Nice

After Thursday's big drop, I speculated that today we would see a short, sharp drop followed by a big rally. Well, even I can get it right every now and then. That is precisely, 100%, what happened.

I think there's a decent chance, however, that we may have moved into a new phase of this market. Maybe that is just wishful thinking. But I don't think today's big 150+ upside move on the Dow is the beginning of yet another assault onto new highs. Instead, I think it's just a pullback in what seems like could be a staircase down. We'll see.


One of the main reasons I thought we'd see a big move up today is because of the many instances of supporting trendlines around the closing levels of yesterday. This graph of the S&P 500 shows how the upper trendline of the (now broken) channel represented meaningful support for the index. Sure enough - boing! - it bounced right off of it. But I really think we're going to re-enter channel-land next week.


I tripped across Checkfree (CKFR) and got into a short position there. This is a honkin' big head and shoulders pattern, although as yet incomplete.


Goldman Sachs represents the kind of stock on which I'd like to own puts once the relief rally peters out (which could probably be about 30 minutes into Monday's session). I closed out the vast majority of my positions and am sitting on a ton of cash right now, waiting to re-enter shorts and puts at good levels.


NutriSystem is definitely on my list, too. This seems like a great bearish play, now that it has pushed its way up to formidable resistance.


I took the plunge with ONT today, buying a large block of shares. It's my only long. But this is a sensational-looking graph, particularly with the explosion in volume, and it has fallen to a price level that is reasonable compared to where it was at a couple of weeks ago.


Whirlpool (WHR) did what so many large stocks did this week........fell hard, and then recovered to a neckline (more or less) today. These are great set-ups.


Rock on. See you next week.

The Tireless Bull

Each day seems to bring more of the same. The market jumps down. Firms up. Dances around the +0 net change all day long. Then does a late day surge. It's teasing the bears. And the bulls don't seem to be getting tired.

One silver lining to this very big cloud is that the leadership is thinning. Take the NASDAQ 100 for instance. In spite of the Dow making lifetime new highs virtually every day, this index has been a laggard. It was even down a decent amount today.


As you can see by the chart of SPY, the market is ahead of itself. It has "overshot" the channel, just like it "undershot" it early on.


Worth considering as a short - Adobe (ADBE):


Another candidate - Allergan (AGN):


I suggested Checkfree (CKFR) earlier this month, and it's getting smashed in after hours trading today. Nice to have a bright spot in this horrible market.


Health Net (HNT) is another short candidate.


And, lastly, Textron (TXT):


I've noticed in the comments section (which is much quieter now that the anomymous people are locked out) that people sometimes append their ideas with "do your homework" or "do your due diligence" or something else along those lines. Let me save your typing fingers - - you don't need to say such things. The whole idea behind charting is that whatever knowledge the market has is already built into the chart.

Does anyone really think that by puttering around the net they are going to uncover some explosive new information about a stock, be it good or bad, that it absent from the minds of the collective body that trades it? If so, have at it. I personally think you're wasting your time.

To everyone who has survived so far - my hat's off to you. This sucks!