Ode to Steve Jobs

All the world was abuzz today about the iPhone. This is one gorgeous, sexy, amazing-looking product. Although I've used a PC for years, I bought my first Macintosh early in 1984, and I worked at Apple for a few years. Steve Jobs has been my hero since I was about 14 years old, and the adventures he has had in his business life make Odysseus look like a bore.

Steve Jobs has more style in his pinkie than Bill Gates has in his whole body. And even though the Google founders could buy and sell Steve Jobs many times over, I doubt there's anyone in the country that would opt for lunch with the Google guys over Steve Jobs. He's amazing. As is the press coverage....the top story on CNN!


As well as Fox.....


So it's not surprise that Apple exploded higher today....on volume of over 100 million shares! It wasn't that many years ago that the entire stock market traded 100 million shares. Now just one stock can do it. Just look at this graph!


This is a very late posting, so I'm going to have to tear through it. Boeing (BA) still looks like it's changing trends.


COF, mentioned many times in this space, is moving achingly slowly, but at least it's moving down.


Express Scripts (ESRX), a favorite here, looks terrific. Lower lows and lower highs are clearly intact.


CSX still looks good on the short side.


And FTO is looking like it has a real chance at completing its head and shoulders pattern.


HES is moving nicely lower with all the oil stocks (yep, I got blown out of those OIH calls first thing this morning).


And Hilton (HLT) is obeying the "trendline changing from support to resistance" phenomenon.


Oh, and then there's RIMM. I set my stop too tight on this. It got killed today - obviously because of Apple. I mean, the Blackberry is the most boring piece of crap on the planet compared to the sexy iPhone. Who wants one of those ugly Blackberries now? That's so 2002.


RTI continues to behave as any bearish pick should.


...as does SIE...


...and TSO...


It's late, so I'd better publish this. I hopefully will have more time tomorrow for some general market analysis. Thanks for stopping by!

RIMM Job

It's nice to feel on top of the market again. It's no disaster for the bulls, but days like this give one hope.

My shorts in $XAU (gold/silver), which a lot of commenters have slammed the past couple of weeks, are doing well. $XAU kind of gave up the ghost today. No more petite inching down. It fell in a meaningful way. This makes the likelihood of a meaty fall a lot stronger.


High-priced stocks like CME can lose double digits of dollars each day, which makes them great for put owners. It's getting closer to the trendline. Can it crack through?


TSO's top looks lovelier every passing day.


I got snookered into thinking Sears (SHLD) was going to be a superstock. But as I've reminded myself, and others - - it's Sears. Are polyester pantsuits coming back? Does every household need ten new lawnmowers? I confess I have no position in this stock, but I sure envy you put-holders out there.


The disgusting, greedy pigs at Goldman Sachs that have bled obscene bonuses out of their firm this year have been getting a lot of press. Don't you think investment banks have jumped the shark by now? I sure do.


Yep, that twinkle in my eye is Google, everyone's favorite company ever to exist. Chip, chip, chip. Lower each day. So much for the hockey stick.


FDX continues to be weak, even after the impact of earnings was absorbed yesterday.


I was hoping for a nice nasty surprise from RIMM, but they had blowout earnings and their stock is way, way high in after hours trading. I wouldn't drop dead of shock if they ended the day down tomorrow. It's just a hunch. Maybe a completely stupid hunch, but a hunch nonetheless. I'm hanging on to these March puts.

Baby Got Redback

As regular readers know, although I'm a bear (in both real life and my Second Life), I do publish bullish charts some of the time (maybe 10%). One stock I've consistently point out as having a handsomely bullish pattern is RBAK, which I first mentioned over a year ago in my September 2005 post. At the time, RBAK was about $9 per share. It was purchased today for $25 per share, and the stock price actually closed north of that.

The calls I bought on RBAK a month or so ago more than tripled in price over a small amount of time. Now this is a beautiful example of an inverted head and shoulders pattern in action!


What's funny to me is some highly-paid analyst published a report in the wee hours of this morning stating, in brief, (1) RBAK had reached its target price, so they were downgrading it (2) a buyout was not likely "in the near future" (which, given the outcome, I guess meant within the next 30 minutes following the publication of the report).. Wow, what an embarassment. Analysts have never been worth a sack of crap, have they?


The $INDU reached yet another all-time intraday high today (turd monkeys!) but closed down a bit. The divergence between the RSI and the price action is absolutely huge. Come ON, you stupid market, would you fall already? Jesus H. Christ!


The NASDAQ continues to look weaker than the U.S. stock market as a whole.


...and the Dow Transports continue to act (alone) in a truly bearish fashion.


