|
|
||||
|
|
||||
| ||||||||||
|
Daily Links
January
2003 |
The Trade Chatter of Trading Comments Here you'll find TAT's short quips concerning the market mood and direction posted intra-day as the market dictates and time allows. It's an outsider's view of real-time market opportunities with various trade plays thrown in. 3:09 PM MST - I have to pack it in early again today. I'll be out with the Weekly Heads Up by tomorrow so until then ... Lastly, I would like to thank the few of you who have contributed monetarily to keep this site running. I would ask that if you find the analysis, insight, and practical trading data that I provide beneficial, that you consider supporting the site voluntarily. If enough folks do not contribute over the next few months, then I will have to reconsider the voluntary approach. Not what I want to do, but the work I do and what I provide does cost time and effort ... time and effort that I could apply elsewhere. Good night. 12:44 AM MST - So far the bounce continues. The stair stepping higher seems to have worn off, but the market is holding well. The last hour and a half should be interesting as we have the weekend in front of us. I plan no changes into the weekend with the current portfolio unless there is some significant change. I doubt that and will hold strictly short to start next week. 11:21 AM MST - That last post must have confused because I immediately get email asking if I'm changing my tune. No. Oversold bounce; end of month window dressing; short squeeze; other factors? All of those make sense especially the bounce and squeeze. I do not believe that the H&S pattern will fail here though and will continue to short as a function of price and time. 11:03 AM MST - The market has a way of disappointing the masses. When too many lean one way, it seems it is destined to tilt the other direction, if only long enough to frustrate and savage. This morning I was attempting to press a bit and the index short is costing me right now as a result. I'm still thinking the bigger picture asserts itself here, but in the meantime, the market is stair stepping higher and taking my index short with it. No pain, no gain I hear you say? Don't know if that is true, but for now it's definitely the pain part ... at least on that trade. 10:17 AM MST - Market clawing it's way higher here. Now we get to test our metal as the red turns to green. My thoughts are the same. The resistance levels are what they are and I will continue to get shorter as a function of time and price. That's just the way I work. 9:32 AM MST - The listed issues want to run but so far, the NASDAQ yoke won't allow it. I've gotten a bit shorter today and will continue to play on this side of the fence. Each rally is sold and because I can't see the SOX turning today, I suspect that will be the case all day unless news hits that brings the listed issues in. 8:30 AM MST - Internals slowing being pulled lower. I tried to short more into that spike but missed. This AMAT news weighs heavy 8:04 AM MST - Numbers didn't disappoint as they market spikes on the sentiment numbers and ignores the purchasing managers. So I didn't get what I wanted. Nevertheless, I will continue to short into strength as a function of time and price. 7:50 AM MST - AMAT finally starts trading down 7%. Look for the SOX to keep a lid on any rally. On the flip side, the financials are out of the gate strong. The risk now is that the 8:00AM economic numbers disappoint and we head south. I took a short out on the DIA in case and am looking to get short an old favorite, HOTT. 7:40 AM MST - AMAT stinking up the joint for technology. This could get ugly. Economic numbers out in 20 minutes also and could add fuel. Trying to get shorter but not crazily. I'll live with what I have if it dives. 7:34 AM MST - SOX very heavy out of the gate. I'm trying to get shorter. 5:50 AM MST - Thank goodness it's Friday. After what seems like a very long week for me, we wind down today and close the books on both the week and the first month of the year. Having been fortunate enough to get in front of the move down I have gotten off to a good start but there's 11 months to go and no time to be comfortable with what has been but instead to focus on what's to be. Last night the futures floated around breakeven while this morning they have began to spike up a bit on the listed issues. DIS reported good revenue gains and got a nice bump after the bell and I see BA winning a sizeable contract this morning. On the economic front, we have personal income and consumption out within the hour, then that tricky Michigan sentiment number along with the Chicago purchasing manager's index a half hour into trading. Don't get too comfortable in front of those reports. Technically the market is weak here. The most significant bullish aspect is that the market is quite oversold on short term basis. That gives it support in the way of exhaustion. Sometimes a market is just too tired to move much. On the flip side of the coin, there's lot of technical indicator pointing to a further drop. I will continue to short into strength and pick away at positions on the assumption that this wedge we are currently building will break too the downside. Could come soon, could come later, but it looks to arrive at some point. 5:50 PM MST - Another exhausting day for me. I honestly can't wait for the weekend. Today was a rough day as we never got any follow through to short. I ended up grabbing 3 shorts at lower entry points than I wished and that was it. All other orders simply expired unfilled. As the old saying goes, you never have enough when things go your way but you have way too much when they don't. Be careful not to get greedy and to take what they give you. Don't drop you discipline for greed. It will ruin you. It has ruined many a young man and woman before you and will ruin many after you. As for the markets today, it was pretty futile. The early attempt to push higher was met with selling and each time a support level broke intraday, you would get the faster selling that is typical of stops being taken out. At the end of the day, they simply sold. Volume wasn't heavy again and until volume picks up on the downside, you can't expect this to be over with. The AD line was negative all day and finished down about 2:1. I'm not optimistic and have not been optimistic as you all know. Sure seems to me that we are technically hanging on going into another weekend of uncertainty. Earnings have not been kind to the market as the expansion needed to boost them just isn't happening. In fact, from the GDP numbers this morning, the only thing expanding is the government and that brings with it a host of other problems down the road. Of course those are long term problems and in the long run we are all dead as Keynes said, so I typically don't even attempt to focus that far out. For now, I'll focus on tomorrow and concern myself with next week. That's enough for one small mind to handle. Good Night! 1:37 PM MST - It's frustrating to be right but unable to profit from it ... or to not profit enough. Today is another day of slight frustration on my part as I had lots of orders in but most didn't hit. As a result, the melt occurs and I'm not full participating. Sometimes it's that way. Being right is only part of the game. Heck, a lot of the game is being wrong and still finding a way to participate. For now, we are destroying any hope of turning that H&S pattern into a failure. Duck and run if you are long here or find a way to participate until it turns again. 1:05 PM MST - Just getting back from lunch, and it's looking turn into a route. I'm just holding short again for now. 11:09 AM MST - Pretty much the same situation out there. I continue to pick away add short positions but am not in a hurry to load up yet. The risk is that we get the drop without me being short enough. Of course the risk if I load up here is that we still could traverse higher for another couple percent even with me being right and then I'm bleeding red and sleeping less at night. So, I'll continue along the path of patience and money management as it's easier to sleep and continues to provide profits. 9:55 AM MST - The market is having a hard time going higher. I've still a number of orders outstanding, some of which may hit some of which look quite unlikely now. I'll continue to look for opportunities, but I'm totally ignoring the long side of this market right now. The internals are skewing to the negative now, while volume continues to be average. Don't know that we will break just yet, but I'd be careful if long in this market at this particular time. 8:45 AM MST - As I sit and watch the market see-saw back and forth, I'm reminded of the times as a kid where on the swing set I would mindlessly sway forward, then back, forward, and again back. In the end I had really not went anywhere but at the time it sure felt like I had. Right now this market is beginning to work off an oversold condition on the short term. Going sideways and going nowhere is the market's way of working off the excesses prior to a resumption of the trend. Since I lean so heavily on support and resistance zones, I figure that the play is still to the downside and that as the market meanders, I should position for what I expect to be the next move. The market's movement is a function of price, volume and time. Right now we are swinging back and forth on price and volume while we waste time. Don't expect to go anywhere immediately but do position for when we get off of the swing. 7:59 AM MST - This morning I began adding a few more short positions to the mix. I have a few orders outstanding to do more if we move up. I'll incrementally get shorter as the market moves up. Early internals are fairly flat and that opening reflected that. Volume is average again. Until we get a move in volume, I expect we will settle back to the trend which is to dribble lower. Today and/or tomorrow could be up days, but resistance is near and should be rather strong so I don't expect a lot more to the upside. 6:45 AM MST - I had a hard time dragging myself to the chair this morning. It's been a big week already and just barely half done. We had the GDP numbers this morning showing growth was almost what was expected. If you parse the numbers though, the gains in spending were mainly government and within that, defense. This looks like Keynesian economics all over again. Yesterday gave us a reversal intraday but I wouldn't get to comfortable with that. AOL reported a loss so massive I can't even imagine what it means. Last big day for earnings and they are hitting the tape as I write. ERTS gets a downgrade on a decent number. That may finally work out as a short. I'm very light in stock right now and will start adding a few more shorts back to the mix. You have to hang your coat somewhere and mine is still leaning to the short side. 3:00 PM MST - Well, we finally got some of that volatility today. After selling off for so long without more than a whimper of a rally, it only seems fitting that the little snapback rally took root. Market never makes it easy and my positioning in front of the rally was good on timing yet the curve ball this morning of nasty weakness was enough for me to bow out. Sometimes it goes that way. Now we have pretty much set the table. Most earnings are out and met expectations but can't guide up. That's a negative that's either priced in or being priced in. I say being because we could start seeing warnings a few weeks from now that would cause further heartburn. The Fed did nothing. That's a neutral. The war with Iraq looks clear to occur now. The only question is the timing. The market expects to run higher once the bombs start falling. That seems a bit naive in that, as with everything else, the players will try to game that and front run it. That's a negative and a positive. The technical picture points lower. Resistance is not that far away and with uncertainty on the Iraq front, I can't see us rallying unless something happens and catches all by surprise. Right now that is just too early. So, I still expect to short into strength under the assumption that the technical picture is the one to play here. That's where the day ends. See you tomorrow. 1:39 PM MST - So the rally continues and I'm standing aside and allowing it to run. Time will come to step in but not yet. I was just glancing back at those longs I dumped this morning. You know, one of those curious looks to see if what you did was what you should have done. Yeah, I'm no different than you. I'm always curious but I'm also realistic. When you are uncertain, you step aside. There's no use in second guessing and there clearly is no reason to wait and see and hope. Make your move, live with the results and trade another day. That's how you grow your money pile ... not through wishing and hoping. 