Thursday, March 22, 2007

Grind It Out

I know a lot of you spend a lot of time worrying about a gift to buy me, particularly since no one was able to come through with a C3PO tape dispenser. I will welcome this surprisingly frank Batman water pistol in its stead.

And for your daily Unlikely Juxtaposition of Books, I offer this snapshot I took in my local Borders bookstore. It's not crystal-clear, I realize, but on the right of this New Non Fiction selection is Hillary Clinton's "It Takes a Village" retread, and on the left is a book about sexual pleasure for women. I'm surprised one of these books did not leap to the floor under its own power.

Oh, yeah. Charts. I almost forgot. Today was one of those grind-it-out bore-fests where the do the rah-rahs say it?........oh, yes, "digest" their gains. This still falls in line with what I was looking to unfold: specifically, the end of a full retracement before the fall resumes.

The daily candle yields a similar picture. Notice the spinning top today. I've marked another recent spinning top, which happened to be at the very peak of the market.

All the charts that follow tell the same story, so I'll just net it out for you here: (1) plunge after 2/27 (2) consolidation (3) turbocharged retracement to approximately 2/27 levels. My speculation, and where I'm putting my cash at this point, is that the markets will resume their fall. The rest of today's entry will be little more than tickers and graphs. Here's the gold and silver index (XAU):

AHM (part of the sub-prime world):

BAC (a huge bank, but a beautiful chart nonetheless):

Bear Stearns (BSC):

Continental (CAL), mentioned countless times here, having completely a lovely head and shoulders retracement to the neckline.

Brazil iShares (EWZ):

Goldman "nut" Sachs (GS):

PSB, part of the commercial real estate crowd:

Oh, speaking of Hillary......your video of the day. This is what all the fuss is about regarding the repurposed "1984" commercial. Hearing her nasal voice patronizingly talk about "conversation" this and "chat" that is truly nauseating. Anyhoo........enjoy:


sami said...

bought ahm puts on strength yesterday... my limit order got filled before the Fed announcement, so i was in the red right off the bat... they are moving back in the right direction though and i am hopeful they will reward me like the IYR puts that i bought in mid Feb and closed on 2/27.

Leisa said...

Regarding the video--powerful! Impactful (though impactful is not a word, it should be).

The books? I'm speechless.

Bryan said...


Thank you for the spinning top on the SPY. With existing home sales numbers tomorrow, and new home sales numbers on Monday, look out below!

h. lovil said...


My only concerns pattern-wise is the possible bull flag and a possible cup and and handle form ation that could be forming in the indices.

Hope not as I am real short

scotr451 said...

hi tim
I wanted to post on your blog and share with you a little theory i have about the current state of the market. I am new to the blog world but have been an avid reader of quite a few popular sites including: Phils stockworld, Kevins market blog, the kingsland report, Bretts trader feed, and tom2oc to name a few favorites..
I have also been a subscriber to prophet net for quite awhile and LOVE those java charts!kudos to you and your team for that site

Anyway..the theory

since last july the market was in a huge uptrend. the herd is all expecting a correction. the market makers oblige with a sell off inspired by a blip in the chinese markets, subprime et al.
so the selloff continues for a little while and then the expected bounce up to near classic fib levels. the chart patterns are "perfect" and right on cue the market swoons with an exiciting drop. the bears rejoyce here and everyone is expecting another leg down. the options put/call ratio spikes up and the market makers sense an oppurnity. with an open fed checkbook the big boys start buying up the big cap dow stocks and suddenly we have a "reversal" day on the indices. Dr bretts dollar flow spikes up and all the experts see the big boys piling in so they follow. the market surges up creating a monumental short squeeze. everyone was expecting another leg down so when the market reversed on them they panic and cover like there is no tommorow.
so now here we are...a sudden up trend appears..dow 13,000 is back on the agenda..woohooo.
So if you are a market maker what to do?? start selling into this rally to pay back the huge fed loans from last week, and also unload shares at a profit before the next "real" leg down in this market. this "Rally" is just what the makers wanted to let the players out bofore the next drop.
I may be all wet here but it makes for an interesting theory dont you think??

onewaystox said...

two images of HR.Clinton on a single post? WTF?!

charttrader said...

Can someone explain the case for a bull market with a slowing economy?

z-stock said...


Item number: 180097445080

Starting bid $65….

Ships to Australia....

z-stock said...

PCAR is a short. Running out of steam… @….77.8../.. 78.3

AssetStrategists said...


IMHO it is about time for a peak at your hand. I firmly believe that there are a bunch of us who would appreciate seeing a current image of your positions.

Thanks for the great charts. I received your book this week but haven't had a chance to read it yet as my son is in the hospital--

Keep up the great work!

EddieFl said...

Another range bound day,, mostly consolidating after the big gains of two days ago,

If any body trades GOOG, looks like it is rolling over,, i got short this morning..

jill said...

It takes a school to destroy a village!

Monster Rules said...

Top 10 holdings in QQQQ today:
9 down, 1 up (INTC)
while all indices are up tiny, a very "heathy" market.

JakeGint said...


Heady? Healthy?

Please confirm. I kept my RUT shorts on this afternoon, against my better judgement. We may have one more week of discomfort...

Humble said...

There is a base on the DOW, an inverted head and shoulders continuation pattern, which has not failed and measures to 15K. Same is true of the SP 500 and the Wilshire, all these patterns are confirmed and still in play. BTW the new high you point to on your DOW 30 chart was the second rally attempt, the first one was in 1968 and it failed to make a new high, there was no base that preceded the rally in 1968. VERY different from now. This week's price action has a good chance of pulling back due to what is unfolding now, and has nothing to do with 40 years ago.