Monday, October 23, 2006

The Stampede Continues

Another day the bulls owned the bears. Big time. Google blasted toward $500 to a new record high. The Dow was up over 100 points early in the day and closed at a new all-time high. These are the times that try bears' souls. Assuming there are any bears even left.

Russell 2000 remains on my list of favored indexes to short (for those still insane enough to do so):


Capital One Financial (COF) is still on my favorites list (again, short).


Fluor (FLR) is doing relatively well (once again, bearish position) considering the market's strength.


I think NBL for a short position related to the oil markets.


Same applies to old favorite Oil Service Holders (OIH) which has a nice clean stop price for limited risk:


Another oil shortie, OII:


For a long position, think about Red Hat (RHAT) which has gorgeous volume to boot:


I finally (!!!) bought Sears (SHLD) today and am already in the green. Beautiful pattern here.


TSO is another short idea.


And, although higher risk than OIH, similar logic applies to shorting $XAU:


This is a rushed post, since I'm off to a business dinner. Considering how high the market is, my portfolio is pretty well intact. Hang in there, everybody.

10 comments:

PB said...

Let's see, inverted yield curve for almost all of 2006, slowing economy, central bank tightening globally, the Dow Transports not confirming new Dow highs. Stocks being priced to perfection once again!

Yup, things are definitely different!!! Less than 10 stocks in the Dow are responsible for it's new highs! But don't worry, these are solid companies that can grow their earnings 15% yearly from here 'till eternity. Never mind that this is more than twice the historical average, and at least 5 times GDP growth, these companies are winners, best of breed, greatest story never told!

Damn, I could be on CNBC if only my logical mind would take a hike!

chronictown said...

What makes me sick is how i got stuck in my thinking and did not adjust to what the market was actually doing.this girl will humble you very quickly. Now Iam to the point where im afraid to pull the trigger on a trade!Iknow i paid fo my lesson, i guess you learn or go broke ! just thinking out loud.Whats a girl ta do??

marhattan said...

i'm with you chronictown... this summer has been an expensive lesson, but I'm excited about getting recharged and back in the game... =) Like they say "Every master was first a disaster."

Also, if there's any bears left you may be interested in consumer reports MoneyAdviser's front page article for Nov.: Basically says the numbers the gov. is reporting for CPI are fudged. (surpise), that actual inflation is far greater than what they're reporting and that the experts who watch inflation are quite worried about a 70s style setback and how quickly it may unfold...

I would love it if we could continue growing the economy indefinitely, but in case we can't... be ready... =}

PB said...

screw that! I know my thinking is right, I'm just amazed at the boldness of some investors. Faced with all the news about a slow-down, inflation raging outta control, I'm sure I'd make the same decision to stay out of the markets. Very few were expecting a push to new highs let alone past 12K. Anyways, time will tell whether this is a sucker's rally or not. Let's talk next summer!

bsi87 said...

Chronic,


Either papertrade or reduce your position size until you get your legs back under you.

Sanjay Sola said...

some stocks are breaking down, so you can short those that are breaking the 50 day averages. i'm watching TAM to see if it breaks the 50 day.

I shorted Celgene going into earnings. do your DD. also have shorts on HITT and XMSR. mixing shorts and longs.

smallswinger said...

My Small Cap Swing indicator switched to SHORT on October 11. This SHORT signal is at -63 as of October 24, intraday.

Here are the recent values of my Small Cap Swing Indicator for the last four or five switches.

