Wanted: Clear Direction. Please!

The Dow was down 34 points today. Big deal. This market is so boring these days. There's just no direction. A little tug up. A little tug down. Intraday graphs are like spasms. The S&P 500 is basically exactly where it was when 2006 began. It went up a while. Then it went down a while. And now it's up a little. Zzzzzzzzzzzz........

Oh, before I forget, this blog is now part of the Ticker Sense poll. Thanks, guys! Is there a way to auto-click the Bearish radio button?

If you have the time and the interest, here's a fascinating (and long) article about large economic trends, particularly centered around debt and interest rates. Bottom line is that a recession is virtually a foregone conclusion.

Oh, one other thing. By happenstance, I found this KlipFolio product. Download it - it's free! And you can add your favorite blog (ahem) to it.

I have two standards for judging new software: does it work right/feel right immediately out of the box (the answer for Klip: yes!) And am I still using it in a couple of weeks? (We shall see!) I've sometimes become jazzed about stuff that I never touch again. Which means, to me, it's not useful. Klip seems awfully cool, though.

OK, on to charts. And there's a bunch of 'em today. Because I've got to believe the market will eventually snap out of this boring funk. And, if there's a God (or at least a sensible God), the market will fall big-time. So let's be prepared, Scouts.

HANS has been fascinating to me for a long time. It has bagged a nearly 10,000% gain over the past couple of years, and I think everyone on the planet is waiting for it to snap at some point. Here's the astonishing graph. Some people have become very, very rich on this stock:


Let's take a closer look. This graph is more recent, and it features two moving averages on the price graph as well as a moving average on the volume graph. Notice a few things. First, volume is really starting to soften on this stock. Second, the 50 day moving average hasn't crossed below the 100 day moving average in a very long time. I'd take this as a strong sell signal if it does. To be honest, I'm short the stock already. I guess I (foolishly) want to get in early on what I hope will happen.


I want to put the S&P graph up again simply because it's so beautiful. You can see all the drawn objects I've laid down on this graph. It would take an amazing amount of bull power (you can think of a more colorful term) to turn this market decisively upward. But it's happened before. The jury is still out right now. There are many strong forces at work that could rip the guts out of this market.


From here on out are graphs with stop prices. Simple. I think all of the following charts are optionable, so you might want to pick up puts. The stop price I cite is the price above which the position should be closed. First up: AMG 95.05


ATW 50.64


DIA 112.56


HUM 58.26


IYR 75.02


MER 73.50


MO 81


MON 43.86


OIH 152


Good luck! And, remember boys and girls, if you want to see a bigger graph, just click on any of the small images. Click Back to return to this blog. See ya....

Sheesh

I, for one, am glad to see this week is over. On the whole, it sucked for bears. Ever since June 14, the bulls have, more or less, been at the steering wheel. We've had some hopeful days now and then, but the sad fact of the matter is that we still get triple-digit push-ups like today on the most feeble of news.

I feel exactly like I did when I wrote this posting in May. Interestingly enough, my feelings of despair at that time precisely match the peak of the market. To the day! So maybe there's a little hope, eh?

There were a few bright points this week, like the nuking of some Insurance stocks. But more and more bulls are getting heartened by recent activity, and you can smell the stink from the media about how rosy everything is. Apparently a slowing economy is great news.

I see the comments section is more active than ever. I don't even want to walk into that bar. God knows what is going on.

The Dow Jones 30 is still - but just barely - in a safe place for bears. I've pointed out five levels. Exceeding each one will make things progressively worse (and if it goes above 5, I'm going to enter the exciting world of retail shoe sales). This is an extremely dangerous juncture.


The note on the chart for the $OEX speaks for itself.


Below is an intraday (minute by minute) chart of the $SPX. It has obediently stayed under the trendline. Now, that's all well and good, but given enough time, the S&P 500 go climb to 10,000 and still be below this line. But at least this slender wall is holding up.


Jeez, I hope next week is better than this one. I enjoyed early June a hell of a lot more than this.

Midnight Posting

It's approaching midnight here in Palo Alto. In less than six hours, they're going to report GDP numbers, and supposedly they will give the market a reason to go either up or down. Very few people will read this before those numbers are released, but I'm posting this new entry anyway.

Based on the charts I'm seeing, I'm predicting a down day, and I'm doing it without the benefit of those figures. So I'll either look like a jackass or a jeanyus. Either way, it'll start with "j".

The Dow Composite looks ready to get pushed back away from its resistance line. When will the bulls ever give up?


The Dow Jones 30 had its second doji in a rowing. Can you say spinning tops? I also have drawn another (smaller) Fibonacci retracement, this one spanning from the May top to the ~10,650 level we keep bouncing away from. Interestingly, today marked the 50% retracement point. Coincidence? I think not!


