Wednesday, September 06, 2006

Failure to Launch

Today's entry is going to be a bit rushed since I've got a business meeting/dinner to rush to........but I can tell you I felt a lot better about today than I did about yesterday (and the thirty days preceding it...) I had my best percentage gain since July 21st, and weakness in oil was especially helpful. I think what the bulls had on their hands today was:


The Dow Industrials is reaching the apex of a triangle. Something has got to give. Either the bulls are going to pull strength out of some mysterious place I can't imagine (the discovery of $500 billion of gold underneath a South Dakota farm, perhaps?) or the bears are going to finally step up, as is their duty, and wipe out civilization. We're all waiting........


The NDX failed below its trendline today. This is not good for the bulls. They got it up, but they couldn't keep it up. One day does not a trend make, by any means, but today was owned by the bears. One day beats the hell out of none.


The Transports don't seem to be mounting a comeback. This is one of the few indexes in an honest to goodness bear market, and it looks like it's going to resume the swoon.


There is a possible H&S on the $XAU, but it's going to take quite a bit of luck. I've etched out a possible pattern here. As the highlighted area shows, there's plenty of work left to be done before we've got a complete pattern. But - - hope springs eternal, right, boys & girls?


The $XMI - the index that has been scaring me the most - has once again failed. It still has a chance of blasting into full bullish mode, but today didn't do the bulls any favors.


Now some choice stocks, all of which I own puts on, and which I offer as suggestions out of the goodness of my heart and a love for my readers. Black & Decker:


Cabot, which is getting zapped nicely:


EOG, which is doing terrific:


HAL, big Dick Cheney's old employer, which is also getting kicked sweetly:


Marathon Oil is doing terrific:


I'm on the fence about Sears. Yesterday I said bullish. Today I say bearish. I'm a capricious one, aren't I? This one could go either way. I own puts. There, I said it. I'm a bear on this one. But who knows?


SLB (I'm not even going to try to spell it) is also getting nuked beautifully.


And Textron - for all I know, they could be in the business of whoopee cushion distribution - - they're all just ticker symbols to me, people - - is a honey.


More days like today, please! I'm a lot more charming when I'm making money.

P.S. As for the recent "Best Financial Blogs" - I'm a touch offended! C'mon, Charles Kirk is a cool dude, and bless his heart for linking folks to our site sometimes, but Jiminy Cricket, this blog - if I may say so - kicks the ass of most of the other blogs mentioned.......and The Kirk Report makes every single "best of the blogs" list. Harumph. Well, maybe time will change things. TASC is going to feature this blog in October and November. There, rant is over.

80 comments:

Anonymous said...

"this blog - if I may say so - kicks the ass of most of the other blogs mentioned."

I agree!! (But I like to read Kirk also)

Anonymous said...

I have no idea how to interpret today's rally...was a bear until recently and now I may be leaning that way again. Here's some interesting reading...

http://www.rgemonitor.com/blog/roubini/

Anonymous said...

Interesting day. I just about gave up trading for a day job (wait, I have a day job), when out of the sky crashed an ice shower which took the market and pushed it down. Yeaaaa . . . .

Seriously now, nice down day. Did not look like the overall market had a tremendous amount of volume so I remain cautious.

Love that Tim does not know the companies - TXT. Just an FYI, they sell beanies with helicopter props. You are the best! I agree, I like your posts better when you are have a "bear" day.

Good trading to all.

Anonymous said...

Oh, if only there's some follow through manana...or how about sideways, and then -100+ on Friday?
Well, we can hope anyways.

I had BDK on my watchlist as well and bought puts just before closing.

JBL looks like a good play, and USG fell -2.53 on 1.6x avg volume today...lots of room to fall yet.

Happy (hopeful) plummeting everyone.

Lee

Anonymous said...

sideways than a -100+ drop on Friday would make my weekend PERFECT. I feel a drop to 11150-11250 range soon

Trader 2006.

duggy@gate.net said...

Tim,

I am a bona-fide bear, but with all the people prepared for the "coming" bear market and the "September Curse" I can't help thinking about the famous quote from good ol H. Ross Perot:

"I never got hit by a truck I saw coming three blocks away".

Makes me worry about getting hit by the bull I DIDN'T see coming.

Doh!

Sanjay Sola said...

I would probably be cautious with any oil shorts now. the oil chart is near a trendline and the 200 day average. not worth the risk when it's so oversold and near resistance. also, whenever the headlines say "Oil at 5 month lows" start taking some off the table. I don't think the oil bulls will let it fall that easily. it will take some time for the move to be made.

it's worth looking at a chart in oil when you short the oil stocks.

