Wednesday, April 18, 2007

Chug

If my mood is a good contrary indicator for the market, heed it well. I was profoundly dismayed and depressed by the market's action today. At one point, the Dow was up over 60, and I was thinking to myself that there are really better things to be doing with my life than writing a bear-oriented blog. I toyed with the idea of pulling the plug on this thing.

Historically - and I've been trading a long time - my psyche is always darkest before the dawn. And it was really dark today. The Dow at a new lifetime high. Bearish ammunition like Yahoo being down 12% nearly neutered by the bulls. And the childish persistence of comments like "lmfao" in this blog (I say again: I abandoned rotflmao and other such nonsense a little over 25 years ago.....so, IMHO STFU).

The news isn't all bleak. My Russell 2000 puts actually went up in price today. And many indices continue to appear stretching the bounds of sanity. Look how the $MID is mashed up against the highest ranges of its Bollinger bands. Plus the RSI went above - and then below - the 70 mark, which is a sell signal.


The NASDAQ, aided by Yahoo, actually edged down today.


As I mentioned, the Russell went down today, in spite of the market's strength. I closed my S&P puts earlier in the day. I'm sick and tired of the bid/ask rape job in those options. The Russell is simply a better value.


As for the S&P 500, look at this interesting channel. These two lines are perfectly parallel, drawn at a 30% angle. After the late February/early March sell-off, it's incredible how much strength this index has found. But it is still trapped within this very well-defined, multi-year channel. Odds for further strength are poor.


My gold/silver puts also had a good day. The 120-150 range of the $XAU is a good trading opportunity for those who want to play off the recent cyclic nature of this index.


Lastly, the Amex Major Market ($XMI) fell a bit today as well. We have a sell signal on the RSI here too.


What's the latest count now? 21 up days out of the past 24? Something like that. It's something ungodly. I can only imagine how complacent the bulls must be getting now. Although I don't think it's an accident that the $VIX actually went up today, in spite of the widely-publicized record highs.

71 comments:

Anonymous said...

At one point, the Dow was up over 60, and I was thinking to myself that there are really better things to be doing with my life than writing a bear-oriented blog. I toyed with the idea of pulling the plug on this thing.


This is just un f* believable coincidence. around 12.30pm PST I had the same thoughts

tilis said...

TIM

For the public record, during what periods during the past 20 years have you been bullish?

Thanks

Lauriston said...

We need a catalyst, and I think it will be China as in February. Unfortunately, China keeps going higher everyday about 1% up everyday for the last 6,540 days or something like that. I don't think they know what is "hugging upper Bollinger Band" in China! LMAO. I have been waiting for a selloff for more than a week now and I am also getting tired of this charade. I feel like screaming "STFU!" at the bulls, but hey, congrats to them. Now if only we could get 1-2% down tomorrow it would be great...

JakeGint said...

Tim,

Sorry to use your board to get a message to Tom2oc, but this is the only place I've ever seen him, and
HE DOESN'T ALLOW COMMENTS ON HIS BLOG.

Annoying, Tom!

But great recent posts, anyway.

(And to be clear -- this is NOT "Tom the Trader" who's been advertising here, but the OTHER Tom, who actually posts INFORMATION on his blog, rather than come-ons.)

_______________

The secret word is "pkibua."

Translation: "Pack it in, Bub."

__________________

The SECOND secret word is "uibqpdg"

Translation: "Ubiquitous Pig Dog"

TOMTHETRADER said...

NSM GS MS EMC SMH

Poor volume but GOOG will come to the rescue ...bad a/d line has us protcting for a buy the dip !!!

TTT

Anonymous said...

The great cowboys ride bulls. If the don't get bucked off they jump off after 8 seconds. Don't worry, we are close to the eight second mark

JakeGint said...

Anon--

This bull's so old I bet that cowboy feels like he's riding that giant bronze one outside the NYSE...

_________________

The secret word is "sywsm"

Translation: It's sink or swim time, fellahs (and ladies)!

Des said...

Tim,

I hope and assume that you're being facetious about pulling the plug. You provide me with a daily dose of humor and charts for which I am very grateful. It's my opinion that opening the 'Comments' section to a bunch of witless, foul-mouthed anonymous posters is perhaps a mistake, but you’re the owner.

Your daily posts are always appreciated; please stick around.

Leisa said...

"This bull's so old I bet that cowboy feels like he's riding that giant bronze one outside the NYSE..."

Jake that is so funny! A little levity is a good thing.

sam said...

Hi Tim, I just want to let you know that I don't think this market will even give us a change to "buy the dip", the pullback might not even happen before the top half island has been reached. We are at the 5 stage(the last stage) of the bull market. You just have to think like a madcow.
my 2 cents. good luck to all of us.

sam

Anonymous said...

