Thursday, July 20, 2006

Charts for Yer Shorts

This one's simple, folks. I've got puts on all these. And I love 'em. Enjoy.

APA:


BNI:


CX:


DO:


EOG:


HNT:


MRO:


MON:


NXY:


OIH:


PBR:


$XAU:


Cheers.

37 comments:

Howard Lindzon said...

That gold index is the one that looks like death.

Hurricane5 said...

Tim, just think if you had bought all those stocks! You would have made a fortune! Those are lovely charts for my bullish eyes!

Anonymous said...

How do you play $XAU short??

Thanks.

Anonymous said...

too bad goog came out with BLOWOUT numbers.

Tim Knight said...

"How do you play $XAU short??"

Buy puts!

Anonymous said...

Pop quiz time for all you smarties!

The US consumer accounts for 20% world GDP, the US consumer is cutting back spending. What will happen to the US stock market?
1) Rally to all time highs.
2) Nothing.
3) Fall out from an 11 storey window.

Anonymous said...

Droog shorts GOOG?

Anonymous said...

what goes up must come down. ill play the dont ! thanks Tim !


chronictown

bsi87 said...

proshares has a short gold & silver fund. SPPIX. Also short OIH fund SNPIX.

traderdave said...

Tim

Thanks for the early morning laugh! Love the work.

David

PB said...

bsi87 -- thanks for your feed back. I myself think we are already in that late 60's early 70's period where the markets bounced around between resitance and support. Look at the DOW between 2001 and today, tried to break 11,700, did not, now we are headed down. How low? 9K, 8K, 7K? I'll hv to ask my psychic!

Hbarr said...

Market is getting some more of that ultra-violence. DELL really gave their shareholders a little more of the 'ol in-out in-out, eh? And on options day too!

Bottoms up, Alex.

bsi87 said...

PB

If you look at a very LT chart, DJIA support is at 7500 which dates back to Oct 2002. ST 10,600.

I expect the mkts will test, break support, and then bounce to tick off the most people, bulls and bears.

You may be right re 60's. Looking at a very LT chart shows DJIA traded between 1000 and 600 from 1965 to 1982. Similar ratio shows 7200 which is about where the DJIA was in the Far East meltdown. Should be a great time for traders.

Hbarr said...

P.S. - Everyone who wants to know just how bad things are with the homies (homebuilders) - and how bad they're gonna get - should listen to yesterday's DHI call. It went on for two hours. What a confessional it turned out to be!

Management was brutally honest with the polyannas analysts, most of whom seemed to be in shock during the Q/A.

Might as well put in on right now. It's a good soundtrack for a crash.

Sanjay Sola said...

Hard to find many stocks that are holding up here. the inverted yield curve has been spotted recently. they are present in many bear markets (over half at least).

Denver_Investor said...

"How do you play $XAU short??"

The new GDX ETF correlates with the xau almost perfectly; and it has options available.

bsi87 said...

Buying some USO to hedge my OIH short here.

Anonymous said...

Looks like longs in the market are getting the old "in-out, in-out" today.

:)

HAL reported disappointing earnings. Not good for the OIH.

bsi87, you're making money hand over fist here. Congrats. Wish I had the courage to do what I KNOW needs to be done in this market. But for some reason I just can't bring myself to pull the trigger. I guess after watching the action from the sidelines for the last 3-4 months (I sold out of my positions in April), I've lost the trading edge.

-Tony

bsi87 said...

Tony

People talk about trading on paper. I think the thing to do is study up on whatever indicators/stocks you follow and trade in small positions until you get your legs under you.

Closing my OIH short. MACD is diverging. Look to reopen the short at the 20 or 50 DEMA.

USO buy stop limit at 69.49/69.54. Trailing sell stop at 68.60/68.55.

Anonymous said...

PXJ looks like a buy soon. Wouldnt mind buying some of PXJ around $18

Anonymous said...

Yikes, has anyone seen the volume today?? It's huge (relatively speaking), especially for a Friday.

To this point in the day, the Dow is way above the volume on Wednesday for the morning session.

Look at the 5-day line chart for the Dow... you can draw a perfectly straight resistance line along the top. Looks like program selling and big money is heading for the exits in an orderly fashion (as I mentioned yesterday).

"Nothing to see here, folks. Move along."

-Tony

BTW, bought a small starter position in GLD today near the lows. It will definitely be time to accumulate more heavily under $60. They're starting to push gold down already. I hadn't expected it to start for another several weeks.

Anonymous said...

Yes, I know it's options expiry today, which can account for some of the heavier volume. But it's not "choppy" action, it's clearly a steady selloff. And I'm also looking at the straight decline in the Dow as a more significant signal.

-Tony

Anonymous said...

how come the other day when the markets were in rally mode everyone was saying nasdaq 2150 and dow 11300????????????????????

there were few fools in here saying the markets were going higher. Where are you now that the market has sold off 2 days in a row??

I really dont comprehend where you pulled those numbers from. Pretty sad to think we were going higher.

