一个笨蛋的股指交易记录-------地狱级炒手

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Wednesday, May 24, 2006Ready to Bounce?
Finally, the market was able to hold its act together until the close to post a small gain (on the Dow, at least). At 1:34 p.m. the markets seemed to be really falling to pieces, but it reversed and shook off part of the damage. It may be that, at last, a bounce is at hand (unless the GDP tomorrow morning at 8:30 EST is a surprise).

Below is the Russell 2000. The fascinating thing to me, and what tells me we've "gone bear" is this - - notice how before the market would form a saucer and launch from there (the prior three horizontal lines). Now the saucer is in a rounding top form, and the prices fall from that. So prices are mover lower away from patterns instead of higher. I like that.


But the market has fallen hard and fast, and I would feel a little better about this whole thing if we could push back up against resistance levels, giving us bears some fantastic short opportunities. Here's a close-up of the S&P 500. As you can see, it's got plenty of upside room to push up against that median line and a relatively small amount of room to fall down to that support line.


A similar argument can be made for the NASDAQ, which seems to have firmed up the best today from its earlier losses.


One interesting chart was the Oil Services sector (OIH). This pattern, if it appeared at the top of a stock's price action, is called the abandoned baby, and it's rare and very bearish. I'm not so sure it means anything when it's in the middle of price action, since clearly this isn't the very top.

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One interesting chart was the Oil Services sector (OIH). This pattern, if it appeared at the top of a stock's price action, is called the abandoned baby, and it's rare and very bearish. I'm not so sure it means anything when it's in the middle of price action, since clearly this isn't the very top.


Pan Pacific (PNP) has shaped up into one of the many, many nice head & shoulders tops I am seeing these days.


And Urban Outfitters, which I suggested  has performed precisely as predicted.


Oh, and in the People Never Learn department, let's bow our heads for Mamma.com (MAMA) which went full-circle from $1 to $17 and back to $1 again. Look at the volume in the middle of the chart. Sad, ain't it?


at 5/24/2006 3 insightful comments
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Tuesday, May 23, 2006The Bears are in Control
I can't remember when I've had so much fun trading the markets.

Everything about the market feels right. Which is the strongest indicator to me that the bears are in control. The charts make sense. Everything is working from a technical analysis perspective.

Even when the Dow was up 75 points earlier today, I felt confident and assured about the market. Although I was thinking the market might go up hundreds of points over a few days, today's run-up felt like it was all the bulls could muster. So I gobbled up more puts. And the market went limp, as it has done for the past three days in the final hour, handing the baton back to us bears.

The market has to turn around at some point. The next resting point on the Dow is 10,925. If it cracks that, it will have sunk through a major ascending trendline, and the party really starts.

Take a look at the NASDAQ Composite. This market had plenty of room to recover. But instead, it's falling away from that broken trendline like Wile E. Coyote from the side of a cliff.


The S&P likewise had plenty of room to push higher to make it easy for us bears to short. It was up this morning, but it fell to pieces. All the markets made gorgeous bearish engulfing patterns. You can just hear the bulls screaming with frustration. It's a nice change. Screw those guys!


There are way too many great shorts to show right now. I'll just give you a couple. Here's Aetna (AET), which has broken a huge ascending support line.


Boeing also represents a really cool potential short. The head & shoulders hasn't fully formed yet, but look at high this thing is above the trendline. Looks ready to get gutted.


How many of my 36 positions are puts? 100% of them. Allow me to tip my hand:




at 5/23/2006 12 insightful comments
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Monday, May 22, 2006Perfect Fibonacci Retracement
A long time ago, I drew a Fibonacci retracement spanning from the market's peak (January 2000) to its post-bubble trough (October 2002). The 61.8% retracement level on this is 1,253.29. Today, at 11:51 a.m. EST, it hit this mark almost exactly and instantly turned around.


Here's a closer look at the day's action. To be fair, it didn't hit the line to the penny, but it did so with 99.999% accuracy and - forgive me - that's good enough!


A similar "buy" signal can be seen with the Russell 2000 ETF where it touched the ascending trendline perfectly.


One "sell" suggestion would be for E*Trade (symbol ET), shown below. I wouldn't call this a head and shoulders, because the right shoulder is higher than the left. All the same, it looks like a nice topping pattern to me.

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One "sell" suggestion would be for E*Trade (symbol ET), shown below. I wouldn't call this a head and shoulders, because the right shoulder is higher than the left. All the same, it looks like a nice topping pattern to me.


Readers of this blog will also note this is the first time I'm going to suggest you buy some pot. Specifically, Potash (symbol POT). It seems a relatively safe bet during what will probably be a short-lived upswing in the market.


Property stocks look ready to fall hard, and Simon Property Group looks like a particularly good play considering it has both broken its trendline and is in a nice toppy rounding pattern.


At the risk of repeating myself: I think the market's going to go up. Maybe for a day. Maybe a few. Maybe even for two or three weeks. But it's going to hit some choice resistance levels. And then I'm going to go bananas buying puts. The bull trap is set. We need to wait a while before it springs.
at 5/22/2006 11 insightful comments
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Friday, May 19, 2006Next Week's Golden Opportunity
What a week this was! But I am hoping next week is even more exciting.

