七月 24, 2008 - 11:43 下午Real Life Bear EncounterIt's nearly midnight as I am typing this. A few minutes ago, I encountered a wild bear.
Nope, I'm not making this up. Let me explain. As regular readers know, I am at Fallen Leaf Lake near Tahoe. Tonight I decided to do some star-gazing, since everything is so clear here - - you can easily see the Milky Way, and Jupiter is almost painfully bright. So I went out on the boat dock, did the star thing, and started heading back to the lodge.
A couple of guys were staring at something, and since I'm the curious sort, I hunched down to see what they were looking at. It was a brown bear, probably about five feet long, staring back at us, maybe fifteen feet away. Even though I heard a story yesterday about a woman whose arms were both taken off by a bear (in Alaska, not around here), I didn't feel nervous. We made some noise, and he galoomphed away. He was really very beautiful, and I was glad to have seen him. Although the thought did occur to me how ironic it would be if I was maimed or killed by a bear, of all things. I think he could sense I was a kindred spirit, so he left us unharmed. Had I been Abby Joseph Cohen, he surely would have attacked, in spite of the smell.
I had compiled a ton of charts tonight, but my connection is rather slow, so I'm actually going to make this quick. I had a very, very good day today. I'm not sure if it was my best percentage gain ever, but it was awfully close. I was blown away how well things went. Even though energy has slowed its descent, my energy puts did terrific, and I'm still wondering if OIH is going to break beneath its fan line to start the next act of this play.
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I am extremely short banks, and I find the huge rally provided by the bulls a few days ago to be a tremendous blessing. It made things cheap for bears.
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In all the tumult, there are a couple of ways to play it - - either play the bullish side by taking advantage of battered prices, or play the bearish side by taking advantage of pullbacks. CAL is an example of the latter, since I shorted it after it rebounded hundreds of percent in just days.
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Whereas CROX was the opposite. I bought a bunch of this when it was at about $7.50, and I sold it all at about $9 a couple of days later. Thank goodness I made this an opportunistic trade, because the opening bid should be around $5 or so tomorrow. That was one close call.
Whereas CROX was the opposite. I bought a bunch of this when it was at about $7.50, and I sold it all at about $9 a couple of days later. Thank goodness I made this an opportunistic trade, because the opening bid should be around $5 or so tomorrow. That was one close call.
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I have puts on RKH, which, in addition to my puts on stuff like LEH, WFC, and BAC, is a great way to play the "cascade" we're witnessing.
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I'll belabor my $UTIL short again, but at least this time I'll post a target, which I've tinted below. If we break the neckline, my target is about 370-380.
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I am still long DUG, and this has been a fantastic trade. I started accumulating this when it was in the high 20s, and let's face it, this is a very bullish looking formation, particularly with the volume surge.
I am still long DUG, and this has been a fantastic trade. I started accumulating this when it was in the high 20s, and let's face it, this is a very bullish looking formation, particularly with the volume surge.
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I'm going to leave the mountain of charts I had pulled for you unused. I'm going to bed now, hopefully avoiding any nasty dreams about bear attacks. Since he just headed off in a different direction, I'll remember him as cute instead of fearsome. Kinda like another bear you know! G'nite.........
Posted: 11:43 下午 | No comments! Be the first! | Permalink
七月 23, 2008 - 07:30 下午The RescueI have to say, I'm both disappointed and angry. The gigantic bailout that the Federal Government is shoving through the system creates a series of winners and losers. Specifically:
Winners
[*]The CEOs and other executives of FNM and FRE, all of whom pull down seven-figure and eight-figure salaries and have pulled one of the great corporate heists in business history[*]The lower-middle class blockheads that gobbled up real estate at sky-high prices, thinking they would be the next Donald Trump, who are going to simply walk away from their "investments"[*]The shareholders of FNM and FRE, who have been spared a $0 stockLosers
[*]All the citizens of the United States, particularly those who pay taxes[*]Honest, hardworking people that got mortgages through honest means, pay their payment promptly each month, and have received no help or favors from anyone (I am pointing not-so-subtly at myself right now.....)So the honest and hardworking folks are the fools. And the charlatans and crooks are the winners. And the entire country slips that much closer into oblivion with this travesty.
