Everyone....
I am moving over (if all goes well) to a new blog publishing platform. From now on, please go to:
http://www.SlopeOfHope.com
I would REALLY appreciate your comments (not here, but at the new site) about what you do and don't like about the new platform. I have done almost no customization of it, so it's kind of sparse. But I'd like to fine-tune it with your help. Thanks.
What a week! And a great week it was.
For those of you insane enough to have owned July puts on Google until today, congratulations. The slight earnings disappointment from GOOG nicked $40 off their stock price at one point, and naturally the options were going insane.
The sea-change that has taken place is that all the sub-prime woes have elevated the volatility in this market. It's very plain to see from the $VIX graph below.
But this market right now is all about one thing - range, range, range. As David Byrne once sang: "I go up and down/I like this/curious feeling." If you are able to pay close enough attention to it, and you've got your groove on, you can make a lot of money.
But a glance at the Dow graph below shows that the price is currently about in the middle of a very sweeping range. And now we're in no man's land. Do we bounce off the horizontal line and fly well above 14,000? Do we push our way through the muck beneath that line and start and honest-to-goodness bear market? Or do we continue to fart around ad nauseum. I dunno. And you don't either.
The Russell is even more "range-y". Hell, I was in and out of calls AND puts all day long on this, and nary lost a cent in the process. It was quite a ride. But I'm about as flat as Kate Moss right, since I'd rather enter Monday morning with a relatively clean slate. (e.g. mountains of cash).
One last intraday index to show you - the S&P 500. I'd say we are at an important "bounce or break" point here. It will take a lot of strength for either the bulls or the bears to reach escape velocity from the range shown here, but once either side wins, it's going to be dramatic.
The rest of the charts are just short/put ideas. I sold a lot of "I told ya so" graphcs today (e.g. items I had suggested which went very much as planned), but I don't want to waste your time with those. You know I've got good ideas from time to time, don't you? Once in a while?
Here's BP.
CAH looks ready to break its neckline.
Colgate (CL) might have finished a nice triple top here.
CVX also looks good.
I'm putting GOOG here not as a suggestion, but mainly to show how nicely it retraced its entire hard-fought gain in just a single day. Who knows - those who bought in the low 500s might be very happy in the long run. After all, it's still a nice bullish pattern. But today it was a better buy!
HES, like many oil-related stocks, looks great to short.
I suggested MLM a while back (howdy, Leisa!) It's doing well.
I made so much cash today I decided to risk a bit on a couple of RIMM puts. This sucker has to fall some day.
Here's a final thought for you. See ya Monday.
I'm going to make you feel how deeply you want and love me by having a really short post today. I am moving heaven and earth to get this blog moved to a different platform, so I need to focus on that.
I will say, however, that I'm pleased to see the after-hours market slamming the bejesus out of Google (GOOG). As I am typing this, it is down nearly 40 points. Congratulations to you brave put owners out there.
Maybe the bloom's coming off the rose, eh? I mean, it's Google for the love of Jesus.
Did you know I have a Google connection? Yes, it's true. I'm even more interesting than you imagined. The angel investor for my company, Prophet, was none other than Andy Bechtolsheim (Sun's co-founder and Google's first investor). His $100,000 check to them is now worth billions. And, hey, he did all right on Prophet too! Thanks, Andy.
It was an interesting day on the market. Non-amazing earnings from YHOO and INTC, coupled with the continuing problems at Bear Stearns with their hedge funds, took the Dow down about 130 points or so. Looking at the 60 day intraday minute bar graph, I thought that was about all that was going to squeezed out of the market for the day, so I sold all my index puts.
This doesn't always work........back on February 27th, I also sold my puts at what I thought was the bottom, when the Dow was down about 130 - - and it continued to fall hundreds more points.
The only honest-to-goodness bear market right now is anything to do with residential real estate. It's a slow death.
After the close today, IBM reported good earnings, and the after-hours market is up a little. At this point, it's simple a question of whether we shake off the worry and truly blast through 14,000, or if the weakness will get us down to at least that breakout point from last week.
The intraday of the Russell 2000 shows how nicely we swooned and then recovered up to what is a pretty substantial point of resistance. Falling today was easy. Pushing through this resistance area will be tougher.
Much the same can be said of the S&P 500. This longer-term graph shows the small rounded top, the fall, and the recovery.
I'm staying away from the Gold and Silver index ($XAU). I'm not sure what it's going to do next. But it has clearly made the (former) long-lasting channel irrelevant.
