WYNN & CNG. Resorts and Natural Gas. How Are They Doing Today?

Welcome back gang. Let’s take a look at WYNN tonight. This was viewer request and I’m happy to go ahead and take a look at this. The thing about WYNN is that I have some issues about this particular instrument being at these nose bleed levels.

A couple of things that are on my mind with this one. You’ll notice that early on in the trend, look at my stochastics, they only pulled down into what I refer to as the half spike area initially. Then as we go along we start to cut a little bit deeper into that actual bonafide half spike area. Then we go ahead and actually cut into a full spike. So, it is still humming along there bouncing off the full spike and that’s great but now here we are pretty quickly after that last full spike right back down to full spike area. At this point we’re actually getting below the speed lines as you can see as well (on my charts at 1:09).

I have some concerns with this. I believe their earnings are on the 30th or thereabouts and this really kind of reminds me of a conversation that we had on CMG last night. For all of you that are part of my student family I had a big hour and a half event last night and it was incredible. It was extremely well attended and lots of awesome questions were asked. CMG was actually the featured stock last night and I had extensive warnings about that. You’ll see that it is down about ten dollars today.

About The WYNN

As we look at WYNN here, I have similar concerns. You’ll notice that we’ve just been on quite a run. We went ahead and had a lot of energy at first. In fact, in was so strong that it couldn’t even get down into the full blown half spike level. Then it finally gets to the half spike, then a full spike, and now we’re back to the full spike again, so this trend is getting a little tired. This particular stock has a propensity, if we look over time, when we start getting these nice little runs in here it will easily pull back between 10-20% before pushing on again. Now you notice that in this particular jaunt here (on my charts at 2:19) has actually gone all but parabolic. Again, if we look back in history, usually when this has any sort of run it has a halfway decent pullback of 10-20%. We can go back and see that history more and more in the past here. With that being said, being that it has gone kind of parabolic before earnings it is somewhat priced for perfection. That always makes me nervous. You will always find a lot of people like to buy stocks right before earnings hoping that someone knows something here and now it’s going to gap up and have this win. That does happen occasionally but most of the time it’s very hard for companies to meet and exceed earnings and also provide exceptional forward guidance.

Again, I would remind you back to this article that I’ve posted to you a number of times now. I posted this about six days before LULU went and took its big nosedive. If you look at this particular season the number of negative posts is extremely high and the number of positive warnings is extremely low. The problem is that you’re getting to the point now in this market (which has gone up and up and up parabolic and people are wondering why and how) where there are a lot of analysts out there that are really pumped up and talked up. These analysts have been big proponents for certain types of equities and that. The problem is that they’ve done such a great job with cheerleading that now it’s getting to the point where companies just can’t keep up with those inflated expectations. Now the cookie is starting to crumble.

With all that being said, what that means in English is if you’ve got a stock that is priced for perfection and a company can’t keep up with that, that is where you start getting those nasty gap downs. We’ve seen all too many of them in the last week or two.

So I look at something like this and I can’t get awfully excited about this for just that reason. We’ve had a fairly, almost sustainable, run but now we’ve gone somewhat parabolic. That brings us back to CMG because that was the same kind of thing. We have more of a sustainable angle of attack. A nice 45 degree angle run but then we went parabolic here again. Again, it is a restaurant stock. Who doesn’t like Chipotle? I like it. The reality is that if any sort of bad news comes out for this thing the same situation is going to occur. You are priced at these highs like this and even in the past this thing has had a good run and then taken some pretty good whacks. Here we are this time where we’ve had a good run and a parabolic move as a part of this and so my concern has been that we can see some sell side. Like I said, today we were down approximately $10 with that.

So, be wise. Really think about where you’re at with the position of your favorite stocks because if your stock has had a big run up in advance of earnings now it has to meet and exceed all of these already frothy expectations that people have put forth. As we can see, the cookie’s kind of crumbling here and a lot of companies just can’t keep up with those inflated expectations anymore.

Positive numbers are going down and of course the negative ones are coming out in full force.

You guys have a great night and we will look forward to seeing each and every one of you tomorrow morning in the Live Trading Room or tomorrow night with more great stuff coming up here. We have the big CME event tomorrow that I will see some of you at as well as the event in Scottsdale, Arizona this weekend. I’m looking forward to seeing many of you live in the next couple of days. Take care and have a great night.

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