10:52 AM MST - So the rally did grow some legs. Again, I don't know how far it can carry and I'll not attempt to play it with long positions. I just took profits on INTC and will be looking to farm shorts out into the rally as it develops ... but not too soon. 10:17 AM MST - There is certainly the ingredients for a snapback rally here. I've pulled all my longs out of discipline and see no reason to second guess that move here. There are competing forces that could result in either a good sized drop or rally and my decision is to sit short with the trend and wait for a tradable extreme to develop, higher or lower. Sometimes you simply have to wait for the opportunity rather than trying to force it. Patience truly is a virtue in this game of wits. Note that I'm almost 80% cash right here. 9:15 AM MST - I'm simply waiting this out. I see no reason to make a move given the current risk/reward play. Staying short. Internals don't say to do anything different here. 8:04 AM MST - This market reminds me of a drunken sailor who doesn't have enough wits about him to know that he's overmatched. Each time it gets slapped to the floor, it pulls itself up to it's knees, hands on to the table and stagger back to it's feet only to get get knocked down again. This morning I cannot tell you if we will rally off this oversold position are simply sink lower. I do know that I don't care to stay long when the trend is definitely against me. I'm not about hope. I'm not like the sailor. I know when to stay on the ground (at least most of the time). For now, I'll let the few short positions I still maintain run a bit if they will and stand aside until we get a bit more clarity. Take a look at the strength in EDMC this morning. Could be a nice short setup again there as it bounces of of CECO's earnings. 7:47 AM MST - I am playing the market very defensively at this point. I know we are oversold. I also know that we have broken a neckline on a H&S pattern. I'd rather be short than long right here and I didn't the enough of a bounce to have the long positions that I put on make any real dough for us. At the same time, there's no reason to hang on to them and hope. When you are uncertain about the prospects, cut your losses, stand aside, regroup, and then come at them again. Wrong or right short term, it's the thing to when you don't have the edge. 7:26 AM MST - As much as I want to be long here, I'm pulling all but one long around the opening bell and staying with a few shorts for now. 6:12 AM MST - Now the speech is out and from all I could tell, it was pretty much in line with what was expected. I don't think it added any clarity to the Iraq situation and although there seemed to be some evidence presented, it was more of an attempt to shift the burden of proof on Iraq. Not trying to say that is right or wrong but rather the tactic was one I've heard before but am surprised that we waited until this late date to use it as the cornerstone to the war drum beat. Anyway, my take is that this does little to change the uncertainty picture. The GDP number is up shortly and the futures are sucking air in front of it. If that holds, it could be an ugly day despite the market being so oversold. That number has the potential to move the markets. I didn't expect a lot more on this bounce but hate to think it was limited to just one day. Can't make any money with one day counter trend rallies! I'll reserve judgment for what to do until that number arrives. Right now I'm leaning to dumping my longs and adding a couple more shorts. I am not one to fight the trend but instead to fight a running battle of surgical strikes against the trend as timing dictates. Be back in a few. 4:12 PM MST - Some days simply don't have enough time. Today was certainly that way. I made a few moves; booked some gains; added and subtracted, but in the end, I'm still balanced going into tonight's speech. It could turn out to be a non-event. My suspicion is that the markets are looking for a catalyst and that when that's the case, somehow something magically appears. I'm starting to bone up on the next set of short positions to initiate. Hopefully I ride a few longs, then hop off at the precise moment needed and ride all the shorts south again. Precise is a stretch. I'd be happy to be in the ballpark. I will say that when I'm trading with an eye towards the market heading the opposite direction of some existing position I hold, I tend to hold those positions on a shorter leash and take profits more quickly. It's hard to cut profits short, but it's all about the bigger game and the larger risk. Right now I'm in the mode of booking trades on longs and allowing the short investments to ride. Soon I'll look to add to the short positions if the market allows. All in time though ... have a good night. 1:55 PM MST - Just holding into the close here. I pulled AMZN a bit earlier, and am going into the speech pretty well spread ... long and short about 50% total, 50% cash. 12:10 PM MST - It's interesting that we see the market gaining strength while it's underlying numbers become less impressive. Volume is low today (absence of sellers now?) and the internals less optimistic than early yet we rise to the highs of the days. Just echoes of uncertainty in my mind. For now, I'll continue to hold steady with the mixed plate of stocks and let the market machinations provide opportunities for us to profit. 10:47 AM MST - General market is treading water until the speech is out. Now that we are positioning for geopolitical events, let's not get to carried away. I've gotten pretty two-sided for a volatility play. As I've said before, it seems likely we could catch a bounce in this general area. Whether we scare the wits out of folks before or simply rally from here, I don't know. All I can do is play the cards as I see them and the odds are that we bounce from this general area. If we stretch further down first, I'll look to add a bit more long exposure. If we rally, I'll look to lift longs and initiated some additional shorts. If we sit and do nothing, I'll have reconsider depending on additional info that is out there. Right now, I expect volatility to come, not for us to sit and do nothing. 9:35 AM MST - The markets have entered a quiet period. I actually thought we could see some volatility in front of the speech, but instead it's quite positioning. I've taken more profits off the table with that bounce in SGDE and just initiated a long position in ARG. Somewhere in here we will get a snapper rally and it will likely be as quick as a turtle bites. I'm trying to keep my long positions for short periods and book the gains when they appear. I should have done that with KDE just as I did with SGDE this morning. My mistake. You have to measure the market in it's own terms. Sometimes you are forced to keep your horizons shorter like now from the long side. Take what the market gives you and be happy it's giving anything away at all. It's all a gift and just like a gift, if you don't accept it when given, it might not be there later. 8:00 AM MST - Market having a hard time deciding what it should do in front of the big speech. I still would not be surprised to see some volatility as a result. Early breadth is good but volume is a little light. If the market doesn't fold early, look for some strengthen as the morning wears on. I'm back to sitting on my hands. 6:25 AM MST - My long/short mix right now is about even after yesterday's flurry of activity with longs making up 25% of the portfolio, shorts roughly 23.5% and the rest cash. Given that I had positioned properly prior to the downdraft, I can now try to play the expected snap back rally without undue risk. This may or may not work, in that, I may or may not have gotten close enough to the bottom before the snapper occurs to take real advantage of it. Because I previously pegged short term support in the areas traded yesterday, this is why I began to move. Once there appeared to be a potential short term bottom in place, I decided to move. The notion that the markets are apparently selling the rumor and will follow that up by buying the news with respect to the Bush speech, and the possibility that the economic reports tomorrow could provide the catalyst, I felt it was necessary to reposition to try and profit by my short run thesis. Note once again that I'm only trading here. I'm just looking for some short term gains on a bounce prior to reloading both barrels for another run down. That's the thought right now. We will now see how it plays out. As for today, the headline news is another possible Fed ease. Whoa Nellie, am I reading that right? Talk about cross currents! Futures were up higher but have eased as the morning moves forward. Durable goods out soon and that will likely shape the opening. I'm expecting volatility over the next few days. If you don't like volatility, then you are in the wrong place if you are in the market. 2:25 PM MST - I started taking some profits today and added a couple more longs to position a little two-sided for an expected short bump back up. The internals were pretty horrible all day and although I didn't get the exact exits I preferred, I did get close enough to start booking some gains. Tomorrow we get some economic data and then there will be some positioning in front of the Bush speech. I don't know what will be the catalyst and whether it comes tomorrow, Wednesday or even as late as Thursday, but it feels like a little snap back rally is getting more likely and I've decided to try and play it for a quick move back up. Having said that, do note that I'm still net short here and will want to short into the snapper if it happens. 12:47 PM MST - I just bought back a big chunk of SGDE again and took some profits a bit ago on FRED. Couple orders in to book some profits on SAH and CPWM if that comes to pass. Not making wholesale changes here but as they sale this market down into possible bounce points, I get more interested in trying to trade it rather than simply holding short. There are also some economic numbers due out tomorrow that could impact us to. 11:47 AM MST - Looks as if this market may be finding some footing here. That would jive with the support areas previously identified. I'm putting a few orders in to take partial profits ... hopeful for another leg down into the bell. Remember, we are in a position of strength here so we take out those positions that have coincident support areas with the general market and we don't press to take profits. In the bigger scheme, I will look to short names a bit higher up again if things work out. 10:16 AM MST - I've been very quite this morning, being patient and allowing these positions to work for us. Sometimes you can simply get too excited and start making trades which do nothing for your bottom line. The early optimism has faded and the internals have started to rot like berries on a tree after the frost hits. I don't see any reason to make a move yet. Just wait it out. The time will come soon for a bounce, but not today I expect. 8:18 AM MST - The raw nerves of this market are becoming exposed as we start seeing volatility in trading. Hard as it is, you have to try and pick your spots. I've put one offer out on JOSB with it's broken chart, but other than that, I'm doing my best to sit still and act rather than react. 6:17 AM MST - This morning we are staring a pretty ugly sell off in the face. Futures went from slightly green late Sunday afternoon to redder and redder overnight. Asia was down, Europe is down about 3% across the board. Geopolitical events are taking center stage. Personally, we are positioned well here and will simply try to determine where to take partial profits on this mini-melt. Again, my thought is that we catch support in the next couple of days at one of the areas I've identified in Weekly Heads Up and on the Support & Resistance page. I'll take out or take partial profits on stocks that have support lines in corresponding areas. I'm also seeing some stocks just starting to break down and those will be the ones I'm shorting into on any strength. Another option is to make a few purchases into this malaise for the bounce. That's a bit more risky and is dependent on how bad the selling gets. All in all, the past 10 days have set us up for a nasty move down. Whether that comes quickly, or pauses and then continues, or bounces then continues is the question in my mind. The market will dictate the action and we simply have to try to ride the bucking horse to the finish line. 2:57 PM MST - The selling today makes me wonder if the beginning of next week is going to be real ugly. I'm confused by the lack of fear this market seems to exhibit when the technical picture is getting worse and worse. Heck, I thought most everyone still trading follows this stuff to some degree by now. The internals got worse as the day wore on. The volume didn't rise to confirm fear. The VXN shows complete unconcern about this debilitating decline. The VIX, on the other hand, did begin to show some fear today ... finally. So, all in all, it looks like more badness is in store both on the sentiment technical picture as well as the market structure. I ended the day exactly as I started it having shorted some YHOO intraday only to take a few pennies and leave. I will look all this over again this weekend as always to try and game the week to come. See you then. 1:55 PM MST - Holding short into the close in case you are wondering. 