All indexes have broken the fuck out. Of course it's important that we hold these levels into the close (hour plus yet to go) to confirm but I'm eyeing a lot of strength at the moment. I must say I'm a bit surprised that we made it there today. Shit, the Dow is up 300 plus. I said GODDAMN!
I've been a buyer today. Bought the TOL breakout (even though it makes me sick) and caught VLO breaking out of a triangle. Been a (short) seller too, of SSRI.
Watching the refiners closely. They've been destroyed with the rise in crude. With crude breaking down I'm looking for the bounce. I'm going to be a big buyer of TSO above $18, started nibbling this afternoon (perhaps prematurely).
Most exciting though, is that amidst all this strength I've managed to hold on to three of the four shorts I started the day with. Still short FRO (happily), PX (giving it some rope) and GIFI which is down a buck at the moment. I swear to God GIFI is something else, it seems to trade contrary to reality. The market gets killed (like yesterday) and it's strong and vice versa today.
Today's disappointment was ALCO. Waiting for the breakout but forgot to check it until about a half hour into the day. When I did it was up a buck and a half. Damn missed it, or so I thought. Later on in the afternoon it was up Five. FIVE! Wow.
The market can go ahead and close now. I'm pleased. Had a very, very nice day. Everything seemed to work.
Friday, August 8, 2008
Oil is Broken
The uptrend in oil, as I have it drawn, is unofficially broken. Snapped like a turkey's neck in November. Official contingent upon closing prices. Should gold take out it's prior intermediate low, I will consider it broken as well (I warned you about that last week). The dollar is raging higher thereby breaking the back of the commodity bull. Psst, (whisper) we're also in a recession.
The stock market is happy and, for a change, I'm happy by extension. Since last August almost every time we have had one of these giant rallies I have been cursing and breaking things. Today I am long. I enjoy the novelty of partaking in the bulls' joy but I remain a bear in bull costume. Higher prices will eventually lead to me shedding my costume and going all Rambo on these bulls.
I think we're making another run at 1292 on the S&P and I expect a breakout but let's not get too far ahead of ourselves.
The stock market is happy and, for a change, I'm happy by extension. Since last August almost every time we have had one of these giant rallies I have been cursing and breaking things. Today I am long. I enjoy the novelty of partaking in the bulls' joy but I remain a bear in bull costume. Higher prices will eventually lead to me shedding my costume and going all Rambo on these bulls.
I think we're making another run at 1292 on the S&P and I expect a breakout but let's not get too far ahead of ourselves.
Thursday, August 7, 2008
One of These Days...
...I'm going to make some money. In the meantime losing really, really sucks. Seriously.
Funny thing about today: I break my rule of no daytrading (out of frustration) and buy 1000 DXD (2x short Dow). It's plainly obvious that the market is going over the cliff. So after the initial break of the lows I initiate the position and literally four minutes before the market goes into a waterfall I sell it! For no gain! HA! Fucking hilarious!
I'm leaving now to go punch myself in the face. Have a nice fucking day.
Funny thing about today: I break my rule of no daytrading (out of frustration) and buy 1000 DXD (2x short Dow). It's plainly obvious that the market is going over the cliff. So after the initial break of the lows I initiate the position and literally four minutes before the market goes into a waterfall I sell it! For no gain! HA! Fucking hilarious!
I'm leaving now to go punch myself in the face. Have a nice fucking day.
My Bad
Yesterday I claimed that 1285 was the line in the sand for the S&P. That was erroneous. The number is 1292 which is not only resistance but the 38.2% retracement. I stand self-corrected.
We have rallied off the lows this morning but it still feels like we are heading lower this afternoon. Truly this market has no direction here. This is consolidation.
We have rallied off the lows this morning but it still feels like we are heading lower this afternoon. Truly this market has no direction here. This is consolidation.
Wednesday, August 6, 2008
Making Money Long (Well, Hopefully)
After dropping two percent yesterday (not bad considering the absurd 300 point move) and starting the day down another one and a half percent I'm rallying the troops. Too many names out there putting in short term bottoms for me to be a seller. Most of my shorts have been taken down (mostly yesterday morning) and I have replaced them with a number of longs.
Got long RIMM, UAUA, MCHP, RTN and ITW, all of which are breaking out. Also shorted some GIFI off of a head and shoulders top.
Got long RIMM, UAUA, MCHP, RTN and ITW, all of which are breaking out. Also shorted some GIFI off of a head and shoulders top.
Line in the Sand
1285 on the S&P.
Above it I get short term bullish (gasp!). Failure to surmont that level and it won't be long before I resume my selling. Leaning towards the former but it's just a hunch.
Above it I get short term bullish (gasp!). Failure to surmont that level and it won't be long before I resume my selling. Leaning towards the former but it's just a hunch.
