PARL - This is just goofy

[spikefader]

Spike,
What's your prognonis on the markets now? I am looking at charts, and still sitting entirely in cash. How's that Vector doing? BTW, that Fear Chart hit Ultra Lows that haven't been seen in years. "Ultra Extreme Fear."

Vector has been bullish since the close on June 15th.

But I've just given your question some deep thought and reflection and gone over a bunch of charts and weighed it all up and the short prognosis is we have a major bottom in and I'm a full on bull! So buy buy buy! hehe

And if you recall my recent predictive comments in the option thread (about a month ago??) that if we get a weekly VIX close over 18.00 that a major bottom would be "put in" within 2 weeks.......well, VIX closed weekly at $18.12 on June 9th. 4 days later, on June 14th, the bottom was in. I did say within 2 weeks......so that worked out nicely.

This coincides with INDU bouncing nicely off the weekly support, and that chart looks clearly bullish to me. The SPX weekly is below that, and that's bullish too, after a nice strong channel long. Add your indication of extreme fear, then there is your confirmation that it's time to buy. Seriously. I think any weakness this week is a buying opportunity! Go the bull!

[New-born baby]

Thanks, Spike

Thanks, Spike. I always love your analysis.

Would you say, then, that the $WTI descending triangle will descend? Yes, I know the triangle is not resolved. But to be a full on bull would require that the crude price not prematurely choke off any rally.

And if you are a full on bull, would you then say, yes, its a whopper of a buying opportunity on just about anything, including (cough, cough) PARL.

[peanuts]

I tend to agree Runner.... Call me old fashioned but I gage the steel industry by what I see every day in my business.... We ordered 40k pounds from GGB (Ameristeel) last week (my railway trackwork business is booming btw (see NSC) and I think it's due to the coal industry) and they (GGB) had the order in stock! We quoted STLD (was RESC) and GGB beat their price delivered.... For the past two years we've had to wait on their rolling schedule on EVERY ORDER! Prices are still up but remember that steel's just a stinkin' commodity, I've seen it all before. I don't see a huge connection between oil prices and steel prices.... Yes there's some, but steel ain't hooked to oil "at the hip" or anything (they don't move in lock step in other words).... When steel prices start to fall they can fall fast (20 to 30% in a 4-6 weeks). If the economy softens due to rising oil.... Oil will continue to rise.... and as steel inventories rise and orders fall then basic steel stocks could crash like a shot quail.

I'll probably short steel into any strength again this week, I could be early on this call but I really think "Steel's" due a further correction.... If I do short sell it I'll post it...

Lye, you probably bought from GNA, not GGB... GNA is the North American operations of Gerdau.

The steel industry pricing has a floor to it. There is a big picture item here that should be considered. The industry is still highly fragmented. If you look at other industries (aluminum, for example), you will find that there are 3 or 4 major players, with 1 or 2 of them having at least 20-30% of the total market share. Today, MT is the largest steel company... do you know what the percentage of market share they have? 11% That's it, just 11%. Why do you think that Lakshmi and Aditya Mittal are in a bidding war for Arcelor with Severstal? Because it will create a big giant of a steel company that has extreme bargaining power and should be able to improve the overall efficiency of the operations through synergistic matches in all aspects of managing a business. Following this, pricing wars on the market will become a thing of the past and you will be forced to pay a certain price for the steel you get. Be happy that you can now bargain for steel... it won't last

The steel industry WILL continue to consolidate. I am 1,000,000,000% sure of this. There is a floor to every steel company's stock price. You estimate 30% drop from here... I respectfully disagree with you.


A Handicap parking sign does not signify that this spot is for handicapped people. It is actually in fact a warning, that the spot belongs to Chuck Norris and that you will be handicapped if you park there.

