Monday, August 07, 2006

HANS & Fans

Let us all bow our heads for a moment of silence out of respect for fallen superstar HANS (long-time favorite of wayward poster hurricane5, who set a price target of $120 for this stock). At long last, this thing is getting clobbered.

HANS has fallen 40% in less than a month. Why, oh why, didn't they ever have options for this thing? Well, truth to tell, there were a few options, but just a handful, and the bid/ask spread was wider than Roseanne Barr's waist.

Anyway, here's a daily graph of HANS, accentuated with a Fibonacci fan (long term) and supporting trendline (medium term).


A closeup view of this stock indicates that, for now, we're close to a bottom. I've covered my short on this at a handsome profit. I think that, long term, the stock is headed way, way lower. But I'm happy to take my fat profits for the moment.


Few things in life are certain, but this is: tomorrow is going to be bananas on the market. Which is probably going to take a lot of the excitement and participation out of the market today. I probably won't have a heck of a lot to say until after this Fed madness is past us. We'll see.

83 comments:

Anonymous said...

Tim,

can we hope the same for AAPL?

Sanjay Sola said...

today is setting up for a nice distribution day and many more to come.

oil is going much higher. the Alaskan shutdown is going to be very bad for the US. 400,000 barrels a day will have to be replaced. we're tapping the strategic reserves for the 2nd time in 2 years. scary. but then you need to refill the reserves back up again. not sure how that will work.

no one knows how long the Alaskan shutdown will even last. it could be a week to month/s.

all in time for Labor Day, a heavy driving day.

also, refineries are at over 91% capacity. and they will need maintenance soon.

don't forget the Iran meeting on August 31 and any hurricane problems.

bad news will keep coming in a bear market. expect the unexpected. it's strange how that works.

.

Christopher said...

So Tim, or others, where do we see its smaller competitor JSDA going? I know its stock is not very liquid, but it looks very overvalued.

Anonymous said...

Oh Great One! Thanks for the advice about HANS. I know I'm not deserving, but I too made a fat profit, all thanks to you.

Great One, you mentioned MOT as a possible short. I would like to plunge in. Is it time now?

Anonymous said...

"Great One" ?

Tim Knight said...

Great One. I like that :) Maybe I should cut down on eating snacks!

I closed HANS too early. Which serves me right. There was no *technical * reason to close it. Wow, what a day on HANS. Smack-o-roony.

I'm long MOT puts. I believe in its weakness. Of course, it's not as expensive as HANS, so there's less $$$$ to fall.

Tim Knight said...

Wow. I haven't seen the comments section this dead in a while! We went from a beehive to a cemetary. I guess people are in deer-in-headlights mode regarding the Fed tomorrow.

Anonymous said...

Tim, or should I say great one?
Are you still long puts on the XAU and gold miners?

Super Bull said...

Gun to my head, I will bet that tomorrow is going to be a big selloff after the Fed decision. The reason being that we already have a 5% rally in S&P. Time to take profit.

dexter said...

Tim, have you left all your shorts on through the fed decision or are you looking to remount at higher prices?

Tim Knight said...

To respond - - yep, I've still long puts on the XAU, and yes, I still have all my puts (or shorts) in place except for a handful which have been stopped out. I am loaded for bear (or bull, more accurately).

The way I see it, the Fed thing is (knock wood) a can't lose situation for us. If they pause, that's what everyone expects, and we'll have a "sell the news" selloff. If they notch rates up again, all hell wil break lose.

And, irrespective of this, no matter what they do, we're faced with the question of what they'll do the NEXT time we go through this?

Why a Fed pause suddenly means it's a rosy future for the bulls is beyond me. I mean, people, the reason they're doing all this is because the economy is slowing down!

UrquhartCastle said...

Damned if you do, damned if you don't. To hike, or not to hike, that is the question.

The Bears will be happy either way. :)

Anonymous said...

should I just take the bet and go in on DXD before the Federal reserve meeting at 2:15pm, I really feel the market is headed lower and think i could grab 3% by tomorrow afternoon if i get in around $70

Anonymous said...

"Why a Fed pause suddenly means it's a rosy future for the bulls is beyond me. I mean, people, the reason they're doing all this is because the economy is slowing down!"

That's a little too simplistic. It certainly didn't guarantee a beat market in '94 just after the Fed stopped hiking.

call-sign maverick said...

As the artist "Meatloaf" said, "2 out of 3 ain't bad"

The fed will either:
1. hike rates - good for bears

2. pause with hawkish language (like, "we still could raise rates and/or remain data-dependent) - good for bears, because as Tim has said, this is already priced in

3. pause and say no more hikes for the indefinite future - snowball's chance in he!!

