HYDL is another sweet looking short.
http://photos1.blogger.com/blogger2/945/1439/400/1116-hydl.jpg
We're still in "a new high every day" mode. This can't last forever. You know that as well as I do.
at 11/16/2006 47 insightful comments
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Labels: $compq, $oex, $xau, aem, al, are, cof, goog, hydl, mro, yhoo
Wednesday, November 15, 2006No Man's Land
I have an interesting graph to show you. Here it is:
http://photos1.blogger.com/blogger2/945/1439/400/1115-%24ndxbeforethefall.jpg
Amazing market, isn't it? Nothing but strength. What's salient about this graph is that it's an image of the $NDX, and the rightmost price bar is the peak in March of 2000. As you can see, there's hardly any warning about what's going to happen. But this is what a market looks like before it collapses.
What can you draw from this? Probably not much. Obviously rises proceed collapses. And just because a market goes up a lot doesn't mean it's going to go down a lot. What I find somewhat chilling about this graph is how little warning anyone was given, even with the Dow selling off the last two months of this graph. Food for thought.
One of my favorite charts is the long-term view of the $SPX. I've marked up this chart with lines galore, but you get the idea. As you can see, we remain at the tippy-tippy-top of the ascending channel.
http://photos1.blogger.com/blogger2/945/1439/400/1115-%24spxlongterm.jpg
A closer view shows more clearly this top (oh, and for those that don't know, just click on any image to see a much bigger chart). Also remarkable is the trendline I've drawn on the RSI which has been cleanly broken.
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A closer view shows more clearly this top (oh, and for those that don't know, just click on any image to see a much bigger chart). Also remarkable is the trendline I've drawn on the RSI which has been cleanly broken.
http://photos1.blogger.com/blogger2/945/1439/400/1115-%24spx.jpg
The Dow Utilities, which go largely ignored in most commentaries, has been a non-participant in the recent rally. Worth noting.
http://photos1.blogger.com/blogger2/945/1439/400/1115-%24util.jpg
I mentioned GOOG yesterday as a very attractive chart. It is, but just like SHLD, it hasn't really exploded off its pattern yet. I find it interesting today that the "$500 for the sake of $500" crowd couldn't manage to push the stock above this lofty level, and the chart was left in a shooting star pattern for the day.
http://photos1.blogger.com/blogger2/945/1439/400/1115-goog.jpg
For the moment, I'm glad I turned the comments section back on to anonymous posters. It's rocking and rolling again. We'll see if people keep the discourse civil this time.
at 11/15/2006 84 insightful comments
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Labels: $ndx, $spx, $util, goog, new high
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Tuesday, November 14, 2006Burying the Bear
See this towel? It's 100% cotton. And I just threw it in.
There's only so long we can pound sand, folks. Ever since July, the market has gone straight up. Iraq doesn't matter. The swing to the left in the political scene doesn't matter. The doomsday economic scenarios don't matter. There are way more buyers than sellers, and that's all the market needs to keep making new highs.
I had suggested recently that we probably should go back into our caves until the second half of January, at least. It seems that's probably the case.
I feel a personal commitment to doing a blog entry here each day. I must say, right now it's probably about as fun as someone doing a blog about the wonderful prospects of the Republican party. It's kind of a drag.
All the same, let's take a look. The NASDAQ Composite pushed higher today, and from a Fib retracement level, it's got plenty of upside left.
http://photos1.blogger.com/blogger2/945/1439/400/1114-%24compq.jpg
The NASDAQ 100 is just as disturbing. Just look at how much open air there is between where we are at and where we could go.
http://photos1.blogger.com/blogger2/945/1439/400/1114-%24ndx.jpg
A closer look at the markets - this one is the S&P 500 - shows that you could basically put a ruler on your screen and plot the market from July 16 to the present. It's basically an unforgiving push higher.
http://photos1.blogger.com/blogger2/945/1439/400/1114-%24spx.jpg
The only bit of weakness today in the stock indices was the Dow Transports. It continues to not confirm the Dow Industrials strength. I'm sure there are some that could make an argument that Dow Theory is best left in the dustbin of history. I have no opinion.
