Wednesday, January 10, 2007

The S&P 1400 Line in the Sand

The most important fact of today's activity is the S&P 500 didn't breach 1400. The horizontal line you see below is substantial. For many weeks, it provided a formidable resistance to prices moving above it. Once clearly pierced, it transformed into support. This barrier is crucial......unless it is cracked soon, hope will fade (for the umpteenth time) for a meaningful drop in the market.


The NASDAQ has been especially strong recently. I'm sure Apple, Inc. (AAPL) can largely be credited for this.


Finally, the Dow Transports remain safely bearish, but if the downward sloping trendline is broken (which would be at about the point the arrow is pointing), that would be really bad for the bears.


Just a couple of stocks to mention today - one short and one long - - and both tech. The short suggestion is gigantic Microsoft (MSFT). Years ago, this stock minted millionares and billionaires. Now it's just a big, fat bore. But its recent rapid ascent makes for a nice shorting opportunity with very low risk, since the stop-loss point is to close.


On the flip side is none other than Sun Microsystems, which has been in the process of either getting blown to pieces of marking time since the turn of the millineum. It finally seems to have done something exciting, and there's no doubt that the burst above the huge area of resistance drawn here is unusual and meaningful.

36 comments:

Anonymous said...

We have consolidated plenty and now we continue our ascent upwards. Bears do not have the strength to push this market down as can be witnessed from the repeated failures to break 1400 on the S&P 500. The NDX 100 is off to the races courtesy of AAPL, XMSR, MRVL and SIRI. We'll easily climb another 10-15% from here.

Anonymous said...

Im watching NDX 100, it has already touched 1820 twice already, tomorrow it may go for its third chance. The NDX run could run strong tomorrow, but I would think a pullback of at least 1-2% is in the cards. Like you said AAPL has kept the NDX propped up for days now.

Also the transports have been just stuck for weeks im hoping they turn down, would be nice to see IYT below 80.

Trader 2006.

Anonymous said...

4:50 another 10-15% from here without a pullback. I didnt think 12000 was possible by the end of 2006 but to say another 10-15% is unlikely.

Trader 2006.

Anonymous said...

check out this out:

According to the Economist global money supply growth has increased at a whopping 18% annually over the past three years. That’s unsustainable. It’s the force behind HAL, M&A activity, Emerging Markets, housing bubbles and so forth. Will or how will central banks start sopping-up this excess is unknown. But at some point, something has to give. If the central banks are true to their words as “inflation fighters” they will have to act. The longer the imbalances continue the uglier the result.


its from etfdigest.com

http://www.etfdigest.com/daveDaily.php


he has some good charts and a little opinion about each one.


Trader 2006.

Anonymous said...

Hey Tim

GREAT CALL on shorting GS....NOT!

PB said...

anonymous loser should be lined up and shot!

10-15% easily??? Buddy, reality seems to have clearly escaped you!

It took ALL YEAR to get 15% on the DOW, and you say it will be easy!?

Nothing is easy, except stupidity for you!

Why don't you go hang out with your bull buddies, or start contributing something half intelligent!

Sanjay Sola said...

good charts Tim. glad to see that you're not always bearish. we don't want you to be the next Herb Greenberg.

Anonymous said...

Thx Sanja Sola --- we don't want you to be the next 'free' thinker. Stick with the herd buddy!!!

PB said...

Hey Tim!

You are right about the majority of people adopting the bullish view. There are not many in the media who are willing to embrace that not everything is right. Every piece of news (as it relates to the markets) seems to be sugar-coated. They will get as far to being bearish as to say that they are cautiously positive.

As for the markets, nothing seems to faze them. I thought commodities were selling off because of slowing global growth. Then why don't equities also sell-off? It is mind-numbing for sure. This market wants to pull everyone into it, when that happens we will finally have a correction that is more than a day or two long!

Tim Knight said...

Anonymous (of course) wrote: "GREAT CALL on shorting GS....NOT!"

That's what a stop-loss order is for, dickhead.

Cal said...