Tim,

Yes it does get drepressing at times thats for sure. Sometimes that old tune from Buffalo Springfield comes to mind,,Paranoia runs deep,Into your heart it will creep. Don't worry !! It will pass soon enough.

As for myself,I got fully invested today in ProShares SDS.The one thats an inverse to the S&P 500.

Anonymous said...

I hate to say this ,but relative to "going to new highs" off of "new high levels", from the past in " % " terms ,the INDU are really not that high at all.And most of the technical indicators are intact to support this.I don't like THIS market because it backs and fills it's way up deceptively with little sell-offs that all of sudden turn into sizeable buy programs that are almost impossible to catch.I like volatility in large swings that last 2 or 3 days .Who does'nt ? But if you look back at say the last 25 years of the 'Industrials',and especially where it has traded over the last 8 years,we really aren't all that high .It's confirmrd by the most of the other indexes and certainly by the other major world markets.Only our NASDQ trails behind to a degree that is head scratching,but that I guess is from all the so-called ".COMS" that went out of business.Thats bad news for die-hard bears.But this market is really hard for bullish day traders too.All those little mid-morning and mid-afternoon selloffs stopping the call players out right before reversing again and closing at another little all time high .If we're going up ,I wish we could have one of those 800 pt up weeks and kick some ass, but it probably won't happen that way.This market is really tough for ALL short term traders ,but the public with mutual funds and 401 K's love it.Not to hot ,and not to cold...and lets not forget this is Bush's last year to leave a legacy and all he's got is leaving the White House with a Dow- Jones at a MAMMOTH all time high .But that ain't bad and he's got Paulson and Bernanke help him " git 'er done ". It's entirely possible this could last into next year.

Anonymous said...

guess what's happening for me today, every SP emini up i add more short position and i believe god is fair. then we got sold off in last 15 minutes.

IM said...

19 of 30 DJIA stock down yet we make new all time highs. Amazing !
The small caps and the Nasdaq are showing weakness which is not a bullish sign. Volume was fairly high though there was plenty of selling in the last hour.
I think 12600-12650 would be a good entry point on the longside.
A break below 12,400 would be a good shorting opportunity.

As long as the commercials are net long, the market will continue going up. Its simply a matter of what the majority of the big money is doing. They essentially dictate which way the market is going. If you can't fight them, you might as well join them. History will show that the market direction has little to do with economic data and more to do with money flow. The economic data may show the economy is in deep shit ( excuse my french) but if the money flow is positive and big money is buying, than the market will continue going up. Keep an eye on what the big boys are doing and you will always be making money.

gary said...

It appears that the market is going to continue the runaway move from last July. So far the correction size is about the same, about 25-30 points on the S&P. watch the corrections on the way up once we exceed the average correction and make a lower low that will probably be the siganl to short. Be patient bears at least wait for a lower low before going against this market. I want to see a large short position in the COT report also.

TradeItLIkeItIs said...

gary

I like your points about the COT.

Couple questions...

Are you just looking at the S&P contract? The emini or other index contracts?

Do you look for a certain change in the %bullish on the contracts to indicate that the 'big boys' are beginning to lean the other way?

And in your opinion, how far would the big boys have to 'lean' the other way before a small trader follows them - because 'they' have deep pockets and can fade the market a long time before it finally reverses.

Thanks

- TradeItLikeItIs

bizinsider (dave) said...

Tim, don't lose heart...

For the bulls I have only one thing to say:

"Excpect the un-expected"

At this point everone expects the bull to run because it been so 'resliliant' as one CNBC commentator put it.

Here's a bit of trivia:
The sell off of February was a Fib time series number of the 1987 October sell off.

But trivia aside, take a look at those long-term charts. We are in interesting territory. We are hairs above the old high,... I mean come 'on 40 pts above and they are making a big deal about it? That's the trap... on a long term chart it looks like a bad pixel.

It's true though - it's sink or swim time. I would rather see a slow errosion of prices than a one day drop though because it seems, historically, those big drops get wiped out pretty fast by a raging bull run back up. But a slow grinder of a decline would tip you off that a true correction has started. My long term indicators say a trip back to 11,600 on the Dow is possible by year end (October?). Try to find a single person anyhere who believes that will EVER happen ;-)

All I can say is, "Expect the un-expected".

BizInsider (Dave)

Anonymous said...

just monitor GS direction. usually it rep the market in general.

Anonymous said...

lauri, you need more then what you got to help the account balence back up sucka...

ps. dont lose too much monie bears.

Tim Knight said...