Anonymous said...

BOLG OF THE YEAR

Super Bull said...

I think the rally is over. Time to take profit and short.

Anonymous said...

super bull is saying the rally is over!!!

Trader 2006.

Hbarr said...

Textron invented text messaging. ;-)

HOV came out with another sucky earnings report. KBH warned after the bell and cut their EPS estimate for this quarter by 20% and the stock fell 4% after hours (leaving another 16% to go, I guess).

Anyone who tried catching the Homie falling knife in the past month is going to end up living in the ghetto. All they were doing is making continuation patterns before the next leg down.

Last night, I had a dream:

My Uncle Ben came over to read me that Goldilocks story last night, and he said the economy is really nice and there's nothing wrong with a CPI that's gonna finish the year up 3.9%.

Then Erin Burnett popped out of my closet, waving pom-poms, and wearing nothing but some bull horns on her head. Just then the roof caved in.

Then I woke up...

Anonymous said...

And people thought the homebuilders were cheap. I dont know how long I will be saying this for, but the homebuilders still have another 25-40% drop coming. How anyone can be bullish on this sector is beyond me. KBH will be trading around 28-32 by the early 2007, TOL will be in the upper teens.

Trader 2006.

EddieFl said...

You do have a great Blog Tim, keep up the great work.....

Anonymous said...

The MM's have already made their money..... through options expiration day....coming up next week. Notice that the majority of stocks are well above their max pain, thus in order to reap the most $$$ possible the markets will have a lousy week next week, would like to see a nice bounce tomorrow morning....

Leisa said...

Tim, you do indeed have a terrific blog. I'm surprised that Bill Cara's or Barry R's blog was not mentioned either. Whenever I become sour on humanity, I merely remember the incredible act of generosity that you and many others (other content provders and bloggers)commit when you spend time providing quality content. I'm also glad to see you less cranky! I added incrementally to S&P and DIA puts on Tuesday. I think that I was the first (perhaps only) volume that day. It's like walking into a diner at what you think should be a busy time and seeing no one. You ask? Do I really want to eat here? So I just grabbed a to go order!

Leisa said...

I found this word in The Economist. Some might fight it a useful description of market activity...."In chess they call it a Zugzwang, the position that arises when your next move, any next move, is liable to lead to disaster".

Anonymous said...

Futures are down huge this morning, once again. Could be another distribution day.

Dow down 100 points today??

We'll see.

Anonymous said...

Gap down to confirm yesterday's weakness. Very nice. S&P down 1% yesterday. Maybe another 1% today?

The Trader II

Anonymous said...

I knew "Downosedive" went long! Bears will have a good day. Enjoy the ride! Chronictown

Anonymous said...

Trader II, I don't remember you saying that you were going short. In fact, you kept saying "soon, but not yet."

Now after yesterday's action and today's negative futures trade, you suddenly became bearish 2 days ago and magically took out short positions on Tuesday?

JerryB.

Anonymous said...

JerryB: On Tuesday, Trader II said that we should see some downside action this week. And he also said we could see S&P 1291 in a few days.

But I guess I don't remember him shorting anything either, at least not that he disclosed on this blog.

-Tony

Anonymous said...

I WILL KEEP REPEATING THIS 'TILL I AM BLUE IN THE FACE!

OIL WILL ONLY DROP IF THERE IS WEAKING DEMAND ... WEAK OIL WILL BEGET WEAK STOCK PRICES!

Thanks for listening.

Anonymous said...

P.S. --- don't even mention expanding oil supply, ain't happening anytime soon!

Anonymous said...

Futures down again!

Nice. Will sell some of my QID and hold onto half of a position going into next week when PPI and CPI are released. Last time the markets ralled over 250 points on data showing no inflation, will it play it safe this time. Will still be holding SDS and QID but QID a smaller position, will buy back in on anything under $65.
Looking for $68 on QID today.

