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.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YtxMIGUI/AAAAAAAACM8/mZqjl6psdWQ/s400/0423-ontearly.jpg
What happened next? The technical term is that the stock farted around for years to come. In fact, the aforementioned farting was down at a substantially lower price. So although the burst above the saucer was great for those who got in early (and got out), it wasn't so hot for the buy-and-holders. And that's not because the market was bad in general. On the contrary, the market was very strong.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YuBMIGVI/AAAAAAAACNE/Uoq6ROtkzFs/s400/0423-ontafterearly.jpg
Capital One (COF), which I mentioned as a short countless times earlier this year, continues to fall.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YgBMIGMI/AAAAAAAACL8/NCJdLsvMkAo/s400/0423-cof.jpg
Lehman Brothers (LEH) has a fascinating interaction with those Fibonacci fans. Investment banks have had huge runs up (yes, yes, I got blown out of GS) but this is worth watching.
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Lehman Brothers (LEH) has a fascinating interaction with those Fibonacci fans. Investment banks have had huge runs up (yes, yes, I got blown out of GS) but this is worth watching.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YgRMIGNI/AAAAAAAACME/gx83eOtouEQ/s400/0423-leh.jpg
As for Southern Copper (PCU), I think one glance at this channel would suggest that, no matter what your viewpoint on the stock, we're certainly at the northern end of this channel.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YgRMIGOI/AAAAAAAACMM/VH3gqvawtNw/s400/0423-pcu.jpg
Check out Potash Corp (POT). That's quite a shooting star, yes? A short on this with a stop price just above the high today may pay off nicely.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YghMIGPI/AAAAAAAACMU/z-2v40qeHSY/s400/0423-pot.jpg
Finally, Schnitzer (SCHN) continues to act bullishly. I'm including its former breakout from years ago to indicate what a handsome move this stock has made in the past from a similar breakout.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Ri0YghMIGQI/AAAAAAAACMc/rP6suHlaDNU/s400/0423-schn.jpg
I'll post the results of the poll tomorrow and indicate what, if any, changes I'll be making to this blog based on your input. Thank you!
at 4/23/2007 107 insightful comments
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Labels: $msh, $spx, cof, leh, schn
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Friday, April 20, 2007Topless
What more can I say? The market is on turbocharged boosters right now. Bad news doesn't stop it. And Lord knows that good news isn't going to stop it. Crossing the fabled 13,000 mark next week seems to be virtually a foregone conclusion.
Looking at the SPY (S&P 500 ETF) below, you can see the entire bear market of 2000-2002 has been rendered moot, and we are way up to lifetime highs. And this is nothing compared to the likes of the MDY.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RikfHhMIGII/AAAAAAAACLc/yuE2xGcBXmE/s400/0420-%24spyhigh.jpg
I think I've personally had just about enough of the "top calling" business. As you may have noticed, I'm just taking it one day at a time. Let me illustrate how hazardous top calling can be.
Take a look at the graph below. Let's put ourselves in a bearish mindset and, observing the rapid, relentless explosion higher of equity prices, assume that the tide is going to turn. Or at least things are going to rest for a while.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RikfHxMIGJI/AAAAAAAACLk/-AR0uO7e-j8/s400/0420-%24ndxA.jpg
Look what happened next. It slowed down, but it didn't stop going up. Buying kept feeding on itself.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RikfHxMIGKI/AAAAAAAACLs/p7bdACMUJHU/s400/0420-%24ndxB.jpg
Now the market accelerates yet again. The bears have been wiped out. All the bulls are zillionaires. And bets start taking place as to when the NASDAQ when overtake the Dow in terms of point value (Remember that?) So the bears completely throw in the
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One item that actually turned out as predicted was Capital One (COF). In spite of today's massive market rise, it was quite weak.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rike5BMIGGI/AAAAAAAACLM/qqHqyFVC7Oc/s400/0420-cof.jpg
A few stocks had great earnings, opened way higher, and yet sported a pretty large bearish engulfing pattern. McDonald's (MCD) is - excuse the pun - a whopper.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rike5RMIGHI/AAAAAAAACLU/x1n-qopH2L0/s400/0420-mcdbearish.jpg
I'm glad this week is over. All this bullishness is stomach-churning. Maybe we're just at point "A" of the graph shown at the top of this post. But so many stocks have gone stratospheric, it continues to be hard to believe.
at 4/20/2007 92 insightful comments
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Labels: cof, mcd, new highs
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http://photo.ce.cn/main/jrkd/200704/20/W020070420358552748417.jpg
Now the market accelerates yet again. The bears have been wiped out. All the bulls are zillionaires. And bets start taking place as to when the NASDAQ when overtake the Dow in terms of point value (Remember that?) So the bears completely throw in the towel.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RikfIBMIGLI/AAAAAAAACL0/ILZW6jz1j5c/s400/0420-%24ndxC.jpg
After a few months of a soft market, the bulls could just as easily look at the graph below and figure that the market's done taking a breather, and it's time to push higher again. It's very easy to imagine the sentiment. After all, it looks like the "shake out" is through, observing this graph.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rike4xMIGEI/AAAAAAAACK8/Vd1lsnI6D_0/s400/0420-%24ndxD.jpg
And we all know what happened next. And I've marked each of these points on the chart below. The bears were dead wrong all the way up. And the bulls were dead wrong on the way down. And yet we can see (if you try to be objective) why the bulls or bears were completely rational in their conjecture at the time of these graphs.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rike5BMIGFI/AAAAAAAACLE/jercrCwKWXg/s400/0420-%24ndxE.jpg
So is it hopeless? After the past two months, I'm starting to think so. It's very demoralizing to be analytical, rational, and careful, and yet be so wrong. And it doesn't exactly help that my free contribution of thoughts yields mud-slinging yuk yuks from the bulls who frequent this board.