"For the public record, during what periods during the past 20 years have you been bullish?"

From PRECISELY 1982 until September 1987, and then from precisely October 1990 until January 2000. No interruptions!

Happy?

Sheesh.

Anonymous said...

Wow,those are EXACTLY the same months and year brackets I would have guessed you were bullish . Unbelievable.

Tim Knight said...

Some anonymous posters are dickheads.

All dickheads post anonymously.

Therefore, Socrates is a man.

Or something like that.

carmelus said...

If I were you I would close those put options over XAU since that cyclic nature will not repeat, there was a breakout in XAU and HUI, now it is testing but given the dollar weakeness expect gold and mining companies towards upside.11 months of correction are over finally

tilis said...

Tim

Thanks for your response.

So in truth you aren't a permabear - though I am surprised you did not go bullish in '03.

Now Tim, lets say all the major indices (well except for Nasdaq) exceed their 2000 highs - test these highs, hold - and start going up with large volume showing continued accumulation - would you turn bullish then?

Thanks

Anonymous said...

I believe that when it became somewhat obvious the markets were going to make new highs, the big boys weren't going to let too many people get in with buy the dips strategy. I know I was waiting for a pullback, more than one day, to get long but looks like I missed a nice run. So be it.
Just from a psychological aspect, I have felt for quite a while that the economy could take a weak market or weak housing but not both. So once everyone is "convinced" that housing troubles are behind us then maybe the market will reflect fundamental reality. ( not looking to get into Goldilocks debate)
I also think the LBO craze will wind down fairly soon as the dollar continues to tank. Hell, Why not use massive debt that can be repaid with a cheaper dollar? That will not bode well for the markets when those bids get pulled.

gary said...

Tradeitlikeitis,
I look at the net position of the commercial longs minus the commercial shorts. Mostly concentrate on the large contract but I do add in the dollar value of the e-mini. When the net gets to extreme positions say -40,000 or more I start looking at cycle lengths and for very overbought levels on the weekly charts before shorting. The Commercials are usually early on the short side. We are probably due a correction here soon although I don't know if it will occur before options exp. As long as the trend of 25-30 points hold and the SPX keeps making higher lows I would have to guess that the runaway move is still intact. Watching the dollar closely. If it breaks multiyear support at 80 bad things could follow. Keeping an eye on Gold suspect it will lead if the dollar is going to fall.

Anonymous said...

anonymous dickhead posting.

dollar is down, i.e. exports are cheaper and imports expensive, but USA is not a exporting nation like china which means prices/inflation go up i.e. fed hike rates i.e DOW will DIE

Anonymous said...

LBO and PRIVATE EQUITY DEALS are going to hurt this market when everything starts to fall apart.

Anonymous said...

DOES THIS MAKE ANY SENSE:

While the Dow Jones Industrial Average (DJIA) ended its eight-day winning streak on Wednesday (much to the relief of the pundits on Wall Street who feared stocks were getting ahead of themselves), the blue-chip barometer still managed to log a gain of 0.41 percent for the week. Elsewhere, the S&P 500 Index (SPX) added 0.63 percent and is now trading slightly above levels last seen before the broad-market pullback that started on February 27. Furthermore, the index closed only about seven points shy of its year-to-date high of 1,459.68 achieved on February 20.
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A short-term question for investors to ponder is, "Will technicians view this move back to the level preceding the February 27 sell-off as an opportunity to sell?" If September 2006 is a guide (which is when the SPX reached the May 2006 peak level), the market sputtered for a few days before ultimately breaking out. What's more, the market during this period in September saw a very similar winning streak compared to now.

Last week, the financial media allowed subprime concerns to drift to the background as they focused on the fact that NYSE margin debt is now at a peak last seen in 2000. However, this is nothing more than a coincident indicator. In other words, growing margin debt is good until it turns lower. What's more, had one sold stocks as margin debt was hitting highs through the course of mid-late '90s, one would have missed a huge rally.

In addition, included in margin debt calculation is short interest, which has grown during the past few years and is contributing to current high number. As you'll remember, March saw NYSE short interest jumped 9.5 percent. Meanwhile, one fact that has been overlooked by the financial media on this topic is that the amount of free credit, which is associated with selling of stocks in margin accounts, is at significantly higher levels than that of 2000. This would suggest that margin debt associated with short selling is much more than that of 2000, which is another way of saying that we are not at the euphoric levels of 2000, when a higher percentage of margin debt was attributed to borrowing to better leverage long stock positions.

Last week, more stones were added to the wall of worry the market is scaling, as the financial media listed concerns regarding business spending as a chief worry, replacing housing as the number-one worry. Meanwhile, the International Monetary Fund (IMF) issued warnings about Leveraged Buyouts (LBO), while a hedge fund principal made concerned sounds regarding private-equity deals.

