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Reducing the granularity of the chart to a weekly from a daily, we can plainly see the bearish engulfing pattern which took place last week. This week - Wednesday, Thursday, and Friday, to be specific - is loaded with important economic indicators. Here's hoping they shove the markets lower and help increase the minuscule bits of angst floating about into a growing sense of dread.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rm3_5gmb0II/AAAAAAAACyk/V_bbU1mrxC0/s400/0611-%24induweekly.jpg
The S&P 500 weekly offers, to my eyes, similar conclusions.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rm32Pwmbz_I/AAAAAAAACxc/nak7k2Us3hc/s400/0611-%24spxweekly.jpg
Let's look at a handful of individual stocks. I'm going to get into a short position with Amazon (AMZN) tomorrow morning.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rm32QAmb0AI/AAAAAAAACxk/ceCd4bekzLw/s400/0611-amzn.jpg
CAH, offered by a thoughtful reader, also looks like a sharp short
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CAH, offered by a thoughtful reader, also looks like a sharp short.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rm32QAmb0BI/AAAAAAAACxs/6CQxJeICT-E/s400/0611-cah.jpg
As does CEG, also offered by a kind reader (and I do appreciate those emails and charts, folks).
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm32QQmb0CI/AAAAAAAACx0/qJUZxrfRkyg/s400/0611-ceg.jpg
Let's pause another moment and consider CROX. Let me say right now I am not short this stock, and I don't plan to be short this stock. I nibbled on some puts a couple of weeks ago, and I was promptly stopped out. I've learned my lesson. This is a momentum play, pure and simple. and I shriek like a little girl when I see this chart. No touchee.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rm32Qgmb0DI/AAAAAAAACx8/wrOSMUohr0o/s400/0611-crox.jpg
We can compare CROX to a similar stock from many moons ago called Taser (TASR). Here's what TASR was doing back in the day. Check out the similarities of both price and volume action.
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We can compare CROX to a similar stock from many moons ago called Taser (TASR). Here's what TASR was doing back in the day. Check out the similarities of both price and volume action.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rm31oAmbz6I/AAAAAAAACw0/2XVMaeP5CwY/s400/0611-croxtasr.jpg
What happend to Taser after it peaked? Well, you already know that answer, don't you? Here's a percentage graph. Will CROX suffer a similar fate some day? I bet it will. I really doubt you can ply an ongoing competitive advantage off some cheap-looking fad-driven "shoes." But I, for one, am not going to guess when the momentum is going to run out. No thanks.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm31oQmbz7I/AAAAAAAACw8/CH1eGeI2Vgw/s400/0611-croxtasrafter.jpg
OK, back to shorts. Entergy (ETR) is a good idea to consider. And remember, folks, these are just ideas. Read the top of the screen. None of this is advice. I'm just spoutin' my feelings and notions. So settle down.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rm31ogmbz8I/AAAAAAAACxE/PGTmIGzCGfk/s400/0611-etr.jpg
I mentioned GOOG as a long idea. Ya know what, I've changed my mind. I think I might buy some puts on this one, mostly for the same reasons as Apple, although not nearly to the same extent. I see a failed breakout happening here. Maybe.
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I mentioned GOOG as a long idea. Ya know what, I've changed my mind. I think I might buy some puts on this one, mostly for the same reasons as Apple, although not nearly to the same extent. I see a failed breakout happening here. Maybe.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rm31ogmbz9I/AAAAAAAACxM/ff1lftsV8PY/s400/0611-goog.jpg
And if you think the energy/oil run has gone berserk, Exxon Mobil (XOM) presents a relatively low-risk to play this on the bearish side.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rm31pAmbz-I/AAAAAAAACxU/Rui1vRLeJ8s/s400/0611-xom.jpg
That's it for the day. If the week rolls in my favor, you can expect more videos and such. Until then, please think about what I've said above. I'm right from time to time.
at 6/11/2007 54 insightful comments
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Labels: aapl, amzn, cah, ceg, cpt etr, crox, goog, iphone, tasr, xom
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Friday, June 08, 2007Nice
After Thursday's big drop, I speculated that today we would see a short, sharp drop followed by a big rally. Well, even I can get it right every now and then. That is precisely, 100%, what happened.
