Tuesday, June 19, 2007

The Show Must Go On

It was another relatively uninspiring day on the markets......but I dare not let a post go stale! So, as always, at least a few thoughts.

Akamai (AKAM) is a peculiarly slanted head and shoulders pattern which inched lower today, in spite of some general market strength.

Albemarle (ALB).....and, good technician that I am, I have no clue what they do.... continues to fall nicely. There is really very little in the way of support on this stock, so I'll just keep tightening up my stocks.

Just to show again I am not a bear a bear only, I've got a couple of bullish ideas. One of them is Blockbuster (BBI) which is trying......apparently with some success....to change their business model in the age of Netflix and Apple TV.

Another bullish idea - well, kinda - is DXD, which is a double inverse ETF based on the Dow 30. It's incredible how popular these things have become. Just look at that volume.

A bullish idea I've mentioned before which is moving in the right direction is JetBlue (JBLU).

My crusty old short in Sears Holding (SHLD) is ever-so-slowly moving downward. It finally edged beneath the support line you see drawn here.

I'll see you here tomorrow.


Gary said...

That huge volume in DXD, SDS and QID is one of the things that keeps me bullish other than the large commercial long position. I want to see that volume dry up as a sign that everyone is afraid to short. That will be the top. As long as the top picking goes on and on there's always a large supply of shorts to squeeze.

Pivot Turner said...

Please don't count on short squeeze theory, which deesn't work in both bull and bear market.
Try to trade with short squeeze is dangerous.

Anonymous said...

If you keep your cut loss strategy tight no reason you couldn't trade with a short squeeze in mind.

ctkwtk said...

Re: volume on DXD, SDS, & QID. I feel this volume is more due to human nature (ie. greed), than an indication of direction. I see no corresponding increases in DOG, SH, $ PSQ. If you can read a chart short term (day/swing), why settle for 100%, when 200% is available in a much more liquid vehicle? I admire poster JON who thinks he can make 50% annual. Why not? Why not 100% or more.

Troy said...

Tim, long time reader, first time posting...I think the bull bashing of you has been overdone. Yes it's true that you don't fight the primary trend, which I have to say is still up. But I don't think anybody has really talked much about timeframe. If you are looking to scalp or hold only for a few hours or a couple of days, then your picks have probably worked out pretty well. I have to have a little longer time frame because I still have a day job, so I have learned that trying to call tops for me is difficult. But short term declines do seem very tradable if you are nimble. Shorter term is also where technical anaylsis seems really sharp.

Curious, what would you say your average holding period is?

Also thoughts on ONT?

I like your blog because it is good to hear both sides of the story.


b.healed said...

do you think that AKAM has started into a series of higher lows and higher highs? thanx

bmbull said...

Re: the volume on the Ultra-short ETFs - keep in mind that these funds have been in existence less than a year. It takes some time for 1) them to be 'discovered', and 2) to generate a 'reputation' (and/or liquidity) to the point where people are comfortable in trading them.

For those reasons, I'm not sure that looking at current volume levels vs. past levels is all that meaningful. These funds have taken some time to develop a 'following'.

Gary said...

"I admire poster JON who thinks he can make 50% annual. Why not? Why not 100% or more."

Because the kind of leverage it takes to make those returns will blow out your account when you have a couple of trades go against you that's why not.

Regarding the inverse funds granted it does take a while for them to become popular however the volume is steadily growing as the market is moving up. That surely seems like investors are still trying to pick a top. The volume spiked on Feb. 27th and it's been surging higher ever since as the market has risen. Doubling down when your losing isn't a very profitable strategy.

dbohntr said...

I am not disagreeing with any good management rules and I try my hardest to not risk more than 2% on any trade.... but I get 100% returns often. buying a CALL/PUT for $2 and selling it for $4 is not the toughest thing to do in the world.
I am not saying I do it ALL THE TIME but buying PCU,DO,BIDU,AAPL,MLM,VIP,POT,FCX,CROX,.... yada yada yada on support and selling after a little bounce for 100% gain plus is not unrealistic at all.
If you are a good Technician and get a good entry, risk can often be very low if you are a patient trader.

Maybe I missed an earlier conversation piece.

