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Thursday, December 14, 2006

The Rich Get Richer.......

Well, the bull's commanding grasp of the market is not loosening. The bears have been - as the kids say - "pwned!" It's painful. It's relentless. But it's real.

One reader has sent me a "domed house" graph of the market (a couple of times), predicting a reversal in the Feb/Mar timeframe. Hey, that prediction is as good as any other. Here it is.......

I'm just waiting for the insane press and books of the late 90s to return to us.

The MidCap 400 is one of the few indices that hasn't blown into full breakout mode, but it's close. Just a whisker's breadth away.

The NASDAQ 100 ($NDX) is actually relatively weak, in spite of a strong showing today.

Here's a much longer view at the market, this via the S&P 100 ($OEX). You can see where I've drawn the Fib retracements. Today was a blowout bullish day. It is visible even from this "height."

And here's the broader S&P 500. The bulls have been totally in control for five solid months now. You can just about lay a ruler down from mid-July to mid-December and see the market zoom straight up. Ugh.

The $VIX, which was in single digit territory a couple of weeks back, has returned to that astonishingly low level. The $VIX had risen for a bit, given us poor beleaguered bears some hope, but it's come full circle. Is it theoretically possible to below into negative numbers? I suppose not.

Here's a closer look at the $VIX.

Finally, the $XMI was the earliest index I made a bullish call on (begrudgingly), and its super clean pattern continues. A burst up from a saucer, plain as day.

This is probably the first time I'm pointing out more "Buys" than "Shorts", but - - if you can't beat 'em, join 'em. I've got six ideas for you bulls out there. AKAM has been profoundly strong and is in new high territory:

BZH, mentioned many times already, is worth a new look:

CRVL has been superpowered by surging volume.

PWAV seems to be turning the corner as well, after a long fall:

Here's PXP:

And, finally, Redback (RBAK), mentioned many times. The volume is terrific, and this is up about 35% from when I first pointed it out.

Now, for those insane enough to be bears (like me) until their dying breath, a few short charts. CTX:

John Deere (DE):

Lehman Brothers (LEH) which, in spite of blowout earnings, actually fell on this +100 point (on the Dow) day.

MEE, an energy short:

I sure must have been a lot more fun to read in the summer when I was full of P&V. At this point, I'm just showing up, hat (and charts) in hand. Grumble. Being a bear really sucks.

Wednesday, December 13, 2006

The Sleeping Man Pattern

Looking at the past five or so days on the markets, this one in particular the S&P 500, I can see what we have here is a classic Sleeping Man Pattern.

Honestly, people. Today's action isn't worth my commentary. I hope something happens soon (preferably down), because this market is boring me to tears.

Sorry to trouble you that you checked in today. Doing a good post takes time, and I have nothing new to say.

Tuesday, December 12, 2006

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!