I haven't bothered putting up a NASDAQ chart in ages just because this poor index is so battered and bruised, it's hardly worth looking at. But we clearly see a steady progression of lower lows and lower highs. Which is the very definition of a (loving sigh) bear market.


The S&P has done a great job staying underneath the medium-term resistance line, and it seems to have run out of gas. It fell today in a lovely bearish engulfing pattern.


A few days ago, I mentioned the Transports were probably done selling off. Boy, was I wrong. This index has sold off harder than any of the other major indices in the past few days. It is approaching major, major support right now. If it cracks the trendline and Fib retracement, wow, I don't know where it's going (except down).


Have the Dow Utilities made a double top? This is the only index with strength over the past month, but it backed off without making a new high today.


Gold also seems to have turned 'round.


Well, I'm going to walk the dogs. See you in the a.m.

Peter'd Out

Our bull friends need to recognize that it's important not only to GET it up, but to KEEP it up. Delighted to see this fizzle away today. That bodes well.

Insurance Fibs

No, this isn't a post on insurance fraud. Just wanted to share a couple of stocks on which I own puts that got clobbered today. Thank you, Mr. Fibonacci!

Aetna:


Cigna:


Oh, I see the bullish 70 point gain today has been destroyed and we're now showing a loss on all major indices. Zzzzzzzzzziiiiiiiiiip. Suck on it, fellas.

Some Junctions More Crucial than Others!

I want to start by offering the stock market bulls an insight into their future once this tug-of-war finally ends.

A lot of people have been asking about sentiment, since apparently there's a lot of bearishness out there, and it's widely considered a contrary indicator. I was intrigued by this, but after examining the graph below, I've concluded that it's a fairly meaningless exercise. Sentiment rockets up and down to the point that it's just noise. The creator of this graph pointed out a few times that bearish sentiment correlated with a market bottom. Well, yeah, but I can just as easily point out three times that bearish sentiment correlated with a top. Because it's meaningless! I've circled (in green) one such example.


Dow 11,257 is what we want to not cross, people. I was nervously watching the Dow today as it ratcheted up another 50 points. But it couldn't keep it up, and it closed down by a point. What's remarkable to me is the doji pattern that formed. How's this for a tug-of-war, folks? I can't remember the last time I saw such an incredible doji. It has indecision written all over it. No one has control of this market! And it's getting tiresome.


Since last Tuesday, the S&P has been pushing ahead with a series of higher highs and higher lows. Not good for us bears. But it has stayed beneath its trendline, and I see strength starting to flag. Make no mistake, though. We have got to close out this week with some meaningful weakness! Recent market activity is far too heartening to our bull friends!


On a daily basis, you can see the S&P is also in a doji pattern (although not to the freakish degree that the Dow was) and we are still safely below the trendline. But we are very close to the danger zone, folks. One more good, strong day, and things are going to suck.

Post # Two Hundred Fifty!

This is my 250th post to this blog (tweet! honk honk! tooooot!) I wish the market gave me more of a reason to celebrate this momentous occasion. But bulls love to buy, irrespective of reality, so there we have it.

NTRI obviously got completely hammered today, losing nearly a fifth of its value. I noticed that NTRI bulls were citing that it was "only" because the CEO had left. As I mentioned in the comments.....can you imagine if the stock were up 20% because of some great news, and NTRI bears cited that news as meaningless? They'd get zinged. So, likewise - - NTRI Bulls, you were dead wrong, and the stock is in sorry shape now.

The comments section is completely abuzz, which I think is terrific. Lots of little battles being waged there, which I think is very much like the market these days. It's just a mud pit of fighting. Someone comment that the market was bullish because "...the GDP rises with time and the markets rise with it." OK, so does that mean the market always goes up? With that logic, apparently so.

Today the market was neither up nor down but simply annoying until about the final hour of the day, when it inexplicably shot up. It closed up just a little over 50 on the Dow. This is a very dangerous juncture for us, fellow bears. The $INDU is mushed right up against an important resistance line, and it's actually risen a skosh more than I would like to see. I'm worried. It sure as hell better head south tomorrow. Crossing above 11,257 would indicate something is very, very, very wrong.


The S&P 500 ($SPX) is likewise mashed right up against an important trendline. 1,280.38 is the upper limit of what I'd tolerate right now.


Now on with some specific short picks. Here's Cigna (CI):


CP:


ESRX is one I haven't talked about in a while. This is sweet looking:


GS is another beauty:


I like Dick Cheney's old company HAL:


Health Net (HNT) is another shortie:


Well congratulations to us all for putting up with 250 of my posts. Here's to the next 250! (God help us....)

The Voice of Reason

Another nearly 200 point rise in the Dow today. The main reason being given was a company was being bought. The ticker symbol should be BFD, but it's HCA. Honestly, what on earth does this change about the market's prospects? Pfft.