Longs might want to consider CCJ. It seems to be bullish and is done with its retracement.
Although residential real estate is getting thrashed, these problems seem to just be starting in the commercial real estate world. Maybe there's an opportunity to short these and enjoy a spill similar to what we're seeing now in residential real estate.
I don't think I'm going to take a position in Union Pacific (UNP), but this is an awfully terrific looking shooting star candlestick.
Today was the big day. Dow 14,000 was crossed (we won't mention that the broader S&P 500 index actually fell on the day). I'm not sure what repelled the market away from this level. Your guess is as good as mine.
Of course, television pundits were completely obsessed with the Big Round Number. If and when we actually close above 14,000, it will be about 3 seconds before someone writes an article entitled, "Next Stop: 15K!" Yawn.
I took a small bearish position on CME today. It seems we have a failed breakout here. Plus, all the elation over BOT is past us now.
Intel is one of the largest and earliest earnings reports for Q2. As of this writing, this stock is down nearly 5%, wiping out about $7 billion in shareholder value. As an aside, YHOO also just reported, and they are down about 2% right now.
I've got puts on NutriSystem, whose stock is finally starting to slip some.
I also augmented by CVX position by buying some XOM puts.
That's it for today. I think some of the snarky comments have me less inspired to write a long, thoughtful post. I've got other things to do.
Dow 14k is in the air, and it's all the pundits seem to want to talk about. I've already mentioned here that my 'upper limit' is 14,100 on the Dow based on its breakout. Even though the Dow was up today to yet another lifetime high, the broader indexes were down, and my overall portfolio climbed by 5%.
When I showed the "mother of all double tops" by way of the S&P 500 graph, many people remarked that the S&P was cheap since profits have doubled on the S&P 500 since the prior high in 2000.
That may be true, but the logic is flawed. That's the equivalent of a Republican declaring the White House could be won in 2008 if only they could find a candidate twice as popular as George Bush. Just because something is double something else doesn't mean the opposite result will take place. If the P/E in 2000 was 500, would a P/E of 250 make it a bargain? Of course, those weren't the real P/Es, but hopefully you can see my point.
The daily chart of the Dow 30 helps illustrate how this market is in the toppermost of the poppermost. I see a fall ahead.
On an intraday basis, it's clear to see how strong the price movement has been since the breakout. I've tinted in the target zone. We have moved through most of the pain already.
A daily chart of the NDX - which I've been avoiding for many months - suggests this graph could be running out of gas too.
My favorite, the Russell 2000, edged down nicely today.
Even though the Gold and Silver index ($XAU) broke above its channel, recently history indicates the RSI has been a reliable bearish indicator; note the areas I've tinted and the subsequent price action.
Akamai (AKAM) looks like a potential bearish play; note the series of lower highs.
ALB also looks nice for a short.
I bought puts on Colgate (CL) today.
I continue to hold onto my CROX puts, which are doing OK.
I also bought puts on CVX this morning. So far, so good.
And I shorted DST (a busy day.....)
I mentioned puts on FXI last week. These look better than ever.
JC Penney has been a favorite of mine recently. My puts on this stock edged higher today due to the stock's weakness.
On the whole, it was a great week for the bulls. The Dow, the S&P, the Major Market Index, and a host of others climbed to all-time, never-seen-before high prices. So where does it stop?
The Dow's high on June 1 was about 13,690. Its low on June 8th was about 13,250. That's a 440 point difference, and that's the approximate range of the rectangle out of which it just emerged. By traditional measurement, you take the high of 13,690 and add 440 points and get the target of 14,130. That's 223 points or 1.6% away. It won't take much to get us there.
The Russell pushed into new high territory, but by the slimmest of margins. I'm not sure I would call this a breakout on this particular index yet.
I rarely use arithmetic scale, but I am going to do so here on the S&P 500 to make a point. What I want you to see is the amazing drama that has taken place over the past quarter century, with the S&P exploding to a high in January 2000, collapsing terribly in a bear market, and then flying yet again to the prior high. Is this the mother of all double tops? Only time will tell. Although the bulls that visit this blog certainly would say no.
My puts on Baker Hughes (BHI) did well today. The oil service sector seems like it may be ready to drop a while.
Colgate Palmolive (CL) has tipped its hand by cracking beneath that supporting trendline. It also seems to be in the throes of a triple top. I'm going to buy puts on this Monday morning.
My CROX puts went up some today, as this high-flying stock actually eased a bit in an otherwise very strong market.
