Wednesday, November 29, 2006Recovery Holding Firm
Today's entry is going to be on the short side, since I've spent most of the day sitting in either airports or on airplanes.
As you well know, the market made an earnest move higher today. Around the middle of the day, it looked like the recovery was softening (the Dow went from up over 90 to up about 45 or so). But then the bulls got their feet back underneath them and pushed it to close near the high of the day. Disappointing. A failed recovery is exactly what we bears need right now, and we didn't get it.
Here's a daily graph of the Russell 2000. The market could easily push into new highs (yet again) in the next day or two. That would make memories of Monday's fall completely vanish.
http://photos1.blogger.com/x/blogger2/945/1439/400/677653/1129-%24rut.jpg
Here's a closer view of the NASDAQ 100, and you can see here how helpful Fibonacci retracements can be, even on an intraday basis. I've drawn the Fib from the recent high to the low on Monday. You can see today we pushed up to a 50% retracement, fell back down to the 23.6% level (pretty much right on the nose) and then back up to 50%.
http://photos1.blogger.com/x/blogger2/945/1439/400/771478/1129-%24ndx.jpg
The graph of the S&P shows a similar behavior. This graph shows more time - the past ten days instead of the past two - and you can see here how we're at a crossroads. Either we break recent highs and go into full-blown bull party again, or we snap below Monday's lows, in which case - - finally - - we poor, beleaguered bears will get a bit more control over this market.
http://photos1.blogger.com/x/blogger2/945/1439/400/1422/1129-%24spx.jpg
As you might imagine, the rise up in the market today and (to a lesser degree) yesterday took the air out of the $VIX in a big, big hurry.
http://photos1.blogger.com/x/blogger2/945/1439/400/664856/1129-%24vix.jpg
I am doing today's entry in a mad rush to get on another plane, but I didn't want to leave everyone high and dry! More charts and analysis tomorrow - - promise.
at 11/29/2006 38 insightful comments
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Labels: $ndx, $rut, $spx, $vix
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Tuesday, November 28, 2006For Your Consideration
Well, after yesterday's 158 point drop, the market went up 14 points today, and CBS Marketwatch proudly trumpeted, "Buyers Come Back to Market!" Yeah, it's a veritable stampede.
The question over the coming days is whether yesterday's drop was a one-hit wonder or the start of something bigger. With the exception of mid-May to mid-July, the year 2006 has been largely a Big, Fat Disappointment to the brainy (and broke) bears, as the air-headed (and much richer) bulls have trampled all over us. Dogs do wonder when their day will come.
Take a look at this intraday chart of the S&P 500, for instance. The prior blue area was the last decent downturn. But as you can see, it only preceded yet another runup to new highs. There's every possibility this miniature rout could yield the same result.
http://photos1.blogger.com/blogger2/945/1439/400/1128-%24spx.jpg
The Dow Transports has been more consistently bearish than the Industrials. There was no rally today - it fell some more. This chart is probably one of the strongest reasons we bears have in our pocket for overall weakness in the future.
http://photos1.blogger.com/blogger2/945/1439/400/1128-%24tran.jpg
As mentioned a few days ago, the $VIX had gone (briefly) into single-digit territory (shown highlighted here). That didn't last. The $VIX exploded higher yesterday, and it seems to have broke its multi-month long downtrend.
http://photos1.blogger.com/blogger2/945/1439/400/1128-%24vix.jpg
I've augmented this graph of the Dow 30 with the Wilder RSI (shown beneath the price pane), and you can see the RSI has really tumbled hard lately. The Dow has plenty of room left to fall, even if the rising trendline stays intact.
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I've augmented this graph of the Dow 30 with the Wilder RSI (shown beneath the price pane), and you can see the RSI has really tumbled hard lately. The Dow has plenty of room left to fall, even if the rising trendline stays intact.
http://photos1.blogger.com/blogger2/945/1439/400/1128-%24indu.jpg
The NASDAQ Composite has a similar story. There's plenty of open space (shown in highlighted blue here) between the current price and the supporting trendline. So even respecting the possibility that the bull market might be intact for many months to come, there's still an opportunity to make cash on the descent back down to the supporting line.
http://photos1.blogger.com/blogger2/945/1439/400/1128-%24compqroomtofall.jpg
GOOG is a curious chart right now. One could take a very bullish view on this stock from a technical perspective, and it has had a very clean retracement back to its breakout point after having ascended well above the fabled $500 level. You be the judge.
http://photos1.blogger.com/blogger2/945/1439/400/1128-goog.jpg
Virtually everything about GOOG (except the bit about $500) can be said of SHLD as well, although it looks a touch more vulnerable to my eyes.
