After the Bank of Japan action…

I have let things settle out and even though I am short an investment bank, a bank index and a Semi equipment company, I am positive on the day.  That is not to minimize the fact that today would be much nicer had I held SPY and GOOGL, but it is what it is.  Not bad.

Going right into Kuroda’s wheel house I purchased a stock that just yesterday I noted as being a formerly over hyped (though high quality) Machine Tool company pitched by financial suits as a Robotics company…

A Prime Machine Tool Builder w/ a Hyped Twist Falls Flat in Q4

Fanuc got hammered again today and considering BoJ’s stance on the Yen, I took a shot on this exporter.  You see, BoJ had been talking about reforms and certain entities (Morgan Creek Capital, GaveKal and others) had been explaining a bullish thesis on Japan, in part based on reform and the potential of a strengthening Yen (don’t look now but Japan’s banks are conspicuously bearish today).  Well, that is out the window as any wax that went on was stripped right back off again by BoJ last night.  Indeed, not only is the wax off, they are grinding down into the metal now.

So Fanuc is getting killed on the earnings we knew were going to be bad, due to general industry dynamics we identified as far back as July…

Machine Tools Fading

But now, with a halt in the cease fire against the Yen might one take a shot with a quality company with a Robotics sideline?  Well, I’d rather give it a try on my terms, not some financial suit’s terms. This is not a buyable chart, so I bought it. 

Unlike MKS Instruments, a company I dealt with years ago and cannot stand, Fanuc is one I dealt with and loved.  Much like the former was not a reason to short MKSI, the latter is not a reason to buy FANUY.  But it is a quality company, it is getting over sold and is no doubt unwinding the people who bought the ‘Robotics’ hype (hello 3D Printing circa 2014), and BoJ has just gone into full frontal Yen blow up mode (again).  Long story short, I bought it and we’ll see how it goes.  You should not buy it because you (likely) are not a manufacturing person, don’t know Fanuc and well, the chart…

Aside from that, the risk ‘OFF’ likes of NFTRH+ highlights TLT and its inflation-protected fellow, TIP are not doing bad at all today and in fact, are the main reason, along with my light exposure to gold stocks and energy, that I am green.  Interestingly here, TIP vs. TLT (bottom panel) is not indicating inflation expectations yet.

Back to the really fun stuff, here is the state of the majority of the US stock market.  There are reasons we have called it a counter trend bounce, and below are 5 of those reasons.