Tuesday, May 01, 2007

Learning to Crawl

Today's post will be short, everyone. I had a pretty good day, actually, but looking at the charts, there is frankly not a heck of a lot to say. Some days are just like that.

The rise on the Dow today was actually kind to my portfolio - - it went up some, in spite of its bearish stance. But the hammer pattern shown in the Russell 2000 is a little worrisome. We're not exactly at the bottom of some gigantic slide, so this single candlestick isn't anything horrendous in terms of a turning point, but all the same, a hammer is a hammer, and we need to be extra cautious. For myself, I trimmed my $RUT puts pretty substantially near the bottom earlier today.


The stock PSB continues to shape up as a potentially great head and shoulders short. Speaking of which, AMR (not shown here) continues to behave very well for the same reasons.


One stock which has broken its major ascending trendline is BankRate (symbol RATE). Even though it's bounced above the line again, I consider the line broken and therefore am short this stock.


This is a fairly quiet week on the economic announcements scene, and the real excitement of earnings season is over (with the likes of Apple, Google, Yahoo, etc. behind us). So there aren't a lot of fireworks right now, and in many ways stocks seem to be stuck at a more or less equilibrium stage right now. As always, well-placed stops are the most crucial thing to have in place, should the market regain its strength in a big way and start to push higher still.

28 comments:

Dennis said...

Here is why it is so tough to be a bear: DJ just got taken over with a 50% premium. Bears can't win.

b.healed said...

i woke up too late to get out when the rut was down this morning. should have gotten out then. bummer

TOMTHETRADER said...

Tim,
The problem with a momentum market is nothing really matters...recession , plague , war it just doesn't matter...there is so much cash for so few stocks as CNBC will tell us and real estate investors will now see the DOW at all time highs and say ..now there is a way to flip a few grand !!! US government wants us buying stocks and up 40% this tear ...it will keep us charging 52"LCD's and make sure we don't "officially" go into the crapper..sell to China and the rest of the BRIC and make earnings off the lowest dollar in history. I can't be a Bear for long losing 2-3 days is not my style ...I will give it a couple more days and if we don't get at least 100 down on the DOW ..I and my membership shall be back to BOVINISM !!!

TTT

http://www.ttthedgefund.blogspot.com

Tim Knight said...

This idea of "too few stocks" is just one of the lines handed out by those driving the market higher.

I don't recall seeing any desperate shortage of stocks. I'm sure if you added up all the equity buyouts, going-private deals, etc. it would amount to a tiny fraction of a single percent of all the equity out there. Completely negligible.

If you think there's a lack of stocks, open up a Wall Street Journal and examine the tens of thousands of financial instruments available for purchase.

cantdrive55 said...

It's the shrinking floats available to the fund managers thats due to the share buyback programs by the corporations that is causing the rising prices !

HELLO !

Kirill said...

Tim,
You wrote: "I trimmed my $RUT puts pretty substantially near the bottom earlier today". I'm just wondering why you started trimming. Was it just because $RUT already dropped substantially and was touching a support at 808-810? Kinda short term profit taking? What about this "... I don't permit (theoretically) ... on-the-fly position closings" (from your post on 03/02/07)?

Tim Knight said...

"You wrote: "I trimmed my $RUT puts pretty substantially near the bottom earlier today". I'm just wondering why you started trimming. Was it just because $RUT already dropped substantially and was touching a support at 808-810? Kinda short term profit taking? What about this "... I don't permit (theoretically) ... on-the-fly position closings" (from your post on 03/02/07)?"

An absolutely valid question!

To be blunt, I didn't get stopped out, so the "right" thing to do would be to let the position stay in perpetuity.....but let's face it, these are options, and they expire, and they have time decay, so it MUST be closed at some point.

I closed it today because, based on the 60 day minute bars, it seemed prone to turn up, particularly given the strength in the Dow and S&P 500. And, in retrospect, I'm glad I did, since it let me bank many thousands of extra dollars.

Just to be clear, though, I closed ONE position and kept THIRTY others open. The $RUT just happened to be very much in the green.

Oh, and if it helps my case, I did re-enter a smaller RUT position near the peak of the market today when the Dow was up about 70 points.

JakeGint said...

I feasted on AKAM and APA pie today.... but you know I've a hankering for some AAPL.

ctkwtk said...

Re: $rut Is it easier to train a bear to dance, or a bull to charge?

Keith Shepard said...

I had only one possible swing Short trigger las night and that was (NUE). I didn't see any real weakness in it, so I passed.

All my longs got hammered. Ouch. The market was up, but I was in the wrong place. Ah well. At least I have more new Anime to watch tonight.

=^.^=

JakeGint said...

Here's a trigger... everything Beannie came by and pumped last week.

It it's solar, it's polar.

Leisa said...

"It it's solar, it's polar."

Very witty! But it is just a current whimsical state. If/when oil gets gassy it will be hot again.