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Virtually everything about GOOG (except the bit about $500) can be said of SHLD as well, although it looks a touch more vulnerable to my eyes.
http://photos1.blogger.com/blogger2/945/1439/400/1128-shld.jpg
Now a couple of short ideas for you. NXY:
http://photos1.blogger.com/blogger2/945/1439/400/1128-nxy.jpg
And U.S. Steel (X):
http://photos1.blogger.com/blogger2/945/1439/400/1128-x.jpg
It was a pretty slow day on the market today, so that's it for now. I'll be traveling on business tomorrow, so my blog will probably be posted later than normal. I'll see you on the other side.
at 11/28/2006 38 insightful comments
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Labels: $compq, $indu, $spx, $tran, goog, nxy, shld, xau
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http://bbs.macd.cn/attachments.php?aid=1690792&noupdate=yes&3
少林飞剑
Monday, November 27, 2006The Jerk Report
Did anybody notice, over marmalade and eggs
In between the princess' legs
What with wars and floods and beggars
Not to mention stocks and shares
If you have a moment to spare
Can you write and reassure me that I have seen
They're constructing a time machine
There will be no need for the obituary pages
We can have any hero from the bygone ages
'til the truth emerges, the argument rages
The major and the minor
Turn from tallow into tar
Should we leave them in their place?
Down in damnation's cellar
Ahhhhh. It was a nice, nice day. Best day in four months. The Dow down almost 160 points. The Russell, the S&P, the NASDAQ - all smashed.
But we must be careful here. The tyrannical bulls have fooled us many times already. Downdrafts have been short-lived. So as much as I'd like to see every bull on the planet get wiped out, let's wait a couple thousand points before putting any party hats on. It's just nice to get a good, solid, down over 1% (finally!) day under our belts.
Here's a chart you probably didn't expect. The traffic for f*ckedcompany.com (for your folks that bristle at anything more severe than "poppycock", I've politely included an asterisk). The schadenfreude that drove this site's popularity has clearly diminished with the market's health. Let's hope Phil Kaplan has plenty of reason to celebrate in the coming years as companies get nuked again.
http://photos1.blogger.com/blogger2/945/1439/400/1127-%24edcompany.jpg
The pattern we have seen recently certainly apes the one we saw in May before the delicious descent in June/July. One day does not a trend make. But it's a start.
http://photos1.blogger.com/blogger2/945/1439/400/1127-%24indu.jpg
The $MSH technology index had its breakout pattern shattered. Good. Poor old GOOG is beneath the nosebleed-high $500 mark.
http://photos1.blogger.com/blogger2/945/1439/400/1127-%24msh.jpg
The S&P 500 is probably the best index for options, given the relatively high volume and the volatility of the index. The bid/ask spreads still tend to be fairly gigantic, but on days like this, you can make some serious green.
http://photos1.blogger.com/blogger2/945/1439/400/1127-%24spx.jpg
Part of the profits stem from the fact that the volatility exploded higher. So the value of the options pushes up both intrinsically and from a time-risk perspective. Just look at this jump in the past few days.
[ 本帖最后由 hefeiddd 于 2009-5-7 06:26 编辑 ]
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Part of the profits stem from the fact that the volatility exploded higher. So the value of the options pushes up both intrinsically and from a time-risk perspective. Just look at this jump in the past few days.
http://photos1.blogger.com/blogger2/945/1439/400/1127-%24vix.jpg
I can't shake the $XAU as a short pick. It has come full circle back up to the retracement level shown here.
http://photos1.blogger.com/blogger2/945/1439/400/1127-%24xau.jpg
One last index to look at - the $XMI. It has tumbled quite a bit the past week. Breaking the line shown here would put a nail in the bullish coffin for this sucker.
http://photos1.blogger.com/blogger2/945/1439/400/1127-%24xmi.jpg
My LEH puts are doing fine. Looks like some serious failure happening here.
