The Story of the SS Republic

I had a very busy day today. Not much to say on markets, they continue to have good action under the surface while the indices take a pause. Amazon missing earnings may cause some jitters tomorrow. I made two buys in the late afternoon, will see how it goes.

The long rally of 2012 has some tension building in the finance universe so rather than mix it up there, a totally non market related tale tonight.

The Story of the SS Republic

I am a huge fan of stories of lost ships and treasure. The SS Republic delivers quite a tale.

The ship was built in 1853. Powered by steam engine and propulsion was done by two huge paddle wheels on the sides of the ship. Originally the given name was Tennessee.

Adventure? Check out this list:
-Part of first steamship service between NYC and Central America
-During the California Gold Rush, transported "49'ers" to the eastern shores of Panama and Nicaragua to travel to California's Sierra Nevada mountains
-Transported the last wave of mercenary soldiers in William Walkers rogue take over of Nicaragua, then brought the defeated back home
-Served the Vera Cruz, Mexico to New Orleans shipping lane

Quite a run already, but it gets better.

In New Orleans when the US Civil War broke out, the Confederate navy seized the ship and used it for blockade running. She was re-named the CSS Tennessee in 1861. When the Union forces took over New Orleans the ship was dubbed the USS Tennessee and was pout to use at the Battle of Mobile Bay in 1864.

In March 1865 the old ship was deemed to expensive to refit and was sold at auction. Now given the name SS Republic, the ship was used for the New York to New Orleans travel route from then on.

Gold and Silver Currency for Rebuilding the South
Leaving New York on October 18, 1865 the ship was loaded with passengers as well as a sizable amount of gold and silver coins meant for rebuilding the hard currency base in the south after transfer to New Orleans.

A strong hurricane off Georgia proved too much for the ship, from Wiki:

On the fifth day of her voyage, a hurricane off the coast of Georgia proved too strong for the ship. By evening, her hull was leaking so badly that the fire in the boiler was extinguished, and she stalled in heavy seas, taking on water faster than her crew and passengers could bail her. At 4 pm on October 25, 1865, she sank. The passengers and crew escaped in four lifeboats and a make-shift raft, but 40-foot seas throughout the night made keeping them afloat a serious challenge. It was not until two days later, on October 27 that the survivors, now desperate with thirst, were found by the sailing ship Horace Beals. On October 29, the steamer General Hooker had been sent to look for the Republic, and rendezvoused with Horace Beals. The passengers were transferred and taken to Charleston. Most of the passengers and crew survived, although several were lost on the raft before they could be rescued. All the coins were lost.

And that was that. Or was it?

Rediscovery and Recovery of the Coins
In 2003 the company Odyssey Marine Exploration (OMEX) was able to locate the wreck off Georgia in 1700 feet of water. OMEX uses historical study, side scan sonar arrays, and Bayesian search statistics to locate ships.

The side scan sonar made the two huge paddle wheels very clear to see (its hard in this picture, but it was clear):

The rover robot that OMEX uses to search the ship and recover coins took this picture of one of the wheels:

All told, nearly $75 million dollars in gold and silver coins were recovered at the wreck.

Now that is a tale!

Further reading:
Lost Gold of the Republic - Priit J. Vesilind

Full disclosure: I have a small position in OMEX from years ago that is still "underwater" (pun intended) and thus this tale is not investment advice or trying to get back to even, just find it very interesting.

Have a good night.

Technical Difficulties

Another Monday, I don't like them. Still, was a better Monday than usual.

Drive Profits Like You Stole Them
I always do most of my screening and chart work on Sundays to get ready for the week ahead. For shorter term trades I try and stick to a one week time frame. In the iBC trading room, the 12631, I work out ideas and post charts for discussion. Last night I had over 8 real candidates. The soft open today kept most of them from moving, but soon after the open one name was looking good and it was not even a pick of mine.

Sunday night I checked out Art of Tradings Trader Stewie's post:
10 New Setups To Watch Next Week
All nice looks but one stood out to me big time, ROVI. This chart just looked explosive. Here is my work up:

I was in this morning early as this stock stabilized fast. Then it took off. Hard.

I was trying to sell in the afternoon but my smart phone kept acting up and freezing. Was not a great feeling. I got it pushed through and closed the trade with a 5% gain for the day. Looking at the chart I would revisit this name with a close over $35, this could be a big runner.
(You can follow Stewie on Twitter; @Traderstewie)

Technical Difficulties
The open was pretty messy today but you had to figure it was going to get bought. I had a bunch of names to think about opening spots in, but they were hanging around and there seemed to be no hurry. Add to that I had a hot runner from the position above and technical difficulties with my phone all day and I mostly did nothing.

And that's fine.

As long as the market stops being a freak show of insanity, there is always plenty of time to trade. I have been banging the table for a few weeks about individual names performing better than they have in a while. Even Josh Brown was on CNBC (first clip in this series) talking about the same thing:
Media: Set-Up City

One name I like (it has SEX in the ticker!) is MSEX and it's still looking ready to roll:

I have plenty more.

