen the price of Uralkali stock? Is it really going to surprise anyone that the Russian horse traders decide that industry discipline regarding supply is the only way to ensure profitable operations? The shock price drop to $300 reminds all the greenfield operators that they should not build it based on pricing and demand coming!
Last run higher went towards $24 before retreating. The gap remains and this might be the second attempt to close it. SLV makes a move after being stuck around $19 for months. No lower low on the recent bottom, at least not yet. Is the bear on break or is he done yet?
SLV and PSLV (near NAV) is a very efficient way to TRADE spot silver with a 99% plus tracking to spot prices. Taking physical delivery does have a storage and transport cost/risk factor as well as any premium you pay to buy and discount you take to sell. Right now PSLV carries a 4% plus premium to NAV and its been much higher at times and also close to zero at times. Bears carry low premiums in general and bulls tend to have high premiums. These bullion banks work for commodity traders because they don't involve futures that roll over with contango. Half of 1% annual fee is downright close to zero for traders, even with a year or two of duration. Less risk than miners too.
The past four years have a lot of one-time bulls on the sidelines with severe losses. Who knows when the four year old pattern changes? Short-term bounces is all one can expect until the bear pattern of lower lows and lower highs ends.
Almost three years running and we finally successfully re-test a low (for now at least). If we close the 25+ gap we'll even have a higher high! Obviously, time will be needed to know when the bear ended and if it has yet to do so. BUT - we are seeing a few signs of life in commodities and pm's.
How can an inflation index matter? The government has always under-reported inflation and they can't prop up the peso with us dollar reserves which are rapidly dwindling. The shock drop of the peso has set off a wild spree of price hikes and product shortages. Its better to hold goods than pesos (or anything else for that matter). Citizens all hate the peso as they watch its purchasing power drop rapidly. Fiscal chaos in Argentina is not going away. Once you start the down hill freight train running the peso paper drops towards worthless as it has so many times before. The big question is what happens to TEO when the economy collapses again. Panic and uncertainty become the norm.
Last run from 17 3/4 ran out of gas near $24 and this run from 18 1/4...? We'll have to see what happens on the second attempt. The high close above the 200 dma today was very bullish. SLV is very touchy about $20 even and once again jumped it this morning with another gap.