091

Monday, August 07, 2006

HANS & Fans

Let us all bow our heads for a moment of silence out of respect for fallen superstar HANS (long-time favorite of wayward poster hurricane5, who set a price target of $120 for this stock). At long last, this thing is getting clobbered.

HANS has fallen 40% in less than a month. Why, oh why, didn't they ever have options for this thing? Well, truth to tell, there were a few options, but just a handful, and the bid/ask spread was wider than Roseanne Barr's waist.

Anyway, here's a daily graph of HANS, accentuated with a Fibonacci fan (long term) and supporting trendline (medium term).


A closeup view of this stock indicates that, for now, we're close to a bottom. I've covered my short on this at a handsome profit. I think that, long term, the stock is headed way, way lower. But I'm happy to take my fat profits for the moment.


Few things in life are certain, but this is: tomorrow is going to be bananas on the market. Which is probably going to take a lot of the excitement and participation out of the market today. I probably won't have a heck of a lot to say until after this Fed madness is past us. We'll see.

at 8/07/2006 83 insightful comments   Links to this post

Friday, August 04, 2006

Why Is this Man Smiling?

Before I forget, thanks to everyone who posts to this site. Yesterday's blog entry got over 100 comments so far - a new record! There's quite a sub-culture growing in this blog! We should get t-shirts made or something :-)

This is a very unusual intraday post.

When I saw the market up (another) 70 points this morning, I was pretty cranky about it. Because, believe it or not, I'm not going to keep generating excuses for a bear market (e.g. "Big, round numbers are major resistance points, so there's no way we're going to cross 20,000 on the Dow today!") I'll eventually give up if this keeps going higher. But not yet. And here's why.

It's the charts. What the charts are telling me is that the Fed rally is already done. We don't have to wait until Tuesday's insanity. The bulls have enjoyed this ride already. The futures market is pricing in an 85% probability of the Fed pausing their rate increases. Which is what the bulls have been praying for. 85% is pretty damn high.

When I was first working on this post, the market was near its daily peak. It's already softening fast. But that's not why I feel confident. It's the charts. Like I said. Let's take a look.

The VIX has finally come alllllllllll the way back down to its trendline. It touched it perfectly this morning. All the fear seems to have been squeezed out of the market. The markets having everyone smoking ganja again. So puts are cheap.


The Dow 30 is, among the index charts, the most disappointing for a bear. If you look back at the chart I made of the Dow back on July 28th, you'll see that four out of the five "do not cross this level!" points have been blown through. Being beneath the ascending trendline (not numbered, but shown in the graph) is the last line in the sand to survive.


But the charts of the indexes - even the $INDU - still suggest the miniature rally we've been suffering through is over. All the indices are bumping up against trendlines that will be tough to cross. Here's the Nasdaq Composite:


The S&P 100:


The S&P 500:


The Dow Utilities may have put in a major double top (which is important, considering how key interest rates are in the market recently):


The the American Stock Exchange Composite - the $XMI - has, for the umpteenth time, made a run at its resistance level. I imagine it'll despair and fall away as it has so many times before.


I've been recommending shorting oil service stocks (OIH, DO, RIG, and so forth). Those are doing terrific. As is AAPL. If I get time, I'll do another post today or this weekend. Good luck! And here's hoping for a shooting star (or better...) today.

at 8/04/2006 71 insightful comments   Links to this post

Thursday, August 03, 2006

What the Health?

What a day.

It started off well enough, with the GLOBEX in the tank and an instant 50 point chop off the Dow. From that point until almost the end of the day, the losses got chipped away, and eventually the bulls took the upper hand and pushed the Dow up about 70 points. By the closing bell, the Dow closed up about 42. So they took another one away from us.

It seems the increasingly active 'comments' section of this blog has become a commiseration center for us bears. I can sympathize! It's frustrating and maddening to witness this market's continued strength. There are pockets of weakness - such as good old HANS finally getting kicked around some - but, by and large, the bulls are still running the show. (I don't get real hung up on conspiracy theories about the Trilateral Commission manipulating prices..........the fact is that virtually all investors out there are, by their nature, bullish, and that have a lot of money to push this market higher).

I've been very focused on the Dow, which has been relatively strong compared to the Nasdaq and S&P, and - unfortunately - it finally crossed above the "line in the sand". It doesn't mean the bear case is vanquished. It does mean, in the short term, that it holds less water. It would actually make a lot of sense if we had a big rally tomorrow, from a technical perspective. A crossover is a crossover, and there's no doubt prices violated this resistance line.


Looking at the minute-by-minute chart, you can see some very plain, broad Up and Down trends. The time is right for it to turn back down. But nowhere is it written that this up and down cycle will continue. The market should have started going down today (and, at first, it did), but the bulls overcame that weakness.


What never ceases to amaze me - and I mean this, because I've been doing trendlines forever - is how much power trendlines have. I mean, Good God, just look at it - once the price crossed above the trendline, it "obeyed" it beautifully, coming to a gentle rest at exactly the trendline. This will be the launching off point starting tomorrow morning after the jobs report (either up, which is sadly more likely, or down).


I humbly offer a few short suggestions for your consideration. Here's Motorola:


Transocean (RIG), suggested earlier in this blog, which showed some nice weakness today:


And aging handsome dude Ralph Lauren:


Two big events are coming in the next three trading days: the jobs report (Friday, tomorrow) and the Fed (Tuesday). This is really our last, best hope to get the downward market we "should" get based on the market's behavior the past couple of months. If this strength continues, we're really going to have to re-evaluate.

at 8/03/2006 123 insightful comments   Links to this post

Newer Posts Older Posts Home