It is still a favorable tape that will reward solid homework and set-up hunting. Until I see the names and set ups I am watching start to fail overall in large numbers, I will keep a lack of interest in broad market moves.

Have a good night.

Friday; It's What's for Dinner

Boston metro saw some crazy heavy rain today. It has cleared out and will be almost 50 degrees into Tuesday?! February may be a payback month.

Market Observations
This week saw three major market positives:
-Blow out earnings from Apple (AAPL).
-The Fed, while not opening up QE 3 directly, made it clear they want to see some inflation even if they have no idea where the hell it shows up.
-Facebook has moved up their IPO offering, all the way to next week.
That is quite a trio of fuses to light an already explosive looking market.

Because I am a skeptic at heart, I would wonder why Facebook is rushing this move so much. After a huge rally, are they worried it might reverse? I have no idea but file it under "suspect".

That said, next week may provide one of those rare opportunities to get long and be very confident. Market players will make very sure that IPO has a nice running environment. Seeing the Internet momo plays skyrocket late day makes me confident a run higher is at hand. All to place an IPO everyone can dump to make money. Nice.

Friday Night Entertainment
Because you worked hard all week and deserve a break.

Missing Ships and People
I love real mystery or tales of extreme situations. Always have. The great site iO9 has a collection of 10 tales that they think could make great science fiction novels:
10 Real-Life Lost Voyages That Would Make Amazing Science Fiction Novels
A couple selections:
-Roman Ninth Legion
-Percy Fawcette, whom have covered before. This will get movie treatment and I think I saw Brad Pitt will star.

There were also some great articles on iO9 this week about "Mitochondrial Eve" and how that data backs up the idea that humans evolved one time in one place in Africa then spread across the globe. Here is a graphic with years ago estimated and routes of human migration:

Way cool. Full disclosure: I do not write for iO9, nor have any relationship with them other than I think the site rocks and makes scientific stuff more easy to understand for non-scientists.

Picture Pages
Visual cues.

Smile Rabbit!:

see more This is Photobomb

The old days:

see more Historic LOL
Never changes.

Film Clips
In case you need a movie idea.

Plenty of great horse centered films (Hidalgo, War Horse) but from my youth I always loved "The Black Stallion Returns" best of all:


If you have not seen the classic film "Used Cars" with Kurt Russell, well, you should:

The price (or rent?) is too damn high! Blame Bernanke.

Rock Blogging
Bringing the tunes since 2007.

Loyal reader Gawains was looking for some Steppenwolf and "Born to Be Wild" circa 1969 works!:

Good pick.

One of the hardest workers on charts and ideas on Twitter is G. Thomas Lackey and he puts so much effort in day and day out he needs a song break. He also knows engines and cars, which is cool beyond doubt. Here is Sublime and "Santeria":

You can follow him on Twitter via @gtlackey

My friend Arctic Gambino wanted The Black Keys and "Your Touch" and I have never heard this song, its wonderful! Bluesy and edgy:

LOVE IT!!! Follow him on Twitter as @a_bh_a

Not quite under the 1 year rule, but I was wanting some LA Guns and "Over the Edge":


I am in a sad mood so why not up the ante with "Love Hurts" from Nazareth:


Two songs to go.

Heavy time.Turn it up. White Zombie and "Thunder Kiss 65":


Last call.

Close the show with Heart and "Alone":

Fitting.

Have a good night.

Best of the Web Thursday

Short post tonight.

Best of the Web Thursday
Markets saw some minimal losses today. Whether profit taking or other, it was needed if this is going to be a big run. I was so busy last night I had no time to really have a action list ready for today. It worked out as most names I have an eye on provided better entry points by day's end. I will do a full workup this weekend and be ready for next week.

Not one to leave you with no content though.

Why not check out the great Tumblr that Josh Brown (The Reformed Broker) and I co-author:
Things Apple is Worth More Than
Yes, it's back!

My man Jake of EconomPic had a great post on Leading Economic Indicators and some changes that were made. Please swing by and check it out, very important:
The New (And Improved) Leading Economic Indicators Shows Expansion

ChessNwine will keep you from getting too excited, long or short with a well thought out, reasoned take in his market recap for today:
Stock Market Recap 01/26/12

Robert Sinn (The Stock Sage) explains profit taking and has a great look at what subscribers get to see in his daily updates (Full disclosure, I am very happy to be one of the early adopters, excellent tool for trading) via the SMS service:
The Bulls Ring the Register

Good luck and remember it's Friday so get your requests in for Friday night.

Have a good night.

Reaction is Highly Exothermic

I was busy the second part of the day as some equipment went crazy, so I am a bit pressed for time tonight to get caught up and get some other things done.

Reaction is Highly Exothermic
When I wrote last night's post I had a feeling that the lift in markets was not just do to some wishful thinking and people holding their breathe. I figured some kind of change was on the way that would be seen as positive. I had hoped perhaps FED head Bernanke may want to reel in expectations in the face of high oil and a rising stock market, but nothing like that happened today.

