More of What We Want
Today's action is exactly what we want to see. Good news in the market. Excitement. A big up opening. Chip, chip, chip away at it. And wind up with a big loss. Perfect. Even the commenters on this board were talking about an up day and a two day rally. Come on, folks! Are you kidding me? Cisco? Do you really think anyone cares about that dog anymore? How 1999!
A few have asked me to look at NILE. I did, and I moved on. It's an awful chart. I couldn't tell you whether it's going to go up or down. It's just a mess and not worth following.
Some people were puzzled at my dismissal of Cisco. Yeah, it's a big company, but so were Ford and GM. Cisco is yesterday's news. I mean, look at what it's done over the past two years. A 0% change. Wow, that's a barn-burner.
The Dow Transports got ripped today, and they are decisively below both a major ascending trendline as well as the Fib level. Nasty. Great for us bears, though, especially the Dow Theory fans.
Once again I offer a handful of my charts that I'm short (or, more likely, am long puts). This is just a smattering of my 50 or so positions. Here we go.....ATW:
BSC:
CERN:
CME:
COG:
DO:
FMX:
The key is to keep hacking away at the bulls, day by day. One day things are going to break hard. But we need to break their spirit first.
78 comments:
Tim/others: Do you think it is time for the financials (BAC, WFC)to rollover COP took it on the chin today (but a feather knock considering what happened to the lenders)? I've felt like the S&P (and DOW) have held up remarkably well given the overall economic environment. I still think (falls in the what do I really know category), that the slowdown is going to be harder and faster than many predict.
BAC and WFC scare me. They have been so strong. Even *I* am nervous about shorting them! No doubt they've been leaders, though.
what a day and of course i could do no trading because I had no way of trading.
This market is so stuck in a trading range its not even funny. I wouldnt be suprised to see a rally tomorrow that would just get me more confused. However the transports are breaking down and do not look good. Earnings are coming to an end and I guess you can say there is no catalyst for this market.
NVDA has earnings after the bell tomorrow night. Stock has had quite a run in the last 2 weeks, if they miss or warn say hello t 20 overnight.
Leisa-
Personally I wouldn't short financials. I would however take a look at the Retail Sector for shorts.
With the weakening dollar, and Gold moving up, it is looking very bad for the economy and the major indexes. I might load up some more on Precious Metals.
I certainly agree that the market will fall swift and hard soon. Historically, August and September are very weak months.
Does anyone see AUY as a good short opportunity?
Poor earnings report last night, stock dropped 2.6% on heavy volume as spot gold went up.
The chart looks ripe to break down as well. Not much support underneath its current price and the RSI just turned down.
Yes, spot gold might move higher, but I think the stock's a dog and will follow the broad market lower.
Anyone care to offer opinions on AUY?
Thanks,
-Tony
Just thought I'd put out a couple more shorts for everyone:
VOL broke through its $44.00 support and retested it (failed). Although it's not at the best shorting point, it's still at $40 and should see the low $30s very soon. Short 1/2 position now and double up if it gets above $42 (next minor resistance).
GW is bumping up against the 200-day SMA and looks like it will be once again denied access. Short now at $7.47 with stops at $7.80. GW could easily see $6.80 again, especially if NGas starts to weaken and the OIH takes a dive (which Tim has indicated that he thinks it will).
BTW, I also really like COG (thanks Tim). Chart looks great. Downside looks to be 10% from here. Set stops at the 52-wk high at $56.25.
Good luck all.
-Tony
My most favorite recent puts from the past couple days looking at techs @ strike and current profit:
CAT @ 70 +320%
UTX @ 60 +200%
MCD @ 35 +128%
C @ 47.50 +16.67%
IBB @ 70 +35%
MDY @ 135 +46.34%
Late last week:
UNP @ 85 +139%
AAPL @ 65 + 119%
I did make some poor choices based upon what I thought a stock would do, not really the technicals. I got burned every time (so far):
BP put: thought the pipeline problem would hurt it.
XOM call: thought the pipeline problem would help it
ADM call: looks like it could go up...
MER put: looks to be ready to drop...
IYT and RTH may bounce
IYT back to 76
RTH $91
tony was checking out COG, looks like it could drop very soon. Might be tempted to get in on a nice short.
TIM whats your thought on PXE and XLE, both are just shy of a 52 week high especially PXE.
