...And an Awful Lot Like Me.....

First off, if you didn't get around to reading yesterday's post, you should. It rules.

The trend change that I have been hoping, praying, and wishing for might (I say MIGHT) be here. Whether it is or not, the past week or so has been very good to me. Successful trading comes with its own set of challenges, but I'm enjoying myself. Watching the Dow go from a 90 point deficit to a 20 point surplus today, I had the sense that it was time to get more puts. And that was the right move. Lower lows and lower highs seems to be the rule of the day.


The "culprit" of all this wonderfulness is soaring interest rates. One reader (who shall remain nameless but I shall refer to as SuperCOT COTLover) opined that interest rates aren't going to go up forever. Well, ummm, that's right. But they weren't going to go down forever either. Believe me, there's plenty more that can go wrong to help add fuel to this wonderful fire.


Someone else asked to see my positions. Anyone blinkered enough to spend time every day sharing his best charts and thoughts for no money is stupid enough to show all his positions too, so here goes (the bold items are puts; everything else is a short):


Remember that channel I mentioned yesterday for the Russell 2000? Well, it was cracked today. Good.


And the S&P 500, which had been floating above its channel for a while now, has now achieved - if you will - double penetration. The index is within the bounds of its channel once more. Which only means it is at the very highest reaches of its channel, with ample more room to fall.


And, not surprisingly, the $VIX has been zooming higher lately. Even at these levels, we are far, far below historical averages. During saner times, the $VIX would occasionally push above 50.


ALB, which I've been short for a while, has now completed its pattern. Huzzah!


Oh, remember back on May 22nd that I suggested BTJ as a short? I've marked it with an arrow here. How's that for a call, folks? I (stupidly) closed it out a couple of days ago for a nice profit, but, again, it was just stupid. There was no solid reason to cover the position.


CAM is another one dozens of great short/put candidates.


And the DIA is a great general way to play the market downturn via puts. This is a gorgeous chart. Stop price of 134.76 on this one, if memory serves.


My puts on GOOG are doing well. This is a failed breakout pattern. For such an expensive stock, there is nothing sweeter.


I'm avoiding real estate shorts, pretty much (I've got one or two). Looking at IYR, it is approaching a supporting trendline. Of course, if you read about the billions upon billions of dollars in mortgages that are about to explode, it could be that the real estate downfall has only just started trickling in.


My JCP puts are doing well, although his pattern is not complete yet. But it has a very good shot of doing so.


Check out Sears Holding (SHLD). It has crossed its 20, 50, and 200 day moving averages! Now the fun can really begin.


And for all those who used me as a contrary indicator........keep holding those positions, boys. I'm sure you're right and they'll be back in the black in no time. In fact, double up. You know I'm wrong.

XTC........

Charlie Don't Surf!

This is going to be one of those danged "airport posts" which are shorter than normal, since I am frantically typing prior to rushing onto my plane. Forgive me!

The markets were nice yesterday for us bears, although I wouldn't be surprised if we took a breather here for a bit. The NASDAQ 100 does a fair job of showing how tired this market is, possibly moving into our dreamed-of lower highs/lower lows scenario.


Perennial favorite Russell 2000 is resting on top of its Fib retracement, which could mean a bounce up today. I really need it to penetrate through this line to move to the next logical level.


Apple has been a powerhouse, but I think it's a great put candidate now. Oh, and by the way, my experience with AppleTV completely sucked. I returned it the next day. Disaster.


FDX is a great example of a failed bullish breakout. Look what has happened since its break journey above that horizontal line.


McDonalds as a short......I'm lovin' it.


Here are my current positions......actually, the screen wasn't big enough to show them all. As usual, put options are shown in bold. See ya this evening!

What a Week

This was quite a week. 12,000 pierced. A close above 12,000. It even managed to end the week above 12,000 (by 77/100ths of a point. Blowout earnings from GOOG. And a tidal wave of earnings reports, few of them shockingly bad.

If there's an opposite of fear and panic, we have it right now. The VIX pushed even below the trendline I drew for it a while back. These are epic low levels of complacency in the market.


Someone asked yesterday in the comments section about where I place stops. It depends on the chart. There's no set percentage or anything. That would be arbitrary. Take LLL, for instance, which I own puts on right now. I have an order to sell the puts at the market price if the underlying stock goes above 80. It's not based on a formula. It's based on the chart, and every chart is different.


I'm still 99% short right now (with a fair bit of cash on the sidelines), but here's a couple of long ideas for you. There's Redback Networks (RBAK):


As well as Sears (SHLD), which I've bashed for the longest time, but I cannot help but admire its gorgeous pattern. This has got to be the most perfect cup-with-handle pattern I've ever seen. It's beyond me why everyone on the planet would suddenly start buying their leisure suits and knit pants at Sears, but the chart doesn't lie.


I haven't indiscretely shown my positions in a while, so they are below (those that will fit on the screen, anyway; I ran out of room). As always, click on the picture (and any picture on this blog) to see a bigger version.


This market is in a "watched pot never boils" situation, and it's tiresome, I know. Some think we'll have to wait until after the elections are over. Some think we'll have to wait until January. And plenty of people think there's no such thing as a bear market anymore. Time will tell.