Wednesday, April 25, 2007Yeeeeeech....
You can thank the good people of United Airlines for my ability to get this post done relatively promptly. My brief flight from Seattle to San Francisco has been delayed three hours. So here I sit on the plane, waxing poetic about this insane market.
By the way, does anyone find this image from the login page of TMobile to be strangely suggestive? (Long, uncomfortable pause). No? I guess it's just me.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri_zobbKgfI/AAAAAAAACRE/hUuzat2axvE/s400/0425-%24humpty.jpg
Here's the NZD/USD - - what I have to say about it is basically the same as what I've got to say in the next paragraph.....
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri_zorbKggI/AAAAAAAACRM/uorqhQzCprE/s400/0425-%24nzddollar.jpg
As long as the dollar remains weak, there's going to be yet another reason for stocks to go higher. Looking at the EUR/USD chart, it's clear that we're at an extreme point, but (obviously) it could push to yet another extreme. This chart, in case it's not clear to you, shows the strength of the Euro (and, conversely, the weakness of the dollar), so mentally invert it.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Ri_zb7bKgaI/AAAAAAAACQc/277TpdqjkWo/s400/0425-%24eur.jpg
What's interesting about the market is just how swiftly it has pushed higher. Look at the chart below. I've highlighted each of the most recent three "surges", and as you can see, each surge is happening with greater speed. The two lonely down periods here were last summer (oh, how I miss those days....) and - ever so briefly - about eight weeks ago.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Ri_zb7bKgbI/AAAAAAAACQk/7082dtZB6HI/s400/0425-%24indushorter.jpg
The NASDAQ Composite is still within its rising channel, at the tippy-tippy top. Clearly Apple's (AAPL) sensational earnings will push both Apple and the NASDAQ higher first thing in the morning
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The NASDAQ Composite is still within its rising channel, at the tippy-tippy top. Clearly Apple's (AAPL) sensational earnings will push both Apple and the NASDAQ higher first thing in the morning.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Ri_zcLbKgcI/AAAAAAAACQs/raC84nR2R4k/s400/0425-%24compq.jpg
The S&P 500 is clearly above its channel. An overshot, or a whole new ball game? Search me.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri_zcbbKgdI/AAAAAAAACQ0/VJM_eahiA1k/s400/0425-%24spx.jpg
If you want a truly bullish picture of the market, take a step back and look at the long-term $XMI. This is a chart of an amazing breakout, a perfect pullback, and a subsequent push to new highs. This is exactly what bull markets are made of. Astonishing.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri_zcbbKgeI/AAAAAAAACQ8/rLHRQs88iFc/s400/0425-%24xmi.jpg
I have suggested Akamai (AKAM) as a short before. It didn't really perform until today.
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I have suggested Akamai (AKAM) as a short before. It didn't really perform until today.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Ri_ywLbKgVI/AAAAAAAACP0/2yzhFs62Sq4/s400/0425-akam.jpg
I like looking for weak stocks on a day like today, because if a stock can't get it up on a day like this, it's in sorry shape. Check out ATI.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Ri_ywLbKgWI/AAAAAAAACP8/udVChqcaYJw/s400/0425-ati.jpg
Same goes for Colgate, which actually opened higher. Look at the honey of a bearish engulfing pattern on this one.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri_ywbbKgXI/AAAAAAAACQE/OQ1poDqo2q4/s400/0425-cl.jpg
CRS, mentioned here yesterday, is failing its breakout, and it fell today on strong volume.
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CRS, mentioned here yesterday, is failing its breakout, and it fell today on strong volume.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri_ywrbKgYI/AAAAAAAACQM/NoEhZ8UqzkA/s400/0425-crs.jpg
Dril Quip (DRQ), mentioned in this blog before as a buy, continues to perform well. Just about anything to do with energy (either classic or alternate) seems to be zooming these days. I can at least take heart that I am in a natural gas partnership.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Ri_yw7bKgZI/AAAAAAAACQU/7z3rfZ2nx44/s400/0425-drq.jpg
General Dynamics (GD) looks like a potential short. It busted its trendline a number of weeks back, and it seems to have double topped today, falling when everything else was rising.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Ri_yL7bKgQI/AAAAAAAACPM/lUOPq2YabJw/s400/0425-gd.jpg
I don't have any particular opinion on GOOG, but it only rose one tenth of one percent today - - pretty feeble, wouldn't you say? I think it may be telling. I'd also point out that all the gains from its fantastic earnings report a few days ago have vanished. Everyone who bought into that rally - even at the day's low - is in a losing position now.
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http://haha.happy369.com/Files/BeyondPic/漫画总汇/2006-6/20/0662005105995333.jpg
I don't have any particular opinion on GOOG, but it only rose one tenth of one percent today - - pretty feeble, wouldn't you say? I think it may be telling. I'd also point out that all the gains from its fantastic earnings report a few days ago have vanished. Everyone who bought into that rally - even at the day's low - is in a losing position now.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Ri_yMLbKgRI/AAAAAAAACPU/RyBIkdB__ec/s400/0425-goog.jpg
I like Southern Copper (PCU) as a short at this price.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri_yMbbKgSI/AAAAAAAACPc/z7cJwJ3RpDg/s400/0425-pcu.jpg
Schnitzer Steel (SCHN) - - man, can you imagine being the receptionist there and saying that name all day long? - - continues to look fantastic as a bullish play. Wonderful strength on handsome volume.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri_yMbbKgTI/AAAAAAAACPk/mVfTlDAJLt8/s400/0425-schn.jpg
Questar also looks good on the long side.