Chevron (CVX) printed a terrific shooting star candlestick today.
If you are dying to short (or buy puts) on a Dow stock, you could do worse than IBM.
My puts on Radio Shack (RSH) had a nice day too. It's pretty easy to see why. New highs on the market mean ecstasy without the need for batteries. Demand drops. Sales drop. Battery Club suffers.
Have a good weekend.
Well, it finally happened. We broke out of the consolidation that's been grinding along for six weeks now. The action was just bizarre. I suppose shorts were getting squeezed left and right, and bulls were jumping in with both feet. It was like an orgy of buying.
Based on traditional technical measures, the target for the Dow at this point would be 14,100. I'm not saying it will necessarily get there, but this has been a really clean consolidation, and it seems a sensible conclusion. Particularly given the strong psychological import of the Big Round Number 14,000.
My index-of-choice for puts, $RUT, wasn't as strong as the other indexes, and luckily I was kicked out of my puts the moment the market opened (sparing me most of the day's strength). The high price of 856.39 is awfully close.
Looking at a long-term S&P 500 chart, you can see the index is approaching its lifetime high reached nearly eight years ago.
Now, a moment about the comments section. I totally expected the bulls to rip off their bras and swing them over their heads today - - that's fine, because I would be just as obnoxious if the Dow was down 283 points. There's one particularly poster who doesn't crawl out from under his rock very often, but when he does, his posts are little more than hate and vitriol (he is hiding behind a screen name, but his name is Ryan and he lives in Phoenix). I look forward to being on a new blog platform where I can block sub-humans like this.
In the middle of 1999, Newsweek proved once again the "cultural saturation" rule by having the cover below. The market still had six more months of climbing before it started eroding (not going into full bear mode for another six months after that), but it definitely was a signal of a looming top.
A new best-seller reminds me of the same cultural phenomenon. I actually picked up this book a few days ago and am looking forward to reading it. I guess I'm a frustrated sociologist.
The $VIX has been beaten back into submission again. I'm surprised how cheap puts are these days. I am seeing lots of November puts that are priced no higher than August puts - - - time premium seems to be about zero for some stocks. In most cases, I am seeing in-the-money puts that are barely higher priced than their intrinsic value. So they're basically giving them away.
Apache (APA) is a pretty promising bullish pattern.
And Blockbuster (BBI), which I've mentioned before, also looks bullish.
I think JC Penney (JCP) is at or near its full retracement today. I'm ready to jump into puts on this one again.
There are three stocks that look surprising flaccid given today's action. The first is Baidu (BIDU), which is part of beanie's bombast.
The second is CROX - - I admit, I see the shoes everywhere (ahem - I only wear Eccos, in case you were going to send me some shoes) but I still think it's a fad stock.
And finally, Google (GOOG). For a stock like Google to go up 0.16% on a day like this is pretty lame.
Today's rally was supposedly prompted by strong consumer spending. For a real view of American Consumerism, enjoy this clip from George Carlin - - the portion on consumers starts at the 4:00 minute mark.
A rare intraday post......
I said in my post from late last night that I wish the market would break out of its consolidation and give us some direction. Well - it did - to the upside!
For the Dow Jones at least, there's no doubt about it - this is a clear breakout. I guess this market won't stop going up until every last public company has been acquired and made private. Then we can just shut the equity markets down for good.
Sweet Jesus on a Biscuit......can we please get some direction? Yesterday's 148 point drop on the Dow was encouraging. But follow through? Of course not. We bounce back today by half that amount. Zzzzzzzzzz. Give us as break - literally - through one of those price lines!
Oh, a bit of housekeeping. I've made a couple of cosmetic improvements. First, at the request of a comment made to the previous post, I have reduced the number of posts displayed down from 7 to 3. That will speed up loading time and make for a shorter page to scroll. Second, I've changed the scheme of my charts to what I think is a much cleaner appearance. Let me know what you think. Oh, and in case you've forgotten, click on any chart to see a much bigger version.
Back to charts. The Russell 2000 is in the same boat every other index is - if it breaks beneath a very clearly defined support level, it's time to rock and roll. If it continues to fart around in this range, it's just going to keep boring the pants off of everyone. And if it breaks into new high territory, that's when I climb to the top span of the Golden Gate.
I bought a bunch of puts on the $XAU today based on its price position relative to its well-defined channel. A stop-loss on this would not be expensive, since we're mushed up so high against the channel.
