Thursday, April 26, 2007

Twenty-Five-Peat

Yawn. The bull's getting boring. By my count, 25 out of the past 31 days have been up on the Dow. So much for climbing a wall of worry. It's skipping higher.

I mentioned yesterday that the US Dollar had to soften up to have any chance of market softness. Although it didn't help today, I notice the NZD/USD did weaken considerably and is sporting a pretty hefty bearish engulfing pattern.


One nice effect this did have is to soften up gold quite a bit. My $XAU puts continue to do well.


Apple traded over $100 for a while today, its highest price in history. I remembered Dell's famous quote in the late 90s about how Apple should just give up, so I decided to look up when he said that. Well, fancy that - - right near the bottom. Buyers of Dell on that day would have about 140% in profits by now. Buyers of Apple, on the other hand, have enjoyed more like a 1,600% gain.


Akamai, a short suggestion here, continues to fall on very significant volume.


I sold American Airlines (AMR) short yesterday near its high for the day, and it is sinking nicely away from its neckline. By traditional measurements, there could be another $9 in losses on this stock.


I've never charted Honeywell (HON) here before, but it's a Dow 30 stock and worth watching. No clear bearish pattern here, but clearly an opportunity for it to take a breather.


I've mentioned in the recent past how McKesson (MCK) is dancing around its Fibonacci fan lines. At long last, it started to fall away from one of those lines today. It took a while.


Morgan Stanley (MS) represents a relatively low-risk short here, since it has apparently retraced about all of the descent that it is planning to retrace.


PSB, which I've been short a while, continues to slowly form a potential head and shoulders pattern. So far, so good.


Questar (STR), mentioned several times recently as a long candidate, moved handsomely higher today.


In honor of Steven Hawking's planned adventure in weightlessness, I thought I'd share this funny (but slightly NSFW) clip.

34 comments:

TOMTHETRADER said...

Tim ,
You got me ..I bought puts today for the first time since February !!!! After 1100 points I bought puts on the QQQQ as the RSI broke my all time high ...after hours MSFT will keep everything afloat early but the big news may be in WFR SNDK and SMH tomorrow. I don't know whether I like being a Bear ...let me know the PERKS ???

TTT

Tim Knight said...

Wow, shutting off anonymous had more of a profound effect than I anticipated. This post has been up 90 minutes, and only one comment. Oh, well. At least things seem more civilized.

plunger said...

jake,
that APA chart looks good now, nasty down candle, on big volume, gotta give you props, nice call,

plunger said...

whats your downside target?

If it'll break that $74 area support should be a nice fall from there.

Safal said...

My fellow bears,
I need some help. I fought the tape on AMZN the last couple of day, trying to sell every extended move.
Capitulated today around 3:30pm and realized a loss of 52K.
I bought some July 55 and July 60 puts towards the close, which will probably end up costing me again.
I'm numb and disgusted with my stupidity. How if any can salvage my losses?

Dennis said...

I am very skeptical about this bull market. The fundamentals continue to deteriorate with worsening real estate market and high inflation. I continue to believe that this bull market is living on borrowed time.

b.healed said...

i continue to wait on my iwr to fall. unfortunately it keeps moving upward. i was going to buy aapl, but forgot....guess i should have. when you mentioned a put on xau i checked to see if i had trading permissions to do so and i do not....wish i would have. it would be cool to be smarter....guess i will be someday....hehehehehe

Leisa said...

Safal--I'm sorry for your loss. Martin Goldberg notes on Financial Sense On LIne that he thought a hedge fund blew up for that action was buying panic.

I don't have any advice for you. But I do know that shorting a heavily shorted stock can end up with unhappy consequences.

I'm reading a paper on Boom/bust cycles (one of the FED working papers). It's pretty interesting. I'll post/reference a couple of snippets if there is any interest. I know most folks here are technicians; but I think that fundamentals offer a constructive backdrop to that revered discipline.

I elected to close my FMD before earnings. I had a reasonable enough quick pop. I took the gain and bought some calls. Yes, calls. Sept 40's.

NewEquity said...

