Wednesday, July 26, 2006Some Junctions More Crucial than Others!
I want to start by offering the stock market this tug-of-war finally ends.
A lot of people have been asking about sentiment, since apparently there's a lot of bearishness out there, and it's widely considered a contrary indicator. I was intrigued by this, but after examining the graph below, I've concluded that it's a fairly meaningless exercise. Sentiment rockets up and down to the point that it's just noise. The creator of this graph pointed out a few times that bearish sentiment correlated with a market bottom. Well, yeah, but I can just as easily point out three times that bearish sentiment correlated with a top. Because it's meaningless! I've circled (in green) one such example.
http://photos1.blogger.com/blogger/4311/970/400/0726-sentiment.jpg
Dow 11,257 is what we want to not cross, people. I was nervously watching the Dow today as it ratcheted up another 50 points. But it couldn't keep it up, and it closed down by a point. What's remarkable to me is the doji pattern that formed. How's this for a tug-of-war, folks? I can't remember the last time I saw such an incredible doji. It has indecision written all over it. No one has control of this market! And it's getting tiresome.
http://photos1.blogger.com/blogger/4311/970/400/0726-dojidow.jpg
Since last Tuesday, the S&P has been pushing ahead with a series of higher highs and higher lows. Not good for us bears. But it has stayed beneath its trendline, and I see strength starting to flag. Make no mistake, though. We have got to close out this week with some meaningful weakness! Recent market activity is far too heartening to our bull friends!
http://photos1.blogger.com/blogger/4311/970/400/0726-spx.jpg
On a daily basis, you can see the S&P is also in a doji pattern (although not to the freakish degree that the Dow was) and we are still safely below the trendline. But we are very close to the danger zone, folks. One more good, strong day, and things are going to suck.
http://photos1.blogger.com/blogger/4311/970/400/0726-spxclose.jpg
at 7/26/2006 46 insightful comments
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Tuesday, July 25, 2006Post # Two Hundred Fifty!
This is my 250th post to this blog (tweet! honk honk! tooooot!) I wish the market gave me more of a reason to celebrate this momentous occasion. But bulls love to buy, irrespective of reality, so there we have it.
NTRI obviously got completely hammered today, losing nearly a fifth of its value. I noticed that NTRI bulls were citing that it was "only" because the CEO had left. As I mentioned in the comments.....can you imagine if the stock were up 20% because of some great news, and NTRI bears cited that news as meaningless? They'd get zinged. So, likewise - - NTRI Bulls, you were dead wrong, and the stock is in sorry shape now.
The comments section is completely abuzz, which I think is terrific. Lots of little battles being waged there, which I think is very much like the market these days. It's just a mud pit of fighting. Someone comment that the market was bullish because "...the GDP rises with time and the markets rise with it." OK, so does that mean the market always goes up? With that logic, apparently so.
Today the market was neither up nor down but simply annoying until about the final hour of the day, when it inexplicably shot up. It closed up just a little over 50 on the Dow. This is a very dangerous juncture for us, fellow bears. The $INDU is mushed right up against an important resistance line, and it's actually risen a skosh more than I would like to see. I'm worried. It sure as hell better head south tomorrow. Crossing above 11,257 would indicate something is very, very, very wrong.
http://photos1.blogger.com/blogger/4311/970/400/0725-indu.jpg
The S&P 500 ($SPX) is likewise mashed right up against an important trendline. 1,280.38 is the upper limit of what I'd tolerate right now.
http://photos1.blogger.com/blogger/4311/970/400/0725-spx.jpg
Now on with some specific short picks. Here's Cigna (CI):
http://photos1.blogger.com/blogger/4311/970/400/0725-ci.jpg
CP:
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CP:
http://photos1.blogger.com/blogger/4311/970/400/0725-cp.jpg
ESRX is one I haven't talked about in a while. This is sweet looking:
http://photos1.blogger.com/blogger/4311/970/400/0725-esrx.jpg
GS is another beauty:
http://photos1.blogger.com/blogger/4311/970/400/0725-gs.jpg
I like Dick Cheney's old company HAL:
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I like Dick Cheney's old company HAL:
http://photos1.blogger.com/blogger/4311/970/400/0725-hal.jpg
Health Net (HNT) is another shortie:
http://photos1.blogger.com/blogger/4311/970/400/0725-hnt.jpg
Well congratulations to us all for putting up with 250 of my posts. Here's to the next 250! (God help us....)
at 7/25/2006 49 insightful comments
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Monday, July 24, 2006The Voice of Reason
Another nearly 200 point rise in the Dow today. The main reason being given was a company was being bought. The ticker symbol should be BFD, but it's HCA. Honestly, what on earth does this change about the market's prospects? Pfft.
In any case, I was going to title today's entry "This is Not Good" or something like that, but once again, having looked at my charts, I'm not worried. Sorry, I'm just not. Chart after charts just screams "sucker rally" to me, and when I look at the long-term (we're talking decades, people) chart of the S&P 500 or the Dow, it's got bear written all over it.