I've got to hand it to the bears, I'm a bull and yesterday, but especially today was very discouraging. The market has had a lot of good excuses to rally: the earnings season has been strong (CSCO was a good example yesterday) Fed pausing, and yet the market is unable to trade higher. There's no doubt about it, the price action has been lousy.
Tomorrow TGT and URBN report earnings, TGT is going to be a market mover for most of the retail sector. I think if numbers are weak $40 is certainly possible. Also looking at HD, looks like its breaking down and $30 should be here soon.
Tony,
AUY was a Crammmmer pick in gold. So short away all you can. Crammmer has been pumping this stock and asking people to stop eating food and instead buy this stock with that money. Looks like he has successfully misled people again.
I do not follow AUY. Thanks for the info though. Should be low risk short.
Sanjay,
Excellent call on CELG!!
CEPH news should hopefully bring down CELG tomorrow
Tim,im still hangin on to my MO short with a stop @81.00. any insight from the team would be great. lets hope the "apple" continues on its downward journey! thanks for all the great posts guys and gals. Chronictown
I am fairly bearish on the market, but IMO too many of the shorts mentioned here by both blogger and comments are strong stocks. Pick the really weak ones when on little counter-trend rallies with 5 day RSI bouncing to 70 or so - by weak I mean below both 50 and 200 day MA's.
Bear baiter
Bear baiter,
Do u have any stocks meeting the criteria you specified.
thanks
Fellow Bear
Guys - the market will fall today, maybe plunge. Here in UK we have a major terrorist alert - actual bomb plot against US incoming flights (10 flights) has been foiled. Some major mobile phone networks in UK have been switched off and large amounts of flights cancelled. Attack was believed to be due within the next 1 to 2 weeks. This is bound to hit the US, because as we have been that close, you can be sure in the US that threat must also be an even greater risk. Apparently our PM has called Bush several times to discuss. Coupled with the rate uncertainty and economic turmoil, this may well be start of a major downturn. I just sure hope that the terror threats dont ever happen anywhere, God knows thats the one thing no sane person wants.............
Hmmm...I may end up with a duplicate post here..Tim, thanks for your feedback. Also on my early post I typed "cop" rather than "cof". Re. bull v. bear...best to be a market agnostic, though my naturally contrarian tendencies are satisfied among those of the bearish persuasian. I don't think (as Kudlow has said ad nauseum, I don't watch him anymore) that capex is going to save the economy from the faltering consumer. CFO's get tightfisted when they see growth prospects declining. Capex still translates into depreciation expense. I think that the Asian markets will eventually turn nasty given their dependency on the US consumer. Though the first tier of consumer/mortgage lenders is rolling over, I think that the effect on the stronger names has been underestimated. Admittedly, I have more work to do on that thesis. With BAC's purchase of MBNA, there will be some credit exposure there. I may put some money where my mouth is. Tim/others, thanks for feedback.
For you option players out there, what month and strike do you normally try to play? (e.g. If you think it's going to go up do you buy 3 month in deep in the money puts?)
Thx!
bsi87, are you shorting the indices or individual stocks?
Remember, too, that those bombings were earlier in the year, during a period of high bullish sentiment. So a recovery and a market rise following the initial selloffs was not unexpected. Today, we have a different set of circumstances in the markets. I wouldn't count on them duplicating their earlier behavior. But I guess nobody can tell what will happen.
bsi - yes the perceived terror threat will be short lived as long as it deosnt actually happen, but.........these MAY be a catalyst that kicks the ball of other economic doom down the hill. ie it may finally bring a sense of realism about how the world and US really is
and another thing about this terrorism risk as far as the US is concerned is that you can be pretty sure that the 'ready to go' network in the UK is almost certain to be mirrored by a network(s) in the USA, so the risk of an imminant terror threat in US is potentially as high as it can possibly get. Caertainly here in the UK this latest terrorist threat is the main talk with everyone and its the sheer scale of it as well
Yeah eddie may go short! best sentiment indicator out there...lol
:) I use Eddie as my short term trend indicator and tim, bsi, and pb as my longer term trend indicator.
bsi87: Thanks for the reply. Let me know if you see any reason to close those Ultra Short ETF positions.
I'm also long QID, DXD, and SDS (short the markets) and I don't plan to close them anytime soon.
I think the Big Boys are waiting before they let loose on gold. I don't see any panic buying, but there most definitely won't be any panic selling, either.
