Wednesday, November 01, 2006


OK, I'm starting to enjoy the market again. Four down days in a row. Granted, only two of them were worth anything (today and last Friday), but I'll take what I can get. Red on the screen, and I'm a happy guy.

Today was actually my second-best day ever in percentage terms, and it wasn't even down that dramatically. It's finally becoming clear to the public that the economy is faltering. Bring on some more of that! I guess I'll only regret it when I try (again) to sell my second house here in Palo Alto, The market has become mushy around here, and I gave up selling it a few months ago. I was going to try again in spring, but if things keep going this way, I may wind up as a landlord far longer than I ever intended.

Many months ago I suggested ESRX as a short. It's worked out nicely. It never violated the stop price I suggested, and those owning puts have made out like bandits.

The NASDAQ is looking particularly squishy these days, which is terrific. Take a gander:

Similar action is on the $NDX. You can see a nice progression of lower highs here, and today's downdraft was a monster bearish engulfing pattern.

Also take note of just how quickly the air has come out of the S&P's RSI indicator. It's fallen from nosebleed levels to well under the important 70 line. Let's keep beating the spirit out of these bulls, guys 'n' gals. Shake them and break them.

I loaded up on $XAU puts early today, when it was high. It closed pretty much unchanged. This isn't a clean head and shoulders pattern per se, but it's got the markings of one. I like it.

The Fib Fans on ADSK are charming, to me, and it's got a nice, clean stop. Ummm, keep in mind that tight stops can get ignored by giant gaps up, such as I experienced with Cigna (CI) today. It basically opened at its high and fell the rest of the day. Grumble. But I digress.

I've been holding AGN puts for a while. Nice one.

For those wanting to take advantage of the sky-high REIT market, may I direct your attention to ARE?

ATI looks to have put in a lovely double top.

Capital One (COF), mentioned here on numerous occasions, is behaving like a good boy should.

NOV is a nice play on the OIH drop.

Finally, someone mentioned US Steel (X). I bought puts on this a couple of days back. I like what I see here.

In closing, I just want to say thank-you for the thank-yous. There are a lot of nice notes in the comments section, and believe me, I don't do this blog for the money (averting eyes....) I do it for the love! So I appreciate the nice words.


chronictown said...

Re: KRY The comany got a permitt to drill 40 holes, is the permitt for mining coming soon? USGL closed above 50 dma on big volume. $GOLD closed above 200dma.UP gold down for me.Whats a girl ta do?

stockshaker said...

hey guys!

I like the X stock in the spotlight - been watching it for about a month (currently in it). I'm just a little curious however, it had a nice breakout (bullish) about a month back, and indeed, stoc/macd look overbought - hence the short term pullback, typical really.

Im a really big supporter of MACD especially when crossovers/divergences occur on longer term time periods ie 3 years. Now, if anyone looks at the 3 year graph of X - you can see a really nice crossover that happened, ohhh... about the same time when the bullish breakout occured.

Buying puts now on this stock, just for hopes that it continues to fall despite all the evidence??? Who wants to play with fire?

Sanjay Sola said...

Tim, thanks for pointing out ATI on your sight. i'm locked and loaded on that one.

many of the semis look dreadfully overbought. Broadcom is near an upper trendline.

Jim Rodgers, the great commodities trader, mentioned we were in a recession or near one. you can see it through all the numbers. looks like margins have peaked in earnings and the economic data suggests it.

omega said...

I would keep my stops tight on XAU. To me it looks like a triple bottom more than a head and shoulders. As chronictown noted, Gold crossed a key resistance level at 610 the other day (it's now over 620). Here's a chart:

Andrew755 said...

I just got long the S&P SPY on that weakness for a trade.... I feel like an idiot for getting shook out of my position yesterday..... but lesson learned. I'm looking for a rally today..maybe tomorrow.....

Elections are next careful whatever your positions are. Because of my caution I didn't place orders on the Canadian market...the government sold off the market huge yesterday! 300 points, and then it was down this morning.

I'm having a good week but could have been better with the SPY put trade yesterday....grrr. I don't see very much to get excited about long or short...but looking for volatility to pick up.z


Sanjay Sola said...

microsoft news afterhours today. looks like they are partnering with someone.

Andrew755 said...

OIl and gold are backing off and now here comes the rally... this feels really manipulated to be honest...Oil was down a buck earlier today and those went positive....and now is back down 80 cents.......

I will be buying oil stocks on weakness in the next week or two... there is a positive divergence.

PB said...

MSFT is partnering with the devil!
oops ... that's old news!

chronictown said...

gold blowin up!whats a girl ta do?

Leisa said...

Toshi, I have a naughty (but serious) comment for your merchandise corner....You need women's tee shirts that say "click to enlarge" and men's shorts that say same. You can make the appropriate graphs to fit both. Donate some proceeds to charity if you do this! Ciao!

mde said...

The bear is back. This market is going to tank. I am going to get my shorts executed first thing tommorrow.

Sanjay Sola said...

aging bull market, consumer confidence down, retail stinks, oil breaks down, GDP at 1.6%, housing troubles, inflation still persists, wage costs up, semis and transports lagging, Dow leading, small caps struggling, market double top, parabolic rally, 4 distribution in the Nasdaq.

So the market runs abnormally into a double top.
What's the conclusion to this story? it's the end of the bull run, unless some miracle happens.