Gee, Tim, how do you really feel about this?
I have some s'mores to make, so this will be short (as a side note, no one makes s'mores like me - - - I am a zealot about the marshmallow being just right; God help you if you are with me and your marshmallow goes up in flames; that means instant death). Below is a great which screams "more drops to follow"; don't you think people figured the worst was over at each one of those tinted areas?
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The indexes might have a little more upside left - - in the coming weeks, maybe an S&P as high as 1325 or so - - but at the moment, the DIA is up to its 32.6%.
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The $UTIL is on a fast track to a massive H&S pattern. Amazing.
The $UTIL is on a fast track to a massive H&S pattern. Amazing.
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My energy puts had a dynamite day. OIH is pushing that fan line. Could it crack to the next level below?
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I have been buying puts on brokerages and banks. I hope this graph helps explain why.
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The Russell hit its Fib perfectly today. I lost about 10k on $RUT puts early in the day, but I re-entered the position
The Russell hit its Fib perfectly today. I lost about 10k on $RUT puts early in the day, but I re-entered the position at almost exactly the top, and those are in the green now. Not enough to compensate for the loss, but hey, the trade is only a few hours old!
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USO has cracked its fan line; the energy market has really fallen to pieces quickly, as I had hoped.
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I'm off to the campfire. I'll be looking at more charts tonight. If I see anything interesting, I'll post it in the morning. Adios!
Posted: 07:30 下午 | No comments! Be the first! | Permalink
六月 19, 2008 - 09:37 下午SeasickMy favorite part of the day is reading to my beloved children at night. (Indeed, I have had such vast experience reading these books, I keep toying with the idea of doing an excursus for my readers on Curious George; one day, perhaps; and I'm serious about this.) Many of their books tend to be science-oriented, even though my kids are pretty young.
Tonight I was reading a book about genetics; I get a little sheepish when it gets to the sperm and egg part, but I did read the bit about how all human embryos start off as female but, after a few days, about half of them become male. A portion of the dialog with my son (who, by the way, is gorgeous, thanks to his mother's genes, not mine) went like this:
Son: "So everyone on earth would be a girl if that didn't happen?"
Dad: "That's right"
Son: "Oh, that's good. Otherwise it would be pretty unpleasant."
Oh, he's a wise one.
The big news in the market today was that crude oil took a wallop. But don't be confused. The past ten sessions have been nothing more than a trading range between about $131 and $139. The market doesn't know what to do with itself. If it pushes above $139, you're going to see an explosion to the upside. And if it breaks below $131, I think we'll easily move to $123. The longer this range persists, the more substantial the eventual break will be, regardless of direction.
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The sucky part for me was that almost all the profits tacked onto my portfolio yesterday was eliminated today. I don't mind if I suffer a "wash" if the Dow is down 130 points one day and up 130 points the next. But if the market is down 130 points and then up merely 30, and I still am no better off, that worries me. Why shouldn't a 130 point tailwind help me more than a 30 point headwind?
Even more troubling to me is the graph below. Friday is quadruple witching, and the bullish engulfing pattern expressed by the NASDAQ could make for a bullish day. The market really needs to take it on the chin for me to have a good Friday. Otherwise, I think it's going to be in the hands of Beanie & Friends.
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The Russell 2000, on which I own puts, has been stuck in its own trading range for many weeks now. This isn't at all a clean pattern. A break below 717.50 would be terrific, but I'm not holding my breath.
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My bearish bets on crude oil may pan out after all, though. The MACD and Slow Stochastic both turned south recently.
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And OIH, which came within two pennies (!) of my stop price earlier in the day, sported a nice bearish engulfing pattern. But let's keep in mind the range I was talking about. Unless crude slips beneath $131, we'll just continue farting around. And a push higher by crude could supercharge OIH above the $220 level.
And OIH, which came within two pennies (!) of my stop price earlier in the day, sported a nice bearish engulfing pattern. But let's keep in mind the range I was talking about. Unless crude slips beneath $131, we'll just continue farting around. And a push higher by crude could supercharge OIH above the $220 level.