[Runner]

My market take for now is what I call “wait and see”. This to me means just that. I’m not sold the bottom has been put in just yet. Many of the Indices are at critical areas right now and testing resistance. Price action has not proven to me a major bottom has been put in. I’m taking the wait and see approach in this current market. I see nothing wrong with testing the waters with smaller positions, and enough discipline to bail if it goes against you. All the groups I track are in horrible shape and the momentum has not been on the upside. Yes I know things can change, but show me first. I don’t view oversold conditions as a reason to load up, but just me. Fear charts can produce more fear and the fear factor can reach more extreme levels. The bulls just have not sold me on the idea of a rally that is sustainable for now.

I’ll be looking for the S&P to clear the 1255-1260 area as a signal to look for stocks putting in possible bottoms. My scans are mixed right now both on the long side and short. I still see the trend as being down for now and until it shows me my bias for short term is down.

[skiracer]

I have to agree with Runner's take on the situation. Wait and see is the safest strategy right now. Trade what you see and not what you think. Right now everyday will provide tradeable situations where the nimble and quick will prevail but that doesn't mean that you have to be in the market but only to keep your eyes open for interesting setups either long or short. It's much easier to say than to do though. Personally I wouldn't be of the mindset to go out on a limb and forecast a bottom yet although looking at the charts I can agree with the concept that we are getting near a bottom. But that remains to be seen.
All of the large steel producing companies and their larger customers usually have set a pricing for their products that protect the customers against rapidly rising prices and the producers against falling prices. They hedge their prices out 6 months to a year in many cases. Energy, oil and natural gas, producers and customers work the same way to some degree although oil is a much more tradable commodity than steel so the guys placing themselves in the middle of the futures markets for energy have a more pronouced effect on the cost of a barrel of crude. Energy, oil specifically, is also much more suseptible to worldwide political events.
The cost of energy has more of a substantial effect on steel producers so I have to look at it in that respect. If energy continues going up it would have a better chance of adversely effecting the worldwide economic situation. If steel prices go down for their products but energy prices continue up it will not necessarily mean that the economic situation will improve. Energy will continue to be the main ingredient in the equation.
Take a look at your own situations at home. Is it costing you more to live and to get by on what you make? Do you see any improvement coming in that direction? The sectors that were really driving the economy, housing and banking (refi's) over the last couple of years are now on the downside of their waves. The markets reached an incredible high over the past few months and nothing sustains those levels forever. As the economic patterns change so does the market. Overall does anyone think that we are in better shape right now than we were 6 months ago? If there is no solid basis there for the economy or markets to pyramid off of then how can we expect a trend upwards?

[spikefader]

Thanks, Spike. I always love your analysis.

Would you say, then, that the $WTI descending triangle will descend? Yes, I know the triangle is not resolved. But to be a full on bull would require that the crude price not prematurely choke off any rally.

And if you are a full on bull, would you then say, yes, its a whopper of a buying opportunity on just about anything, including (cough, cough) PARL.

Thanks NB! I just did the chart for $WTIC and it's clearly bullish. (click on that chart and bookmark my page if ya haven't already)

To your view that

"to be a full on bull would require crude not prematurely choke a rally".

I would say this: Don't let oil confuse the issue of market bias. Both can show strength simultaneously.......and when they don't, they can still trend up and be broadly bullish at the same time. Chart history shows this obviously. One must be careful when applying FA to any TA interpretation. FA (and fears and biases one has in response to things like the price of oil and economic events etc.) can cloud one's vision rather than help it. Very often the market will do the exact opposite of what we expect, and one's left wondering and confused and kicking themselves that they didn't trade the stinkin' chart that is in hindsight so stinkin' obvious.

And the obvious stuff from the charts right now is that there's a very good case that suggests the bias should be long. Now....nothing wrong with the wait and see approach. That's fine....cuz flat is a position. Yes, there are times to be fearful.....like fearful one's losses will get worse. Red fear is good. Capital protection is good. But I caution not to let fear stop you from getting excellent entries. It's the same old thing....buy falling prices at support to give yourself an edge. And it isn't necessarily easy is it? But doing it at major support provides an edge. And in my view, any falling prices to support levels this week is going to be a bullish opportunity, not a liability. And naturally, the great thing about trading with a plan with limited downside is that if one is incorrect about buying support, and the support fails, then one stops out, steps aside, and waits for the next opportunity.

