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Stock Tiger Stalking Stocks™
For Monday October 22, 2007
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Close Friday
Dow -366.94 at 13522.02, Nasdaq
-74.15 at 2725.16, S&P
-39.45 at 1500.63
 The
20th anniversary of the 1987 stock market crash,
otherwise known as Black Monday was widely talked about
this past week and Friday was the actual date of the anniversary. On
the event 20 years ago the Dow dropped 22% (3,000 at today's
price) so the 369 decline on Friday looks pretty tame in
comparison.
Now they say that the drop on Friday had nothing to do with the
anniversary but was only a coincidence
and nothing more. Well since everyone knew about this date and you
had Caterpillar CAT talking about recession it seems prudent to take
some money off the table after the big run since the August low.
There is growing concern about the US economy and this has not
stopped the indexes from going up but we have seen by other
indicators that the "smart money" has been selling the rally.
Financials are leading the way lower as the credit problems
increase and spread as they likely will continue to do through
2008. The long term bond yields had been heading higher for
some time and we showed that they broke above down trend line
recently. The bond market controls the long term interest rates and
this suggested that they would continue to go higher. The sharp
reversals this week suggests that they are changing their minds and
sending a signal to the Fed to continue to lower the short term
rates. The 10-year note yield dropped to 4.38%.
The 2-year note dropped to
3.76%. At the start of the week they were 4.68% and 4.23%, respectively.
The Friday selling was very broad based and all groups were hit
as exit seemed the word of the day. Sell and ask questions later is
often the case in uncertain times. As we see on the chat below the
sell off on Friday was almost a mirror image of the buying spree on
September 18 when the Fed cut rates. The Dow on the day went up 336
points even though nothing had changed in the economy at all to
justify the move. Now the chance of another rate cut by the Fed in
late October is at almost 100% probability so the media is
reporting.
We had a great Friday as nine of our short candidates triggered
and made good gains. We had been adding them to the list for a few
days in preparation for such a day and it really paid off.
Last week we showed this chart as each time it gets over the 80
line we soon see a market pullback. The percentage of stocks on the
NYSE that are trading above their 50-day moving average. A move from
83% down to 52%.
The 15-min Dow chart shows the sell at 13700 or
13620. Nice day trade and low risk as you use tight stops above
the support/resistance.
The Nasdaq 100 15-min chart with the
short sell at the break of support at 2143.
Here is the weekly performance of the major
indexes
And the weekly of the sectors and a few
closed up for the week.
I know that many of you who have not set up
a futures account use ETFs such as this ProShares Ultra Short
Dow reverse - so it goes up about 200% of what the Dow falls so
on Friday it gained 5.4%. Note how it is almost a mirror image to
the drop it made on September 18. ItT may now have resistance as
shown.
The Dow daily chart shows the rather
automatic short sell that happened when support broke on Friday.
It is now trading well below the Bollinger band however
stochastics and the RSI have room to fall before giving our
usual oversold readings. We expect a significant rally this week
Monday or Tuesday but do not know when or how much it may pullback
first.
One likely place on any further pullback for support is shown.
On this longer term daily chart you see the
first trend line was the stopping point on Friday. We like to keep
old trend lines on a chart as often they are still in play even if
once before they were violated. On top you see the negative RSI
divergence showing that even though the prices were going up the
buying was going down - this suggesting that "smart money" has been
selling since July.
Here the view
with the channel at a bit different point to show another lower
trend support that may come into play later. The overall higher
volume selling may mean a top is in for the time being at least for
a month of so. We are still in earnings season so more surprises may
come.
As usual the Japanese yen rallied as the US markets dropped. Not drawn
but you can visualize a trend line very near right above the current level..
The Nasdaq closed right at the July high support. The 50-day is a logical
target on a continuation. The white line shows how well the RSI cross under the
70 predicted a pull back.
The Russell 2000 closed near its former support but under the 200-day.
This has been a weaker index than the others and dropped the most on Friday.
