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Take a look at stock CHRW as a short candidate with a stop of $50.25. I like how it's retraced part of its recent fall and seems to be re-weakening.
http://photos1.blogger.com/blogger/4311/970/400/0511-chrw.jpg
The same can be applied to E*Trade (ET). I usually don't buy puts on stocks this inexpensive, but the trend change seems so clear (and its ascent so mighty) that I made an exception here.
http://photos1.blogger.com/blogger/4311/970/400/0511-et.jpg
Not a recommendation per se, but one chart I wanted to offer as a great example of "lower highs and lower lowers" is AIG, which got whacked today. It also is very trendline-compliant. This is a really beautiful graph from a technician's perspective.
http://photos1.blogger.com/blogger/4311/970/400/0511-aig.jpg
One last, random comment. I'm just curious - can someone tell me who trades Time Warner? And why? This has got to be the most boring chart in the world, yet it trade millions of shares a day. Do you get a free sandwich or something if you place a trade on TWX? I'm just wondering, because the nearly-flat graph below represents about three years of activity.
http://photos1.blogger.com/blogger/4311/970/400/0511-twx.jpg
at 5/11/2006 6 insightful comments
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Wednesday, May 10, 2006Extending the Overextension
The insanity surrounding "Fed day" has become so predictable it's perversely boring. It's the same old song - - from the open until 2:15 EST, the market doesn't do much of anything special. Then a snare drum rolls, the announcement is read, and the markets go stark raving mad for about 30 minutes. It's quite a spectacle.
http://photos1.blogger.com/blogger/4311/970/400/0510-fedlunacy.jpg
Speaking of lunacy, here's an updated chart of perpetual riser Hansen Natural (HANS). This is a percentage chart. I don't touch this thing. I just watch in amazement. It's kind of hard to fathom that a niche player of energy drinks has a market capitalization approaching five billion dollars. This stock will fall hard one day, but I for one am not about to guess when or why!
http://photos1.blogger.com/blogger/4311/970/400/0510-hans.jpg
As long as we're looking at insane charts, let's drink in the latest on copper:
http://photos1.blogger.com/blogger/4311/970/400/0510-copper.jpg
......and gold:
http://photos1.blogger.com/blogger/4311/970/400/0510-gold.jpg
Just to show you how loony things have become........I was speaking with my electrician about providing an electrical circuit to my back yard for some construction work going on. The electrical contractor emphasized that the bid was only good for one day, since the price of the wire was moving higher so rapidly, he could not rely on his own cost of materials. When your own electrician has to worry about commodity prices for a 100 foot piece of cable, you know things are bananas!
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Below is the Dow 30. I could make all kinds of technical jargon, but I will offer only this: the market is really, really, really extended. It will not keep going up every day, people. Promise.
http://photos1.blogger.com/blogger/4311/970/400/0510-indu.jpg
The NASDAQ 100 fell over 1% today, and as you can see from this chart, its attempt to bust out above its consolidation simply isn't going to happen. If it weakens further, it is at serious risk of cutting beneath a major supporting trendline.
http://photos1.blogger.com/blogger/4311/970/400/0510-ndx.jpg
at 5/10/2006 9 insightful comments
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Tuesday, May 09, 2006A Couple of Buys While We Wait......
Really not much going on in the market to talk about. Yes, the Dow was up again, but it seems to be kind of acting on its own. Even though it moved up more than 50 points, the S&P 500 did nothing and the NASDAQ fell. So it seems the Dow is standing alone as the truly strong, consistent mover.