The Thermite Reaction was initiated.

The FED statement was fairly tame, and my first reaction was "is that it?". It was later in the press conference that Bernanke made it clear, more easing is on the way and the FED has even gone greenlight on targeting inflation at 2%. Calculated Risk has a great rundown and you can see it here:
Analysis: Bernanke Paves the Way for QE 3

I would argue that the FED has lost their minds here. They cannot control WHERE cash will flow when prompted by such a policy and there is sure to be serious ramifications from this action going forward. The FED is always behind a curve and inflation may run well ahead of target before unemployment drops by a large margin, if at all. Unemployment is a structural problem, not a cyclical one, but the FED is still stuck in the past. Nothing can be done to stop them. No one really wants to. Sad, but it is what it is.

As is, the last 3 weeks have reminded me of another time and that was in the summer of 2010. In August the FED opened the door to QE2 at the Jackson Hole meeting and markets ran from there all the way to the actual implementation. A small correction happened in November, but it was not large. That run went all the way into February 2011. The whole way many, myself included, thought the run up was nuts and made no sense. Here is a daily chart look:

A million things are different now of course, but I get the same market feel at this point.

Greece is small, and it will take Portugal a while to get bad. It's an election year so the money and promises will be flowing for all kinds of things. The push from the FED today could result in a great trading market environment lasting weeks to a few months.

My plan is to stick with individual stocks. Play the best set ups with the best patterns and observe price action that way. The indices may fluctuate but the 100% correlated market has been broken up. If this is a huge fake out, it will be clear as more and more names start to fail trades.

Sentiment is running very hot here, and that can usually be a contrarian indicator. But nothings ever never, and nothings ever always. When the animal spirits are set loose, calling them back proves a difficult task.

Have a good night.

Explosive Ingredients

Amazingly it was 50 degrees here today and very sunny. It was almost like a spring day. Went for a walk and that was great in January.

Apple Blowout Earnings
Apple (AAPL) once again blew out the house on earnings. The numbers continue to be staggering, and growing. Even the most aggressive estimates I had seen were way off. 13 Billion in net income for past quarter and revenues grew to 46 Billion. You cannot even fathom such a thing.

Now it may be time to get re-acquainted with the excellent site, Things Apple is Worth More Than on Tumblr. I need to start making updates as Apple is now surging higher. Suggestions welcome anytime!

Explosive Ingredients

Thermite Reaction

Markets are running higher since mid December. Earnings have been good, and Apple just blew it up. Tomorrow the FED meets and will start their effort to be even more clear on their plans. It's an explosive mix.

Articles and rumors ran around in December that the FED was prepared to buy anywhere from 600 Billion to 1 Trillion more in mortgage backed securities in another round of QE. With markets running hot and oil still near $100 more QE may be a bit aggressive from the FED. That said measured inflation is still zero and there is Euro market drama in the wings. I do not discount that Boom Boom Bernanke may pull the trigger yet again in another effort to ignite animal spirits.

So is more FED buying priced in here or not? It's a close call, but I think there is a feeling that more help is on the way. At a minimum some kind of re-investment program like before (QE light) is in play. Anything else could set off a run higher that will have real legs. If the FED sticks with just keeping rates low until 2050 the market action from there is going to tell me a lot about how strong things are.

Have a good night.

Taking Profits, Cutting Losses

No, I still hate Mondays.

New England Patriots in Rematch with New York Giants
The New York football Giants beat a very good San Francisco team that made two major fumble errors in the game. The New England Patriots overcame numerous mistakes as the Baltimore Ravens missed a game tying field goal at the end of regulation.

And now it's the big Superbowl rematch. Just unreal.

Taking Profits, Cutting Losses
Last Tuesday I bought some stocks after screening and things were looking good overall coming into Monday. I closed all four positions today for various reasons. Two will highlight in tonight's blog. The other two were INTU (+1.2%) and ANSS (+4%). Nothing wrong with either name and I will revisit INTU for long term account, just grabbing some profits.

I had high hopes for the position in NXTM. Friday the stock was hit and this morning it started off ugly and went down fast from there. Having stops in place is always important and I was stopped out fast at around $18 for a -1.1% loss on the trade. It got worse from there with a big drop all day long. The move down retraced most of the good move up I was seeing. While it has not violated the hammer print on 1/12/12 there are many names moving well now and I saw no reason to hang around on this one:

Know your exits.

My last trade was CRESY and this one really worked out well. Traded to plan and expectations. Have to love when that happens!:

Breaking out of the triangle I had a target of $13 on this name and it overshot that a bit this morning. I closed the trade out for +10.5%.

Overall, markets needed a break today and I may stay in cash until I see what Boom Boom Bernanke has to say on Wednesday. There is also AAPL earnings tomorrow that can really affect things. Overall 2012 has been way more constructive than the last months of 2011.

Have a good night.