1:12 PM MST - Too busy today to update the boards but I'm looking to possibly cover a few shorts into this malaise and play a couple bounce longs. Nothing big, but if they come in enough, I'll do just that. We are starting to see some good pace to the selling now, right on schedule. 12:25 PM MST - I'm starting to put some orders out to book some gains if they come in towards the close. As you know, I like to book some gains when the emotion gets going and they are in my favor. That's what I'm after here. Making and booking a few pennies hopefully. 11:59 AM MST - I'm seeing the indexes try to lift here but frankly, I think it's futile today. I could be wrong, but that break in the H&S looms overhead now so don't expect a big move if they try to move this higher. I've started putting a few buy orders out, nothing big but a few nibbles. I'm not in a hurry to buy though, let that be clear. 11:06 AM MST - Everything pretty much going according to script here. AMZN giving an intraday reversal. How sweet is that. As you know, I shorted YHOO on AMZN strength this morning thinking that was a safer way to play the possible breakdown. I'm not buying yet, but I am starting to think about it a bit. Did put an order in for some SGDE if it breaks down ugly. This afternoon might be the time to step up to the plate and put a little long exposure on. Nothing big but a little something. I'll reserve judgment until I have to make a decision. Right now it just looks plain ugly and I suspect it's going to get a bit worse as we head towards the closing bell. 10:22 AM MST - Well, the slow bleed is turning into a bit of a gusher. Although fear levels are rising, I don't see the crescendo yet. I'm holding short and waiting here. Volume picking up a bit and it's clear that we have an absence of buyers out there. The neckline has been pierced now and we could see a very ugly finish as a result. Only sector really exhibiting strength today is our old friend;; precious metals. 9:06 AM MST - The breadth numbers have not improved at all. Lately the middle of the day has been rather quite and a slow continuation of whatever intraday trend that has been in place. I suspect today will be more of the same. I shorted some YHOO a bit ago and am now seeing AMZN give us a bit of an intraday reversal sign. Maybe that little puppy comes home after all. Standing pat for now as I think there's a good chance of some more problems with the market later today. It's starting to appear as if a bit of fear is surfacing although volume is not supporting that yet. 8:38 AM MST - All early indications is that not only is it a bad day, it stands to get worse. I can't think of any reason for this selling to abate as we have made lower lows not on the DJIA and the SPX. If you remember back to the charts I've shown before, we are touching the neckline here and it appears we have a good chance to break that neckline today or Monday. Typically, you get a bit of stabilization for a little while after the neckline break, and then head further in the direction of that break. As a result, I'm sitting tight with my shorts and am looking to shed part or all of the one long. I do not expect this market to lift meaningfully short term. 8:04 AM MST - Other than a few select issues, market is getting pretty beat up this morning. There wasn't any kind of lift for me to short. I'm caught in the crossfire where with AMZN off the heels of it's report. Will have to take a loss there it appears. Looking to unload the KDE also to protect. I don't see today getting any better as the backdrop of all the uncertainties and reports from last night are enough to give many a reason to sell. 6:50 AM MST - Futures about break even. Not a lot happened from the earnings overnight although AMZN is trading up on it's news. Have to watch that one to see if it can make a higher high. If so, I'm on the wrong side of the ledger and will need to eat the loss somewhere along the line. I think we could see an attempt to rush the market higher this morning but it should fail. I'll look to add a couple shorts if it does so. Not enough good news around and way to many uncertainties coming next week to make anyone want to get too long here. 3::55 PM MST - Not much of a wrap to offer today as I was a bit scattered today anyway. I don't see much excitement in after hours earnings. AMZN, KLAC, etc., all are pretty quiet ... even with KLAC lowering guidance. Interesting! At this point you have to start to consider the UN report on Monday and how will the players want to position in front of that. No real earnings or economic reports tomorrow of substance so I think the focus will shift. Metals were up today on the back of that, and right now I would think that most players will not want to get very long in front of that news. So, out of the gate tomorrow, we could get some follow through buying but I would be looking for a pullback into the remainder of the day. Just shooting from the hip here. See you tomorrow. 12::40 PM MST - It's so easy to overreact to news and feel that you have to play every nuance the market provides. That's really a mistake though. The key thing is to sniff out a trend and set yourself up to profit from it if it continues at key points. If you can look ahead and project what may happen if things fall into play you can develop a thesis for what may happen. Then you can test and modify that thesis on a daily basis given the news flow and primary the chart reactions. I say this only in that the high percentage play right now is not to abandon the short side but to try and weather a rise and then add shorts again. The muted upside reaction today seems to validate that thought although I'm not so naive to suggest that I've won before the race is finished. Still holding all positions and will now hold into the close. I let 1/2 the AMZN short go towards the highs today as I'd rather eat the $200 loss and reduce risk into earnings instead of flipping the coin and going for a triple. Just playing it close to the vest which you've become accustomed to me doing. 11:40 AM MST - I've been watching gold stocks and wondering would they every make higher highs with gold making highs almost daily. Well, today they look to be doing that. That move continues to look tired but I wouldn't short into it ... yet. I've considered that, you can be sure, but no, I'm not shorting. Just waiting until the time is right to short and it isn't now. On the overall market, now that I've had enough time to absorb today's action, it sure looks confused. Wants to rally but is to worried to do so. Very mixed up. I'm staying mostly short as a result. 11:25 AM MST - Ok, as I poke around, I still think that the market will try to rally a bit off these December lows. I don't think it will hold and am not closing my shorts as a result. I tried to put some longs on but only added one. I'll not chase as I don't think the payoff is there. Instead, I'll concentrate on where to short again next. 11:05 AM MST - Just climbing back in the seat here to see that the market's ability to follow through so far has been limited. We have a volume surge on the NYSE and average on the NASDAQ. Higher volume on lower prices is a continuation of the story it seems. Average volume on rising prices is the other half. Tell me what's wrong with this picture. I got a fill on KDE as it sold off this morning and that's about it. I see my portfolio is mixed. There's is a reasonably possibility that this attempted rally could gain a bit of traction but as we see, there are so many landmines that I would not expect it to go far. I'll start looking around to understand my next moves. 6:25 AM MST - Finally the market got a batch of high profile earnings and some guidance that didn't disappoint and the futures finally have reason to rally. The after the bell crowd took those stocks up handily and this morning? I've some personal business to tend to this morning that we keep me out of the trading turret. I expect to be back in around 11:00 AM MST. Until then, I plan to simply allow the stocks in the portfolio (they are all shorts right now other than the KDE add yesterday) to ride the storm in this morning rally and evaluate how the market handles things once I get back in. I suspect that this rally, if it unfolds will ultimately fail and we will head lower again. There is certainly reason for a snap back rally here. I talked of it starting Tuesday, and again yesterday, but the catalyst didn't present itself. Whether this opening gap can hold and gather steam is yet to be seen but the odds favor it. As a result of this selling of late, some stocks have been brought down to a level where there are some purchases that can be made. I'll not chase then, but I have put orders in for some more KDE, SGDE, some RINO, ARG, and G. The idea is to use bounces in these stocks to offset losses that will occur in the shorts without pulling the shorts. All of these stocks should catch bounces rather soon or go sideways whether the market moves up strongly or not. These are all stocks that show either good charts or chart patterns that are playable here. Now that the indexes are back down near the December lows, you can understand that some dip buyers can/will turn out. I'm not enamored by the type of support here and suspect it will fail after a bit of a bounce, but at the same time I understand how the crowd works and I respect their moves as it is by studying them and their actions that we become better traders. Note, the LEI comes out 30 minutes after the bell and could sour the mood or add fuel to the fire. The only economic report this week of substance. 2:55 PM MST - Another day, another dollar as they say. I ended up putting yet another short onto the stack I already have. I went after one of the health care concerns I've talked of recently in LPNT. Weak rise into resistance is a risk/reward hard to pass on. The markets made a try today to pull out of this funk, but the EK and JPM earnings along with the MOT outlook didn't allow even a day reprieve. Volume picked up today and the internals stayed and then grew even more negative into the close. The attempted snapback rally failed and I suspect tomorrow could get a bit ugly as a result cause if they can't take them up, they will take them down. Until this boat has too many folks on one side, it won't flip over and head the other way. Right now we are not to that flipping stage yet. Until we begin to reach that state, you'll see me on the short end of the boat. See you tomorrow. 12:58 PM MST - The attempt to push higher failed, so lower we go. I doubt I'll do anything into the close given the current environment. Just holding this mess of shorts and the one added long. 12:10 PM MST - Still not much happening. It's interesting to see that volume on the NYSE is heavier on average than that of the NASDAQ while the former is down and the latter up. Just suggests more weakness in my view. I've been milling around and waiting. Sometimes there's a lot to do, sometimes very little. As I continually say, patience is key though as doing something just to be doing is a recipe for disaster. My take is the markets should see an attempt to push higher into the close given the activity so far. I just don't think there's a lot there though and will do nothing about it other than a possible short or two into strength if it materializes. 10:38 AM MST - The middle of the day continues to be a quite time. I'm seeing a little speculative money attempting to buy in here but sure seems early to me. I recognize that we are at support here and that we have seen pretty good selling for a decent spell, but I would remind everyone that the support zone is what I would term of the bad variety, that just being oversold doesn't guarantee a rally, and there are enough uncertainties looming just overhead that I can't see anything more than a blip taking place at this point. Just so you know, I'm scouring my charts and trading sheets for more shorting opportunities. 