Cardinal Health (CAH), mentioned here numerous times, is on the cusp of a breakdown. But until it goes beneath that neckline, it is a pattern in formation, and nothing more.
I found the puts on Chinese equity-based FXI were fairly heavily traded, so I acquired some today.
I mentioned McGraw Hill (MHP) as a short last month, and it has lost about 15% of its value since then.
Now, as you know, I acquired a couple of iPhones on National Steve Jobs Day, and I made a little video about it. It's a terrific product. There's a ton of wizardy and magic in it, and I'm proud to show it off.
But, Lord almighty, this thing has bugs. Bugs, bugs, bugs! And I'm not even a heavy user. I just checked, and I've used it a total of 9 hours and 36 minutes. That's decent, but it's hardly an exhaustive field test.
In that time I've tripped over a surprising array of really serious issues. Like the fact that the phone outright hangs so hard that I have to reboot it. And the lack of basic editing features, such as double-clicking on a word not selecting that word. Or the inability to insert a cursor within a word (e.g. if you misspell a word, you have to erase the whole frickin' thing and retype it instead of correcting the offending letter).
The worst bug of all is Safari crashing. Which it does. Constantly. So a typical example is like this.......you're cruising along, looking at a web page, scrolling up or down a bit. And then - bam! - it throws you right back to the "home" screen of the iPhone. No big deal, you say, I'll simply go back to Safari (the web browser). Sure, you can do that - - but you're starting at scratch again. The page you were looking at is gone.
This happens to me so constantly that I'm put off on looking at any web content anymore. It isn't just a nuisance. It basically eviscerates one of the principal reasons for having this thing!
Added to which, every time I plug the iPhone into its dock for some juice, this stupid window appears on my desktop, so I have to cancel out of it. Annoying as hell. 
Luckily, someone has helped me to release some of my frustration by asking the question: Will It Blend?
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.
How do you address the heartache of repetitious comments? How does one quell hyperbolic, bombastic touting of the same securities over and over? What can you do to temper a mix of English and Spanish comments? Yes, it's....
Sorry for the very late posting tonight. Long story. While up here in the (relative) wilderness, I was struck by this sign:
The Dow, although up, still didn't signal a break yet. We're still in this flag pattern.
Gold has had a very strong past couple of days, but it also is at the upper reaches of a well-established range.
I've been mentioned BEAS as a short for a couple of weeks now. It has a nice, clean stop at $14.20.
Sotheby's (BID), which I've succesfully shorted before, might have a nice double top here.
Honeywell might have registered a triple top. All these "mights" and "maybes" are annoying, I'm sure, but it's never clear until some time has passed. These are calculated risks.
Martin Marietta (MLM) is awfully lofty and seems to be losing its momentum at these heights.
On the bullish side, I mentioned SCHN back on April 14th when the stock was $46. It has had a strong run since then, with a particularly strong surge upward today.
Another old favorite, Taser (TASR) seems to have found its second life. It has run up a bit much for me to be interested now, but a pullback to its breakout would make this an interesting buy.
Up, then down. Up, then down. In spite of my optimism last Friday, I'm feeling that dealing with the markets these days is a Sisyphean task. We've been range-bound for many weeks, and it looks like we're at the top of that range again. Here's the Russell 2000 on an intraday basis.
Of course the big question......and it only gets bigger every time we find ourselves at the extreme of a range.....is "break or bounce?" As with anything else in the world of charts, the longer a time period that price action is range-bound, the more dramatic the "escape" from that range.
So whereas I was optimistic before when we were near the bottom of the range (emotion check: greed), now I'm concerned we could bounce above this range and get back into full-blown bull mode (emotion check: fear). It's pretty clear that this week will give us the bounce-or-break answer. Here's the S&P 500 on a daily basis, and you can see the consolidation period over the past five weeks or so:
On an intraday basis, this range is very clear to see. Although prices typically take longer to climb than the fall, it seems that within this range, the motion is happening with similar speed. It only took a week from me to change my attitude from "oh, yeah!" to "awww, crap."
I haven't been following gold too closely, but wow, the $XAU chart is really in motion now. It is still in the range shown here, but Friday was a big day for the gold bulls.
Akamai is in an interesting breakdown pattern, albeit at an angle. Worth watching.
Chicago Mercantile (CME) is a good example of why it's important to wait for patterns to complete (I am guilty of ignoring this rule on occasion). As you can see, it was in a tremendously toppy pattern, but then it skittered away from the breakdown point and has done sensationally well since to the upside.
