Blog description
- Rodney
- A place for friends to gather and view stock market charts, discuss technical analysis and market outlook. What is your Principal Asset? How can it be developed? Each and all should do their own due dilligence and homework before investing. And by no means should you use anything I say or show here as a sole basis to buy or sell securities as everything is for educational experience only.
Thursday, February 21, 2008
SWC: Short @ $19
A 2 year chart and a 1 month chart tell the tale on SWC. Huge resistance @ $19 and entirely too much of a move too fast. A possible short term PUT play here could be the April $15 +SWCPC which is priced @ $1.00. A limit order of $0.75 and patience could easily make the money @ $14.50 in a hurry. Of course a prudent stop would be anything over $19.18.
Triangle's still
The nimble traders have made a killing playing this triangle from bottom to top and back again. But this gig is up.....Friday will be the reckoning day and if the overall trend holds it should be a breakout to the bottom side. However, I would not be surprised to see another Short shakeout move higher before the selloff. We shall know the answer for sure by Monday's close.
Wednesday, February 20, 2008
Bermuda triangles everywhere
Most of the index charts are sporting this cosolodation triangle pattern. Bottom line is when this breaks (by Friday) it will be a substantive move whichever way it goes. Remember the trend is your friend and the Bear trend off the October 07' high is still intact.
Here is a 3 month chart of the DOW prior to today's open.
Here is a 3 month chart of the DOW prior to today's open.
Monday, February 18, 2008
Sunday, February 17, 2008
IWM 3 month with Fibs
It does not get any plainer than this. The lows are toast within a week. Be sure to check out Market Ticker's post this weekend. He's on board for a malestrom washout as the financial sector crumbles and the FED is helpless. Rate cuts? you say....HAH......Bottom line----------------Going long here on anything is a mistake. Patience, Patience, Patience
Friday, February 15, 2008
Thursday, February 14, 2008
Death from above.....
According to what I'm seeing the chart below pretty much depicts the majority of index charts. A downward bear channel where the top of the channel was tested and failed. If you look back the last time this channel top was tested and failed on 2/3 & 2/4 you will see what is shaping up to be some nasty downside movement coming. This is NO time to be long, ANYTHING, unless you are into inverse ETF's like the TWM just to see charts go up instead of down.
Bottom-line: We will test and probably blast through the 1/22/08 low within the very foreseeable future.
Bottom-line: We will test and probably blast through the 1/22/08 low within the very foreseeable future.
And for your entertainment pleasure I think this is a fitting video.
Wednesday, February 13, 2008
Tuesday, February 12, 2008
Very compelling stuff from Market Ticker
http://tickervideo.org/eod-0212/eod-0212.html
Here is the PDF link to the Fed report.... WOW!
http://www.ny.frb.org/markets/omo/omo2007.pdf
Here is the PDF link to the Fed report.... WOW!
http://www.ny.frb.org/markets/omo/omo2007.pdf
Fibs @ work on the IWM
Here is a great example of using fibs for enrty and exit strategy. As you can see on this 3 month chart the fall from 80 to 64 found downward resistance on each fib line. So if we draw a line from that low to the near term high we get new retracement levels for the bounce. It is pretty clear IWM may struggle along the bottom side of the bottom fan to tough resistance @ $71 & $72 in order to get back to test the $72.80 level. I'll be sticking in a toe by scaling in with Puts at these levels and loading up after the retest of 72.80 for the next leg down. Stops to be set at $72.90.
For the brave with HUGE cojones buying Calls below $70.50. for the ride to $72.80 you could set a stop @ $70.10.
For the brave with HUGE cojones buying Calls below $70.50. for the ride to $72.80 you could set a stop @ $70.10.
A lesson on taxes compliments of David R. Kamerschen, Ph.D. University of Georgia
This is worth reading. Take a minute to get an education on how the US TAX system really works.
Suppose that everyday, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. He said, "Since you are all such good customers, I'm going to reduce the daily cost of your beer by $20. Drinks for the ten of you now will only cost just $80." The group still wanted to pay their bill the way we pay our taxes, so the first four men were unaffected. They would still drink for free. But what about the other six men, the paying customers? How could they divide the $20 windfall so that everyone would get his "fair share"? They realized that $20 divided by six is $3.33.But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay! And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $50 instead of $59 (15% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $9!" "Yeah, that's right,'exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got nine times more than I!" "That's true!!" shouted the seventh man. "Why should he get $9 back when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money among all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up any more. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia
The esteemed and knowledgeable Dr. Kamerschen left out one important point: the bartender, trying to be nice by cutting his price by $20, got stuck with a $40 tab then beat up all nine customers thus losing $100 in sales per day because of his nice "intervention".