9:46 AM MST - Looks to me that too many folks are looking for one of those snapback rallies and so ... we don't get it. The market has a funny way of not doing what the majority desires. The negativity surrounding earnings and the backdrop of war seems to much for this market to overcome short term. As such, the financials are continuing to lead us lower here while the rest of the market hangs on. 8:32 AM MST - Well, maybe the market can lift due to oversold. At least it's trying. I wouldn't put a lot of weight into it holding though. Be careful if you choose to chase. 8:02 AM MST - The early story is the financials and consumer cyclicals are weak again while technology is holding. Same pattern as yesterday. I don't expect a rush of buyers so I still don't see a good snapback rally here ... at least not yet. Internals are negative across the board and volume is even lighter. Lots of folks straddling the fence it appears. We won't get an end to this move until the volume picks up and a few more folks begin to panic. Took my profits in PETM this morning. Couple orders out on SGDE and KDE to purchase. I'm being quite patient on purchases although I have zero longs in my portfolio right now. No big hurry in my mind. Only when it makes sense. 6:19 AM MST - Futures were flat in the aftermarket last night as MOT gave a good accounting on earnings but guidance looked light again. So far, the markets have sold off completely as a result of the inability or unwillingness of companies to guide earnings higher. That doesn't look to change anytime soon and so the depressing selling continues. This morning finds Europe under siege and our futures reflecting that ... down by a fair pittance. As I've remarked of late, there's a little snapback rally brewing in here somewhere but timing it and expecting it to give anything more than a token appearance keeps me on the sidelines with respect to trying to play it. If we stretch far enough before it happens, then maybe, but not quite yet. Probably, at this point, what will make sense if I try to play it is to simply hedge long with an index play while keeping the shorts on the table. More about that later. For now, let's enjoy this slide and continue to consider where to take partial profits. 3:00 PM MST - Internals were negative all day and ended that way. Volume did not pick up, in fact it dipped a bit. It was pretty much a slide from beginning to end. My portfolio is exhibiting that life to it now after struggling the first couple weeks of the year. Not that I take glee in others misfortunes, I recognize that each time I short something, someone is buying it. Odds are, the poor fellow buying isn't covering a short either. The market is getting a bit stretched now in the short term but that never guarantees a spike in the other direction. It simply increases the likelihood of such a spike at some point in the future. To be quite honest, that could still be as much as a few days away (at least a spike of any consequence). As I said earlier today, I'm not looking to play a snap back rally but instead to use it to short into further. At this juncture that looks to be the money move. Now if this downdraft continues long enough without the snapback, then I'll change my tune. You simply plan your trades as a function of time and price. See you tomorrow. 1:00 PM MST - Market continues the slow melt. I've continue to pick at shorts overall thinking the retail sector may see the next shoe drop. Today is looking that way but one day does not make a market so I'll reserve judgment a bit longer. Doubt I'll do much more if anything into the close. 12:19 PM MST - The most striking feature of today's trading is that you have a rolling weakness from sector to sector. Just as when a market goes up and is on a trend that carries you witness one sector rise one day, another the next; bear markets do the same when they are trending. Today you see sector weakness that otherwise maintained last week when this all started. It kind of builds upon itself. I don't see a lot of hope in a rally into this afternoon. Maybe tomorrow. Too much pulling against the markets here in my estimation. I'm trying to add some CPWM short currently. 10:49 AM MST - We've entered the midmorning doldrums now. I've done very little other than to continue scouring the retail sector for additional shorting opportunities. I've found a couple more and will look to enter them later today or tomorrow. I've not had a chance to update the boards, but take a look at CPWM, PBY, BBI, GYMB. These are all stocks that have troubled charts and that I've not revisited in a while. Might be time to pay attention to them again. We could see an attempt at a rally later today/tomorrow. You know I'm still pessimistic here and will look to add shorts. I don't see a reason to attempt to catch the rally if it hits. I don't expect it to go far. 9:38 AM MST - Now that we are settling into the day, I see continued weakness that persists across the boards. Internals are bad and there was little volume on that initial push higher. There are a few longs that I'm interested in but frankly I think it's a wee bit early so I'm waiting to initiate them. Just sitting on my shorts and enjoying the continued melt. 8:48 AM MST - I'm starting to see some weakness in the consumer cyclicals. I've been thinking that this could happen at any time and that's why I've been shorting that sector a bit. Overall, we are due for a bounce somewhere but I'll not try to play it but will instead use it to short a bit more. Did put on one more short this morning in ERTS. Broken chart there also. Overall, the pessimists are winning the battle right now and I wouldn't stand in their way. 8:16 AM MST - The early internals are reasonably negative. I've been able to cover the short on SGDE from Friday and will look to re-enter long now on the next pull back. If it rises much more, I'll short again. HDI came in better than expected and plunged. Overall, a good start to the portfolio, but no ability to add to the shorts. Look for rallies to be sold for now. Play the trend which is down. 6:25 AM MST - Kind of hard to get back to work after a nice three day weekend but the market beckons. No time to rest. Asia was up, Europe is mostly down and our futures have flat lined after being up last evening. The next three days sees roughly half the companies reporting earnings and giving guidance. The monkey is the guidance. Without solid guidance, this market has already shown it has problems. I suspect that they ability to give guidance is still up in the air and therefore I expect further problems in the market. On the boards, I'm starting to see some signs of a few selected buys but nothing to rush into. I still have far more shorts showing on my charts than anything else, and I'll still concentrate on picking up a few more of those in select spots. As you can tell, I'm not hopeful. My portfolio is entirely short as I speak. 4:25 PM MST - A fitting end to an ugly week as the markets close near their lows and with a serious loss for the week. With a three day weekend in front of the markets, with so much negativity being spread around, with economic numbers that gave no relief, the backdrop of war, earnings that met expectations but couldn't project them, etc., I guess it's what makes sense. I end this week having sold off every last long I own in my trading accounts. Every one of them. I don't recall a time when I ended the week without at least one long. I guess that underscores my pessimism on the ability of this market to lift and we are only end to the first week of earnings reports. I will spend some time considering what was, is and might be for the coming week and you'll hear about it here first sometime later tonight in the Weekly Heads Up. Until then, have a great weekend. Enjoy the family and the time you have with whatever you choose to do as you can never get today back tomorrow. 1:27 PM MST - A couple traders over on the Trading With TAT mailing list ask me when to use market orders versus not as they see me using them sometimes through that communication medium. My feeling on market orders is pretty simple. If there is enough volume to support them (in other words the stock is reasonably actively traded), then you should use market orders to get out or in a stock when you want guaranteed immediacy. Of course the problem is that you can't guarantee your price, but if the market you are buying or selling into is actively traded and your broker routes you order straight through without playing with it first, then you will get a fill very close to the Level II quotes you are seeing at the time of the order. Sometimes on listed issues, this isn't as good ... at least that is my experience. Market trying to raise it's head here but it sure looks like the players are using mallets to keep it down. Not much hope for a lift of any size today. 12:49 PM MST - A little over an hour to go and the market has shown no real signs of life. In keeping with the inability to show increased temperament, the market seemingly looks resigned to slowly melt away. No real increase in fear or anything else for that matter. I've turned to day trade a short on SGDE ... just looking for a quick hitter if possible. Tight stops there. And I will take on that MOVI short if can rally a bit more. All in all, there is little sign of life outside the safety stocks excluding precious metals. I see that those stocks have extended their declines since I first talked about them this morning. I'm thinking that they will be a good buy somewhere down the road again so we will keep our eye on them. Never overextend your stay ... cause in trading, one niters are not a bad thing. 11:54 AM MST - So far, I've done little after the opening trade and subsequent attempts. The market is doing just about what I want it to do here so I'll shut up. There's no lift to speak of and I think the selling will only intensify a bit more as the last couple hours kick in. Look for some short covering/profit taking into the close, but probably not a lot. 10:02 AM MST - It's times like these that I go back to the index charts and start asking myself where support is. I also start looking at the patterns that I thought could play out and wonder about the odds of those scenarios occurring and what they project as a result. Let's take each of these thoughts one at a time. Support/Resistance zones are always one of the primary keys to trading. You can have all the fancy indicators that you want, but if you can read charts for support and resistance, then you are ahead of the curve. I've just updated the zones on the indexes again for my and your benefit. Here they are. The one pattern that I have talked about for 3 weeks now is the potential H&S pattern in the DJIA. The same pattern applies to the SOX, the SPX, the NASDAQ, the NDX. Although the SOX and the DJIA have the more picture perfect patterns, they all still fit the pattern. As long as the right shoulder does not make a higher high, it's still a H&S type pattern as Edwards and Magee point out. So, if the patterns are indeed finally playing out, what are the projections? The classic projection is to take the distance between the top of the head and the neckline and the subtract that from the neckline. All of these measuring rules I have adapted a bit to take the percentage rather than the absolute. You do the math either way. In both cases, if in fact these patterns are indeed confirmed in the coming days, then there's a decent sized move still to come ... down. Still leaning short. 9:03 AM MST - Internals deteriorating further, now almost 3:1 negative on both the NYSE and NASDAQ. Volume still heavier than recent, but not that much, especially considering options expirations. Take a look at MOVI for a possible short as it climbs back towards resistance. I see that the financials, though better than most sectors, have gone red again. Looks like a slow bleed to continue today. 8:44 AM MST - Another note is that will the bludgeoning going on in technology, I see a lift in the safe areas again ... drug and medicals. Look at our old friend UNH for example. 