The VRTrader.com VR Platinum Newsletter Wednesday 10/12/2005
"Tools for the High Performance Trader"
Copyright © 2005, All rights reserved.
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PORTFOLIO UPDATE | by Mark Leibovit
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VR Platinum Portfolio Update
Wednesday, October 12, 2005
Pre-Market
New Buy/Short
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DIA - Short @ Market. Target: 99.00. Stop: 106.02
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LEIBOVIT FILES | by Mark Leibovit
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Leibovit Files
Wednesday, October 12, 2005
Opening Comments
Tonight begins the High Holy day in Judaism, Yom Kippur (Kol Nidre services at sunset), but we suspect the market isn't quite ready to flip to the buy side, despite our prediction that the market was a sale (short) on Rosh Hashana (the Jewish New Year) and a buy at this time. Among other things today is Weird Wally Wednesday which is the Wednesday of the week prior to option expiration wherein futures traders adjust option positions tied to the expiration of contracts at this time. Volatility in themarket is as likely now a week before option expiration as it is next week, despite all the press typically attributed to the expiration itself.
As you may have noticed, Nasdaq has been the weaker sister of the major stock indexes which normally is not a good sign, but we also know the market is manipulated and along that line of thinking the weakness could be created a 'bear hook' just at a time when the market is readying for a bounce. Remember, just recently in September how the Semiconductors suddenly began to rally exciting the 'Street' and CNBC that the market was supposedly readying to take off to the upside when indeed it was a trap just prior to the current sharp decline both in Semiconductors and Nasdaq itself. If you're trying to 'hook' the Street why not give them what they want when they want it and then pull the rug out from underneath them? This is precisely what happened. You may ask, how can this be? No one manipulates stocks. It is illegal, isn't it? My answer is ask Alan Greenspan who (and his successor and predecessor) who set the standard for others to follow.
While many indexes have been moving to new relative lows the past couple of days, the Dow Industrials, the S&P 500 and the New York Stock Exchange Index have been holding lows from last week. We're inclined to believe those lows are about to come out, regardless of the fact we're deeply oversold and Yom Kippur approaches. The Dow Industrials has been brilliantly manipulaed (yesterday was an example with a pop in General Motors) to mask the market's underlying weakness, especially since the Dow Industrials is given so much press coverage as the barometer of 'the market'. Remember, it's only 30 stocks! We still have unfulfilled measurements down to 9900 and possibly 9700 and there is nothing stopping even lower targets to be formed. But, alas, the Plunge Protection Team may be out there doing their dirty work, so we'll just have to wait and see if they will allow last week's lows to be broken.
Cyclically, we've mentioned that something more significant could have occured when the market peaked out late this summer to the extent of decline well through October interspersed, of course, with sharp technical rallies. Regardless, this is still October and we NEVER rule out a Crash scenario even though the Plunge Protection Team is carefully trying to keep the lid on things. So far, the market is roughly following the October, 1987 pattern whic included a rally in September ahead of the Crash coupled with a maniacal Federal Reserve Chairman raising interest rates.
Gold touched a new bull market high yesterday with the GLD (Gold bullion ETF) trading up to 47.72 on increasing volume on its way, on our opinion, to $500 now and possibly $650 or higher a bit down the road. Remember, we believe in the midst of a 20 year bull market that may have 15 or more years ahead of it. With that view, lock the coins up in the vault and hold on to those gold shares and just walk away! This may be one of the few times that we would accept the 'buy and hold' mentality that we often
criticize.
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WATCHLIST
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None.
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LONGS
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DSX - Diana Shipping Inc 14.50
WHY WE LIKE IT:
DSX debuted trading in March and has increased the last couple of trading days (Aug 31 - Sep 1) on increasing volume after finding support at 13.50 on 8/29/05.
