Froth

How do you address the heartache of repetitious comments? How does one quell hyperbolic, bombastic touting of the same securities over and over? What can you do to temper a mix of English and Spanish comments? Yes, it's....


Sorry for the very late posting tonight. Long story. While up here in the (relative) wilderness, I was struck by this sign:


The Dow, although up, still didn't signal a break yet. We're still in this flag pattern.


Gold has had a very strong past couple of days, but it also is at the upper reaches of a well-established range.


I've been mentioned BEAS as a short for a couple of weeks now. It has a nice, clean stop at $14.20.


Sotheby's (BID), which I've succesfully shorted before, might have a nice double top here.


Honeywell might have registered a triple top. All these "mights" and "maybes" are annoying, I'm sure, but it's never clear until some time has passed. These are calculated risks.


Martin Marietta (MLM) is awfully lofty and seems to be losing its momentum at these heights.


On the bullish side, I mentioned SCHN back on April 14th when the stock was $46. It has had a strong run since then, with a particularly strong surge upward today.


Another old favorite, Taser (TASR) seems to have found its second life. It has run up a bit much for me to be interested now, but a pullback to its breakout would make this an interesting buy.

How Now, Mao Dow?

There was a time, not long ago (like, ummm, early last week) that I would have felt cheated and flustered by the Chinese market's tumble not having a bearish effect in the U.S. But at this point, I am so utterly distrustful (and numbed) by this market that I'm not at all surprised.

The Shanghai index fell the equivalent of over 1,100 Dow points last night, and our market - of course - went up. I truly believe - and I am seriously not exaggerating - that a nuclear bomb on a major city would not cause a major disruption in this bull market. I swear to God, this market is insane, and even the death of a million people would not stop it. It has lost its mind.

So. Having said that, let's look at a few charts.

Crude oil is pushing higher. Looking at the continuous futures chart, it seems to have plenty of room on the upside.


The strength in crude is obviously good for oil service stocks. The OIH is at a new lifetime high and had a very strong day today.


I mentioned last month how bullish energy looked, and stocks like Apache (APA) have been stars.


Conversely, companies which suffer due to high fuel costs got hurt today. My short recommendation of American Airlines (AMR) is doing well.


One I don't think I've mentioned in the past on the short side is BEA Systems (BEAS).


I have, however, mentioned Bunge (BG) a few times, and this one is shaping up nicely.


Capital One (COF) is sort of stuck right now. I own puts on it, and they haven't done a thing, but I am still hopeful about this position.


Federal Realty Trust (FRT - "don't giggle at our ticker, please") looks like a clean bearish trade to me as well.


I don't mention Google (GOOG) much, but this stock looks like a strong buy (yep, buy). This chart is strong, and the volume has been inching higher. Obviously this company is an ungodly powerhouse and is doing well at the expense of poor Yahoo, which seems to be dying an agonizing death.


I bought puts on Honeywell (HON) today. Maybe a lil' double top here.


The investment banks seem to be edging south, in spite of the market's continued strength. Merrill Lynch (MER) in particular looks good for a short play.

Small Caps Catch Up

The market pushed higher today in fits and starts, and in the end, the Dow and S&P 500 closed down a little while the Russell 2000 - home of smaller cap stocks - pushed to a new high.

Even though the market seems unfazed by the weakness in NZD/USD, it is still worth watching. This currency pair has done a decent job indicating recent turning points in the market.


One stock I don't think I've mentioned before is Bunge. This has made a flag pattern recently. You can make of the pattern what you will:


BTJ has been a recent high-flier that might make a good short candidate:


CRS had a nice breakout a few weeks ago, but this breakout seems to be losing steam in a big hurry. Failed breakouts make great shorts.


Much of the housing sector - - lenders such as AHC as well as builders like BZH - had a nice bounce higher today. I took it as a good opportunity to enter some shorts of stocks that were retracing their head and shoulders pattern to the neckline, such as ESS, shown here.


Honeywell (HON) is starting to lose ground.


....as is Microsoft (MSFT)...


A couple of long suggestions. JetBlue, mentioned here not long ago as a potential buy, looks good. A series of higher lows and agreeable volume trends make this a handsome candidate for puchase.


And Questar (STR), also mentioned in the past, continues to prosper after its well-formed breakout.

Twenty-Five-Peat

Yawn. The bull's getting boring. By my count, 25 out of the past 31 days have been up on the Dow. So much for climbing a wall of worry. It's skipping higher.

I mentioned yesterday that the US Dollar had to soften up to have any chance of market softness. Although it didn't help today, I notice the NZD/USD did weaken considerably and is sporting a pretty hefty bearish engulfing pattern.


One nice effect this did have is to soften up gold quite a bit. My $XAU puts continue to do well.


Apple traded over $100 for a while today, its highest price in history. I remembered Dell's famous quote in the late 90s about how Apple should just give up, so I decided to look up when he said that. Well, fancy that - - right near the bottom. Buyers of Dell on that day would have about 140% in profits by now. Buyers of Apple, on the other hand, have enjoyed more like a 1,600% gain.


Akamai, a short suggestion here, continues to fall on very significant volume.


I sold American Airlines (AMR) short yesterday near its high for the day, and it is sinking nicely away from its neckline. By traditional measurements, there could be another $9 in losses on this stock.


I've never charted Honeywell (HON) here before, but it's a Dow 30 stock and worth watching. No clear bearish pattern here, but clearly an opportunity for it to take a breather.


I've mentioned in the recent past how McKesson (MCK) is dancing around its Fibonacci fan lines. At long last, it started to fall away from one of those lines today. It took a while.


Morgan Stanley (MS) represents a relatively low-risk short here, since it has apparently retraced about all of the descent that it is planning to retrace.


PSB, which I've been short a while, continues to slowly form a potential head and shoulders pattern. So far, so good.


Questar (STR), mentioned several times recently as a long candidate, moved handsomely higher today.


In honor of Steven Hawking's planned adventure in weightlessness, I thought I'd share this funny (but slightly NSFW) clip.