Tuesday, July 03, 2007The Range
OK, let me get this out of the way: I was wrong about Apple.I proposed that the hype around the iPhone would be a precursor to the stock getting walloped. Well, on the first trading day after the iPhone's introduction (yesterday), the stock did indeed inch down (and on a 126 point up day on the Dow, no less).
But it reached a new record high today. And, looking at the chart, there is no technical reason for the stock to be weak. So I sold my puts at a (relatively modest) loss this morning, and shame on me for ever doubting the power of Steve Jobs, my lifelong hero.
Phew. OK, done with the self-flagellation. Today's entry will be very short, since I imagine most of you are already wrapped up in July 4th festivities. As I mentioned yesterday, it looks like the readers of this blog were correct in suggesting very bullish behavior just prior to the Independence Day holiday.
One thing is clear, though. Over the past five weeks, the markets have been bouncing around in a clearly-defined range, ending (temporarily, at least) the unabashed push upward preceding June.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoqGwBJT9gI/AAAAAAAADGk/gb9_0QE2k3M/s400/0703-%24indu.jpg
Zooming in a bit on the Russell 2000, the range has actually had two stages, demarcated here with two different colors of highlight. The most recent range is more volatile, yet it has a higher base.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoqGwRJT9hI/AAAAAAAADGs/30V_Q-_7sdY/s400/0703-%24rut.jpg
This becomes even more obvious when you look at the $VIX. The range between highs and lows on the $VIX has exploded higher since June 1st. It makes for some extremely jumpy trading, since bulls and bears are struggling more than ever for control.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoqGwhJT9iI/AAAAAAAADG0/mW_L6i7mnAE/s400/0703-%24vix.jpg
As for my broad view of the market.......it's pretty simple. I chalk up July 2 and 3 to the aforementioned Independence Day strength. I would expect to see some meaningful weakness for the balance of the week. If that doesn't take place - - and certainly if we push above the range that I've illustrated - - it looks like the bulls will take back the control which they set aside as of June 1st.
at 7/03/2007 45 insightful comments
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Labels: aapl, iphone, steve jobs
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[ 本帖最后由 hefeiddd 于 2009-4-28 07:21 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 07:22 编辑 ]
Monday, July 02, 2007The 7/4 Push
A number of readers have been remarking how strong the market is prior to the July 4 holiday, and how bears should sell into this strength as opposed to shorting too early (like last week). If today is an indication, it seems that was good advice. The market was strong across the board, with the Dow posting a better than 125 point gain.
My index-puts-of-choice are for the Russell 2000. I've got a pretty big put position on this index. As long as the series of lower highs and lower lows stays intact, I'm fine with this.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RolsXBJT9fI/AAAAAAAADGc/ZyU0czzY1VY/s400/0702-%24rut.jpg
Remember, tomorrow is an abbreviated trading session (the equities market closes at 1:00 EST, three hours earlier than normal), so it's bound to be a quiet, low-volume today. I would think most of the pre-July 4 fireworks got taken care of today, but there might be another little push upward. The S&P 500 is also in a "lower highs" pattern, and it needs to remain so in order for the short-term bearish picture to remain decent.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RolpZxJT9aI/AAAAAAAADF0/HX0xbrZusXI/s400/0702-%24spx.jpg
One nice Dow stock for puts is Alcoa (symbol AA) which looks to be in the latter stages of a head and shoulders formation.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RolpZxJT9bI/AAAAAAAADF8/30WeB7jAYzE/s400/0702-aa.jpg
For big believers in the continuing ascension of energy prices, APA looks like a good bullish play. This is a really nice saucer breakout.
[ 本帖最后由 hefeiddd 于 2009-4-28 07:23 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 07:25 编辑 ]
For big believers in the continuing ascension of energy prices, APA looks like a good bullish play. This is a really nice saucer breakout.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RolpaBJT9cI/AAAAAAAADGE/BgjrPegscWk/s400/0702-apa.jpg
PSB is a short I closed a little while ago with a nice profit, but I re-entered it today, since it seems to have finished with its retracement.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RolpaBJT9dI/AAAAAAAADGM/u3LWVCXg4IQ/s400/0702-psb.jpg
at 7/02/2007 36 insightful comments
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Labels: apa, psb
[ 本帖最后由 hefeiddd 于 2009-4-28 07:25 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 07:26 编辑 ]
Friday, June 29, 2007Are the Bulls Losing Their Grip?
Dedicated bulls should worry about this: the market is starting to make sense to me. Last week was a really good week. This week was a really good week.