Tuesday, August 5, 2008
Piss Poor
The purpose of this blog is to organize my thoughts and to keep a journal of sorts for future reference. The objective is to be truthful about my performance and illustrate good times and bad. So along those lines, I have to admit to piss poor performance of late.
Some combination of lack of conviction and poor attention during trading hours has me grounded. Grounded as in right into the fuckin' dirt. My lack of conviction, I believe, has something to do with coming back from vacation feeling out of the loop and lack of clear direction in the market as a whole. Poor attention during market hours is the harder part for me to deal with. I look at today's watch list and the winning trades are all right there on paper written by my hand. So I guess I just need to get my head on straight before I find myself living in a cardboard box.
This is the hard part of trading, the part that you can't teach. Psychology. It's the key to the whole puzzle. My tools and strategies are simple but trading itself is extremely challenging.
The only thing I can fall back on is that I've been here before. Many, many times. Time to pick myself up out of the dirt, brush myself off and get back to my winning ways. I have no doubt that I will be successful in the long run but it's easy to lose sight of the big picture when faced with adversity.
Some combination of lack of conviction and poor attention during trading hours has me grounded. Grounded as in right into the fuckin' dirt. My lack of conviction, I believe, has something to do with coming back from vacation feeling out of the loop and lack of clear direction in the market as a whole. Poor attention during market hours is the harder part for me to deal with. I look at today's watch list and the winning trades are all right there on paper written by my hand. So I guess I just need to get my head on straight before I find myself living in a cardboard box.
This is the hard part of trading, the part that you can't teach. Psychology. It's the key to the whole puzzle. My tools and strategies are simple but trading itself is extremely challenging.
The only thing I can fall back on is that I've been here before. Many, many times. Time to pick myself up out of the dirt, brush myself off and get back to my winning ways. I have no doubt that I will be successful in the long run but it's easy to lose sight of the big picture when faced with adversity.
Monday, August 4, 2008
Nowhere to Hide
Up until last week you could have avoided most of the pain by hiding out in commodities. Not anymore. This jives with my thesis insofar as all along I have maintained that we would reach a point in time where there would be "nowhere to hide".
The general consensus is that commodities getting bludgeoned should be bullish for everything else. I'm not so sure about that. Rather I think the pain has just increased. Previously we were pricing in an elevated chance of outright implosion in the financials, which became less pronounced once Bernanke and Paulson decided to try and bail out their buddies, now we are pricing in a recession. Enjoy.
The general consensus is that commodities getting bludgeoned should be bullish for everything else. I'm not so sure about that. Rather I think the pain has just increased. Previously we were pricing in an elevated chance of outright implosion in the financials, which became less pronounced once Bernanke and Paulson decided to try and bail out their buddies, now we are pricing in a recession. Enjoy.
Putting Dogma Aside
It's no secret that I'm a big proponent of owning precious metals. The whole reason I've owned metals for the last few years is in anticipation of this very moment in time. The moment when the government tries to bail out Wall Street and it becomes clear to all that Bernanke is in a box. That's my financial dogma. Now the reality, is something different.
Gold failed to hold $900. Let us take a look at GDX, which tracks mining shares. I see a potential top.
That's ugly. Also problematic is the chart of my old friend PAAS. I've made a small fortune being long this stock over the years but now I want to be on the other side of that trade. At least for the time being.
You know, the market is funny and often operates contrary to your expectations. I'm somewhat surprised the metals aren't going nuts to the upside considering the backdrop. However, I trade based on reality not dogma. Best case scenario is that the metals get hammered and set up the buying opportunity of a lifetime. We'll see.
Yes I did short PAAS this morning.
Sunday, August 3, 2008
Sunday Offering
My intention was to post a handful of good ideas for next week but frankly I've got other shit to do. However, I would be remiss if I didn't, at the very least, cover this one.
Isn't that one beautiful head and shoulders top? Wouldn't be surprised to see this index trade below 400. You may now be wondering how it is you might play a top in the utilities index, if so shame on you because you weren't paying attention last week when I told you.
After doing some homework in anticipation of a top in the Utes I came across SDP. Immediately I knew that this new found symbol would come in handy down the road and sure enough one week later it's showtime. The important thing though is waiting for the pattern to confirm. Timing is key. In this case the pattern will complete with a decisive break below the neckline, say 470. I'll be looking for that Monday to get long SDP.
Let's Review My Brilliance
On the 17th of July I suggested shorting coal stocks and offered three beautiful examples. One of them was CNX which was trading at $90. Here is the before and after.
Good for twenty plus points. Damn I'm (occasionally) good!
Good for twenty plus points. Damn I'm (occasionally) good!
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