一个笨蛋的股指交易记录-------地狱级炒手

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Friday, May 26, 2006Busting the Bounce
I said at the start of this week that the market was going to go up for a number of days in order to create great selling opportunities for the bears. It seems this is precisely what has happened. The Dow had a particularly strong Thursday and Friday, and I'm sure the vast majority of people are thinking that the recent weakness was just a little correction so that the huge bullish gains can now resume.

Well, good. That's what we want them to think. The bull trap is just about finished being set. I wouldn't be surprised if the trap was sprung as early as Tuesday (remember, Monday is a market holiday). But even if not, it's coming soon. Almost certainly next week, by my estimation.

The $VIX, which had soared with the market weakness last week, has plunged back down again. This is great, because it makes those SPX puts that much more reasonable to purchase.


Here's something interesting to note as well - look how the volume got stronger on the way down and is completely weak and wimpy on the way up (this example is the DIA ETF, which is very representative of the market as a whole). Limp retracements are just what the (bearish) doctor ordered.


As for the Dow itself, it looks like it's heading back toward its retracement level. We're very close at this point. A decently strong opening on Tuesday (up 40 points or so) followed by a loss for the day would be sensational. Not necessary, not nice.


The NASDAQ Composite is also just about ready to kiss the underbelly of its broken trendline.


As for the S&P 500, this likewise is moving toward the underside of a broken trendline, having bounced strongly off its Fibonacci support level a few days ago.

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As for the S&P 500, this likewise is moving toward the underside of a broken trendline, having bounced strongly off its Fibonacci support level a few days ago.


Now for a few specific stocks to consider shorting (or, if you're so inclined, and if they're available, buying puts on). Here's Anderson (ANDE), a huge topping formation:


EME also a nice rounded top:


IPS likewise had a huge runup, a recent breakdown, and a subsequent partial retracement:

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IPS likewise had a huge runup, a recent breakdown, and a subsequent partial retracement:


Lehman Brothers (LEH) is also retracing to the underside of the trendline (I'm not stating stops for these, but obviously you should have a sensible chart-based stop order for every one of these positions; oh, and as always, click on any of these images to see a much larger version).


MBT has a beautiful, large rounded top:


And the topping pattern on WLP is kind of cool since it's actually tilted upward, but the retracement obeys this bend nonetheless:

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And the topping pattern on WLP is kind of cool since it's actually tilted upward, but the retracement obeys this bend nonetheless:


US Steel (symbol X - who knows why.....) is also a crystal clean retracement to the underside of the broken trendline.


Great stuff! A down week next week would make for some very happy bears, me included. Thanks for all the nice emails and comments, everyone. It's great to have such a smart bunch of folks reading and contributing to this blog, and it's encouraging that apparently people keep coming back for more each day.
at 5/26/2006 16 insightful comments
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Thursday, May 25, 2006Finally, the Bounce
Well, that was predictable.

The bounce that everyone's been waiting for finally arrived. The Dow was up nearly 100 points, and there were bounces pretty much across the entire spectrum, including energy. The S&P 500 graph below (intraday) shows how the market was finally able to get some real strength.


The horizontal lines represent Fibonacci retracement levels as measured from the early May highs to yesterday's lows.

If you look at the intraday graphs of the $INDU, $SPX, and $NDX, you can see fairly clearly where they "should" pause. I put should in quotes simply because markets don't always obey technical analysis, and there's no doubt I've been wrong before. If they do (a) pause there (b) reverse (c) take out the recent lows, then we'll have an honest to goodness bear market on our hands. And it'll be about time.

I'm going to keep this brief today, but I'll offer one nice looking chart to you for consideration of a short sale - CRR, Carbo Ceramics. A retracement anywhere close to $50 probably represents a nice low-risk/high-reward trade.




at 5/25/2006 4 insightful comments
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Wednesday, May 24, 2006Ready to Bounce?
Finally, the market was able to hold its act together until the close to post a small gain (on the Dow, at least). At 1:34 p.m. the markets seemed to be really falling to pieces, but it reversed and shook off part of the damage. It may be that, at last, a bounce is at hand (unless the GDP tomorrow morning at 8:30 EST is a surprise).

Below is the Russell 2000. The fascinating thing to me, and what tells me we've "gone bear" is this - - notice how before the market would form a saucer and launch from there (the prior three horizontal lines). Now the saucer is in a rounding top form, and the prices fall from that. So prices are mover lower away from patterns instead of higher. I like that.