B Healed,
I think AKAM is just what you think it is. It all depends on your time frame. On the short term( last two weeks ) the stock as tacked on 10%.
Over the last month and a half, the stock looks like it was channeling and broke out on good volume and is know flagging back to re test that 46 area.
If you look at the last 4 months, you just have a series of lower highs.
Trade it like you see it and what ever happens, happens.
I have traded it both ways.

Gary said...

I think the above post was refering to increasing their total portfolio by 100% a year. Sure you can make 100% on a given options trade. However if you are trading large enough to increase your total portfolio by 100% in a short time then you will surely blow out your account, as the guy from the mens warehouse ad says, "I guarantee it".

plunger said...

Gary, I think your dismissing the point that some traders are beginning to use the Inverse funds for hedging. Used with correct stops they can work well, with little risk in the volatile markets like we have had the past few months. Granted, you're not gonna make a fortune in them, but a way to recoup some $$ on the big down days we've had.

I got to agree with the money management point you've been making. I believe limiting your losses is the only way to stay in the game. Profits will come, but guaranteed, so will losses. My accounts have never been big enough to use only 2% per trade, as some say, but I try to limit my loss % to keep portfolio intact.

just a thought,

newequity said...

You once mentioned that you owned SWIM. Did you sell it or are you holding on? Just noticed it on one of my scans.

AssetStrategists said...


I sent you a chart on MRK. If it breaks below $49.25 I think the target would be $46.50.


Anonymous said...

light day for comments

AssetStrategists said...

MRK closed at $14.26 - right at the breaking point! I'm not yet in - probably should be.

Got into FPL puts yesterday at $60.27 - those are doing great today!

Got killed in UIC today - OUCH!

Got out of LEH at $81.25 with a profit @ 2:40ET just before the drop but didn't add on any puts.

Got into BEAS yesterday when it broke through $13.65 resistance. It dropped back to $13.54 today which is surprising with as much as everything else fell today. Ultimately, Tim, your short call on this will probably be correct if this market keeps falling. Meanwhile, I have a tight stop.

Overall, I lost less than 1% today and live to trade tomorrow!

Tim, you must have had a killer day! What will you ever do with all those profits?

Tim Knight said...

"You once mentioned that you owned SWIM. Did you sell it or are you holding on? Just noticed it on one of my scans."

I work for SWIM, and I am an SVP there. I have never, ever mentioned it here, out of an abundance of caution. It's the only stock I have pledged to myself I will never mention here under any circumstances (except now, to dismiss the idea).

Anonymous said...

Ooooouuuuch on SWIM.

Get the feeling we are in for choppy markts here. Not that the market isn't confusing enough for most...just judging by the amount of bears and the fear by Main St. This summer should prove to be most interesting.

Winace said...

As for my "tripling my account in a week" comment. Well, it was true. I carry, as I have mentioned before, the largest amount of leverage I can. About 50:1. I could be trading forex at 200:1, but that's pushing it. As far as 6 digit account.... are you counting the digits after the decimal??? I trade for fun. I keep it "game like", I sleep better at night that way. I trade short time spans with very tight stops. My winning trade percentage is 46%. I do not trade my 401k or anything. I trade a cash account only and spend the profits as I go. Kind of like a supplimental income. I max at two trades a day, maybe up to 20.00 each (2.0x10 to maximize commisions). I place my stop at a dime. Also, I do not hold a trade overnight, on most occasions anyway. Maybe you should inquire about details newequity before jumping to assumptions. Yea, I could blow out my account, but the profits would still outweight the losses. I know the Q's and that's what I trade. Every trade has a risk:reward ratio. I make that ratio with stops. I trade deep in the money so gamma/delta weight in my favor. Theta is negligable also. If I every trade a six digit account, I most likely will never have more than 4 digits in the market at one time. And I have been shorting, everyday, for the last two/three weeks. On the Dows largest up day, I lost 7% of my trade. I don't find that to awful bad. Today was good, go bears!

Anonymous said...

winace...where on earth do you find 50:1 leverage?

newequity said...
This comment has been removed by the author.
Winace said...

I typed it out and lost it due to my GD router. I'll explain it later market.