8:42 AM MST - As I scan for opportunities, I'm struck that gold stocks are not perking up here. Gold is trading at it's recent highs yet the stocks are not. One could play a short into this area at this point it appears. Not sure that I will, but it sure looks like that, for the short term, these stocks are out of gas. 8:30 AM MST - I'm seeing the financials gain some footing here and if that holds, there will be no rout taking place. That doesn't change my view on the negativity, but just speaks to the action today. I ended up booking the gains in SGDE this morning and am now looking at AGL short although it may or may not take. Other than that, I'm satisfied to let these shorts have a little room to work over the coming week. Internals 2:1 negative with volume a bit heavier. It's attempt to confirm the downtrend now. 7:57 AM MST - To day trade this market short today, you had to take it short straight out of the gate as it hasn't lifted a bit yet. Still time for a bit of a lift over the next half hour. Still watching to see if an opportunity arises but not that hopeful. I believe that the attitude shift is already taking place and that rallies are going to be sold quickly now. 6:19 AM MST - The downgrades are everywhere this morning and the red ink is already bleeding onto my screen. The inability to forecast a bright future is quickly squeezing all the air out of the bag here. With geopolitical uncertainties, earnings forecasts that don't cut the mustard, a technical picture that is deteriorating fast, and a three day weekend, today could get quite ugly. Although positioned correctly, today may be the day that we could attempt to press a bit for a day trade. I've a little work to do prior to the opening here to see if so and of course, a lot depends on how the market trades as it may not permit entry points with reasonable risk. If you haven't figured it out by now, I like home runs but I seldom swing for the fences. I'm usually satisfied to hit a bunch of singles and a couple doubles to grind out performance. 2:59 PM MST - The earnings are out with IBM and MSFT. IBM looked to lift things but then MSFT disappointed, both on revenue and outlook. They did sugarcoat things with a split and a dividend declaration, but the early verdict is who cares. Of course it's early and we'll have to wait and see what tomorrow looks like as first impressions can be misleading, but for now, it doesn't appear that this is going to help matters. Good night. 1:36 PM MST - Heading down the stretch here and I continue to nibble at nice short setups. SAH is the latest one. Don't expect much, if any lift into the close now. I'll end up sitting out the IBM play. 12:45 PM MST - The latest attempt to move the market up a bit looks to be failing so I would expect that we will drift down into the close at this point. As you all well know, the two big reports are due out tonight. So far, most earnings pronouncements have been of the type, "We had a great quarter BUT we are not so sure about the coming one". That's been the problem so far. MSFT is always cautious going forward so I don't actually expect them to guide higher. Not good. IBM is a wildcard. That's why I was anxious to book my gains and stand aside. So, tomorrow, we will probably be moved by these two names and then the sentiment report a wee bit into the trading day. And of course, it's Friday and with today's worries about war I wonder just how many folks will be looking for an exit for the time being. Just thinking out loud as always. Guess I'm kind of talking myself into maintaining my short leaning. 11:45 AM MST - Exogenous events look to be driving the market now, namely Iraq and illegal weapons being found. Gold is rallying as a result of that and the dollar weakness. Equities, as you see, are trading down. I've tried to stand back and let the portfolio work for me as we may indeed have positioned correctly at this point. Other than biotech, drugs and a few consumer cyclicals I happen to be shorting, the market is slowly giving it up here. Boy, if those two big reports tonight don't lift the spirits, this could get ugly in a hurry. 11:11 AM MST - So far I'm batting 100% in taking profits too early today. Took some SGDE off to watch it rally and booked gains in IBM to watch it fall another dollar. Better back away from the keyboard. My patience definitely is off kilter today. It does bring home a point though, and that is, regardless of what you do, don't look back and kick yourself if wrong, or if you take profits too early, or whatever. If you have a sound strategy and manage your portfolio with a strategy that fits you, you can make money even with mistakes as it's a misnomer to think you will not make mistakes as they are inevitable in this game. Market really starting to struggle now and the drift down begins again. With this drift taking place the last two days, we could get a little bounce out of those reports tonight as they selling in front of them is occurring, instead of buying. 10:30 AM MST - I'm back to that patience thing again ... watching and waiting. I had a flurry of activity this morning and now am in stand still. Have been itching to take those IBM profits to the bank and now feel like I will sometime today, but still playing it by ear. No need to take the risk into earnings if I can ring the register. Market really struggling to do anything here. Just like all the pundits said before that the if we held and consolidated, we could go higher; well, if we hold now and consolidate, we can lower ... or something to that effect. There's really not much to convey here other than that if you control your exposure and your risk, you can pretty much trade any way you want. So much of trading is psychology and managing your portfolio properly. 9:29 AM MST - If it were not for biotech getting a technical breakout today, it would be quite ugly already. I will be most interested to see if those technical chasers bag their quick money or stay with it through the day. The real resistance on the BBH is up around 98 or so and given that, there's more gains to be had there assuming the target is hit. Volume is about average and we are not witnessing increased nervousness even as the market struggles here. That suggests that we could just bounce around or slowly trend down. I'm eyeing my IBM and trying to decide if I take quick profits or not. For now, I'll give it a bit more room to fall. 8:49 AM MST - My screen is no longer green as the red invades. There are some big reports after the bell, but so far, any company that has climbed into earnings has been slapped, those that have fallen previously are not treated so bad. I continue to be pessimistic as my portfolio suggests. Volume is a bit light and internals are on the positive side still. I'm keeping my eyes out but I have plenty of exposure and am playing it by ear now. As you know, this is the time of the year where one must dance with the elephants. Its an interesting dance as the primary concern is not to get stepped on. 8:00 AM MST - Biotech is the story early as it's all revved up. I shorted a little FRED near the opening and just took some of the SGDE off. I think this strength is to be shorted, if anything, not bought. Like candy, it looks good until it become part of the landscape (your waistline). 6:24 AM MST - Up late last night working so the eyes are a bit cloudy this morning. The futures are negative but not by as much as when I went to bed, but then again, the differences is not that great either. Pretty flat. Last night we saw YHOO and QLGC get hit pretty hard on earnings that exceeded but outlook that mimicked my eye condition. They got their hair clipped a bit in the after hours trading and a quick check this morning shows that the hair has yet to grow back. This morning there are more earnings before the bell and then again after with some economic interests sprinkled in. Two tech heavyweights will give their spill on the business at hand and I'm short one of the names. As I have maintained here for a good week or so, the earnings going forward will probably still be murky and the Street will most likely not accept that view. What we do today will be a function of the uncertainty, the hope and the fear on both sides. My trading, if any, will be a result of those emotions which it typically is. 2:40 PM MST - There was a attempt to take them higher in that last hour as a nice little intraday saucer bottom was being formed, but that final 30 minutes was all about closing near the lows. After hours I see YHOO being taken to task after their report. Should help my AMZN short. Same story on QLGC as they are selling off after hours also. Today marked the beginning of true earnings and so far the Street is not treating the reports kindly. With the runs from the October lows, the Street is clearly asking for more. So far, what is being offered up is not being accepted as enough. There are still more earnings to come, and things can chance, but the first full day of serious earnings is not helping the market to move higher. I'm not ready to call this market ready to roll, but after testing my metal for a couple weeks, it's beginning to look as if the short call may still work. Leaning short and calling it a night. See you tomorrow. 12:56 PM MST - The key things to take away from today's market action are:
A couple heads up, EDMC is doing an intraday reversal today. Could jump a couple points back into resistance. Also, PETM has clearly broken down at this point. 12:01 PM MST - As the day wears on, the internals are the basically the same and the volume looks to be about average with recent days. So, no wholesale selling yet, just an orderly decline. As I said early, lots of news to come still with some major names out tonight and certainly tomorrow. I do expect a bit more selling into the close though given what I have seen so far. 10:30 AM MST - The market has broken some key short term support levels and it appears today is a goner as far as a real rally. Things should get a bit dormant for a while now until another push the last couple hours further to the downside. I'm just sitting tight and eyeing a couple shorts but have not even put an order in. 9:22 AM MST - Markets have sold right down to short term support. I don't expect the bullish elements to give up this easy for a look for some buying in here and a lessening of the selling. I do think they fail today as all indicators point that way. If you are wondering, what's more important, current data or a glimpse of the future, then today's selling is telling you the answer. The market is a reflection of the future. Friday's employment data was discounted because it was a reflection of the past. Today the focus is on a number of companies talking down the future. 8:37 AM MST - We are definitely posting heavier volume with a good set of negative breadth. My gut says to press but my head says to cool it. I'm still in negative standings with my current positions and it's too early to get too excited here. I would expect the market to try and lift a bit into the uncertainty but man there is a lot of negatives out there and if the market can climb this wall of worry I indeed will get worried. 8:09 AM MST - Volume picking up a bit on the NASDAQ and that could finally be a good sign for the bearish among us. I'm seeing very little lift anywhere as of yet. As is the nature of a zagger, you stake out a position and gradually add to it typically going against the majority and then you wait for the market to come back to your point of view. It's too early to suggest or to even think that I have succeed in this task at hand, but certainly today looks a heck of a lot better than yesterday. I note that PMCS is nudging up closer to it's down trend line here. Making me a bit more interested. They report next week and there seems to be some favor being paid to telecom chip stocks still with CSCO and others continuing to nudge higher. May be worth a look if you are so inclined. 7:45 AM MST - The early direction is to the downside a bit. The SOX is starting to bleed a bit as the INTC mystic wears off. I'm not pressing at all. There are a lot of reports to come still. That PPI number was quite interesting this morning. Wondering if we will now begin to hear more about deflation again. That talks has faded as of late. Remember, the argument with deflation is that if you can't raise prices you have to contract your earnings. Most companies, if you notice, are maintaining earnings by contracting, not expanding. 6:55 AM MST - The key indexes to watch today are the SOX and the BKX. If both can gain strength, we will have some upside juice. If the BKX fails at 800 again and the SOX turns down, this market will start to roll. Monitor those indexes over the next few days to get a good feel for what's happening underneath the headline numbers. 