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.

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.

Buy Buy!

Two days into 2007, and each of them an up day on the Dow. The bulls are still having their fun. Granted, both days combined don't even equal 20 points. But the bulls are still lovestruck.


OK, that probably woke you up. I hate to be punitive, but no one commented on my gallery of Worst Album Covers yesterday, so I wanted to supplement them.......from the pious.....


...to the romantic....


...to the deepest male emotions.....


....to Ken.....by request. I imagine this is simple a blank vinyl disc.


ABT looks attractive as a buy. This market is really overpriced, I think, but this is still a handsome chart.


HAL, on the other hand, is more symbolic of what's happening. Broken trendlines, weakening stocks, all masked by a strong megacap market


I'm starting to lose faith in GOOG (and RIMM) as shorts. Today was a very strong day on both counts. I've marked by stop-loss price on GOOG here.


DST is sort of fascinating in how it shows trendlines "changing coats" from support to resistance. This kind of thing happens all the time.


BLUD, which I've mentioned many times before as a long, continues to be fantastic. Just look at this strength.


BAC, Bank of America, seems a possible attractive short as it seems to be changing direction here.


QID, the double-inverse NASDAQ ETF, is fascinating in the sense that volume is exploding and the price is finally turning around. Hopefully this is the shape of things to come.


OXY is a good representative of the weakening oil stocks.


Whereas the broad OIH continues to falter. I've been bearish on oil for a few weeks now.


HYDL, mentioned here as a short before, is also enjoying a downdraft.


Although I haven't mentioned HP (the symbol, not the company) in a while, this is a gorgeous example of Fibonacci retracements in action. Magical!


Finally, RTI looks like it may have put in a double top.


See you Friday afternoon......it'll probably be a late posting. It might not even happen until the weekend. But I'll get it done!