Trader 2006.

plunger said...

jerry b, what do you care what trader II does? is this an exclusive bear club? what the hell, i prefer the short side, but also realize the market determines the flow, right or wrong, i just try to go with it short term and invest long term.(been gettin killed short term lately tho)
good luck to all

plunger said...

im changing what ive been repeating these last few weeks,

"obviously i can stay irrational longer than the market can stay solvent"

plunger said...

shoulda ,woulda coulda, all the whining on this site,c'mon, theres no big conspiracy, no secret club, when the market moves against you, act, swallow your pride and do what needs to be done. im as bearish on the economy as any here, but it,s irrellevant when the market moves against me, it tkes my money right or wrong, and i accept it, i dont whine about which way it should be, i was wrong at that time, mybe bad timing, bad analysis, maybe both, i hopin for some serious down days, but hope stops there, i trade accordingly, sometimes right, sometimes wrong.
good luck,

plunger said...

p.s. guys please stop forecasting the market every day,every hour, every minute, if you say "it's gonna rain " every day, one day you'll be right, does'nt make you a meteorologist. just a blowhard

Anonymous said...

I've been pounding on the table to go short last thursday and friday. Time to enjoy this ride down. ES is 4 points away from my target. Looking forward to covering half position here.

The Trader II

Tim Knight said...

"p.s. guys please stop forecasting the market every day,every hour, every minute, if you say "it's gonna rain " every day, one day you'll be right, does'nt make you a meteorologist. just a blowhard"

Amen to that. Even I don't try to predict what's going to happen every day. I just try to give a general prospective and some likelihoods. But hearing the Dow is going to go up or down X points in Y amount of time isn't very helpful to anyone. It's just wishful thinking.

Glad to see the market's down this morning, though. It's not a prediction, just a quote!

Anonymous said...

sold half my position in QID and went long a small position in QLD FOR A TRADEEEE at $69.70.


Trader 2006.

Anonymous said...

sold QLD 69.82....

Trader 2006

Sanjay Sola said...

any thoughts on RIMM? chart looks scary.

chart.http://finance.yahoo.com/q/bc?s=RIMM&t=3m

plunger said...

dead right tim, you give great charts with great analysis, on which way the path of least resistance should be, with tech. analysis to back it up. your prob. the better analysts here and i value your opinion greatly, and even you dont predict the market, you give good analysis of where it should be, not hwere it will be,

thanks for all info you give,
and the best damn blog out there,

Anonymous said...

This is a great blog Tim.

Anonymous said...

trader 2006 ----- a .0017%profit,

how much money you trading with, ? no offense but damn thats a tiny reward for ????

Michael said...

What has been more useful to me is using Stockcharts (no, I'm not an owner) to plot various stocks/indices against a risk free alternate like TLT or the 30 year bond. When TLT topped around 88 and the yield was 4.71 a couple days ago, it coincided (sp) with the mkt topping action AND the latest rally in the precious metals. With bonds reversing, equities and many other asset classes are dropping.

If bonds continue to drop, they will put pressure on equities.

Anonymous said...

looks like AAPL will try to go as high as possible till the 12th. I will short AAPL on 11th. The ass-holes are pumping this so high, it should be worth less than $50

Sanjay Sola said...

despite a small bounce, there aren't any stocks i'd buy. the stocks that are green today will be red tomorrow.

market breakouts from last month are alos breaking down now. a very bearish sign,imo. market leadership is getting hammered. that's not something you like to see in the leaders. Apple will be one of the the last stocks to break down.

Anonymous said...

I bought AAPL yesterday at 70.10, looking to ride this till the 12th. Shorting before 12th sounds perfect. Ride up and then ride down.

Anonymous said...

aapl looks so "ripe" to short.

Trader 2006.

Anonymous said...

Long OIH at 134.01. Stop at 132.80.

It's hit that 134 area multiple times and hasn't broken down.

It's in a descending right triangle. Support IMO at 134 will hold. Any move above the 142 area will cause a short covering squeeze. JMO, do your own homework

bsi87

Anonymous said...

bsi87: I should have listened to you regarding GLD and SLV. I'm getting crushed -- both are down like 3-4% today. Unreal.

But as I said, this is my long term money, so I'm just hoping that gold and silver are higher a year from now than they are right now.

I mean, gold is down because the dollar is up (for no real good reason). There's just no way to predict that. The technicals didn't look that bad to me, either, and silver definitely broke out of the 12.00-12.50 trading range, but now in 1 day it's right back down there again. Just more of my plain bad luck.

-Tony

Anonymous said...

AAPL is going higher as if they phucking mac geeks invented a cure for cancer :-)

Anonymous said...

GM is leading dow.

What is wrong with this picture???

Anonymous said...

Watching PEIX again. Approaching its 20 day BB bottom around 15. No position.

Looking at DBRN. Former IBD momo pick. Ladies will continue to buy clothes. (GRIN) No position.

