Once More into the Breach

Well, I'm glad we got that bit of business out of the way!

The stock market did its usual spastic freak-out the moment the Federal Reserve Statement was issued. First it lurched down. And then up, big time. And then down again. And it spent the rest of the day generally heading south. It wasn't a plunge, by any stretch, but it certainly nuked a very healthy rise in equities into oblivion.


Looking at the candlestick chart of the IWM (which is the ETF for the Russell 2000), you can see a picture-perfect shooting star. My feeling is that tomorrow will be a down day, and we can get back to the business of shorting this market.


Colgate (CL) is a relatively stable/"no surprises" stock that might be worth acquiring puts against.


Coventry Health (CVH) appears to have failed to break out of a normally bullish pattern, which is bearish. I'm short the stock.


I've mentioned Jet Blue (JBLU) for the bulls out there. I stand by this position. Maybe this former high-flier is getting its act together after many embarrassing fumbles.


I bought puts on MCK today based on a small head and shoulders pattern plus a falling-away from a Fibonacci fan.


Oils are looking pretty good for put/short opportunities too. I bought puts on OXY just before today's close.


Same story with Southern Copper (PCU).


Potash puts are fairly heavily traded, thus the bid/ask spread isn't atrocious. I picked up some of these today (as with all the other trades, well after the Fed craziness).


...and the same for Schlumberger (SLB).


.....and Exxon (XOM).


I stopped trading Research in Motion (RIMM) ages ago, since the stock is just too weird for me to understand. Congratulations to those long the stock (and, even moreso, long the calls). RIMM had oh-my-God earnings after the close today and, last time I checked, was up 12%. Poor old Fred Hickey can't seem to live this one down.

Darkest Before the Dawn?

To All Disciples, Nay-Sayers, Hangers-On, and Stubborn Mules.......

I bet you didn't know this, but I used to sing. Yes, sing. Amateur level, naturally, but it was fun for a while. Allow me to share my sentiments for recent market activity with this bit of Latin I warbled at one point:

Confutatis maledictis,
flammis acribus addictis,
voca me cum benedictus.

Oro supplex et acclinis,
cor contritum quasi cinis,
gere curam mei finis.

Y'know, times like these so remind me of 1999. Basically smart, sober, thinking people (ahem.....) knew the market was insane. And they got their butts handed to them. Stupid, mindless sheep didn't have to think at all. And they got freakin' rich. The world just ain't fair, is it? Who said IQ pays?

I looked at the comments from yesterday's post and have a couple of replies. To Leisa, I'm delighted to have provided you a big "O" through this blog. Don't let my wife know. She's got me as an exclusive service provider on that front. And downosedive, I agree, we may be in an "overshoot" right now. Indeed, if you believe my 1972=2006 analysis, we're going to keep grinding higher until January or so.

Someone commented how my mood was a contrarian indicator. Perhaps so. Truth to tell, even as a permabear, I'm not bad at picking bottoms. Take a look at my post from July 15th. This marked almost to the day when the market turned around. Now, unfortunately, I've been fighting it ever since........but my point is that I did recognize when the selling was over.

In spite of a completely rotten week, my spirits are relatively good. Hope springs eternal in the bearish breast, eh? Let's take a look at some charts.

The NASDAQ, which I am painfully short by means of puts on the QQQQ, the $NDX, and the $MSH, has been super strong. It's wayyyyyyy at the top of almost every technical channel at this point. But - - that is meaning squat these days.


The Russell 2000 index is something I follow closely. If the market ever does start falling (which, I'm guessing, will be around the year 2039 or so) this one is going to get hit the worst. It's been quite strong and is approaching a lifetime high. I'll let the chart speak for itself.


The S&P 500 has been charging ahead as well. Unlike the Dow, it is not at a lifetime high (God forbid it gets there anytime soon). It's pushing its way toward its 78.6% Fib retracement. This is a heavily marked-up chart.


The $VIX is as low as public opinion of Congress right now. I mean, God almighty, just look at this thing. I've circled the prior nadirs (how often do you use that phrase in conversation?)


I bought calls on the $XAU a few days back and sold them today for a decent profit. Yeah, a wimpy little trade, I know. I'm just having trouble defying this huge head and shoulders pattern any longer. But it definitely bounced off that Fib line (and neckline) and could head higher - maybe even much higher.


Now on to some specific stocks. Here's AAPL. Doesn't the current action look just a touch like late 99/early 2000 to you?


Here's Allegan (AGN):


Boeing (BA) which - gasp - went DOWN today. Maybe the whole Airbus-sucks thing has played itself out. This is a broken trendline.


Black and Decker (BDK):


CMI which, umm, looks just a little overbought, wouldn't you say. I mean, God almighty, just look at this thing.


CTX.......


DE, which I'm not zany about, but seems vulnerable enough......


IWM, which is the ETF for the Russell. A convergence seems to be approaching.


Lehman (LEH).....


LEN.....


Our old friend OIH which, I confess, could go up. But I'm betting down. I'd say a stop at $131 would make this a relatively low risk/high reward trade.


Redback is something that I'm long. Goes against ever fiber in my body, I know, but it is one of the few decent looking bullish plays I see.


I will now grab my mango-infused rum, kneel down on the floor, and pray to the bearish God in heaven to smite those who keep pushing the market higher. Our time will come. Let's just hope we're not all wearing barrels by the time it does.