In all honesty, I've been waiting for "better prices" in gold, but I seriously doubt we'll have any sort of panic selloff to drive the spot prices below $620 or even $630.
The dollar may have small rallies here and there, but it will eventually decline vs. other currencies. This will only strengthen gold's allure and drive prices higher in the long term.
Exactly WHEN the big move higher will take place is anyone's guess. But I think if you follow the resistance trendline and look for a break above (around $660 now), you'll be able to get on board before it really starts to move fast.
I have about 1/2 total position in gold average at $615. I will add the other 1/2 if it breaks above $660.
Just my opinion.
-Tony
bsi and others No terorism risk is discounted. Market is up 6. Ridiculous fantasy world for both now and the next 6 months. But what any of us think is irrelevant because as you and other have said - the market will do what it does regardless and trade what you see. The trouble is what DO I see? Just just dont know which way things will go. Any talk of any further decline still seems unattainable. I cant even see 11050, never mind 10700. What a mess
Downosedive: It's not a matter of being able to "see" exactly where things are headed. It's a matter of risk management and capital preservation. That's all.
In this case, the markets were overbought, bumping up against heavy resistance, and there was really no good news forthcoming. So, the short side seems to be the best way to play right now.
Choose your stocks (or ETFs), set your stops (just above resistance levels), and make your trades. If you "guess" wrong, then you lose some money, but not a ton. But you're just playing the ODDS right now, not working off of a 100% certainty.
Yes, there's a pretty decent chance that the markets will go against you. The secret is to minimize the damage to your portfolio if things suddenly get all out of whack.
I wish I had some more free capital to play some small individual stock plays, but I just don't. I would have loved to short AUY, GW, COG, and VOL at the open today. I would already be ahead a few percentage points on those 4 stocks alone. AUY is looking particularly weak and should go below $10 very soon.
As I said, it's all about risk management. Don't worry about being 100% right all the time. Just worry about not entering LOSING positions 100% of the time. If you choose your stops correctly, the losses should be much smaller than the gains, even in a crazy market like this one.
-Tony
Sanjay,
Double up on CELG shorts?
Bsi87: you're right about gold. But for my long term investment, I'm not concerned about a 3% drop into the $620 area. I truly feel that gold is going much higher in the next year and I'm prepared to ride out the 5% swings along the way.
Bottom line is that there's a MUCH greater chance of gold going past $800 than there is for gold going below $500. That's all I'm counting on right now. And if the global financial conditions suddenly collapse for some reason, you won't be able to catch gold's move unless you're watching it minute-by-minute.
BTW, since you're short gold, when would you consider covering it? When it breaks down to $620? Or do you have the 200-day as a target? Just curious.
-Tony
Wow, major terrorist threat and the Dow is down 20.
Maybe is an H-bomb was dropped on New York the Dow would tumble as much as 50 points.
Jeez.
we are heading down guys...
just letting the week go by, PPI, CPI, and other great reports out next week,
well probably see nothing doing today and tomorrow, nothing important coming out, and key areas of the market broke down yesterday so there will be some buying into the weakness. next week will definelty see some fast and far down movements. 1224 is a real possibility next week
whoops 1240 i meant
Good to see the market up today. It sends a very clear message to the terrorits - we shall not be defeated!
tony & eddiefl & bsi - thanks for comments. Agree. Trouble is Im now in too deep to back out. Somehow I need to trade out as best I can and that means identifying the very short term trends ie trends that last up to 4 trading weeks in length. Right now, I cant even see a trend for 2 days, nevr mind any longer. Consequently Im in a real muddle!
Yeah, I'm sure the terrorists have their eyes glued to their quote screens.
Anyway, I closed out my SPX and OEX puts for now. I'm happily holding on to all the oil puts/shorts.
If an event like this makes the market go *up*, something is screwy. Do U.S. markets get exciteda abut UK terrorism? You'd think so. Think back to last July 7th.
bsi87,
where did u get these numbers from?
Actually Tim, they do watch their quote screens.
And as a U.S. LEO that is short myself, I couldn't be happier to see the market up.
I am shorting: ACLI AAPL CELG...
Come on guys, SPX bounced off the short term support at 1262. nothing surprising.
Also, last time max-pain for OIH was $135 and they pin it at $130. Hedge wants to make maximum money from their put options.
Technical Bounce in HANS due? I'm thinking about getting in for a mini short squeeze, but I don't want to catch the falling dagger.