Tony: No, there were plenty of indicators showing weakness. RSI doubled top on the daily. It hit the top of the 20 day Bollinger band. Candlestick showed SLV tried to get thru 132 two days ago but failed. Then yesterday, that 132 area was rejected again. Then consider that that it appears the Fed is going to hike again. That makes bonds more competitive with precious metals. If you're playing it as a LT hold, I guess it doesn't matter. If your indicators aren't performing, then I'd be looking at some new ones. JMO.


bsi87

Anonymous said...

re:WM

Buying at 41.78. Sell stop at 41.48.

Do your own homework.

bsi87

PS watching AAPL, think it'll test the May high at 73.80 and that'll be the place to put a short on. JMO, no position.

EddieFl said...

Great site Tim, just did more exploring of the site, It really is a comphrehensive site.

I know its mostly a bear blog, but the blog is one of the better ones I have seen also.

I got the Silver membership, will most likely upgrade to the Gold soon,

(no, Tim has not paid me for this blog, no free shirts or mouse pads or nothing,, )

Anonymous said...

knew i sold my QLD to damn early...damn it, could have made 1.00+ profit on my trade

Trader 2006.

Anonymous said...

Too much overhead resistance in AAPL. Will probably break down at 73.80 May high as another poster mentioned.

Michael said...

re:APPL

Took a look at it. P&F figure shows 85. That can be a LT target and the stock is volatile.

Anyway. APPL hit 73.80 in early May. Had closed previous day at 71.89, a difference of 1.91. Using half that 1.91 or .95, added to previous close gives a shorting price of 72.84 (.5+71.89). I'm setting a sell short limit order at 72.84, good for the day. My buy to cover order will be at 73.90 so my risk is 1.06 per share.

It is trading at the 70 RSI area so it looks interesting to me.

Also Max pain for Sept is 67.50

bsi87

Anonymous said...

correction

(1.91/2)=.95
.95+71.89=72.84 shorting price.

bsi87

Anonymous said...

re:APPL.

Traded thru my limit order. Short at 72.91.

Buy to cover at 73.90, limit 73.96.

Do your own homework.

bsi87

Anonymous said...

wow AAPL just keeps going higher. WTF are the people thinking who are buying it here? Will it go to the moon?

Anonymous said...

haha markets reversing. ticking me off since I held QLD at a perfect PRICE. think this mini rally may fade into the closing.


Trader 2006

Anonymous said...

AAPL doesnt stop. I think its on anticpation of new products due out. Heard something about an IPOD phone, if you ask me HOW IMPORTANT IS IT THAT YOU HAVE A DAMN MP3 PLAYER ATTATCHED TO YOUR PHONE. DAMN PATHETIC IF YOU ASK ME.

Trader 2006

Anonymous said...

Tim,

Sorry for intraday target post. I will stop those. ES missed my target at 1291 by 2 points.

Lot's of luck fellas!

The Trader II

Michael said...

re:AAPL

Taking a lot more juice (shares) to get AAPL up to these levels. Also note volume declining as it moved up from the 50 area.

bsi87

smallswinger said...

On 9/06/06 my Small Cap Swing Indicator moved to a
SHORT signal when the market gapped down.

Here are the recent values of the latest swing signals.

. . . . . .Small
. . . . . . Cap . . . . . . . . .Russell
. . . . . .Swing . . . . . . . . . 2000
Date . . . Ind . .Signal . . % Chg

08/28 . . +05 . .LONG . . +1.1%
08/29 . . +23 . .LONG . . +1.2%
08/30 . . +39 . .LONG . . +0.8%
08/31 . . +48 . .LONG . . +0.0%
09/01 . . +52 . .LONG . . +0.1%
09/05 . . +62 . .LONG . . +0.8%
09/06 . . -19 . .SHORT. ..-2.1%
09/07 . . -41 . .SHORT. ..-0.6% . Intraday @ 11:30am EDT

Normal target for LONG: . . +65 to +75
Normal target for SHORT. . -65 to -75

Anonymous said...

FLASH NEWS: In a surprise news release AAPL mentioned that its latest iPod can also be used as a dildo :-)

Michael said...

re:APPL

There was a UBS analyst raising his target to 92. And Sept 12 meeting supposed to have all this excitement. My risk is about 1 buck/share.

re:OIH. Moving my sell stop to 133.04,just below the low of the morning.

Tony,

if you don't use trailing sell stop/limit orders, I'd suggest it. Might help with your "bad luck"

good luck
BSI87

~ Nona said...