Markets have no where to go but DOWNNNNNNNNNNNN

Anonymous said...

need to break 10,600

bsi87 said...

Tony,

The DJIA was down 78 pts in the first hour. Looks more like grinding to me. It hit 10650 three times in the last week and didn't break. And the MACD diverged when it hit that level compared to June 13.

re:GLD. Watching that. Broke the 20/50 DEMA. I'd like to see a reversal before going long.

anon #1: re Naz 2150/Dow 11300. Those area that I see as resistance to any rally. Keep in mind the DJIA dropped 4.9% in 7 trading days and the Naz dropped 10%. Nothing moves in a straight line and with volatility, it's a great opportunity to trade counterrallies for 2-3%.

Anonymous said...

bsi: of course you're going to have a diverging MACD on the 2nd and 3rd attempt at 10,650 because the change in the moving average was much, much less than it was back in June. I don't think that says a whole lot. I agree, though, that the 10,650 level is key for the Dow. Either it breaks down or trades sideways forever until the P/E's (ie., change in market sentiment) come down due to earnings catch-up. That would just suck.

I'm not trying to pick a bottom for GLD. It definitely looked weaker than usual today and took a huge hit in late trading. I just wanted to start a position in case of a head fake. I fully expect GLD to pull back further, possibly to the $56 range. But just in case it doesn't, I want to at least have some exposure. Besides, the $620 level has been tested and has held several times already. It's a minor support level, which is why I only took out a small position (roughly 1/4). I'll add another 1/4 at $590 and the last 1/2 at $540 if we ever get there.

If gold goes below $500 after I finish building my position, then I'd be in a bit of trouble, but then again, something would have to change significantly in the global economy for that to happen.

Not that you asked, but I thought I'd share my viewpoint on gold in case anyone wants to discuss it.

-Tony

bsi87 said...

Tony:

VIX spiked on Tuesday as well. Just think there'll be a better set up to go short again. Any kind of a rally under these conditions would be unexpected by most. Why we would have one, I have no idea. An oversold condition can get more oversold, rally to relieve it, or trade sideways. Time will tell.

The 50 day MA for GLD didn't hold. 56 is the 200 DMA.

Good luck with your position.

Anonymous said...

I agree that there should be a better short setup soon. Lots of technical people are calling for "the short of the decade" in the next few weeks.

Yes, it's unfortunate that gold didn't hold its 50-day. But it's been at $620 before and recovered. And since $620 just so happens to be at the bottom of a trading channel that goes back to last year, I decided to take a shot today.

As I said, I fully expect gold to get back to $560. And I plan to buy on the way down as I mentioned.

I'll be watching the VIX closely and probably try going long on any reading around 20 or higher and short at around 13-14.

-Tony

PB said...

Selling the rallies is the new battle cry! Even Cramer is pushing this philisophy!
I expect one more rally, not much above Dow 11K before this whole ship really starts to sink!

Anonymous said...

agree pb, one more 2-3% rally then its downnnnnnnnnnnnnn

shawnrayp said...

so Tim's a clockwork orange fan....nice

Sanjay Sola said...

the bull market is definitely. market has not seen the bottom. we have a long way to fall still.

Anonymous said...

Think we may see a minor bounce in the Nasdaq back to 2100 tops. Then its down, however I think there will be another 5-7% rally in the markets before the next big drop. I dont think its straight down from here. Think a late summer rally followed by heavy selling in oct-nov.

Anonymous said...

major sell signal on the small cap sector.

Sanjay Sola said...

Historically in mid term election years, like we have now, the market has bottomed in October and rallied very heavy in November and into the following year.

Interesting that the Fed fund rates are predicting that the Fed will lower rates next year. Perhaps that how the next rally will start.

downosedive said...

There are some good comments hear. The most rational appear to recognise there will be a further spike up, probably next week and possibley as short in duration as this weeks has been ie a 2 day wonder. After thats out of the way, the real downward trend should start, although there will still be brief rallies. Gradually even the most hardened bulls will end up selling into whatever rallies there are. Again good observations here - the 10600ish restitance to go downwards, as to the upper resistance, that now seems to have firmly slipped to 11000, down from a previous consensus of 11200 to 11300. Goodness knows what next week will bring, but what a roller coaster ride this is....if your day trading in particular

Mark said...

NAILED!!! DIA smacked right at 108.56, which just so happens to be where I drew a trend from about 3-4 weeks ago before the "head" (is it a true h&s yet?). Upward trend from 101.63 on 2/1/2006 ended today @ 108.69, downward trend 112.84 on 6/2/2006 ended today @ 108.55, both converge next week.

The interesting thing to me is that DIA dropped very quickly to the upward-trend today and then bounced between the two, with a few high bounces that went over the downward-trend.

If it follows that same down-trend, we are looking at 104-105 for the Aug option expire.

If you can't tell, I don't delete very many trend lines. It's that whole "history repeating itself" thing. Or at least there are lines that seem to come back into play days, weeks, and even years from when they started...