Monday, December 11, 2006

Waiting on the Fed

Hi folks. It was another "watch the paint dry" kind of day on the market. The Fed announces its rate decision tomorrow at 2:15 EST. In the old days (a year ago or more....) this usually caused unbelieveable fireworks. With the market so tepid and boring now, it might be a relatively subdued session. But it's bound to be more interesting than today.

For those of you laying awake at night, agonizing what to get me for Christmas, try to find a rare C3PO tape dispenser. Yes, this was a real licensed product. The reaction I read of one person who saw this product sums it up best: "Sweet Jesus on a snowmobile......."

I made mention the other day of Second Life. A few people scoffed at the entire concept. Believe me, I've been mixed up in microcomputers for 27 years now, and I know a big thing when I see it. Virtual worlds are going to be huge. It might take a few years. But it's off to a great start. Like I said, I'll probably throw a little get-together just to see who shows up.

What didn't show up to the market today was any kind of excitement. Take a look at the $INDU - I've drawn a rectangle around the relatively tight 100-point range of the past couple of weeks. The market dipped below it for one brief shining moment, but generally speaking we've all been in a total rut since Thanksgiving.

The S&P is a similar story.

The $XAU is also in a pretty tight range. A clear move beneath this area would encourage gold bears. I sure wish the market - any market - would make up its mind. We're all just diddling around here.

GOOG seems to be in a quagmire around $485. If their quarterly earnings aren't sensational, that could be the catalyst for a nice move down. There is nothing terribly clean about this chart. The only thing it tells us is that the explosion up to $500 has abated.

Check out the monster divergence in Goldman Sachs (GS). What I like about the puts on these is that they could get some meat on them. Yahoo, for instance, is never going to have 40 or 50 points blown off of it, because it's only a $29 stock (peanut butter, anyone?)

My bullish case for NTRI was off the mark; the line I should have drawn is horizontal, not angled. I've reworked it below. As you can see, the price failed to clear above this line, and it took a pretty bad drubbing today.

See you on the other side of Bernanke. Let me know if you find that tape dispenser.


PB said...

Hey Tim:

Me too! That tape disp. is awesome!!! The facial expression is priceless!!!

I've been salivating over GS and what a sweet short it would make In no time at all that thing could be back at 150.

As for Second Life ... interesting concept, bad execution. If it's going to gain any mass appeal, it needs to be A LOT more user friendly. And the name also should be dumped ... maybe DIGITAL LIFE or how about i-life? Let Apple buy them out and bring it to the public in a big way. It's too techo-geeky at the moment.

Maybe Pappa Bear can give us bearz a nice stocking stuffer for Christmas. This market seems to have stalled here. Let the sell-ff begin!

sage08 said...

The way the mkt's positioning itself, i think it's getting ready to ignite on the upside.. I don't think Ben is going to say anything negative at this time of the year, esp when the housing bubble has burst.. i've entered a long for S&P500 at 1414.3 with stop loss at 1408.. if it hit 1420, it's bulls all the way...

One Way Stox said...

that's a keen observation about the difference b/t options on a $200 stk. (GS) - vs. - a $25 stk.

You need big point moves to make big scores in options

gs, goog, cme, ice, shld, bidu, nyx, dna, oih, are some of the big money-big score stoc now. Got any others?

Anonymous said...

No higher high on QQQQ since 11/24. Come on bulls & Bernanke, let's get this show on the road. (Santy Claus is coming, isn't he?)

Anonymous said...

I would not dare shorting gs that is one of the best performers this year and they are about to have a stelar quarter. Gold looks good for a move to the yearly highs and
goog although it has lost its momentum it doesn't mean that it will go down. Also thinking that goog will miss their earnigs is quite wishfull and don,t forget that Q4 is their strongest quarter on a seasonal basis. I have said it before and I will say it again one needs to be crazy to short this market. This is a strong market, just look at txn after hours. Even txn revised guidance downwards it has barely moved down and it was up for a moment. I bet it will be up tomorrow. If the stocks with the worst fundamentals cannot go down on warnings don't expect any mercy from leaders like gs and goog.

Anonymous said...

I forgot to sign the post above


Anonymous said...

As for where the market heads I think its to the upside, why? BECAUSE IT just has to move that way. Seems nothing is stopping it. After the 150+ point drop 2 weeks ago I thought everything was going to go great for the bears but since that day nothing has gone right. Everything is in the bulls favor. Just when the markets look tired new money props it back to new highs. ITs getting old but making money in these markets is not. A few blogs I read are saying the DOW could push to the 12440 area. A 161.8% extension could put the dow around 12550+. Who knows, i'm waiting patiently for the NDX to break 1760 and drop straight to 1720-1730 area but I think I'm wishing too hard. Only way these markets will drop is if I go long my entire portfolio. Especially that QLD at around 90.

Tonight TXN lowered its forecasts but for some reason its only down around 20 cents. SMH isnt off that much either.

Trader 2006.

Anonymous said...

Funny how everyone here now only looks to the upside! The market will confound everyone adn it won't do that by going up. We need a pull-back bad!


Tim Knight said...

I see in the Barron's outlook for 2007 that EVERY........ .SINGLE...... ...PERSON....... (including Abby Joseph Cohen, cough, gack) feels we're in for a BULLISH 2007.

Makes ya think.

Anonymous said...

C3PO? Second Life party? Is your wife real person or an online lover of sorts? Just kidding, just seems funny.

Ugly Betty

Russell said...

Just wanted to mention that I lost a lot of money shorting AXR I started at $83 sold at $105. I wish I had done more research. I wanted to short something realestate related. On thanksgiving I was traveling to northern california I bought a newspaper in modesto the front page read that forclosures were up 1000% in the area. So the next day I had to short something. Too bad it was AXR. I tried to find something related to this local but couldn't I guess I din't try hard enough. Today I found it, it is PSBC check it out. Not really realestate related but at least the location is right.

z-stock said...

More big point Movers..
Bot Ptr Pbr Fxi Si Pot Isrg Stq Mstr Mtb Ci Ben Bxp Vno Icf Spg Aapl Ibm Vip De Cmi Ba Mlm Txt Fdx Vmc Dfx Lmt Stra Exbd Acl
I read at Forex, “The gold rally is expected to remain well and alive as long it holds above the channel support of $602.00, after which is expected a resumption of the bull.” Who cares?
I’m still shorting Xau.

Anonymous said...

It's the percentage of price movement that matters, NOT the dollar amount.

We are little vampires.

Abby J. Cohen shd have been flushed down the toilet last time around. Who really listen to what she has to say anyways? No new insight, same ols bull story spun differently.

The only chick worth listening to is Stephanie Pomboy of Macromavens. She's one smart cookie! Funny too, not bitchy like other women with brains.

ooops, sorry, this is not a dating site. Do I look like a slut?


Leisa said...

Anyone short the the steel stocks should be wearing a smile today.

Anonymous said...

Does LEH ever go down? Saw that Tim made a comment about being "up" on LEH, but not sure if he's aware that options have a price history. Bad call.

Tim Knight said...

Huh? I have puts on LEH.

And where's my tape dispenser?

- Tim

Anonymous said...

From 12/7/06 posting:

"I've had puts on LEH for a few days (someone commented how I got whacked on it; I have no idea what they are talking about; I did not get stopped out). The way it's playing inside these Fib Fans is cool, and it seems to be losing its grip at this level."

Care to share whatever your tape dispenser is smoking?

Anonymous said...

What a bull market


Anonymous said...

MOT coming back up. buy buy buy