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My LEH puts are doing fine. Looks like some serious failure happening here.
http://photos1.blogger.com/blogger2/945/1439/400/1127-leh.jpg
Last week I pointed to HLT as a choice short pick. So far, I nailed the top.
http://photos1.blogger.com/blogger2/945/1439/400/1127-hlt.jpg
AKAM isn't anything to write home about, but it's not bad for a short. I see some serious weakening happening here.
http://photos1.blogger.com/blogger2/945/1439/400/1127-akam.jpg
NVR is thinly traded, but it's a fun short on days like this. It can lose 20 or 30 points in one session.
http://photos1.blogger.com/x/blogger2/945/1439/400/450790/1127-nvr.jpg
This week is going to be full of economic data. Today's weak retail report was the first gift we needed. Santa, bring us more!
at 11/27/2006 19 insightful comments
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Labels: $vix, big down day, hlt, leh $xau $indu $spx $msh
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Friday, November 24, 2006No Rest for the Wicked
Most bloggers are taking today off. Not me! Although today's entry will be on the short side.
The US dollar, as you probably know, got punched in the nose, and that had pre-opening GLOBEX good and red. The market opened lower, spent most of the time climbing up to trim those losses, and then finally stumbled again in the end (incredibly). The intraday minute bar chart of the $INDU suggests we might have a small top on our hands. But we've certainly been faked out before. Many, many times.
http://photos1.blogger.com/x/blogger2/945/1439/400/25005/1124-%24indu.jpg
The Dow Transports seems to be cooperating with a bearish outlook. The descending trendline you see is still being respected. Unlike the $INDU graph, this is on a daily basis.
http://photos1.blogger.com/x/blogger2/945/1439/400/441574/1124-%24tran.jpg
I had puts on the $XAU that got promptly closed at the opening bell due to a surge in gold's value. A look at the $XAU shows that this may still ultimately form a head and shoulders pattern, it certainly isn't as clean a trade as it once was.
http://photos1.blogger.com/x/blogger2/945/1439/400/152262/1124-%24xau.jpg
Since commodities are such a major part of the investment scene these days, let's take a quick look at a couple of influential ones. First, copper. This is a long term (multi-decade) chart. I think anyone would agree copper is in a weird no-man's-land at this point, having ascended to never-before-seen levels. Unlike stocks, commodities tend to revert to norms over time. Don't you think something looks kind of out of whack here?
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Since commodities are such a major part of the investment scene these days, let's take a quick look at a couple of influential ones. First, copper. This is a long term (multi-decade) chart. I think anyone would agree copper is in a weird no-man's-land at this point, having ascended to never-before-seen levels. Unlike stocks, commodities tend to revert to norms over time. Don't you think something looks kind of out of whack here?
http://photos1.blogger.com/x/blogger2/945/1439/400/456607/1124-copper.jpg
Crude Oil, on the other hand, seems like it's positioned to move higher. We've had some relief, moving down from $75 to about $58 per barrel. But oil bulls may find themselves in a good position, in spite of the still relatively high price of fuel.
http://photos1.blogger.com/x/blogger2/945/1439/400/917736/1124-crudeoil.jpg
Hope you enjoyed your Thanksgiving, and I'll see you after the closing bell on Monday!
at 11/24/2006 37 insightful comments
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Labels: $indu, $tran, $xau, copper, crude oil
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Wednesday, November 22, 2006Giving Thanks (for nothin!)
Mr. Market (the cornball term I see used in other blogs about the stock market) hasn't been kind to us bears for the past five months. Today was sort of a do-nothing day, although the Dow managed to eke out another 5 point gain. I imagine this Friday's half-day will be equally as thrilling, if not moreso.
I marked up the Russell is kind of an interesting way. Check out what happens after each breakout. I'll leave it to you to draw your own conclusions. Hopefully my mark-ups will be helpful to you in your own analysis.
http://photos1.blogger.com/blogger2/945/1439/400/1122-%24rut.jpg
The $XMI, whose breakout really presaged a lot of the recent strength, is clearly losing steam here.
http://photos1.blogger.com/blogger2/945/1439/400/1122-%24xmi.jpg
I've got a few ideas to throw your way. Here's AEM, which is a nice play on shorting gold.
http://photos1.blogger.com/blogger2/945/1439/400/1122-aem.jpg
BZH is actually a long idea (bullish) that I've offered before; here's an updated chart.
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