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Questar also looks good on the long side.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri_yMrbKgUI/AAAAAAAACPs/1B7dN9pwEEc/s400/0425-str.jpg
Tuesday, April 24, 2007Vox Populi
All right, the votes are in!
In spite of the Dow's strong run today (and its continued attempts to crack 13,000 - - come on, can't you get it over with?!?!?) the Russell is still looking good on the short side.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri59zRMIGgI/AAAAAAAACOc/ZJEAq7DpYMI/s400/0424-%24rut.jpg
And the Gold and Silver index continues to behave nicely within its descending channel.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Ri59zhMIGhI/AAAAAAAACOk/VzNajKmQ2J4/s400/0424-%24xau.jpg
I entered a new short today, CRR.
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I entered a new short today, CRR.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Ri59zxMIGiI/AAAAAAAACOs/Xg9HDyTBOQ8/s400/0424-crr.jpg
I don't have a position in CRS right now, but it looks like a potential short, since an otherwise beautiful bullish pattern isn't seeming to catch fire - - added to which, the volume has been slowly dying down for over a year.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Ri59axMIGZI/AAAAAAAACNk/sVVRHlnM-7k/s400/0424-crs.jpg
I like the looks of MicroStrategy (MSTR) for a short position too.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri59bBMIGaI/AAAAAAAACNs/jQ1NRC25YEg/s400/0424-mstr.jpg
...same story with MWP. As you can see, I'm using a trip of moving averages to help drive home the waning momentum.
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...same story with MWP. As you can see, I'm using a trip of moving averages to help drive home the waning momentum.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri59bRMIGbI/AAAAAAAACN0/mToITUwHp8E/s400/0424-mwp.jpg
As for ONT, the stock I keep mentioning as a long - - it continues to look good, and on sensational volume. Remember my cautionary tale from yesterday, though.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Ri59bhMIGcI/AAAAAAAACN8/UQT-COGuthI/s400/0424-ont.jpg
Lastly, my X puts finally started pushing up in price. It's about time.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Ri59bhMIGdI/AAAAAAAACOE/6f_BKWD27XM/s400/0424-x.jpg
Everyone is obsessed with 13,000. As I said, I (strangely) want to cross it. "13k and out of the way", so to speak. I imagine once this barrier is crossed, people will check that off their list and start selling into it.
Oh, and.......
at 4/24/2007 49 insightful comments
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Labels: $rut, $spx, crs, mstr, mwp, ont, x
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Monday, April 23, 2007Finally!
At long last, the Dow did not go up today. A one-day respite, at least, from the torture!
All eyes have been on Asia, particularly since the 2/27 blowout. People are wondering when the mania is going to end. God only knows, and He ain't telling. Here's a graph of Malaysia. I mean, these aren't magical fairylands, people. Have you been to Malaysia? I have. I think it's a hole, myself. But then again, I'm an Ugly American.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri0Y7RMIGWI/AAAAAAAACNM/6fbaTIAxd_I/s400/0423-%24malaysia.jpg
Even though we haven't crossed the fabled 13,000 mark on the Dow, the press is already impatiently looking for the next big milestone. ''We could be looking at 14,000 by the end of the year,'' said Robert Froehlich, chief investment strategist for DWS Scudder. Yeah, fine. Whatever.
Anyway, the S&P had a touch of weakness today, but notice how it stayed perfectly above its former resistance level. In other words, now that line represents support.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri0Y7hMIGXI/AAAAAAAACNU/daVDy_XvJWA/s400/0423-%24spx.jpg
The Morgan Stanley Tech Index looks like it could fall badly, but unfortunately, the spread between the bid/ask on these options is wider than Rosie O'Donnell's underwear. (I wonder to myself just how long people will pause before clicking that link.)
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri0Y7hMIGYI/AAAAAAAACNc/lwMMC7Iohjc/s400/0423-%24msh.jpg
A couple of cautionary tales for you. First - - - American Airlines (AMR) appears to be a lovely head and shoulders pattern.
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A couple of cautionary tales for you. First - - - American Airlines (AMR) appears to be a lovely head and shoulders pattern.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YtRMIGRI/AAAAAAAACMk/HHMpMRjF-Ug/s400/0423-amr.jpg
But look at Continental Airlines (CAL), which I was mentioning as a short for the same reason a few weeks ago. It pushed above its neckline twice. And then - finally - started to fall. All I can say is that, because of this, AMR doesn't' excite me as much as it might, and this serves as a reminder of the importance of stops.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YthMIGSI/AAAAAAAACMs/zKdoUKlgYI0/s400/0423-amrcal.jpg
Another cautionary tale. The stock ONT looks like a honey of a buy. I've mentioned this before. Great volume. Great price action. All the right moves.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YtxMIGTI/AAAAAAAACM0/D5L2UN0M-XI/s400/0423-ontrecent.jpg
Let's look back a few years, though. A similar situation with the same stock. Let's presume you jumped in and bought a bunch of this.
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