turned out to be true. The stock was up over 30% at one point today.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiPgXZuuvYI/AAAAAAAACHU/3jBDBVpniSM/s400/0416-fmt.jpg
Energy continues to be strong, as I've suggested it might many times recently. Here's the OIH.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiPgXpuuvZI/AAAAAAAACHc/yPqBgwXGKQc/s400/0416-oih.jpg
About a week ago, one of the folks in the comments section asked about ONT. I responded in comments that it looked great, and I repeated that in the next night's post. Although speculative, this stock is doing amazing things, and the volume backs it up.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiPgXpuuvaI/AAAAAAAACHk/A5rudfk7SCs/s400/0416-ont.jpg
Energy play Schlumberger (SLB) continues to be strong. I point it out here due to its size and especially strong performance.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiPgX5uuvbI/AAAAAAAACHs/99UY2iSL5u8/s400/0416-slb.jpg
I guess one might joke....."How does one make a small fortune being a bear?" Answer: "Start with a large fortune." Things look grimmer than ever for ursine types. Valuations don't matter. Common sense doesn't matter. All the bearish arguments you've heard don't matter. All that matters is that (a) a lot of people with (b) a lot of money (c) don't know what else to do with it. So we go up and up.
at 4/16/2007 44 insightful comments
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Labels: fmt, oih, ont, slb
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Saturday, April 14, 2007I, For One, Welcome Our New Bull Overlords.....
Thanks for coming back this weekend (or Monday......) to see my post. I had to do some thinking, charting, and scanning to reassess the market.
Oh, before I begin, a shameless plug: for those who have been holding off buying Chart Your Way to Profits, check You'll be able to get some third-party opinions from those who have actually read it. The one negative review was from someone who didn't realize the book was largely about ProphetCharts and JavaCharts. So, consider yourself warned.
I really tried to look at the whole market with a very open mind, because the strength of the bulls since July has been frustrating, confusing, and vexxing. I keep coming back to the graph below, which shows the S&P 500 over the long haul. I simply cannot see that we are set up for a bullish surge. I don't want to hear about liquidity, the global economy, or the trillion dollar oil surplus seeking a home. This blog is about charts, and the charts, to me, don't say "buy."
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiEoP5uuvVI/AAAAAAAACG8/UUNovp4HJVA/s400/0414-%24spxlong.jpg
Looking at a short-term S&P chart, we can see that we're getting dangerously close to the high set back in February. It isn't the all-time high (set early in 2000), but it's getting close to that as well. The big question now is, does the market (a) sink from here (b) push up to a double top and then sink (c) blow past the February high and make an assault on the all-time high from the bubble.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiEoP5uuvWI/AAAAAAAACHE/FfFDDSvBojY/s400/0414-%24spx.jpg
To me, an important indicator to watch is the NZD/USD market. The New Zealand kiwi has been extraordinarily strong. The weakness in late February was a good early indicator of the tumble the markets took. But, since then, this currency has basically been going straight up.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiEoHJuuvQI/AAAAAAAACGU/SplMcyhmO_U/s400/0414-%24nzd.jpg
Another item I watch is China - one shorthand way to do it is via GCH (Greater China Fund). One interesting tidbit is that it seems to have retraced up to a retracement level. We'll see if it backs away or not.
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Another item I watch is China - one shorthand way to do it is via GCH (Greater China Fund). One interesting tidbit is that it seems to have retraced up to a retracement level. We'll see if it backs away or not.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiEoHJuuvRI/AAAAAAAACGc/2t0VByORX5A/s400/0414-%24gch.jpg
I wanted to show a few examples of why it's careful not to fall in love with a particular point of view. In particular, why it's important not to anticipate pattern completion.
Technical analysis is a helpful tool - especially in markets that are friendly toward one's general investment disposition. For instance, if the market were, by and large, weak, the short ideas I've suggested over the past months would have been quite successful. But the fact is that we're swimming against the tide, and that makes it very, very hard.
And I'm not saying the market would have to be in some horrendous free fall. But if things were easing down, week to week, and month to month, that's where using T.A. to smoke out good short opportunities is invaluable.
But when you're swimming against the tide, you have to be extra vigilant. Take BP, for instance, shown below. I mentioned this as a potential short. It had a beautiful topping pattern. It broke below its neckline. And it started falling.
