The Slope of Hope

First off, as you can see, I've dolled up the site a bit. After I added MyBlogLog (for which you really should sign up - it's pretty cool, and it's free) I decided to spruce things up a bit, including the title of this blog. Perhaps you haven't heard the old saying about how markets climb a Wall of Worry and fall down a Slope of Hope. But that's where the title comes from.

On the plane home, I started reading Ken Fisher's The Only Three Questions that Count. I like it a lot so far. You might want to check it out if you enjoy Mr. Fisher's writing in Forbes.

Today was another weird day on the market. It was weird in that, once again, my totally bearish portfolio gained value in spite of another triple-digit climb on the Dow and another record high. And it was also weird that, yet again, really crummy economic news came out, yet the markets cheered. What a bunch of psychos. Oh, well.

BBD has been mentioned here as a bullish play, and it's looking stronger than ever.


I also like (bullishly speaking) CRDN.


I have avoided copper for a while, but I think I'm going to acquire some puts on Southern Copper (PCU) based on its location within this channel.


John Deere (DE) is something on which I already own puts, and I like the look of this huge bearish engulfing pattern, particularly since it was in the context of a big "up" day.


Real estate is getting even weaker, and KRC is another good short within that world.


Lastly, I hate to bore you with another ONT chart, but I continue to be amazed how well this stock is doing. It was first mentioned by a reader in this blog at the point where the arrow is showing, and I agreed with her bullish take on the stock a few days later. Since then, it has more than doubled, and on amazingly strong volume.


It's nearly midnight, so I'm off........see you at the regular time tomorrow afternoon! And remember to sign up for MyBlogLog - it's a kick!

Spasm

Today's post will be relatively lame, unlike yesterday's really long and cool post. Read it if you haven't already.

In typical fashion, the market did a total spasm when the Fed did their announcement today. First the market fell hard. Then went up. Then fell down. then finally went up again, staying there, and closing up to yet another record high (rolling eyes).


There are a few interesting charts that are busting into new highs off of pretty bullish patterns. One of them is BBD.


Another, with a similar pattern, is Carpenter (CRS):


I'm going to give Sotheby's (BID) another try on the short side.


The market's just going to keep rising until it stops, folks. Nothing more to it. It'll be interesting to see how Friday goes, since there are some key retail figures coming out.

Stalemate

In yesterday's post, I laid out bullish and bearish arguments for the market, since we seem to be in one of those awful stand-offs between the bulls and bears. Today played out in precisely that manner.

The widely-anticipated jobs report came out. The results were interpreted as bullish. The markets zoomed higher at the opening bell. Fibonacci retracements were touched all over the place, and then the market started to soften fast. It went negative. Then positive. Then negative. Then positive. And finally ended with about 1/4th of the gain it had at its high point. Just ridiculous.

I'm 100% in puts and shorts right now. Below are my positions. Boldfaced items are puts.


Here's the Dow 30. You can see it bounces off that Fib beautifully.


And here's the Russell. For the second day in a row, it bounced off the fib. It actually managed to sneak across the line a little, but not for long.


The $SPX is pretty similar to the $INDU.


I've got a couple of long suggestions. Here's Bowater (BOW):


And, and even better one, Pico Holdings (PICO), which has the advantage of a big volume surge recently.


A few short ideas. BBD seems to have retraced within the Fib retracement nicely.


MS, like a lot of other investment banks, has likely retraced to an area where I think it doesn't have the strength to climb any higher.


Microstrategy (MSTR) blew me out a couple of weeks ago, but it was a one-day fake out. This one looks weak.


Options on the QQQQs have the advantage of being penny-priced, which is much more fair to traders.


Reynolds (RAI) is retracing back to its broken dome pattern. I also have puts on another aluminum stock, symbol AL, but the chart isn't as pretty.


Lastly, symbol RYAAY looks like a low risk/high reward short candidate.


My kids have given me some kind of bug, so I'm typing this with the chills. Even though it is 70 degrees outside, I'm going to go sit in front of the fire! Have a good weekend!

Seven Nation Army

I'm gonna fight 'em all
A seven nation army couldn't hold me back
They're gonna rip it off
Taking their time right behind my back

Another day, another lifetime high on the Dow. C'est la vie.

I mentioned BHI as a short a few days ago , and it got walloped. Even put options that are several months out doubled in value today. Oil in general (be it OIH or a component) is pretty attractive to my bearish eyes right now.


I'm pretty proud of this graph, so click it to see a big version. It's a minute bar of the NZD/USD forex trade I've been suggesting. The symmetry between the phases I've shown here is really intriguing to me. I've numbered it for clarity. I've been trading it both up and down (long and short) during the most recent cycle. I imagine we're about ready to head back into a long tumble now. This is a really fun currency to trade, in spite of the wide pip spread.


The Russell 2000 remains my favorite index on which to own puts right now. Put values have been getting creamed lately by (a) rapidly rising index values and (b) withering volatility premiums. A one-two punch. Call me crazy, but I am loading up on them at these levels.


Allstate (ALL) has a dainty head and shoulders pattern that I think is worth trading, since it seems to have fully retraced.


BBD has a clean relationship with its Fib retracement.


This is a bigger graph than I normally show - ten years - and it's of Goldman Sachs (GS). I still love this short.


HES is another fresh one I'd suggest you check out.


I've still got my IYR puts. They're under water, but just take a gander and how lofty this sucker is.


My MTH short is still solid. I am once again showing a bigger graph so you can understand how far this thing could fall.


OXY is another oil short worth examination.


PCU isn't as clear-cut, but it's at the top of a channel, and I'm going to nibble some puts on this one tomorrow.