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.

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!

Yeeeeeech....

You can thank the good people of United Airlines for my ability to get this post done relatively promptly. My brief flight from Seattle to San Francisco has been delayed three hours. So here I sit on the plane, waxing poetic about this insane market.

By the way, does anyone find this image from the login page of TMobile to be strangely suggestive? (Long, uncomfortable pause). No? I guess it's just me.


Here's the NZD/USD - - what I have to say about it is basically the same as what I've got to say in the next paragraph.....


As long as the dollar remains weak, there's going to be yet another reason for stocks to go higher. Looking at the EUR/USD chart, it's clear that we're at an extreme point, but (obviously) it could push to yet another extreme. This chart, in case it's not clear to you, shows the strength of the Euro (and, conversely, the weakness of the dollar), so mentally invert it.


What's interesting about the market is just how swiftly it has pushed higher. Look at the chart below. I've highlighted each of the most recent three "surges", and as you can see, each surge is happening with greater speed. The two lonely down periods here were last summer (oh, how I miss those days....) and - ever so briefly - about eight weeks ago.


The NASDAQ Composite is still within its rising channel, at the tippy-tippy top. Clearly Apple's (AAPL) sensational earnings will push both Apple and the NASDAQ higher first thing in the morning.


The S&P 500 is clearly above its channel. An overshot, or a whole new ball game? Search me.


If you want a truly bullish picture of the market, take a step back and look at the long-term $XMI. This is a chart of an amazing breakout, a perfect pullback, and a subsequent push to new highs. This is exactly what bull markets are made of. Astonishing.


I have suggested Akamai (AKAM) as a short before. It didn't really perform until today.


I like looking for weak stocks on a day like today, because if a stock can't get it up on a day like this, it's in sorry shape. Check out ATI.


Same goes for Colgate, which actually opened higher. Look at the honey of a bearish engulfing pattern on this one.


CRS, mentioned here yesterday, is failing its breakout, and it fell today on strong volume.


Dril Quip (DRQ), mentioned in this blog before as a buy, continues to perform well. Just about anything to do with energy (either classic or alternate) seems to be zooming these days. I can at least take heart that I am in a natural gas partnership.


General Dynamics (GD) looks like a potential short. It busted its trendline a number of weeks back, and it seems to have double topped today, falling when everything else was rising.


I don't have any particular opinion on GOOG, but it only rose one tenth of one percent today - - pretty feeble, wouldn't you say? I think it may be telling. I'd also point out that all the gains from its fantastic earnings report a few days ago have vanished. Everyone who bought into that rally - even at the day's low - is in a losing position now.


I like Southern Copper (PCU) as a short at this price.


Schnitzer Steel (SCHN) - - man, can you imagine being the receptionist there and saying that name all day long? - - continues to look fantastic as a bullish play. Wonderful strength on handsome volume.


Questar also looks good on the long side.


Given today's action, I'm glad the readers voting to take anonymous comments down. You can imagine what much mud slinging would be going on right now.

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.