Here's the kind of scenario I think it fairly likely, and if it plays out this way, it represents a one-two punch for bears to make money. Now that the big fall from earlier this week seems to have cooled down, the market has had a chance to stabilize. Both yesterday and today, the market seemed trying hard to compose itself (although the final hour yesterday caused the market to freak out and fall some more).

What I can see happening next week (barring a surprise this weekend) is for the market to get its legs back and start chalking up some gains. The S&P graph below shows how the market is rather oversold at this point, and I could see it scratching its way back to that median line:


The S&P 400 MidCap (MDY, shown below) also shows what appears to be a short-term bottom in the market.


So, moving up from these levels seems quite plasible. Profiting from this rise could be handled by buying calls on SPY, MDY, DIA (I'm less enthused about QQQQ, which seems too dangerous). Another good pick may be AAPL:


If we get a few days to make some green based on the market's upturn (which is when the bulls will come out, relieved that the worst is over), I'd close out those positions for a profit and start shorting. I'd wait until the market had recovered to some pretty obvious resistance levels before doing so. But if we are in a new pattern of lower highs and lower lows, this is a fantastic opportunity to profit in both directions.


at 5/19/2006 6 insightful comments
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This is an unusual intraday post. It seems to me a strong possibility that we're at a short-term bottom. Observe these charts. Here is the S&P 500:


And here is the very important oil services index:


The lows today were set at 11:16 a.m. EST. If these are taken out, then this post is moot. But some short-term trades on, for instance, call options on QQQQ, SPY, DIA, and OIH, might yield some handsome profits for next week.


at 5/19/2006 6 insightful comments
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Thursday, May 18, 2006So Much for the Recovery.....
Well. Wasn't quite the rally we might have expected, was it?

The GLOBEX was up nicely before the open. And the market opened higher across the board. Let's take a look at how long it lasted:


I've got to say I'm a little surprised. Perhaps some more selling had to wash through the system before we got stable enough to push higher. But the fact that the markets just meandered most of the day and then started falling hard in the final hour doesn't bode well for a recovery rally.

Medium-term trendlines are now broken, and we need to look at longer-term trendlines as our next stopping point. The Dow looks vunerable to about 11,000 based on the line in place. Should it break that one, it's a very different ball game.


The NASDAQ market continues to look especially weak. The NASDAQ Composite, shown below, has blasted through a major support line. As I said yesterday, what we ideally want is a recovery back to this line (which is now resistance, formerly support) so we can short the bloody hell out of everything. Shorting into a falling market is obviously riskier. It would be better to sell into the strength.


The NASDAQ 100 is similarly weak. This presents a very clear area which, if retraced, makes for a marvelous place to short stocks.






at 5/18/2006 5 insightful comments
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Wednesday, May 17, 2006Fantastic Sell-Off
The last few days have been sensationally fun. The market is behaving beautifully from a technical perspective. And, no, I'm not jazzed just because the market is down. On the contrary, I think it's going to go up (yes, up) in the very short term, creating more great shorting opportunities. And, in the meantime, we might even make some cash going on the long side (yes, you read that right).

Here's the Dow Jones 30 for the past year or so. As you can see, the medium-term trendline was violated by just a hair, and the market closed at exactly the trendline (I do not draw these trendlines after the fact, folks; these are honest, pre-drawn trendlines).


The $VIX spiked big-time today, which is no surprise considering the Dow was down nearly 250 points at one point.


Look at the graph I've made below, comparing the $VIX with the Dow 30 (click on any of these images to see a much larger one). Notice the very high correlation between big $VIX spikes and short-term bottoms in the market. This is one of a number of reasons I think today may have been the bottom for a bit (how long the 'bit' is remains to be seen).


Here's another interesting graph where, again, I've highlighted the points of interest for emphasis. It shows the DIA (which is the Dow 30 ETF) with its volume. Notice today's huge volume. Two other recent instances of a big volume spike likewise marked the establishment of a short-term bottom.

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Here's another interesting graph where, again, I've highlighted the points of interest for emphasis. It shows the DIA (which is the Dow 30 ETF) with its volume. Notice today's huge volume. Two other recent instances of a big volume spike likewise marked the establishment of a short-term bottom.


Yet another interesting graph (isn't this fun?) is below. It shows a channel with a midline on the SPY. You can plainly see the SPY is right in the middle of the road (think Pretenders.....Learning to Crawl). It seems a natural "point to pause."


The NASDAQ 100, which has been extremely weak (it's been down 7 days in a row, right?) seems oversold at this point.


One specific 'buy' I'd suggest is Apple Computer (AAPL), my employer from many years ago. I think we've got a nice inverted head & shoulders pattern here, as well as firming at the Fib retracement level. Plus, it went up today (yes, up) which is extraordinary considering the market's action.


For my bear friends who think I've lost my mind, fear not, I'm not only still bearish, but moreso than ever. I think days like today help sow the seeds of doubt. But I really don't want to see the market keep sinking. I think more likely we're going to see a recovery. That could very well establish some exquisitely beautiful shorting opportunities before the carpet gets yanked out from people again.

Many of you have been posting questions to the comments board. I'm going to try to answer them en masse sometime soon. Ta ta!
at 5/17/2006 4 insightful comments
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