Thursday, July 27, 2006

Peter'd Out

Our bull friends need to recognize that it's important not only to GET it up, but to KEEP it up. Delighted to see this fizzle away today. That bodes well.

17 comments:

Anonymous said...

Should I be embarrassed that I recognize the picture on the left as Peter North?

Howard Lindzon said...

not bad tim. likin the style

Tim Knight said...

Just as embarassed as I should be for posting it in the first place :-)

Hats off to you for getting the cultural reference!

costas1966 said...

Sideways with an upwards bias
That is how I would characterize the market the past 2 months. I doubt that todays sell off has changed that. I have to admit though many stocks have been breaking down, such as the transports, high fliers like goog ntri isrg bidu. So if one is short in the right stocks they have done fine. Looking at the chart of S&P 500 the past 2 months the market has been moving within an up channel at a very slow pace. The upper boundary of the channel is at 1284 today, but with the current trajectory it seems that the market will test that upper boundary on 8/10/06 at 1289. That is 2 days after the FED announces policy on interest rates!!!
This pattern in reality is a bearish flag with a downside target of 1180-1185. This is an interesting setup pointing to a top, and at a time when the Fed pause and the earning reports will be fully discounted. Also that will be a time that the market will have nothing positive to look forward to exept a couple of very weak months September and Octomber, a slowing economy and a possible drop in corporate earnings. Lets see what happens.

The chart is in my blog under market observations for whoever is interested.

Anonymous said...

Peter could really drop a load ...LOL LOL LOL

Kapil Khanna said...

Another DOJI today. Close at the falling trendline on the dow. We need to see some selling real quick for a validation on the downtrend.
My puts are no good at these levels :(.

Anonymous said...

This was a good day for the bears.... I was ticked off that I didn't pick up some index puts right off the opening strength, but maybe (probably not) I'll have the chance tomorrow morning. This rally is almost over, hang in there. I've never seen a market run up like this on bad news, after the bell RACK was the latest victim.

A few good plays right now are WFMI and SBUX. Both are high multiple retailers.... and are due for some whackkage. hahah. Sbux is below its 50/200 day MA's. AND WFMI is weak weak weak.....

Cheers

Sanjay Sola said...

hilarious charts!

market leadership is disappearing fast: NTRI, ISRG, BIDU, LVS, SMSI, GRMN were all down on heavy volume.


Tomorrow is the GDP day. It has the potential to be a pretty big day. I firmly believe this market is rolling over.

PB said...

The early day strength was fuelled by the overseas rallies. But the US appetite was not there. Bellies are full of stocks, market now ready to hurl, especially once it gets a look at the GDP #'s!!!

Thanks Tim for the 300% return on PENN!!!

Hbarr said...

Ooooh, RACK. That's gonna leave a mark.

Denver_Investor said...

This is really starting to remind me of the 2002 period, in that any disappointment with future guidance can crush a stock. RACK down 10 to 25 or so on lowered guidance. Other crushes this week: UPS and AMZN and others.

If consumers finally have to cut back who will get hurt? Retailers, shipping companies (UPS, FDX, UNP and other rails), semis (less sales of consumer goodies), and casual dining are my first guesses. Eventually this will impact the banks, but so far they seem pretty much unscathed. Exception: CORS, financing high rise luxury condos...ouch.

I'm playing this almost exclusively with bear put spreads, hoping to have around a double on a 20% move in the underlying stock. Worked perfectly with UPS.

bsi87 said...

I think the difference is during the favorable period, Oct to May, there is excess liquidity to absorb stocks that get hammered. Combination of being in the favorable period plus that 3rd yr of 4 yr cycle, there's not much interest in catching knives.

Mike Stone said...

lmao, just google'd peter north:

'cum shot master'

http://www.google.com/search?hl=en&q=peter+north&btnG=Google+Search

Anonymous said...

To Jessica_Rabbit;

Still not sure what GOOG put you own but here goes:

1st. legging into a long straddle is not the best way to do the set up but let's work with what we have .. what's the delta of your current put..this is were legging in gets difficult..

A long straddle is in my opinion a netural strategy best used when you expect a move but uncertain of the direction.

Normally in a long straddle you would do a simultaneous put and call purchase at or in the money at the same strike price for both the put and call.

In this case you would maybe profit no matter the direction of the move..you lose if the move does not happen??

Word of caution..80% plus of options purchased lose all or part of their value before X-day??

Not my figures so says the CBOE.

If you are as you say looking to mix it up then look into some credit spreads and other option strategies other than always being a purchaser. You will be a better trader long term using a mix of startagies.

Maybe some other readers can improve on this brief.

I remain,

(Not) Always a Bear

Anonymous said...

Tim,
Yo my man....you one crazy MOFO!!!! North can get it up and Dole struggling to keep it up...beats the hell out of trendline on charts any day!!LOL!!

Mark said...

I remain confident. The bulls are wearing out. How many will turn to the dark side or scatter like sheep?

The DOW has broken through a critical inter-day up-trend that started 7/24.

It will likely drop first thing in the morning, but then bounce back up. Expect another boring, floating day...

Sanjay Sola said...

I like it. market is getting overbought. GDP and inflation numbers were not good for the bulls. The end of the month buying will make the house of cards come down much faster. Monday is July 31, so we could see more end of the buying.

I expect the market to fall by Tuesday at the latest. adding a lot to my Celgene short.