Anonymous said...

take the shorts with a grain of salt boy.

Dennis said...

The fundamental data keep getting worse but stock markets keep going up. But I have faith that reason will prevail and stocks will turn south. I just remounted my spx puts today and waiting for breakdowns in the market. It may even happen tomorrow.

Tim Knight said...

"So in truth you aren't a permabear - though I am surprised you did not go bullish in '03."

In all seriousness, I was bullish in 2003, although rather late in the game. But I did well.

Anonymous said...

Tim,

You seem to have some REAL talent. Charts! Honestly.

Your disposition as of late has been rather "down" if you know what I mean.

Maybe I missed something, but I didn't know that your blog was for shorts only. Seems to me that chart analysis is a valuable skill to have going both directions.

I'm reminded of a quote by Edwin Lefevre, author of Remiiniscences of a Stock Trader. He wrote: "But there is only one side to the stock market; it is not the bull side or the bear side, but the right side."

Maybe if you can approach positions with that in mind, those of us who read you to learn will find possible trades going both directions. Of course the important thing in this case is that they will be supported by your convictions, which we all know springs forth from your charting knowledge.

Just a thought...

Stephen

zeus111 said...

Words of Wisdom for the bears


Basic rules of technical analysis is that the trend is your friend.The trend is up in all indices and shorting in an up trend is the like you are swimming upstream on a river. You may have some luck swimming against the current but if you insist doing it you will end up drowned. Using stops does not matter you may delay the process of losing big money but sooner or later you will lose big money. I don't care if you are the best trader in the world (and it is an impossibility that you are because you are trading countertrend) , you keep shorting in a bull market you will get burned. You may get 2-3 profitable trades out of 10, but what good is that.

It is not rocket science. You buy the retracement in an bull market and you short the rallies in a bear market. Last time I looked at my charts we were in a bull market. Also I don't want to hear the market is overbought. The market can stay overbought for a long time in a bull market. Using overbought stochastics or rsi to sell short in a bull market is a guarantee money losing proposition. These are the rules when you trade off oscillators such as stochastics or rsi. In a bull market you buy when the oscillator signals oversold. In a bear market you short when the oscillator signals overbought. In a trading market you sell when the oscillator signals overbought and buy when it signals oversold.

Also I don't want to hear that the market is overvalued. It sells at 16-17 times this year earnings. Where do you see overvaluation. You can argue it is fairly valued but overvalued it is not. S&P 500 was selling 35 times earnings in 2000, that was overvalued, Nikkei was selling 70 times earnings in 1990, that was overvalued.

Tim and the rest of the bears wake up, snap out of it and listen to what the market is telling you. We are in a bull market

Tom2oc said...

Jakegint, (sorry Tim for using for your blog)

"Annonying Tom" !?

Gee, why didn't you join me in buying the dips since I posted that 3/1 State of the Market analysis? Was it not clear enough? :) Just pulling your leg, sorry if you've been on the wrong side of the market.

I don't allow comments so I can focus on doing TA research instead of reading and typing.

Market is overbought at the moment so would be normal to see a pullback/consolidation phase starting in coming days but eventually I still give the best odds to COMP for crossing 2533 and shoot to 2750 later this year or early next year before a bear market gets under way.

But ready to switch side whenever I spot a character change.

Best,

dr.phil / a.k.a. - dickhead said...

Tim,

I'd like to see/hear some more finite and absolute predictions of levels and time frames you feel you could make on the Indu and S&P 500 and where you think they should be in the relative near future. Say like July 1st.We all know this trading business is in the end supposition and conjecture,so just throw your best opinion out there.

Ex.-Date : 07-01-01
DJIA : 11,758
S&P : 1373

Atlas said...

Any of you Yankees looking at how the far east is doing tonight. It will be an interesting Thursday.

Anonymous said...

EWT-
If you go to 5 min levels for the quick buck-you wont find it!

Take a little time...read this and draw your own conclusions. Leave your position and your emotions at home.

