How Soon Is Now?

These are the times that try bears' souls.

Oh, my fellow doom-and-gloomers, it's been a tough few days! Indeed, it's been tough since, oh, about October 2002! Ah, well. Hope springs eternal in the savage breast. And the one bullish glimmer in my black bearish heart, the stock of my employer, has been up quite a bit lately. So at least that's going well!

Let's start off with a couple of interesting short picks. One is pretty risky and the other is fairly obvious.

The risky one is Allegheny Technologies, the specialty metal producer which has been on a huge tear for three years, up over 2,500%! Check out the trendline I've drawn, which was violated a year ago. The prices have finally pushed their way back up to the underside of this ascending resistance line, and this "kissing the underbelly" represents a relatively safe place to short the stock. I'd put in a stop price of $75, because this is a very strong stock.


Another reason ATI might be a good short is that, on the whole, volume has been getting lighter. Notice the line drawn on the volume graph below and see how volume has been generally waning in the face of the stock's ascent. To be fair, the dollar volume of the stock is probably pretty steady.


One short I've had a while which is doing nicely - and continues to look promising (particularly considering its fall during the last couple of super bullish days) is McKesson (MCK). It's a lovely topping dome pattern, pure and simple.


I'm watching the Nasdaq 100 ($NDX) very closely, because a fall-away from the saucer pattern being built would be very bearish. Notice how the prior two saucer patterns were much, much bigger than the current one.......and they didn't even go up that much even when complete. What we want to see is (a) a failure for the saucer to form and (b) subsequent to that, a cross beneath the trendline shown here.


Lastly is the Dow Utilities ($UTIL, which has the ETF of UTH). The monster rally yesterday, fueled by relief over interest rate increases, pushed the price of this back to its neckline. It's getting soft again now, and I remain convinced the target shown in shaded green is going to be met.