Best to all, and good luck this week.

[jiesen]

whoa, how'd we end up in such an in-depth discussion of the steel market on a PARL thread?!?

[New-born baby]

whoa, how'd we end up in such an in-depth discussion of the steel market on a PARL thread?!?

Jiesen,
Haven't you ever smelled that stuff PARL makes? Reminencent of the smoke of a foundry, if you ask me.

[New-born baby]

Thanks NB! I just did the chart for $WTIC and it's clearly bullish. (click on that chart and bookmark my page if ya haven't already)

To your view that

"to be a full on bull would require crude not prematurely choke a rally".

I would say this: Don't let oil confuse the issue of market bias. Both can show strength simultaneously.......and when they don't, they can still trend up and be broadly bullish at the same time. Chart history shows this obviously. One must be careful when applying FA to any TA interpretation. FA (and fears and biases one has in response to things like the price of oil and economic events etc.) can cloud one's vision rather than help it. Very often the market will do the exact opposite of what we expect, and one's left wondering and confused and kicking themselves that they didn't trade the stinkin' chart that is in hindsight so stinkin' obvious.

And the obvious stuff from the charts right now is that there's a very good case that suggests the bias should be long. Now....nothing wrong with the wait and see approach. That's fine....cuz flat is a position. Yes, there are times to be fearful.....like fearful one's losses will get worse. Red fear is good. Capital protection is good. But I caution not to let fear stop you from getting excellent entries. It's the same old thing....buy falling prices at support to give yourself an edge. And it isn't necessarily easy is it? But doing it at major support provides an edge. And in my view, any falling prices to support levels this week is going to be a bullish opportunity, not a liability. And naturally, the great thing about trading with a plan with limited downside is that if one is incorrect about buying support, and the support fails, then one stops out, steps aside, and waits for the next opportunity.

Best to all, and good luck this week.

Spike,
I love it! Thanks for a truly great post!

[Lyehopper]

Lye, you probably bought from GNA, not GGB... GNA is the North American operations of Gerdau.

Yes, you are correct. It's from Gerdau Ameristeel. They are a very well run outfit imo and their quality is topshelf....

Hey Peanuts, You are in sales, right? Ask the fellas you are selling to about inventory, and backlog (forget the published reports, they're always a late indicator). See if they hint that there's a little slowdown in orders and a build up in inventory of certain stuff. Again, I might be a few months early but keep an eye open for a definite top. I've found steel stocks to be a great money maker on the short side when timed right. Since we're both connected to the industry we should be able to spot the top.

[skiracer]

I just don't see a bottom in place yet. An if oil does spike up farther I don't see it helping things to the upside except if you're in OIH, XLE, or any of a basket of oil related stocks whether producers or service companies. An just as a coincidence here's is what Briefing.com's Swing Trader had to say an I didn't steal his choice of words at the end of the sentence.

[New-born baby]

Yup

Ski,
For once I can agree with you Yes, I would not buy any of those charts.
I am still in the wait and see mode.

[skiracer]

I saw this on Briefing.com this morning. Kind of relates to what we've been talking about.

[stenzrob]

So anyway, back to the PARL circus.

Lawsuit filed today. Some on the Yahoo board believe, or at least say they believe, that this is a desperation move on the part of the shorts, trying to block the sale to Ilia which would lock in their losses. The huge short position in PARL started well below the current price and the shorts have just continued to increases their position as the price rose. I continue to hold a long position, just to see how this hand plays out.

[billyjoe]

Something is fishy. Does anyone have a list of the fragrances that PARL produces ? If so is 3 day old carp on the list ?
-------billyjoe


p.s. holy crap ! Did anyone else notice the CEO's name is Le Catch ?