6:35 AM MST - They came and the went. INTC apparently talked up the current quarter and talked down the next. Which is more important? I would suggest that the majority of the companies are going to have a hard time talking up the next quarter which raises the question of can this market rally into that news. Look, I never underestimate the power of this market to do what it wants to do. In the end, its the collective thoughts of millions that move it and herd instinct can kill you. So, we will give the market a chance today and this week, to tell us what it thinks. The give and take that was INTC last night probably ends up not being enough to give complete direction to this market. We find the futures mixed this morning and struggling for direction. Asia was mostly up and Europe started that way but they are now down a good 1% or so across the board. The most unnerving part of this market from a short sellers perspective is the inability for the market to go down on bad news. Clearly the market desires to go. The question is, can it? I still submit to you that the odds are against a new weekly high in this market. Until it either does that or appears to be headed for that, I'll have to remain negative. In the meantime, I've got to start searching for more long setups in case I'm wrong. 2:50 PM MST - The INTC news has been and continues to hit the tape and the stock and especially the corollary stocks of KLAC and AMAT or trading down. I'm not getting as much traction out of this as desired yet, but I don't think the call will go that well and I suspect guidance is going to be hard to swallow. We will see. For the day, we got a bit shorter and took those precious metals off early. So far that trade is looking good, but you know how it is ... it's like the weather in Colorado ... stick around for a day and it will change. I may check in a bit later tonight after the dust settles. See you then. 12:43 PM MST - I've not bother to post much today as my inactivity level is high. It's really all about waiting right now. In a couple hours we will know what the verdict is but until then .... I see Kmart announces some huge job cuts. Looks like the market was surprised by the size. Last time I check they were in bankruptcy so I'm not sure why it's such a big deal now. That's how industry's consolidate. Some merge, some are taken over, some are simply wiped out. 10:14 AM MST - Market attempting to push a bit higher as I write. Still looking for the cracks but they don't appear. A couple folks wrote about the trade out of metals this morning and I have to say that the sell of PAAS near the highs today when it is now down 7+% looks pretty clairvoyant. I can only say that sometimes you have to be lucky as well as good. Elsewhere I can't feel quite as good as I've been nursing along short positions for a week now with less than stellar results .... and I'm still waiting. A lot of trading is about waiting as I've said many times before. Today's just the latest example. 9:00 AM MST - I'm very much in the wait and see mode. I've got a couple orders out on KDE and ICTG (for those shares that did not fill), but I'm willing to wait on the big horse's earnings after the bell today. I don't think there is much edge to trade the tight pattern we will probably see all day today. 7:57 AM MST - Very much like yesterday where we are seeing buying in technology again in front of the INTC report tonight. Unlike yesterday, the boards are red early though and the pace of activity looks light early. I've personally took my profits finally on precious metals. May be doing so too early but I've got big gains there and am booking them here. I'm also getting some nibbles on my ICTG short offer. Look for the market to waffle around today as player position for the big report tonight. 6:30 AM MST - As the morning wears on here, the futures have bounced around quite a bit. They were up, then came back in some were heading back up again and now are settling back in. The overseas markets have generally made gains overnight and that is influencing the pre-opening action. The latest news breaking is about illegally smuggled weapons found in Iraq. Don't know anything more than that but I see futures coming in as a result and precious metals turning to even after being down a few minutes earlier. With all the cross currents and unknowns, it's easy to see this market being whippy today as emotions will drive it most likely. So, today would not be a day for tight stops unless you are looking for a way out. As you all know, the fundamental events this week are primarily earnings but also economic news. My take on the weekly update was that we have more risk to the downside than up on these fronts and I have definitely positioned that way. Am considering pulling my precious metals stocks today as I am wanting to book those gains somewhere in here. There is conflicting data points about whether there is more left in this move or not. When you don't know, fall back and ask yourself, would you make a trade in the same direction at today's prices. That's always a wake up call. 5:15 PM MST - As most of you have probably surmised by now, the daily wrap up is usually delayed on Monday's due to meeting marathons I participate in the afternoons. I've looked over today's action and it pretty much ended as it started, kind of a reverse of Friday in that this time we started strong and pulled back rather than a pullback and strong finish. Internals ended up almost perfectly flat with a little more down volume in NASDAQ at the close than up The biggest event today was the fade in the semis as they were quite green early and ended red. All the players are looking for the same thing, so tomorrow night will be interesting as INTC gets things kicked off. As for me and my portfolio, you know where I stand. Until I see reason to change, I'll maintain my negativity and continue to lean short. 1:21 PM MST - Not a lot of time left until the close. Market looking pretty flat still. You could argue this as bullish in that the recent gains have held. If there is one thing that does worry me of recent action, this is it. Making a leg up and then holding on to it, is the sign of a market wanting to go higher. It doesn't always succeed as nothing is for sure, but it's something you tuck in the back of your kepi and keep for reminders on a rainy day. My thought that IBM would report today was wrong as the site I was looking at evidently had bad data. Seems like the first biggie is INTC tomorrow. So much for the better as I think they will struggle to meet numbers and I can't see how they can honestly talk up the future from here. Of course, they are one of the more problematic of companies as they always talk up things ... good or bad. I'll most likely do nothing more into the close. I see FNM coming close to my strike prices. That's probably my next short to take. Maybe tomorrow. 12:18 PM MST - I've not said much today as the market hasn't done much. I continue to monitor and wait. I've staked out enough risk at these levels and am willing to wait and watch and then determine the next steps. I've noticed that oil heads up as does precious metals while the dollar comes in more. Can't see how that is supportive of higher prices. Guess that earnings hope is stronger than the negatives today. 9:56 AM MST - My pessimism on this market continues. I'm getting a little traction here, losing a bit there in terms of my portfolio but I'm willing to wait this out. I have serious doubts that we can rally on forward looking statements when they start coming out. Additionally we have lots of uncertainty elsewhere and and overbought market at resistance. All of this adds up to caution at best, short selling if you care. The internals have about evened out on both volume AD and issues. Seems like everyone is stuck either waiting or slightly repositioning. 8:35 AM MST - Despite continued positive internals, indexes have pretty much gone red. I added a little more short in HDI but otherwise am continuing to watch and wait. I've enough short even though there are compelling shorts to be had. Look on the boards if you are looking for some. In the face of earnings and lots of other uncertainties, with resistance at these levels, it's difficult to see how we push higher right here. Always possible but hard to rationalize. 7:55 AM MST - The opening fade did not take us negative so I would expect a second push up here to try and fold some short positions. They are definitely testing the shorts metal this morning and once the earnings starting hitting we should see some tell tale signs about which direction this market really is heading short term. Volume light to start but good internals. 6:40 AM MST - As I looked through charts over the weekend, I continue to see very few charts that I want to buy and so many I would want to short here. I just can't get bullish until that scenario changes. Honestly, I cut off the short list at stocks that are within 6% of my target entry price because that list is almost 40 stocks. If I were to make the list include those within 10% which is my usual cut off, then I would have had another 20 stocks to add. On the long side, I have a total of 8 stocks that are within 10% of my strike price. Now there will come a time where the majority of the short positions roll in to long positions ... at the start of the next major bull run I suspect, but for now, I continue to be pessimistic until I see a noticeable turnaround in this key personal bottoms up type statistic. As for the markets, Asia showed promise early last night and the futures were up on that. Europe has continued that strength and our futures are hopping as a result. I would be leery of buying this open. With all the earnings to hit this week, seems a bit reckless. If anything, I would fade it. What really matters this week is earnings and whether projections/outlook has cleared enough for CEOs to project better earnings to come. Until that can happen pretty much across the board, then I wouldn't expect a sustainable rally of significant proportions to occur. 3:06 PM MST - Well, the final numbers are in and from the bullish perspective, you have to be impressed. Bad jobs numbers wasn't enough to pull this market down. That really sets the tone for next week as now we have a market that refuses to fall on bad news. Makes me a bit nervous to be short quite frankly. I'll have to have a heart to heart with myself this weekend and decide what I really think. We will get enough earnings next week to decide which way this market rolls. I've not yet looked to see the ordering of which reports come when and that's something I'll check over the weekend. Seems the market is poised to squeeze the shorts here if the right circumstances play out. I don't like that and will need to assess the risk. On the other hand, there are still lots of red flags out there and it really seems like a matter of time before she falls. If I didn't have those precious metals in hand here, my portfolio would not be hanging so well. So now the question is one of timing again ... that one variable that's hard as heck to get your arms around. I'll be considering that again this weekend as we put out the next installment of the Weekend Heads Up column as well as Naked Trades. 11:51 AM MST - Seems like whoever jammed this market higher earlier either ran out of bullets or it was all short covering as we now drift lower everywhere but biotech on my boards. I should take a minute to broadcast a reader and good friend of mines question from this morning as I think it serves the entire audience. His question was, why did I short IBM this morning rather than JCOM because from my Raw Potential pages, JCOM was the better short. The answer is twofold. The main thing is that IBM was trading much higher than the entry price shown on my trade sheets. If you plug in the new numbers, as are now shown in the existing portfolio, you can see that they are roughly equal in trade value. Since I don't update the trade sheets intraday and sometimes not even overnight as was the case last night, that's what can happen as prices fluctuate around. The second reason is that when I tried to short JCOM a day or so ago, I couldn't borrow any shares. If you can't borrow shares that says that most likely everyone and their mother has already borrowed and thus the risk is higher as a short squeeze is more flammable. Doesn't necessarily stop me from trying but it is something to consider as the risk increases. Market continues to struggle here midday. Now the close becomes even more important for both sides. A glance at internals shows a much more mixed picture than earlier. 