If you do believe the market is ready to head south again, a short position on the DIA or puts on it are a pretty good bet, since both the stock and the options are so liquid.
Micron (MU) is a stock I've mentioned as a bullish idea for the past couple of weeks. It looks better than ever. Just look at Friday's push upward.
I'm sorry this post was late; as I mentioned, I was heading to Lake Tahoe and that took a big bite out of my day. Enjoy your weekend, and I'll see you Monday evening.
Everyone knows the old saying: "If you Can't Beat 'em, Join 'em". So I submit myself to the New Normal. I embrace that Things Are Different This Time. I surrender my soul to the wisdom of the bulls. Let us gather hands around the truth together.
Corporate debt is a positive. First, because interest rates are so low, it represents virtually free money for private equity firms to maximize value to shareholders through buyout transactions. Those making access to this debt are trained professionals and are managing the debt load - and its risks - responsibly.
The booming Chinese economy is putting some strain on the environment, yes, but the Chinese have learned from the lessons learned in the British and American industrial revolutions and have taken the steps necessary to protect their environment for the sake of those that consume their products, for the sake of the economy in the long term, and for the sake of future generations.
The manic building in Dubai, Shanghai, and other emerging economies is exhilarating, and the race to see who can wind up with the world's tallest building just adds to the fun. The building boom is not overdone. On the contrary, Dubai - - until recently, a sweltering, barren desert - will become the top tourist attraction on the planet. The strength of the oil economy will allow this entire region to blossom for decades to come as the new epicenter of global capitalism and prosperity.
The housing "bust" is completely overblown. Yes, there are some isolated instances of damage from the sub-prime lending debacle, but it is completely contained. Although the red-hot pace of housing gains from years past will rest steady for a while, there is in fact no housing "bust", and thus no aftereffects to the economy at large.
The fact that the savings rate has dropped into negative territory is simply illustrative of strong consumer spending. We live in an age of rapid change, and adapting and embracing that change takes money. Here in the United States, we are simply helping lead the way by taking part in an exciting new time of electronic and communications wizardry.
The U.S. equity markets are not overpriced. Indeed, as the private equity buyouts of late illustrate, stocks in the U.S. are undervalued.
By the same token, the Chinese stock market offers a store of value that will only continue to rise. A value of 8,000 on the Shanghai index seems almost a foregone conclusion, particularly since the number "8" is widely considered to be lucky in China.
Some many say that the tremendous push of wealth to the highest echelons of society will create social unrest and turmoil. "Some" are wrong. There are about 1,000 billionaires in the world today (up from zero in 1915), controlling nearly $3 trillion in wealth. The couple of billion people in the world that live in poverty will view these billionaires as inspirational.
There's plenty more good news in the world. The Blackstone IPO was not an opportunistic event meant to exploit the naivete of investors buying at the top of a market. It was simply a means by which the principals in the organization could tap into some of the value they had built while at the same time providing a means for the common man to participate in this exciting new investment vehicle.
The entire "terrorism" issue is completely overblown. Once the war in Iraq withers away to a close, terrorism will be a smattering of unrelated incidents that no longer affect the Homeland.
We have outgrown inflation, and it has about as much chance of returning as the fads of the 1970s that accompanied it. Food and energy are notoriously volatile components, so if we strip away the ability to feed and transport ourselves, the core inflation numbers are comforting.
Next year, when a Democrat is virtually guaranteed to win the Presidency, the combination of a left-leaning Congress and President will be just the kind of "one-two punch" the economy needs to really kick into high gear. Taxes will be reduced or at least be kept low. And the entirely Democrat federal government will provide business all the assistance it requires to continue to thrive.
And, just to put a cherry on top of the whole thing, watch this:
I am now cleansed. And I no longer have to bother with this bearish claptrap. I've had enough.
OK, let me get this out of the way: I was wrong about Apple. Back on June 11th, I proposed that the hype around the iPhone would be a precursor to the stock getting walloped. Well, on the first trading day after the iPhone's introduction (yesterday), the stock did indeed inch down (and on a 126 point up day on the Dow, no less).
But it reached a new record high today. And, looking at the chart, there is no technical reason for the stock to be weak. So I sold my puts at a (relatively modest) loss this morning, and shame on me for ever doubting the power of Steve Jobs, my lifelong hero.
Phew. OK, done with the self-flagellation. Today's entry will be very short, since I imagine most of you are already wrapped up in July 4th festivities. As I mentioned yesterday, it looks like the readers of this blog were correct in suggesting very bullish behavior just prior to the Independence Day holiday.
