Got nearly all the juice out of that SKF trade before it tanked.
The Geithner speech really juiced things.
Today, looking like the financials will give something back on the horrible COF numbers. YHOO inline, Bartz doing a good spin-job.
Oscillators *way, way* overbought here. S&P oscillator at +9, I would be a seller at +5. No new longs here, peel 'em off if you have 'em.
Looking at SRS just below the all-time low, around 25.50. Again, these instruments are to be held no longer than green bananas.
But the market has a distinct squeeze-y feel. Keep those stops tighter than a fist and positions small.
Wednesday, April 22, 2009
Tuesday, April 21, 2009
Wedgie in the indices
I took off half the SKF yesterday and moved stops. Because (repeat after me) We Never, Ever Let a 25% Weekend Move Get Away. Plus, the double-short products are just a pure shit ripoff. They're intraday-only.
All three indices look to me to be at the bottom trendline of a wedge. A break of that downtrend line could mean a lot of downside for the markets. A bounce could be a big move up.
I went back to the bible, Edwards & Magee's "Technical Analysis of Stock Trends," and looked up the pattern of a wedge.
Tell me how well their comments have held up:
Rising wedges are common in bear market rallies. Magee says that it is so typical that frequent appearances of wedges after an extensive decline bring about questions as to whether a new bull trend is in place. Does that sound familiar?
Another item of note is that it normally takes more than three weeks to complete. We've got that. And once prices break out of the wedge to the downside they usually waste little time before declining in earnest.
We're still somewhat overbought, not as bad as it was a week ago.
I would lean to the short side here, with the caveat that it's hard to make money during earnings season either way.
Geithner speaks, or rather obfuscates, late morning. Last time, it was worth a 100 point Dow bounce. The plan is to stay neutral until he speaks. If you want to be long, some oil might be good on a reversal.
All three indices look to me to be at the bottom trendline of a wedge. A break of that downtrend line could mean a lot of downside for the markets. A bounce could be a big move up.
I went back to the bible, Edwards & Magee's "Technical Analysis of Stock Trends," and looked up the pattern of a wedge.
Tell me how well their comments have held up:
Rising wedges are common in bear market rallies. Magee says that it is so typical that frequent appearances of wedges after an extensive decline bring about questions as to whether a new bull trend is in place. Does that sound familiar?
Another item of note is that it normally takes more than three weeks to complete. We've got that. And once prices break out of the wedge to the downside they usually waste little time before declining in earnest.
We're still somewhat overbought, not as bad as it was a week ago.
I would lean to the short side here, with the caveat that it's hard to make money during earnings season either way.
Geithner speaks, or rather obfuscates, late morning. Last time, it was worth a 100 point Dow bounce. The plan is to stay neutral until he speaks. If you want to be long, some oil might be good on a reversal.
Monday, April 20, 2009
Fading the rally
Rally looks artificial and long in the tooth by every measure I look at.
Got hit at 56.75 on 400 SKF for a green banana trade. Want to stress, there's no technical reason within the framework of my methods to do this here.
Turned loose half the SU at 25.75, basis was around 18 off that double-bottom. That was a pretty clearly an intraday triple top at 25.90. You really want to be shedding longs here.
Also, half the BHI, again, bought off that double-bottom weeks ago. This has been a very disappointing position.
It's basically been the overlevered junk leading this rally off the bottom.
Actually, I am thinking this will be a buyable pullback. You see this kind of move frequently on the Monday after expiry.
Builders look good on a pullback... XHB at that 12 support, I think, is where you want to enter. I like the composite ETF chart better than any of the individual charts.
As a rough guide, I'm thinking in terms of a 50% retracement of the whole move since early March. This would be, very roughly, S&P 750/Dow 7250. Some reasonable support there as well.
I think very precise technical levels are nonsense to try to trade by. Stocks in the real world come up a little short, or go over just enough to rape you. I think in terms of scaling in, in 2, 3, 4 trades, then put a stop on the whole basis.
Got hit at 56.75 on 400 SKF for a green banana trade. Want to stress, there's no technical reason within the framework of my methods to do this here.
Turned loose half the SU at 25.75, basis was around 18 off that double-bottom. That was a pretty clearly an intraday triple top at 25.90. You really want to be shedding longs here.
Also, half the BHI, again, bought off that double-bottom weeks ago. This has been a very disappointing position.
It's basically been the overlevered junk leading this rally off the bottom.
Actually, I am thinking this will be a buyable pullback. You see this kind of move frequently on the Monday after expiry.
Builders look good on a pullback... XHB at that 12 support, I think, is where you want to enter. I like the composite ETF chart better than any of the individual charts.
As a rough guide, I'm thinking in terms of a 50% retracement of the whole move since early March. This would be, very roughly, S&P 750/Dow 7250. Some reasonable support there as well.
I think very precise technical levels are nonsense to try to trade by. Stocks in the real world come up a little short, or go over just enough to rape you. I think in terms of scaling in, in 2, 3, 4 trades, then put a stop on the whole basis.
Tuesday, April 14, 2009
Couple of moves in the last few weeks
OK, a quick update... the strategy here is short the S&P, long oil, short treasuries on the long end.