Anonymous said...

If the fed pauses there will be a bried rally that I would be shortttttttting.

Anonymous said...

I think the current state of the markets goes well beyond a simple "pause or don't" scenario. The TREMENDOUS amount of liquidity that is still pumped into the markets on a daily basis can easily overcome any small selloffs that might occur in the short term.

401k plans, pension plans, overzealous bulls, etc. are all pumping money into the markets. The "automatic" 401k investments make up a huge portion of the investment funds that are continually pumped into the markets. I suspect those investments won't stop just because the Fed decides to pause or not.

Anyways, I do expect a sagging of the market, but in looking at the big picture, it just seems like we could see 1995 all over again with some renewed buying interest after a brief correction.

Anonymous said...

if tomorrow there is no 1/4 raise hike and a pause there will be a 1-2% rally. That is without question.

If there is a rate hike and no pause go short and by 4pm you should be up about 1-2% on any stock you short.

Anonymous said...

i can't beleive that 8% of US oil is coming off line and the market is only off 20 points. THAT IS INSANE. got to love the PPT.

Anonymous said...

They have to replace 22 miles of pipe and could take 2-3 months. $80 oil is possible by end of august or even sooner.

Anonymous said...

there is NO WAY saudi can pump more and IRAN is not going to give us any.

WHAT A F'IN JOKE>

Anonymous said...

Calpers just announced they will start buying commodities. Oil stocks will skyrocket!

Anonymous said...

Anyone buying into HANS. I may buy a little under $29.00 if it gets there tomorrow. However The stock is off 40% in about a week. I think it may be done going down. May be due for a bounce.

Anonymous said...

So Tim,

it appears that low volume in the comments section of your blog means that there will be low volume in the $INDU, or wait, or is it the other way around...

PB said...

Looks like hurricane5 left just in time!!! Ohhhh, the drubbing he would be taking now!!!

Re: the FED meeting, I see no hard numbers indicating a pause or a stop, but plenty of numbers supporting a hike.

5.75% by year-end!

EddieFl said...

I think we go sideways until the Fed announces then probably tomorrow start forming the new true trend for the next couple weeks.

Either way,still long on my positions, tightend up stops. I wouldnt be suprised if we go higher by the end of today. Every anallyst and pundit is calling for weakness in the market, so it will probably go the other way. Either way i got my stops. ITs a high probability game, that is the most i can hope for.

So you all scared hurricane5 away, haha,, sounds like I would of been friends with the guy.

Mark said...

eddiefl, it is funny that you showed up within days after he left. Incredibly coincidental to me...

Anonymous said...

Short:
ACLI

EddieFl said...

MArk, ,YEs, how odd. Imagine that there are at least two bulls in this world, me and hurricane,, MAybe the Tri-LAteral commision was behing it...comspiracy theories.


Do you all trade the BBH? yes, I know, mostly shorting, im sure. But honestly it is a huge mover when a true trend develops, which may start happening today or tomorrow. It had a 40 point move in the MAy/June selloff. JUst offering a suggestion.

Anonymous said...

JUST WENT LONG SDS at $69.75

Sanjay Sola said...

The next leg down begins soon. I covered my Hans short.
looks like support at $30 and the 200 day moving average is there. if it breaks $30 on good volume, i'll short it again.

CowboyTrader said...

I would expect the Fed to pause today maybe a bit of hawkish language. The market will get a quick pop (I am looking at 1290 or so on the S&P500), then a farily big drop to 1247. After the Fed pauses and earnings season is over, there is nothing to hold up the market. Crickets until the announcement

costas1966 said...

It seems to me that everyone in here expects the same thing including me. That worries me.

Anonymous said...

when everyone is expecting a rally at 2:15 it wont happen. Markets will weaken by 2:30pm

Paul

costas1966 said...

Paul what worries is that everyone expects a rally and a fumble and we could very well have a rally withour a fumble, the type that squeezes the shorts.

Anonymous said...

I am short ACLI NOVL.

ACLI: little cash, huge debt, Wading industry in a slowing economy...

Anonymous said...

SAnjay Sola, Are you still short on aapl,and if so what exit price are you looking to cover on.Any thoughts would be great.Keep up the great posts. ChronicTown

Anonymous said...

costas you make want to sell my SDS long now for a minor loss. I have until 2:15

HANS investors,

short story:

I was short HANS at 32, but decided to cover and go long at $31.50 ended up selling for a loss today at $30.00, that was a really pathetic trade that if I stayed with my first instinct i could have walked away with great money. Never again. Should have known to stay to short. Stock continues to drop, feel like shorting but my luck it will turn around and head to $30++

Anonymous said...

