Tuesday, October 24, 2006

The Tireless Bull

Each day seems to bring more of the same. The market jumps down. Firms up. Dances around the +0 net change all day long. Then does a late day surge. It's teasing the bears. And the bulls don't seem to be getting tired.

One silver lining to this very big cloud is that the leadership is thinning. Take the NASDAQ 100 for instance. In spite of the Dow making lifetime new highs virtually every day, this index has been a laggard. It was even down a decent amount today.


As you can see by the chart of SPY, the market is ahead of itself. It has "overshot" the channel, just like it "undershot" it early on.


Worth considering as a short - Adobe (ADBE):


Another candidate - Allergan (AGN):


I suggested Checkfree (CKFR) earlier this month, and it's getting smashed in after hours trading today. Nice to have a bright spot in this horrible market.


Health Net (HNT) is another short candidate.


And, lastly, Textron (TXT):


I've noticed in the comments section (which is much quieter now that the anomymous people are locked out) that people sometimes append their ideas with "do your homework" or "do your due diligence" or something else along those lines. Let me save your typing fingers - - you don't need to say such things. The whole idea behind charting is that whatever knowledge the market has is already built into the chart.

Does anyone really think that by puttering around the net they are going to uncover some explosive new information about a stock, be it good or bad, that it absent from the minds of the collective body that trades it? If so, have at it. I personally think you're wasting your time.

To everyone who has survived so far - my hat's off to you. This sucks!

19 comments:

guru trader said...

tim ... like your blog ... see mine!
http://kachingo.blogspot.com/

Derek "NHL KING" said...

Hi Tim,

I read your blog everyday and really enjoy it. It's nice to know I'm not the only bear out there bracing this tough time.

I have a question for you, DELL, I've been short on this for a while and I really think they're going to get hit on there earning in Novemeber.

What's your opinion on Dell?

Thanks.

Tim Knight said...

Dell's chart is a snoozer to me. Not the kind of chart I would trade.

Glad to see CKFR and FLR getting hammered after hours today.

rcreedon said...

PNRA is getting hit after hours too! Congratulations! and Thanks!!

Livermore said...

Tim, I think a top is near, you went long SHLD at the top. You are giving up on my of you your shorts, top is near.... My guess is 1400 on esz6 is all we get

Dougo said...

Yeah, it's even getting harder for me to spread my bearish sentiment at work. Except for 1 beleiver I met (a salesman who was visting) today had no converts amoungst my coworkers. They all think I should be on anti-depressants...
As far as bullishness goes I'll contribute with UEX and MGA (TSX), both small Uranium companies that have had a spike as of the last few days (due to a Cameco mine flooding). Uranium is a story that has been below the radar of the masses for awhile....

Viva la Bear

Doug

bsi87 said...

re:Homework.

Learned a long time ago that some people just read and buy. Homework can consist of looking at charts in different time frames, deciding entry/exit points, determining position size based on volatility and size of one's portfolio, etc. A lot more to trading than looking at single charts in single time frames.

I don't think one line admonishments is gonna hurt anyone.

FWIW.

Andrew755 said...

Wow, how many charts gapped down this morning....it is crazy that the indices are this high. Because of my discipline..... I didn't trade the oil/gold.....for the reversal. Oh by the way..positive divergence on the oil chart.

I'm staying clear until after the fed meeting..... you know I swear I've been saying this for the past few weeks. But remember US elections are a few weeks away...

Sanjay Sola said...

3 distribution days for the Nasdaq. yesterday was a distribution day. if oil pops, this game is over and everyone will panic. it's already at $60 a barrel. gold is moving also.

Sanjay Sola said...

I'm happily in cash. a couple of stocks reversed on me very quickly. leadership is too thin anyway.

the fact that i'm one of the few on this board is a good indicator to go to the sidelines.

downosedive said...

Tim
The phrase 'do your own homework', is taken as a funny slang way of saying 'check this out yourself if you want more detail because I cant be bother to spend time explaining to you!' I actually find this a bit amusing, so long may it continue. In fact I use it at work to tease people when I pretend that I 'cant be bothered'

Andrew755 said...

Holy smokes...more rallying.

I just didn't have the guys to buy before the Fed....now the markets are up to the races (not letting anyone in). It is frustrating. Actually I wanted to catch the trading bottom on ESRX but decided to sit out.

Want to know why the market keeps rolling????? TOO MANY SHORTS..... Rally-cover, drop on data/earnings, people short- then cover....it's a frustrating cycle....
Read this : http://bigpicture.typepad.com/comments/2006/10/record_short_in.html

Denver_Investor said...

Take a look at NTRI today. Blowout earnings and a steller outlook. Took it up for a little while and then it collapsed, a $12 range for the day on a $62 stock.

Big squeeze on the home builders. I'm watching this for another shorting entry point. A LOT of wishful thinking in the sector; the bottom of the housing downturn is NOT in...not even close!

niko said...

Okay... I've tried to be as calm as possible on this one, but what the HELL is going on with CKFR?!?! I was kicking ass on another brilliant TK pick, and this piece of crap is now RALLYING back after taking a dump on its balance sheet.

This just pisses me off. Down 5+ this morning, now down 2 and change. Killing me. Anyone have info?

stockshaker said...

Yeah, niko, I have information about why its rallying ... Someone is not doing their homework.

PB said...

yup, the bears are getting are real good screwing in the ass! Like many, I'm waiting to go long, but I need to see a break. It's coming soon as there is a nice gap down at 1360 or so on the SP500. That's about 200 DOW points lower. Also, waiting to at least test the old highs at 11,700. I think this rally is the biggest surprise so far this century.

bsi87 said...

I feel like I'm in a crowded theatre and someone is about to yell "FIRE!".

in any case,

re: EEM showed a kangaroo tail reversal from 102 to 106 a few days ago. I've been waiting to put a short on around 104. Looks like my time is coming up.

re:Broad indices. We're about 30 days from where the morning news shows noticed the DJIA was hitting new highs. Time to look for short positions.JMO.

Don't do homework on my account. LOL.

Old Soldier said...

Tim,

CKFR was a great ride this morning for about 10 minutes or so.... I bought 10 Contracts (Puts) on it last week based on your charts and a couple of searches that I had done. After seeing your post yesterday about the afterhours smashing it was taking, I watched it and exited it at it's low of the day - Great way to start a rather boring day (for me at least). Thanks for the great Blog and the helpful charts. Killed a few Bulls today....

Randy

Nimesh said...

CYMI did the same thing.....down from 45 to 39 AH and closes today.......get this....closes green!!!!!