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Thursday, April 19, 2007
Just. Plain. Weird.
Well, we bears started off with every advantage this morning. The Nikkei had fallen hundreds of points. China had gotten clobbered. The currency situation looked eerily similar to what caused the February 27th mini-crash. The GLOBEX was way down. And the market opened down, soon more than 60 points off the Dow.
And then what happened? Of course. The bulls came to the rescue. Incredibly, inexplicably, disgustingly, the market shook off the barrel-full of bad news and actually went into the green for the 700th day in a row. Un-{Nixonian expletive deleted} believable.

The most important "index" to me is my own portfolio, and I was glad to see that it actually moved reasonably higher today. Someone was asking in the comments section why I'm so hung up on the Dow. Two reasons. First, it's the most widely recognized and used index by the public. And second, I deliberately am seeking out the strongest index (currently, at least). If I'm bearish, I want to be in tune with the least bearish of the major indexes to keep an eye on its strength.

Perennial favorite $RUT (the Russell 2000) fell down today. It's interesting to see the candlesticks here. Three down days in a row, each one a little more strongly down than the prior one.

The S&P 500 was also down just a touch today. I see in after-hours trading that Google (GOOG) blew away its estimates (I have no position in GOOG) and it is up something like $13 per share. Obviously it will be interesting to see what the stock does in "real life" tomorrow. But the company's ability to print money is clearly undaunted.

My puts in $XAU are going great. The lower lows/lower highs is as plain on the nose on your face.

The NZD/USD has got to fall in order for us to see real weakness. It looks ready to turn, based on what I've marked here.

I haven't done this in a while, but below are my current positions. All of them are bearish. The bold ones are puts, and the regular ones are shorts.

Lastly, I haven't provided a video in a while. One of my favorite groups ever, Devo, did this video back in the early 80s (my own personal musical nirvana). With the crappy time we bears have had over the past two months, I thought it was time to "take a break".......
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Labels:$indu,$rut,$spx,nzd/usd
Wednesday, April 18, 2007
Chug
If my mood is a good contrary indicator for the market, heed it well. I was profoundly dismayed and depressed by the market's action today. At one point, the Dow was up over 60, and I was thinking to myself that there are really better things to be doing with my life than writing a bear-oriented blog. I toyed with the idea of pulling the plug on this thing.
Historically - and I've been trading a long time - my psyche is always darkest before the dawn. And it was really dark today. The Dow at a new lifetime high. Bearish ammunition like Yahoo being down 12% nearly neutered by the bulls. And the childish persistence of comments like "lmfao" in this blog (I say again: I abandoned rotflmao and other such nonsense a little over 25 years ago.....so, IMHO STFU).
The news isn't all bleak. My Russell 2000 puts actually went up in price today. And many indices continue to appear stretching the bounds of sanity. Look how the $MID is mashed up against the highest ranges of its Bollinger bands. Plus the RSI went above - and then below - the 70 mark, which is a sell signal.

The NASDAQ, aided by Yahoo, actually edged down today.

As I mentioned, the Russell went down today, in spite of the market's strength. I closed my S&P puts earlier in the day. I'm sick and tired of the bid/ask rape job in those options. The Russell is simply a better value.

As for the S&P 500, look at this interesting channel. These two lines are perfectly parallel, drawn at a 30% angle. After the late February/early March sell-off, it's incredible how much strength this index has found. But it is still trapped within this very well-defined, multi-year channel. Odds for further strength are poor.

My gold/silver puts also had a good day. The 120-150 range of the $XAU is a good trading opportunity for those who want to play off the recent cyclic nature of this index.

Lastly, the Amex Major Market ($XMI) fell a bit today as well. We have a sell signal on the RSI here too.

