Tuesday, July 10, 2007

Spock Grok

I was going to write a huge entry today about emotions and the market. But it's already four hours after the close, and I'm still stung with guilt pangs from such a late posting last night, so I'm going to leave my essay for another day.

I will say, though, that I yearn to be like Spock during times like this. The problem with these range-bound markets is that, for a bear, (a) when at the low end of the range, I'm flush with profits, I'm totally committed to my positions, and I'm into way more risk than I should be since I've been doing so well; yet (b) when at the high end of the range, when I'm sacrificed some or all of those aforementioned profits, I'm skittish and risk-averse. Obviously being just the opposite would be helpful on both counts. Spock is a cool customer.

Of course, we're all only human, and markets run completely contrary to human nature. That's why there are a handful of big winners - - those that defy the greed/fear trap - - and the rest of us are just schlubs. Let's face it - emotions and the financial markets are just another example of one of life's bad combinations.

I haven't mentioned China in a while. I'll say this.........long term, I think China is going to be king of the world, or at least a prince. Whereas its neighbor Russia will, in my opinion, collapse back into socialism or communism within the next decade. My optimism for China's long-term prospect's aside, what we're witnessing now is a bubble, pure and simple, driven largely by embarrassing naievete on a greedy yet clueless investing public.

The Dow fell 148 points today. It doesn't mean much until and unless we break 13,250. If we do, I'll probably return to being the arrogant pr*ck you all love so dearly. Until then, my hands remain peacefully clasped on my lap.

The Russell 2000 had an even worse (that is, better) day. My index puts on the $RUT did great.

The S&P is approaching the re-entry point on that channel is busted above a number of weeks ago.

I've stopped buying puts on AutoZone - there's only so much punishment I enjoy - but this stock is really looking toppy.

Ol' beanie has mentioned BIDU so much I might as well put up a chart. My hat is off to any chart that can do this on a day like today.

I added to my Capital One Financial (COF) position.

The DIA puts aren't as clean a deal as the IWM or RUT puts, but they're OK - - decent volume and a 10 cent not-too-terrible bid/ask spread. I did a day trade on these today with good results.

Goldman Sachs (GS) continues to be a put position I believe in.....although the big plunge never seems to happen to AJC's employer.

I've mentioned McKesson (MCK) many times because of its Fibonacci fans. Add to this now an imminent head and shoulders breakdown.

Someone mentioned SHLD in the comments section today.......thanks very much! I've mentioned Sears over and over. It's been inching down. Only today did it really take it in the groin.

VMC is kind of an interesting pattern, inasmuch as it seems to be breaking below a pretty wide consolidation rectangle.

I heard this tune today, and it reminded me of the markets.......to everything there is a season. Bears: I swear it's not too late.


sysin3 said...

Lots of selling in all kinds of stuff today, so hang in there.

But I (think) you might share my problem ... anticipation. If it ain't going down, don't short it. Working on that one ;-)

Anonymous said...

JCP looks like it's having a tough time getting back to that last shoulder. Is it time to get back on the put express?

Controlled Trader said...

Feels good to see volume. Looks like we won't have many posts today because today was distribution day and most of posters ironically are bulls.

I think today's distribution day should have followup. S&P is below 50MA (Simple). It was below that when bulls started having fun on low volumes. As I write Nikkei dropped 1.06%.

Its about time for bulls to take profit or let it vanish. JMHO.

dbohntr said...

wang-holder, funniest thing I have seen in a while.

Tim Knight said...

Where IS everyone tonight? Oh, well; here's a feel-good article for you:


Brian said...


A correction to the sensationalist drivel in that link you posted:

"In February of this year, Rep. Henry Waxman's Committee on Oversight and Government Reform revealed fresh details of how the Coalition Provisional Authority dumped $12 billion in cash into Iraq in 2004...a modest portion of the $510 billion we have spent so far in Iraq and Afghanistan."

He neglects to mention that the $12 billion in cash BELONGED to Iraq, owed to them under the oil-for-food program.

Tim Knight said...

Maybe I wouldn't post such drivel if I had my own wang holder.

Tim Knight said...

By the way, what do you think of my new chart style? I think it's cleaner. Opinions?

Controlled Trader said...

Wondering why did not we hear 'C' word tonight? I meant COT report. May be tomorrow. Futures are showing small higher open tomorrow.

I liked your charts.

