Electile Dysfunction

This is a really dangerous time for us bears. All eyes are on the election right now. Setting aside whether the Dems or the Reps prevail, the fact is that if the market breaths a sigh of relief on Wednesday morning (for whatever reason), there are important "lines in the sand" which could be taken out by the bulls. If this happens, I'm ready to hang up my bearish hat until probably mid-January of next year (and even then I would consider whether to don it again or not).

The NASDAQ Composite represents this danger well. Look how close it is to pushing above the double top it has made over the past several months.


The Russell 2000 also shows this danger, but in a different way. Look at the downward-pointing arrow. If the $RUT pushes above this level (and it could easily be tomorrow or Wednesday), there's going to be a very hefty stake pushed through the bear's heart for the rest of the year.


If the market does push higher, the $SOX is probably not a bad place to look for calls. It seems to have found a short-term bottom.

The $XAU (gold and silver), on the other hand, might be a nice short play. I've circled what seems to be a possible turning point. I've got puts on this index right now.


One stock which shows just how hefty the bull run has been in mega-investor Warren Buffett's BRK.A, which now trades well over $100,000 per share!


I've mentioned Fluor (FLR) before as another good bearish pattern, but it merits repeating.


And let's bow our heads for a moment and remember departed reader hurricane5, who held us HANS as one of the "one decision" stocks to own. This poor beverage stock has lost 50% of its value. It had an unbeliveable run, but you just knew this thing couldn't sustain itself.


In closing, take a look at LEH. This stock is so typical of what I see right now. A double top which could be taken out and blow all the bears away. Or, if it weakens anew, could be a fantastic short to have. But this election isn't going to clear up until Wednesday. Until then, we can only wait and see.

The Stampede Continues

Another day the bulls owned the bears. Big time. Google blasted toward $500 to a new record high. The Dow was up over 100 points early in the day and closed at a new all-time high. These are the times that try bears' souls. Assuming there are any bears even left.

Russell 2000 remains on my list of favored indexes to short (for those still insane enough to do so):


Capital One Financial (COF) is still on my favorites list (again, short).


Fluor (FLR) is doing relatively well (once again, bearish position) considering the market's strength.


I think NBL for a short position related to the oil markets.


Same applies to old favorite Oil Service Holders (OIH) which has a nice clean stop price for limited risk:


Another oil shortie, OII:


For a long position, think about Red Hat (RHAT) which has gorgeous volume to boot:


I finally (!!!) bought Sears (SHLD) today and am already in the green. Beautiful pattern here.


TSO is another short idea.


And, although higher risk than OIH, similar logic applies to shorting $XAU:


This is a rushed post, since I'm off to a business dinner. Considering how high the market is, my portfolio is pretty well intact. Hang in there, everybody.

It Must Be Frustrating.....

The closely-watched Dow Jones Industrial Average peaked at 11,997.10 today, a minuscule 2.90 points from the fabled 12,000 mark. At this point, it seems almost a foregone conclusion it will cross that level. I'd like to get it over with. It must be frustrating for all the media waiting to announce this big event.

The market reminds me of a popular toy from my childhood......


Given Friday's long, chart-rich post, this is going to be a short one. Here's the latest on the $SPX. There's plenty of overhead resistance from early 2000, and we seem at the highest reaches of a channel at this point. The fans you see traversing the screen date back to the Great Depression.


Fluor (FLR) looks pretty decent as a short to consider.


I've been short the Morgan Stanley Tech Index for a long, painful time. This one's been nasty. The stop is pretty obvious (and pretty close.......)


LUFK is another idea to consider for you shorties.....


If you want to bet against the red-hot REIT market, the IYR is a good way to do it. There are plenty of puts out there........not heavily traded, but not so thin as to be impractical.


This week earnings will be coming in hot and heavy. Apple, Yahoo, Google......tons of stocks. Should make for some clearer direction.