10:21 AM MST - Market has settled down from that early gap down, rally them back. I just shorted some IBM. I'm wanting a little more exposure in technology and this chart has exhibited strength of recent heading towards their earnings release next week. I think we can short that as I don't think any technology company is going to be able to guide the numbers up appreciably. Internals are positive and AD line on volume solidly positive, but AD line on issues almost even. Money flowing into big cap technology has been the story this morning. That ram job higher was almost certainly some program trading. Whether it was asset allocation or not can be debated. The only caveat in my mind is the strength going into the close today. There is still the possibility of a short squeeze from here so you have to be mindful of that. 9:10 AM MST - Big cap technology continues to pull the market to the side of green. I still am thinking this is a false move. At the same time, I respect the fact that I could be dead wrong and continue to monitor. The push higher hasn't affected most of my shorts significantly other than they are not falling. At the same time, I'm waiting rather acting as is my nature. When things are rough, my goal is to tread water until they get easy again. That's kind of where I'm at so far this year. 8:34 AM MST - Technology brought the markets back from the brink. Clearly there is anticipation that the 4th quarter numbers will be better than expected on the earnings front for technology as that is what the market seems to be pricing in here. I took some early profits on G and have otherwise stood aside. I'm watching this strength carefully though as I may have to take a few AMZN out on the short side if it looks to get out of hand. Large short interest there and it tends to run with the technology group. Volume average and internals negative but improved from early. All in all, the buying of the weak opening is a positive for the bullish perspective ... disappointing from mine. 8:02 AM MST - Market moving higher in the face of bad news. Not what I wanted. I may cover a little to reduce the exposure as this is not what I wanted short term. Earnings next week and that seems to be why we are shrugging off the news today. 6:36 AM MST - Well the numbers came out and what was green futures quickly turned red. It's early and anything can happen but there has to be a few more question marks after that set of ugly numbers as to the viability of an economic recovery. Now it is true that employment numbers are lagging indicators and I'm sure we will hear that as the day wears on, but this market rallied into these numbers and if the numbers are bad, that's bad for this market. I've got some work to do to get ready for the bell. Be back. 5:15 PM MST - Well the day is done and now all eyes, including mine, are focused on tomorrow's employment number. There is some trepidation as we face the possibility of a short squeeze, but honestly, that doesn't change a thing as the die appears to be cast. The difference is that of timing and the desire to make money so we'll evaluate the market's reaction to whatever numbers print and decide what to do. The internals ended rather strong although volume took a back seat as the day wore on and ended up a bit lighter than average. All in all, it really comes down to the numbers tomorrow followed by the earnings season that kicks into gear next week. And also, in case you have not noticed, I have put up some Message Boards where you can post your comments and thoughts regarding anything germane to the site. I only ask that you do so in good taste and use it to promote an understanding and furthering of the principles that this sight adheres to, the furthering of knowledge in the areas of technical analysis, probability measures, and sound money management practices. 1:52 PM MST - This is one mixed up market as the uncertainty grows. Heading into the stretch here and will end up closing near the highs it appears. All eyes on the employment report tomorrow and the word is that today's rally is prefaced on a good number tomorrow. Don't know if that's true but that's the rumor evidently. 12:43 PM MST - Well, if there was any question about whether the market would really roll over into the close, the last hour has answered that question. Looks to close strong from here. I'll play the cards I have into tomorrows employment number. 11:41 AM MST - The indexes are starting to roll over a little here. Don't know if it's sustainable. I've decided to simply sit tight with shorts in place. I like the action in the precious metals as they have calmed a bit after the early selling. I've got lots of short sells on my boards, a number of which are in play, such as DELL and IBM. I'm waiting a bit longer to decide if I should add short in technology. Kind of wanting to keep my exposure amount about where it is though going into tomorrow. 10:39 AM MST - The market is always a challenge, sometimes more so than others. Right now I'm staring a situation in the face which I hoped not to deal with and that is a seminal event tomorrow. The employment numbers can move the market by providing the excuse for momentum to swing into action. Given today, we will see the markets poised to make another run if that number proves to be a positive surprise. If it proves to be a negative surprise, then we will get the opposite effect most likely. Note that even one more pop higher will not invalidate the idea that we fail on this latest rally. It certainly will raise the stakes but there are larger patterns at work that still suggest a failure. The problem is one of timing though. Since the employment numbers will occur pre-market, we will gap if they surprise either way so you have to position today, not tomorrow. I'm currently 37% invested, most of it on the short side. I have a couple orders in for more short positions so I'll end up about 41% invested if they hit. That's a decent amount of exposure and more than enough going into such an event. The only thing that bothers me is that this week, up days have shown greater volume than down and that's bullish. That thought tempers my enthusiasm to be too short. Everything else pretty much makes me want to be short here. 9:09 AM MST - Ok, I'm finally getting good feeds again and a couple readers have given pointers to back up feeds for the future. Thanks. Internals are solid and volume is equal to yesterday now that I can really see it. 3:1 AD line. Markets are setting up for a break higher or lower on the unemployment numbers tomorrow. We had enough feel goods last night to get the buyers cranking this morning. Strength across the board pretty much today and it doesn't appear that it will back off now. I've was blinded this morning without my visibility and consequently just sat still. I'm still of the opinion that this market will break lower but today's action isn't helping those thoughts. In fact, a little bit of doubt is starting to surface in my mind. Not enough for me to change directions, but enough for me to be cautious and wait for another data point. Tough start to the year so far. 8:25 AM MST - I'm flying blind right now as my data feeds are bad. There appears to be good strength across the boards and from what I can gather, the internals are actually positive. Don't know about volume. I'm looking for an alternative source right now for live market internals. 8:00 AM MST - Excuse me, but where did all this strength come from today? I see no volume along with it. What's happening here? Volume is roughly half of yesterday at this time. And the strength is pretty much across the board. Did all the sellers walk away? Are my number feeds this morning incorrect? I'm a bit perplexed by what I see early. On HOTT, we have a reversal in the works as it doesn't look to hold the gap opening. Hindsight would make all of us super rich. 6:58 AM MST - There are times when the market is just plain stingy. Right now it feels that way. I've began setting up short but there are no guarantees that the timing is right or that the ponies I've assembled can be ridden. Last night, I had to start cutting one out, HOTT, as it looks to gallop away now. Most of the other short still look controlled, but earning season is upon us and anything can happen. Futures are up this morning and we have unemployment numbers tomorrow. I'm still cautiously bearish here but if too many players were squeezing to the short side, the lack of warnings and the ok retail numbers this morning may cause a little squeeze again back the other way. For now, you just have to maintain your discipline and continue to pick away until we get a pattern confirmation one way or the other. Currently the water is muddy and money hard. 3:05 PM MST - So the markets looked kindly on me today (other than HOTT) and we got a little traction to the downside. Now people can start to talk about the right shoulder of the H&S pattern that we have chatted about for 3 weeks now. Whether that pattern proves out or not remains to be seen. For now, there are some questions about the inevitability of this move higher. Volume actually was a bit lighter today than yesterday but internals sucked again like yesterday. Still too many bulls versus bears in the sentiment camp, etc. With earnings being sold off and lots of uncertainty out there I'm having a hard time getting bullish here. I do have a personal problem with HOTT reporting sales increasing so much. That has that stock up a decent clip after hours. I'm toying with taking some off the table there for safety's sake although I'm not convinced in can really breakout. Well, you win some, you lose some. All in all, as long as you manage risk and are reasonably apt at high risk/reward ratios, you should succeed. See you tomorrow. 1:00 PM MST - Starting to pick up steam here. I'm thinking my thesis is gaining traction. Still haven't done anything new. 11:43 AM MST - As I scan around to see what's up, I see the dollar falling out of bed and our precious metals friends spiking as a result. Just a word of caution on that front, tops (short and long term) are typically filled with thrashing exhibited by large swings. Just something to tuck away in your little kepi. Overall, market getting roiled today. I think it's interesting to see that the first set of earnings reports out are seeing the stocks sold down hard. Take a look at AA which was a candidate short on this site to see what I mean ... down over 10% on a DJIA component. Tell me that folks aren't a little worried about earnings season now. 9:49 AM MST - I'm still sitting on my hands here. Financials are digging in their heels and that could be a bit bullish later today. Consumer cyclicals also continue to show strength which is upsetting my plans. Chips and software getting beat up today. Not a lot of rhyme nor reason there it seems. Internals actually improving on the day and volume just a tad lighter than yesterday. Patiently waiting ... 8:30 AM MST - I'm still holding off doing anything here. I did take profits on the KDE trade but the early weakness in consumers is now strength some I continue to wait on that front. Overall, market looks to want to give back some points today. I watching and waiting. 7:45 AM MST - As I told Trading With TAT readers this morning, HOTT could set up to be a nice day trade short today. I'm watching it closely and looking for the opportunity to pounce. Risk/rewards are compelling and trading patterns are playing out consumer cyclicals are down heavy early which will not lend support. On the general front, we see weakness across the boards early. I expect a fade in here somewhere in the next 15 but I also expect it to fail. 6:22 AM MST - Last night I mused about the lack of earnings warnings so far. Today we are starting to see some from after that post last night and again this morning. The geopolitical concerns are growing again with the ricin scare in Britain this morning being a hot topic. Futures are a bit weaker this morning after the big up day Thursday, consolidation Friday, anticipation rally Monday, consolidation Tuesday. Do we consolidate more before another leg up or is the legging done. That's really the question. I've worked the charts a bit and will not throw in the bearish case as long as we fail to make higher highs on higher volume on the indexes. The numbers work until then. That doesn't mean that you ignore the individual stocks in terms of risk management, but that the guiding light I'm using is still a bias to a failure setup rather than a bullish breakout. As such, you will see me acting according to that plan until the data points suggest I do otherwise. 