Oh, before we go any farther, a tip of the paw to everyone's favorite perma-bull, hurricane5. One of his most fervant recommendations (the top one, I think, with a target price of a million bucks a share or something) is NTRI. It's getting slammed in after-hours trading.
http://photos1.blogger.com/blogger/4311/970/400/0724-ntricane.jpg
Back to reality. The Dow Jones 30 has just two numbers that count right now. This is simple: if it breaks below 10,660, the bears are going to own the market. If it breaks above 11,150, that's going to cause some medium-term damage to our evil plans for world domination. I think the buying mania is just about tapped out. But I've been wrong before!
http://photos1.blogger.com/blogger/4311/970/400/0724-indu.jpg
Looking at the intraday S&P 500, it didn't get above last Wednesday's high, and even if it does, there's still a bit of play before this gets worrisome.
http://photos1.blogger.com/blogger/4311/970/400/0724-spxintraday.jpg
The daily chart of the S&P is the same tired channel you've seen for a while. We're still in a nice succession of lower highs and lower lows since the May 10th peak. Let's keep it that way, shall we?
http://photos1.blogger.com/blogger/4311/970/400/0724-spxchannel.jpg
This final graph is really what I was talking about earlier - - click on it to see a bigger image, stare at it for a while, and try to convince yourself this is a graph that's going to shoot higher. Just try. You can't, because it's not going to do so. History is telling us it's time to head lower. A lot lower. Just watch.
http://photos1.blogger.com/blogger/4311/970/400/0724-spxverylongterm.jpg
at 7/24/2006 71 insightful comments
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Friday, July 21, 2006End of a Terrific Week
I never thought I'd declare a week in which we had a +212 up day on the Dow to be "terrific", but it has been. In spite of the (idiotic) one-day rally based on Bernanke picking his nose, or whatever he did to get the bulls excited, I had my single best percentage gain of all time on Thursday, and overall the week was really profitable for me. I think that speaks to the overall deterioration of the market. If a bear can make a bunch of money in a week that sported such a huge rally (and don't forget the +51 up day on the Dow on Tuesday), something's going right.
I have almost 100 - yes, one hundred - short and put positions right now. Not one stinking long in the bunch. And I think all but one or two are showing a profit. I'm not going to assail you with more stock charts. Indeed, my "pictograph" posting seemed to get a lot more comments and attention than my huge slew of charts. So I'm going to refocus on the market in general this time.
Oh, by the way, I just got a sneak peek at what the cover of my forthcoming book is going to look like. Ya'll are all going to be required to buy this once it's out, ya know!
http://photos1.blogger.com/blogger/4311/970/400/0721-timbook.jpg
The first chart is of the Dow Composite (symbol $COMP - and, gotta say it, click on an image to see a much bigger version). This one is fascinating because the reference line for the Fibonacci Fans drawn here - - ummm, I just realized how boring this description would be. Suffice it to say these are not trendlines, and I'm kind of blown away at how accurate these fan lines turned out to be, considering the reference line is nowhere near them. The price is definitely playing with the idea of cutting underneath that highest fan line.
http://photos1.blogger.com/blogger/4311/970/400/0721-comp.jpg
Next is the Dow 30, and I know you've seen this chart a million times. But we have got to cut underneath 10,660. That huge green shaded area represents the last, best hope of the bulls to keep this market floating. If we can get the Dow beneath that level, we're gonna own 'em.
http://photos1.blogger.com/blogger/4311/970/400/0721-dow.jpg
The S&P 500 is in the lower half of its ascending channel, and it's look very interested in pushing beneath recent lows. If it breaks under that ascending support line, things are going to get really exciting. We are still within this channel, however.
http://photos1.blogger.com/blogger/4311/970/400/0721-spx.jpg
The Transports actually look like they could take a rest for a bit. They are approaching both a pretty substantial trendline as well as a Fib retracement level. So it wouldn't surprise me to see the Transports bounce a bit soon here.
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The Transports actually look like they could take a rest for a bit. They are approaching both a pretty substantial trendline as well as a Fib retracement level. So it wouldn't surprise me to see the Transports bounce a bit soon here.
http://photos1.blogger.com/blogger/4311/970/400/0721-tran.jpg
And, finally, a recent favorite $XAU (Gold & Silver index). This is similar to the Oil Service Sector (beaten to death this week, so I shan't be showing that chart again), except that the head and shoulder is still in formation. (As for OIH, it sneaked beneath its neckline today). This looks like a honey.
http://photos1.blogger.com/blogger/4311/970/400/0721-xau.jpg
I promised this week would be exciting, and it was. Next week is bound to be the same. And just remember, we're moving closer all the time to that wonderfully bearish month of September! Oh, by the way, if the Dow does break under that green area, I'd say we're headed for about 9,800. Should be a fun ride.
at 7/21/2006 24 insightful comments
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Thursday, July 20, 2006Charts for Yer Shorts
This one's simple, folks. I've got puts on all these. And I love 'em. Enjoy.
APA:
http://photos1.blogger.com/blogger/4311/970/400/0720-apa.jpg
BNI:
http://photos1.blogger.com/blogger/4311/970/400/0720-bni.jpg
CX:
http://photos1.blogger.com/blogger/4311/970/400/0720-cx.jpg
DO:
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DO:
http://photos1.blogger.com/blogger/4311/970/400/0720-do.jpg
EOG:
http://photos1.blogger.com/blogger/4311/970/400/0720-eog.jpg
HNT:
http://photos1.blogger.com/blogger/4311/970/400/0720-hnt.jpg
MRO:
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MRO:
http://photos1.blogger.com/blogger/4311/970/400/0720-mro.jpg
MON:
http://photos1.blogger.com/blogger/4311/970/400/0720-mon.jpg
NXY:
http://photos1.blogger.com/blogger/4311/970/400/0720-nxy.jpg
OIH:
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