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Capital One (COF) is getting close to completing its H&S, which would send it down to the green area I've shaded.
http://photos1.blogger.com/blogger/4311/970/400/0605-cof.jpg
Oh, and remember my recommendation to shortLooks like this is finally starting to work out.
http://photos1.blogger.com/blogger/4311/970/400/0605-mth.jpg
Finally, symbol TOA has completely its H&S and broken nicely to the downside. I'd wait for a retracement back to the neckline for a nice, clean trade.
http://photos1.blogger.com/blogger/4311/970/400/0605-toa.jpg
at 6/05/2006 7 insightful comments
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Friday, June 02, 2006Are We Done?
Today marked what I hope was the high-water mark for the recovery. A number of charts speak favorably to this possibility. First off, the $VIX finished retracing its breakout and almost perfectly touched its former resistance level. It's actually pretty uncanny.
http://photos1.blogger.com/blogger/4311/970/400/0602-vix.jpg
The NASDAQ 100 opened higher but closed off its highs, and its high for the day retraced its recent fall back up to resistance.
http://photos1.blogger.com/blogger/4311/970/400/0602-ndx.jpg
Likewise, the S&P 100 ($OEX) retraced back to its Fibonacci line.
http://photos1.blogger.com/blogger/4311/970/400/0602-oex.jpg
The Russell 2000 is a favorite of mine right now. Its graph shows a rounded top, to which the price has retraced to resistance. Notice how this rounded top differs from the multiple saucer patterns earlier experienced within this broad ascending channel.
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The Russell 2000 is a favorite of mine right now. Its graph shows a rounded top, to which the price has retraced to resistance. Notice how this rounded top differs from the multiple saucer patterns earlier experienced within this broad ascending channel.
http://photos1.blogger.com/blogger/4311/970/400/0602-rut.0.jpg
A couple of specific stock short suggestions. Here's Burlington Northern, which hasn't finished its head & shoulders pattern, but it's worth tracking.
http://photos1.blogger.com/blogger/4311/970/400/0602-bni.jpg
Also there's old favorite Health Net, which had been terribly weak about a month ago and has recently been quite strong. It's getting back to a level that represents very good risk/reward. Pay close attention to the Fibonacci levels, illustrated here.
http://photos1.blogger.com/blogger/4311/970/400/0602-hnt.jpg
at 6/02/2006 6 insightful comments
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Thursday, June 01, 2006Watching for the Reversal
The strength in the market is exciting. Crazy to hear a bear say that? Nahhhh - this whole thing has been predictable. I'm delighted we had such a strong day today. I won't be delighted if we have a few more like it!
Looking at the $VIX, it seems that the fear has swiftly become wrung out of the market as things have shored up nicely for our friends the bulls:
http://photos1.blogger.com/blogger/4311/970/400/0601-vix.jpg
Looking at the index charts, I see each and every one of them approaching clean retracement/pullback levels. Here's the NASDAQ Composite as it marches back to the underbelly of its broken trendline:
http://photos1.blogger.com/blogger/4311/970/400/0601-compq.jpg
The Dow 30 is in the process of making a handsome head & shoulders pattern. If you're a bear, you do not want to see it move higher than the area I've circled.
http://photos1.blogger.com/blogger/4311/970/400/0601-indu.jpg
The NASDAQ 100 has farther to go than most other indexes, perhaps because it's been especially weak. If this whole affair is simply a retracement, we may not see this index reach back to its former support level before resuming its fall.
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The NASDAQ 100 has farther to go than most other indexes, perhaps because it's been especially weak. If this whole affair is simply a retracement, we may not see this index reach back to its former support level before resuming its fall.
http://photos1.blogger.com/blogger/4311/970/400/0601-ndx.jpg
The S&P 500 is making its way up toward its median line within a very clean channel pattern:
http://photos1.blogger.com/blogger/4311/970/400/0601-spx.jpg
Finally, the Dow Transports also stands a good chance of making a head & shoulders pattern. Although it wouldn't take much strength for it to render this pattern invalid.
http://photos1.blogger.com/blogger/4311/970/400/0601-tran.jpg
Readership is this blog has been growing steadily each day, and I want to again express how humbled I am that it's become so popular. Thanks for taking the time!
at 6/01/2006 17 insightful comments
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Wednesday, May 31, 2006Charts and Targets
As I mentioned yesterday, I felt today would probably bring some strength since the $VIX had blown skyward so fast and furious. Below is an intraday chart of the $INDU over the past 30 trading days. As you can see, it seems to be giving quite a bit of compliance to its Fibonacci levels. It needs to break through its lows earlier this month to get serious about turning bearish.
http://photos1.blogger.com/blogger/4311/970/400/0531-fibs.jpg
I'd like to offer up a variety of charts I think represent good opportunities for bears. These are optionable, so July slightly-in-the-money puts probably provide the best bang for your buck. You might want to wait a day or two to see if the market's strength today continues before pursuing any of these. I've marked approximate target prices with green shading.
Here's BHI:
http://photos1.blogger.com/blogger/4311/970/400/0531-bhi.jpg
BSC:
http://photos1.blogger.com/blogger/4311/970/400/0531-bsc.jpg
COF:
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COF:
http://photos1.blogger.com/blogger/4311/970/400/0531-cof.jpg
CRR:
http://photos1.blogger.com/blogger/4311/970/400/0531-crr.jpg
DRIV:
http://photos1.blogger.com/blogger/4311/970/400/0531-driv.jpg
EME:
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EME:
http://photos1.blogger.com/blogger/4311/970/400/0531-eme.jpg
GPI:
http://photos1.blogger.com/blogger/4311/970/400/0531-gpi.jpg
HUM:
http://photos1.blogger.com/blogger/4311/970/400/0531-hum.jpg
IPS:
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IPS:
http://photos1.blogger.com/blogger/4311/970/400/0531-ips.jpg
NUE:
http://photos1.blogger.com/blogger/4311/970/400/0531-nue.jpg
PD:
http://photos1.blogger.com/blogger/4311/970/400/0531-pd.jpg
PENN:
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PENN:
http://photos1.blogger.com/blogger/4311/970/400/0531-penn.jpg
SHLD:
http://photos1.blogger.com/blogger/4311/970/400/0531-shld.jpg
Beauties all, aren't they? Some serious, consistent strength from the Dow might wreck these patterns. It's definitely happened before. For the moment, we seem range-bound between 11,050 and 11,280.
at 5/31/2006 7 insightful comments
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I'm a bit nervous that the market still has the opportunity for a bounce, since the resumption of the fall was so rapid. Looking at the $VIX (below), it seems that, in a single day, we've approach the recent extremes. If the market really starts to get hit hard, we could see those extremes beaten, because let's keep in mind, the VIX is historically still very low (it was three times this level back in the dark days of 2002). But I wouldn't be at all surprised to see some mild strength in the market tomorrow.
http://photos1.blogger.com/blogger/4311/970/400/0530-vix.jpg
The NASDAQ Composite is representative of pretty much all the indexes and major stocks right now - - - a fall from May 10th until early last week, followed by a short, sharp upturn, followed by today's big fall. If we take out the lows set in October (represented by the thick red line) there is no doubt about it - we will be in a bear market. No questions asked. (And it has nothing to do with big spooky round numbers like 10,000. Sheesh.....)
http://photos1.blogger.com/blogger/4311/970/400/0530-compq.jpg
at 5/30/2006 7 insightful comments
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