Grinding the Gears

I appreciate everyone's patience while I got my entry done for the day. I went on a whirlwind adventure to Florida to speak (five times) at an investment conference.

Many people were asking me about my book. You can buy it from Amazon right now, and I imagine it will be in your local bookstore within a few weeks. I see it's zoomed from #400,000 to #3,800 in just a couple of days. Harry Potter, look out!

I was really disappointed in the market on Tuesday (yesterday). It started with a quick drop, and then it punched and clawed its way back up to another lifetime high on the Dow.

The bulls are ungodly powerful right now. The reason is simple. This entire basis for people buying into this market is no different than the reason any six year old offers for doing anything..........."everyone else is doing it!" And that kind of sheeplike behavior has been creating graphs like that of the Dow Composite, which is straight up, grinding higher, and higher, and higher, annihilating us poor bears the entire way......


The Dow, which fell nearly 50 points today, continues to offer a flicker of hope for the ursine among us.


The S&P 100 likewise shows a continued reduction in upward momentum as viewed via the RSI.


Today I'd like to offer a mix of both short and long suggestions. As always, check them out more deeply for yourself. Let's start with the shorts. BP, mentioned here a couple of times, pushes closer and closer to breaking its huge head and shoulders pattern.


Carnival, also a repeated mention, looks better too.


CNX is another short energy play, in spite of recent strength in the OIH.


EXC seems to have clearly broken its upward trendline.


Now let's break tradition and pull up some bullish ideas. The balance of today's post is bullish suggestions. Starting with Genentech (DNA), where I've highlighted some similar patterns in the past and their subsequent upward breakouts.


FedEx, moving on to new highs.


HOLX also looks good, and has strong volume backing up its breakout.


IPS is also good for aggressive bulls.


The trouble I am having with conjuring up bullish ideas is that it's tough finding safe bullish patterns in a market this high. I could point out plenty of momentum plays, but I'm not really into taking advantage of the Greater Fool theory.

Good night, and I'll see you after the close Thursday.

Four Hundred

Today is my 400th post (huzzah!) May God grant me the strength to see it through to post number 500. And smite anonymous phone callers.

The stock market these days reminds me of a celebrity. With makeup on, they can be very sexy and alluring. Without the gloss and shine, however, it can be a scary sight.


The S&P was somewhat weak today, as was the market as a whole. This was a nice relief, since a springback from Friday's weakness would have heartened the bulls. However, we have to cut beneath 1417 to break the series of higher highs/higher lows. Otherwise, we're just going to continue to waste our lives waiting.


The $VIX is, understandably, pushing higher.


I'm kind of "charted out" for now, so let me share just a few. At long last, some of the commercial realty stocks are falling. Here's sky-high AIV, for example.


Amlyn (AMLN) remains a favorite short.


I've mentioned BP a bunch of times. The head and shoulders formation - and it's a huge one - continues to form nicely.


CNX is also in a topping pattern with a very clear stop-loss price.


And although I have no position in NutriSystem anymore (NTRI), I would be terrified being long this stock. It's in a huge no-man's-land right now, and there is very little in the way of support between its current price and........I won't even say how low.


On to post 401! See you tomorrow.

Finally....

Wow, I have never been so late with a blog posting before! I am a day late but, thanks to my NZD/USD trade, far from a dollar short. I've been up since 3 a.m. catching up, and I am at long last going to do the post I wanted to do last night! (Technical Note: Blogger seems to be having major issues recently. I can't view comments, and I imagine none of you have been able to post. The lateness of this post is my fault, but the technical problems are not!)

If you saw the news last night, you should recognize what a scoop I provided with my bizarre BillyWitchDoctor.com post a week or so ago. That clip was from Aqua Teen Hunger Force and - wouldn't you know it? - they were the top story yesterday. No, I'm serious. There was a huge bomb scare in Boston, and it was due to a publicity stunt from our french dry/milk shake/meatball pals. Nice going, Frylock.



OK, back to charts. Today's entry is a little weird because I start pulling charts for it at 4 in the morning and was still doing so just 90 minutes before the close of the market. So this isn't a typical end of day commentary.

Kudos to those of you who took my NTRI suggestion seriously. This was a beautiful chart. It had a lot of good elements.....a major ascending trendline that had been broken.....a clear area of resistance.........a (sloppy) head and shoulders pattern. And it positively fell to pieces subsequent to my suggestion to check it out.


For those who didn't mind the risk, the rewards were handsome. Check out the action on this NTRI put - - up thousands of percent in just a few days!


Bulls in the stock market can take heart from the Transports. It looks like this has broken its clear bearish pattern. And, as I'm typing this, it looks like the market is headed to another solid close higher.


The S&P 500 is at the very, very top of its ascending channel. Any higher, and it's going to break above resistance.


Another cheer-up for the bulls is the MidCap 400. This is about as good a cup with handle pattern as you're ever going to see (my lame rendition of the pattern, in green, notwithstanding).


The Dow 30 seems to be headed for yet another closing higher today (the market's got another hour and a half open as I type this). But it's still below the ascending trendline is broke early last month.


For a bullish play, I like Genentech (DNA). The saucer shape and the volume both look positive.


CNX for a short idea.


Bank of America (BAC) is another good short idea. I closed my puts a couple of days ago at a profit, and it looks like it might be time to re-enter.


Sun Microsystems (SUNW), mentioned a month ago (or so) as a bullish play, is doing well. This is a gigantic saucer - just massive.


No one has commented on my FOREX suggestion (maybe there are only equity players here), but it's been doing amazing things. I've doubled my account balance in just a week based on this one currency.


I had never charted MWP before, but this is another good short idea.


McDonalds (MCD), shown here with Bollinger bands and the RSI, is a pretty safe bearish play.


And Google (GOOG), which announced earnings last night, is doing something really interesting - specifically, it's acting like a normal stock. In the past, whenever they had earnings, there were these massive gaps (highlighted here in green). There was no gap today - - although it's somewhat bearish for GOOG that yet another quarter of blow-out earnings is actually producing a down day (so far) for the stock.


My apologies to any of you wondering what took me so long to do the post. It's been nuts!

Remark on Comments: I think the geniuses at Google (Blogger) are busy counting their billions of dollars, because their site is sure a mess tonight. People can't even post comments. 90% of the reason I do this blog is to read people's comments, so please try again later. I want to hear what you have to say, and others do too!