Diana Shipping, Inc., a holding company, engages in the ownership and operation of dry bulk carriers. The company’s dry bulk carriers transport iron ore, coal, grain, and other dry cargoes along worldwide shipping routes. It charters its vessels primarily to major trading houses, major producers, and government-owned entities. As of September 30, 2004, the company’s operating fleet comprised seven Panamax drDiana Shipping, Inc. and its subsidiaries engage in the ownership and operation of dry bulk carriers. The company’s dry bulk carriers transport iron ore, coal, grain, and other dry cargoes along worldwide shipping routes. The company’s dry bulk carrier fleet may be divided into four categories based on a vessel's carrying capacity, such as Capesize vessels that have carrying capacities of more than 150,000 dwt and generally operate along long haul iron ore and coal trade routes; Panamax vessels that have a carrying capacity of between 60,000 and 80,000 dwt and carry coal, grains, and to a lesser extent, minor bulks, including steel products, forest products and fertilizers; Handymax vessels have a carrying capacity of between 35,000 and 60,000 dwt and operate along a large number of geographically dispersed global trade routes mainly carrying grains and minor bulks; and Handysize vessels that have a carrying capacity of up to 35,000 dwt and carry exclusively minor bulk cargo. Diana Shipping charters its vessels primarily to major trading houses, major producers, and government-owned entities. As of September 30, 2004, the company’s operating fleet comprised seven Panamax dry bulk carriers, which had a combined carrying capacity of approximately 525,000 dead weight tons. Diana Shipping was founded in 1999 and is based in Athens, Greece.y bulk carriers, which had a combined carrying capacity of approximately 525,000 dwt. Diana Shipping, Inc. was founded in 1999 and is based in Athens, Greece.
POTENTIAL TRIGGER:
Buy at market with a stop below the August 1 low of 12.32. Target $20.
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CBJ - Cambior Inc 2.10
WHY WE LIKE IT:
As we have said repeatedly, we think gold is on its way to a minimum target of $500/ounce. We think CBJ will benefit greatly from further strength in gold.
Cambior, Inc. engages in the mining, exploration, and development of mining properties, principally gold, located in North America and South America. The company operates gold mining divisions, which include Omai, located in Guyana; Doyon, which includes two underground mines located approximately 40 kilometres east of Rouyn-Noranda, Canada; Sleeping Giant located in Quebec, Canada; and Rosebel located in Suriname. The company also owns 50% interest, through a joint venture, of the Niobec mine, a niobium operation located in Quebec, Canada. The Omai mine is an open-pit operation with a cyanidation and carbon-in-pulp processing plant. The Doyon property covers an area of approximately 2,870 hectares. The Sleeping Giant mine is a vein-type underground gold mine managed by Cambior under a joint venture with Aurizon Mines, Ltd. (50%). The company was incorporated in 1973 under the name Niobec, Inc. and changed its name to Cambior, Inc. in 1986. Cambior is based in Longueuil, Canada.
POTENTIAL TRIGGER:
Buy at market with a stop below the May 16, 2005 low of 1.51. While we suspect that gold may pull back further here, we do not want to miss theturn north in CBJ when gold does reverse up out of its current pullback. Target 4.75.
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SHORTS
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PKI - PerkinElmer Incorporated 20.03
WHY WE LIKE IT:
PKI is sitting right at support after a weak bounce attempt last week. PKI gave a Negative Volume Reversal ™ signal on Friday, August 19 and encountered more selling on Monday, August 22. The sellers look ready to assume control on this one.
