Wednesday, December 27, 2006


Wow. They finally did it. The bulls got the Dow over 12,500. 2006 is definitely going to be a year of great memories for the bulls. Congratulations, longhorns!

If you look at the performance of the various indices this year, you can see that - strangely - the Dow 30 is the king. Clearly mega-caps are on top of the world. The Dow is usually the boring, staid index compared to the likes of the NASDAQ. The laggard here is in fact the NASDAQ 100.

One chart that provides some small bit of comfort to bears is of the S&P 500. Take a look at how the index has behaved within the confines of the channel I have drawn. It certainly seems that the time is pretty ripe for a push downward. We are completely mushed up against the highest bounds of the channel, and the time space between the arrows is calling for a fall.

Anderson (ANDE) is a pretty handsome looking chart to buy (yes, buy). The volume is relatively anemic, however, and that's not a great confirmation sign.

Immucor (BLUD), which I've mentioned many times in the past as a buy, continues to push higher. The higher it goes, the stronger it looks.

Express Scripts (ESRX) actually fell today, in spite of the triple-digit rise on the Dow. I've always enjoyed this one as a bearish play, and I'm in it again.

Google is still looking good for a fall, in spite of recent strength.

Looking closer, one could even suggest a small head and shoulders pattern recently. Today's big upward move was a nice retracement to the neckline.

There are only two days left to the very tough year.......I suspect the bulls are going to just keep padding their gains.

Hope springs eternal. Come on, 2007 - - be kind to us!


Lauriston said...

Looks like ANDE is actually coming up against major resistance, but good luck anyway if you are long. All the others you mention look like sweet shorts especially ESRX. I think we may get one or two more days of window dressing and then a good drop, or we may get another surprise come first week of January with "new money" coming into the market. So watch out and keep nimble! Bear hunting season is not over yet...

Anonymous said...

lay out the volume beneath goog and it looks even more like a head and shoulders

One Way Stox said...

Stox go one way: straight up, or straight the hell down...and ever since Bernanke stopped raising rates, it's been like '95 all over again.

Two-thousand points on the Dow just like that. It's beautiful.

Anonymous said...

I remember quite vividly, attending a New Year's Eve party 12/31/99. Dow was around 11500, naz outta sight. Everyone was saying "it's different this time", new 'metrics', 'parameters', 'internet age'...yadda,yadda,yadda. Dow managed to mosey on down to 7200. Naz know the REST of the story.

Anonymous said...

Tim....Are you in the market this week with the light volume or are you enjoying the Holidays? Not much going on. Belated Merry Christmas and Happy New Year to you and your family.

Jack W.

Anonymous said...

This market is getting sicker and sicker.


sick sick market

Anonymous said...


if u had had a positive/bull bias in 2006 you would have been a billionaire by now. There is still time left for you to change your mind as 2007 will be even more bullish. Just watch and learn...

Anonymous said...

11:32 right now everything feels perfect because the market can do no wrong, go back to may, june and july when the market was in decline mode. I remember it clearly, I tried going long about a hundred times and everything I bought went straight down. Felt like there was no bottom to this market. Felt like 11,000 was FAR FAR FAR away. Then one day everything turned brighter as if anything you bought would go only one way: UP.

Nothing goes straight up forever. There WILL BE A PULLBACK. Every International market is up over 25% some putting in gains of over 90%, there will be a correction and when it does happen it should be no surprise to ANYONE.

TRADER 2006.

Anonymous said...

Market is not sick. It's a great bull market. Shorts will be annilated.