Spock Grok

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.

Are the Bulls Losing Their Grip?

Dedicated bulls should worry about this: the market is starting to make sense to me. Last week was a really good week. This week was a really good week.

Now, if we were at the tail end of a two-year long bear market, it would be easy to shrug this off. "Oh, yeah, Tim the permabear has been doing well because everything has been falling non-stop." But you know that's not the case. The Dow was at its highest level in human history earlier this month, and it still has over 98% of that value. So I've been able to score big profits trading virtually entirely bearish positions in a market which has been in anything but a free-fall.

So it's making sense. Leading up to this month, I was starting to lose my mind with how nonsensical, bizarre, and random the market seemed to be. It would be like living in a town where cars stop at green lights 80% of the time, pedestrians occasionally walked along the middle of the highway, and baby carriages were parked on the roofs of buildings. After a while, you start to lose your mind in that kind of environment and question your own sanity.

But the town I live in suddenly makes sense. People stop at red lights and go on green. Baby carriages are safe. And pedestrians remain on the sidewalks. And the market goes up when I think it's going to go up. And it goes down when I think it's going to go down. It's a nice change. Let's keep those buggies off the roofs for a while, shall we?

If you read my post from earlier today, you know I spent a little time this morning at the Palo Alto Apple store watching the crowds line up for the JesusPhone iPhone. If you didn't see the post earlier, check it out. It's got a cool little video I made.


I'm trading the Russell 2000 options actively, both intraday and on swing trades. A tight stop on the IWM ETF is at 84.19 right now, which was the high for both Thursday and Friday.


There's really no good instrument for trading the MidCap 400 ($MID), but it's a fascinating graph to me. The markets seem to be revving up to be in swoon mode.


I haven't traded the NASDAQ (either index or hardly any stocks) for a while. It's been relatively defiant of the recent weakness in the market. But I have a feeling this group is going to start joining the downdraft party.


Side note, now that I mention NASDAQ - congratulations to RIMM owners, particularly call owners. I see some of the calls were up literally quadruple-digit percent levels today!)

Oil services are looking terrific for shorts/puts. HES is particularly well-formed and liquid.


McKesson (MCK) is another beautiful stock. One of the best examples of exploiting Fibonacci fans that I've ever seen.


RadioShack (RSH) has been on an enormous upswing of late. (Rumor has it that AJC has joined the Battery Club multiple times to keep her bedside electronic accouterments fully-powered, thus the earnings spike). But - - just like JC Penney is JC Penney - - Radio Shack is Radio Shack. And that's all you need to know. I've got puts.


Next week should be relatively quiet with a big fat holiday right in the middle of it. Have a safe one (most of you, at least), and I'll see you on Monday.

Late breaking news! I was there for the Big Event (the 6:00 opening of the doors at the Apple store). It was a madhouse. Police, news crews, and hundreds of people (half of which were taking pictures).


You know the funny part? People waiting three days to be near the front of the line. And one hour later....one hour......I was able to just walk right in through the front door without a wait. Great use of three days (and nights), fellers. Anyway, here are my two iPhones perched on the kitchen bar:

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.

Twenty-Five-Peat

Yawn. The bull's getting boring. By my count, 25 out of the past 31 days have been up on the Dow. So much for climbing a wall of worry. It's skipping higher.

I mentioned yesterday that the US Dollar had to soften up to have any chance of market softness. Although it didn't help today, I notice the NZD/USD did weaken considerably and is sporting a pretty hefty bearish engulfing pattern.


One nice effect this did have is to soften up gold quite a bit. My $XAU puts continue to do well.


Apple traded over $100 for a while today, its highest price in history. I remembered Dell's famous quote in the late 90s about how Apple should just give up, so I decided to look up when he said that. Well, fancy that - - right near the bottom. Buyers of Dell on that day would have about 140% in profits by now. Buyers of Apple, on the other hand, have enjoyed more like a 1,600% gain.


Akamai, a short suggestion here, continues to fall on very significant volume.


I sold American Airlines (AMR) short yesterday near its high for the day, and it is sinking nicely away from its neckline. By traditional measurements, there could be another $9 in losses on this stock.


I've never charted Honeywell (HON) here before, but it's a Dow 30 stock and worth watching. No clear bearish pattern here, but clearly an opportunity for it to take a breather.


I've mentioned in the recent past how McKesson (MCK) is dancing around its Fibonacci fan lines. At long last, it started to fall away from one of those lines today. It took a while.


Morgan Stanley (MS) represents a relatively low-risk short here, since it has apparently retraced about all of the descent that it is planning to retrace.


PSB, which I've been short a while, continues to slowly form a potential head and shoulders pattern. So far, so good.


Questar (STR), mentioned several times recently as a long candidate, moved handsomely higher today.


In honor of Steven Hawking's planned adventure in weightlessness, I thought I'd share this funny (but slightly NSFW) clip.

Loving the Lump

Yesterday I wrote....

I was hoping for a nice nasty surprise from RIMM, but they had blowout earnings and their stock is way, way high in after hours trading. I wouldn't drop dead of shock if they ended the day down tomorrow. It's just a hunch. Maybe a completely stupid hunch, but a hunch nonetheless. I'm hanging on to these March puts.

Well, well, well. The hunch was right. RIMM was in record high territory after hours yesterday. Once reality started to sink in, the gains diminished, and the stock fell on the day. Let me be clear here: for a stock to go down significantly on a day when blow-out earnings are reported, blow-out projections are made, and record highs are made prior to the open........well, sweet dreams are made of this.


I also still like the look of MCK. Maybe my hunches have a bit more credibility now. Plus the Fib fans.


Bank of America isn't going to have a Google-sized (anticipated) fall. It's a major bank, after all. But I think the best days of this stock are through.


$XAU has a lot of room left to free-fall.


And although I'm not in an $MSH position (I'm in $NDX), this is a good prospective put purchase. Very toppy.


This has nothing to do with trading, but I loved the Lisa Lampanelli bit of the William Shatner roast. As a lifelong Trek fan (of the Original Series......please!) I found the entire event a kick. You froo-froo types, don't bother. But if you want a good laugh and don't mind the raunch, here you go.....


Oh, and Merry Christmas, everyone. Let us look forward to a year of delivering lumps of coal to bulls - both naughty and nice - in the year ahead.

Sub-12K. Tim Says Yay.

The Dow was able to close for ten days in a row above the 12,000 level. Not today, though. We're back into 11,xxx territory. Let's hope it stays that way! For years!

As usual, I've got a number of charts to share with you that you might find of interest. First up is a long (you heard right) suggestion, symbol CRR. Looks pretty battered to me, and the swell in volume recently indicates a possible change in direction.


Now onto more familiar territory - the shorts! Here's FMX:


LLL looks good:


I like how MCK is playing against these Fib fans:


MTW looks like a good double top:


NVR is thinly traded, but a good topping pattern:


Finally, these's QQQQ. Check out the similarity between the two sections of the RSI indicator. To me, this suggests the QQQQs (and, therefore, the $NDX) are headed much lower.