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GNK has, for three days now, been tickling its resistance line. Let's hope it stays beneath.
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A number of red-hot stocks, like MOS, POT, and CNQ (below) had some pretty big dollar drops today. The next few days could be interesting for these issues.
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I bought MDR puts today based on what appears to be a failed bullish breakout.
bought MDR puts today based on what appears to be a failed bullish breakout.
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I also acquired, early in the day, puts on PXD.
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I'll probably have more to say tomorrow (although if the market roars higher, I'll probably be too bummed to say much). I'm off to bed now. And I leave with you this - - a local story from Maryland, the state I am currently visiting. This has to be one of the best headlines. Ever.
Posted: 09:37 下午 | No comments! Be the first! | Permalink
五月 29, 2008 - 02:38 下午Oil Helps OutCrude oil, which is on the nation's mind like never before, softened up enough today do my puts some good. I am generally short most major items related to oil, gold, and agriculture. We had similar dips in crude oil in late March and late April, both of which were followed by pushes to new lifetime highs, so I am not saying the past few days are game-changing. But at some point this bull trend will be broken.
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I mentioned yesterday that I closed out my XAU puts. That was obviously early, and it's a shame that the huge bid/ask spread was the major reason for my wanting to close them out. Oh, well. I could see this easily heading to $160 and maybe even lower.
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My NASDAQ puts are pretty deeply in the red. I am watching $MSH closely. If it pushes past 625, this trade is shot.
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Crude's weakness translated into strength for the transports. This index is within a hair's breadth of a new historical high.
Crude's weakness translated into strength for the transports. This index is within a hair's breadth of a new historical high.
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Apple remains one of my favorite puts, particularly in light of its relative weakness to the broad NASDAQ today.
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CNQ is just one example of the formerly hot ag-related securities that are softening up.
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I mentioned $250 as a key breaking point for FSLR (which has fallen am amazing 65 points in just a couple of weeks). We're very close.
I mentioned $250 as a key breaking point for FSLR (which has fallen am amazing 65 points in just a couple of weeks). We're very close.
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Both Baidu (BIDU) and Google (GOOG) are also tantalizing at these levels.
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Baker Hughes (BHI) is a pretty sweet short with a stop at $90.
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The broad OIH has had an amazing run this year. A true tumble in crude might bring this down to the $150 level.
The broad OIH has had an amazing run this year. A true tumble in crude might bring this down to the $150 level.
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I don't know if I've ever trade OSTK before, but I entered a new position in it today (short).
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Another new position for me is VMI, which is forming a broadening top.
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I also entered AGN today based on its push higher today, since the risk is lower at these levels. My stop is at $58.
I also entered AGN today based on its push higher today, since the risk is lower at these levels. My stop is at $58.
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CERN is falling away nicely from the horizontal line you see here.
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And Fastenal (FAST) was a new short for me today, again based on the lower-risk entry point. There is a lot of resistance in the $50-$52 range.
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Finally, a couple of steel-related issues on the short side.
Finally, a couple of steel-related issues on the short side.
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While I am encouraged at crude oil's weakness, I gotta say, if Friday isn't a down day on the indexes, I'm going to be pretty disappointed with this week. Today's firmness in equities are disquieting, although at least a portion of it was lost in the final 90 minutes of the trading day. See ya Friday!
Posted: 02:38 下午 | No comments! Be the first! | Permalink
三月 20, 2009 - 07:06 上午Energy Looks Prone to WeaknessI was going to do a post titled "Maybe Atilla is Right". As I'm looking at all my index charts, I'm impressed by just how much resistance there is in this market, and how poised equities seem for a renewed turn downward. I'm not ready to join that camp, but if the market does really plunge, we've got to throw the guy a parade or something, because everyone else (including permabears EWT) have thrown in the towel.
Energies have been good for me on the long side over the past week, but I think they're about to turn weak. I shorted a bunch of XLE this morning. OIH, shown below, also looks it has a very serious resistance level at 88.15
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Posted: 07:06 上午 | Comments (View) | Permalink
三月 03, 2009 - 06:47 下午Constant CrossroadsI discovered that I had written a post in early January 2009 which I never published; I accidentally left it in draft mode. I've decided to publish it here, mostly as a comment cleaner, but also to dig up what I was thinking about a couple of months ago, for whatever it's worth.........I notice that my short suggestion of ARE was pretty danged good...
