Caterpillar Earnings – What It Means To Me

I don’t care what anyone else says ( obviously no? ) as we’ve all got our own opinions.

You can listen to the constant stream of bull%&it coming across CNBC justifying company after company’s earnings misses – then the ridiculous “short-term reasons” they suggest.

Fact of the matter is, the majority of companies that indeed “have met earnings expectations” have  largely done so via cost-cutting and margin expansion. Don’t be fooled – this is not revenue growth. Your company might “appear” to be doing better as well –  with 60 fewer employees etc…

As “the “global supplier to construction and mining industries, Caterpillar (NYSE: CAT ) sees the very foundation of economic expansion,  and is often considered an economic bellwether, particularly in emerging economies like China. More machines sold means more holes dug, more roads built etc.

If in the absolutely “simplest sense” one can’t see / comprehend CAT’s massive earnings miss as indication of global growth “slowing” and forward guidance as “further slowing” – I’d be extremely concerned that you may need to have your head examined.

CAT is no “one hit wonder” or some “.com fly by night”.

As CAT goes………global growth goes.

32 Responses

  1. GTFO October 23, 2013 / 4:43 pm

    Sure looks like the “bag” is being passed.

    • Forex Kong October 23, 2013 / 4:45 pm

      You’ve got that right.

      It’s a long and drawn out process but……it is most certainly being passed.

  2. schmederling October 23, 2013 / 8:43 pm

    Hey Dr.Kong…… right on the money…….
    I have a Neg fire in the DXY daily TF which has been running some 9-days now….. with the weekly still on the Cliff for a Neg fire as well…… this should form the bottom relative to the DXY’s movements lately….. Will be entering short all USD pairs shortly still holding long the EUR trade against the USD… 🙂 Let’s see how this plays out here….. meaning how the commod currencies react to the DXY’s final move lower….

  3. schmederling October 23, 2013 / 8:49 pm

    I am also long PM’s here for the moment – but that may be just a quick in & out depending on what I see relative to reactions to the DXY…. have been popping in & out of the sector for almost a month now with great success until I see a forthwith change in the action…… but long is currently on the table for a week or so…..

  4. JSkogs October 23, 2013 / 8:53 pm

    Ya Kong you’d have to think we might have a good marriage right now between technicals and fundamentals for an SPX correction….quite a major one. Declining fundies declining volume blow offy daily candles and a rising bearish wedgie….and risk oriented currencies have already suffered serious corrections over the past few months. What say you?

    • robert October 24, 2013 / 8:05 am

      An spx correction is about as rare as chance of a meteor hitting earth…. fed is never going to let it fall even 1%

      • JSkogs October 24, 2013 / 9:08 am

        We’ve had a few large corrections since QE. As high as 16%

      • Forex Kong October 24, 2013 / 9:09 am

        Good luck with that Robert.

        Keep drinkin the “hope” and fed kool aid.

      • robert October 24, 2013 / 9:33 am

        I m short es myself, just that it is frustrating to see it keep going up n up… btw kong, are u able to share with us on how u spot ur signals? Thanks

        • Forex Kong October 24, 2013 / 10:17 am

          Hang in there Robert….I’ve been more or less short since May so…..

      • robert October 24, 2013 / 10:32 am

        I mhanging in there… but not sure how long… this thing looks like it could go to 1800s1900s easily by year end…n it is usually bullish from nov…

      • robert October 24, 2013 / 10:44 am

        Bears just simply drop the ball everytime the bulls stare at them.. fundamentals r weak.. yet ath on us n europe mkts??

  5. JM October 23, 2013 / 11:17 pm

    Good stuff Kong.
    By the way, is there a book on trading that you have read and recommend?

    • Jworthy October 24, 2013 / 9:36 am

      JM, what are you looking for specifically? Another reader recommended “Trading in the Zone” by Mark Douglas a few posts back. I just picked it up yesterday night and am only 50 pages in but really enjoying it so far. The main emphasis seems to be about why trading is so tricky to master and what you can do to prepare mentally. Again, I’ve just begun it, but so far so great. I also have lots of book reviews on my website but they are mostly equity (not forex) based. I’m sure some others around here can offer lots of suggestions…
      Hope that helps!

      • Forex Kong October 24, 2013 / 10:25 am

        For what it’s worth guys……I’ve never read a single book on trading / investing / forex.

        “But” ……(throwing you guys a bone here) If you “really” want to learn something ( and certainly not about fashion or how to pick up the ladies )

        “Brett Steenbarger”. “traderfeed”.

        Thank me later.

  6. David October 24, 2013 / 11:22 am

    Jworthy, glad you’re enjoying that book. Not only is it informative, but it is also well written and easy to digest, unlike many trading books I’ve read.

    Still waiting for the Euro to come back down. The commodity crosses are looking really good with GBP/NZD passed 1.94 now. I’ll book some more profits to be safe as it can easily dive 100 pips on a dime.

  7. JSkogs October 24, 2013 / 1:25 pm

    I’m still confident that Tuesday was roughly the high for the next few weeks but c’mon man this is testing me! I need to have a mid-day tequila shot to get through this crap!

    • Forex Kong October 24, 2013 / 4:14 pm

      It’s a tough market and a tough time for those of us looking for the downside isn’t it?

      Putting it in perspective….we’re sitting at the table with an asshole with 85 billion dollars in chips, and the ability to go “all in” on every hand. Certainly not an “easy” situation.

      The fundies will catch up here “some day” so keep up the fight.

