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I'm all charted out, everyone. Enough.
Not a very exciting week, and today was a total snoozer. But I've got some other important matters to attend to, so I'll probably do a post Monday morning. Until then, have a good weekend. Thanks for swinging by (especially those of you that keep the comments section bustling).
If you are desperate for insightful commentary from a major publisher, I offer you the entire Market Focus from Barron's for this upcoming Monday. Read it if you have the time:
In this high tech world of ours, it's easy to lose sight of the basics. But looking at the Dow Transports, my bear eyelashes flutter like mad. Let's step away from the tick-by-tick stuff we all watch and look at this monster chart:
.......and closer.......
I find this pretty exciting. Anyone have good suggestions for how to play the short side of this, particularly with respect to options?
What you see below is what I see as I look out my window. And that's about what I see in the markets right now. This is one of those tough times. It's difficult to know what's next. All I can recommend is a re-examination of all your positions and a tightening up of stops across the board. It doesn't look like an exciting or dynamic day. Just a good day to take stock (so to speak) and try to look at your charts with an objective eye. More later........
At my daughter's school this morning, this was on the easel. You know it's got to be Stanford/Palo Alto when one of the items is "Maybe bears eat tofu."
I confess I get bugged when analysts and/or bloggers that I frequent turn bullish. I feel betrayed somehow. But that reveals a terrible confirmation-seeking bias. One shouldn't simply seek out opinions agreeing with their own. I think it's more useful to seek out opinions in absolutely contradiction to your own, in order to challenge it.
Having said that, if there's one chart I'm looking at now that has the "bull bell" ringing, it's this one. To me, this is a pretty compelling argument for an upsurge in the NASDAQ in the coming weeks.
This morning, strangely enough, the chart that induced me to sell off my index puts (at great profits, thanks so much) was the FXI. It seemed to be bottoming pretty hard. At the time, it was actually down, but it was dancing just above those two lines you see (Fib and trend).
The $CZH agrees with this (temporary, at least) bullish prognosis for the Chinese markets.
I'm not seeing any screaming-bearish charts. Best case, I'm seeing "middle of the road stuff", like the all-important IWM. The RUT is the only index on which I have a put position, and it's not particularly big.
I bought 8 calls today. One of them was MER. Investment banks are looking a bit bullish.
The also-very-important S&P 500 is also middle-of-the-road. I don't doubt the medium/long term bearishness of these charts. But I am very suspicious of the short-term.
As I mentioned a day or two ago, the SOX is looking pretty bullish to me. The options on it stink, so I wound up buying calls on the SMH instead.
And one specific stock in the $SOX group I bought calls on was KLAC.
I've still got 63 equity puts and 1 index put, but I've got 8 equity calls. I might back away farther on the put side if the market shows more strength. I might even get index calls soon. Don't hate me because I may be temporarily bearish. I'd rather be nimble than dogmatic.
I find the bulls' daily attempts to push the market into triple-digit green territory on the Dow, and then their failure to keep it there, is very heartening. It's also excellent to sell into the strength. For the record, although I found all the 8 call possibilities intriguing in the last post, I didn't have the heart to buy any of them. Not wanting to fight the primary trend, and all that.
I've sold off my SPX puts and NDX puts at dee-li-cious profits, and I've trimmed my RUT puts by about a third. Thank goodness (so far). I did so when the IWM was down about 40 cents, and now it's up 50 cents - - a big reversal! That half hour is a magical turning point. I'm not sure if there was news to drive this reversal (too busy looking at charts to check!), but I've shunned the Greed Ogre quite well lately. For whatever reason - luck, perhaps, and nothing more - doing so has served me well.
The VIX is also kinda on the high side (about 30) which made it a somewhat easier decision for me. I could get re-interested in those puts, just like yesterday, if we push to - - I dunno - - somewhere around $70 on the IWM. Stay tuned!
