Wednesday, January 03, 2007

Money Shot to Start the New Year

Greetings, my beloved fellow bears.

I introduce this year to you with some of the worst album covers of all time. Just to lighten the mood before we get down to business.





A merciful God has spared us from listening to the contents of the above albums on this blog.

I have so much to say, but honestly, I'm on the world's slowest network. So I'll have to keep it relatively basic tonight.

I rarely read USA Today. It is to journalism what Pamela Anderson is to dramatic acting. But I happened to see its cover story on Ten Reasons the S&P 500 Could Make a New High in 2007.

It was the usually claptrap bulls - - including Abby (ack! cough) Joseph (hack!) Cohen - - like to smear around. I will spare you the list, but the 10th reason they provided: "Because records were meant to be broken." What a bunch of nimrods.

I was delighted, of course, with today's action. We entered this year with the bulls snorting like mad. The GLOBEX was up huge yesterday. Markets around the world soared, including the parabolic Chinese market. And every blessed article on the stock market talked about what a fantastic year 2007 was going to be for the bulls.

So the market shot higher by 130 points. And I gobbled up a ton of S&P puts. Then the market starting sinking. It turned the other direction 170 points, but finally closed the day up 10. All the same, I'm not complaining. Serving up disappointment to the bulls is always a delightful treat, and this is a great way to start the year.


Here's the daily view of the S&P 500. Just take a look at today's range! What a tug-of-war!


I've been promoting the $XAU as a short ever since about $149, and it continues to behave nicely. This is looking better every week.


Now on for the straight charts. I am posting this so late, I don't have time for commentary, but I'll just lay the symbols out for you. BHI...


CERN


FTO, whose head and shoulders continues to form beautifully:


GS:


QQQQ (again, just look at that range, highlighted in light blue):


RYL:


And gargantuan XOM:


I'm sorry for the relatively text-free post. But godspeed to you all, and for crying out loud, keep the comments germane (and non-anonymous, if you're able!)

25 comments:

Anonymous said...

Tim,

What prompted you to load up on S&P puts after the morning run up? I mean, I know you're a bear, but the market was very strong until Fed started speaking, so (at least for me) it was tough to get in short position. I was looking to get some QQQQ puts.

Thanks,

Anonymous said...

sit tight and wait for retail sales and job numbers. If ADP is right on than expect a nice SELLOFF on FRIDAY.

Trader 2006.

Anonymous said...

If you're bearish, and you know coming into the new year that urgent new cash will get deployed immediately, but you also can feel that the demand is a mile wide but an inch thick, you have to fade the early bounce. At least that's what I did. So far, so good...the market looks like its ready for a long overdue bear phase. Again. Jeff

EddieFl said...

NON TECHNICAL ANALYSES.

I would look for some pharm and oil shorts in the up coming weeks. The new Congress is taking over tomorrow and they are gonna put pressure on those two segments...

Damm commie liberlas,,, just kidding.

Tim, carefull with those album covers, you dont want the PURITAN JUSGES coming out again..

Still short GS and BSC (puts)

EddieFl said...

PURITAN JUDGES.

Tim Knight said...

"If you're bearish, and you know coming into the new year that urgent new cash will get deployed immediately, but you also can feel that the demand is a mile wide but an inch thick, you have to fade the early bounce."

Beautifully put, sir.

~ Nona said...

Happiness is a day in the market like today and Tim's blog at night.

Ahhhhhh.....

~ Nona

Adam -Theophilus Capital said...

Great post and comments Tim and Jim. No matter whether its fundi or a techi information, It's good to see some fellow skeptics writing quality stuff these days.

Quick question(i'm not extremely proficient on the charting side): Do you mark your trendlines on a stem(high-low of the day)or bar(open/close of the day)basis? It seems to differ from person to person, but it could be a very crucial difference for wide swinging days such as today.

Keep up the good work, thanks again for the great insight, and good luck!