But the market has fallen hard and fast, and I would feel a little better about this whole thing if we could push back up against resistance levels, giving us bears some fantastic short opportunities. Here's a close-up of the S&P 500. As you can see, it's got plenty of upside room to push up against that median line and a relatively small amount of room to fall down to that support line.


A similar argument can be made for the NASDAQ, which seems to have firmed up the best today from its earlier losses.


One interesting chart was the Oil Services sector (OIH). This pattern, if it appeared at the top of a stock's price action, is called the abandoned baby, and it's rare and very bearish. I'm not so sure it means anything when it's in the middle of price action, since clearly this isn't the very top.

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One interesting chart was the Oil Services sector (OIH). This pattern, if it appeared at the top of a stock's price action, is called the abandoned baby, and it's rare and very bearish. I'm not so sure it means anything when it's in the middle of price action, since clearly this isn't the very top.


Pan Pacific (PNP) has shaped up into one of the many, many nice head & shoulders tops I am seeing these days.


And Urban Outfitters, which I suggested  has performed precisely as predicted.


Oh, and in the People Never Learn department, let's bow our heads for Mamma.com (MAMA) which went full-circle from $1 to $17 and back to $1 again. Look at the volume in the middle of the chart. Sad, ain't it?


at 5/24/2006 3 insightful comments
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Tuesday, May 23, 2006The Bears are in Control
I can't remember when I've had so much fun trading the markets.

Everything about the market feels right. Which is the strongest indicator to me that the bears are in control. The charts make sense. Everything is working from a technical analysis perspective.

Even when the Dow was up 75 points earlier today, I felt confident and assured about the market. Although I was thinking the market might go up hundreds of points over a few days, today's run-up felt like it was all the bulls could muster. So I gobbled up more puts. And the market went limp, as it has done for the past three days in the final hour, handing the baton back to us bears.

The market has to turn around at some point. The next resting point on the Dow is 10,925. If it cracks that, it will have sunk through a major ascending trendline, and the party really starts.

Take a look at the NASDAQ Composite. This market had plenty of room to recover. But instead, it's falling away from that broken trendline like Wile E. Coyote from the side of a cliff.


The S&P likewise had plenty of room to push higher to make it easy for us bears to short. It was up this morning, but it fell to pieces. All the markets made gorgeous bearish engulfing patterns. You can just hear the bulls screaming with frustration. It's a nice change. Screw those guys!


There are way too many great shorts to show right now. I'll just give you a couple. Here's Aetna (AET), which has broken a huge ascending support line.


Boeing also represents a really cool potential short. The head & shoulders hasn't fully formed yet, but look at high this thing is above the trendline. Looks ready to get gutted.


How many of my 36 positions are puts? 100% of them. Allow me to tip my hand:




at 5/23/2006 12 insightful comments
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Monday, May 22, 2006Perfect Fibonacci Retracement
A long time ago, I drew a Fibonacci retracement spanning from the market's peak (January 2000) to its post-bubble trough (October 2002). The 61.8% retracement level on this is 1,253.29. Today, at 11:51 a.m. EST, it hit this mark almost exactly and instantly turned around.


Here's a closer look at the day's action. To be fair, it didn't hit the line to the penny, but it did so with 99.999% accuracy and - forgive me - that's good enough!


A similar "buy" signal can be seen with the Russell 2000 ETF where it touched the ascending trendline perfectly.


One "sell" suggestion would be for E*Trade (symbol ET), shown below. I wouldn't call this a head and shoulders, because the right shoulder is higher than the left. All the same, it looks like a nice topping pattern to me.

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One "sell" suggestion would be for E*Trade (symbol ET), shown below. I wouldn't call this a head and shoulders, because the right shoulder is higher than the left. All the same, it looks like a nice topping pattern to me.


Readers of this blog will also note this is the first time I'm going to suggest you buy some pot. Specifically, Potash (symbol POT). It seems a relatively safe bet during what will probably be a short-lived upswing in the market.


Property stocks look ready to fall hard, and Simon Property Group looks like a particularly good play considering it has both broken its trendline and is in a nice toppy rounding pattern.


At the risk of repeating myself: I think the market's going to go up. Maybe for a day. Maybe a few. Maybe even for two or three weeks. But it's going to hit some choice resistance levels. And then I'm going to go bananas buying puts. The bull trap is set. We need to wait a while before it springs.
at 5/22/2006 11 insightful comments
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