I think there's a decent chance, however, that we may have moved into a new phase of this market. Maybe that is just wishful thinking. But I don't think today's big 150+ upside move on the Dow is the beginning of yet another assault onto new highs. Instead, I think it's just a pullback in what seems like could be a staircase down. We'll see.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RmpCaQmbz2I/AAAAAAAACwU/26CPrhHiE2I/s400/0608-%24indu.jpg
One of the main reasons I thought we'd see a big move up today is because of the many instances of supporting trendlines around the closing levels of yesterday. This graph of the S&P 500 shows how the upper trendline of the (now broken) channel represented meaningful support for the index. Sure enough - boing! - it bounced right off of it. But I really think we're going to re-enter channel-land next week.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RmpCagmbz3I/AAAAAAAACwc/324TYd5oWkE/s400/0608-%24spx.jpg
I tripped across Checkfree (CKFR) and got into a short position there. This is a honkin' big head and shoulders pattern, although as yet incomplete.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RmpCagmbz4I/AAAAAAAACwk/-g5MFD-zVUs/s400/0608-ckfr.jpg
Goldman Sachs represents the kind of stock on which I'd like to own puts once the relief rally peters out (which could probably be about 30 minutes into Monday's session). I closed out the vast majority of my positions and am sitting on a ton of cash right
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Goldman Sachs represents the kind of stock on which I'd like to own puts once the relief rally peters out (which could probably be about 30 minutes into Monday's session). I closed out the vast majority of my positions and am sitting on a ton of cash right now, waiting to re-enter shorts and puts at good levels.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RmpCagmbz5I/AAAAAAAACws/RZ_wA-syuC8/s400/0608-gs.jpg
NutriSystem is definitely on my list, too. This seems like a great bearish play, now that it has pushed its way up to formidable resistance.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RmpCQgmbzzI/AAAAAAAACv8/ufD4G_AFVvU/s400/0608-ntri.jpg
I took the plunge with ONT today, buying a large block of shares. It's my only long. But this is a sensational-looking graph, particularly with the explosion in volume, and it has fallen to a price level that is reasonable compared to where it was at a couple of weeks ago.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RmpCQwmbz0I/AAAAAAAACwE/tMrY5B5HWYg/s400/0608-ont.jpg
Whirlpool (WHR) did what so many large stocks did this week........fell hard, and then recovered to a neckline (more or less) today. These are great set-ups.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RmpCRAmbz1I/AAAAAAAACwM/Am1-d57fhYk/s400/0608-whr.jpg
Rock on. See you next week.
at 6/08/2007 27 insightful comments
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Labels: $indu, $spx, ckfr, gs, ntri, ont, whr
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Thursday, June 07, 2007Love So Deep, Kills You In Your Sleep
I'm no better. I just know I'm not any better of a person than any of the bulls that frequent this board.
When the market is roaring higher........when bears like me are getting slaughtered .........it's only natural that you gloat. You announce how the market is just going to keep going up forever. You wish for the destruction of all the bears. And you offer up reasons why It's Different This Time and there will never be a down market in your lifetime.
So - as the kids say, good on you, because I'm no better than that. The market is a battlefield. Wiser souls - of which many claim to be, but hardly any of them are - are truly neutral, and they position themselves to try to take advantage of the ebb and flow. Mere mortals, like your humble narrator, tend to be more dogmatic. History - and human nature - tend to make the vast majority of them bulls. And a vanishingly small number are bears. So - join hands around the campfire, and let's sing!
I hate you. You hate me. We're a trading family. With a big fat drop, and a knife from me to you. This one day, you get the screw.
So allow me to remind everyone of the disposition just four trading sessions ago. Last Friday, June 1st. Hardly a blip in time. The Dow had made another lifetime closing high. Let's review some of the comments offered up:
Permabull NewEquity wrote: I just bought 100 DIA calls mid-day for the ride back up through all time highs. No resistance at all and we should break 14k Dow in the next 3 weeks according to my tech analysis guy.
John (B) predicted, regarding the S&P 500, whose closing price today was 1490.72: "Putting these numbers in my model, the 500 fair value today is 2,300...and based on earnings for next year, fair value would be about 2,800."
And, lastly, Beanie11111 declared the bottom for a number of stocks: "...AKAM has bottomed...SBUX has bottomed.....WFMI has bottomed." As a follow-up, in the mere four days since that post, those stocks have declined 3.2%, 5.9%, and 6.5%, respectively. So I guess some people have different understanding of bottoms than others.
Suffice it to say, the past three days have been very good for me. Indeed, I had trouble deciding what charts to show, because they are all gorgeous. Every single one - every one - of my dozens of positions pushed way higher today. I even made some very profitable intraday option trades - both long and short! - with the Russell 2000.
The Dow fell 1.48% today. And, after the regular market closed, the ETFs on the indexes just kept falling. The DIA wound up down 1.96%.
I actually would not be surprised to see a very short, very sharp drop first thing in the morning followed by a rip-roaring push up. Looking at this channel, it seems to me the selling is a touch overdone (on the very short term) at this point. You hear me, fellers? I'm not saying we're going to enjoy another 4th day plunge. Nice as it would be.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rmhr1wmbzuI/AAAAAAAACvU/dGviE3ZItTw/s400/0607-%24rutlong.jpg
Zooming in closer, you can see what I mean. Now, of course, all trendlines are eventually broken. And if the one shown here is decisively snapped, it could be a new ball game. But the past 11 months have made me paranoid, and although the last 3 days have been sensible, I still don't trust this market or its participants.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rmhr2AmbzvI/AAAAAAAACvc/aI7IsgTPHyg/s400/0607-%24rut.jpg
Akamai (AKAM) hasn't plunged as fast as I hoped, but it's doing OK. It's still a very nice pattern, and I've got some nice green on this one.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rmhr2AmbzwI/AAAAAAAACvk/EXPP1tigKHY/s400/0607-akam.jpg
CSX is way the hell above its trendline, and it is sporting a cute little head and shoulders pattern to boot.