One thing is clear, though. Over the past five weeks, the markets have been bouncing around in a clearly-defined range, ending (temporarily, at least) the unabashed push upward preceding June.
Zooming in a bit on the Russell 2000, the range has actually had two stages, demarcated here with two different colors of highlight. The most recent range is more volatile, yet it has a higher base.
This becomes even more obvious when you look at the $VIX. The range between highs and lows on the $VIX has exploded higher since June 1st. It makes for some extremely jumpy trading, since bulls and bears are struggling more than ever for control.
As for my broad view of the market.......it's pretty simple. I chalk up July 2 and 3 to the aforementioned Independence Day strength. I would expect to see some meaningful weakness for the balance of the week. If that doesn't take place - - and certainly if we push above the range that I've illustrated - - it looks like the bulls will take back the control which they set aside as of June 1st.
A number of readers have been remarking how strong the market is prior to the July 4 holiday, and how bears should sell into this strength as opposed to shorting too early (like last week). If today is an indication, it seems that was good advice. The market was strong across the board, with the Dow posting a better than 125 point gain.
My index-puts-of-choice are for the Russell 2000. I've got a pretty big put position on this index. As long as the series of lower highs and lower lows stays intact, I'm fine with this.
Remember, tomorrow is an abbreviated trading session (the equities market closes at 1:00 EST, three hours earlier than normal), so it's bound to be a quiet, low-volume today. I would think most of the pre-July 4 fireworks got taken care of today, but there might be another little push upward. The S&P 500 is also in a "lower highs" pattern, and it needs to remain so in order for the short-term bearish picture to remain decent.
One nice Dow stock for puts is Alcoa (symbol AA) which looks to be in the latter stages of a head and shoulders formation.
For big believers in the continuing ascension of energy prices, APA looks like a good bullish play. This is a really nice saucer breakout.
PSB is a short I closed a little while ago with a nice profit, but I re-entered it today, since it seems to have finished with its retracement.
This will be my last "introduction of the iPhone" post. Promise.
I have been mixed up with computers since 1979 and have religiously followed the characters of the Silicon Valley since 1982. I know the history of Apple particularly well, especially around the creation of the Macintosh. Thus, I've become acquainted with the stories of the players in that story.
Let me introduce you to three players in particular, numbered below. 1 is Andy Hertzfeld, one of the software geniuses on the original team (He works at Google now). 2 is Bill Atkinson, another of the software geniuses (he invented Hypercard, created the original MacPaint program, started General Magic, and is now an acclaimed photographer). And 3 is Burrell Smith, considered the hardware genius behind the product.
Here's another photo of them, taken on the day the Macintosh was unveiled. You can see how exuberant they look. Notice another circled face, that of Apple co-founder Steve Jobs.
Nearly a quarter of a century has passed since those photos were taken (incredibly...) So fast-forward to the present.....well, last Friday, when I was hanging around the Palo Alto Apple store. And look who wanders in......none other than Steve Jobs!
Now, you've got to recognize what a big deal this is. It's iPhone day. And this store is the epicenter of techies and geek-freaks. And Steve Jobs shows up. It would be like having a unveiling of a major new edition of the Bible and God beams down for a visit. You can imagine the reaction. So in this clip you see him checking out the store and deciding to go back across the street to grab his wife and bring her in too.
And once they are in the store, Jobs immediately sees the aforementioned Andy Hertzfeld (who, 30 seconds into the clip, you can hear saying "Bill stayed here all night", referring to Atkinson) and, at 1:00 into the clip, you can see Jobs amble over to Atkinson to chat with him a while. So it's like a micro-reunion.
So where was Burrell? That, to me, is kind of the sad part.
My understanding is that after the Macintosh-crazed 80s, he ran into some issues. Suffice it to say that I see him on the street at least a couple of times a month. He has a very long beard, partly grey. He walks at a quick pace, but looking at the sidewalk the entire time. And, to a random stranger, he might even look like a homeless guy (although I'm pretty sure he's living comfortably and likes to make regular jaunts to Whole Foods to get out and about).
What's striking to me is that most people would really assume he's just another homeless guy, without realizing what a major figure this person was in computers - and the Mac in particular - today. And his absence from all the excitement in the video above just reminded me of the juxtaposition. Because as the accidental reunion was taking place, their missing member was probably alone, walking to the grocery store, stare affixed to the sidewalk, destined to pick up another quart of milk.
