The collision of global markets and social mood

Thursday, March 12, 2015

Thursday -- Retail, Burgers, Euro, Charts, SAM

ES Futures:
Moderately higher (.4%) but not looking bottomy enough. Good. Lower targets close by.

Third straight drop in retail sales. Newest darling Shake Shack getting clubbed for 8%. Can't people afford burgers anymore?

Euro popped a little around midnight. About time. Still thinking euro strength means Greek exit.

10s look much better after a strong auction yesterday, and 30s are the relative strength leader today ahead of today's auction. Let me be clear: I want to see treasury prices go to new highs -- so I can short them.

Crude and NG may still need time to set up, but yesterday looked good for NG. It couldn't crest the prior swing point, though. So again, trust but verify.

Still nowhere.

S&P Outlook:
Posted a flurry of Fib targets yesterday on Stocktwits. "Four Fib targets of note -- $SPX 2023.66, 2026.70, 2027.48, 2033.88 + 2020.85 gap."

There is also a lesser Fib at $SPX 2039.39. Yesterday, S&P price just hit 2039.69. Spooky.

Today's bounce could go all the way to the 2067 area. Ticks and A/Ds are strong. Above 2067, especially above the 2083.49 swing point, may signal the significant turnaround envisaged Tuesday.

The wave count remains a challenge to pin down, but perhaps this may be materializing --

Special Situations:
Boston Beer Company (SAM) has been on my radar for a few years now. I thought it would have imploded a long time ago; I was wrong.

SAM's price/earnings ratio is 38.68 vs. an industry average of 22.62. Its price-to-book is 7.69 vs. industry average of 2.63, all on daily volume that is often well under 50,000 shares. Staggering.

SAM is, at best, an outlier -- a great example of modern accounting and, most probably, good old fashioned stock merchandising.

Its cash flow is 141 million vs. BUD's 14 billion yet its shares trade for more than 2X -- 262 vs. BUD's 122.

Grab an old copy of Reminiscences Of A Stock Operator and re-read the section on manipulation. With a very low float and VERY low daily volume, it is my personal feeling that SAM may be benefiting from a single stock operator possibly trading his own book -- shorting it to buyers as it goes higher then supporting it by buying shares when it declines.

The reason I bring it up today is that it finally seems there is a seller in it. I have long thought that the overall market rally would keep running until this highly overpriced craft beer company began to crack.

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