080
Wednesday, September 13, 2006
Come On, Toshi!
This market is now pushing the upper boundaries of all the lines. Check out the $OEX and see just how high it is:
If you look close, we are at the resistance level both from the trendline perspective and, though you can't see it, the long-term 50% Fibonacci retracement perspective.
Bold souls might want to short aggressively at these levels. This is bananas!
Tuesday, September 12, 2006
Triple Digit Up Day
I don't mean to make this the "oil and gold bear blog", but that's where all the fun has been the past week. Oil's descent slowed somewhat today, but at least it didn't reverse. This is one of the greatest head & shoulders patterns I've ever seen. The green shaded area indicates the potential to fall based on classic measurement techniques. I doubt it'll sail straight down, however. That would be just too easy!
As I've pointed out, $XAU is forming an H&S - it hasn't completed one yet. I've eased up a little on my short positions on both gold and oil for now, but I'm still plenty short. It's just fallen awfully far, awfully fast. Plenty more potential downside, though.
Below is a ten year view of the S&P 100 ($OEX). We are, once again, nearing the 50% retracement level. I would be flabbergasted (and mightily disappointed) if it managed to get to the north side of this line. We are within spitting distance of the high seen in May. Might even make a new yearly high tomorrow.
The $SPX is still on the "correct" side of the trendline shown here, but the market showed some real strength today. Another strong up day Wednesday would splash some cold water on all the fun I've been having.
The Dow Transportation index seems to have retraced to the underside of its former trendline. Could this be the end of the retracement?
...and the Utilities are softening...
I happened across this chart of JRC today. I have no position in it, but I just loved seeing a stock do little else but fall day after day. It warms a bear's heart.
See you Wednesday!
Monday, September 11, 2006
Thank You, Commodities!
It was a sweet trading day. Gold and oil, mentioned as shorts here many times, got completely trashed. Looks like there may be plenty more trashing to come. Here's the latest chart on OIH, which has plainly broken its neckline, along with some possible support levels on the way down.
Funny enough, since oil peaked in the first half of May, there was a scramble to generate financial instruments based on this once-again hot commodity. Some web ads can be awfully ironic.
Here's the $XAU, which got nuked. I see a lot more potential downside here. Today was an extraordinary gap down.
The S&P 500 ($SPX) has until recently made a series of higher highs, which is what a bull market is made of. I think the trend may have changed. I've illustrated the "chain" of higher highs and what I think might be the first link in a new chain of lower highs, which is what a bear market is made of.
The $OEX, bless its heart, broke under its trendline, and it's struggling to mount it again. I think it will fail. Which means we here will succeed.
Here's a lovely example of the power of trendlines. ATW broke under its trendline. It struggled mightily (as the $OEX is now) to get back up. It kissed the trendline. Then - - sayonara, cowboy.
Genentech (DNA) gives us a great example of a failed pattern. This was a gorgeous saucer shaping up. Even I mentioned it as a bullish pick (gack, gack, cough). Today changed the picture. No more saucer.
Although I have no position in GRMN, this might be a nice head & shoulders pattern which is nearly completed.
The same applies to HYDL.
This market is a lot more fun these days. Hopefully there won't be a "gee, no attack on 9/11 anniversary" rally tomorrow. The bulls will buy based on just about any premise. Anyway, see you here on Tuesday.