Here we go:

32-37 = one
37-38/42(double bottom) = two
42-66 = three
66-74 = four
74-87 = five (and completion of master "3" as in 1932-1987) = 55 years

To explain 87-07 we have to jump one degree higher:

1914 (dow 53) to 1929 = one (ratio 7.284906)
1929 to 1932 = two
1932 to 1987 (see above) = three
1987/87 = the crash = four
1987 bottom to 2007 = five ( low close 87 = 1738.7 x 7.284906= 12666.26 !!! WE HAD 2 CONSECUTIVE CLOSES AT THAT EXACT LEVEL ON FEB 6 +7)

Now lets move back to the entire history of the Dow (and the "start of capitalism as we know it") in 1896 (110 years- but it will only take 11 mins to read)

1896-1929; 33 years (more precisely: 12,000 days) = Wave 1
1929-32/33 = Wave 2
1933-66; 33 years (12,000 days) = Wave 3
1966/74; = Wave 4
1974=2007 = 33 years (12,000 days) on Oct 03, 2007
Thats for timing

now the price:

1896-1929 consists of a 1up-2down-3up
first leg ratio 3.655075
interim correction : 57% of prior up
REPEAT 1978 (742) TO 1987 RATIO: 3.655075 = TGT 2712 (HI CLOSE 2722!)
third leg 1914-29 ratio 7.284906
interim correction (87/87) : 57% of prior up (742-2722) ( 1616 Dow intra day was crash low)

Additionally, subwaves since 2002, 2005,2006 indicated tgt clusters, all ending in the 12,650-12800 area....

So it appears from this analysis that there is "nothing left" to the upside (nevertheless: my safety exit >13k since I have to provide room for my error), based on the above quant. studies.

In summary, Eliott with his limited time horizon for data in , seemed to have got it right.(although his definition of the "3" advance is not that clear (1.618) certainly does not apply,
but neither does Prechters "retroactive" fifth extension...since it is of no other value than retroactive confirmation.
But I have found a constant way to figure that one out with amazing precision, typcially > 99%

At this point, I would think 7200/low 6k seems a reasonable objective next, although EWT would suggest significantly lower levels. But we can deal with that when we get there.

So this then is the "fifth" and IMHO final for a 110 year cycle...It does NOT anticipate new highs. (past 12,800)

And for those who still decry the Dow as the "Old Economy", they might want to think twice: Including dividend re-investment (yes thats the cashout that one doesnt see anymore
in the Index) the Dow is up 50x off the base of 570 in 1974. Anybody who still invests in NAZ w/o a penny of DVD might want to consider that for the naz should be approximately
at 5,000 to be at parity with the Dow... So the Old Economy seems to be alive and well, and so is the "Old Europe", whereas Mr. Rumsfeld is gone.

Enjoy, and I totally invite your comments!

And for the charts to proof what I say go to www.prophet.net Javacharts

dr. phil / dickhead said...

Japan down 257.

Globex S&P Futures down 6.00

Your right Atlas,tmrw might be interesting !

ross said...

Excuse me, oh you who have given yourself the handle of a greek god, you may soon experience some serious repercussions as the result of your apparent hubris, which is a greek term that refers to an excess of confidence.

Friends, this market smells phony in the manner of some of the great tops of yore. I think how this beast behaves immediately around and after expiration, in other words, now, will be very telling. Soon a lot of shorts will be cleaned out, and we will see if the volume and put call patterns, (take a look at the decisionpoint data and tell me if you see the problem) which look bearish are going to have any say over the direction of prices.

FWIW, there is a brad turn date in the next day or so. We may have already put in the high if Globex is any indication.

JakeGint said...

That's all I wanted to tell you Tom... that I did switch sides after reading some of your stuff (I already had a bias for watching the $BKX as a leader).

It made sense, and while I don't think it's going to get you hired by Goldman Sachs or Blackstone, I think it could stand to make you some dough in the near term.

I worry about using "GOOG" and "APPL" as long term indicators, however.


Maybe think again about allowing comments? Feedback is important.

___________

the secret word is "yttzcx."

Translation: "yabba dabba doo, with CSX too!"

Anonymous said...

I mentioned yesterday that JPY was strengthening and this rally is coming to an end. My comment was removed for some reason? Well, too bad. Yen strengthened again and take a look at AUD and NZD..We are bidding a good bye to carry trade and eventually the global expansion.

We can expect to have weakness in the markets tomorrow.

Northvan said...

Tim,

I agree with Stephen. Your insight transcends any ideology.

In the meantime, keep the faith. It is natural to be bearish when fundamentals are out of whack; but you still need to keep you head above water until the equilibrium corrects itself. Realistically, we should mix up our short plays with strategic longs. Although I have been completely short since January or so, I must admit that it is not a very sustainable approach. A more prudent strategy would be to play both sides. Without simple good fortune, this may be the only way to truly outsmart the permabulls (shocking examples aside).

You began to introduce long plays in this blog before I was ready to be more pragmatic; but I am beginning to come around. In fact, I was always willing to go long (on precious metals, anyway), but only after more a significant correction. Now, I can see the wisdom of mixing it up.

Perhaps you could provide some long plays of particular interest to the bearish among us (pawn brokers, for example).

beanie11111 said...