Looking back, on Express Scripts (ESRX) was when the stock was at about $92. It has since fallen to about $70. The green shaded area, which I drew a long time ago, seems to have been achieved. That doesn't mean it won't go farther, but I'm proud to point out that the original price target was cleanly reached today.
http://photos1.blogger.com/blogger/4311/970/400/0509-eres.jpg
One of the very few bullish looking patterns I see out there is Cirrus Logic (CRUS).
http://photos1.blogger.com/blogger/4311/970/400/0509-crus.jpg
Another is Chipmos Technologies IMOS (IMOS), which is likewise in the semiconductor industry.
http://photos1.blogger.com/blogger/4311/970/400/0509-imos.jpg
Hopefully tomorrow's Fed announcement will shake off some of this uncertainty. See you afterwards!
at 5/09/2006 7 insightful comments
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Monday, May 08, 2006The Waiting Game
OK, I've got a confession. All that stuff about the bulls being in control and the bears needing to hide in a cave? Deep down, I don't really believe it. I think the market has been living on borrowed time, and it's all going to blow up at some point. It's waiting for that "some point" which is exasperating.
The first is Allegheny Technologies (ATI), shown below. I've mentioned this one more than once, but it's an intriguing chart. It's clearly below its ascending trendline, and the ascent over the past few months has been so massive (with diminishing volume) I'd say this was a pretty good short, with a stop price at $80.
http://photos1.blogger.com/blogger/4311/970/400/0508-ati.jpg
A similar short suggestion, with similar rationale, is Carpenter Tech (CRS) with a stop at $140.
http://photos1.blogger.com/blogger/4311/970/400/0508-crs.jpg
The "very bullish" chart of the American Major Market Index ($XMI) should be taken in context, by the way. If you look at the chart of the past several years, including the highlighted inverted head & shoulders, you can see that it's nothing to write home about. Even if it manages to hit its full inverted head & shoulders target, it's not going to get to any new lifetime high.
http://photos1.blogger.com/blogger/4311/970/400/0508-xmi.jpg
Lastly, take a look at the (recently very boring) GOOG. Its nearest Fibonacci retracement level is $394.58 by my calculations. Just look at this intraday chart over the past week or so - it is just amazing to me how the price is clinging - closer and closer, in fact - to the Fib level. Spooky!
http://photos1.blogger.com/blogger/4311/970/400/0508-goog39458.jpg
at 5/08/2006 7 insightful comments
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Friday, May 05, 2006Strength Begets Strength
Ugh! OK, the bulls are completely in control of this market. Bulls everywhere - be they oil bulls, precious metal bulls, stock market bulls - have the world by the horns. We bears better hide in our caves and peek out until the weather is better for us. This is nasty!
The Dow is just a couple of hundred points away from its lifetime high, set in January 2000. The green stripe here illustrates how close the lifetime high is. It's hard to believe in 2002 we were 3000 points lower than this.
http://photos1.blogger.com/blogger/4311/970/400/0505-dia.jpg
The S&P 500 has smooth sailing, from the Fibonacci perspective. As the shaded area illustrates, there's about 4.5% left of "open air" until the next Fib is hit. This index has shown amazing power and resilience.
http://photos1.blogger.com/blogger/4311/970/400/0505-spx1385.jpg
If you need any evidence that the stock market is once again very visible in the public eye, look no farther than the home page of CNN.....
One other very bullish signal is that the American Major Markets index ($XMI) finally broke above its inverted head and shoulders pattern.
http://photos1.blogger.com/blogger/4311/970/400/0505-xmi.jpg
My difficulty with this market is that there simply aren't any bullish chart patterns that I like. There are certain stocks which seem to keep pushing ever higher (take a look at HANS, for instance). But I just can't get comfortable diving into something which is already up hundreds, or even thousands of percent.
This market puzzles me. But one thing is sure: the bulls are in charge, and, rational or not, the market just keeps soaring.
at 5/05/2006 10 insightful comments
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Thursday, May 04, 2006A Great Day! (for the bulls......)
Will wonders never cease? Take a look at the Dow Transports ($TRAN). Up well over 3%, fueled in large part by EXPD, which itself was up nearly 20%. And the Dow Jones Composite had a.......
http://photos1.blogger.com/blogger/4311/970/400/0504-Composite.jpg
Ugh! I guess this bull isn't so wimpy after all!
