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Thursday, October 20, 2005You Knew This Already
See my post and then look at the chart below, which brings you up-to-date:
http://photos1.blogger.com/blogger/4311/970/400/1020-ToldYa.jpg
The market was repelled again. "The kiss of death" - twice - is what's happened this week. And you knew what to do a day ahead of when it actually happened!
Such is the beauty of technical analysis.
at 10/20/2005 0 insightful comments
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Wednesday, October 19, 2005Kiss Me Twice!
I wrote yesterday about how the IWM had "kissed" the underside of a huge three-year long trendline, indicating how clearly support had turned into resistance.
After an initial softness this morning, the market firmed up and exploded higher. As you can see with the chart below, it once again "kissed" the underside of the trendline precisely!
http://photos1.blogger.com/blogger/4311/970/400/1019-KissMe.jpg
The key question, of course, is what will it to tomorrow? If it is once again repelled, this will encourage the bears and discourage the bulls. If, however, the line is penetrated, it makes for a more shaky bearish argument, and the line becomes less meaningful for either camp.
I wanted to offer another example of how useful Fibonacci retracements can be. Over the past week or so, I was extremely short various crude oil markets, particularly oil service stocks. These positions (both shorts and puts) did quite well, but it's nerve-wracking to have a position racking of profits if you don't know when it's going to turn and go the other way.
That's where Fibonacci comes to the rescue. All I had to do was take a look at one chart - the XLE - to see that it was approaching a retracement level, meaning that both the XLE and the oil stocks were likely to bounce up.
http://photos1.blogger.com/blogger/4311/970/400/1019-XLEFib.jpg
And bounce they did. I closed out everything (and even bought XLE calls) just as the market whipped around the other direction. Thanks, Mr. Fibonacci!
at 10/19/2005 0 insightful comments
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Tuesday, October 18, 2005Kiss My Trendline
On Friday, Saturday, and Sunday, I was speaking at a trade show in San Francisco about Prophet.net, and I was enjoying talking to users of our products (both current and prospective) and sharing ideas about the market.
Because I did a lot of demonstrations, I had more time than usual to look at charts, and I was amazed at just how beautifully bearish everything seemed. I can't remember a time when everything seemed to line up so well.
So much so that I told many people my belief of what the market would do when the new week began - - and not in general terms, but in specific, to-the-penny terms.
My prediction was that the market would open higher on Monday, carrying through with its upward momentum on the prior Friday. But that it would "kiss" the bottom of its major ascending trendline and start reversing, and that it wouldn't look back.
My term "the market" is specifically about the IWM, although the market in general applies. Below is the intraday, minute-by-minute graph of IWM. Notice how, early on Monday, it kissed the underside of the now-broken support (which means it's resistance at this point) and fell.
http://photos1.blogger.com/blogger/4311/970/400/1018-KissMyTrendline.jpg
To........the............penny! (I would hasten to add that I don't "adjust" my trendlines after the fact; this is a well-established, multi-YEAR trendline; you are just zoomed in very close to it).
I am writing this on Tuesday afternoon, after the close, and one of the most critical earnings reports has just been issued (Intel, INTC). Revenues and earnings were sensational, and INTC shot up higher shortly after the announcement. Then it was breakeven. Then it's down. Last I looked, it had fallen about 3%, even on that terrific news. They haven't even held their conference call yet, so who knows if INTC will be up or down tomorrow.
But having a down market on bullish news can only bring tears of joy to a bear's big brown eyes.
at 10/18/2005 0 insightful comments
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Friday, October 14, 2005Oh, Baby!
I could go on and on about the breakdown in the market this week (oh, Tim, please.....) but I won't. This Friday - like last Friday - our dear friends the bulls bid the market up in a one-day rally. Sorry, guys, it's too late. The giant ascending trendlines have been broken, and you were only able to push prices up to the underbelly of your former support. Game over, man. The bears are ready to party.
So while we look forward to next week, let me offer up just a single stock - a short, naturally. This one is baby clothes maker Carter's. A stellar head & shoulders pattern that holds the potential for a terrific drop, as indicated by the chart below.
http://photos1.blogger.com/blogger/4311/970/400/1014-CRI.jpg
at 10/14/2005 0 insightful comments
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Tuesday, October 11, 2005Crack.....
The "recovery" from last week's selloff lasted all of one day - - specifically, last Friday. And it could hardly be called a rally. The selling simply abated for a few hours.