CDX, a short I've suggested before, had a nice down day - - I suppose led by FedEx's action.


And speaking of FedEx, another item I've suggested shorting, it had a nice down day, although it certainly was no demolition of the stock. These things can take time, I suppose.


One could make a flimsy argument that GOOG is sporting a petite head and shoulders pattern. I wouldn't even mention it. Oops, too late. Anyway, I have high (low) hopes for GOOG in January.


Finally, TSO continues to be well behaved. This looks like a nice, fat toppy pattern to me.


Someone commented (and let me say, I really appreciate the comments section - - I read it religiously) that yesterday's graph of the coming disaster in Medicare has nothing to do with stocks or the financial markets. I dunno, I think the insolvency of the United States will surely be germane at some point.

Oh, I forgot. Liquidity. There's liquidity. And all that money needs a place to go. (Where it came from, no one knows - - actually they do - - leverage, leverage, leverage. Which, oh, is a two-edged sword). Anyway, liquidity is the current This Time It's Different argument. Just like how the Internet's productivity enhancement changed everything and justified the valuations of 1999.

People just never learn. Never. I simply cannot wait for those Liquidity twits to get blown to hell. Then at least we can wait a few years before we have to endure them again with another fabricated story.

Bears and Atheism

I think my bear avatar is so cute, I just have to show it again. Particularly since we had some red today.


Before I start with the charts, I'm going to be an idiot and actually mention religion in this blog. Now, let me be clear from the outset - - this isn't about religion per se. It's about a parallel I've noticed. People seem to confuse metaphors with analogies quite a bit. I don't - - and the analogy is this: atheism is to Christianity as bearishness is to bullishness.

Why, Tim, what do you mean? I will try to explain without ticking off too many people.

Christianity in the United States is mainstream. Most people in the country identify with it. It has been the backbone of this country since its founding, and although certainly attendance at Sunday service has been declining for years, by and large it's a stable, popular base.

So is bullishness. By and large, people in America are bulls. They believe in the future. They believe in optimism. The growth of America over the past three centuries in testament to that. Bullishness works. Bullishness makes people rich. Bullishness is the American way.

And here we come to where the weirdos are. Where the freaks live. The atheists. And the bears.

Both atheists and bears are outside the norm. They are, generally speaking, frowned upon. They are not the mainstream, and deep inside the hearts of those who are in the norm is a secret wish that the doubters will be proved Supremely Wrong at some point. In the case of bears, that would mean that It Really Is Different This Time, and markets will go straight up for many years. For atheists, it would mean that Jesus himself shows up on the Today Show to announce his second arrival.

And this is the troubling part for me. See, I'm a good suburban protestant. I know what it feels like to be in the mainstream. Methodists and Presbyterians do OK in the suburban jungle in which I've grown up and thrived.

But recently the atheists have been getting a lot of press. I'm surprised Richard Dawkins didn't make Time's Man of the Year for 2006. Bestselling books such as The God Delusion are selling like mad.

And here's where the parallels click..........Richard Dawkins is smart. Really smart. And it's got to be just a little bit troubling for those who give it a few moments of thought that really brainy, thoughtful, deep-thinking people are atheists. Because it makes you wonder what "side" you really want to be on.

And so it is with the bears. I'll be blunt - - I think bears are a lot smarter than bulls. Bears tend to be the more thoughtful, cerebral sort. Given the ways of the world, it also means that bears tend to be Flat Broke. Just as atheists can rest assured that they will not elect anyone to the White House in the next hundred years at least.

It's frustrating to be a bear, just as I'm sure it must be frustrating being an atheist. Because you watch the mainstream prosper and thrive. And you believe in your heart that they are just dead wrong. And you're the outsider. You're the freak. But it's very tough to convince the crowd when you are so clearly outside of it.

Do I have a conclusion from this? Not really. I simply think it's an interesting parallel. I'm not tempted to jump over to the atheist side any more than I'm tempted to jump to the bullish side. So I live with being a stupid sheep and a brainy bear at the same time. The duality of man!

Are you still reading? Are you still there? Good. Then we'll look at a few charts. Honest to God.......

The market did what I wanted it to do today (for a change), which is push higher, get the bulls excited, and then dash their hopes. Nothing makes my day more than a disappointed bull. The markets were down across the board, particularly in the world of gold and oil. The MidCap 400 did not break above the horizontal line shown here, indicating a possible failed pattern.


The NASDAQ was especially weak today. Here we see the $NDX slipped away from its formerly ascending channel. Ta ta, naz.


