Thursday, May 03, 2007

A Call For Bull Content

Over the past 25 trading sessions (March 29th through May 3rd), the Dow 30 closed up 22 times and down only 3 times. That means only about 12% of the time, we were down for the day. The net change was up 941 points.

During the 25 trading sessions prior to the above (February 22nd through March 28th), the Dow 30 closed up 12 times and down 13 times, meaning the Dow closed down 52% of the time. The net change was down 438 points. Quite a change, eh?

Given the above, you can imagine how the brawling in comments has been getting worse (and only God knows how bad it would be if anonymous people were still allowed to post). Back on April 17th, I asked all the bulls to make some recommendations. Only a couple of folks did. One of them had a bunch of options, which frankly I'm too lazy to look up, and another - TomTheTrader - listed a bunch of equity symbols.

I decided to do an experiment and entered a hypothetical portfolio of 100 shares of each of his recommendations, using a price of the opening on April 18th (the morning following his comment). In other words, I'm assuming you decided to buy, at the opening price, an equal number of shares of each of the stocks suggested (the weighting would vary quite a bit, obviously, since the share prices were so different). The symbols and their "entry" prices were:

DOW 45.29
EMC 15.12
GLW 23.40
GSK 58.4573
GS 213.75
GSF 62.31
INTC 21.35
MYL 21.60
MS 81.50
NDAQ 31.20
SMH 35.22
QCOM 43.19
QLD 85.85

By way of comparison, I decided to compare it to the Russell 2000. Over the period since Tom's suggestions, the Russell has moved up from 827.41 up to 828.87, which is a small change of 0.18%. Tom's suggestions were also up .18%, but with a 3 in front of the decimal point as well (e.g. 3.18%). So - - great work, Tom!


Now, as regular readers know, we get our fair share of bulls in the comments section that yell and scream daily about how stupid bears are. That's fine. But what interests me is to find out how smart our bullish colleagues are. Specifically, I'd like to hear what they have to say (in a constructive sense).

So here's my offer - - anyone who has bullish recommendations, commentary, or market views, I'd like you to send them to email address (which you can find in my profile). I will print any specific suggestions or market analysis without comment or editing (except for spelling). Consider it an opportunity to demonstrate the market prowess which you possess.

The NASDAQ is threatening to push above its resistance line, similar to the fashion that the S&P 500 did a few days ago. If tomorrow opens higher, we can pretty much count on a new surge by the NASDAQ. It's all up to the employment report.


The Russell 2000 is also threatening its stop-loss price of 835.17, which is its lifetime high.


Notice how the S&P 500 is staying above its former resistance line. Even earlier this week, on the one day the market dipped lower, the S&P closed above this former resistance line.


I shorted BID yesterday, and it fell nicely today.


I am also short CCL, which seems to have a lot of potential to fall.


InfoSys(INFY) is in a small H&S formation. Plus, when a major stock like this goes down on such a strong day, that's a good sign.


Retailer JC Penney (JCP) remains below its busted trendline.


I went long CCJ (the uranium producer) today, and it's already in the green.


CRDN is shaping up as another prospective long, assuming it breaks above the line I've drawn here.


WBD has been on a tear for months, but I shorted this one earlier today, and it fell nicely. It is sporting a hefty bearish engulfing pattern, although for a stock that is relatively thinly traded like this, it isn't such a big deal.



Finally, just to ensure I am going straight to hell, I offer you Merrill Howard Kalin, who is a mentally retarded adult that broadcasts his own cooking show. And does imitations. Poorly. This must be seen to believed, but if you're the impatient sort, skip ahead to about 4:30 and watch it until the end.

18 comments:

TOMTHETRADER said...