The selling has resumed, and chart after chart looks like the one below (which is the symbol IWM), with major ascending trendlines being shattered to the downside:
http://photos1.blogger.com/blogger/4311/970/400/1011-IWM.jpg
I've highlighted the point where today's prices punched through the trendline as well as when this last took place in late March of this year. You can see what happened next.
at 10/11/2005 0 insightful comments
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Thursday, October 06, 2005Boing!
I want to show you something fascinating - look at this graph of IWM (which is the ETF of the Russell 2000). Notice the lower trendline. It is VERY old (about 3 years) and, as the red square indicates, its price was getting extremely close to touching it today.....
http://photos1.blogger.com/blogger/4311/970/400/1006-IWMLong.jpg
Near the end of the day, the price of IWM did touch this trendline, and just look at the incredible and instant turnaround in the price!
http://photos1.blogger.com/blogger/4311/970/400/1006-IWMShort.jpg
Is that not amazing? Think of it! A trendline spanning three years is so strong that the price is only permitted beneath is for about 90 seconds before whipping around!
Don't get me wrong; I still think the market is doomed. But, for the very short term, I'm long the market. I merely think it's oversold for right now, and I'd like to ride a quick bounce up in the meantime.
at 10/06/2005 0 insightful comments
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Wednesday, October 05, 2005Those Fabulous Fibonaccis
As happy as I am with the market's plunge recently, I'll just have a short entry today to comment about crude oil.
The graph below shows crude oil (specifically, the December 2005 contract) over the past year. I've drawn a Fibonacci retracement on it. Notice how amazingly it forces support and resistance on the price. I've highlighted areas of particular "bounce".......
http://photos1.blogger.com/blogger/4311/970/400/1005-FibCrude.jpg
I am short quite a few oil service stocks now (which already have shown a nice profit), and this chart indicates that crude oil is going to take a fall more due to the nice head & shoulders pattern. I imagine the next stopping point will be at about the $59 Fibonacci level.
at 10/05/2005 0 insightful comments
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Tuesday, October 04, 2005Five Reasons This Bear Loves This Market
(c) Bounce Off Resistance - Take another look at the same graph. See the descending trendline at the top? A series of lower highs and lower lows. And today the price couldn't penetrate this resistance line. Just another affirmation of a top.
http://photos1.blogger.com/blogger/4311/970/400/1004-Candlestick.jpg
(D) Major Trendlines are Broken - On all the indices, multi-year ascending trendlines have been broken to the downside. You can see an example of this in the longer-term MDY chart below (reminder: you can click the image to see a larger version). There is another, lower, trendline that hasn't been broken yet, but I'm confident it will be sometime this month.
http://photos1.blogger.com/blogger/4311/970/400/1004-MDY.jpg
(e) Utter Complacency - People still think the bull market is intact. They still think that, at worst, the market will return 5% each year (indeed, this is the 'bad news' that is shared in popular circles.....that modest returns must be accepted instead of 25% annual returns). Here, for instance, are the subject lines over the past several weeks from a major technical analyst - look how, day in and day out,
at 10/04/2005 0 insightful comments
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Tuesday, September 27, 2005NZD Forex Revisited (Again)
The timing just was about perfect. The market "topped out" the very next day, sank, recovered some, and then really starting sinking.
http://photos1.blogger.com/blogger/4311/970/400/0927NZD.jpg
So the NZD/USD market moved from about 71 cents to 68 cents. Three pennies. So what, right? Well, the FOREX market is so highly leveraged, that three penny move would have resulted in a three hundred percent return over the course of those five weeks (e.g. a $10,000 account would be worth about $40,000).
What's exciting to me about this graph is how cleanly it played within the Fibonacci retracement. NZD/USD is considered an exotic currency market. But it's a terrific-looking graph. I'd step aside at this point, although long-term I can see this graph heading much lower.
at 9/27/2005 0 insightful comments
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Tuesday, September 20, 2005Eleven Steps then a Stumble
Finally, some direction! It's about time.
There's an old saying about the market - "three steps and a stumble" - which implies that if the Fed raises rates three times in a row, the market will fall. Well, the Fed has raised rates ELEVEN times in a row, and finally the market looks like it is starting to take notice.
Below are three charts of the largest ETFs - our old favorites SPY, QQQQ, and DIA. Each of them tells a similar story of a slow shift from upward market to downward market.