PerkinElmer, Inc. provides scientific instruments, consumables, and services to the pharmaceutical, biomedical, environmental testing, chemical, and general industrial markets worldwide. It designs, manufactures, markets, and services products and systems in three segments: Life and Analytical Sciences, Optoelectronics, and Fluid
Sciences. The Life and Analytical Sciences segment provides drug discovery, genetic screening, and environmental and chemical analysis tools, including instruments, reagents, consumables, and services for daily applications in scientific research and clinical applications. Its products are offered under various brand names, including Wallac, Packard, NEN, AAnalyst, Clarus, OneSource, LABWORKS, Pyris, Spectrum, Optima, DELFIA, ImageTrak, UltraView, prOTOF, Victor, LANCE, ELAN, and ViewLux. The Optoelectronics segment provides digital imaging, sensor, and specialty lighting components used in the biomedical, consumer products, and other specialty end markets under the brand names Cermax, Heimann, ColdBlue, MultiBlue, Power Systems, Amorphous Silicon, and Reticon. The Fluid Sciences segment provides fluid control and containment systems for environments, such as turbine engines and semiconductor fabrication facilities under the brand names Belfab, Callisto, Centurion, U-Plex Seals, E-Seals, Rigid E-Seal Joints, and PressureScience. The company was founded in 1947 and is headquartered in Wellesley, Massachusetts. PerkinElmer, Inc. acquired Elcos AG in February 2005, which designs and
manufactures custom light emitting diode and solutions for biomedical and industrial applications.
POTENTIAL TRIGGER:
Sell short at market with a stop over the July 26 high of 21.60. Looking for 18.
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TIMER DIGEST MARKET SIGNALS
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For Tuesday, September 13, 2005
STOCKS: Bearish
BONDS: Neutral
GOLD: Bullish
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CURRENT PORTFOLIO
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Click here to see our Current Portfolio: http://www.vrtrader....lays/stocks.asp
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NEW PICKS
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Based on either Bullish or Bearish technical signals and the Volume Reversal™ methodology, these stock picks look primed to make a move. No trading system is 100% accurate and care should be taken to consider market conditions before entering any trade. Not all trades are suitable for all investors and each investor should consider their own risk profile before making a decision.
Format:
Symbol - Company Name
Buy @ = this is the strategic range picked by the VR staff.
Target: = estimated destination of equity during life of play.
Stop: = recommended* stop loss considering equity volatility.
*stop losses should be placed according to your own risk
tolerance.
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RISK MANAGEMENT STRATEGY
When a stock declines/rallies 1 point or more from the price at which bought or sold short, we will raise/lower stop to cost. This will limit the potential loss on a trade. For each additional 1 point move, a further adjustment is made.
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CURRENT BULLISH STOCK PICKS
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HIET - 1/28/2005 - Long @ 1.03 Target: 1.70 Stop:0.30
MDM - 7/13/2005 - Long @ 2.55 Target: 3.50 Stop: 1.50
KO - 7/29/2005 - Long @ 44.25 Target: 48.50 Stop: 38.00
WEL - 8/2/2005 - Long @ 1.40 Target: 2.50 Stop: 0.98
FRG - 9/27/2005 - Long @ 3.00 Target: 6.50 Stop: 1.60
HMY - 9/28/2005 - Long @ 10.48 Target: 15.00 Stop: 8.00
NEM - 9/28/2005 - Long @ 47.61 Target: 66.00 Stop: 34.00
DWA - 9/29/2005 - Long @ 27.13 Target: 31.00 Stop: 24.75
LU - 9/29/2005 - Long @ 3.26 Target: 4.15 Stop: 2.75
LCC - 9/30/2005 - Long @ 20.42 Target: 26.00 Stop: 21.42
SUNW - 10/4/2005 - Long @ 4.41 Target: 7.00 Stop: 3.00
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CURRENT BULLISH INDEX PICKS
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EWJ - 9/27/2005 - Buy @ 10.30-10.40 Target: 14.50 Stop: 10.00
GLD - 10/10/2005 - Long @ 47.31 Target: 50.00-51.00 Stop: 44.00
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CURRENT BEARISH STOCK PICKS
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N/A
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CURRENT BEARISH INDEX PICKS
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TLT - 10/5/2005 - Short @ 91.27 Target: 89.00 Stop: 93.50
DIA - 10/12/2005 - Short @ Market Target: 99.00 Stop: 106.02
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DISCLAIMER
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This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of VRTrader.com may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. VRTrader.com
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.
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Do not duplicate or redistribute in any form.