The Russell 2000 is also failing its bullish ways. The relative strength continues to weaken and is heading below the 50 mark. I really like the way things are turning around.


And here is the S&P 500, the only stock index on which I own puts right now (and a disturbingly large amount). We see how the RSI pulls farther away from the failed trendline.


The last index is the $XAU, the Gold and Silver index. We have been watching this a while, and this is a closer view than the one I normally provide. There still is no cut-and-dried pattern here, but it is clearly weakening, and I would look for it to fall all the way back to its neckline, at least.


Although oil has already started getting weaker, it might not be took late to get on board FTO, assuming the emerging head and shoulder completes.


Google (GOOG) fell nearly twenty points today. There is absolutely no doubt at all from this chart that the former "$500 now! $600 tomorrow! Go, go, go!" enthusiasm is shot. Google is priced for perfection. This company is far too arrogant to just keep sailing.


HWAY looks like a promising short pattern.


And MEE, mentioned here many times in the past, is behaving as it should.


I've also mentioned TSO, which had a solid down day. Oil's weakness is benefiting many of the items we are watching.


I'll brace myself for the comments section, since I've strayed away from charts. But keep in mind I'm not advocating a religious position here at all. Although I admit to proselytizing the Church of the Bear without shame.

The Stalemate Continues.........

Twelve stinking points. That's all that got lopped off the Dow after the Fed announced no change in rates (as everyone expected) and that inflation was indeed still a concern.

The intraday chart below shows what happened. After a nice pre-announcement drop, people sort of clung to their chests until the announcement, at which time the market did its usually insane up-and-down which-way-is-up madness. Most of the day's earliest losses were wiped clean.


I took a snapshot of $MSH earlier in the day since I thought it was worth considering as a short. Keep it on your radar screen.


The $OEX is sporting a big ol' hanging man for today. These don't happen that often. Just try to find another one that's even close on this chart. These usually suggest tops. Of course, we're in a market where bad news is good news and good news is great news, right? So - - the hanging man will probably muscle the noose off his neck, jump to the gallows, and start twirling around with an exciting Up With People dance.


As I've mentioned, the Transports are the only really bearish index with us, and it continues to behave nicely. Thank you, Mr. Rail.


Just to get an idea of the quagmire the market is in, look at the American Stock Exchange Major Market Index. Four days in a row of virtual carbon copies. Booooooooring!


I haven't shown my positions in a while. I've trimmed this a lot from the days of holding eighty positions! I'm much more into cash now, as this market continues to idiotically lurch higher.


Now - some individual stocks. Conoco (COP) seems to be a safe bet, as it is at the top of a well defined trading range. As always, though, upside breakouts can and do happen! So be careful.


This one isn't a short or a long - just kind of a puzzler. One of the strongest stocks lately has been Campbells. That's right - soup. Consumer Defensive plays are all the rage, I guess. I guess I've been in the Silicon Valley too long. I find it curious how people can get all excited about someone who puts alphabet soup into a can and sells it for 79 cents.


Google (GOOG), one of my more speculative put positions, is weakening a touch. Using my employer's "three arrows" method, we can see here that we've got a triumvirate of down arrows.


Goldman Sachs is my favorite investment bank short right now.


Heinz is another one of those "huh?" stocks, like Campbells. Ketchup. I guess it's all the rage.


MDC has retraced to its neckline nicely. I don't love this enough to make a position out of it, but it's well worth considering.


Merrill Lynch is a sky-high pattern which I've also secured as a short position.


Meritage (MTH), mentioned here many times in the history of this blog, has also retraced to its neckline.


I have not touched OIH for a while. I had a great time with it during the summer. It seems to be at a real stalemate right now. We're all just watching it for a breakout in either direction. I am guessing down. Surprised?


Fred Hickey is one of the few gurus I really enjoy reading. He had a really interesting mention in this week's Barron's where he was slamming tech stocks. One of his short recommendations is one on which I own puts, Research in Motion (RIMM). The article says, in part:

"In an echo of the 2000 tech mania, the analysts covering Research in Motion don't seem to be fazed by the fact that its market cap is now up to $26 billion, or 11 times sales." He notes, in contrast, Motorola (MOT), the cellphone giant and a key competitor, with sales of $42 billion, versus $2.4 billion for Research in Motion, yet its market valuation is only two times larger and 1.3 times sales. Palm (PALM), another competitor, sells at less than one times sales. Fred's calm assessment: Research in Motion's "valuation is certifiably insane!"

Lastly, Tesaro (TSO).


On what can we pin our dreams next? Crappy retail sales? That's tomorrow morning. Hope springs eternal in the bearish breast!