It's quite obvious to anyone watching the market that the explosive movements were a phenomenon of October and November 2008. Trading in 2009 is going to be much more of a slog, and it will be harder to make big money. That's why, slog though it may be, the market deserves more of our attention than ever, because there's still milk in the cow. We just have to know how to squeeze.
Take a look, for example, at the chart below. You can see the big plunge from September 19th through October 24th, and after a rapid, week-long climb, there's another plunge terminating November 21st. Ever since then, it's been one minor crossroad after another. The moves have been muted and choppy. Those making consistent missteps are getting chopped to pieces.
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I highlighted the pink area above for a reason. As much as I enjoyed the big drops on Wednesday and Friday of last week, we have to keep our eyes open for (yet again) some modest strength at these levels. The only reason is that the highlighted range represents decent support, and the "escape" from this zone due to the Santa Claus rally validates how relieved the market was to escape it. To be sure, the entire issue of the "credit crunch", indicated by the dramatic easing of the TED spread below, has taken a back seat to the more fundamental issues of crappy employment numbers and an earnings season which is unlikely to impress anyone.
http://slopeofhope.com/ImageProxy?imageid=3350
Taking a look at the Dow 30 average, the ride from 9,000 to 8,600 was pretty fast, and it's apparent how formidable the retracement at that level is (exact value: 9,042.08). This is the last week of the Bush administration, so it'll be interesting to see, psychologically, how much of a lift the 1/20 inauguration provides. I've been saying for months now, nothing would be better for the bears than an honest-to-goodness rally. As it is now, the market is struggling like a sick cow.
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The broader Russell index is a fine example of the recent chop. Just look at the activity from November 21st: there are ten distinctly different swings in price action: huge up, down, up, down, up, down, up, down, up..........and now down again. If you asked a third grader what was next, "up" seems to be the next logical step, unless something forceful breaks this sickly uptrend. The line at 521.46, which repelled prices last night, is the next logical hurdle.
Ah, and my old buddy gold. I remain relatively bearish (I guess 7 on a scale of 1 to 10), but this bugger is being stubborn. A break below 253.73 on the $HUI would set things in motion nicely.
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I got prematurely excited about energy based on the strength earlier this week, but the failure to bust through the line at 88.15 was all it took to send prices softer. Equities, gold, and stocks are all wrapped up in the same conundrum - - - they want to go higher, and the market has been slowly pushing that rock up the hill - - but people are so freaked out by what's going on that there are simply too many eager sellers to let the buying build a head of steam.
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I'm just trying to keep my eye open for good positions on either side. ARE, shown below, is a prime example. I would want to be short this stock, no matter what the Dow does.
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Even though I've got a mix of long and short positions, it's evident to me that the "personality" of my holdings is definitely bear-friendly. Because on up days, my portfolio might go up a little (or down a little), but on down days, it soars higher, although the move is somewhat attenuated by my long positions, obviously. In any case, I still remain hedged, and I think it's going to be a while before I get heavy-bullish or heavy-bearish. This is still very much a trader's market and has little room for dogma.
Posted: 06:47 下午 | Comments (View) | Permalink
三月 03, 2009 - 11:31 上午The Energy Bull ReturnsOK, I'm back into energy in a big way. I have bought very large positions in USO and OIH. I managed to get USO at a better price than I sold it at this morning.
I think I am going to start relying on large oil and gold trades as my principal money maker since the /ES seems to be just smashed to pieces.
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Posted: 11:31 上午 | Comments (View) | Permalink
二月 22, 2009 - 09:51 上午Meet James Ensor"O, Lord, make me pure....but not yet" - St. Augustine
Although I keep cancelling my subscription, Barron's keeps winding up on my driveway every Saturday morning. I read a couple of interesting bits in there this weekend.