The bull market may be living on borrowed time but why fight the trend that is apparent. Keep a tight stop on all positions and stop worrying so much Dennis.

wincity said...

Safal, sorry to hear about your loss on AMZN. I watched the toad the last 2 days in amazement. It's pure short squeeze, IMO. Tomorrow should be its last day if it still has fuel left. Then it's up to the market. I feel the market at least would level off from here and then sell off in May. Hard to say but keep your cool.

Oneway said...

The quote by Micheal Dell over the chart of AAPL is one of the best you've ever posted.

cantdrive55 said...

Dell & Jobs are friends and both billionares.They both get a pass. They both did something worthwhile with their lives that improved the lives of a considerable amount of the worlds population. Nuf said. Whats going on HERE and whats the deal with calling a bear market for 2300 pts straight up ? ! ?

wshhmm德州牌手 said...

As I said before, when bull market is near end, there will be a crazy run.

Market should have a deep correction or bear market, from the crazy, I don't think it is May or June.

I got the feeling, SP will go over all time high to squeeze the history double top pattern short, then that is time to short it.

JakeGint said...

Plunger,

I'm going to cover a bunch at $73, market willing, and then hang on to see if we can get back to that fitty-day line.


I also shorted CRAAPL today on the second break of $100... the hedgies thank all those retail buyers they were fading at $101 plus when certain screamers were entering these fora.

Moving down the alphabet, Tim's old friend AZO, Allah curse his beard, is finally starting to crack.

I'm seein' a lotta crack out there folks.

Smoke 'em if you gottem.

JakeGint said...

And oh yeah, Tim... if it's gonna be Non-kid-suitable cartoons... oh fork it, whatever... I guess it was kinda funny.

Tim Knight said...

"Dell & Jobs are friends and both billionares."

(Scratching head) - they ARE? That may be. But I've never heard of it. And I follow what Steve Jobs does pretty closely (I pass his house every week when I take my son to music class)

Anyway, trying to compare the achievements (or lack thereof) of this blog to the achievements of Dell & Jobs is preposterous, so I won't even try. It doesn't even make any sense.

I haven't been calling a bear market for 2300 points. Frankly, if you look at the major turning points of the market (including bounces to the upside), I usually was pretty plain about a bounce coming.

The most recent major low, for instance, was back on March 14th. Read my post where I explicitly say - and I start off by saying "I think it's time to back off for a while", and I pay out four specific reasons for what I see as a bullish turn in the market.

http://tradertim.blogspot.com/2007/03/candlesticks-galore.html

Safal said...

Thanks. I just need to keep a cool head, I'll get a shot soon, if it gaps up tomorrow, i am a seller again. What can I say, I guess I'm a sucker for pain. I see about a 8-10% over the next couple of weeks.

JakeGint said...

One more thought on AAPL. When it came screaming down from $105 at the open this morning (look at it on the 15 minute charts, its quite dramatic), I couldn't help but harken back to my youth when they used to play those educational musical cartoons between stuff like Superfriends and Grape Ape... Schoolhouse Rock I think it was called? Conjunction Junction, what's your function?... etc, etc.

Remember?

Anyway, the one I thought of this morning as AAPL slid was the one about the exclamations points... (He made a connection, in the other di-rection, and the crowd started shouting out, IN-TER-JEC-TION!! ) etc...

Except instead of the requisite exclamation, I was thinking about the crowd shouting out:

DIS - TRI - BU - TION!!

Who'm I kidding though, right? Craapl only goes one way...

JakeGint said...

Hey Tim, do me a favor and look at that 15 minute chart on Craapl today.

You ever see a MACD (12,26,9) butterfly like that in one day?

It's like battle of the Hedgework Stars or something...

Geoff said...

Tim (or anyone else who may have the answer),

This might be a stupid question and obvious to everyone else, but why do you put so much emphasis on the NZD/USD? At first I thought you traded it because it obeyed the fib lines so well, but when you posted about the overall market on Saturday, April 14th, you said:
"To me, an important indicator to watch is the NZD/USD market"

Why is the New Zealand dollar so significant to the U.S. equity markets?