The one scenerio that will catch every off guard is a sell off after announcement followed by a power boner over the next 2 weeks.

Anonymous said...

is HANS a good short still?

Sanjay Sola said...

I reshorted Hans on the heavy volume. stock is falling on heavy volume and it's below the 200 day average.

oil is going to make new highs soon. so i have no worries with any of my shorts. oil is the strongest weapon the bears have. once Prudhoe Bay went down, it makes for an easy short situation.



where are we going to get 400,000 barrels of oil a day from? especially if it takes over a month or two to replace those pipes.
what if Iran wants to use oil as a weapon now? what if a refinery goes down?

throw in the inflation data today, the slowing economy, and that the Fed pause is priced in, market is overbought, and leaders are plummeting and there's really not much reason to worry.

Anonymous said...

hans was the leader that is no longer a leader...market is losing leaders one day at a time

Anonymous said...

they said that they may be offline for 2-3 months...oil to 80 and gas at the pump to 3.50+ soon

Anonymous said...

once the market turns red watch out

Anonymous said...

Sanjay,

Whats your thoughts on Indian banks IBN and HDB. Short now or wait for few more days?

Sanjay Sola said...

Not really sure about those banks. HDB is not a good short candidate because the float is too small for me. IBN is in a downtrend, but i usually short stocks with bad news hanging over them. so i would not pick IBN as a short.

I would rather short Nutrisystem because it's below the 200 day on heavy volume. I prefer shorting momo stocks that break key averages and supports. they fall the fastest, especially if they have some bad news attached to them.

i would then use the 200 day average as an exit strategy. if the stock pops convincingly over the 200 day on news/volume, i would think about covering.

costas1966 said...

Hans has dropped almost 50% from the top. Technical indicators such as rsi wilder and stochastics are deeply oversold. The risk of a countertrned rally picks up a lot at this point. if you still chose to short this despite the high risk of a rally, you should keep tight stops and avoid holding the position overnight

EddieFl said...

Costas,, good warning on HANS. That was a nice short. Tim made a good call on it.

Im still Long SP500 and a couple others small positions. Sp500 at 1300 i will cash out my longs, i still beleive we see 1300.00 even it is a flash rally today.

Good luck this afternoon Gentleman, i'll check in at 4:30 p.m.,

bill said...

2 more hours till this roller coaster tops. Make sure your strapped in and all hands are inside the ride.

who knows what will happen. anyone wanna comment on the production numbers, lower than expected output and higher labor costs, lol. great news!

bill said...

Well the saying goes that bull markets ignore bad news and welcome good news. Judging by the value/defensive driven nature of the market, we are not in a bull market now. remember that

so everyone is expecting the fed to cut and that will be a band-aid, well i really do not think that they care about this as much as the expectations of comments from Mr. B that a slowing economy will contain inflation. guess what, not gonna happen.

this is what will happen IMHO, bad news had been ignored and covered with the Fed blanket, only to have the fed reiterate everthing that has been ignored at this FOMC meeting, regardless of a pause or not. The market has set itself up for this very scenario by its defensive nature that is being ignored.

see you at a retest of 1222 on the S&P.

Anonymous said...

going to be one heck of a ride....

no pause and say hello to dow 11k this afternoon...


mike

Anonymous said...

Anyone shorting CELG? - BigBill

Anonymous said...

would like to see the market break down ahead of the meeting, im long SDS and would like a little profit, dont want to get stuck holding it if the markets rally...

paul

Anonymous said...

sold SDS and now waiting to re-enter so patiently. Im thinking a pause will rally the markets and then a late day selloff

costas1966 said...

UNH looks like a good long setup H&S bottom with a retracement to the neckline that held. That is if you want to mix it up a little and not being all to the one side

Anonymous said...

market is stuck, its so waiting for the 2:15pm decision.

Anonymous said...

rates going to 6% so i dont think they will pause today. Good luck.

Anonymous said...

HANS holding firm around 28.80 to 29.10

Anonymous said...

I hope there is a rally today and the next few days. I want to load up on QID, SDS, DXD.

call-sign maverick said...

Seems like evveryone has forgotten about last week's employment figures and their"lock" for a pause... Well I think the fed will pause, the market will rally until about mid-morning on Thursday, then reverse.

