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Friday, May 25, 2007

Chart-Free Memorial Day

From time to time, there's just nothing new to say, and I don't want to waste your time with the same old charts.

Turn off your computer and enjoy the long weekend. We all could use a graph-free break! See you all again on Tuesday.....

at5/25/200711 insightful comments 

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Thursday, May 24, 2007

Some Day This War's Gonna End

It was a good day today. At first, I was distressed to see the Dow blasting higher, well past the 13,600 mark. It was up nearly 100 points. But I noticed something. Looking at the $RUT and the $SPX, they were not at new highs. In fact, it looked like the Dow's strength was just pushing them into making a right shoulder on an intraday head and shoulders pattern. So I bought more puts.

That was the right move. The Dow went limp, soft, and squishy, and we enjoy a nearly 200 point intraday turnaround. Every single position of mine was way in the green.

Oh, please remember to sign up forMyBlogLog, which now has nearly 100 members! It's free, and it's a fun way to see the other folks that have made the trip to The Slope of Hope.

Now, I am maintaining my cautious and newly humble disposition, so I will say, in the face of today's fall, that we must exercise caution. Just look at all the recent falls in the past few months. Every single one of them was just a blip - a momentary pause - before the market shot higher still. So a grudging respect for the bulls is in order.

I mentioned Bunge Ltd (BG), and it is doing beautiful. The perfect presentation of lower highs and lower lows.

I mentioned yesterday that housing stocks had pushed up to their necklines, and I was going heavily short to enjoy the hoped-for fall. It did just that. It's nice when patterns behave as they should. Here's Essex (ESS) as just one example.

InfoSys (INFY) at long last cracked beneath its neckline. Now we can get serious about making some cash on this one.

PSB also enjoyed the aforementioned housing H&S fall.

Vornado (VNO), suggested by a reader here last week, is another honey.

Whirlpool (WHR - has that for a boring company?) is flipping direction too. Good.

And now, your thought for the day.

at5/24/200728 insightful comments 

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Labels:bg,ess,infy,psb,vno,whr

Wednesday, May 23, 2007

Thanks, Alan

The market surged again this morning. The S&P 500 was at a new lifetime high. As was the Russell 2000. As was the Dow 30. It looked like Dow 14,000 was just around the corner.

Then Alan Greenspan - bless him - threw some cold water on the excitement by speculating the Chinese market was overheated and headed for a fall. That's all it took to render the breakout (shown in green) moot (shown in pink).

Now, the Old Tim would have been dancing around shouting about how it's the end of the world. But the New Improved Tim With Integrated Timing (figure the acronym out for yourself), severely humbled over the past year, will do nothing of the sort. Indeed, if you think back to Greenspan's most famous declaration ever - - "irrational exuberance" - - it might be instructive. He said it on December 5, 1996, and you can see the brief aftermath here:

But if you take a longer view, you will note that the irrational exuberance had barely even started. The market went up hundreds of percent more, as measured by the NASDAQ.

Not to say that I'm unhappy with today's small tumble. A look at the major indexes shows they are very tired. Here's the S&P 500:

And here is the broader Major Market Index ($XMI):

There's an interesting article by Herb Greenberg about the fact that brokerage margin debt is at anever-seen-before high. Obviously people are willing to go into debt on a widespread basis to buy into the recent mania. If you think the shorts are only going to get squeezed worse, you might want tocheck out this blog which focuses on opportunities to go long on stocks that may be squeezed up.

I am still short Akamai (AKAM), and its head and shoulders pattern (an obvious favorite of mine) is nicely intact.

AutoZone (AZO) is finally getting serious about falling.

Carnival (CCL), which had some recent strength, is again at a relatively low-risk zone for shorting.

Housing stocks, strong yesterday, are a safer short now. Here is Essex (ESS):

Infosys (INFY) is inching ever-so-slowly toward its neckline. If and when the neckline is broken, a substantial fall would seem in order.

Martin Marietta (MLM) may have double-topped here, and it is far above its supporting trendline.

Morgan Stanley (MS) is sporting a nice shooting star today. Granted, many recent shooting stars have been rendered moot by the market's strength. Still........

And Whirlpool (WHR) is likewise far enough above its supporting trendline to present an attractive short (or put-buying) possibility.

There'sa ton of economic information coming out tomorrow morning. It should make for an interesting session.

at5/23/200714 insightful comments 

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Labels:$spx,$xmi,akam,azo,ccl,ess,greenspan,infy,mlm,msft,whr

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