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CSX is way the hell above its trendline, and it is sporting a cute little head and shoulders pattern to boot.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rmhr2QmbzxI/AAAAAAAACvs/TDzs6SvAEzQ/s400/0607-csx.jpg
CVX would definitely pop up if the market strengthened, but that would just give me another opportunity to add to my bearish position.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rmhr2gmbzyI/AAAAAAAACv0/EAaRQ_Dx4OM/s400/0607-cvx.jpg
I closed my Deere (DE) puts today at a nice profit. Not because I think the stock is going to be strong. But only because I'd like to re-enter them at a better price, assuming the market "recovers" some in the very short-term.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RmhrrQmbzpI/AAAAAAAACus/GIbznWqLSCY/s400/0607-de.jpg
The Asian markets are having a touch of reality. My EWM (Malaysian market) short is doing nicely. I daresay the Asian markets will kind of freak out during their Friday session, which might make our Friday session interesting as well. But, if forced to bet, I'd say we'll probably close higher, Asian freakout and end-of-week jitters notwithstanding.
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The Asian markets are having a touch of reality. My EWM (Malaysian market) short is doing nicely. I daresay the Asian markets will kind of freak out during their Friday session, which might make our Friday session interesting as well. But, if forced to bet, I'd say we'll probably close higher, Asian freakout and end-of-week jitters notwithstanding.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RmhrrgmbzqI/AAAAAAAACu0/uKN5aRs5qyM/s400/0607-ewm.jpg
InfoSys (INFY) finally cracked its neckline, although it still seems to behave stronger than I'd like to see. Would you plunge, already?
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RmhrrwmbzrI/AAAAAAAACu8/q40I8Muts6U/s400/0607-infy.jpg
JC Penney (JCP) - on which I bought puts yesterday - had a nice fall due to weak retail sales. Of course, a true break of this neckline - - - the pattern is only just forming now - - - would make these puts fantastically profitable.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RmhrsAmbzsI/AAAAAAAACvE/jcIWQng9xls/s400/0607-jcp.jpg
Merrill Lynch (MER), along with my other investment bank shorts, soured (for the bulls) today.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RmhrsAmbztI/AAAAAAAACvM/UAyfO0AEfA4/s400/0607-mer.jpg
Oh, a couple of final comments to two users before the video. TomTheTrader, please stop posting your URL. I consider that an ad, and I'm going to be more consistent about nuking comments that are ads in any way. And Gary - for goodness sake, we get it. COT, COT, COT. Message received and understood. Lordy. Oh, and as for you readers that only show up on big down days like this......shame on thee!
Anyway........
at 6/07/2007 88 insightful comments
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Labels: $rut, akam, csx, cvx, de, ewm, infy, jcp, mer
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Wednesday, June 06, 2007The Less We Say About It, The Better
Two good days in a row. I won't get used to it. The crapola bull-filled last 11 months has left me bitter and disillusioned. But seeing a bunch of green over the past couple of days has been nice. I was prepared for all the pointless "Buy the dips!" and "Get in now to ride to Dow 15,000" nonsense in the comments section. It's what you can expect.
The S&P 500 over the past couple of years was in a giant, upward-sloping channel. The highlighted area is the "above even the top" chunk. The madness exceeding the madness. At a minimum, I would expect us to at least re-enter the aforementioned channel.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RmcbbAmbzlI/AAAAAAAACuM/LiZRKvrOJa0/s400/0606-%24spx.jpg
The $VIX, understandably, has shot higher, given the approximately 200 points blown off the Dow 30. Fear is on the rise. Finally.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RmcbbwmbzmI/AAAAAAAACuU/ctwgBX1heWg/s400/0606-%24vix.jpg
AutoZone is one of those nice shorts which has a tight stop but plenty of potential downside. It's one of those charts that could represent a major trend-shift but doesn't make you pay through the nose to see if you are right or wrong.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RmcbbwmbznI/AAAAAAAACuc/Qrft9Y7e57M/s400/0606-azo.jpg
Bunge (BG), mentioned here many times already, is on its way to its target price. This is a short position (obviously).
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RmcbcgmbzoI/AAAAAAAACuk/OYW6RZgvy-8/s400/0606-bg.jpg
A thoughtful reader sent me a suggestion of symbol CEG. This is a handsome looking short. I have no position in it, but I'll follow it from now on.