In any case, I was going to title today's entry "This is Not Good" or something like that, but once again, having looked at my charts, I'm not worried. Sorry, I'm just not. Chart after charts just screams "sucker rally" to me, and when I look at the long-term (we're talking decades, people) chart of the S&P 500 or the Dow, it's got bear written all over it.

Oh, before we go any farther, a tip of the paw to everyone's favorite perma-bull, hurricane5. One of his most fervant recommendations (the top one, I think, with a target price of a million bucks a share or something) is NTRI. It's getting slammed in after-hours trading.


Back to reality. The Dow Jones 30 has just two numbers that count right now. This is simple: if it breaks below 10,660, the bears are going to own the market. If it breaks above 11,150, that's going to cause some medium-term damage to our evil plans for world domination. I think the buying mania is just about tapped out. But I've been wrong before!


Looking at the intraday S&P 500, it didn't get above last Wednesday's high, and even if it does, there's still a bit of play before this gets worrisome.


The daily chart of the S&P is the same tired channel you've seen for a while. We're still in a nice succession of lower highs and lower lows since the May 10th peak. Let's keep it that way, shall we?


This final graph is really what I was talking about earlier - - click on it to see a bigger image, stare at it for a while, and try to convince yourself this is a graph that's going to shoot higher. Just try. You can't, because it's not going to do so. History is telling us it's time to head lower. A lot lower. Just watch.

Another Chance to Short?

The comment boards have been full of people begging for Dow 11,000 again so they could enter more shorts. Well, folks, here's your opportunity!

For myself:

+ I'm easing out of some of the transportation shorts/puts, since I think this one's kind of done for now

+ The gold shorts still look good

+ The oil service sector is sporting a fantastic head & shoulder formation, but I am keeping VERY tight stops on these positions, since they've come down so far, so fast

+ I think today's 155 point rise on the Dow (as of this writing) does represent a good short opportunity, but only with tight, intelligent stop prices.........it could easily be argued that last week was the start of a new (short-term) leg-up in the market.....

More later. Just wanted to say a few words since the market was up so much this morning.

End of a Terrific Week

I never thought I'd declare a week in which we had a +212 up day on the Dow to be "terrific", but it has been. In spite of the (idiotic) one-day rally based on Bernanke picking his nose, or whatever he did to get the bulls excited, I had my single best percentage gain of all time on Thursday, and overall the week was really profitable for me. I think that speaks to the overall deterioration of the market. If a bear can make a bunch of money in a week that sported such a huge rally (and don't forget the +51 up day on the Dow on Tuesday), something's going right.

I have almost 100 - yes, one hundred - short and put positions right now. Not one stinking long in the bunch. And I think all but one or two are showing a profit. I'm not going to assail you with more stock charts. Indeed, my "pictograph" posting seemed to get a lot more comments and attention than my huge slew of charts. So I'm going to refocus on the market in general this time.

Oh, by the way, I just got a sneak peek at what the cover of my forthcoming book is going to look like. Ya'll are all going to be required to buy this once it's out, ya know!


The first chart is of the Dow Composite (symbol $COMP - and, gotta say it, click on an image to see a much bigger version). This one is fascinating because the reference line for the Fibonacci Fans drawn here - - ummm, I just realized how boring this description would be. Suffice it to say these are not trendlines, and I'm kind of blown away at how accurate these fan lines turned out to be, considering the reference line is nowhere near them. The price is definitely playing with the idea of cutting underneath that highest fan line.


Next is the Dow 30, and I know you've seen this chart a million times. But we have got to cut underneath 10,660. That huge green shaded area represents the last, best hope of the bulls to keep this market floating. If we can get the Dow beneath that level, we're gonna own 'em.


The S&P 500 is in the lower half of its ascending channel, and it's look very interested in pushing beneath recent lows. If it breaks under that ascending support line, things are going to get really exciting. We are still within this channel, however.


The Transports actually look like they could take a rest for a bit. They are approaching both a pretty substantial trendline as well as a Fib retracement level. So it wouldn't surprise me to see the Transports bounce a bit soon here.


And, finally, a recent favorite $XAU (Gold & Silver index). This is similar to the Oil Service Sector (beaten to death this week, so I shan't be showing that chart again), except that the head and shoulder is still in formation. (As for OIH, it sneaked beneath its neckline today). This looks like a honey.


I promised this week would be exciting, and it was. Next week is bound to be the same. And just remember, we're moving closer all the time to that wonderfully bearish month of September! Oh, by the way, if the Dow does break under that green area, I'd say we're headed for about 9,800. Should be a fun ride.

Charts for Yer Shorts

This one's simple, folks. I've got puts on all these. And I love 'em. Enjoy.

APA:


BNI:


CX:


DO:


EOG:


HNT:


MRO:


MON:


NXY:


OIH:


PBR:


$XAU:


Cheers.