Adam - www.TheoCap.Wordpress.com

Lauriston said...

I loaded up on puts and shorted ETFs also as soon as the drop started as I am always looking for those "insiders" who knew about Fed minutes to start the action. Drop started maybe 20-30minutes BEFORE Fed minutes were released. Makes you wonder. Makes me wonder, and profit, almost always! http://lauristonletter.blogspot.com/

stealthelephant said...

A true broadening pattern is always ominous of a change in direction. I'm not sure if we are seeing that yet--broadenings are tough to participate in when they are happening--but the volatility indicates a degree of uncertainty that diverges from popular sentiment and the media. Even though I believe you are the "Boy who cried wolf" at this point, Tim, attention needs to be paid. Attention needs to be paid.

Anonymous said...

Shorts getting taken to the slaughterhouse today!

Anonymous said...

Tim, I noticed you use fibo levels in some of your charts. Are you a follower or use Elliot Wave in you analysis? If so, what is you general opinion of using Elliot Wave in trading, there are some people (zealots) who use it exclusively and some who just treat it as a tool. I myself try to use it as a tool along with some commons sense. Appreciate any thoughts. Happy New Year, Sam.

beanie11111 said...

Sam, only creationists use Elliot Waves because it comes from astrology! :)

Anonymous said...

once again the shorts were celebrating pre-maturely. LOL - it aint over till 'tis over. sorry guys...

Tim Knight said...

Adam, my trendlines are based on either highs or lows - I am stickler for the trendline not being 'violated' at any point along the way. That's cheating. The prices have to be completely above or below the line.

I'm not an Elliott guy - - not because I've learned about it and dismissed it, but only because I've never been intrigued enough to learn more.

Oh, and bulls - do you always have to be anonymous? Come on - show yourselves if you have something to say!

Anonymous said...

Shorts are gonna get pulverized this year

Anonymous said...

Market is going wild again.

It seem too wild though.

imo

Anonymous said...

Bidu up 10% in 2 days

unreal

What is wrong with this market?

unreal

Anonymous said...

Nothing wrong with the market at all. Just something wrong with us being permabears. Ouch!!!

Anonymous said...

i can't take the pain any more. Damn paerma-bear blogs, damn doom-sayers, damn you all to hell. i turned bullish this morning and bought calls in semis and already made up for many days of losses. i'll never listen to a short again. perma-losers

Anonymous said...

If you want to make money on the short side in this market, you need a big pair of brass ones. Otherwise, just go long or go away. Jeff

Anonymous said...

I was a bear until today when I lost 2.5k on a small account and turned bullish witht the double long qqqq etf. Woo hoo Im ready for the ride up 20% this year.

JakeGint said...

Well, we can take some small comfort in the fact that the oil plays you've mentioned look pretty darn doomed. I sold XOM calls today (I like to spend theta), and I think I may be doing that for a while. My major frustration is with a couple of ridiculous PE balloons I've been trying to prick for the last couple of months, some successfully (AKAM) and some not so much (CELG).

Like a lot of people who tend to aggregate toward those of like minds, I too had BLUD on my screen as a bullish play. When I saw you mention the same, I felt even better (permabear that you are). BLUD showed even more strength than I thought it could today. I wish I'd bought more calls. Ah well.

At least I didn't sell the RIMM calls like I thought I'd too two days past. Talk about dodging a bullet. At $140, however, RIMM may sing a different tune... Your comments are welcome.

Anonymous said...

Tim

Seriously, when do you think we will get a drop in this market i.e. one that lasts longer than 1 day? Please see if you can address this in your post today. This bull is just un****ingbelievable!

thanks

Anonymous said...

Can someone please tell me WTF is going on in this market, you get a wild selloff at 2:30pm only to close green, then today the markets open down, the dow starts to tank and than by 3:30pm its F%^king green. This cannnnnnnnnnnnot continue, it just cant. The average money manager is looking for gains of 8% for the year. WTF