Now, if we were at the tail end of a two-year long bear market, it would be easy to shrug this off. "Oh, yeah, Tim the permabear has been doing well because everything has been falling non-stop." But you know that's not the case. The Dow was at its highest level in human history earlier this month, and it still has over 98% of that value. So I've been able to score big profits trading virtually entirely bearish positions in a market which has been in anything but a free-fall.
So it's making sense. Leading up to this month, I was starting to lose my mind with how nonsensical, bizarre, and random the market seemed to be. It would be like living in a town where cars stop at green lights 80% of the time, pedestrians occasionally walked along the middle of the highway, and baby carriages were parked on the roofs of buildings. After a while, you start to lose your mind in that kind of environment and question your own sanity.
But the town I live in suddenly makes sense. People stop at red lights and go on green. Baby carriages are safe. And pedestrians remain on the sidewalks. And the market goes up when I think it's going to go up. And it goes down when I think it's going to go down. It's a nice change. Let's keep those buggies off the roofs for a while, shall we?
If you read my post from earlier today, you know I spent a little time this morning at the Palo Alto Apple store watching the crowds line up for the JesusPhone iPhone. If you didn't see the post earlier, check it out. It's got a cool little video I made.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoWWvxJT9TI/AAAAAAAADE0/fKbA9tFwgx8/s400/0629-%24jesusphone.jpg
I'm trading the Russell 2000 options actively, both intraday and on swing trades. A tight stop on the IWM ETF is at 84.19 right now, which was the high for both Thursday and Friday.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoWWvxJT9UI/AAAAAAAADE8/FhYqyRdN45k/s400/0629-%24iwm.jpg
There's really no good instrument for trading the MidCap 400 ($MID), but it's a fascinating graph to me. The markets seem to be revving up to be in swoon mode.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoWTohJT9OI/AAAAAAAADEM/CvTPPpSAmmw/s400/0629-%24mid.jpg
I haven't traded the NASDAQ (either index or hardly any stocks) for a while. It's been relatively defiant of the recent weakness in the market. But I have a feeling this group is going to start joining the downdraft party.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoWTphJT9PI/AAAAAAAADEU/BUbKvNHA95U/s400/0629-%24ndx.jpg
Side note, now that I mention NASDAQ - congratulations to RIMM owners, particularly call owners. I see some of the calls were up literally quadruple-digit percent levels today!)
[ 本帖最后由 hefeiddd 于 2009-4-28 07:27 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 07:28 编辑 ]
Oil services are looking terrific for shorts/puts. HES is particularly well-formed and liquid.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoWTqhJT9QI/AAAAAAAADEc/Gnyy6QEsD3A/s400/0629-hes.jpg
McKesson (MCK) is another beautiful stock. One of the best examples of exploiting Fibonacci fans that I've ever seen.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoWTqxJT9RI/AAAAAAAADEk/MWobWBmj4sc/s400/0629-mck.jpg
RadioShack (RSH) has been on an enormous upswing of late. (Rumor has it that AJC has joined the Battery Club multiple times to keep her bedside electronic accouterments fully-powered, thus the earnings spike). But - - just like JC Penney is JC Penney - - Radio Shack is Radio Shack. And that's all you need to know. I've got puts.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoWTrhJT9SI/AAAAAAAADEs/Rs-P2KNltH8/s400/0629-rsh.jpg
Next week should be relatively quiet with a big fat holiday right in the middle of it. Have a safe one (most of you, at least), and I'll see you on Monday.
Late breaking news! I was there for the Big Event (the 6:00 opening of the doors at the Apple store). It was a madhouse. Police, news crews, and hundreds of people (half of which were taking pictures).
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoXFdxJT9VI/AAAAAAAADFE/WahyiN0w5Hc/s400/0629-%24crowdwaits.jpg
You know the funny part? People waiting three days to be near the front of the line. And one hour later....one hour......I was able to just walk right in through the front door without a wait. Great use of three days (and nights), fellers. Anyway, here are my two iPhones perched on the kitchen bar:
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoXFdxJT9WI/AAAAAAAADFM/6FW_pLvv1Cw/s400/0629-%24iphones.jpg
at 6/29/2007 30 insightful comments
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Labels: hes, mck, rsh
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[ 本帖最后由 hefeiddd 于 2009-4-28 07:48 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 07:50 编辑 ]
Thursday, June 28, 2007Once More into the Breach
Well, I'm glad we got that bit of business out of the way!