Andrew Dai said...

the market is about to open, no buybacks, no big m&a... the overnight future gains got erased. based on yesterday's s&p's activities, I won't be surprised to see some upward push.

i recorded on my own blog, but by looking at last week's option activity of SPY & QQQQ, you would have to wonder: is this a setup? while there has been active way-out-of-money puts buying all week while the underlying trading is light. for example, i noticed that 75% of the s&p july 146 puts are settled at the offer (someone is buying) with big blocks EVERYDAY. I would not believe this is simply protection buying since the market will have to tank 4-5% within two weeks for that protection to be effective, and nonetheless those puts are not cheap after the end-of-month volatility.
there should be more to come, although i think we could see the last push.

Anonymous said...


I'd like to see more of where your beliefs that a stock/index should break to the downside before confirmation but only to end up not confirming. I think its terribly important for both bulls/bears to wait for a stock/index to confirm a move before you take action.

JakeGint said...

If you consider the alternative headline, implying gender confusion, then you know they chose the right order.... as best as that could ever work out..

BTW -- Isn't George Takai (sp?) JAPANESE?

Due Diligence! COT's pretty insanely bullish, in case you missed the commercial...

beanie11111 said...

10-bagger comin your way???

Did you buy the SOLF aug. 15 calls @ .40 (or less)?

I believe this is the next 10-bagger.

Tim Knight said...

George Takei is indeed Japanese, but (a) his look was so jaunty and (b) I wanted to keep the Star Trek theme, I decided to make a compromise.

And who knows? Maybe he simply owns a lot of Chinese stocks!

beanie11111 said...

YUM earnings is tomorrow morning. If you got the stomach size of Rosanne Barr, then go buy some calls.

Andrew Dai said...

problems are looming - SLM says "no acquisition."

Andrew Dai said...

Can you imagin no M&A? that is indeed the last straw for this "bull" market.

Controlled Trader said...

Bulls put up very good show today.

4profit said...

Yawn- this tape isn't even fun anymore. Somebody wake me when the market follows through even once.

Gary said...

Q's at new highs in the after hours. Not exactly the C-word but close enough. What have the bears got against being patient?

Tim Knight said...

greetings from Squaw Valley. I will be doing another relatively late post tonight. About 8 pm or so. See you then!

Alex said...

Hello Tim,

Always enjoy your posts and you've inspired me to learn puts. Yea I'm a newby and very much in the learning stages but I have my days when it all clicks, and then days like I don't have a clue as to WTF is going on.

Would you mind sharing some of your ideas as to when you close a position and why? I do mostly options, unless the stock price is under 15 bucks.

Thank You,

ps: I've had some real nice put plays, thanks!

JakeGint said...

Squaw Valley? Wasn't that the site of a Bing & Hope "Road to..." flick?

Or am I thinking White Christmas?

Or Dick Button's gold medal?

Whatever, I think we're talking historically significant, West o' the Mussussup -wise.

Controlled Trader said...

Gary: Where were all the bulls yesterday? I did not see any posts from you either. Pshycologically weak and less confident bulls?

Controlled Trader said...

One more observation. Indexes were dropped 1+% today while Q was dropped less than 1. Today indexes were up 0.5-0.6% while corresponding ETFs was up 1+%.

Obviously all ETFs are bullish than underlying asset value. Something is brewing.

JakeGint said...

Controlled... cool your jets... I'm on vacay like the Timster.

Still 100 and fitty pahcent bullish.

Grade A US.

newequity said...

Tim and thebears were the wang holders today.

charttrader said...


2 suggestions for this blog...

1. Reduce the number of posts on the home page to just 1 or 2, it's very painful operating the tiny scroll bar

2. make the comment box resizable, it would make the comments easier to read, which maybe the most interesting part of the blog

2sweeties said...
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2sweeties said...
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2sweeties said...
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2sweeties said...

Just wanted to tell everybody that according to some researchers Fridays 13th are 67% of the time UP.

If interested you can read about it
here (just scroll down through the interview, is one of the last questions...)

Tim Knight said...

"Tim and thebears were the wang holders today."

At least I have to use two hands, unlike some people I could mention.

Controlled Trader said...

charttrader: I had problem with non-resizable small comment box too then I found easy solution. Right Click on '#insightful comments' and choose 'Open in New Window' in popum menu. This way connects will be opened in regular size IE window.