Anonymous said...

mid morning on thursday...thats tough to agree with. dow 11450-11500 tops.

Anonymous said...

5 minutes

Anonymous said...

bloomberg continues to mention pause. no pause = a huge drop

Anonymous said...

no hike!!

Anonymous said...

All hell breaking loose!!!

PB said...

Fed pauses and the mkt drops! Just as expected, a pause was fully priced in. Time to slaughter the bulls!

Anonymous said...

Certainly not much of a rally. Tough to guess what's going on right now.

The markets seem to have sold off a bit and are now consolidating around 11,200.

Should be interesting to see what will happen in the coming week(s).

Anonymous said...

looks like the market will go up in the last hour.

Anonymous said...

Everyone expecting a 'sell-the-news' trade. So they make it look like that's what's happening, draw in the suckers, then BAM! stick it to them.

Get the rally hats on boys!

Sanjay Sola said...

volume has gotten much better.

no reason to get scared, if the market rallies. the market may try to throw some head fakes at the bears.

the bulls have to break two key resistance points.
2100 and the 50 day moving average of the Nasdaq.

The market is not going to successfully rally. Once the bears got General Hansens, you know the bulls have lost.

Anonymous said...

Sanjay, what are you shorting?

Sanjay Sola said...

GLW, NTRI, APPLE, HANS, AKAM, CELG, RHAT, SIRF, CAKE, DRI, NTLI, XMSR,and TIE are my short postiions. i mixed low risk shorts with some higher risk ones.

Anonymous said...

Sanjay: how many of those are RECENT shorts? Or have you been sitting on them for a while?

My question is: are they still profitable shorts, or have they already run their course? I'm reluctant to short HANS at this point, for example, as it looks ready for a rebound. AAPL could still yet climb, CAKE has been sitting around $22-25 for a while now, and TIE is completely unpredictable. I saw one day when TIE was down 11%, but finished the day in the GREEN by 1.5%.

-Tony

Sanjay Sola said...

anyone buying gold? might be good to buy if the Fed is pausing.

Anonymous said...

i shorted 5000s hans with my entire account this morning knowing that this dog cant hunt. keep up the good teaching tim, i follow with pride.

Anonymous said...

Wow, you've never been to Vegas...

Anonymous said...

hope AAPL goes back into the 50s soon!

Anonymous said...

Sanjay, I'm in gold already. Not much action today. Actually dropped a bit. Gold has been in a trading range for a while, so there's no short term trend quite yet. Long term, gold should do well.

Gold is trading near the apex of a symmetrical triangle right now. If it punches through $660 on good volume to the upside, it's clear sailing. But if it gets into the low $620s on the downside, it could easily revisit $560 or perhaps even lower.

If you're not in, I'd wait for a breach of one of those two levels before making a decision.

-Tony

Sanjay Sola said...

I shorted Nutrisystem today at $47 because of volume and the chart says it headed down. I doubled my Celgene short because of the volume (5 million+ shares and it broek the 50 day). Celgene will see the 200 day average at $38. just my guess.

I shorted TIE earlier this week. I wanted a cyclical play in my short portfolio. will watch the $30 mark on that one carefully.

Sirf was at $20. chart is just ugly, stock is expensive, and there isn't much chart support.

doubled my apple short at $64.90 (below 200 day average on strong volume).

Anonymous said...

I am waiting to see ACLI crash to MA200. Little cash, huge debt, declining manufacturing revenue...economy slowing in U.S=>shipping slowing.

Anonymous said...

Is it time go short massive yet?

anyone?

bsi87 said...

Gold didn't do what many expected, i.e. rally on news of a pause/halt. It also rejected a 3 month long descending resistance line near the apex of the triangle. The rejection showed the bulls have lost control and the rejection near the apex shows indecision on part of the bulls as well. Volume was shrinking everytime the resistance line was hit. Closed down inside the triangle. The ascending supportline is only 2 months old so it's more likely to be broken.

On the flip side, note what OIH is doing despite BP's problems. Dropping. Looks like a retest of the 130-132 area coming up.

DJIA has been able to close above that 11,250 area while punching thru it on an intraday basis. On flip side, I have my doubts that it'll punch below 10,700. But I'm short and trailing stops.

re:Anon. Massive short? I don't think it's time to be massive long or short. Just about everything looks rangebound to me. Or if you want to be massive anything, also be quick to take profits, long or short. JMO.

Anonymous said...

Been doing well on the Apple short. Looking for some additional retracement.

Also looking at GM lately. Purchased the puts today.