The first chart of the SPY (the S&P 500 "spiders") shows the ascending trendline which the prices are approaching. This trendline is still a ways away, but if it's cracked, it bodes well for the bears out there (like me).
http://photos1.blogger.com/blogger/4311/970/400/0920-SPY.jpg
Next are the "cubes" (QQQQ, the NASDAQ 100 ETF) which have already broken their ascending trendline. This market has never recovered quite as well as the other markets (especially the Mid Caps and the Russell 2000, which hit lifetime highs not long ago). All the same, it's just as vulnerable as everything else. I've drawn the ascending and descending trends to make it more clear. You can see where the ascending channel has been clearly violated.
http://photos1.blogger.com/blogger/4311/970/400/0920-QQQQ.jpg
Finally are the "diamonds" (DIA, the Dow 30 ETFs). As with the SPY, the ascending trendline has yet to be violated. But if it is, bulls need to watch out. The shifting tide continues to work its way in favor of the bears.
http://photos1.blogger.com/blogger/4311/970/400/0920-DIA.jpg
at 9/20/2005 1 insightful comments
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Friday, September 09, 2005Redback Recovery
Just one stock to mention for this post (which is my 50th one, by the way! Did anyone bring a cake?) Redback Networks - RBAK - is in a fantastic inverted head & shoulders pattern, with good volume to boot. This is a terrific long opportunity (as always, click on this image to get a much bigger picture):
http://photos1.blogger.com/blogger/4311/970/400/0909-RBAK.jpg
at 9/09/2005 3 insightful comments
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Tuesday, August 30, 2005More Short Ideas
I continue to be very pleased at the structural breakdown of the stock market. It's like watching a cruise ship turn around; it's slow, it's steady, and it's massive.
Below are a bunch of different short positions I'm in right now; as always - (disclaimer-time here!) - these are just for your observation, entertainment, and further analysis. These aren't recommendations. But they're worth checking out.
Here's Comtech (CMTL) in a very toppy looking pattern with a nice clean stop price.
http://photos1.blogger.com/blogger/4311/970/400/0830-CMTL.jpg
Next is Conmed (CNMD), which I've been following a long time. It broke beneath this neckline a couple of weeks back and has now retraced to the underside. Looks like a nice short opportunity to me.
http://photos1.blogger.com/blogger/4311/970/400/0830-CNMD.jpg
Everyone's favorite Internet stock, Google (GOOG), is below; once again, a nice clean break with the price kissing the underside of what used to be support:
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Everyone's favorite Internet stock, Google (GOOG), is below; once again, a nice clean break with the price kissing the underside of what used to be support:
http://photos1.blogger.com/blogger/4311/970/400/0830-GOOG.jpg
Gilead (GILD), an idea I got from fellow chartist Michael Kahn, is shaping up to a lovely head & shoulders pattern (obviously a favorite of mine, since I keep mentioning this popular pattern):
http://photos1.blogger.com/blogger/4311/970/400/0830-GILD.jpg
Chocolate maker Hersheys (HSY) formed a massive head & shoulders pattern. It's not perfect, since the left shoulder is actually a little lower than the right, but we'll let that go.
http://photos1.blogger.com/blogger/4311/970/400/0830-HSY.jpg
Invitrogen (IVGN) broke a huge ascending trendline a couple of weeks ago and is kissing the underside of that line:
BMHC
http://image.wetpaint.com/image/1/9T5eszulR0XGkOnmv5Bo6w56019/GW829H475
CMGIhttp://image.wetpaint.com/image/2/VK7nPP5hO0yjAgwa9nZsxg10574/GW460H402
DNAhttp://image.wetpaint.com/image/1/j7ZvJXGPcnocDt9bILyJVQ1360115/GW837H541
EMChttp://image.wetpaint.com/image/1/xf-VWYXNQsiQqAaXKa3x5w1360357/GW831H545
EMC 2007http://image.wetpaint.com/image/1/8mrTD3bAttJ44sY_R3dYLw134083/GW1024H738
ACMRhttp://image.wetpaint.com/image/1/KDy5GGziGQr_LOvZVcEJDw291583/GW1024H694
五月 03, 2009 - 03:42 下午The Energizer BunnyThe handful of large positions I have are all basically commodity-bullish; I have no big index positions of either stripe. I'm as confounded by the strength in /ES now as everyone else (I'm typing this about 40 minutes into the open on Sunday afternoon). If we cross above 887, well, that's just going to encourage the bulls even more.