4:02 PM MST - I'm not seeing any warnings of significance out after the bell. This is bullish for the markets. The markets held up well today but internals ended negative. The strength in the software and storage areas of the NASDAQ kept it positive for the day. I'm not sure that today was a watershed day, one way or the other. Worst case, you have to think a little consolidation is in order here. AA reports earnings tomorrow. Are we priced for perfection in earnings are is there upside? Have the numbers come in enough that they can be hit and estimates raised? MERQ seemed to be that case today. I don't know the answer but I do realize that I've forgotten to do my homework on stocks I'm in or considering with respect to when they report. I'll do that tonight. Earnings season is elephant season and you've got to be able to dance with them or get crushed. So, the plight continues. The big upcoming events are geopolitical still, all this tax talk for a while longer, and the jobs numbers on Friday. I'm thinking the markets could firm into the Friday number or at least be positioned close enough to recent highs to scare the heck out of shorts Thursday and Friday morning. Friday could be the tell-tale day on the near term direction of this market. Right now it seems to be lining up that way. 1:45 PM MST - Some trepidation into the close. To close them red would be best from my perspective. All in all, an ok day from the bullish camp all things considered though. Certainly plenty of flags out there still though. 12:32 PM MST - I've received 3 separate emails worried if this rally will continue. I've wrote each to say although we could get a bit more of a squeeze, I'm fairly confident in the call that we are topping and that you just need to manage your risk/portfolio in the meantime. That's my thinking on the subject and how I am acting. 12:03 PM MST - It looks as if my fear of the indexes moving higher on the news is materializing as a result of the markets not moving down. Momentum sometimes feeds on itself and if the market doesn't sell off on the news, then there is a rush to buy it as a result. I waiting to see the lasting power on this little surge. Could set up a reversal or could chew up some shorts in the meantime. 11:06 AM MST - Speech coming up soon. Today I've gotten beat up a bit, especially on the precious metals front. Not willing to let those go yet though. I'm watching and waiting but unwilling to do anything more until more data points are on the table. NASDAQ has been a rock of support so far today as the big caps there keeping us up. 9:58 AM MST - Market refusing to come in still. Choppy up and down action in front of Bush's economic plan. I think the details are pretty much known so unless there's a whopper of a surprise that's been kept hidden, I'm not sure we can rally that much more on it. Now the flip side is if the market doesn't sell down, you might see a short covering rally as a result of no selling. Always a possibility short term. I'm biding my time and waiting this out for now. May have pulled the trigger a tad early but the idea was to establish a beachhead of shorts and to work from there. Internals still negative, volume still good. 8:56 AM MST - I can't help but notice the markedly increased volume today. If the pulls back relatively hard on heavier volume; that leans bearish. If the opposite occurs, that's more bullish. I did add to the HOTT short a bit ago and was going after JCOM but can't short that one. No stock to be borrowed. Internals still negative for the most part and getting more negative. The various indexes I cover are also turning red ... including the chips. 8:13 AM MST - Volume picking up now. Internals mixed early but big caps taking us higher earlier. Usually the momentum money runs after the more liquid. I'm sitting on my hands right here. If I'm reading the tape right, we should get some resistance in trading today. Chips are trading strong again early. 6:36 AM MST - As I sat last night flipping through a few charts and reading a lot, I wondered out loud if I'm about two days early on these shorts. I can't tell you if that's true or not. It always hurts to short a nice spike but sometimes you have to just hold your nose and go to work. Yesterday I put on enough shorts to put me at roughly 20% long, 21% short, and the rest cash. As you know, roughly half those longs are precious metals. So now I consider what's next. Given Monday's action, most likely some more consolidation, maybe a bit of a pull back or a bit of a rise but probably nothing major until the news that was bought Monday is discounted on Tuesday. Bush makes his speech early afternoon EST. Alcoa reports earnings on Wednesday and then next week the season kicks into full gear. Has the street already discounted less than rosy outlooks because I think that is what they will get for the most part? Has the street sufficiently discounted the geopolitical mess we find ourselves in? Is the fact that most sentiment indicators continue to point to a correction at hand wrong? Is the fact that volume is still light a warning sign still? With or without my thinking about what should happen, it's careful that I continue to maintain my wits and simply see what the street dishes out now that I'm staking out a position of decent size again. I started short positions today with the idea that I would add to them if warranted. The majority of these positions were expected to be built and maintained (within limits), not one day wonders. I don't want to be in too big of a hurry but the size of the move yesterday puts the markets and a number of these stocks at resistance areas that should provided some discomfort to further blast moves like Thursday and again Monday. As a result, I'll continue to add selectively to the short setups and rotate out of those that fail and into those that continue to hold. I'm rather confident that there are enough question marks to raise enough doubts that this rally will not make new highs. If wrong, I'll have to eat crow, take some losses and plot another plan. As we talked about many times last year. You conjecture a thesis, you watch for supporting or non-supporting evidence, and then you revise as needed. It's a constant process that plays itself out over and over. Thesis, antithesis, synthesis .... round and round we go. Futures are fairly flat with a slight negative bias. Precious metals trending lower over night as well. Most foreign markets negative overnight. Not sure this market has a lot of oomph at this point. We will soon see. 7:45 PM MST - Now that I'm back and looking at what transpired today, I see the following. Nice volume expansion in the last 1/2 hour but I should note that the last hour saw the markets moving down, not up. In fact, that was the biggest pullback on the entire day. Volume ended higher than recently (bullish) but less than average (bearish). Internals were quite positive 3:1 listed, 2:1 over the counter. New highs/lows were good. Gold reversed off the early highs and finished near the lows. All in all, it was a good day for the bulls. Today I began some short positions that are trading positions. I'm thinking that the averages will not make higher highs on this move. In fact, my thoughts are that they will not go very much higher than what you experienced today. I will need to monitor the markets of course because I could be wrong and this momentum could continue. You don't make money sitting on the fence though ... every now and then, when things line up, you have to make a stand and put your money where your mouth is. I've been talking about the desire to see prices push higher to allow me to short. today I started shorting on that very notion. Now it's up to the market to tell me what to do next. 4:22 PM MST - This afternoon has been havoc for me. I'll be looking at the day a bit later this evening. Check in then for an update. 12:55 PM MST - Looking back at my resistance numbers, all the indexes are at the targets now. 12:30 PM MST - The steady march higher that began this morning continues. Volume has picked up a bit but still below average. I've pretty much taken the majority of my initial short positions and am now in the wait and see mode. Lots of folks caught with nothing in their portfolio to begin the year and they feel the must buy. You know my thoughts on chasers. I'll be very curious to see the trading tomorrow and if this momentum can continue. Sure seems iffy to me. 11:03 AM MST - I know, I know. It's very hard to sell into a market that is rallying. I understand that. If you are a zagger though, selling into the teeth of a rally is what you do when the cards line up right. I could be totally wrong and it wouldn't be the first time, but this sure looks like a playable set of shorts here and the risk/reward calls out to me. You can do what you choose, sell it, buy it, sit on it, but right now I think this move higher is as precarious as it is enticing. I'm leaning short. 9:30 AM MST - Market has had a good run this morning on light volume. I've started shorting it as a result. I see it stalling out right here and am quite pessimistic what I'm seeing early. I say that not meaning to imply that short positions will be rewarded immediately but that they will eventually. 8:48 AM MST - I'm starting to put out a number of orders to short into strength here. I am definitely leaning short at this point. I have no faith that this move can last primarily given the work I put out in the weekend update, the lack of volume this morning and the continued strength in precious metals. 8:31 AM MST - Market has positive underpinnings in terms of breadth and the sectors trading higher BUT NO VOLUME. I may be jumping the gun, but that's a big flag to me. I'm starting to put out a few short orders into the midst. 8:03 AM MST - I'm not seeing hardly any pick up in volume. For an up day; follow through day and no volume. Very interesting. Makes me want to short even more. I'm still holding off but may start soon. Want to give it a little bit more time. Precious metals also heading higher. 7:50 AM MST - First look shows decent underpinnings to start the day. I put one short order out on INTC but am waiting on others right now. Think the market could push higher short term today. 6:50 AM MST - As I worked through the charts this weekend, I found 2 long stocks that I would buy at this juncture and some 16 or so I would want to short. What does that tell you? Tells you to lighten up on the long side I suspect and to consider starting to average in on some short plays. Good morning and welcome to our first real week of trading. All the traders have a clean bill of health (there slate was wiped clean with the turn of the year) and a market that rallied precipitously on the first day of the year as if no one wanted to be left behind. Classic behavior would be for an ensuing rally to develop today as carry over momentum from last week's holiday light volume move higher. I've been attempting to wait before taking any major positions until we see some volume return to the street, or at least until we see that volume is not returning when it should. Without that piece of the puzzle I'm a little lost in my position taking. So, I'll be quite curious to see what the day brings us. I've got a long list of short positions I want to start up and I'll be looking for the signal that I should start doing so. The big news this week is Bush's tax cutting plan. There's talk of no longer taxing dividends. I suspect this should provide a bullish underpinning to the markets for now. As is the way with the street however, you buy the rumor, sell the news and the news is tomorrow so today may be the day to start taking a little stake in the expected behavior of the street. That we will see. For now, the futures have settled in to flat from up last night. Europe is struggling a bit again and there's problems in on line bookings (ROOM and EXPE) getting hit on an earnings warning out of ROOM. This is the season for that sort of stuff. I'm starting to lean back to the short side but trying to wait out a little more of a push north before getting serious. There are some plays I'll try to initiate today most likely but want to see early trading before I do much. Back in a bit. 12:05 PM MST - Volume continues to be lackluster and I've effectively ignored the action today. I really am wanting to wait and see what happens next week, now that the holiday thinned trading is over, the past year is swept under the rug, etc. Volume is lackluster and internals mixed today. Market actually holding those gains well. Looks to end that way. Could get a little push up or down into the close but I don't expect much either way. 10:15 AM MST - Market hanging tough here. I am seeing precious metals prices picking up here. That's counter to bullish move of yesterday. I'm still just hanging out. Watching the consumer stocks having a hard time and pondering where I take them out if they don't find footing. That's one of those sectors to short going forward. 8:53 AM MST - If you are long here, you want to see this day go out without major losses. You want to see the gains of yesterday hold pretty much in tact. If so, then you can look to follow through when t he big boys get back on Monday. I'm sitting on my hands |