But what happened next? It got strength. It went above the same neckline. Thus, the pattern was rendered moot. And then it soared! Being able to escape the "jaws of death" like this is a real sign of strength that must be feared by bears.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiEoHZuuvSI/AAAAAAAACGk/UsAmDfh0o_U/s400/0414-%24bp.jpg
Here's a similar situation with FTO. A gorgeous head and shoulders in the making. But the pattern did not complete! You can see what happened next. That's why scoring a little more profit by seeing a completed pattern in your mind's eye is seldom worth it.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RiEoHpuuvTI/AAAAAAAACGs/HawArE-fGWE/s400/0414-%24fto.jpg
For our next example, here's HES. I've often pointed out how, once a trendline is broken, the price obediently stays beneath it, and maybe "kiss the underside" of the trendline. That's all well and good, but it doesn't mean a collapse is at hand. A price can stay beneath its trendline for a very long time and still make tons of money for the bulls.
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For our next example, here's HES. I've often pointed out how, once a trendline is broken, the price obediently stays beneath it, and maybe "kiss the underside" of the trendline. That's all well and good, but it doesn't mean a collapse is at hand. A price can stay beneath its trendline for a very long time and still make tons of money for the bulls.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RiEoHpuuvUI/AAAAAAAACG0/-rU_eZ-2KRY/s400/0414-%24hes.jpg
My general feeling toward the index is simply that I don't know what the hell is going on. A terrible confession, eh? But these markets are bewildering these days. You're going to hear the same story from me - - we're pushing toward either a double top or to new highs. We're awfully close to one or the other.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiEnkZuuvLI/AAAAAAAACFs/o2l5AoZumzk/s400/0414-%24indu.jpg
$NDX is a skosh weaker. It could back off from the horizontal line I've drawn. Or not.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RiEnkpuuvMI/AAAAAAAACF0/74hYUC9xyZQ/s400/0414-%24ndx.jpg
I was blown out of my precious $RUT puts. But that's what stops are for, right? I don't like the look of this index nearly as much as I used to.
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http://i2.sinaimg.cn/dy/c/2009-04-12/77339efda312db47b3540d0c04fc7613.jpg
http://i3.sinaimg.cn/dy/c/2009-04-12/760913f166a974727badab2a17b8fc3c.jpg
I was blown out of my precious $RUT puts. But that's what stops are for, right? I don't like the look of this index nearly as much as I used to.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiEnk5uuvNI/AAAAAAAACF8/k2PGNgM4jUs/s400/0414-%24rut.jpg
Some indices - such as the $XMI, shown below - have wasted no time in going to new lifetime highs. Disturbing. The bulls are in their ninth month of totally owning this market.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiEnk5uuvOI/AAAAAAAACGE/3ur7STWVBko/s400/0414-%24xmi.jpg
Most of the strength these days is in really "old school" stuff. I'm talking about Steel.....Uranium......Copper........and, for God's sake, Railroads! This is no "new economy" play here. It's 19th/20th century stuff. Here's uranium company CCJ, for instance:
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiEnlJuuvPI/AAAAAAAACGM/nFq74kMUJ80/s400/0414-ccj.jpg
Goldman Sachs gave me at least a little relief. Even on a strong up day, it was weak.
[ 本帖最后由 hefeiddd 于 2009-5-1 12:15 编辑 ]
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Goldman Sachs gave me at least a little relief. Even on a strong up day, it was weak.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RiElopuuvHI/AAAAAAAACFM/iE8-Uumk7BM/s400/0414-gs.jpg
Tech giant IBM, on which I also own puts, also was surprisingly weak.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiElo5uuvII/AAAAAAAACFU/zbkLmVMu83o/s400/0414-ibm.jpg
I'm looking at MLM for a new short position.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiElo5uuvJI/AAAAAAAACFc/yve6QYWLxFc/s400/0414-mlm.jpg
I've been short MSTR for a couple of weeks, based on the failed breakout you see highlighted here. So far, so good.
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I've been short MSTR for a couple of weeks, based on the failed breakout you see highlighted here. So far, so good.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RiElpJuuvKI/AAAAAAAACFk/5TTq2fx-uVo/s400/0414-mstr.jpg
MWP is in a tight range. It's going to break one way or the other soon. I have no position at this time on this one.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiElRZuuvBI/AAAAAAAACEc/M7dy5IF5-HM/s400/0414-mwp.jpg
Someone mentioned last week the stock ONT. I felt strongly bullish on it based on the breakout and volume strength. It has moved up handsomely since then and looks better than ever.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RiElRZuuvCI/AAAAAAAACEk/TVqd-Ll5Xp4/s400/0414-ont.jpg
SCHN (Schnitzer Steel - try saying that five times fast) has a hugely bullish pattern too.