Do you all like the PPT and the super banks today ?
Thoughts/comments on GLD?
good to see low volume on 50 points on the dow, and low on the nas, theres no real buying going on.
High volume, low volume, doesn't matter about the volume pal, it matters that the market is UP and that the terrorists haven't disrupted and sabotaged our lives and our economy!
questions:
what does "maximum pain" refer to?
when setting stop losses for options do you use the per price share of the option/etf or the value of the underlying security/etf?
i have heavy losses on my puts. not to the point of max pain but it certainly is irksome to say the least. need to work on risk management!
hopefully my eight $65 nov calls on conoco phillips will stem my downside.
tim must be going crazy holding all of his puts.
Nothing can bring this market down!
OMG
is this market being manipulated?
"is this market being manipulated?"
oh come on! what do you think? The market is manipulated to screw both long and short holders.
Tim is probably fine holding his puts
they are 1-2 months out so the time value is still there
they are in the money but probably just itm
he knows ( as we all should ) that this market is going to roll over!
"crazy" is those of us with aug puts haha
hahahahahahahahahahahah
my question about whether the market is being manipulated was tongue in cheek.
how long can AAPL be above 60?
two friends go camping in the desert outside of phoenix.
(bill) falls into a hole and breaks his leg. as he lies in pain a rattler bites him on the end of his penis (maximum pain )
his friend (bob) runs to town to get the doctor
doctor can't come to bill's aid, but gives bob directions so he can help him
to be continued
we will hitting close to 100 comments today again!!
But my shorts are not doing all that great today.
please be patient, the real entertainment is coming
You are right anon, its good that terrorists have not disrupted or hurt our lives. but as to the volume remark i have to comment on it out of your patriotic context cause its sounds good. no offense
Yesterday NASDAQ dropped: volume at 2,074,060,032
Day before NASDAQ dropped :volume at 1,889,440,000
NASDAQ gains with todays volume at 1,439,840,000 with 43 minutes left in the session
some guy saying "High volume, low volume, doesn't matter about the volume pal, it matters that the market is UP" =priceless
doctor tells bob that he must make small incisions in a x pattern on the bite marks and suck the poison out
bob gets back to his friend and bill asks in desperation
" what did the doctor say"
short BRCM, watch NVDA after the close. Earnings. If they arent good say hello to 20 if there great 28.
doc said
"you're gonna die"
unless darcy sucks out the poison from you cock!
Darcy - you take 5 posts to tell a stupid joke ?!!? Get the hell off this board.
lighten up folks
like theres something else for you to do with the market doing what it is doing.
Also, I put my name on my posts, so if nothing else people will identify who is posting.
EXXCUUUUSSSSEEEE ME for having a sense of humor.
if you have lost your sense of it, I feel sad for you
try making better trades, maybe you get happier
:)
That cme looks very appealing for a short. Volume is coming in to the downside and there is a gap wide open. Tim mentioned that and I think it is a good short. I bought some puts
Costas1966
I assume that the indices are nicely set up to go down tomorrow?
Hey Darcy! --- your joke was funny, but it'd be funnier on a down day ... and bill should be named bull!!
-Peter
all cnbc kept talking about was the how the markets are usually up after terror attacks, did anyone see it this morning.
punch line was also a reference to this "bull run?"
thanks for the comment
and it is a good joke
question about shorting, anyone can help it would be great, I just started shorting stocks,
my question, when you short doesnt your cash balance show an increase rather than a decrease???
This market is so simple. I don't know how long it'll last but the basic patter is...
Gap up, watch it go up in first 30 min and short. Gap down, short immediately and wait until 10:30 EST and it'll probably be the low of the day. When it gaps down, usually it's safe to buy around 3PM and sell at 3:50PM. When it gaps up, it's usually safe to short around 2PM and cover around 3:30PM. At least that's for OIH.
It's been doing that for the past week.
it's the AUG put holders that are grumpy and not laughing at penis jokes!
I'm off to Pamplona to kill some real bulls!
nice call on NVDA 12:29pm
anon
Yes, when you short, your balance will show you have more cash. Interactive broker will actually pay you interest on that cash. But it doesn't mean you have more buying power.
Somehow, IB gives me 3.2X short overnight buying power. But most guys where buy long term puts to short.
NVDA options problem!! will not be able to file the 10Q.
NVDA dropping in AH, just shorted at 22
CME got plummeted at the close. Great call Tim.
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