Market Speculator said...

I am not a permabear or permabull...i ride trends up or down...I am an optimistic person and not too mention on a yearly basis the market is up 72% of teh time.

But I've writing about my caution in this market...the follow-through happening only 3 weeks after the trend...low vol rallies...blah blah blah but have said to go long stocks but just not go "ALL IN."

Had a guy comment that I've been too negative...LOL LOL

Said he wasn't going to read me anymore due to my negativity....

I mean this is what we have...ppl wanting this market to go higher BADLY!!!! It is scary to think this...

Side note: today volume was runing 34% higher than yest. on the NASDAQ...so our huge decline came on massive volume...only to end the day up 4%....oh boy the big insitutions were plowing money into the market today!

MS

Brett said...

Tim,

I don't agree on RATE at all. I see a strong long-term uptrend with a triangle consolidation over the last year. If it breaks higher, there's a pretty huge move in there. With so many promising bearish trades out there, this isn't one of the easy ones.

Tim Knight said...

"I don't agree on RATE at all. I see a strong long-term uptrend with a triangle consolidation over the last year. If it breaks higher, there's a pretty huge move in there. With so many promising bearish trades out there, this isn't one of the easy ones."

You could be right, Brett. This is not a fantastic chart. It's a relatively weak argument. But to my view, the risk/reward ratio is worth it. My stop price is at 41.92

TOMTHETRADER said...

Rim,

Woulkd you agree NDX 1885 is one of the bigger keys to this stock market right now ??? I think if they can rally them past it could go sharply onit's way but a hold here by the Bears could keep the Bulls at bay for a while ...any thoughts on NDX ??? especially on it's importance this week ???

Tom

z-stock said...

5/1/07..mm 5/1/07..mm 5/1/07..mm
ICE reports BMO, which possibly affects AMG (sympathy play) and perhaps MS, (short term). Then again, ICE report might have zero effect. (I’d like to see that, ----(no effect))--- happen.
zee
p.s. I think the bulls get killed by the employment report FRI. ( at least MNST and MAN do)

toober said...

5-2-07 J Najarian trade of the day AMR June 27.50 Calls. We have a market.

JakeGint said...

Rate beat by 13%, affirms guidance.

But perhaps we should not be so fast to Equigloat...

Interestingly, not up so much anymore... Current BID is actually a buck BELOW yesterday's close.

plunger said...

Tues April, 24th
plunger said...
ONT looks like a climax top to me, except for the volume on the last day, could be short covering tho, have to wait and see if it'll break new highs or break down

5:59 PM

ONT closed at $2.07 yesterday, down @ 25% from top call.

Are you still "awaiting further analysis[with bated breath]" from me Jake?

plunger said...

I noticed new equity queen didn't pipe back in when it closed below his quote price yesterday.

Tell me something new equity queen, whats your opinion on RATE? Where is it going; up or down? How high? What's a good stop point or trailing stop for RATE? You have no idea do you? You just follow Tim's posts and only spout off when you find he's wrong, [if only for a short time on some calls as in RATE] then sit back and feel pretty smug.

Let me clue you in on something, showing someone to be wrong does not make YOU right! Is that too hard for you to understand. Just because someone else's opinion turns out wrong, doesn't mean you were right or proved them wrong. Especially when you just wait for the outcome and THEN chime in. At least Tim's got the balls to play his hand and lay all his cards on the table, which is more than I can say for you.

Bring something to the table queen, you're boring.

Tim Knight said...

I appreciate your mentioning that, plunger.

Yeah, I closed out RATE at a small loss. That's how it goes. We move on.

My advice to NewEquity is to get his jollies somewhere else. I am clearly adding nothing of value for him, and God knows his comments are not helping anyone here.

plunger said...

Nicely put Tim, I love how he fails to mention the numerous the charts and stocks you've listed here that are falling or fell. I can list many I made money on I discovered on this site.

I get a ton of good stock ideas from this site, then do my own due diligence as anyone should. I don't know how you screen for these charts, but I never would have had the opportunity to find a lot of these companies and analyze the charts if not for this site.

I don't have to agree with everything you post nor all analysis but I've always respected your abilities and courage to do what you do here.

beanie11111 said...

just when permabears thought they got the longs canned, the bulls coming back and gives them a schlacking!!

NewEquity said...

sorry bears as the markets are up nicely again and tagging the stop loss on all you permabears.

beanie11111 said...

Don't fight Secretary Paulson!


Booyah!!!

Let me know if you've covered; that's when i sell my longs! lol

plunger said...

beannie say's
"the bulls coming back and gives them a schlacking!!"

schlacking? - is that german for "dead dog on couch"?

I think you meant "shellacking".

Nice try though. Your verbal taunts would carry more weight if it didn't seem like they were written by a twelve year old.

Humble1 said...

you need to read edwards and magee on drawing parallels, your are way off.