What's the latest count now? 21 up days out of the past 24? Something like that. It's something ungodly. I can only imagine how complacent the bulls must be getting now. Although I don't think it's an accident that the $VIX actually went up today, in spite of the widely-publicized record highs.
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Tuesday, April 17, 2007
Cocksure
Out of the past 24 trading days, the Dow Jones has been up 20 of them. The market has been on a basically unstoppable rise since July of last year. And, since October 2002, the market across the board - particularly in Mid Caps - has been zooming higher.
Even the strength since February 27 of this year has made the bulls nauseatingly cocksure. Here are some recent quotes I have extracted from the comments section of this blog. Keep in mind that bulls aren't exactly the sharpest knives in the drawer, so you'll need to look past the grammatical errors and misspellings, all of which I've left intact:
you morons are shorting into the next largest bull market. who gives a damn about volume when price pays boys.
Ahh another up day, the bears cannot catch a break.....fu$king sad. UP UP UP, the dow has had its longest winning streak in 4 years. WTF is wrong with this picture?
bullish is the way to live the good life and buy index options for the weekly runs to maximize gains
take that bears, nice rally for all you moron put buyers.....
everyone including the parents were waiting for this rally. believe me short tim it is far from over pall
Trader time, wrong again,.. When will you admit to being wrong earlier with regards to your bearish predictions and puts? Why are you still in denial? Stop being a n00b and admit to your errors. Why do you keep relying on technical analysis while oblivious to fundementals, which is what really drives this market? Anyweay best of luck cause yoru gonan need it.
So your thankful for 'helpful' advice even if it is wrong advice? That makes a lot of sense.
I don't think the market is half as frustrating as you are silly. I said all along, if there is a top, identify it with a name.....silence. Soon it there will be another sell off, but you will have much more trouble picking it out verses buying the dips till they don't work no more.
i hope you shorts get hit with huge losses trying to go against the great American way of everyone prospering together.
bend over shorties.....
take that bear shorty, new highs galore across the board and time to buy calls with all dry gunpowder to leverage the coming upside in the next few weeks.
Chart more long positions so we can actually make money...lmao...
And there you have it. Bullishness in a nutshell. One might want to acquaint any bull friends with the difference between a possessive pronoun and a contraction. Or the proper spelling of the word versus. Or the fact that terms like "lmao" were used by folks like me back in 1980 - nearly thirty years ago - and seemed trite even back then.
It was recently offered the the logic for being bullish was that Warren Buffett was rich. I could use the same logic to start my own digital animation company and personal computer manufacturer since Steve Jobs is rich.
This site is about charting the U.S. markets (primarily). Everyone should keep in mind that I take my valuable time doing this blog not because it makes me any money, but because I like looking at - and talking about - charts. This blog has earned a well-deserved reputation as a safe haven for bears. But, since the spirit is willing and the flesh is weak, bears have been dropping, one by one. Even my old friend Dennis turned in his virtual bear card last week.
My disposition remains unaltered, not out of stubbornness, but out of thoughtful analysis. One need only examine the comments extracted above to comprehend the depth of thoughtfulness bulls can conjure up. They have been right, to be sure, over the most recent years. And, broadly speaking, they have likewise been right since 1982. But, I say again, my present point of view remains unchanged in spite of the market's recent strength.
The Dow Jones 30, shown below, had another positive day today, although this evening'sGLOBEX markets are rather weak. (Yahoo, in particular, is kept walloped by nearly 9% as of this writing). There is, as always, a potential to mark a double top here, but broader indices (such as the $MID) recently went on to new highs and negated their potential double tops. It would take very little additional strength on the Dow's part to do the same.

A look at the $MID, embellished with Bollinger Bands, indicates we are stretched almost to the breaking point at the high end.

Take note of the Russell 2000 as well, which actually went down today in spite of the market's general strength.

The S&P 500 is also way at the top of the Bollinger bands, and the RSI is just peeking over the 70 level, meaning a weak day tomorrow would give us a sell signal via the RSI.

I bought puts on the $XAU today with a stop at $150.

The $XMI seems profoundly overbought to me.

My short in MWP is doing pretty well. This is quite a hyberbolic stock (I won't bore you with ONT today, but that in hyperbolic in a good way - - bulls are doing great with it).

Just to give you some perspective, here's U.S. Steel (X) over the past ten years. I'm sure the bulls will quickly explain away the 12-fold rise in price. But try to be rational, even for a moment. Look at the graph. Tell me this isn't overbought.

People never learn. It's always "different this time." There's always a new excuse. Years ago it was the Nifty Fifty. Or the One Decision Stock. Or the New Economy.
Or, now, the Goldilocks economy. And the sheep..........I mean, the bulls........are happy to go along with it every stinking time.
Special Bull Challenge! For those of you convinced things are Different This Time - - instead of prattling on, tell us what to buy! I'd like any of you bulls to provide ticker symbols, target prices, and stop prices. Since you seem convinced of your rightness, lay it on the table. Tell us poor saps what we should really be doing. We'll see how your picks fare. Please post these in the comments section........
 
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Labels:mwp,x
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