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Monday, September 11, 2006

Gold, Oil, and the Fifth Anniversary

I read in the comments section how my (cringing) post of bullish picks was the sign of capitulation and a turning point. He's right. If I - the bear of bears - the Cassandra of Cassandras - start hunting for something to buy, you know that the market's about to fall. And so it has. All this great contrary advice for free!

For those of you who just flew in from a deep-space colony, today marks the solemn 5th anniversary of the attack on America. I preserved my email that day, shown below. Note the interesting subject lines that precede and follow it. My favorite is "Development goes on" from our dearly departed Alex.


So - - oil - - OIH - - has finally broken its neckline! YES! Huzzah! Cheers and felicitations! Traditional H&S measurement methods would indicate a fall down to $90. I'm not so sure. The traditional measurement rarely works, in my experience. Suffice it to say those of us positioned bearishly on oil are having a fantastic morning. I know I am.


Gold is likewise getting clobbered (and, likewise, I've been pointing to it as a great short). Unlike OIH, the H&S is in formation, not complete. But it's a honey. And if it does complete, the gold bugs are going to be chased away for another twenty years.


It wasn't that long ago that we were flooded with advertisements and marketing messages about gold. $2,000/ounce gold. Buy, buy, buy! I guess I'm not the only one that creates contrary indicators.

at 9/11/2006 24 insightful comments   Links to this post

Friday, September 08, 2006

September Straightens Up

First, a tip of the paw to a blog reader Paul who was kind enough to dedicate a posting to me. The bear clip is pretty funny.

It was a pretty good week. Gold and oil were particularly good to us bears. Even though the stock indexes were up today, all my portfolios went up (in spite of being 100% bearish) simply because they are so loaded with oil and gold shorts. OIH is looking really sweet, and maybe that H&S pattern isn't so apt to be foresaken after all........


If the $INDU starts falling, I've marked what I think are the natural points of support. If it makes its way down to the 10,700 zone, there is a ton of support, both in terms of the Fib retracement as well as a trendline - - plus the fact that 10,600 has been an ungodly strong support zone. If it truly manage to bust below 10,600, then 10,000 is the next huge brick wall. It would take something really, really serious to get us below 10,000 within the next year or so.


The $OEX reached its tippy top early this week and has been easing back. I think it's unlikely these broader indexes are going to show such strength any time in the near future.


Same with the $SPX - this is a longer-term view.


The $UTIL had been a really steady ascender for years, but it brokes its trendline long ago and has been in a trading range. It's very near the top of that range, and I've highlighted the fairly substantial amount of distance it could fall before reaching its next major support zone.


As I mentioned, gold has been doing great (for bears) and although this H&S pattern is even iffy-er than OIH's, it could still happen. As you can see from my clumsy drawing, it's a good thing I never tried to become a surgeon. Many lives have been saved.


Have a good weekend, and I'll hope to see you Monday afternoon.

at 9/08/2006 30 insightful comments   Links to this post

Thursday, September 07, 2006

Long entries like yesterday's take a lot of time, so I'm going to make it shorter today. I must say, it was heartening to see this headline at the top of Marketwatch:


So why not get yourself a t-shirt, mug, or mouse pad to celebrate, eh?


This is anecdotal, but here in the Silicon Valley, the sky-high home prices are starting to look awfully toppy. I personally tried to sell my second home (a 1400 sq. ft. basic house on a 6000 s.f. lot) for $1.4 million. Guess what? No takers! What a surprise, eh?


This graph has been shown here umpteen times, but oil has been so good to me, I just have to keep showing it. It could do great things for us. But it needs to stay weak!


Lastly, here are positions from two of my accounts (I manage four accounts personally). All of 'em puts or shorts, of course!


Let's go for a three-peat tomorrow, OK?

at 9/07/2006 66 insightful comments   Links to this post

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