AVNR is the next DNDN??!!!



$55 target?

dr. phil / dickhead said...

China and Japan both down 2%. Da Bears might have fun for a couple of days (or more ).

Neme said...

dear tim,

being in the minority has never been easy. you know that, so cheer up my friend. As M.Pring puts it:" To be successful, the technical approach involves taking a position contrary of the expectations of the crowd. it requires patience discipline and objectivity..." So let the ignorant complacent bullish crowd rejoice and party all night thinking this is going to last forever. this is Euphoria and it's good news. They don't know that the Bear is already in the House...

I really appreciate your work. Thank you for sharing it with us.

b.healed said...

Thursday is going to be a drop in the market.

Leisa said...

Toshi, I think that with last p.m.'s post you officially qualify as a contra-market mood ring. When you get disgusted THAT is the time to go short. Yesterday I picked up some RTH and MDY puts.

Anonymous said...

From Barcode

I appreciate your blog a great deal but could you please clarify the following :-

You indicated above that you were bullish from October 1990 until January 2000 but on your March 26th post you cited one of the reasons for you being bearish was "feeling cheated out of the amazing gains of the 1990s. ...having missed out on the amazing bull market"

Does this mean that you were bullish but conservative?

Keep up the good work.

(A lot of bears are waking up today but hopefully not too many as it could create a false dawn)

beanie11111 said...

AVNR is the next DNDN?

AVNR closed @ 5.19

Volume today on a successful study result was humongous - over 80 million shares traded, 2x the outstanding shares! That kind of volume we saw with DNDN after a positive fda review. I don't know what's really going on in terms of who's buying who's selling or who cares about this company, but i do know that 80 million shares trades is significant. As such, i put in a play with June 10 calls and see what happens.

Last year, Cramer recommended this stock at 12. His listeners hated him for that one. lol

Very speculative play, all or nothin.

www.beanie11111.blogspot.com

beanie11111 said...

Cramer recommended AVNR last year at $12.

Got this from the AVNR message board:

''PLAYING IN THE MAJORS'
AVANIR - IT JUST GOT LISTED ON THE NASDAQ TODAY! AND I THINK THAT'S A GREEN LIGHT FOR YOU TO BUY THE STOCK!

THIS THING WAS KIND OF LOST IN A REGULATORY LIMBO. AVNR IS A STATELESS CO. THAT JUST GOT ITS PAPERS!

I'M NOT TELLING YOU TO LOOK AT A CO. JUST BECAUSE IT GOT SOME LEGITIMACY, NOW THAT IT'S OUT OF LIMBO, AND ON THE NASDAQ.

THIS THING IS SEXY. IT HAD CAUGHT MY ATTENTION BEFORE TODAY, BUT I WASN'T GOING TO TOUCH IT UNTIL IT MADE THE MOVE FROM THE AMEX. CRAMER BELIEVES IN CAUTION MORE THAN ANYTHING ELSE, EXCEPT FOR FLEXIBILITY, MAKING MONEY, AND JUSTICE!

NOW, I LIKE AVNR BECAUSE IT'S GOT SOME REALLY COOL DRUG FORMULATIONS THAT THE FDA HAS GIVEN PRIORITY REVIEW TO. AND, HEY, AS FAR AS I KNOW, THEY DIDN'T EVEN HAVE TO PULL ANY STRINGS TO GET PRIORITY STATUS.

THE ONLY THING BETTER THAN PULL INSIDE THE GOVT IS A CO. THAT HAS PRODUCTS WHICH ARE SO GOOD THEY DON'T NEED THE PULL.

HERE'S THE SKINNY ON AVNR:

NOW, AVNR'S BIG PRODUCT IS CALLED 'NEURODEX'. IT TREATS PSEUDOBULBAR AFFECT (PBA). NEURODEX WOULD TREAT THE IEED CONDITION, OR INVOLUNTARY EMOTIONAL EXPRESSION DISORDER, OR UNCONTROLLABLE BURSTS OF LAUGHING OR CRYING.

THE GUYS AT LEERING-SWAN ESTIMATE THAT 1.3 MILLION PEOPLE IN THE U.S. HAVE THIS PBA. IF THEY PENETRATE ONLY HALF THAT MARKET, NEURODEX SHOULD BE ABLE TO DO $250 MILLION IN SALES.

THE FDA GAVE NEURODEX PRIORITY REVIEW STATUS LAST WEEK, WHICH MEANS IT COULD BE APPROVED BY THE END OF THE THIRD QTR. - IT'S FAST TRACKED.

