John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (18403)

9/29/2016 11:57:22 PM

From: The Ox

of 33421

Hi JP,
Hope all is well with you and the thread's readers.

There's a ton of speculation surrounding DB but a lot of what I've read does not appear to have anything other than a lack of confidence as the basis of the negativity. One of the better Brexit trades since June 27th has been to short DB and I think it's getting long in the tooth. As with any falling knife, buyer beware but I think this is more a case of eroding investor sentiment than anything else....but I definitely reserve the right to be wrong. The volume is at a point where we could see an even larger % move (in either direction) very soon.

Look at the second chart at the bottom of this page and we can see that the Brexit drop was timely, as the stock was close to breaking the down trend that has been in place for a few years. Confidence is a major part of any bank's valuation and the fact DB has been in a steady decline compounds the obvious, IMO. Also, I haven't seen anyone accurately back up the claim of 40:1 leverage but maybe I just missed it, as I haven't had much time to follow things closely the past couple of months.

I think it's time to watch for a potential reversal at these levels. This is not to say jump in front of the speeding train but it appears to me this has been overplayed and just a case of mo-mo to the downside.

We'll see.

A while back you asked about the Semi industry and where they are at in their cycle. I'd say that it's early in the actual production cycle rebound but that a significant number of the stocks have anticipated a lot of the rebound. After a cursory look, it appears that much of the short term positives have already been priced in and, with that in mind, it's important to be very selective going forward. I think a rising tide will continue to lift most of the semi boats but a number of the charts look like they could use a corrective phase based on how early in the cycle we appear to be.

Here are a few of the charts displayed in a couple of different groups (mostly focused on equipment stocks):

Message 30612589
Message 30612720
Message 30612748

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