Tuesday, September 05, 2006Living with Uncertainty
For those of you hoping to grab on to an anchor of confidence and certitude with today's blog entry, please look elsewhere. All the "shoulds" do not apply anymore. One person in the comment section has mentioned more than once, "The markets can stay irrational longer than you can stay solvent." Hear, hear.
So many stocks have appeared to be in predictable bearish patterns, only to defy it and crack through any bearish predictions. Witness MBT.......
http://photos1.blogger.com/blogger2/945/1439/400/0905-mbt.jpg
And MicroStrategy......
http://photos1.blogger.com/blogger2/945/1439/400/0905-mstr.jpg
Lehman is another good example. Notice the area I've circled. That's the bears saying "I'm going to take you down" and, in response, the bulls say "oh, no you're not....." The bulls are extremely powerful for the past six weeks.
http://photos1.blogger.com/blogger2/945/1439/400/0905-leh.jpg
OIH looked like a slam-dunk head & shoulder pattern. Now it's looking like a tease.
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OIH looked like a slam-dunk head & shoulder pattern. Now it's looking like a tease.
http://photos1.blogger.com/blogger2/945/1439/400/0905-oih.jpg
The Russell 2000 is broad enough to give us a bit of perspective. We've come a long way up since the mid-July lows. We're in a middleground at this point. Are we going to push higher or resume the fall we started early in the summer?
http://photos1.blogger.com/blogger2/945/1439/400/0905-rut.jpg
A close-up of the RUT shows how the "lower highs" (good for bears) has given way to "higher lows" (bad.....). Mid-July was the turning point.
http://photos1.blogger.com/blogger2/945/1439/400/0905-rutclose.jpg
The NDX got up to its 50% retracement level today. If this strength continues, the green shaded area looks like cleaning sailing.
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The NDX got up to its 50% retracement level today. If this strength continues, the green shaded area looks like cleaning sailing.
http://photos1.blogger.com/blogger2/945/1439/400/0905-ndx.jpg
The $OEX is very, very close to its former high from the summer. I keep wanting to ask this index, "aren't you tired yet???"
http://photos1.blogger.com/blogger2/945/1439/400/0905-oex.jpg
One small sign of encouragement is that, in spite of the summer being over as far as the financial markets go, the volume isn't anything to write home about. The steady softening of volume continues.
http://photos1.blogger.com/blogger2/945/1439/400/0905-qqqqvolume.jpg
One potential put I will sheepishly offer is that of ESRX. Looks like a nice clean top pattern to me with a stop close enough to make potential losses minimal.
http://photos1.blogger.com/blogger2/945/1439/400/0905-esrx.jpg
This "month of the bears" (September) has had two up days so far. Not so good, folks.
at 9/05/2006 70 insightful comments
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Friday, September 01, 2006Good Riddance, Summer!
Well, another hard session for the bears. I see a lot of bears throwing in the towels in the comment section. Sad, sad.
Well, let's take a step back and look at the bigger picture. Here's the $OEX. It's getting back to to a pretty major Fib retracement level. We are way below the all-time highs set back during the bubble, so there's a fair bit of overhead resistance. We did not, however, have a double top, as I speculated we might yesterday.
http://photos1.blogger.com/blogger2/945/1439/400/0901-oex.jpg
The $INDU had an especially strong day. We are just 300 points away from the all-time high set back in January 2000. Can you imagine the headlines if we got to a lifetime high? Jesus. Reporters are running around like crazy as it is just because we're at three month highs on the major indices.
http://photos1.blogger.com/blogger2/945/1439/400/0901-indu.jpg
The $SPX has done a yeomans's job fighting its way up the wall of worry. It's discouraging but astounding to behold.
http://photos1.blogger.com/blogger2/945/1439/400/0901-spx.jpg
I will now cast off everything I hold dear, grab an air sickness bag, and offer up the only charts I could muster that look bullish, at least for the short term. Here we go.
ALL:
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I will now cast off everything I hold dear, grab an air sickness bag, and offer up the only charts I could muster that look bullish, at least for the short term. Here we go.
ALL:
http://photos1.blogger.com/blogger2/945/1439/400/0901-all.jpg
CP:
http://photos1.blogger.com/blogger2/945/1439/400/0901-cp.jpg
SHLD:
http://photos1.blogger.com/blogger2/945/1439/400/0901-shld.jpg
UNP:
http://photos1.blogger.com/blogger2/945/1439/400/0901-unp.jpg
The market hasn't been much fun to trade for bears since mid-July. It's been a real drag, actually, for six weeks now. If September - the month of the bears - doesn't turn things around in a major way, we should all sign the Declaration of Insanity that the rest of the world has apparently agreed to and just move on........
at 9/01/2006 43 insightful comments
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Thursday, August 31, 2006Somnambulant
Holy God, will someone please make me up whenever everyone gets back from vacation? I haven't had a vacation in years. Where is everyone? This is nuts!
OK, rant over. The market, once again, puttered, farted, and lolligagged all day long. My twin-disc DVD set ("Grass Growing" and "Paint Drying") is providing excellent entertainment in lieu of the markets. I think all market commentators should get time off until Tuesday, September 6th. It's just not right!