Tim: THANK YOU FOR YOUR BLOG!!!

BSI87: I always read your comments. I appreciate both your experience and the fact that you take the time to contribute. You're a lot of help to newbies like me.

~ Nona

Sanjay Sola said...

Apple chart looks good. too many catalysts. new product cycle and upgrade. relative strength is very high. a tough short. i don't see any resistance yet in the chart. maybe $75? a risky short because it has catalysts

Anonymous said...

there's 2 more trading days before 12th (tuesday). At the rate AAPL is trading the last few days, there is a close +$6 increase in its current price, so more like $80

Anonymous said...

AAPL is kissing the up trend line from underneath. It stopped there August 3rd. Will it blast through that line this time around? We are probably looking at 50mil share day today when all said and done.

Dang! near 2bil market cap through an USB analist reach note. I wonder how much the analist fart would worth.......

Anonymous said...

analists farts ..... priceless :-)

Anonymous said...

re:AAPL

here comes the 2:30 fade.

Sanjay, a short at previous resistance is not risky in my book. It's at the top of the 20 day Bollinger Band. It was a great buy at 50 bucks. And traders will sell the news. In any case, a sell stop above the 73.80 is prudent.

Remember "What everyone knows isn't worth knowing"

Nona, you're welcome. This posting helps me stay focused and disciplined.

re: OIH. Intraday reversal. Looks like that 133-134 area is gonna hold for now. I think Kosmo Cramer had said sell the drillers. LOL.




bsi87

EddieFl said...

I heard the new IPOD can beam you up to the Starship Enterprise. it's remarkable all for 199.00

There must be something happening with APPL that hasnt hit the news, probably come out soon,

Anonymous said...

re: AAPL trailing buy to cover stop.

I'll wait till late tomorrow to move my stop down to today's HOD. That would put my risk to about 50 cents per share.

If you look at an intraday chart, you'll note that AAPL was 2 bucks in the first hour which is amateur hour on heavy volume. This is exactly opposite of what one wants to see if you're long. You want to see no action or a selloff, meaning Mom and Pop are dumping and then heavy volume in the PM as the big boys accumulate.

FWIW.

BSI87

Michael said...

re: WM

Stopped out. Lost 1% on the trade.

bsi87

Anonymous said...

re:Naz.

Looks like it'll rally back to resistance again in the next couple days. I'll be looking at broad mkt shorts then.


bsi87

Anonymous said...

Which of AAPL business line has not been speculated here? New iPod/iPhone, movie download, settop box. The bigger the hype before news, the hard it gets sold on the news.

On the other hand, no one thinks macbook random shut down would dampen sales, no one thinks iPod sales has saturated. No one believes the company might have to restate earnings significantly because of the option scandal.

I believe AAPL is the best short here simple because all these big pay up for risk. We shall see by Oct.

downosedive said...

I done it yet again - covered all my shorts with corresponding longs and so yesterday and todays falls are useless to me, absolutley useless. Im doomed to loose several thousand pounds on on the Sept expiry and there isnt a damn thing I can do to reduce it . Maybe I should be called dowbankbalancedive

Anonymous said...

dow looking like its ready to close at intraday lows.

from yahoo.com

WORLD MARKETS may have also just topped. This has to be watched closely because WORLD MARKETS joining in to any downside would be a confirming negative.

SHIPPERS have now topped also. This group has been acting well for the better part of 3 months.

Friends, it could just be an interesting September...and oh yeah...the FED says everything is just fine.

Gary Kaltbaum


Trader 2006

Anonymous said...

downosedive.

I think I made a comment about your move to the bullish side last week. I was going to do the same thing and im glad I didnt made back most of my losses these last 2 days. Might go long QLD around 68-70 FOR A TRADE.

Trader 2006.

Sanjay Sola said...

i went long on a few stocks that are in strong uptrends. AEOS & PWEI.

Anonymous said...

YEAH!!! I NICE KICK TO THE FUKKIN' BALLS BULLS!!!

GO CHOKE ON YOUR OWN STUPIDITY!!!

Anonymous said...

re:PEIX

looking to go long around 14.79, assuming it gets that low.

downosedive said...

The party's over, a rally is on its way - DJA futures for 8th Sept are already up 28. Dont be fooled by thinking more falls will follow on top of these last 2 days

tapeworm said...

that chick from sex and the city looks like dee snyder (twisted sister);

i couldn't launch anything with that horse face either