PLUS, IF APPROVED, NEURODEX COULD GET 'ORPHAN DRUG' STATUS! WHICH WOULD GIVE AVNR TAX CREDITS AND A 7-YEAR MONOPOLY ON THE DRUG, IN ADDITION TO THE PATENT PROTECTION.

NEURODEX COULD ALSO HAVE APPLICATIONS IN MORE THAN JUST M.S. AND LOU GEHRIG'S DISEASE. THERE'S A CHANCE IT COULD WORK IN STROKE VICTIMS AND ALZHEIMERS PATIENTS.

THEY'VE ALSO GOT NEURODEX IN A PHASE 3 TEST FOR PATIENTS WITH CHRONIC DIABETIC NEUROPATHIC PAIN. AND, RIGHT NOW, THERE REALLY AREN'T ANY DRUGS OUT THERE MEANT SPECIFICALLY FOR THIS PROBLEM. IT COULD BE ANOTHER HUGE OPPORTUNITY FOR THIS CO.

SO I THINK NEURODEX IS A GREAT OPPORTUNITY TO MAKE MONEY. BUT WHEN CRAMER BUYS A STOCK, HE WANTS MORE THAN JUST A ONE-TRICK PONY. I'M BEHIND AVNR NOT JUST FOR NEURODEX, BUT ALSO FOR THE PIPELINE!

THEY JUST SIGNED A DEAL EARLIER THIS MONTH WITH NOVARTIS TO HELP THEM DEVELOP A BUNCH OF NOT VERY SIGNIFICANT SMALL MOLECULE DRUGS.

THE DRUGS AREN'T SIGNIFICANT, BUT THE DEAL COULD EARN AVNR $200 MILLION IN MILESTONE PAYMENTS.

THEY'VE ALSO GOT A DEAL WITH ASTRA-ZENICA - WE LIKE THOSE GUYS, DEVELOPING DRUGS FOR CARDIO-VASCULAR DISEASE.

ONE OF THE THINGS I LIKE ABOUT THIS CO. - ITS CEO IS OVER-QUALIFIED, AND I RARELY SAY THAT. THIS GUY, ERIC BRANDT USED TO BE THE CFO OF ALLERGAN - A $15 BILLION CO. NOW HE RUNS AVNR, WHICH IS A $400 MILLION CO.

THIS GUY MUST REALLY BELIEVE THAT AVNR IS GOING TO BE GREAT, OR ELSE HE WOULDN'T HAVE TAKEN THE JOB.

AVNR HAS GOT NO DEBT. PRETTY STRONG INSTITUTIONAL SUPPORT. 11% OF THE FLOAT IS BEING SHORTED. I GOTTA BELIEVE THAT THE SHORTS WILL

LEERING-SWAN - THEY'VE GOT A $41-$55 PRICE TARGET ON THE THING. I MEAN, IT WENT OUT AT $13. HEY I'LL TAKE $22. I'M NOT KIDDING. NOT BECAUSE I THINK THEY'RE WRONG, BUT BECAUSE CRAMER BE CAUTIOUS, AND AT $22, YOU WILL STILL HAVE MADE A HUGE AMOUNT OF MONEY!

THE BOTTOM LINE!: AVNR HAS ITS DOCUMENTS! I THINK IT'S TIME FOR YOU TO DO SOME RESEARCH AND THEN, MAYBE, DO A 'MON-BACK, TAKE SOME DOWN, AND BUY THE STOCK! '

tradeitlikeitis said...

The Buy the dippers/knife catchers look a little tired this morning - but they are still out.

I don't think anyone will want to short the market until they hear what GOOG has to say.

There is an amazing complacency to sell - of the 100 or so stocks I monitor (many of which are resource related) - there will be large drops on light volume - the dip is bought by daytraders - and they go back up. Now you would expect to see selling at this point after the bounce (profit taking) - but you don't - everyone keeps holding their cards.

We need some selling with volume AFTER THESE BOUNCES for any real correction to start - when everyone tries to cash in their chips all at once and their selling overwhelms the 'buy the dippers' - then the market psychology will change.

TradeItLikeItIs

Jon said...

Bull to the bulls!!! When the shark bites, they will bleed like pigs.
Watching the gas go out of the NDX bag. Divergence in volume here on a daily, monthly and yearly basis from the S&P and Dow Ind Av and Russell 2000. Smart money leaving town, folks.
Kinks are in the armor.
If we don't punch through the new highs with decent volume, game set match.
Patience and don't shoot till you see the whites in their eyes...

Anonymous said...

OMG

It is so hard to get one down day.

Something is wrong here

Anonymous said...

take that headfake girls and shove it....hope everyone got a load of puts in the morning fakeout....hehe....

JakeGint said...

It's not kinks, it's "chinks."