I really have nothing new to say about the markets. If things don't start getting zippier, I'm going to have to start posting old baseball statistics. Here are just a few charts. The latest on the S&P 500...........which way will it go? Hopefully next week, the first post-summer trading, will yield an answer.
http://photos1.blogger.com/blogger2/945/1439/400/0831-spx.jpg
The oil services sector, which fell nicely yesterday, went up a touch today. We still need to break below 130 to make this exciting. I've put a rounded rectangle to indicate the space OIH needs to traverse to make this H&S pattern complete.
http://photos1.blogger.com/blogger2/945/1439/400/0831-oih.jpg
The VIX is still stuck in neutral. Complacency abounds.
http://photos1.blogger.com/blogger2/945/1439/400/0831-vix.jpg
at 8/31/2006 95 insightful comments
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Wednesday, August 30, 2006Oil Slips, Market Blips
It had to happen sooner or later. I'd like to proudly announce the store. There's just a few odds and ends there to proudly display your bearish disposition. Enjoy!
Even though the market rose again (grrrrrr........) my bearish portfolio rose too (hurrah!) mainly because I have so many oil shorts. Oil fell nicely, but it still hasn't broken its neckline. The magic number on the OIH is 130, folks. Go, OIH, go!
http://photos1.blogger.com/blogger2/945/1439/400/0830-oih.jpg
Did the S&P 100 double-top as of today? Only time will tell. I think almost everyone who reads this blog is sick of waiting for the market to run out of steam. I certainly am.
http://photos1.blogger.com/blogger2/945/1439/400/0830-oex.jpg
The $NDX (NASDAQ 100) is kissing the underside of its former supporting trendline. In fairness to the bulls, it seems the NASDAQ Composite ($COMPQ) overcame a similar trendline today. Here's the aforementioned $NDX.......
http://photos1.blogger.com/blogger2/945/1439/400/0830-ndx.jpg
If you want to see proof of the volume withering away in this summer market, look at the SPY graph below. It isn't just a "last week of August" situation. For three whole months the volume has been shrinking. How's that for divergence when compared with the price action, eh?
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If you want to see proof of the volume withering away in this summer market, look at the SPY graph below. It isn't just a "last week of August" situation. For three whole months the volume has been shrinking. How's that for divergence when compared with the price action, eh?
http://photos1.blogger.com/blogger2/945/1439/400/0830-spyvolume.jpg
The $VIX is screaming "complacency." It just grinds lower and lower. I guess people expect boredom and smooth sailing until we have active colonies on Mars.
http://photos1.blogger.com/blogger2/945/1439/400/0830-vix.jpg
A reader wrote and asked me to take off the bearish headpiece and point out a couple of bullish charts. I'd be happy to do so. The American Stock Exchange's Major Market Index ($XMI) is really good looking. The only reason I wouldn't rush headlong into buying this is because it's a freak. All the other major index charts look neutral at best. But, on its own, this is a fantastic looking chart for bulls.
http://photos1.blogger.com/blogger2/945/1439/400/0830-xmi.jpg
As for an individual stock, it's not going to make anyone multi-hundred percent gains anytime soon, but Genentech (DNA) has been very firm. A nice saucer shape has been forming.
http://photos1.blogger.com/blogger2/945/1439/400/0830-dna.jpg
Now go buy a t-shirt! And I'll see you tomorrow......
at 8/30/2006 38 insightful comments
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Wednesday, August 30, 2006Bulls Free to Run
Good morning.
There is - unfortunately! - a fair bit of "open space" for the bulls to roam upward. There's really not much in the way of overhead resistance on the major indexes and, by and large, there's a decent amount of space between current prices and the next Fib level up (which is where they peaked last May). Not a great setup going into what is usually a "bear's month", September.
Take the $SPX (please!) I've marked in yellow the wide open space that bulls could trample upward, if they've got it in them (and, in the past month, they certainly have).
http://photos1.blogger.com/blogger2/945/1439/400/0830-spx.0.jpg
Much the same can be said of the Dow Industrals.
http://photos1.blogger.com/blogger2/945/1439/400/0830-indu.jpg
The NASDAQ is a bit more of an exception. It's approaching a fairly substantial trendline from down below.
http://photos1.blogger.com/blogger2/945/1439/400/0830-compq.jpg
Being exasperated gets old. I'm just going to keep sitting and puzzling. Weird, weird market....
at 8/30/2006 55 insightful comments
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Monday, August 28, 2006Last Week of the Doldrums?
The market is up fairly substantially this morning (Dow +75 points as of this writing), but my portfolios are pretty much unchanged. The reason is that any losses are being offset by my shorts in oil- and gold-related stocks, both of which are having a down day.
The market has been in a low-volume funk for a long time. Word on the street is that, once Labor Day is passed us this weekend, we'll return to normalcy. I sure hope so. These markets are really dull right now.
The S&P 500 is terrifyingly close to crossing its 78.6% Fib retracement (sort of the last holdout....) at the 1303.80 level. It's less than a point away from it now. Not the end of the world if it crosses it, but it puts another thumbtack into the bearish coffin if it does.
In the meantime, here are some interesting looking short possibilities. I've put a red "stop order if crossed" line on most of these........
ADBE:
http://photos1.blogger.com/blogger2/945/1439/400/0828-adbe.jpg
DRQ:
http://photos1.blogger.com/blogger2/945/1439/400/0828-drq.jpg
EOG:
http://photos1.blogger.com/blogger2/945/1439/400/0828-eog.jpg
HAL:
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