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The only bit of weakness today in the stock indices was the Dow Transports. It continues to not confirm the Dow Industrials strength. I'm sure there are some that could make an argument that Dow Theory is best left in the dustbin of history. I have no opinion.
http://photos1.blogger.com/blogger2/945/1439/400/1114-%24tran.jpg
Homebuilders were strong today, recovering from the collapse that everyone knows about. Here's BZH.
http://photos1.blogger.com/blogger2/945/1439/400/1114-bzh.jpg
GOOG looks very strong. It has logged a new lifetime high, and this is a very nice looking pattern.
http://photos1.blogger.com/blogger2/945/1439/400/1114-goog.jpg
Redback (RBAK), which I've named here several times, continues to perform well.
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http://bbs.macd.cn/attachments.php?aid=1690856&noupdate=yes&3
嵩山豪杰
Monday, November 13, 2006Watched Pot
As many people have pointed out in the comments section, it's been a very long time since we've had any kind of sustained downturn. And at this point, "sustained" means more than one trading session! The market is firmly up the 12,000 mark and seems to have its hands perched haughtily on its hips, daring anyone to sell.
It's easy to forget just how complacent and calm this market is. Just look at the NASDAQ recently compared to the wild days of 1997-2002. The market exploded higher over a three year period (and unwound the entire gain just as quickly). Yet over the most recent three years, we've been calmly and carefully moving higher at a deliberate (and annoying) pace.
http://photos1.blogger.com/blogger2/945/1439/400/1113-%24compq.jpg
The Russell 2000, which I'm a bit obsessed with, is in a no man's land at this point. If it breaks below the rectangle I've drawn, odds are very strong that we've seen the top put in. If it breaks above it, we could be in for more of the same bullish behavior. The calendar is not working in our favor. November, December, January are not known as bearish months. But I'm shurring off seasonality at this point, given how useless it was in September and October.
http://photos1.blogger.com/blogger2/945/1439/400/1113-%24rut.jpg
The $SPX, shown below on a minute bar basis, has lost its steam. It was on a solid tear (see the up arrow) for weeks on end. Recently, although it hasn't plunged by any means, it's definitely a bit pooped. Tomorrow morning's retail report and CPI figures (both of which come out an hour before the opening bell) will almost certainly provide some short-term direction.
http://photos1.blogger.com/blogger2/945/1439/400/1113-%24spx.jpg
The gold and silver index, which I am short, fell nicely at the opening bell this morning, but it recovered for most of the day. I've got a stop in here at 142.60.
http://photos1.blogger.com/blogger2/945/1439/400/1113-%24xau.jpg
I'll probably have more to say tomorrow, after the latest economic figures come out.
at 11/13/2006 17 insightful comments
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Redback (RBAK), which I've named here several times, continues to perform well.
http://photos1.blogger.com/blogger2/945/1439/400/1114-rbak.jpg
If you're still looking for something to short, you might consider Yahoo (YHOO). This is a long series of lower lows and lower highs, and let's face it, Google has totally trashed these guys. Amazing that the Google guys wanted to sell out for a couple of million bucks to Yahoo early on. At this point, GOOG's market cap is $150 billion, compared to $37 billion for YHOO.
http://photos1.blogger.com/blogger2/945/1439/400/1114-yhoo.jpg
at 11/14/2006 54 insightful comments
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Labels: $compq, $spx, $tran, goog, new high, rbak, yhoo
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Thursday, November 09, 2006Sea Change
It was nice to see a good, solid down day. Particularly when the market blasted higher from the opening bell, riding on the wings of CSCO's strong earnings. The fact that the NASDAQ actually fell after such a strong opening is great. Green on the screen is a pleasant change these days.
The real change going on is in the political/social pulse of the country. 1994's Republican sweep into Congress preceded the monster bull market of 1995-2000. Conservative values, religion, the 'contract with America' - the whole schmear.
