Looking at the long side

Well, let's take a look at the general markets. The S&P and Dow charts, to me, are in conflict.

On the bull side, both show a Golden Cross right here, where the 50 and 200 SMAs crossed. Also, there was a good bounce off the high 890s area in the S&P and that 8250 area in the Dow, from an oversold condition.

On the bear side, it's still a broken trendline that measures to a top around 950 S&P, 8800 Dow. Also, index put/call ratio comes just below 100, starting to get a little more bearish despite the oversold. Quarter-end games tend to end early rather than late.

Still I'd say the next 5% is up. I took some SSO on that bounce off support. Also covered the PM short, need to get a little long here.

Strong groups this past week were transports (rails have been on fire – can’t find an entry point though), telecomm.

I am not enthusiastic, but I guess I could take:

- T as close to 23.75 as you can get
- WMT looks good to enter as close to 48 as you can get.
- If you want an ETF, RTH as close to 76 as you can get.

One real flier among the transports. I probably won't do this:

- AAWW, as close to 21 as you can get him.

Some physical silver around 13.50, if he comes back.

Covering a little something

Both silver and gold continuous contracts at the 50DMA right here, about a 50% retrace of the last move, at support.

Let's declare victory and cover a third of each of them. Tried, but failed to get long some silver at the 13.50 level on the physical metal.

S&P did a credible bounce off support in the 890s. Taking 800 SSO at 24.75 on the long side.

Bucky taking a buckwheat up the green chute as well, Euroland making tightening noises. Why am I continuously thinking '1931' ?

Trendline breaks

All three indices seeing multimonth trendline breaks today.

Looking like a trendline break in the VIX as well.

I think you want to hold off until later in the afternoon to see what the invisible hand of JPM will do for a stick-save.

Good entry on the short side right here.

I already lost my energy and PM longs to trendline breaks over the last several days, leaving me with shorts on the S&P, gold and a REIT.

I'm trying to add on the short side with about 7% of the account, being stubborn waiting for my price. I think you'll get another chance over the next several days as it tries to flirt with the trendline.

Got short some silver via ZSL, but that was it.

Charts I'm watching

Mostly on the long side...

Purely anecdotal on my part, $USD is a crowded short. I would look for a bounce, with concomitant commodity weakness. I don't know that I'd extend that to say "and treasury strength" since the two have been decoupling for a few days.

However, a stronger dollar would tend to mitigate against the export/heavy industries on this list:

Insurers: HIG, making a pennant, stochastic just crossed, MACD turned up from down low.

Aerospace: BA, like to see him fill that gap at 50, since he's overbought here. Not buyable right now, just a watcher.

Midstream pipelines: APL, inside day after a breakout. Overbought here but, in my ideal world, he'd make a pennant right here.

Tires: CTB on a breakout above 12.

Industrial metals: AA

Personal care products: ACV.


On the short side, taking a shot at a little gold short, playing for 4 - 5%.

Update: Got no longs at all, got some gold short via DGP.

Lots of trailing stops hit

Lost all the golds, all the energies and part of the treasury short to stops today. Every one of them was very profitable. Too many positions to detail right now. I could see the confirmations streaming in starting in over the mojo wire around mid-morning. End of the week, I'll detail what's *left*.

Bigtime in cash, with maybe 25% of the account committed, mostly on the short side now.

For as many weeks as I can recall, though, exercising good trading discipline has been an exercise in futility, as the market seems to have no memory from one day to the next.

Rate issues come to the fore

I took a look at the TLT chart, where it looked like 90 was powerful 2-year support. I wasn't willing to stand in front of a steamroller to pick up a few nickels, so I covered 1/3rd of the bond short on Wednesday afternoon late.

Debt issues back on the table

I came into the week net short, which, of course, was painful on Monday. I think we hit an inflection point with the crushing Cali referendums, then the Japan sovreign downgrade and Britain being place on negative watch. Of course, the killer was that the language in all those S&P analyses applied directly to the US's situation. It's hard to see a scenario that's bullish for treasuries in all this.

The ultimate outcome in California's situation might be a reverse-Okie phenomenon. Given the shabby treatment bondholders have received lately, it wouldn't shock me to see muni debtholders get crammed down. So, of course, Cali muni debt is up over 1% today.

I was up to 60% cash from the trailing stops that were all hit last week. I put some of that back to work in some golds. I picked up the second half of a position in BVN at 24.50. So now I have on 800 BVN with a basis of 24.73.

I picked up another microcap I'd traded in the past - AGT. It did a bull wedge back to support at 0.40. I put in a bid at 0.39 and got hit for 12K shares. That .50 level is really important, going back a couple of years.

Longer-term, I do like the way MEE is forming up here again - pennant with a base at 18. Many coals and coal-related stocks have a similar pattern - CNX, BTU, ANR - but MEE is the most prominent. But at the same time, natural gas can't get out of its own way and it's diverging wildly with oil. So, at best, we're getting some mixed signals in the energy space.