  8. BG October 24, 2013 / 4:21 pm

    Thinking about converting some stocks that have done well into physical gold, but looking for the right entry point. I don’t need to hit it on the nose, but it’d be nice to get some gold once a reversal upwards is a bit more solid. Any advice on an entry point for long term gold, as in gold that I stash in a lockbox at the bank?

    Kong, love your blog, cheers. (viva bitcoin, but it might not “get there” in time, so I want to have something with a guaranteed surge once inflation hits)

    • Forex Kong October 24, 2013 / 4:36 pm

      I was just getting a post together with respect to the miners, and gold in general.

      The current ( and assumed “continued ) endless “printing of money” scenario has really put the boots to the PM’s as no one is essentially “seeking safety” in a world awash with liquidity – we know it can’t last forever but “timing it perfectly” is a stretch.

      One the one side you just “start” buying, and stagger your purchases over several months – averaging in and building regardless. Then on the other side….you wait for a “confirmed move” and likely miss a large part of the initial gains.

      The fundamental case for gold is clearly “buy as much as you can” but as far as timing it goes….I guess it depends on what kind of person you are.

      Between here and an even 1000.00 an ounce ( which I really don’t see happening ) I’d just get in there and buy.

      p.s – I’m on the mindset that the miners have bottomed.

  9. BG October 24, 2013 / 4:59 pm

    Thanks, Kong. That’s kind of what I’ve been doing, but so far, it’s a strategy that has me down 10-20%. That’s probably not the right way to look at it, though, since accumulation should be the goal. That, in anticipation of a 500% rise once this ponzi runs its course.

    • Forex Kong October 24, 2013 / 5:48 pm

      Well….if it’s a long term hold then the current “flux” shouldn’t be a big deal..I’m sure you’ll do fine.

      Gold isn’t a “trade” in my view so….for those with a long enough “profit horizon” – I’d say anywhere in around here is pretty good.

      The miners on the other hand “are” a trade – and should be a wopper at that.

  10. schmederling October 24, 2013 / 10:55 pm

    Hey Dr. Kong…… I would have to agree that at this point QE infinity is not doing much for Gold & suspect that it will not in the near future….. the training wheels are there to pick up the pieces should things waggle & everyone knows this….. So the fear ” Trade” if one wants to call it that in Gold is gone for the meantime….. There is no major catalyst right now for NEW ALL time highs – I am of the theory that taper will actually shake things up for the PM trade in general or until people WAKE-UP either seems very out in the future…….until we have some MAJOR event or DXY collapses then I feel we will be stuck in the range…. the diggers need to get out of this bottom first before PM’s are going to move anywhere in a large % move at the very least this PM’s bull has 2-4 years left & I am leaning more the longer TF now as I just don’t see 2years marking the parabolic move in Gold….. way too soon in my books…..

    Cheers Schmed,

  11. schmederling October 24, 2013 / 11:06 pm

    Still hanging onto the long eur/usd trade but for the moment getting long in the tooth…… will be looking to cut it by 50% in the near future….. then reload on the dip…. $1.40 is still my target … 🙂

  12. schmederling October 24, 2013 / 11:15 pm

    With the DXY looking to continue lower into tomorrow…. this should produce a Neg fire on the weekly TF squeeze once this fires I don’t see this reversing quickly & will play out much lower to the down-side until we bottom…… I have been tracking this set-up for some 18-19 weeks now……

    • Forex Kong October 25, 2013 / 7:45 am

      Im looking for the bottom in USD in the next few days – and not just a bottom but…..likely “face ripper” intermediate bottom type bottom meaning….the beginning of a new series of likely “higher highs and higher lows”.

      I think this will corresepond with a pretty brutal move lower in oil.

      • schmederling October 25, 2013 / 8:20 am

        hmmmmm…. well we will find out very soon….. I just have to continue to follow my tech on the weekly telling me we are going below $78.50 with a RSI bottoming out at 26-27 so still room to go lower IMO…. maybe even as low as 20…….. on the weekly here…. What I am more interested in seeing is how PM will react to the DXY ” “face ripper” out of this bottom….. do we rally with the DXY or get SMASHED for the final bottom…….. including the diggers – this is more importantly interesting relative to the PM sector & the US dollar…… cuz it’s been more or less going sideways or lower even with a falling US dollar telling me that the sector could still have some real issues even though I am long short-term……

  13. Eric S October 24, 2013 / 11:20 pm

    Kong, you dead nuts on buddy. Gold and silver will continue to be manipulated by the big banks, ie. Chase. If you look at gold possession all the elite have moved their gold. Something is coming and sooner rather than later. The Gold and Silver ETF’s are nothing but a suckers play for the masses. CAT is signaling the big slow down is on it’s way and yes all these corporations have made their numbers due to what you said. And those numbers are manipulated by the “analyst’s” who work for the wall street. And let’s see, Wall street owns over 60% of those big corporations stock….what a stroke of luck…

  14. schmederling October 25, 2013 / 8:13 am

    I am adding to my short FB & Tesla here…… looking for some gaps to get closed on the daily……. Finally GMCR has closed the large GAP left on the daily – I have been sitting on this trade for over 6-month if I remember correctly…… I still think it has legs lower here but am out my last 50% & will reload on the bounce…… GAP to close target price in the 30$ range……. keep in mind this could take 6-8 months to complete the move….. ( one of my LT trades ) I am also going long BBRY here…… with a top target of $15….. :)……. just a few ideas I have on the go….. :)!

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