Now that the pendulum is starting to swing the other way, what do we have? Cover stories about aetheism, bestselling books about atheism, a very left-of-center Speaker of the House. It's like a mirror image of 1994. And don't you think the odds of a Democratic president in 2008 are pretty strong? The pendulum is swinging to the left, and I imagine it's going to be approaching socialism before it starts tipping the other way again.
How good do you think that's going to be for corporate profits? Can you imagine what kind of nuclear bomb will hit the market when the capital gains tax is eliminated and people must pay ordinary income on stock profits? After all, no more tax breaks for the rich!
Like I mentioned, the NASDAQ fell. The $NDX pierced its prior 100% Fib level (which, cough cough, I've conveniently skooched upward to today's high). I like the weakness today.
http://photos1.blogger.com/blogger2/945/1439/400/1109-%24ndx.jpg
The Russell 2000, a perpetual favorite of mine, has puts which I've been gobbling up at these levels. Someone asked about IWM - to which I respond, yes, I like this for a short position. I wouldn't call it a head and shoulders, but I like how it is weakening.
http://photos1.blogger.com/blogger2/945/1439/400/1109-%24rut.jpg
I think I mentioned a couple of days back going long the $SOX. Nahhhhhh. I changed my mind and bought puts yesterday. I'm glad I did. This did well today, and it's got a really obvious stop price (and a really obvious this-was-the-right-choice price).
http://photos1.blogger.com/blogger2/945/1439/400/1109-%24sox.jpg
I've never drawn a trendline on an RSI until today, but it works rather well, don't you think?
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I've never drawn a trendline on an RSI until today, but it works rather well, don't you think?
http://photos1.blogger.com/blogger2/945/1439/400/1109-%24spx.jpg
The cool thing is that the $VIX is slowly but surely turning upward. A series of higher lows, marked by that ascending trendline, illustrates this. C'mon, $VIX!!!
http://photos1.blogger.com/blogger2/945/1439/400/1109-%24vix.jpg
Now for some specific short suggestions, all of which have put options available. AMG:
http://photos1.blogger.com/blogger2/945/1439/400/1109-amg.jpg
BA, which kissed the underbelly of its former trendline today:
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BA, which kissed the underbelly of its former trendline today:
http://photos1.blogger.com/blogger2/945/1439/400/1109-ba.jpg
FMX (no options on this, I don't think, but......):
http://photos1.blogger.com/blogger2/945/1439/400/1109-fmx.jpg
HYDL, which busted its head and shoulders pattern, but still looks sweet:
http://photos1.blogger.com/blogger2/945/1439/400/1109-hydl.jpg
TXT:
http://photos1.blogger.com/blogger2/945/1439/400/1109-txt.jpg
Hey, I could use another dose of Down tomorrow. We'll see.
at 11/09/2006 13 insightful comments
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Labels: $ndx, $rut, $sox, $spx, $vix, amg, ba, fmx, hydl, txt
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Wednesday, November 08, 2006All News is Bullish News
Bear markets aren't fiction. They really do happen sometimes. Let us wistfully enjoy the prices of yesteryear, such as the NASDAQ's plunge from 2000 to 2002.....
http://photos1.blogger.com/blogger2/945/1439/400/1108-%24bearmarket.jpg
Boy, those were the days. But no more. You can see how the $VIX just keeps getting ground down to nothing. The last time the bears were partying was in June/July of this year. It's been unrelenting misery ever since.
http://photos1.blogger.com/blogger2/945/1439/400/1108-%24vix.jpg
The NASDAQ was especially strong today. It's about to push into wide open territory, with no recent overhead resistance. Cisco's strong earnings posted after the market's close today is only going to help the bulls.
http://photos1.blogger.com/blogger2/945/1439/400/1108-%24compq.jpg
The $NDX has a skosh more to go to get into the same "open air", but it's probably going to happen. At least I don't own $MSH or $NDX puts anymore (I dumped those yesterday morning).
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