Got some oil... full position each in SU and BHI. The former has done fine, the latter is sitting still.
I'd sold gold on that spike above 1000. Bought it back last week as it came down to the bottom of the channel. You could argue it's making a bull flag here. I'd be a buyer close to 850, playing for 10% or so.
Pull out the chart on XLU to any duration you like. Last year, I caught that H&S on the short side, covered it late last year. Now, it's back at resistance, having barely participated in this rally. Bigger resistance at 30.
Nobody's going to bail out ute debt.
Got some oil... full position each in SU and BHI. The former has done fine, the latter is sitting still.
I'd sold gold on that spike above 1000. Bought it back last week as it came down to the bottom of the channel. You could argue it's making a bull flag here. I'd be a buyer close to 850, playing for 10% or so.
Pull out the chart on XLU to any duration you like. Last year, I caught that H&S on the short side, covered it late last year. Now, it's back at resistance, having barely participated in this rally. Bigger resistance at 30.
Nobody's going to bail out ute debt.
Sunday, March 22, 2009
Chart work for the weekend
Oil stuff I've been buying over the last few weeks has played pretty well. I'm thinking we're in a mode where you want to buy weakness in these and trade around a core.
General market and most stocks I see are very overbought. Wouldn’t commit much money in on the long side here. But there's the potential for new Treasury scam this week, so I think it's important to have some long exposure, even if it's token.
Metals and materials charts look good to me right here, but stochastics are uniformly in the overbought range. Some charts I like on a pullback, and the (loose) entry points I'm looking at:
HL, around 1.90.
AWC around 2.75. The whole aluminum group looks pretty good.
TCK, around 4.50.
For a consumer staple, CL around 55. From some work I did a couple of years ago, this stock has the best inverse correlation to the $USD of any S&P component.
On the short side, the whole insurance group has come back to resistance. TWGP on the short side.
Once you get away from the major indices, I think the double ETFs are a total scam and a thorough bitch to trade. That said, take a look at EEV a little closer to that 43-and-change low.
General market and most stocks I see are very overbought. Wouldn’t commit much money in on the long side here. But there's the potential for new Treasury scam this week, so I think it's important to have some long exposure, even if it's token.
Metals and materials charts look good to me right here, but stochastics are uniformly in the overbought range. Some charts I like on a pullback, and the (loose) entry points I'm looking at:
HL, around 1.90.
AWC around 2.75. The whole aluminum group looks pretty good.
TCK, around 4.50.
For a consumer staple, CL around 55. From some work I did a couple of years ago, this stock has the best inverse correlation to the $USD of any S&P component.
On the short side, the whole insurance group has come back to resistance. TWGP on the short side.
Once you get away from the major indices, I think the double ETFs are a total scam and a thorough bitch to trade. That said, take a look at EEV a little closer to that 43-and-change low.
Monday, March 16, 2009
Canada
Suddenly liking everything Canadian I see.
ECA, CNQ, SU, MUR.
The Canada ETF itself, EWC.
Oil should've fallen off a cliff after the OPEC no-call this weekend.
ECA, CNQ, SU, MUR.
The Canada ETF itself, EWC.
Oil should've fallen off a cliff after the OPEC no-call this weekend.
Sunday, February 22, 2009
Watching some OIX components
Some of the oil services index look pretty good here from a risk/reward.
Liking BHI, 9 days down at support.
DO maybe has the best divergences.
RIG looks OK here too.
Didn't get hit on any of these.
The rest of the DGP is gone to a stop. Gold is increasingly looking like a big double-top, with the trendline down around the 850 level.
Noting that there's been call-buying in the VIX, all the way up to the 90 strike. This should push treasury yields back down.
So, right now, for the longer term, I'm kicking around the idea of a paired trade... long munis over short treasuries, reap the coupon. Later in the year as tax revenues fall off a cliff, the states will encounter funding problems and their debt will blow up. It will wind up being backed by FDIC/treasury.
It will be immaterial which debt quality you own. If you fail to back one, there will be capital flight. So you may as well own the worst of it, stuff from the sand states. I'm thinking something like long PCQ over short TLT. You don't want to use TBT for long-term trade because the Greeks get involved in the double-shorts. If these two classes of debt return to historical parity, you'll be looking at a 60 - 70% gain.
Liking BHI, 9 days down at support.
DO maybe has the best divergences.
RIG looks OK here too.
Didn't get hit on any of these.
The rest of the DGP is gone to a stop. Gold is increasingly looking like a big double-top, with the trendline down around the 850 level.
Noting that there's been call-buying in the VIX, all the way up to the 90 strike. This should push treasury yields back down.
So, right now, for the longer term, I'm kicking around the idea of a paired trade... long munis over short treasuries, reap the coupon. Later in the year as tax revenues fall off a cliff, the states will encounter funding problems and their debt will blow up. It will wind up being backed by FDIC/treasury.
It will be immaterial which debt quality you own. If you fail to back one, there will be capital flight. So you may as well own the worst of it, stuff from the sand states. I'm thinking something like long PCQ over short TLT. You don't want to use TBT for long-term trade because the Greeks get involved in the double-shorts. If these two classes of debt return to historical parity, you'll be looking at a 60 - 70% gain.
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