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Thursday, June 14, 2007
Nattering Nabobs
It's a pretty predictable trend. It the market goes down hard, the comments section is filled with kudos, praise, and huzzahs. And if the market goes up big, the comments section is filled with barbs, told-ya-so's, and permabulls. Either way, it's pretty tedious.
As I've said many times, this blog's purpose is for one person - me - to share his thoughts about the market via some charts. Nothing more. You can get ideas from it. You can take those ideas and turn them upside down (short everything I buy and buy everything I short). It's really up to you. All I hope for in the comments section is a place for other people to offer other ideas. Because there's plenty of interesting opinions out there.
Today, like yesterday, was another "up" day (although not nearly as dramatically). That's fine by me. Now, if tomorrow is up too, I'm going to start to worry. A healthy snap-back rally is terrific in the scheme of establishing lower highs and lower lows. But a continuous push higher can result in what we saw back in early March, where the allure of a drop was squashed and the market simply sashayed its way on to new lifetime highs. My view of the S&P 500 right now is along these lines:

I've got some puts on the DIA with a contingent stop at 136.16.

Symbol CEG has a nice series of lower lows/lower highs. I'm short.

Malaysia (EWM), mentioned here before, continues to look toppy in spite of recent strength in Asia.

I mentioned Goldman Sachs (GS) before. It had pushed its way to a new high yesterday, but once earnings were released, the stock fell on the news. It's not that the earnings were bad - on the contrary, they blew away expectations. But "buy the rumor, sell the news" is as true now as ever.

My puts in JC Penney (JCP) continue to do well, although nothing really great is going to happen unless/until the neckline shown on the pattern breaks. But it could be soon.

Gary mentioned my "bearish" energy suggestions; not at all. I think in passing I mentioned CVX and/or XOM for those who considered energy overbought. But I've devoted whole entries recently (such as "Sheer Energy") to the fact that this is the one sector that looks really bullish. The new high on the OIH today is no surprised, nor is the strength of such stocks as APA, SLB, and SWN.

PEG is another promising-looking stock to short, similar to CEG's pattern.

Finally, your clip of the day. This beautifully captures how I've been feeling about the comments section (especially the TTT situation). There comes a point when I just want to jump off the train.
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at6/14/200770 insightful comments  Links to this post
Labels:ceg,dia,ewm,gs,jcp,oih,pee wee herman,peg
Wednesday, June 13, 2007
Snapback and Logo Vote
Today's snapback rally - the best day this year for the Dow, I read - is no surprise. In fact, it's a bit of a relief. A number of readers wrote me before the opening bell today and expressed their desire that the market would push higher to give them a good chance to sell into the strength. So - wish granted!
I wanted to ask your opinion about something. I wanted to doll up the blog a bit with a logo, and I've got four choices. Instead of just me picking my favorite, I'd love to hear your opinion. It won't take a moment....
Here's choice One:

Two:

Three:

Four:

Which is your favorite? Please take a moment to vote; thank you!
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The question on everyone's mind - mine included! - is whether the recent sell-off was just a bit of profit-taking in an otherwise uninterrupted bull market. Maybe. But a one-day rally isn't going to change my views. I closed out a handful of positions today, but by and large I am holding strong.

The Russell 2000 - which between puts on the $RUT and puts on the IWM seems to be the most tradeable index on the market - is at a crucial point. It pushed through the supporting trendline but is now within its channel again. The next two days are crucial. If the market pushes higher the rest of the week, a lot of my arguments over the past couple of days are kind of shot.

Apple, my "short it!!" topic earlier this week, fell nicely today in spite of the overall market roaring higher. That is a very, very good sign. My puts are up 75%.

A few reiterations of earlier bullish suggestions that still look good. JetBlue (JBLU):

ONT, with a stop at $2.56:

And Southwestern (SWN):

Side note to Timothy Sykes - thanks for the book. I'm flattered, and I'll check it out!
at6/13/200745 insightful comments  Links to this post
Labels:$indu,$rut,aapl
Tuesday, June 12, 2007
...And an Awful Lot Like Me.....
First off, if you didn't get around to readingyesterday's post, you should. It rules.
The trend change that I have been hoping, praying, and wishing for might (I say MIGHT) be here. Whether it is or not, the past week or so has been very good to me. Successful trading comes with itsown set of challenges, but I'm enjoying myself. Watching the Dow go from a 90 point deficit to a 20 point surplus today, I had the sense that it was time to get more puts. And that was the right move. Lower lows and lower highs seems to be the rule of the day.

The "culprit" of all this wonderfulness is soaring interest rates. One reader (who shall remain nameless but I shall refer to as SuperCOT COTLover) opined that interest rates aren't going to go up forever. Well, ummm, that's right. But they weren't going to go down forever either. Believe me, there's plenty more that can go wrong to help add fuel to this wonderful fire.

Someone else asked to see my positions. Anyone blinkered enough to spend time every day sharing his best charts and thoughts for no money is stupid enough to show all his positions too, so here goes (the bold items are puts; everything else is a short):

Remember that channel I mentioned yesterday for the Russell 2000? Well, it was cracked today. Good.

And the S&P 500, which had been floating above its channel for a while now, has now achieved - if you will - double penetration. The index is within the bounds of its channel once more. Which only means it is at the very highest reaches of its channel, with ample more room to fall.

And, not surprisingly, the $VIX has been zooming higher lately. Even at these levels, we are far, far below historical averages. During saner times, the $VIX would occasionally push above 50.

ALB, which I've been short for a while, has now completed its pattern. Huzzah!

Oh, rememberback on May 22nd that I suggested BTJ as a short? I've marked it with an arrow here. How's that for a call, folks? I (stupidly) closed it out a couple of days ago for a nice profit, but, again, it was just stupid. There was no solid reason to cover the position.

CAM is another one dozens of great short/put candidates.

And the DIA is a great general way to play the market downturn via puts. This is a gorgeous chart. Stop price of 134.76 on this one, if memory serves.

My puts on GOOG are doing well. This is a failed breakout pattern. For such an expensive stock, there is nothing sweeter.

I'm avoiding real estate shorts, pretty much (I've got one or two). Looking at IYR, it is approaching a supporting trendline. Of course, if you read about the billions upon billions of dollars in mortgages that are about to explode, it could be that the real estate downfall has only just started trickling in.

My JCP puts are doing well, although his pattern is not complete yet. But it has a very good shot of doing so.

Check out Sears Holding (SHLD). It has crossed its 20, 50, and 200 day moving averages! Now the fun can really begin.

And for all those who used me as a contrary indicator........keep holding those positions, boys. I'm sure you're right and they'll be back in the black in no time. In fact, double up. You know I'm wrong.
XTC........
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at6/12/200754 insightful comments  Links to this post
Labels:$spx,$vix,abby joseph cohen,btj,cam,dia,goog,iyr,jcp,positions,shld
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