Thank you Tim for including me in your site report as you know I ahve gotten a bit disturbed by the lack of action by the "Soldiers"(IWM) and the Gaudy activity of the "Generals"(DIA). The facts remain that this LIQUIDITY DRIVEN WORLDWIDE RALLY is going to end badly. But it may be a tear from now or as I discussed earlier after the Beijing Olympics. That is some 203 thousand points away !!!! If you took those ten sessions I was up 3 plus percent and annualized it (70%) That type of activity cannot be sustained...I feel I am a great stock picker but I think that during the last 30 sessions a fair trader could have done at least half as well and that is what the US Government wants. They will do anything to get you wealthy !!! To pay for higher food and evergy prices to keep us out of recession. The real estate folks are being lead right to CROCS !!!! And so it goes but like I tell my memebers "Strength Begets Strength" "Don't Fight The Tape" "The Trend Is Your Friend" My mentor Dr.Zweig fed this to me for years and Wednesday when I turned from being a PERMABULL and bought puts heavily for the first time since February , I felt that this time may be worse than FEB-MAR but with every dip being swallowed up and every pessimist buying a put ..the market is nearly UNSTOPPABLE ...so we are now 80% long stocks and 20% short NDX. Hoping that going back to kissing up to the government and some more phony mumbers will get us another 3-5% in 10 sessions !!!!

Thanks for the time and effort on this great blog !!!

Tom

http://www.ttthedgefund.blogspot.com

JakeGint said...

Geez, Tim... I got to about the six minutes left mark, and then turned it off.

WTF? Is he retarded? Is this comedy?

I mean, I was pretty sure he was going to cut himself at some point, and I didn't want to be there for it.

As near perfect as that unicorn thing was, this was the opposite.

______________

On the short squeeze front... BRLC caught some air today. Might get ugly for the shorts coming into earnings. Like DNDN ugly.

Leisa said...

Tim, you are such a gentleman.

My conundrum is the strength in RTH with the weakness of its constituent parts. I have some puts that have vacillated between red and green. Currently red, but I'm still holding.Today, I ALMOST bought some puts on BEBE (much pondering, head scratching (I'm a woman, so no belly rubbing/scratchin), as they were reporting today and news has not been so good for others. But, I determined that I had enough short positions, so I passed. I'm not doing a coulda, woulda, shoulda; merely passing along a thought.

I'm quite happy with some energy longs: HERO, SSL and ANR. I must admit, though, that I used the (get your garlic and crosses out) fundamental analysis first. Then, I used technical analysis and I stalked my targetslike Elmer Fudd stalked Bugs Bunny. My only regret is that I tossed THE (which I owned during the news of HERO's takeover) for a nice premium, but I missed a larger move. But I'm still doing well with HERO. There was a huge amount of short interest, so I'm sure that helped fuel the fire.

As an aside, and this may seem like such a stupid thing to say but....given the fuel that short interest plays in these parabolic moves (which IMV, exaggerates the upside move on an advance) it would seem to me that some clever gal or chap would come up with some overlay that plots an appropriate metric on short interest AS PART OF TECHINICAL ANALYSIS (as opposed to having to look it up). If there is a way to divine that, kindly advise.

I credit your book with reviving my interest and insights into technical analysis. Accordingly, I will will to you and your beloved family a 1/3 remainder in my vast estate. Merely provide me with your ssn# and bank account for validation purposes.

I watched 10 seconds of the video. As an accomplished cook, whatever came after that intro was not worth the time (and cringing).

And, if you and your family are ever within striking distance of Richmond, VA, I would be honored to have you as guests for a superlative dinner that I would fix for all of you.

Oh...BTW....I live between Richmond and Williamsburg. The Queen of England I think has passed within 2 miles of a crow flying of my home. Williamsburg is having a grand celebration--400 years. In our lifetime guys!

Safal said...

WYNN, could be formation of right shoulder of H&S, 1.5 stop with target of 88.

John said...

Tim

Take a look at MAR. I thought you would be short this rather than HLT. It is broken and looks like it could go weaker technically. I am not a fundy guy, but I think that based on the cycle, they are flushing this now anticipating a slow down.

Great site. PS handicapped people are a true blessing to all of those around them. I support Special Olympics and encourage all to do so.

Brian said...

Why are you mocking some poor kid trying to have his own cooking show. I'd like to see you host a cooking show!