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SCHN (Schnitzer Steel - try saying that five times fast) has a hugely bullish pattern too.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RiElRpuuvDI/AAAAAAAACEs/yrQjUGe2O-M/s400/0414-schn.jpg
SWN, mentioned here bullishly before, looks even better.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiElR5uuvEI/AAAAAAAACE0/CdLaw0BB7J0/s400/0414-swn.jpg
If you think oil stocks are going to weaken, XOM is a pretty-good looking short/put candidate.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RiElR5uuvFI/AAAAAAAACE8/TJNuoWsuBmc/s400/0414-xom.jpg
As you can see from today's posting, it's more of a bullish/bearish mix. My frothing-at-the-mouth bearishness has become really attenuated by the market's action recently. It's disappointing. I shall continue to watch, wait, and hope.
at 4/14/2007 57 insightful comments
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Labels: bp, ccj, dia, fto, gch, gs, hes, ibm, mlm, mstr, mwp, ont, schn, swn, xom
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Thursday, April 12, 2007B.T.D. or ABC?
The debate raging around U.S. equities these days seems to fall into two camps (for technicians, at least). Whether the current strategy should be what I would refer to as B.T.D. (Buy The Dips) or ABC (as in Elliott Wave Theory). The latter would fall into the bearish camp, and the former are permabulls.
For those who follow the comments section of this blog - - and I'm addicted to it - - you can see quite a few people point to action like yesterday's as simply another buying opportunity. (Sort of like how Realtors are always saying there has never been a better time to buy a house). In other words, the market will, by and large, go up until the end of time, so buying when stocks go "on sale" is the way to go.
That has worked very well so far. Those who have bought on the dips over the past three or four years have done terrific. So it's beguiling to just keep doing the same thing in perpetuity.
But let's look at the ABC point-of-view. Here's the classic notion of Elliott Wave price action: the 1/2/3/4/5 series shows the bullish phase, whereas the A/B/C shows the bearish phase. (Please note I pride myself on being an accomplished chartist, but I only know enough about Elliott Wave to hurt myself; so I may be a little off the mark in some of this terminology).
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rh6nm5uuu9I/AAAAAAAACD8/15P9GsiO_y4/s400/0412-%24classicwave.jpg
As an example of this kind of behavior, let's take a look at the Russell 2000 index from late 2004 until mid 2006. I've drawn some lines here and noted the various phases. As you can see, things line up pretty nicely. I've also drawn a big solid circle indicating the completion of the "b" wave, which is the retracement within a bearish phase. (Newbies: click the image to see a much bigger chart).
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rh6nopuuu-I/AAAAAAAACEE/rG2UEvAjmM4/s400/0412-%24olderwave.jpg
Now here is the more recent Russell 2000, going up to the present day. I will say straightaway that the pattern is not nearly as clean and clear. But, as the big circle indicates, the possibility I have been asserting is that all this bullish action over the past six weeks has been a "b" wave retracement. What we bears are (sick and tired of...) waiting for is for "c" to kick in.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rh6np5uuu_I/AAAAAAAACEM/hzSh3BlPKN0/s400/0412-%24currentwave.jpg
I wrote a few days ago about my bullish disposition toward energy stocks. This morning I bought - yep, bought - SLB and SWN based on this point of view. Both of these moved up handsomely. As you can see by OIH, below, there seems to be a nice breakout for these stocks based on an inverted H&S pattern.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rh6nrZuuvAI/AAAAAAAACEU/iJwU8y-IucI/s400/0412-oih.jpg
Let's see if Friday the 13th (tomorrow) gives the bulls the kind of bad luck we've been waiting for. But today's strength was disconcerting. A push tomorrow above the highs of April 10th would be just another nail in the bearish coffin.
at 4/12/2007 53 insightful comments
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Labels: elliott wave, oih
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Wednesday, April 11, 2007Eight is Enough
Well, the octet of upswings in the market met a welcome halt today. Between the real estate market going down the toilet and the Fed gritting their teeth and confessing that the economy is starting to weaken, the market got the kind of one-two punch in the face it needed.
One catalyst for the drop in late February was the carry-forward trade. The NZD/USD nicely captured this (shown in green). As you can see, this FX has been pushing higher and higher (in spite of staying obediently below the broken trendline). A weakening here would portend good fortune.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rh2C5ZoXkBI/AAAAAAAACDs/4hPBhRr8Gn4/s400/0411-%24nzd.jpg
Much of the indices resemble the NASDAQ 100 ($NDX), shown below - - basically, a slip from the huge upswing we've seen over the past six weeks (which I consider a retracement that will precede a much bigger drop).
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rh2C5ZoXkCI/AAAAAAAACD0/bm4_ugyLplo/s400/0411-%24ndx.jpg
My favorite index puts - the Russell 2000 - had a pretty good day. I've adjusted the stop to 816.13 on these.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rh2CUJoXj8I/AAAAAAAACDE/lmBbnxjXEaw/s400/0411-%24rut.jpg
And here's the S&P 500 ($SPX). Check out the RSI and Slow Stochastic indicators.
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