Suppose that everyday, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. He said, "Since you are all such good customers, I'm going to reduce the daily cost of your beer by $20. Drinks for the ten of you now will only cost just $80." The group still wanted to pay their bill the way we pay our taxes, so the first four men were unaffected. They would still drink for free. But what about the other six men, the paying customers? How could they divide the $20 windfall so that everyone would get his "fair share"? They realized that $20 divided by six is $3.33.But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay! And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $50 instead of $59 (15% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $9!" "Yeah, that's right,'exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got nine times more than I!" "That's true!!" shouted the seventh man. "Why should he get $9 back when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money among all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up any more. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia
The esteemed and knowledgeable Dr. Kamerschen left out one important point: the bartender, trying to be nice by cutting his price by $20, got stuck with a $40 tab then beat up all nine customers thus losing $100 in sales per day because of his nice "intervention".
Monday, February 11, 2008
DD: Cautiously buying Calls below $44.75-$45
It looks like DD is trying to climb off the lows and break this bear channel. The concerning point is the lack of volume on the sideways movement over the last couple of weeks. Buying here at $44.75-45 seems like a good long entry with a stop at $44.50. If it does break the channel look for the top of the channel to then become support.
Friday, February 8, 2008
ETFC: Are you Freaking Crazy?
Definitely a very speculative play, but hey somebody has already double-upped plus from the bottom of $2.10. The 15-Day SMA - 4.19 has crossed the 50-Day SMA - 3.80 and appears to be turning higher. The 200-day SMA is will not be in play for sometime so one we will have to rely on the Fib levels.
Looking at the 5 year you can get a sense of the dramatic sell-off that took place. A positve note is that ETFC is about to break that downward spiral of a channel. Maybe. It could very well retreat to the lows.
The Magic # appears to be $5.50 and ETFC could tear up to $6.35 then $7.35.
A possible entry here would be $4.60-4.75 with a tight Stop @ $4.25. Hmmmmm, is that stop level a coincidence? Exactly a double from the bottom less trading fees.
9 Month
3 Month
1 Month
Looking at the 5 year you can get a sense of the dramatic sell-off that took place. A positve note is that ETFC is about to break that downward spiral of a channel. Maybe. It could very well retreat to the lows.
The Magic # appears to be $5.50 and ETFC could tear up to $6.35 then $7.35.
A possible entry here would be $4.60-4.75 with a tight Stop @ $4.25. Hmmmmm, is that stop level a coincidence? Exactly a double from the bottom less trading fees.
5 Year
9 Month
3 Month
1 Month
GW & Bruno's itch @ $5.85
The bottom line here is the 15 day SMA - 5.89 & the 50 day SMA - 5.52 have turned positive. One would expect GW to make an assault toward the 200 day SMA - $6.61.
If you look at the 5 year chart you can see the channel from $5-$6.5. Take note that GW is on the high side of this channe and likely to hit huge long term resistance @ $6.5. If it breaks through the upside resistance resides @ $7 then $8.50.
Taking note of GW's affinity for the middle FIB line on the 3 month a possible buy order around the $5.85 level may cacth an intraday low in this higher trend. An absolute must would be a Stop @ $5.50 and even tighter @ $5.70.
GW 3 Month
GW 1 Month
GW 5 Year
GW 1 year
G 2yr with FIBS
GW 1 yr with Fibs
GW 6 Month with Fibs
Thursday, February 7, 2008
The VIX
The VIX is important because it measures the volatility of the market. Volatility is simlply confidence level: decision versus indecision, confidence versus confusion. The more confident the market is in its direction the lower the VIX will be; the less confident the higher the VIX will be.
Market volatility has a direct correlation with the cost of Option contracts. If volatility and uncertainty are high - Options will be more expensive. However, it is in uncertain times the most profit in the shortest time span can be made.
Market volatility has a direct correlation with the cost of Option contracts. If volatility and uncertainty are high - Options will be more expensive. However, it is in uncertain times the most profit in the shortest time span can be made.
AAPL: The downward spiral through 112 to 91
As seen by the charts below our beloved AAPL is in a world of $@&^! And as the title of this posts suggests I believe we may see a brief pause at 112 and ultimately a completion of a poorly formed one year Head & Shoulders top.
Head - 205
Neckline - 150
Sholders - 125
And in this case the smelly armpit of 91 for a trough.
It may be safe to belly up to the trough and be Long Call Pigs for awhile when it finally reaches the low 90's. In the mean time I feel pretty confident we can ride PUTS and be short as long as tight stops are kept. Remember nothing goes straight up or down.
Head - 205
Neckline - 150
Sholders - 125
And in this case the smelly armpit of 91 for a trough.
It may be safe to belly up to the trough and be Long Call Pigs for awhile when it finally reaches the low 90's. In the mean time I feel pretty confident we can ride PUTS and be short as long as tight stops are kept. Remember nothing goes straight up or down.
Wednesday, February 6, 2008
Dow Channel Lines
This Dow chart has been zoomed in to try to show the bottom channel over a longer term. Unfortunately, my charting software historical data only goes back as far as 10-28-2002. So this is not exactly what I would consider "long term". If you have not looked at any 10 & 20 year charts of the major indicies you may want to reconsider. I'll try and figure out a way to post some.
In the mean time how bout a little off color humor:
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