http://slopeofhope.com/ImageProxy?imageid=4246
Posted: 03:42 下午 | Comments (View) | Permalink
五月 01, 2009 - 01:04 下午The Crystal-Clear, Plainly-Defined Trendhttp://slopeofhope.com/ImageProxy?imageid=4240
Posted: 01:04 下午 | Comments (View) | Permalink
五月 01, 2009 - 12:42 下午Goofy Stocks Continue to PerformWell, my IRA still won't give up. It's filled with weird little stuff like this:
Original [*]Present
http://slopeofhope.com/ImageProxy?imageid=4239&state=original&height=600&width=600
http://slopeofhope.com/ImageProxy?imageid=4239&state=present&height=600&width=600
I've been charting for a long time, but I admit, how to handle moves like this is always tough for me. It's up over 50% from my purchase price, and most of the profit is very "thin" (e.g. fast moves up).
Posted: 12:42 下午 | Comments (View) | Permalink
五月 01, 2009 - 11:08 上午SOHU Looks StrongI like the look of SOHU. An absolutely gigantic cup with handle pattern and volume in all the right places.
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http://slopeofhope.com/ImageProxy?imageid=4238&state=original&height=600&width=600
http://slopeofhope.com/ImageProxy?imageid=4238&state=present&height=600&width=600
Posted: 11:08 上午 | Comments (View) | Permalink
五月 01, 2009 - 10:17 上午Energy Pushes HigherWell, I've got egg on my face - I admit it! - about any coolness toward energy. I've bought 4,000 DIG based on OIH's breakout above resistance. I am not crazy about the weak volume, but the price pattern is very plainly bullish.
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http://slopeofhope.com/ImageProxy?imageid=4236&state=original&height=600&width=600
http://slopeofhope.com/ImageProxy?imageid=4236&state=present&height=600&width=600
Posted: 10:17 上午 | Comments (View) | Permalink
五月 01, 2009 - 09:49 上午Strength in MetalsXME has pushed above 33.10; this looks pretty strong to me.
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http://slopeofhope.com/ImageProxy?imageid=4233&state=original&height=600&width=600
http://slopeofhope.com/ImageProxy?imageid=4233&state=present&height=600&width=600
Posted: 09:49 上午 | Comments (View) | Permalink
五月 01, 2009 - 09:22 上午Something Actually Truly BullishIn spite of all my grumpiness, there are, here 'n' there, some charts that are honest-to-goodness nice-looking bullish charts. One I pointed out a week or so ago is STV, which looks like this now:
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http://slopeofhope.com/ImageProxy?imageid=4234&state=original&height=600&width=600
http://slopeofhope.com/ImageProxy?imageid=4234&state=present&height=600&width=600
Ain't it purty? A nice, clean breakout, and no concentrated amount of overhead supply.
Posted: 09:22 上午 | Comments (View) | Permalink
五月 01, 2009 - 08:18 上午Go Long the QID?The NASDAQ has had a sensational run, but we're right up against the underside of a long-term Fibonacci fan line.
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http://slopeofhope.com/ImageProxy?imageid=4232&state=original&height=600&width=600
http://slopeofhope.com/ImageProxy?imageid=4232&state=present&height=600&width=600
One way to play this might be going long QID, which is the double-inverse. QID itself is right at the bottom of a pretty impressive supporting trendline.
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http://slopeofhope.com/ImageProxy?imageid=4231&state=original&height=600&width=600
http://slopeofhope.com/ImageProxy?imageid=4231&state=present&height=600&width=600
Posted: 08:18 上午 | Comments (View) | Permalink
五月 01, 2009 - 07:30 上午Shorting EnergyI'm a bit fixated on the withering volume in OIH and what appears to be a very low-risk shorting point on USO. I have shorted a large OIH position at 91.54 today. Here's USO for a change of pace.........
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http://slopeofhope.com/ImageProxy?imageid=4230&state=original&height=600&width=600
http://slopeofhope.com/ImageProxy?imageid=4230&state=present&height=600&width=600
Posted: 07:30 上午 | Comments (View) | Permalink
五月 01, 2009 - 06:46 上午Our Man in BasraHappy New Month, everyone. Let's hope this one is a little more chart-friendly!
I'll just start by saying ultra-bearish-on-bonds TBT continues to perform. I added to this position this morning.
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http://slopeofhope.com/ImageProxy?imageid=4228&state=original&height=600&width=600
http://slopeofhope.com/ImageProxy?imageid=4228&state=present&height=600&width=600
I'd also remind prospective parents out there...........have a heart when naming your child, OK?