The stock market did its usual spastic freak-out the moment the Federal Reserve Statement was issued. First it lurched down. And then up, big time. And then down again. And it spent the rest of the day generally heading south. It wasn't a plunge, by any stretch, but it certainly nuked a very healthy rise in equities into oblivion.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoQhKBJT9NI/AAAAAAAADEE/LhjWTNaD4s0/s400/0628-%24fed.jpg
Looking at the candlestick chart of the IWM (which is the ETF for the Russell 2000), you can see a picture-perfect shooting star. My feeling is that tomorrow will be a down day, and we can get back to the business of shorting this market.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoQhExJT9II/AAAAAAAADDc/6_JEbVNFkG4/s400/0628-%24iwm.jpg
Colgate (CL) is a relatively stable/"no surprises" stock that might be worth acquiring puts against.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoQhFBJT9JI/AAAAAAAADDk/GpFgOH_bK1s/s400/0628-cl.jpg
Coventry Health (CVH) appears to have failed to break out of a normally bullish pattern, which is bearish. I'm short the stock.
[ 本帖最后由 hefeiddd 于 2009-4-28 07:51 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 07:53 编辑 ]
Coventry Health (CVH) appears to have failed to break out of a normally bullish pattern, which is bearish. I'm short the stock.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoQhFRJT9KI/AAAAAAAADDs/q0qhw_ft1v8/s400/0628-cvh.jpg
I've mentioned Jet Blue (JBLU) for the bulls out there. I stand by this position. Maybe this former high-flier is getting its act together after many embarrassing fumbles.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoQhFhJT9LI/AAAAAAAADD0/ycr7WMD7eBY/s400/0628-jblu.jpg
I bought puts on MCK today based on a small head and shoulders pattern plus a falling-away from a Fibonacci fan.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoQhFhJT9MI/AAAAAAAADD8/Ra539n5ObuA/s400/0628-mck.jpg
Oils are looking pretty good for put/short opportunities too. I bought puts on OXY just before today's close.
[ 本帖最后由 hefeiddd 于 2009-4-28 07:54 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 07:57 编辑 ]
Oils are looking pretty good for put/short opportunities too. I bought puts on OXY just before today's close.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoQg3hJT9DI/AAAAAAAADC0/etW7EebtWFI/s400/0628-oxy.jpg
Same story with Southern Copper (PCU).
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoQg3xJT9EI/AAAAAAAADC8/dyhWjKoRA2Q/s400/0628-pcu.jpg
Potash puts are fairly heavily traded, thus the bid/ask spread isn't atrocious. I picked up some of these today (as with all the other trades, well after the Fed craziness).
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoQg4BJT9FI/AAAAAAAADDE/KR0LlxnuwnA/s400/0628-pot.jpg
...and the same for Schlumberger (SLB).
[ 本帖最后由 hefeiddd 于 2009-4-28 07:58 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 08:01 编辑 ]
...and the same for Schlumberger (SLB).
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoQg4RJT9GI/AAAAAAAADDM/r59GwucENz4/s400/0628-slb.jpg
.....and Exxon (XOM).
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoQg4xJT9HI/AAAAAAAADDU/-ujivG-B8G0/s400/0628-xom.jpg
I stopped trading Research in Motion (RIMM) ages ago, since the stock is just too weird for me to understand. Congratulations to those long the stock (and, even moreso, long the calls). RIMM had oh-my-God earnings after the close today and, last time I checked, was up 12%. Poor old can't seem to live this one down.
at 6/28/2007 49 insightful comments
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Labels: clf, cvh, iwm, jblu, mck, oxy, pcu, pot, slb, xom
[ 本帖最后由 hefeiddd 于 2009-4-28 08:02 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 08:03 编辑 ]
Wednesday, June 27, 2007Lying in Wait
This isn't some weird crackpot organization (or a crackpot blog writer). This is a fairly sober group of individuals. Take note.
The $VIX, as expected, absolutely plunged today. I'm not sure - no one is - what the market's reaction to tomorrow's forthcoming GDP report and Fed Announcement is going to be - - but it's possible that all the excess in the $VIX got squeezed out today. For myself, I think I'm going to keep most of the powder dry until well after the Fed announcement, which always throws the market into a bizarre spasm.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoLHkxJT9BI/AAAAAAAADCk/HqTVW-gf-lE/s400/0627-%24vix.jpg
I've tried to emphasize in the chart below the pivot points of the Russell 2000. Just to be clear, the fact that today's is circled doesn't necessarily mean I think the buying is over. But it's a help visual aid in any case.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoLHghJT88I/AAAAAAAADB8/4ukJTyKmZvU/s400/0627-%24rut.jpg
As you probably know by now, the Russell is my favorite index for option purchases. It was especially strong today. At this point, I'd say 840.02 is a good stop-loss level.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoLHgxJT89I/AAAAAAAADCE/ejgZHiitQSE/s400/0627-%24rutcandle.jpg
The S&P 500 also had a good day for the bulls. I've drawn the downward-sloping pennant that I believe is confining the market action these days.
[ 本帖最后由 hefeiddd 于 2009-4-28 08:04 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 08:06 编辑 ]