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

09/12 . . +18 . .LONG . . +2.4% . . . . +2.4%(short-covering)
09/13 . . +41 . .LONG . . +0.8% . . . . +3.2%
09/14 . . +54 . .LONG . ..-0.4%. . . . . +2.8%
09/15 . . +65 . .LONG . . +0.2% . . . . +3.2%
09/18 . . +70 . .LONG . . +0.0% . . . . +3.2% (short triggered)

09/19 . . -06 . .SHORT. ..-0.5% . . . . -0.5% (& confirmed)
09/20 . . -05 . .SHORT. ..+1.2% . . . .+0.7%
09/21 . . -13 . .SHORT. . .-1.0% . . . ..-0.3%
09/22 . . -37 . .SHORT. . .-1.2% . . . ..-1.5%
09/25 . . -43 . .SHORT. . .+1.2% . . . ..-0.3%
09/26 . . -39 . .SHORT. . .+0.4% . . . ..+0.1% (long triggered)
09/27 . . +17 . .LONG . . . +0.4% . . . . +0.4% (& confirmed)
09/28 . . -19 . .SHORT. . .-0.4% . . . . -0.4% (whipsaw short)
09/29 . . -25 . .SHORT. . .-0.6% . . . . -1.0%
10/02 . . -48 . .SHORT. . .-1.5% . . . . -2.1%
10/03 . . -64 . .SHORT. . .-0.1% . . . . -2.2%
10/04 . . -49 . .SHORT. . .+2.1% . . . . -0.1%(short-covering)

10/05 . . +40 . .LONG . . . +1.3% . . . . +1.3%(whipsaw long)
10/06 . . +54 . .LONG . . . -0.4% . . . . +0.9%
10/09 . . +66 . .LONG . . . +0.6% . . . . +1.5%
10/10 . . +70 . .LONG . . . +0.2% . . . . +1.7%

10/11 . . -06 . .SHORT. . .-0.6% . . . . -0.6%(new signal)
10/12 . . -02 . .SHORT. . .+2.1% . . . . +1.5%
10/13 . . -00 . .SHORT. . .+0.7% . . . . +2.2%
10/16 . . -00 . .SHORT. . .+0.8% . . . . +3.0% THIS HURTS!
10/17 . . -07 . .SHORT. . .-0.6% . . . . +2.4%
10/18 . . -13 . .SHORT. . .-0.2% . . . . +2.2%
10/19 . . -19 . .SHORT. . .+0.5% . . . . +2.7%
10/20 . . -35 . .SHORT. . .-0.7% . . . . +2.0%
10/23 . . -46 . .SHORT. . .+0.2% . . . . +2.4%
10/24 . . -63 . .SHORT . . .-0.6% . Intraday @ 1:00pm ET

Normal LONG target: . . +65 to +75 (max: +95)
Normal SHORT target: . -65 to -75 (max: -107)

I remain 100% invested in SHORT small cap positions as of Friday’s close, 9/15/2006 (RUT=729.35 to 759.09 on 10/24, a +4.1% advance). I have lost too much since going fully SHORT, but just cannot go long at such extended technicals.

On the other hand, even though the RUT has gone mostly sideways rather than correcting, the Small Cap Swing Indicator has stayed SHORT and has moved to -65, a point where it could switch back to LONG at any time now.

Too much money supporting the GOP election drive. Markets will likely remain extended til the elections are behind us – then watch out.

PB said...

Can't believe how wound up this market is. Will not even give back 50 points! It really has taken off like a bat outta hell. Someone said that this market will not let the retail guy get in until much higher prices.

The comments have really died down on this blog.

Andrew755 said...

Here check out this article...

http://usmarket.seekingalpha.com/article/19045 - I agree with all of his points.

I'm still standing aside until the air gets clearer....but I'm hitting the charts hard.

I am preparing for a rally tomorrow afternoon that won't last long.... GDP # on Friday will cause a sell off I think.....

PB said...

good article but I think the reason for the rally is that many believe that this will be a repeat of 1994-95. The world has changed a lot since then. We have past the tech bubble and now are in the process of deflating the housing bubble. I still think that equity markets will be severly challenged because of this. But for now the herd rules and every piece of info is twisted in favour of the bulls! I can't believe so many professional managers turn such a blind eye to facts. But don't worry 'cause the Chinese will save the day! They are dying to buy a four dollar cup of coffee from Starbucks that they need to save a week's earnings for!