The NYSE closed at the
50-day and near possible support. Watch the stochastics for it to go
under 20 and oversold.
The 30-year bond yield surprised me by dropping so much after breaking
out last week. So the long term now looks like rates are not ready to rise and
the even short term rates will keep being lowered.
Oil probably getting
giddy here and maybe putting in a short term top soon.
Gold is still near its highs but I think a top is forming as the bearish
divergence shows.
 This
is the exchange rate in Russia this week. 24.60 Rubles you can buy
for $1 but you get 35.05 for a single Euro. I remember when you got
more for the $ that the Euro. It is not now good to be making money in $ and
having to convert them to Rubles. This is a 40-year low so I guess
by sometime in 2008 the direction will change. These cycles take
many years to unfold.
Here is the US dollar and it hurts but is great for US companies
selling outside the USA and the Fed doses want it to look like all
is well.
The weekly economic calendar from briefing.com - not much going on but the
25th
NNRI On Friday I met in Moscow with NNRF, Inc CFO Todd Sinclair and Vice President
Peter Goerke. There are
new development so wanted to pass them along.
We have of
course been waiting for the company to set up their manufacturing
facility in Germany to produce their proprietary shielding materials FEECOM
and BIECOM for use throughout the European Union and around
the world. In their press release from a month ago they said that
they expected to receive the technical request from E. ON, a
major European supplier and operator of nuclear facilities for
installation. They have received this and are currently producing
the material for installation in the first quarter. This I
believe is the first major buyer outside of Russia for their
products and technical services. The company has said that they plan
to have over 50% of their future revenues derived for sales outside
of Russia and this is a significant step toward that. You know that NNRF has made an agreement with STUDSVIK a Western European
based supplier of services to the international nuclear industry.
They will help particularly with the shielding materials both in the
EU and in international nuclear markets. They have been waiting for
actual production to begin and now it has.
Both of the
corporate officers went Kirvo-Chepetsk and Kirov to the acquisition candidates JSC Electroprivod
and Velkont in Russia. They met with senior management of those
companies in their continuing refinement of the business plan so
these acquisitions are making progress.
The CFO was also reviewing the ATOLL financial
statements and I personally think that it will not be too long
before we see them. The additional follow on order for ATOLL as
mentioned in an earlier press release is still looking very
positive.
NNRF company officials met in Germany with Dow
Corning, the manufacturer of NuCap and Global Matrechs, Inc the
licenses holder regarding the technical requirements and application
of the product. I cannot give you more details but obviously they
would not have done this unless their is some movement toward the
use of this product.
The testing of container designs for transportation and storage
of hazardous wastes is progressing. As a matter of course all
decommissioning projects are also ongoing as they develop. These are
very large projects as you know if you have read the 45-parge report
Strategically Positioned for the
“Dawn of a New Nuclear Age”
so
it is understandable that it is taking time.
The 211 NASD filing is
in progress and the new Russian law that will allow Russian
Depository Receipts (RDR) has been passed and now
the government is working on the technicalities of its
implementation. NNRF Inc is expecting to be one of the first to
be listed in this way in Russia.
On December 4th and 5th the company will participate in the
conference in Moscow named
"AtomEco-2007"
put on by The Federal Atomic Energy
Agency (Rosatom) and JSC Atomenergoprom. This is an Exhibition and
Conference in the field of radioactive waste management,
decommissioning and dismantlement and environmental remediation. I
will attend and will report back of course as this is exactly their
business. I will again be meeting with senior management at that
time.
So you can see that there are many ongoing activities
and progress is being made on all of these fronts. I am very pleased with the progress being made.
I know there are short term investors that wish the company were
already reporting huge net profits but the progress is steady and
increasing and that is what you want to see in a company. In the USA
Friday Caterpillar CAT used the R word - recession and maybe
more in the US will but the nuclear industry and the need for
hazardous waste remedies only increases. Not only is this a good
industry to be in but I believe that this is the right company.