Hey Tim, I just want to let you know that I really enjoy your blog. I think your charts are great and even though your a bear you keep the bulls in check. This market is strong, but there are always companies that are about to lose a leg in the race..
I want you to check out this article for just a minute..I think you might find it of interest..
http://carlfutia.blogspot.com/2007/01/advancing-issues.html
thanks,
Caltrader

Anonymous said...

Stops on GS!

You kept posting that chart saying how smart you are for having called it right.

Then GS starts zooming up and no sign of the chart ...on to the next short...

JakeGint said...

Anonymous, whaddaya want, a personal mea culpa mailed to your house?

Post your address, loser. Funny, I didn't see your commentary BEFORE GS broke resistance. Chicken salad.

Jake

One Way Stox said...

when will we be able to buy the puts on your QID?

Anonymous said...

Shorts are done done done!!! They are finished!!! Bulls win win win!

Anonymous said...

Great call on shorting MSFT... NOT!!

anonymous2

Anonymous said...

Bears being taken to the cleaners today. Can't loose long DDM, SSO, QLD.

Anonymous said...

Trader 2006

10-15% is unlikely thats why I am betting on it. Its seems the unlikely becomes reality if this market has taught us anything. Dow 13000 by March and than to 14000+ By December. Naz to 3000+ ( tech leads). S&P to 1600+ . Its all about liquidity and it ain't drying up anytime soon.

The first anonymous.

Anonymous said...

9:40 when liquidity dries up look out, these markets will be finished. Why are the markets touching fresh highs today. Incredibile. I cannot wait for the blowoff top and the 5-10% pullback, its going to feel good.

TRADER 2006.

Anonymous said...

To all you MORON BULLS!

The world needs oil. It does NOT need your fucking ipods or iphones or ANY OTHER i-shit!!!

Anonymous said...

Yes the world needs oil,and now it has it at 25 dollars less a barrel than it was a year ago.What did you think the market was going to do with that much of a price decline ? New highs and 52 week highs on virtually EVERYTHING. Absolutely no follow thru selling even on down days and billions added in liquidity daily. No way this thing is coming down hard this year. And if it does,it will be at least a couple of thousand points higher.We will probably never see 12000 again and the odds don't look for seeing 12,300 again. Look at a chart of the DJIA when we finally went thru 1000 once and for all 20 yrz ago.Then we went straight to 2750 and even when we did have a big correction it was down to 1750('87) and then right on back up thru 3,4, & 5000.Thats closer to the scenario that we are looking at here. We HAD our huge 10/15 yr correction after '911' in '01 & '02.This markets ready to be a"FAT CAT" for awhile again and it has a global economy with falling oil to sustain it this time.

Denver, Co.

EddieFl said...

Tim,


Time to put the anonymous "block" up again.

Or check for ID at the door. These guys are morons, but the morons I know would actually say things to your face, not hide in a blog.

Anonymous, if you cant fork over 40/month for a memebership, then as Jay-Z says, "you aint shiziit.""

Why do i have the feeling you all either dont have a position in the marker or if you do it is so small, you need a magnifying glass to find it, and let me guess you always get out and finish too early, just like your wives and girlfriends say..

Eddiefl

Anonymous said...

$40 a month for what ? And who the hell is Jay-Z except Beyonce's booty call ?(Yeah yeah he's a rap mogul )What the hell does that have to do with anything on this site except "not shit" right ? And what the hell does a 'handle'tell us about you ? Not a damn thing.You all can respond to me as MOFO though if ya want.That be cool. Know what I'm sayin'

Anonymous said...

Shorties got saddam husseined! lol

Anonymous said...

Everything up today

MSFT, GOOG, GS

maybe sign of top?

I hope bull diessssssssssssss

soon

Lost fortune shorting this market.

Dead bear

Anonymous said...

Shorties sucking so bad

Anonymous said...

sellllllllllllllll offffffffffffff

Anonymous said...

hahahahahahahahahahahahahaha, never see 12000 again....are you fuckin serious......I bet 12,000 by early spring watch and learn...12300 could be here by next week



Anonymous said...