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Thursday, April 19, 2007Just. Plain. Weird.
Well, we bears started off with every advantage this morning. The Nikkei had fallen hundreds of points. China had gotten clobbered. The currency situation looked eerily similar to what caused the February 27th mini-crash. The GLOBEX was way down. And the market opened down, soon more than 60 points off the Dow.
And then what happened? Of course. The bulls came to the rescue. Incredibly, inexplicably, disgustingly, the market shook off the barrel-full of bad news and actually went into the green for the 700th day in a row. Un-{Nixonian expletive deleted} believable.
The most important "index" to me is my own portfolio, and I was glad to see that it actually moved reasonably higher today. Someone was asking in the comments section why I'm so hung up on the Dow. Two reasons. First, it's the most widely recognized and used index by the public. And second, I deliberately am seeking out the strongest index (currently, at least). If I'm bearish, I want to be in tune with the least bearish of the major indexes to keep an eye on its strength.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RifoTRMIGCI/AAAAAAAACKs/CMyz5U-kH14/s400/0419-%24indu.jpg
Perennial favorite $RUT (the Russell 2000) fell down today. It's interesting to see the candlesticks here. Three down days in a row, each one a little more strongly down than the prior one.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RifoThMIGDI/AAAAAAAACK0/jNMUY24_sqI/s400/0419-%24rut.jpg
The S&P 500 was also down just a touch today. I see in after-hours trading that Google (GOOG) blew away its estimates (I have no position in GOOG) and it is up something like $13 per share. Obviously it will be interesting to see what the stock does in "real life" tomorrow. But the company's ability to print money is clearly undaunted.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rifn6xMIF8I/AAAAAAAACJ8/w5F9LCFPJ6o/s400/0419-%24spx.jpg
My puts in $XAU are going great. The lower lows/lower highs is as plain on the nose on your face.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rifn7BMIF9I/AAAAAAAACKE/wjMfjV2EYFc/s400/0419-%24xau.jpg
The NZD/USD has got to fall in order for us to see real weakness. It looks ready to turn, based on what I've marked here.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rifn7BMIF-I/AAAAAAAACKM/Kw30ShvAHA4/s400/0419-nzd.jpg
I haven't done this in a while, but below are my current positions. All of them are bearish. The bold ones are puts, and the regular ones are shorts.
Lastly, I haven't provided a video in a while. One of my favorite groups ever, Devo, did this video back in the early 80s (my own personal musical nirvana). With the crappy time we bears have had over the past two months, I thought it was time to "take a break".......
at 4/19/2007 53 insightful comments
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Labels: $indu, $rut, $spx, nzd/usd
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Wednesday, April 18, 2007Chug
If my mood is a good contrary indicator for the market, heed it well. I was profoundly dismayed and depressed by the market's action today. At one point, the Dow was up over 60, and I was thinking to myself that there are really better things to be doing with my life than writing a bear-oriented blog. I toyed with the idea of pulling the plug on this thing.
Historically - and I've been trading a long time - my psyche is always darkest before the dawn. And it was really dark today. The Dow at a new lifetime high. Bearish ammunition like Yahoo being down 12% nearly neutered by the bulls. And the childish persistence of comments like "lmfao" in this blog (I say again: I abandoned rotflmao and other such nonsense a little over 25 years ago.....so, IMHO STFU).
The news isn't all bleak. My Russell 2000 puts actually went up in price today. And many indices continue to appear stretching the bounds of sanity. Look how the $MID is mashed up against the highest ranges of its Bollinger bands. Plus the RSI went above - and then below - the 70 mark, which is a sell signal.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiaDk5uuvqI/AAAAAAAACJk/6R19rcqrtZo/s400/0418-%24mid.jpg
The NASDAQ, aided by Yahoo, actually edged down today.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiaDlJuuvrI/AAAAAAAACJs/6Zx-uQJjSZE/s400/0418-%24ndx.jpg
As I mentioned, the Russell went down today, in spite of the market's strength. I closed my S&P puts earlier in the day. I'm sick and tired of the bid/ask rape job in those options. The Russell is simply a better value.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RiaDlZuuvsI/AAAAAAAACJ0/8fF_KVrnwmY/s400/0418-%24rut.jpg
As for the S&P 500, look at this interesting channel. These two lines are perfectly parallel, drawn at a 30% angle. After the late February/early March sell-off, it's incredible how much strength this index has found. But it is still trapped within this very well-defined, multi-year channel. Odds for further strength are poor.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiaDcJuuvnI/AAAAAAAACJM/GaBTTVs0mmM/s400/0418-%24spx.jpg
My gold/silver puts also had a good day. The 120-150 range of the $XAU is a good trading opportunity for those who want to play off the recent cyclic nature of this index.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiaDc5uuvoI/AAAAAAAACJU/PiUySw61YN0/s400/0418-%24xau.jpg
Lastly, the Amex Major Market ($XMI) fell a bit today as well. We have a sell signal on the RSI here too.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiaDdJuuvpI/AAAAAAAACJc/xwmSS0LIOKg/s400/0418-%24xmi.jpg
What's the latest count now? 21 up days out of the past 24? Something like that. It's something ungodly. I can only imagine how complacent the bulls must be getting now. Although I don't think it's an accident that the $VIX actually went up today, in spite of the widely-publicized record highs.