Thanks

Tim Knight said...

"Why is the New Zealand dollar so significant to the U.S. equity markets?"

Because it's a good indicate as to the attractive of the carry-forward trade. If NZD/USD plunges, that means the carry-forward trade falls apart, which has all kinds of negative effects on the U.S. equity market, not the least of which is a diminishment in intl. earnings for U.S. companies.

JakeGint said...

I thought the carry forward trade was contingent on the yen?

b.healed said...

"Because it's a good indicate as to the attractive of the carry-forward trade. If NZD/USD plunges, that means the carry-forward trade falls apart, which has all kinds of negative effects on the U.S. equity market, not the least of which is a diminishment in intl. earnings for U.S. companies."

I have no idea what you just said.....hahahaha....funny how humbling times come like this when i start to think i know something!

i guess the implication is that NZD/USD goes up, equity market goes up....nzd/usd goes down, equity market goes down. it the inverse true with the eur/usd? it seemed as though the other day you were mentioning that the strength of the eur was indicating strength in the equities.

Leisa said...

Jake: If my understanding is correct, any coupling of currency results in a carry trade. The carry trade is the same, but the constituents change (USD v NZD as opposed to YEN). The USD v. Yen is the most talked about.

Our markets seem to have a high correlation to the yen v. USD. I've not looked at the markets response to the USD/NZD relationship. Time, does that correlate?

Tim Knight said...

"Our markets seem to have a high correlation to the yen v. USD. I've not looked at the markets response to the USD/NZD relationship. Time, does that correlate?"

Yeah, it's the Yen, but NZD is more volatile and sensitive, plus I personally find it a better chart to read. Just sort of my own queer little indicator to watch.

IM said...

Wow, the US equity market correlation to the USD/NZD relationship is amazing. I never realised that. Thanks Tim.

NewEquity said...

Hey queers,

we should be green by the close so have fun while it last.

Tim Knight said...

I'd say the above post speaks for itself.

Flatwallet said...

Tim,

I know I'm asking a lot here, but could you share with us how you scan for strong and weak stocks? I've been daytrading for the past many months but I've seemed to have lost all concepts related to swing and position trading. Since I've built a decent daytrading discipline and see the value in it, I would like to do the same for swing trading. However, if you do post and article on how to do it, could you please point out what we should look for in both bullish and bearish patterns?

Thanks,
LP

JakeGint said...

Tim,

Have you trademarked twenty-five-peat, yet?

Y'know, just in case the Lakers go on another roll...

'Cause if you're down at the trademark office, could you get me the TM on "iBag?"

TIA

NewEquity said...

Tim says "I'd say the above post speaks for itself.'"

So far I am correct far more than you have been for the past few years and we are now green on the day. Take it for what its worth but your blogging years are finished if this quarter turns out double digit gains.

Tim Knight said...

"So far I am correct far more than you have been for the past few years and we are now green on the day. Take it for what its worth but your blogging years are finished if this quarter turns out double digit gains."

+ My point in my comment was it's a little ridiculous to address the readers of this blog as "Queers." Are you in the 8th grade?

+ "Predicting" that the Dow will be up today when the Dow was already up isn't exactly a stretch. I'm not impressed.

+ My "blogging years" are not yours to turn on or off.

plunger said...

NewEquity said...
Hey queers,

"we should be green by the close so have fun while it last."


hey newequity queen you want to start shit with somebody, i'm right here codlick,

as Tim stated, the markets already up and your calling it green, way to go captain obvious, why don't you try something new and name a stock you think is going up and tell us , tell us where the markets going and how high for how long, Try using your head for something other than a hatrack.

awaiting your dimwitted, response..

TOMTHETRADER said...

19 of 21 ...hasn't been accomplished since 1929 and 1927 ..both times it was different ..once down 10% and up 10% in the next months the other flat ...it is the most impressive run I can remember since the mid nineties when you could buy the OEX and sit back and wait for expiration. This is a momentum market now ....worldwide ...the Olympics 08 are the only thing stopping it !!!

TTT