Wednesday, February 28, 2007

Animal Mother

I am channeling Animal Mother. Bulls, you have a real chance of losing control. Stay sharp!

Some folks (well, one - Health Affairs - only God knows what on earth that name is supposed to mean............) suggested I would falsely claim I called the fall. I didn't call the precise fall (otherwise I'd be on Time magazine), but, come on, I gave some pretty clear warnings.

On Saturday, my entry was appropriately entitled, "I'm Starting to Like This Market". I wrote:

The Russell 2000 has been unkind, but I think we're over the worst of this. Here is a sixty day intraday graph; the head and shoulders target of 30 points to the upside has been plainly reached. Clear as a bell.

On Monday, once again, an appropriate title - "Crossroads" - where I wrote:
Accept my good wishes that the higher highs/higher lows pattern be broken in the coming weeks. The bulls must be conquered, and breaking the pattern is the first step in breaking their spirit.

Finally, after the fall, on Tuesday Night... for tomorrow - - again, I haven't looked at a single chart yet, but my early guess is a quick drop in the first half hour and then a big rally afterwards. Not hundreds of point, but maybe 100.

And what, dear readers, did the market do today? There was a quick drop in the first half hour. And then it rallied 100 points (well, 137 at its peak, but you get the idea).

Let's turn to the delicious Abby Joseph Cohen and see what she had to bark today......(this is just an image; don't bother clicking on it for the video; you have to go to for that).

In the video interview I watched (on perpetual rah-rah CNBC, which I never, ever watch, except in the rarest of instances), she stated that the market's "valuation, if anything, has gotten a little bit better". Yep, if you liked the Dow at 12,700, you'll love it at 7,000. She goes on to say that she (it is "she", right?) is targeting a 10% increase this year........and that's conservative....."assuming a deceleration in ...profit growth..."

AJC says of the U.S. equity market......"our market is underpriced....[and represents] very good value." Of course it does, you devilish temptress! The interviewer asked her what, if anything, would give her concern about the market. Her multi-million-dollar a year answer? "Events within the economy." Well, my scrumptious little sex kitten, you certainly know how to earn your keep. Rorrrrwwwww........

Let's put our brains back in and get serious. How high will the Dow go up (ahem - "recover" - - from the "correction") before we get a chance to really rake the bulls over again? Cast thy eyes this way:

.....and this.......

........and this.........

The $VIX pulling back to the horizontal line shown would make things more tempting. My God, the bid/ask spread on S&P options today was wider than Al Gore's waistline. (I think the man has decided to consume - live - anyone not living green. Notwithstanding his $30,000/year house bill on electricity and gas).

I'm going to break form and offer a few bullish ideas. Now, don't get me wrong. I don't actually buy any of this crap. I just get sick of being called a permabear. So I grit my teeth and throw some buys out now and then. Here's ABT:

LEH pulled back beautifully to its fib fan:

And SHLD, which I've mentioned repeatedly, remains a handsome graph:

I received many, many emails over the past 24 hours thanking me (some just in general, others with multi-hundred percent gains from my ideas). One kind gent even sent me a video. I share it with you now. Here, my friends, is how the bulls are coping with the market. (Although the bull is disguised as a giraffe here):


Anonymous said...

The video says it so well.
It looks as if The Peoples Republic is having some fun again this evening, I suggest if tommorrow goes 'well' that a celebration shall be in order, and what to eat: Chinese food of course! It looks as if today was 'Denial'
Thanks for the ideas Tim!
Will buy your book, you have to make an honest living some-how....

short IBM, CAL,
long, GEM (TSX-V), OIL (TSX)

Sunil Saranjame said...

Hi Tim,

I enjoy reading your blog.



junior35 said...

Hi Tim

I appreciate your honesty and modesty.Keep up the good work.
I just wish I had followed your advice!
What's next?Do we sit tight?Short individual stocks?Short the indexes anytime soon again?


Health Affairs said...


You have been calling for a fall for months. So it happened finally, and like I said you would, you now claim you called it...sort of that is. LOL you go girl! Always entertaining!

Glad your vanity book is doing well. I hope the people that buy it will make some money off it. I hope no one ever loses money from your "picks."

Keep calling the top you silly permabear.

Leisa said...

health affairs...Actually, many respected market watchers have been looking for a pull back. Rev Shark on Real Money, Jeffrey Saut, whose been shaking his head of late at the market's rise against the fundamentals, and John Hussman to name a few. And of course Toshi, though I agree that he is a perma bear (monocubear!)but it merely adds to his charm.

I'm sure that you, too, have charming qualities, and I'm confident that if you stop throwing stones and start proffering up your own deep market insights that all of us will greatly benefit, not the least of whom would be you.

As Dr. Fran-n-furter would say: "I'm shivering with An-tici-PA-tion."

Tim Knight said...

Oh, bear market, won't you come inside?

beanie11111 said...

You folks covered everything too soon. We gonna crash all week.

GOod luck

Michael said...

Check out the bearish engulfing pattern on the weekly charts:$SPX,uu%5Bh,a%5Dwaclyyay%5Bpb40%21f%5D%5Bvc60%5D%5Biue6,12,9%21lj%5B$spx%5D%5D


Tim Knight said...

I've trimmed WAY back; I think we may be in for a short term bottom; looking for buys right now.

beanie11111 said...

GOOG bottomed!!!!

All aboard!! No time left.

beanie11111 said...

If there is one stock i want to short, it would be ICE right now at 153!!

z-stock said...

Let’s all leave Health Affairs alone. If he really is from Afghanistan (as his Profile suggests) then he’s on our side.

Mouse click “Health affairs said” (BLUE LETTERS) and go right to profile) OR CLICK ON Z-STOCK, AND GO TO MY PROFILE..Mouse click works on everybody’s, handle.

dbohntr said...

First time blogger, long time reader. Whats happening with CME? I thought LVS did a nice job retesting old support. Hopefully it ends up where it opened.
Short HOG,GOOG,Q's,SPY,LVS,and unfortunately CME!

z-stock said...

I posted (My I.B. TRADING COSTS) on another site and was inundated with questions. I hadn’t realized so many of you were getting ripped off.
I use Interactive Brokers. ( 3 years now) If you use Scottrade, E-trade, or any other $10 a trade service, you are getting ripped offed.
Option trades $2.40 round trip. Always use Smart Routing.
Stock trades $2.00 per 100 shares roundtrip. RELIABILITY = 1000%
Here’s link

zeus111 said...

In deffense of health affairs she is not in the business of forecasting so she is in the enviable position to throw as many stones as she likes and not find herself in the compromising situation where people throw stones at her. Lets face it her post is not that far off from the truth. Although Tim has done much better the past 2 months by mixing it up and accepting somewhat the #1 technical analysis principle, "the trend is your friend", he has ha been bearish for a long time and it has not paid off. They say even the broken clock is right twice a day so this could very well be the broken clock phenomenon. Having said that I am aware that the market broke 3 different lines of resistance on volume so technically there is a high chance the trend is changing. The breath and the volume of the next rally will give us the clues.

For the average investor which probably fits the majority of the readers in this blog it is better to stay long in a diversified portfolio with a lot of low pe high dividend paying stocks. If you want to speculate on puts then set aside some casino money and try your luck.

Health Affairs said...

I second z-stock on IB. I made the change a year ago and have saved over 10K in trading costs last year alone.

amen zeus111. right on point imo.

CommonGround said...
This comment has been removed by the author.