The chart shows that it has been in this pretty tight range for a month now. The
stochastics are in oversold territory. This does not mean a immediate move up
but it does show it is getting nearer. It pulled back to $1.80 in July and then
doubled in 7 days. I do not know when this will move back up but with so much
good progress going on in the company I do know it will.
It was shaping up to be one of the lowest volume days for NNRF, Inc in a
long time at under 100k shares on Friday. This is a time as sales list and the stock was
at $2.09 big and $2.13 ask and a buyer cam in for 60,000 shares at 18
minutes before the close. Only shows that
regardless of the closing price the bigger buyer was willing to pay the ask.
SIBE I have not been in touch with the company for some time so have not been closely
following the situation but wanted to point out that on longer term plays the
timing of exactly when they will really move is hard to pin point but if you
bought for the company story and the story has not changed than it will come.
So like on NNRI above - the stock went rather dormant for months and some may
have wished they did not hold but their waiting paid off as it is up 77% even
from our original buy time when it was at $0.79 and many did not buy then or
sold and bought back lower. The point is that a stock almost always moves up
before the earnings show and I think NNRI will so the same also.
A
woman who is a member of the Red Hats wrote to say how pleased she was in owning
the stock. She did not sell when it dropped in April as she
figured that she may miss the time to buy back as many did on this run. She is
up 77% so far and many bought
during the time it was almost dormant so of course are up more but still it
shows that having some patience in a long term play can really pay off. The
message board thread has been talking of this stock since before it made its
recent run.
PTLG has had some very good news lately and runs up on high volume and
pulls back on light. The trading looks like it now has a lot of penny flippers
who trade for very tiny profits. Stochastics did go to over bought area but the
company is really now progressing pretty quickly and they feel they may hit
profitability in the following quarter. They are for sure in a news cycle mode
as they have press releases so often. Watch on Monday for any additional news. I
think in 2008 we will see earnings that are more than the current stock price so
you can see the upside is extremely significant. It has been mostly oil in Texas
and natural gas in Tennessee however I think they will soon add quite a bit of
natural gas from Texas also. This went from the $0.13 to $0.30 quite quietly and
one day we will be again talking of the break out over $0.54. I cannot know when
but seems to me a good oil/gas stock to hold on to.
Some additions to our watch list:
ANAD this may pullback more and if it does the trend line
will be a place to watch for a buy if it holds. Other wise or buy is
on the break over $19.30
NLY Over $16.65
PGH Over $19.05
PWR Over $32.10 then $32.60. Also maybe
at the $30.00 area if this holds with a tight stop
HOV Short
under $9.76
MFA Over $8.65
ADI Short
under $34.50
MER Short
under $65.49
EFUT Bounce play near the 200 or 50-day
EMA so watch for a reversal
LDK Short
under $35.65 support may be at $33.50 and $33.00
CC Short
under $7.70 or maybe a bounce as volume is decreasing
CBG Short
under $23.65
A representative from
Photo Violation Technologies
Corporation called tonight to tell me of their company. They make a parking
meter that takes a picture of a car's license plate when it pulls into a spot
and the person can pay by money or credit card or mobile phone etc. It takes
another picture if the time runs out and the car is in violation and sends it
via WiFI to the city parking office. The person can pay the fine at a discount
on the spot also. This is a Canadian company and they have a test of about 100
meters installed at Niagara Falls, Canada are in talks with several major cites
in the USA. The Symbol is NCII but at the present it is a shell company
as the final merger (reverse merger) may take 6-8 weeks as you may know. Anyway
I am neutral on the stock but passing it along as they made the effort to call
and it is an interesting product with potential. CSCO equipment is used
for the WiFI and IBM software so both of those companies may have news on this as
things develop.
The foggy day photos below by Miles at
http://mute.rigent.com/index.php?ladat=2007-10-02
Interesting site. The
scenes are in Toronto.
That's a full lid for today - will see you all
during the week.
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Check the
Earnings Calendar
on all overnight holds.
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message board also for other good
stock candidates as there are several there right now.
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