One of them characterized the change in the nature of the market's decline. Back in September and October (ahh, those were the good old days, weren't they?) the feeling was of panic. The selling over the last few weeks, however, have been borne more of resignation. I think that's a fine way to put it.
The other item they pointed out was how their cover story last weekend on the Barron's Economic Plan had buried them in emails. In fact, they got more emails on that story than any time in their "88 year history" (one may puzzle as to why a record for emails would span that much time........they might as well have said it was the most emails they had received in the past ten millinea). Anyway, the number in question was 200. That's two followed by two zeroes. Sheesh, Slope gets over 1,000 comments every day. What's the big whoop? The average age of the Barron's reader must be in the triple digits.
Anyway, a brief comment on the markets - - - there seems to be a steady drumbeat, even among the bears, that by inching just a skosh beneath last November's lows pegs the final bottom of this fall, and we're at last ready for a sustained rally higher. Even apocalyptic types like EWT have laid out enough of a verbal exit plan that would permit the market to rise without their prognostications being incorrect (by the strictest definition, wave 5 could be considered complete at this point, if the market decided to lunge higher).
Newer readers should know there's really nothing I'd like more than a meaningful rally. Bear markets are hard to trade, and this stage of this bear market is like fighting wild beasts over a scrap of meat. Having the market more or less push higher each week, particularly in a market where multi-hundred percent gainers wouldn't be hard to find, would be a relief.
I still don't think we're there yet. As I said about a week ago, I'm looking for a low of 600 to 650 on the S&P before I abandon most of my shorts and go long in a big way. A favorite bear of mine, Atilla over at xTrends, closed out all his bearish positions on Friday, and although that makes me a little uncomfortable, I also recognize his entry points in the past have sometimes been substantially off (although I would hasten to add that, in the end, the trades were wildly profitable). So I'm not to let one other person's disposition warp my views.
Head and shoulders patterns don't really comply with their bearish purpose at bottoms as they do at tops, but I can't help but notice this kind of pattern showing up in a variety of indexes:
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I also see that the VIX has crept up recently; if this chart were of a stock, I would be pretty bullish on it.
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Returning to the theme of people I respect having a different point of view - - I've mentioned before how Gary Savage is ga-ga bullish on gold. My hat is off to Gary, because so far he's been very correct, and his analysis is, as always, thorough and logical. For myself, having a smaller cranium and a greater dependence on simple price charts, I remain bearish. Indeed, on dollar terms, being short precious metals is my largest position. If I'm wrong, the only good news is that I'm not that far away from my stops.
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Ever since the year started, I've tried my hand at being an energy bull. Until the market is ready to truly move higher, this isn't going to yield anything more than pennies. Once the market in general is temporarily out of its funk, I remain confident energy is going to be one of the best places for be for a few reasons:
[*]Intuitively the public understands the need for energy far more than, say, the need for software as a service or high-end cheeseburgers;[*]The public also has a general sense as to just how far energy prices have fallen and, thus, the opportunity for a rise;[*]From a technical basis, the charts in the sector have the closest thing resembling a base
The lower trendline of OIH was violated last week, but it's a small trendline. I am leaving it where it is in order to maintain chart integrity. The moving averages, however, may be setting up for OIH to make a nice move higher. The percentage gains that I think are possible in this group are upwards of 70%, so I want to be ready when the time comes.
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I will confess that this stage of the bear market is seeming a bit long in the tooth. The quandary I am in is simple enough to explain, though: most of my shorts are, on an individual basis, fantastic looking charts. The trouble is that a major rally has a habit of "un-fantastic-ing" charts. So on one hand I would feel incorrect in closing out a bunch of good-looking positions based on nothing more than the fear that a rally might happen; on the other, I don't want to have nothing but shorts if the market moves from 7300 to 9000.
My plan, and my defense, is the same as always: keep adjusting my stops. It allows for the partial sacrifice of profits, yes, but at least it leaves me open to the prospect of more downside. I would much rather forgo a fraction of my profits than run around closing positions, only to see these charts do precisely what it looks like they should do, which is go down.
