THE GUN: OVTI – OH MAN HOMIE, THE MARKET IS PLAYING TRICKS ON ME
click on the chart below to enlarge:
WHY THE HARD SELL, HANK?
It is important in your dealings with the financial markets (especially if you are a more active participant) to approach the markets from different perspectives than most people would. You can't just simply look at the financial world as an all powerful, omnipotent entity that knows the collective thinking of all participants, at all times. There are many who look at the markets this way, to their own detriment. In my experience, it has been important to put a human face on the markets. Not just any human, however. You must approach your dealings with the market like you would a used car salesman, in a lot that you stumbled upon while dumping an old mattress in an area where it would only add to the general ambiance. We'll call him Hank, for the purposes of this article. Hank is an interesting fellow. He is a master of getting people to go the wrong way, against the warnings of that little voice inside that tells you Hank is all wrong. Hank knows exactly when to pull out his blue handkerchief and perform his favorite magic trick for the kids, in order to allow you to trust him that much further. He knows exactly what to say, when to say it and what action to take in order to make sure it all comes together for a sale. Hank was trying hard to sell the bullish story. He was wearing his best suit today, had his $40 dress shoes dripping with polish and made sure to use an extra helping of Longs Drugs imported Italian cologne. It looked a little too good and too proper for my taste. Whenever the market is trying so hard to sell me on something and I see so many willing to bite, I always think of Hank leaning against a wall with a half-smoked cigarette but next to his shoe and a cheesy smile. I have to question the motives and wonder whether the car I will be driving off the lot will make it up the driveway of my home. Caveat...
OVTI – TRADE UPDATE FOLLOWUP
I do have room for one more allocation into OVTI should it decide to move higher from our initial entry point. This is a short to intermediate term trading position for the portfolios.
TRADE UPDATE – OVTI
Starting a short position in OVTI at 32.27-32.30. Reasons outlined in video last week http://www.zenpenny.com/?p=974
THE ATTACK OF THE SPECULATIVE OIL ZOMBIES
They have all come out of their coffins and seem to be invading any AMEX listed company with a market cap under $50 million. I'll admit my confusion here. I am leaning towards this meaning that oil and oil stocks need some rest. Things are looking a tad bit overly speculative here. Here are 8 that came up on my scan tonight. All exhibiting the same behavior on massive...
NEW MEMBER VIDEO
I try to put these out as often as possible for Fire Level members and once a week for Water level members. Tonight's video detailed a significant breakout in our subprime, restructuring play. I have been telling members for weeks that the consolidation was picture perfect, with the likely next move to be on the upside. Today we saw a breakout that came with significant volume. I did issue a "Trade Update" to Fire Level members telling them of an addition to our position during the trading day. Still a double from these levels, if not more. One of the more undervalued plays I have come across on a price to cash flow basis, not to mention the activist/restructuring angle which has acted as a catalyst. Sign up and see what Zenpenny is all about. You'll receive a 9 page research report detailing this name, along with two other holdings. And, of course, the results are guaranteed through our one of a kind incentive fee refund...
10 REASONS A SUPER-CYCLE IN OIL IS INEVITABLE
Article also featured on thestreet.com and Minyanville The argument has been made that the super-spike we saw in oil prices into 2008 was a simple aberration. It was seen as the type of cyclical event that takes place once a decade amongst different asset classes. As we are all slaves to the benefits of crude oil, this is the preferred path of thinking. Unfortunately, the reality of the situation is turning out to be much different. What awaits is a super-cycle in oil prices that takes crude oil prices to levels that are currently thought of as highly unlikely or impossible. Here are the 10 reasons why crude oil prices are going to rise far beyond a point that any of us can imagine: 1. An Arab world that will be struggling between fundamentalist Islam and the thirst for a democratic system for many years to come. 2. An Iranian government that will become all the more powerful as a result of the problem in all of the Arab countries that surround it. They will exert their power through quiet acts of influence similar to what they are doing in Iraq at present. Sunni and Shiite tensions will rise as a result. 3. A demographics issue with what is going on in North Africa, Middle East, Asia and South America. The age of information has brought a “why not us?” attitude to these regions. They are quickly building infrastructure and coming into the modern world, making up for decades of lagging behind the West. Everything that they are doing and will want to do will require oil. From the production of their food, to their transportation, to the containers they use to take their food home when they start serving portions that are far too large…a natural side-effect of becoming westernized. 4. A market for US Dollars that has been in decline and doesn't show any signs of changing its trend. 5. A Russian government that will extend its power base through the economic superiority that higher oil prices bring the country. Russia is one of the largest producers of oil in the world. The major difference between Russia and other large scale oil producing countries is that Russia has geopolitical influence and dominance on its mind. Very similar to another top 5 producer of oil - Iran. These countries realize that their power base will increase or decrease as a direct result of oil prices. The higher the prices go, the more opportunity and influence they will have. Given these aspirations and obvious realizations, they have every incentive to assist the price of oil in its march higher....
TODAY’S THOUGHTS: OIL SUPER-CYCLE, FINANCIAL BLOGGER BUBBLE, NEW RESEARCH, NEW CONSULTING GIG AND MORE!
Today's Thoughts is a nightly article sent to "Fire" level members of Zenpenny. I am posting it on the blog tonight, as I do once in awhile. Sometimes it feels like you're working on a million things and it becomes difficult to compartmentalize everything in your seemingly inadequate mind. For example, I have been wanting to write a report on what I believe is going to be the coming boom in everything oil related, lasting a good part of this decade for thestreet.com. Simply, haven't had time. And then an idea came to my head with respect to all of the financial bloggers out there who seem to be in this bubble of self-righteousness, when all they have become is professional regurgitators of news. It's rare to come across a financial blogger that offers any value. We are officially in a financial blogger bubble. I want to write about this...and will be soon. Then I have the issue of researching a new name I am considering putting together a research report on. It is looking great so far. I'm gonna need a couple of days to compile more info on it. Could be a 400% to 500% mover over the next 12-24 months...not bad. It is a more risky and volatile name than any of the others we are currently holding, which is why I want to be sure that it is worthy of joining the rest of the names. I am also working on putting together a proposal to consult with a couple of the major discount brokerage houses to revamp their active trader products. I think that there are a lot of big names in the industry that have fallen behind the curve. I have been working on ideas to enhance their products and will be presenting it to the executives of one of the companies in the coming weeks. Before trading on the institutional trading desk of Bank of America, I was in charge of getting their internet trading division up and running...until I wasn't. They couldn't make up their mind as to where on the list of priorities internet trading was...this was in the late 90's. I think they still have the same problem today. The general markets have taken on quite a bearish slant with today's action. All the while, the oil markets are looking like they want to challenge some important resistance levels in the coming days and weeks. The opportunity exists to make some serious money in the coming years in the oil markets. The perfect storm is upon us to take us into a super-bubble in oil: 1. An Arab world that will...
QUICK THOUGHTS
- It seems that the Phase 4 investor stampede, signaled an intermediate term top to this market almost perfectly. - Today's downdraft seems ominous. Lots of important support points being taken out just as the markets were attempting a crucial recovery. So begins our correction phase. Choppy, with a downward bias ahead. - Oil/gas stocks will be the play of 2011 and beyond. Do you research. The smaller the market-cap the more chances for aggressive gains. We're up nearly 400% on ours since October of last year. Got a tiger by the tail here and I ain't lettin' go. - High-beta tech will have you offering unsavory favors in exchange for illicit drugs over the coming months. Don't go out like Willy Lump-Lump. It's the last place you want to be. - Working on a possible new long-term position in our portfolio. Still doing the research. Initially it looks very promising,...