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Wednesday, May 30, 2007

The Price of Tea in China

Unstoppable. The bulls are simply unstoppable.

As you know, before the market opened this morning, it was greeted by the news that China's stock market had fallen more than 6% (that would be like the Dow falling over 800 points here). Naturally, our markets opened lower. And they spent the day pushing higher.

To a new record close.

The Dow's at a lifetime high. So is the Russell 2000. And, unless I'm mistaken, so is the S&P 500. It's enough to make me consider renaming this blog The Wall of Worry.

In a balls-out bull market, traditionally bearish patterns get squashed. The chart below is a good example. This is a great-looking head and shoulders pattern. Or at least it was, as indicated by the highlight. But the market doesn't care. It's simply too strong, and this pattern - as with so many others - has been neutered.


I am buying energy stocks, because they are just about the only bullish charts that look like they have firepower behind them, as opposed to just being momentum plays. Here's Apache Corp (APA). Notice the good surge in volume on today, a very good "up" day.



Much the same can be said of Southwestern Energy (SWN).


That's about all I have to say today. This is just getting to be a bit much!

at 5/30/2007 34 insightful comments   Links to this post

Labels: apa, swn

Tuesday, May 29, 2007

Indecision

For those of you who didn't read this morning's post, please check out The Chart Project, which is a little something I've been putting together. I'd love it for some of the readers here to contribute.

The market is in a pretty serious state of indecision. It could be just gathering its breath before it makes an assault on Dow 14,000. Looking at the Dow 30 over the past few months, however, it seems the technical indicators point to a reduction in prices as opposed to a fresh surge.


The Major Market Index ($XMI), although shaped differently, seems to present a similar argument. Especially if the old saw "Sell in May and Go Away" holds true.


The head and shoulders pattern, a favorite of mine, showtimes holds together and sometimes doesn't. Akamai (AKAM), mentioned here often recently, seems to be moving in accordance to its pattern.


Real estate stocks, on the other hand, seem to have violated their recent head and shoulders pattern across the board. Essex (ESS), shown below, is a good example - as is the much broader IYR. This doesn't necessarily mean the bearish pattern is moot. But it definitely diminishes its credibility, since prices have soared above the neckline.


Symbol ALB seems to be forming a nice trend change as well. I would say this is another head and shoulders pattern as well. They seem to be common these days.

at 5/29/2007 11 insightful comments   Links to this post

Labels: $indu, $xmi, akam, ess

The Chart Project

I do a lot of reading about electronic communities in my job, and I hit upon an idea that I call The Chart Project. Simply stated, it's like a Wikipedia for chart images.

I'm not sure if people will ultimately submit zero charts or hundreds, but I'm hoping to get some activity there. I've started by submitting dozens of my own chart samples. If you have any charts that are good example of technical patterns in action (channels, head and shoulders, saucers.......what have you) please submit them! I would love to see this little project get some traction. Thank you!

at 5/29/2007 9 insightful comments   Links to this post

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