Ok, some parts were funny.

NewEquity said...

You are a bear and make funny jokes about the mentally ill who can not help themselves.Far from a gentlemen or statesman for that matter. I've surprisingly turned bearish this month as I think a pullback is in the works soon enough.Not trying to insult but educate since my iq is higher than most on this board/blog.

Momo Fader said...

Tim, here's your bullish stock. IBKR is going to be a monster. They are masterfully leaving plenty of demand, and a limited supply. But these numbers say it all when you keep in mind that 40,000,000 shares were on offer up from 20,000,000:

The following is selected information about the auction:

-- The auction clearing price was $33.00.
-- The offering price was $30.01.
-- A total of 13,504 bids were received in the auction.
-- A total of 8,282 bids were successful.
-- A total of 145,514,807 shares, in total, were bid for at prices equal to or in excess of the offering price.
-- The pro rata fill rate for bids was 27.5%.

The client-side of their platform shows a significant amount of software engineering. It just works, in cross-platform java. Well designed too. Can't speak about the server side, but ... They also give you almost real-time margin borrowing calculations, which must be how they keep their own risks in order. Based on my few months experience, this company could be the GOOG of the trading world, and the Wall St. seems to know it. BB&B had to get in on the OpenIPO alongside J6P. I'll overlook the use of proceeds and corporate governance issues when it's apparent they have a great product, and will grow market share.

Momo Fader said...

Tim, you're really inspiring me lately. Added an entry about IBKR to my blog. Thanks for the visit. I don't know how anyone can make blog entries daily. Yee Gosh.

One of these days I'll get a few bear picks up there. Perhaps I'll start with FSLR, which is a Momo Fade Category 1* short-sale candidate. *(Sell early, sell often)

d333gs said...

This market scares the sQQt out of me. I can't get my head around the mecanics of what is going on with the exception that we are coming out of a 4 year cycle low and we are pulling a stunt like 03-04.
http://stockcharts.com/h-sc/ui?s=$NAA200R&p=D&yr=5&mn=3&dy=
0&id=p48638407663&a=84779467

Right now I am nesting funds in after earnings tech stocks that look to benifit from 2H 07 telco buildouts from the likes of BT .

z-stock said...

Tim, There probably aren’t a lot of people that buy or sell anything, based on RSI. It’s a good way to lose everything. However I promised myself, if DIA hit RSI 80, I would short it. It’s currently, at RSI 78.3. So, I guess my point is, The simplist most simple minded, indicator, this particular round.... might trump, all the other technicals, hands down. Don’t worry, If I have to get into this trade, I’ll set my stop loss, tight.
zee

plunger said...

Beanie1111 say's on April 24th,

"JSDA about to fly!!!!!

no time left.


bottomed!

By beanie11111, at 10:27 AM

[fast forward two weeks, down an additional 10% since beanies bottom call and .....]

Marketwatch -May 3rd

"JONES SODA SHARES DOWN 17.2% TO $20.88 IN LATE TRADING 4:39 PM

nice call beanie, hope you didn't take too much of a [in your words] "schlacking" ....

TOMTHETRADER said...

After jobs data gap opening the markets usually fall for the following 3 sessions if you would like to short the market short term...Noon Friday

TTT

Tom

Tomthetrader

http://www.ttthedgefund.blogspot.com

TOMTHETRADER said...

13275 DJIA

TTT

beanie11111 said...

oh man, the shorties need some reprieve. They hurtin so bad.

Time for the markets to go down down dwon!!!

Tim Knight said...

What a surprise that beanie11111 didn't bother answering plunger pointing out his JSDA fiasco.

The bulls can't take it, but they sure as hell can dish it out.

Oneway said...

I know

It's unreal that the Dow's up 2,000-points since the Fed stopped raising rates last June...& up 1,500-points since breaking ove the old 11,750 top (rolling eyes of sarcasm...)

NewEquity said...

momotrader, you really screwed the pooch on that sure fire Interactive Brokers call. I hope you loaded the boat at 34 near the open pal.