Posted: 09:51 上午 | Comments (View) | Permalink
二月 09, 2009 - 08:37 上午OIH's Moment of TruthMy view of this is pretty simple. Bust above 88.15, and that's bullish (and I'm not just talking about OIH, but for equities in general). Fade away from this level, and that's bearish. This is the clear line in the sand.
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Posted: 08:37 上午 | Comments (View) | Permalink
一月 26, 2009 - 09:31 上午Shorting OIHI just shorted OIH, with a stop at 88.16. I think this rally will ultimately fizzle out; if it does cross my stop, that's very bullish for energies.
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Posted: 09:31 上午 | Comments (View) | Permalink
一月 23, 2009 - 11:05 上午The Energies/Commodities Finally Kick InI've been harping about this long enough. It's about time.
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Posted: 11:05 上午 | Comments (View) | Permalink
一月 21, 2009 - 03:30 下午Thinking LeanerIf you've seen the moviethere's a scene where Schindler is interviewing secretaries for his new business. He's quite the ladies' man, and most of the women he interviews he finds very attractive. So, in a bit of a comic relief (to an otherwise very dark, movie), he winds up hiring dozens of them. He explains: "They're all so..........qualified."
I feel a bit like that when it comes to my stock picks. "I never met a chart I didn't like." Well, OK, that's not true. But I think you're getting the picture. When I see a stock that's attractive, I want to take a position.
Well, there's a problem with that. The problem is that it's one whole hell of a lot of work to trade a large number of positions responsibly. I have 176 positions right now, and there are times that number has approached 200. I don't think most mutual funds have that many positions!
Now, I'm sure virtually all of you will be glad that I'm finally coming to my senses. Hardly anyone runs around saying a person should own as large a quantity of stocks as possible. But I think a reason I've become seduced by taking lots of positions is that, during the formative 2007 trading year, I had to be very much a prospector. If I happened to dig up a chart that was good, I took a position. In the final throes of the bull market, great shorts were few and far between, so I considered any "finds" to be precious.
Well, they're not so precious anymore. There's a bajillion great charts out there. And I really shouldn't feel the need to have a position in all of them.
This finally sunk in recently, because I was given charge of another trading account with a respectable amount of cash to trade. I had a list of over 50 enticing long candidates, and I dreaded the thought of, once again, having to babysit stops, entering positions into MarketMatrix, drag symbols around in ProphetCharts, and so forth. Hell, I was up until 3:30 this morning updating my stops. It gets old!
So I decided instead to just focus on a handful of ultra ETFs. I usually had just one or two positions on, and I "peaked" at seven. I have traded this account for a mere two days, but it's already up 18%. And that's with just plain old ETFs! No futures! No options! And just a handful of positions. Simple. Easy. Profitable.
So I think that, in the coming days/weeks, I'm going to start exiting these positions and change my trading style to be more focused on a single digit quantity of positions in any given account. I will make an exception for my IRA, which has had good success with a few dozen little bitty positions that I just let sit and grow. But it also requires virtually no babysitting. For my actives, I think it's time to take Thoreau's advice: "Simplify, simplify."
As for the market - - my "pure long" accounts (the IRA and the aforementioned new account) did sensationally well. My other two accounts were up, but the gains were muted due to many shorts and puts.
I pointed out earlier today that I thought the EUR/USD had a chance of moving higher, taking energy and commodities with it. I did that post at just about exactly the point where that did, in fact, happen. I'd say this could get back up to almost 1.40 before rolling over again.
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I am long energy in a very big way. My core positions are in USO, OIH, DXO, DIG, and I've also got DBA. I'm pretty confident OIH is going to fight its way back to about $88, and if it busts above it with any robustness, we could see some real fireworks. I am sort of counting on a failure, though.
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I'd say the $INDU has a very good shot at around 8,500 in short order, and possible a cross above 9,000. Only the most sensational efforts by the bulls could put it past that, and even then, I can't see us getting past 9,750 or so, tops.
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My view of the Russell is a claim to no higher than about 510, if that. I'm bullish, yes, but very short term!
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And, the most important of all - the S&P 500. I think another 30 points of padding are within easy reach. We'll have to see how things look if/when we get there, but my guess at this point is that the bulls are in for their ninety-fifth instance of disappointment.