Yes the world needs oil,and now it has it at 25 dollars less a barrel than it was a year ago.What did you think the market was going to do with that much of a price decline ? New highs and 52 week highs on virtually EVERYTHING. Absolutely no follow thru selling even on down days and billions added in liquidity daily. No way this thing is coming down hard this year. And if it does,it will be at least a couple of thousand points higher.We will probably never see 12000 again and the odds don't look for seeing 12,300 again. Look at a chart of the DJIA when we finally went thru 1000 once and for all 20 yrz ago.Then we went straight to 2750 and even when we did have a big correction it was down to 1750('87) and then right on back up thru 3,4, & 5000.Thats closer to the scenario that we are looking at here. We HAD our huge 10/15 yr correction after '911' in '01 & '02.This markets ready to be a"FAT CAT" for awhile again and it has a global economy with falling oil to sustain it this time.

Denver, Co.

11:06 AM

Anonymous said...

FUCK THIS MARKET and FUCK THE BULLS. Seems to be program buying all fucking day long. This market just keeps going higher and higher. Im glad last night the Hang Seng and ^n225 were lower even after the US markets rallied. This is going to end soon, it has too, things cannot go straight up with at least some sort of pullback. Market will get a correction and take a nice needed selloff below 12,000. Market is OVERBOUGHT just like it was oversold 7 months ago.

Anonymous said...

At the moment ,yea I am serious.$50 oil and mountains of liquidity are hard to ignore.Even Tim himself sounded like he did'nt like yesterdays close for bearish prospects.And he's admittedly a bear for all bears.And then there was TODAY.I"d love to see 12300 next week,so I'll be hoping that happens.If it does,then you're the man( or woman)...whatever!

Denver,Co

Anonymous said...

You know whats funny, $50 an oil. I remember the MEDIA hyping 100 oil 100 oil 100 oil 100 oil, supplies arent enough to keep up with demand, ethanol comes into play than hybrid cars start selling like mad, fast foward 6 months later and EVERYTHING is PERFECT. DOESNT make any sense. Isnt oil suppose to go up as demand in India and China use it all up or is that not the story any longer. This market is being played like a the new WII nintendo. They just continue to pump money in left and right. It can only go on for so long. There just cant be a continuous uptrend without any pullback. Look at the housing market falling apart. I think they are pumping these markets up due to the fact there is no other place to put money. The greedy always make money no matter what. Those big guys are inflating everything to keep this economy on its feet. This market will sell off and when it does you will want to be far far far away. All we need is just one international market to collapse and the rest will fall like dominoes.

Anonymous said...

"The short suggestion is gigantic Microsoft (MSFT)."

Right on target with that suggestion!! What a gigantic move today!!

Anonymous said...

I am raking in the dollars on shorting LEH, AMG, GOOG, and the RUT. I also made a fortune buying the OIH. I can't wait for a copy of that book to come out. NOT!

Anonymous said...

You are a "dyed-in-the-wool technician". I would love to know what wool you were dyed in? Curious if you are the mentor to Roberto from Nasdaqtrader.blogspot.com? I do love this site. It makes me feel more intelligent than others. Thanks!

Leisa said...

With my caveat of "I've been wrong about everything so far last year". Commodities are a fallin', and it is a good thing until it is a bad thing.

What we've all seen is mega sector rotation--we saw it into commodities and now it is out of that sector. While the nanny, nanny boo boors (also known as the anonymous posters)have reveled in this bull market (and sure you have to respect it), there have been entire sectors (housing, now commodities) in their own bear market hell. Aren't these the pillars of our economy. I hear alot of yammerin about the services sector, but let's face it, if we are a consumer driven society, consumers buy things, businesses buy services. If businesses do not have consumers to buy their things, then they will cut back on services.

To Toshi-Tim's (Tim, I will go to my grave remembering that little video) credit (and he is soooooo good), he's given folks here ideas on how to play that (and Tim, HYDL is doing spectacularly, I only wish I had taken a testosterone shot and hung on).

But if commodities--the stuff that builds economies--are no longer in vogue, then how long can stocks as an asset class be in vogue without out a little cliff diving for amusement? While initially bullish, this fall in oil and the like cannot be healthy overall for the market. If the data start coming in weakening, it will be like yelling fire in a theater. It may not come, but we need to watch the commodities.

chanon said...

DOW needs to topper 12600 soon, if not small correction to 12200 is healthy.

DOW