Thursday, December 21, 2006


It's nice to feel on top of the market again. It's no disaster for the bulls, but days like this give one hope.

My shorts in $XAU (gold/silver), which a lot of commenters have slammed the past couple of weeks, are doing well. $XAU kind of gave up the ghost today. No more petite inching down. It fell in a meaningful way. This makes the likelihood of a meaty fall a lot stronger.

High-priced stocks like CME can lose double digits of dollars each day, which makes them great for put owners. It's getting closer to the trendline. Can it crack through?

TSO's top looks lovelier every passing day.

I got snookered into thinking Sears (SHLD) was going to be a superstock. But as I've reminded myself, and others - - it's Sears. Are polyester pantsuits coming back? Does every household need ten new lawnmowers? I confess I have no position in this stock, but I sure envy you put-holders out there.

The disgusting, greedy pigs at Goldman Sachs that have bled obscene bonuses out of their firm this year have been getting a lot of press. Don't you think investment banks have jumped the shark by now? I sure do.

Yep, that twinkle in my eye is Google, everyone's favorite company ever to exist. Chip, chip, chip. Lower each day. So much for the hockey stick.

FDX continues to be weak, even after the impact of earnings was absorbed yesterday.

I was hoping for a nice nasty surprise from RIMM, but they had blowout earnings and their stock is way, way high in after hours trading. I wouldn't drop dead of shock if they ended the day down tomorrow. It's just a hunch. Maybe a completely stupid hunch, but a hunch nonetheless. I'm hanging on to these March puts.


cloud said...

I value your blog very much. It is certainly a valuable point of view that every investor should be awared. However, to short the cheapeast major investment bank in the world with a PE of 9.93 just because they made too much money for themselves and the firm (and investors) is just irrational. No doubt GS may come down to the 192 support if there is more correction, but there are easier shorts out there.

Tim Knight said...

"However, to short the cheapeast major investment bank in the world with a PE of 9.93 just because they made too much money for themselves and the firm (and investors) is just irrational."

I didn't mean to imply that their greed indicates it's a great short. Believe me, my rationale is strictly based on the chart. I'm glad you enjoy the blog otherwise.

wincity said...

Even though it seems fundamentally impossible, I also have a hunch that RIMM may close in the red tomorrow. Stranger things have happened in the market. You never know.

Maybe Mr. Market looks at next quarter and sees not so great things ahead for RIMM?

Anonymous said...

Too many people read Barrons a few days ago and flocked to short RIMM. So what happens? Of course market makers will be after their blood. Especially in thin holiday trading. The brooker / dealers look like they are ripe for a pullback, but I would be very very careful shorting them. As someone said, there are better shorts out there like homebuilders, technology stocks etc.

Anonymous said...

Shorted RIMM in AH at 141.50. I think we see a "sell the news" reaction tomorrow.

one way stox said...

good call on the GS puts.

the mkt looks like it's starting to go your way.

EddieFl said...

Still holding puts GS, IBB, SPY.

I for one thingk they will selloff going into christmas week. But then again what I think really doesnt matter.

IF i am long, i think it is the greatest buy of all time, they will have suprise upside earnings, Buffet will buy in the company, there will be a major upturn and it will go to the moon.

If i am short, to me i am waiting on a suprise negative earnings, accounting fraud to come, out, bad news, the company will go to zero.

Which ever side i am on, i favor it all the way. My bias is my position/chart. I stay until proven wrong.

Good charting and great expectation can you keep you in those long trends.

Anonymous said...


what other trading blogs you read? I am in need of good education, the kind I see on your blog. i need more, more, more... what do you recommend? take care, it is low volume trading until first week January, so watch out for squeeze tomorrow and next week, i think GS are good at that! thanks

Sanjay Sola said...

lots of stocks rolling over here.
markets are hugging their moving averages. the oil, gold, and Russell are all hugging their moving averages. these tests of the 50 day average are not healthy.

we will see a bounce but come options week in January things will be very tough for the bulls. you can't ignore the bad data forever and the earnings misses are getting more numerous.
1. Qualcomm, 2. FedEx, 3. Jabil Circuit, 4. Bed Bath and Beyond, 5. Circuit City and Best Buy. , 6. Worthington Steel and many other steel companies. and CAT has already warned. Oracle and Palm were awfully weak too.

so semis, truckers, retail, steel, software, and construction are going to be mixed sectors. that makes it very tough on the long side.

did i mention that insiders are selling like crazy her?. MSFT, GOOG, AIG, NTRI, PFRT, GRMN, ININ etc. Japan and England are likely to raise rates.

even Apple is looking sloppy.

Anonymous said...

short RIMM myself at around 137, wayyyy to early but im not worried, I think its back down to the upper 120's low 130's within a week or 2.


Cal said...

whew, shorting these high flyers, you guys have balls.
I'm interested to know when that 200 point shark is coming to town a rip the Dow a new butt...well you know. I'll be short the Futures indexes on that day, oh it will be lovely. Yes, indeedy. Tim, I think you finally made me start seeing the light....well maybe through a peephole anyway..thanks

Jan Allen said...

Nice chart of the XAU; the XAU gold mining stocks fell through support today which is something I show in a chart in the article 'World Stock Markets Have Failed, Charts Show' where I present many charts that should warm the hearts of the Bears.

Today is a day that will live in financial infamy: the economic tides have turned from Bull to Bear; today the world has passed from an age of prosperity to an age of financial ruin.

While one can do nicely via shorting, I believe one can do better with gold.

To see the charts of the world's stocks falling simply use the link to this blog article or enter prosperingbear in google.

Michael Newton said...

Check out the SPX weekly chart with MACD. It's not looking good for that index.

Anonymous said...

I would like to pound in the head a few of the bullish anonymous posters who come here and declare that 1987 will never happen again!

Well, your right 1987 won't as that year has passed, but please don't be blind enough to think that a 20% one day drop WILL NEVER HAPPEN. What makes you so confident a-hole? All these companies do not deserve to be at these levels. Where the hell are the dividend yields? This market actually needs to fall BY HALF, to make it anywhere near a palatable or valuable investment.

Anonymous said...


- pepsi
(forgot to sign the above post)

EddieFl said...

"Today is a day that will live in financial infamy: the economic tides have turned from Bull to Bear; today the world has passed from an age of prosperity to an age of financial ruin."

What in the world is this comment above talking about!!!. INTO AN AGE OF FINACIAL RUIN?????

WTF? where are you living that it sucks so bad, if you are in Akron, Ohio i may understand, g--d damm, it is not that bad, the market has up cycles and down cycles.

MEMO: to Jan ALLEn, Chicken Little called and said to not be so doom and gloom. The guy still isnt falling..

EddieFl (Florida where the sun still shines)

Merry Christmas to all. and I bet the sun still comes up tomorrow.

jock said...

SHLD is not about products, it's about generating cash for Eddie Lampert, whom Cramer regards as the next Warren Buffett. I don't know if Cramer is right, but I do suspect Sears is just to generate cashflow for deals, as GEICO and General Re do for Buffett.