A strong retail report sent stocks solidly higher. And the ever-strong sectors stayed strong - - oil.....gold.......copper.
I was taking a look at some long term (multi-decade) charts of gold and silver. They are worth a glance. Take a look at the Fibonacci levels, and notice how both markets are coming right up against resistance. Worth noting, since these metals have been on a trip straight to the moon for quite a while. Here's gold......
http://photos1.blogger.com/blogger/4311/970/400/0504-gold.jpg
....and silver......
http://photos1.blogger.com/blogger/4311/970/400/0504-silver.jpg
at 5/04/2006 5 insightful comments
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Wednesday, May 03, 2006Topping Out Retrospective
There are a lot of very toppy patterns in the market. I thought it would be helpful to show some from the past as well to indicate what sometimes happens with these rounded tops.
http://photos1.blogger.com/blogger/4311/970/400/0503-ford.jpg
One pattern topping out right now is trendy clothes seller Urban Outfitters. I don't tend to like stocks less than $50, simply because the puts don't have quite as much juice in them. But for a straight short sale, this is worth checking out (symbol is URBN).
http://photos1.blogger.com/blogger/4311/970/400/0503-urbn.jpg
On a number of occasions I pointed to Express Scripts (ESRX) as a good short idea. It hasn't fallen as far as the shaded green target yet, but it's well on its way.
http://photos1.blogger.com/blogger/4311/970/400/0503-esrx.jpg
Insurance companies have been doing extremely poorly (I have not read the news to find out why). Aetna (AET) for instance got clobbered. Cigna (CI) is also taking it on the chin. I wouldn't short at these levels, but these charts are amazing.
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Insurance companies have been doing extremely poorly (I have not read the news to find out why). Aetna (AET) for instance got clobbered. Cigna (CI) is also taking it on the chin. I wouldn't short at these levels, but these charts are amazing.
http://photos1.blogger.com/blogger/4311/970/400/0503-ci.jpg
http://tradertim.blogspot.com/2006/04/couple-of-new-short-ideas.html]Early last month, I suggested selling Health.net short. This is also turning out fantastic. Just look at it slice through those retracement levels!
http://photos1.blogger.com/blogger/4311/970/400/0503-hnt.jpg
Finally, a quick glance at our old buddy Google (GOOG). I'm offering this chart to illustrate once again how the price is clinging to those Fib levels. Even with the big rally a couple of weeks back, the Fib retracement acted like a magnet, and the price is hugging it tight once more.
http://photos1.blogger.com/blogger/4311/970/400/0503-goog.jpg
at 5/03/2006 7 insightful comments
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Insurance companies have been doing extremely poorly (I have not read the news to find out why). Aetna (AET) for instance got clobbered. Cigna (CI) is also taking it on the chin. I wouldn't short at these levels, but these charts are amazing.
http://photos1.blogger.com/blogger/4311/970/400/0503-ci.jpg
suggested selling Health.net short. This is also turning out fantastic. Just look at it slice through those retracement levels!
http://photos1.blogger.com/blogger/4311/970/400/0503-hnt.jpg
Finally, a quick glance at our old buddy Google (GOOG). I'm offering this chart to illustrate once again how the price is clinging to those Fib levels. Even with the big rally a couple of weeks back, the Fib retracement acted like a magnet, and the price is hugging it tight once more.
http://photos1.blogger.com/blogger/4311/970/400/0503-goog.jpg
at 5/03/2006 7 insightful comments
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Insurance companies have been doing extremely
http://photos1.blogger.com/blogger/4311/970/400/0503-ci.jpg
http://photos1.blogger.com/blogger/4311/970/400/0503-hnt.jpg
http://photos1.blogger.com/blogger/4311/970/400/0503-goog.jpg
at 5/03/2006 7 insightful comments
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