Credibility is everything.

_____________________________

The secret word is "kughuqph."

Translation: "cough, cough, I think it's pleurisy!"

dr. phil / dickhead said...

GS destroys bears chances.Just the way it is.

tradeitlikeitis said...

It has been decreed that NASDAQ must now make a new high.

TradeItLikeItIs

JakeGint said...

"By Your Command!"

__________________

The secret word is "Svmcylc"

Translation: "Save me! The Cylons are coming, the Cylons are Coming!"

Anonymous said...

all the headlines say slower growth, why is the DOW going up?
I'm gonna puke

Leisa said...

Let's just see if all this holds post expiry. But you have to give this market credit for staying power!

Anonymous said...

The market is trading on emotion and momentum. They both trump fundamentals

plunger said...

dollar is down, i.e. exports are cheaper and imports expensive, but USA is not a exporting nation like china which means prices/inflation go up i.e. fed hike rates i.e DOW will DIE

6:29 PM

whew, im glad its that simple and someone finally explained global economics for me. WTF .inflation is not a result of higher prices,

actually the cheap cost of goods from countries like china, are what has kept inflation lower over the past few years. if not for cheap goods imported, inflation would be thru the roof. it amazes me that most of america has no idea what inflation actually is. if you beleive in all the liquidity in the markets now, prices of goods would be sky, fucking, high, if not for cheap imports. if that pipeline dries up, 10% inflation here we come.

tradeitlikeitis said...

Are the Semi's breaking their weekly downtrend?

Are the indices making new highs?

Are the Transports confirming the Industrials?

Is GS making a new high?

Why are so many people short a rising market?

And what if the US dollar has bottomed?

Oh Oh - All that money fleeing the US into gold and metals and emerging markets has to come back into the US - and many many people are short or hedged in the US markets. Oh Oh

Maybe these people have made a wrong trade?

We can profit from this - but one must get rid of their opinoin of what the market 'should' be doing.

So let's see what happens next.

TradeItLikeItIs

Bob S said...

China is down, the markest look like they are going to drop and by noon they have rallied.

I think I have finally figured out what kind of news it takes for the bulls to buy in this market.

The sun came up.
The sky is clear.
The sky is cloudy.
There is a cold front.
There is a warm front.
It's Thursday (or Friday or Monday, etc).
I feel good.
I feel bad.

Maybe the market follows chaos theory. Remember it from Jurassic Park? If a butterfly flaps its wings in Japan, it could cause a hurricane in the Caribbean. I think the market version is

If an analyst flaps his jaw on TV .....

Anonymous said...

If N.Y.C. gets vaporized some night, then this is our market scenario :

DOW-Indu down 50 points in the 1st hour and closes up 50 pts at the close.
...................................

If nothing happens at all overnight:

DOW-Indu up 50 pts at close

NIck said...

tom2oc is a dickhead

He only shows up at the market tops just check back in feb. Tom, if you "don't allow comments on your blog so you can focus on trading instead of reading, typing", then please do not come here to Tim's blog with your typing shit, moron. Have some respect for Tim

Tim Knight said...

Hey, 10:48, for a more complete list of events and their consequences, please review:

http://tradertim.blogspot.com/2006/09/post-three-hundred.html

tradeitlikeits said...

Well the market provided a lot of information - particularly for the bears today. What was weak today - should be the next bear market when it arrives if further clues are provided.

What I like to do on days like these is to look at relative strength & relative weakness compared to the broad markets S&P NYSE Wilshire etc...

Now of course today may be clouded a bit by the options games... however...

What bounced? What did not?

When calculating relative strength I do not use the 'Daily Change' or Daily Closes - to me this is meaningless. It includes the open which has all kinds of gaps and nonsense. Also it is too restricting.

So what I want to know is what happened when stocks had a chance to bounce. And how did they behave after the bounce.

I have programmed my trading software to allow me to enter two dates.

For instance I can enter todays pivot low (9:35-9:40am) and today's pivot high (1:15pm) times.

Take the differnece and divide by your benchmark. I'll also do this for Close-Open/Benchmark.

You can also do this across any time period & multiple days. For the last 3 days (Open-Closes only NOT Closes-Closes) already showed weakening relative strenth in resources stocks.

This is much more useful than watching the DOW.

TradeItLikeItIs

JakeGint said...

But is weakening resource (and commodity) stocks a sign of a coming bear?

JakeGint said...

Tom 2Ocs... GOOG is up almost 2% after hours after closing down a pt.

Not sure I "got" your latest round up, calling GOOG "flat?"

_____________

The secret word is "horlz"

No, I'm not kidding and if you need me to translate that... well, y'all in the wrong bidness.