NASDAQ HEAT MAP

I found a neat little tool from NASDAQ, it monitors the percent changes of ETF's that represent different market sectors. A quick glance and you can see performing non-performing sectors.

http://screening.nasdaq.com/heatmaps/heatmap_ETF.asp

Check it out, hopefully it cleans up my overcrowded quote screen!

CPHI - China Pharma

I've been looking at microcap/small cap stocks in much more depth lately. Specifically distressed equities but I have found some interesting plays in otherwise strong businesses. Take for example the 100%+ gain in CPSL. Purchased around $5, its trading $12 in just a few days. Talk about FAST MONEY...

CPHI had 100% revenue growth and 80% earnings growth YoY. Using the rolling last 4 qtrs of earnings they made 0.31/shr. Give it a 15 PE and you get a value of $4.60. Trading at 1.61 right now

Sentiment Indicators



Stockbee started a little controversy when he pointed out the terrible performance of the Ticker Sense Bull/Bear Blogger sentiment. In fact its so bad, you could fade the crowd and make some decent returns. It's back at its high's going into a FED meeting.....

Uranium!



Oil hits $80/brl, time to look at other energy sources. How about uranium? It's taken a huge hit and likely shaken out the speculators. Here are some interesting stats:

Global demand was 66,000 tons in 2004.
Only 40,000 tons produced by mines, the other 26K comes from old Russian nuclear stockpiles that will run out in 2013.
441 nuclear reactors worldwide with plans for 180 more.
China demand - 3 million this year, 10 million 2010, 18 million 2020

Good stuff! There's a uranium future trading on the NYMEX but its ultra thin [Hint: watch for a big volume spike for a bottom signal] I'm looking at CCJ long dated options.

Book Reviews

I read more books on trading then is probably healthy, sometimes more then once. I'll post reviews of the books I read and you can make the decision to purchase from there:





This is a decent, quick read if your looking for some interesting new hedge fund strategies. I say hedge fund strategies because it delves into more niche products such as PIPE's, Credit Card debits, Sub-Prime lending, etc. Not exactly for retail investors but interesting nonetheless.

There are some specific trading strategies based on QQQQ gaps, Closed End Arbitrage, and some calendar effects which would likely be worth the price of the book itself.

I really enjoyed his honest and open writing style. He explains strategies in a simple and straightforward method. I especially liked his discussion on starting a hedge fund, although the guy who can't live off $600,000 a year is pretty pathetic IMHO, I do take a lot of enjoyment knowing that he is a Wall Street outsider [internet start-ups before investing career] and still successful. He does talk briefly about the advantages of a trading pedigree when it comes to raising capital but it can be done nonetheless.

Once in a lifetime...

Allright I may have only been in the game for a little bit but check this out:

This is the actual traded FED FUND's rate, the rate at which banks borrow and lend cash. Most major banks actually have cash deficiencies and everyday go into Fed Funds, Eurodollars, and other money markets to finance their liabilities. We may never see anything this crazy in a long long time!

Fed Funds




The Nov. Fed Funds future has priced in a 75 BPS cut. 100- 95.42 = 4.50 % implied Fed Fund Rate by Nov. I'm making a bold prediction but here goes:

NO FED CUT IN SEPT.

If you listen to the political cronies, they downplay the employment number as an outlier and the economy is still strong. The credit market will work itself out, blah, blah, blah. If this is the case, then the Fed shouldn't have to cut at all. In any case I think anything over 25 BPS would set off a panic in the world markets, last thing the Fed wants. There are 2 fed meetings till November expiry so this does add to the risk. I think I'll get a lot more information regarding the strength of the market from earnings reports and adjust accordingly.

EDIT
Bernanke decided to cut 50 BPS on the Fed Fund rate causing me massive pain and humiliation. It reminds you that the market CAN and IS illogical many times. By now you know the arguments, what does he see that so bad? What happens if 50 BPS isn't enough, what if 525 BPS isn't enough?? Anyway, my only advice is not to fight the tape even though it smells....

As per the ChiBondKing, nice call on the cut.

SUCCESS STORY.....SORTA

Here is a link to a success story that ends in anything but. The ending is definetly a lesson but I want to focus on a few specifics instead:

"Few have risen so far so fast: He was a college dropout with one year of experience on Wall Street who built an $80 million hedge fund out of nothing in just four years."

"Success in the hedge-fund world came easily to Angelo—perhaps too easily. Born and raised in Flushing’s Greek-immigrant community, he went to Catholic school, bused tables at a neighborhood restaurant, and had a passion for souping up the engine of his Mustang GTS. He left NYU in his junior year, telling people that he had graduated early (in fact, he had dropped out), and took a job at Merrill Lynch as a broker’s assistant. Friends say he was instantly smitten with the perks of high finance—“the lifestyle, getting the limo ride home at night, all that,” says one. Angelo stayed at Merrill just thirteen months—enough time, he decided, to take what he’d learned and strike out on his own."

Rest of the article is here: http://nymag.com/news/businessfinance/23171/