Friday, November 03, 2006

Sub-12K. Tim Says Yay.

The Dow was able to close for ten days in a row above the 12,000 level. Not today, though. We're back into 11,xxx territory. Let's hope it stays that way! For years!

As usual, I've got a number of charts to share with you that you might find of interest. First up is a long (you heard right) suggestion, symbol CRR. Looks pretty battered to me, and the swell in volume recently indicates a possible change in direction.


Now onto more familiar territory - the shorts! Here's FMX:


LLL looks good:


I like how MCK is playing against these Fib fans:


MTW looks like a good double top:


NVR is thinly traded, but a good topping pattern:


Finally, these's QQQQ. Check out the similarity between the two sections of the RSI indicator. To me, this suggests the QQQQs (and, therefore, the $NDX) are headed much lower.

18 comments:

Leisa said...

http://www.financialsense.com/fsu/editorials/mchugh/2006/1103.html

Some may wish to see R. McHugh's new chart. Bears will find it titilating.

Prabz said...

Hello Tim,
Your COF call was wonderful! What you think of BAB (british airways) for a short? I think it topped out?

Do you still favor SHLD? Is it going to be a cup and handle' failure? Though, it did try to hold its position today a bit.
-Your Regular!!

smokeisms said...

leisa...

Best to throw that link out the window. I can not tell you how many time since the 2002 low I have heard... "ohhhh, look out, IT A BROADENING PATTERN... OOOooooo"

Remember that chart of the S&P and the homebuilders sentiment or whatever it was going around a few months ago?? LOL!!! Must be a little "divergence" going on.

The bear market will come, but it probalby won't look like any other until after it happens, then we can pull up all the graphs it looks like and scare people with it during the next bull market.

Jim

mde said...

Great day for the bears overall but I am dissapointed they couldnt step up more. I think this downturn is short lived.

nasdaqstox said...

MTW had a strong quarter and guided upwards FY '06 - is a bearish technical trade on strong fundamentals the correct play? - maybe short term - time will tell...

Leisa said...

Smokeisms....I'm not sure how much stock I put in any of the cycle pundits anymore (Pring, Murphy). It seems that all of them have got it wrong, though I respect them and their work.. I agree with you that the bear market will come when it comes. Reading tea leaves is part of the fun.

Tim Knight said...

Yeah, I don't get too psyched about "parellel" comparisons anymore. I was event hesitant to post my own regarding the RSI. I remember just after the 1987 crash there were some very convincing graphs showing how we were entering a period just like the 1930s.

I also don't put a whole lot of stock in Prechter's musings. I devoured his 1995 book, "Crest of the Tidal Wave", and did a great job talking myself out of the entire 1995-2000 upmove. He said flat-out in that book the Dow would peak at something like 4500 (I don't remembe the exact figure, and plus or minus a few hundred points doesn't matter at this point). Look back at 1995 and you'll see the market went STRAIGHT up.

smokeisms said...

leisa, Tim... Reading tea leaves is certianly fun. It is just more important to look at the current tea leaves and not some tea leaves from decades past and ASSUME the same thing will happen this time. I have unfortunately lost all respect for elliot wave analysis but I could just not understand it... it is always clear after the fact but then in the middle of it there is always a wave within a wave within a wave within a wave and it never seems to do what it says it should do. I've been tracking a count on the REIT indexes that was supposed to call the top in real estate years ago. The count now has us in wave 13 of 5... interesting action this week though.

I tracked the structure of the 1970-73 cyclical bull market for the DJIA for a while as it was showing precisely the same structure as the Nasdaq the past couple of years (Match up roughly 1971 DJIA consolidation to the Nasdaq 2004 consolidation... it is actually quite remarkable). That has broken down here a bit but I guess since the Nadaq has not hit a new high yet it could still play out the same way.... as you know a 50%+ decline into the 1975 lows.

Currently you have an interesting parallel developing with the big rally in the DJIA (just like 1987) as the dollar index bounces down off the 200 day MA in a very similar sturcture to 1987. This still has a ways to go to be a true parallel... need the dollar to test the lows and bounce, the DJIA to put in a lower high and then.... you know what.

I'll watch it just because it is fun but as far as current trades there is nothing like the CURRENT TEA LEAVES to drive decision making. I missed the big post election boom in 2004 because I was convinced the end was near. One thing I have really come to finally understand and accept since then is the true workings of inflation. So long as we mistake inflation for growth, or accept inflation as real growth, the game can go on until too many people get priced out of life. As long as the inflation is even enough and slow enough to keep the illusion alive... DJIA 30k anyone?? My father still thinks he makes more "money" today than he did in 1978 even though he would have to make 30% more than he does now to make the same amount adjusted for inflation. We have an amazing talent for thinking we are getting richer as we get poorer.

In any case.... waiting patiently for the bear to show its face...

Jim

chronictown said...

Smokeisms, thinking that we are getting richer while we get poorer,never really heard it put that way.Good stuff! Bought 15 oz. of gold, the real stuff,sure is prettier than that paper Ive been tradin. Whats a girl ta do?

Tim Knight said...

"The count now has us in wave 13 of 5."

That's a classic. :-)

PB said...

Looks like Saddam got a hangin' man today! May it be a sign of things to come for the market, which by the way has lost you money this decade (inflation adjusted of course). It's a stealth bear market that you won't hear about on CNBC.

Good luck to fellow bearz next week!

Andrew755 said...

Hello guys,

So Saddam is guilty two days before the election, hmmm I wonder if the timing was politcally motivated. I have no question. Don't forget to vote this week, I'm from Canada but your election has an impact on more people then you think. Don't forget the things have been handled... the economy, katrina, Iraq..... so many different things that can't be ignored. Anyways enough political talk....

Interesting how the markets are have worked off their short term overbought conditions within a week... to a point where I think they rally maybe even into the year end.

Something is really weird now though, the metals and oil look like they want to start ramping again.... which makes me believe there isn't a decline coming this fall. If the indexes break there trendlines this market is in trouble......in a hurry.

I'm long X and SPY right now....for a quick trade. The markets aren't going to break down for no reason.....I'm waiting though and am still as bearish as I was this summer.

downosedive said...

Dont trust these minor falls at all. They are a waste, unless you got in when the dja was at its very peak. More inclined to buy the indices because like it or not the expectations for next year will be rate cuts and that will continue to at least support at these levels and posibley drive the indices up a little beyond the all time high. Damm Ive cocked upthis latest opportunity to short. Too late to sell now

PB said...

markets don't like going down unless they have to. maybe we'll have a 3pm reversal, I doubt it. Looks like these fukc nuts want to take this market to 15K in a hurry.

Andrew755 said...

I sold my X and SPY calls earlier this morning, man do I feel stupid...Profits are profits but I was not expectng anything like this it is alot faster then I thought it was going to be...yikes....

PB said...

we got raped again!! Where the hell did this rally come from?

smokeisms said...

Bounce off multiple support... price, trend, MA's... you name it. Pretty usual in uptrending markets.

mde said...

This bull market doesn't know the meaning of pullback. All my friends just moved money from real estate to stocks again. This may be the late 90's all over again. Get ready.