Slope of Hope with Tim Knight

Sneak Peek

First watch this video:

Then check it out.

Break Affirmation

Well, the last part of the day was insane, so I feel compelled to comment.

At 3:30 EST, the market exploded higher. It took only 30 minutes to "erase" the prior six hours of selling. So a Dow that was in the red by triple digits found itself in the green by triple digits. Again, all in just 30 minutes. The Dow ended the day up nearly 100 points after spending most of the day in bearish bliss.

Although I hate to see profits whither away so quickly, I feel good about three things:

1. I trimmed by index positions by half (as I mentioned in the comments section in real time) while we were near the day's lows.
2. I bought IWM puts during the bounce when the IWM was at about 69.40. It's a relatively small position, but it was my way of taking advantage of the micro-bounce.
3. Most important of all, this bounce merely makes stronger my belief in the "broken wedge." Bears, look on the bright side: it only took us 30 minutes to get this retracement out of the way.

Teensie Bit of Support

If any bulls are counting on a bounce here, let me offer a smidgen of hope (unless/until these lines get busted):

Wedgie

In my estimation, the triangle is now broken and we can start to get serious again.

I am trying to be cautious not to get into positions that are too speculative. I've got 70 put positions now, and the well is getting a little dry. I want to be careful not to buy puts on stuff which has historically been really strong (like POT and MOS) and would be the first to pop higher on any kind of bounce. Anyway, the day's going great. Hope you can say the same.

Oh, this is neither here nor there, but here's the latest attempt by Hillary at being funny and human which went over like a lead balloon. Death by momentum!

Quiet Start

Wedge, wedge, wedge. That's been the focus all week. So have we broken it or not? To tell you the truth, I'm not positive. But I think I'm leaning toward "yes"........

In spite of this, it looks like we'll probably start the market slightly to the upside. There's really no market-moving news of any kind. I'll be more convinced of a wedge break it we can take out this level on the IWM........

....and this one on the SPY......

Within the next few days, I am going to be giving you folks a sneak peek - - the first in public anywhere - - of the new blog platform I've been working on. One of the things I think you'll like about it is that it provides real-time, always up-to-date access to my watch list and my portfolios! In the meantime, here's the old school method........these are my current holdings, all of them puts:

Very Late Post Tonight

Great day today!

I look forward to reviewing it, but it's going to be late tonight. See you then, Slope Addicts.

Triangle Man

Most of the trading blogs I'm reading are expressing a combination of exasperation and boredom. People want the market to make up its mind. No such luck! We are bouncing into a increasingly tight wedge. I increased my $RUT put position at this morning's highs. But I have no divine wisdom into when, or how, this market is going to break.

Taking Refuge from the Bulls

Disappointed

This morning, before the market opened, I wrote a post called Great Opening Ahead.There's a reason I didn't call it "Great Day Ahead." I've been around the block enough times to know that a lower opening does not a down day make. Anything can happen.

All the same, I can't help but feel disappointed by the day's action. The market had plenty of great reasons to fall, and it did fall.......at first. But the bulls shook off the bad news, bid up the market, and by the time it was all over, the Dow was up over 90. I closed out my Russell puts early in the day, but I held on to my S&P 500 puts which went from a big four-figure profit to a medium-sized four-figure loss. I'm still holding on to them, but it's a bummer.

There were a couple of recent "success stories" today with some ideas I've offered before. One of them - quite recent - was AT&T (symbol T). I sold this put promptly this morning. Very nice!

Another was Nutrisystem. I've been beating this drum for years. Veterans here will remember that an early detractor, hurricane5, would never shut up about how owning this stock would make people rich. Not so. This stock has gone from $75 to $15 in the span of eight months.

I am less sanguine about the market in general. The bears are at a really risky point here. The wedge is getting tighter and tighter, and it's going to break soon. I, for one, am nervous.

The Russell is equally as maddening. By and large, most of February has been confined to the area I've tinted here, with today's close being near the top of the range.

I've been keeping my eye on the battered real estate sector, and I bought seven stocks in that area today with good results in my IRA account. In fact, I've devoted the entirety of the account to some really ravaged stocks there. And, should the market clearly start moving higher, it will be important to seek out safe issues to enjoy the ride. One such possibility is Amazon (AMZN), which is bouncing nicely off a fan line.

On the whole, though, I've been looking for retracement set-ups - - - the reason I love these is that, to my way of thinking, the market has already tipped its hand, and the run-up in price offers a much lower risk position for entry. Here are a few ideas.

So, overall, a surprisingly stinky day. But the markets do not exist to hand us money. We just try to do the best we can, one day at a time. See you tomorrow!

Hmmmmm.........

The market's failure to break beneath its short-term intraday trendline - - and its subsequent strength in the face of unpleasant economic data - - is not encouraging for the bears.

One bright spot for me was I put all my IRA (a relatively small account) into seven stocks that had been beaten to death by the real estate collapse. Specifically, AIV, CTX, FED, HOV, IFC, RYL, SPF. Even though they are 'just' shorts (instead of stocks) they are up 4% today. A silver lining in the face of my unhappy (and, this morning, quite happy!) put positions.

Ah, well. The battle rages on......