Iran Blowback Part 2 and BCSI
Iran is up to no good
Hezbollah attacks Israel not more than a day after I raised the idea that Iran and its proxies would stir things up. This absolutely reinforces my message: Iran related activity could escalate into market impacting behavior.
Worrisome
The recklessness of the staged attack is alarming. Israel knew the attack was forthcoming: publicly warning Hezbollah for the last few weeks. Nevertheless, Hezbollah assembled hundreds of fighters to launch 100 mortars per hour for 5 hours. Had they succeeded in kidnapping Israelis, the outcome would have been as follows. The Lebanese government army could do nothing to free the Israelis, essentially embarassing them and setting the stage for a Hezbollah takeover of Lebanon. Additionally, such disruption would reinforce the Syrian message that they are necessary for maintaining calm in Lebanon.
In effect, the incident would have blocked Western efforts to transform Lebanon and, more critically, distracted from the current pressure on Syria and Iran.
It indicates the level of Iranian and Syrian desperation. It suggests that more attacks are likely and that Iran is beyond sabre rattling.
Prepare for turbulence
Set Stops on all stocks. It will be hard to know when this may turn into a market impacting crisis. Expect that most stocks will be cashed out.
Expect volatility. Stocks will bounce up and down for a while. If oil supplies from Iran look to be affected, expect things to trend more down than up. Stocks will bounce up and down in 3% cycles. Those cycles will probably be short term in nature - 1 week long. Three strategies
1. Sit out until a bottom is established
2. Jump in at a low and weather the volatility
3. Play the volatility by jumping in when stocks tank and jumping out when they rebound.
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BCSI is coming back
As previously stated, the price drop last week was a fabulous buy opportunity. We got in at $39.5. It is up to $45.5 today. Whoever followed my advice is sitting on a 10%+ gain in one week.
And this is a great time to revisit the value of setting Stops. We bought at $50 and set a stop of $45. This was triggered. We then bought back at $39.5. The Stop capped our downside and let us get back in at a much lower price. As a result, despite a 20% stock price drop ($50 to $40), we are ahead.
Hezbollah attacks Israel not more than a day after I raised the idea that Iran and its proxies would stir things up. This absolutely reinforces my message: Iran related activity could escalate into market impacting behavior.
Worrisome
The recklessness of the staged attack is alarming. Israel knew the attack was forthcoming: publicly warning Hezbollah for the last few weeks. Nevertheless, Hezbollah assembled hundreds of fighters to launch 100 mortars per hour for 5 hours. Had they succeeded in kidnapping Israelis, the outcome would have been as follows. The Lebanese government army could do nothing to free the Israelis, essentially embarassing them and setting the stage for a Hezbollah takeover of Lebanon. Additionally, such disruption would reinforce the Syrian message that they are necessary for maintaining calm in Lebanon.
In effect, the incident would have blocked Western efforts to transform Lebanon and, more critically, distracted from the current pressure on Syria and Iran.
It indicates the level of Iranian and Syrian desperation. It suggests that more attacks are likely and that Iran is beyond sabre rattling.
Prepare for turbulence
Set Stops on all stocks. It will be hard to know when this may turn into a market impacting crisis. Expect that most stocks will be cashed out.
Expect volatility. Stocks will bounce up and down for a while. If oil supplies from Iran look to be affected, expect things to trend more down than up. Stocks will bounce up and down in 3% cycles. Those cycles will probably be short term in nature - 1 week long. Three strategies
1. Sit out until a bottom is established
2. Jump in at a low and weather the volatility
3. Play the volatility by jumping in when stocks tank and jumping out when they rebound.
-----------------------------
BCSI is coming back
As previously stated, the price drop last week was a fabulous buy opportunity. We got in at $39.5. It is up to $45.5 today. Whoever followed my advice is sitting on a 10%+ gain in one week.
And this is a great time to revisit the value of setting Stops. We bought at $50 and set a stop of $45. This was triggered. We then bought back at $39.5. The Stop capped our downside and let us get back in at a much lower price. As a result, despite a 20% stock price drop ($50 to $40), we are ahead.
posted by Andrew at
9:25 AM
1 Comments:
So, what's a good stop for BCSI now?? I put in $40 just for support reasons..
Thoughts?
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