I think today was an absolute reversal day in the markets. Coal, Steel and Mining stocks rolled over like in unprecedented fashion. They are now broken charts and have a long way to go down. I never understood why coal and steel stocks rallied so much in midst of a slowdown but I think people have finally gotten the message. I am switching to neutral on natural gas...the blow-off top on Chesapeake, Petrohawk and Continental Resources was extremely ugly. Although I don't think Nat Gas will crumble, it will be very dangerous to step up and buy now.
Bullish Plays: Apple (people don't understand how many iphones they will be selling), Western Digital/Seagate/EMC (the need for storage of data is off the charts), Mastercard/Visa (when people are broke they use credit cards and all the risk is on the member banks, not them), ConocoPhillips (they will benefit when oil prices go up or down at this point, and people forget their huge natural gas exposure)
Bearish Plays: Cleveland-Cliffs (this stock was at $45 earlier this year...even after the drop at $90, has poor management), Patriot Coal (overextended is an understatement, even after the drop), US Steel (If emerging slowdown is for reals, back to double digits), HSBC/Prduential (Pete Najarian says lots of unusual put activity), Newmarket (Chemicals are going down hard), Potash of Saskatchewan (I see the end of the ag rally short-term), Energy Conversion Devices (I see this stock back in the 50s, where it last consolidated), Salesforce.com (with forward p/e in the hundreds and tech selling off, how is this pig still so high?)
There is too much uncertainty in this market, and you have to be quick and nimble. Israel attacking Iran will cause gold to spike 10% in one day and markets to fall 10%. We could be in midst of a major slowdown in Europe and a potential global bank meltdown (Barclay's, UBS, Citigroup, Bank of America...behaving horribly).
There are some grossly undervalued stock, but what could be undervalued today could be 30% cheaper next week. Good luck everyone.