at 4/18/2007 71 insightful comments
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Tuesday, April 17, 2007Cocksure
The Dow Jones 30, shown below, had another positive day today, although this evening's markets are rather weak. (Yahoo, in particular, is kept walloped by nearly 9% as of this writing). There is, as always, a potential to mark a double top here, but broader indices (such as the $MID) recently went on to new highs and negated their potential double tops. It would take very little additional strength on the Dow's part to do the same.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiU445uuvkI/AAAAAAAACI0/SrY6BWZMHrE/s400/0417-%24indu.jpg
A look at the $MID, embellished with Bollinger Bands, indicates we are stretched almost to the breaking point at the high end.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiU45JuuvlI/AAAAAAAACI8/dkzsE2cC5uc/s400/0417-%24mid.jpg
Take note of the Russell 2000 as well, which actually went down today in spite of the market's general strength.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiU45JuuvmI/AAAAAAAACJE/803QL_x_o0Y/s400/0417-%24rut.jpg
The S&P 500 is also way at the top of the Bollinger bands, and the RSI is just peeking over the 70 level, meaning a weak day tomorrow would give us a sell signal via the RSI.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RiU4xpuuvfI/AAAAAAAACIM/ydqb3cyqyYE/s400/0417-%24spx.jpg
I bought puts on the $XAU today with a stop at $150.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiU4x5uuvgI/AAAAAAAACIU/5IL9rFvXs-A/s400/0417-%24xau.jpg
The $XMI seems profoundly overbought to me.
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The $XMI seems profoundly overbought to me.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiU4yJuuvhI/AAAAAAAACIc/Jyc_N1S0nkU/s400/0417-%24xmi.jpg
My short in MWP is doing pretty well. This is quite a hyberbolic stock (I won't bore you with ONT today, but that in hyperbolic in a good way - - bulls are doing great with it).
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiU4yZuuviI/AAAAAAAACIk/xPUVCqQVSfs/s400/0417-mwp.jpg
Just to give you some perspective, here's U.S. Steel (X) over the past ten years. I'm sure the bulls will quickly explain away the 12-fold rise in price. But try to be rational, even for a moment. Look at the graph. Tell me this isn't overbought.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RiU4ypuuvjI/AAAAAAAACIs/WePWh4avjKE/s400/0417-x.jpg
People never learn. It's always "different this time." There's always a new excuse. Years ago it was the Nifty Fifty. Or the One Decision Stock. Or the New Economy.
Or, now, the Goldilocks economy. And the sheep..........I mean, the bulls........are happy to go along with it every stinking time.
Special Bull Challenge!
For those of you convinced things are Different This Time - - instead of prattling on, tell us what to buy! I'd like any of you bulls to provide ticker symbols, target prices, and stop prices. Since you seem convinced of your rightness, lay it on the table. Tell us poor saps what we should really be doing. We'll see how your picks fare. Please post these in the comments section........
at 4/17/2007 78 insightful comments
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Labels: mwp, x
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Monday, April 16, 2007And So It Goes....
The bears continue to get shot in the head, one by one. The comments section of this blog is a mix of insightful commentary (from both sides) and sophomoric crap from permabulls. Of course, if the market was in a freefall, there would be sophomoric crap from bears like me, so I guess it all evens out.
Many indices and ETFs made lifetime highs today. Not yearly highs. Lifetime highs. Never-before-seen, higher-than-the-bubble highs. Get it? Look at MDY, SPY, $MID, and many others. We're into unchartered bullish waters. The $INDU, while not yet at a lifetime high, is threatening to make the highest level seen in years.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiPgfpuuvdI/AAAAAAAACH8/udwg4sa2B3A/s400/0416-%24indu.jpg
The $OEX pushed above a formidable Fibonacci level today. There's a large opportunity for this to push higher, based on the next Fib level.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiPgf5uuveI/AAAAAAAACIE/dZBrjzxLPho/s400/0416-%24oex.jpg
The Russell 2000 also pushed to a lifetime high today. It, like the $INDU, is just kissing the underside of the broken trendline.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RiPgXJuuvXI/AAAAAAAACHM/spasJrge17Y/s400/0416-%24rut.jpg
Ithat FMT might be a good bullish play. That turned out to be true. The stock was up over 30% at one point today.
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