great minds must think alike. Today I just decided to re-enter my failed CAL short .. giving it another try. Will be scaling in if higher price levels are attained. What are the weakest airlines in your view?
Wrote all this over the weekend but wanted oil conformation before this post....Looks to be setting up almost like I thought The market looks to be setting up for a short term selloff....IMO... 1st we really havn't gone anywhere since the late November and December wasn't much to brag about either for most of the US indexes... Being up maybe 2% since my big liquidation on NOVEMBER 20th...No I'm not as liquid as then, but I did have fun buying back stocks on the cheap with the cash... Always interesting what sectors were kept propped up or overly depressed going into option experation week... I'm keeping my long oil stocks and short airliner positions in play as well.... I would stay very cautious not to jump back into the QQQQ after last weeks hiccup on Wendesday for starters... This sell the news earnings scenario has to have the professionals wondering about taking profits before the annoucements as well.... Which could ultimately leed us to a weaker market as many major companies are set to report over the coming month.... Remember it's not only the reporting company that is affected, but also many stocks with similiar business models in the same sector... Look at this market leadership currently on a relative timing basis according to Vector Vest.... 1. Transportation (Airlines) 2. Container (Metal/Glass) 3. Chemical (Fertilizer) 4. Real Estate Management 5. Building (Cement) 6. Building (Wood Products) 7. Auto & Truck (Tires/Misc) 8. Steel (Alloy) 9. Retail (Discount) 10. Bank (Foreign) Now consider how these will fair in a bottoming of commodity prices soon to rebound sharply and a higher long term rate enviroment...IMO ...Can you see how this has me a little worried about the future of this leadership.... So What have I done to protect my downside in these sectors... 1. Transportation (Airlines) (Short most airliners....OVERWEIGHT POSITIONS in Oil Stocks) 2. Container (Metal/Glass) (Still like the sector, but thinned out many of the bigger positions) 3. Chemical (Fertilizer) (Raging Bull, but with Nat Gas climbing I was a profit taker after the extra 15% gained this month) 4. Real Estate Management (Can you only guess what a rise in the long bond could do to these guys) 5. Building (Cement) (Globally a great story, but PAY-GO could do quite a bit of damage to some US players) 6. Building (Wood Products) (Contrarian play, but the housing correction has at least another 9 months...No panic=No correction) 7. Auto & Truck (Tires/Misc) (Raw material is.....RUBBER....Great for the oil bust, but bad for the coming reversal in OIL...SHORT These) 8. Steel (Alloy) (One day we may actually get a severe down trend in these stocks, but until then TRADE them away) 9. Retail (Discount) (Interesting move here, but fundamentally more sensitive to a rise in GAS prices...I would short as well) 10. Bank (Foreign) (Been a very big Bull here, but have hedged these positions with a DXESX (Direxion Emerging Mkts Bear 2x fund) and I'm waiting to unload the banks and go fully into this short fund.... Emerging MKTS can and will correct....I have a gut feeling it will be in the very early part of Febuary....BTW What about the asia bull market going on....Get on board if you already haven't, because I would be happy to thin my positions out to you... That is all that needs to be said about that bubble...Worried always, but still outperfoming daily... I got some great sector charts everybody should look at using the $Dow Jones index for (I think) 167 sectors $COSTAverageMAN
Tire Index...Sure does look like the momentum is gone and the weaker stocks could be the better shorts.... GT...underweight TWI...Could be the best short here CTB...underweight HAYZ...Best short $COSTAverageMAN
Any thoughts on where the Nasdaq resistance will come into play after 42.90 is broken....I can see a little more support around 41.60, but if this is anything like May....39.01 may be the QQQQ's bounce line.....Any thoughts.....What level would you cover QID if you had it....on the QQQQ chart
From Vector Vest over the weekend.... TOPPING OUT. The Price of the VectorVest Composite, V V C, has gone essentially no where since mid-December. Is it time to take some money off the table? If one looks at our Market Timing Graph in the Daily mode, they would see that the Price of the V V C closed at an all-time high of $28.55 per share on 12/14/06. Our Market Timing Indicator, MTI, closed at 1.50. Eight trading days later, 12/27/06, the Price of the V V C closed at $28.53 and the MTI closed at 1.31. Ten trading days later, 01/12/07, the Price of the V V C closed at another all-time high of $28.56 per share. The MTI closed at 1.25. So we see that while the Price of the V V C has been essentially flat, the MTI was closing at lower highs. I have illustrated this phenomenon on several previous occasions, most notably during the period from 04/06/06 to 05/10/06. In that case the Price of the V V C was actually going up while the MTI was closing at lower highs. You may also see a more dramatic bearish divergence by replacing the MTI with the Buy/Sell Ratio, BSR. The messages of these divergences are so reliable that I call the BSR the "Canary." It tells us that market risk is increasing when the BSR is hitting lower highs while the Price of the V V C is rising. By the time the canary dies, i.e., when the BSR crosses below 1.00, you should have taken your profits. Another way of assessing market condition is to use moving averages. The default setting on the Market Timing Graph includes a 40-day simple Moving Average of Price. Since the Price of the V V C often goes below the 40-day MA during a long rally, I note the event, but usually don't react to it. A more reliable indicator is a 20-day and 40-day MA crossover. As of yesterday, the 20-day MA is only five cents above the 40-day MA and it has begun trending lower. It appears that a crossover is almost inevitable. So batten down the hatches folks, the market is Topping Out. CONTRA ETF'S. Investor's who may be looking for a convenient way of hedging their long portfolios or making money during a downturn, should consider buying Contra ETF's such as the ProFunds Ultra Short series: QID, DXD, MZZ, and SDS. $COSTAverageMAN
Many tech indexes look just like this and it started on 1/18/2007 ahead of AAPL and it was all about crushing new Call options bought during the week before expiration....People never talk about how important expiration is and how the market reacts before and after.....You have to love the Perma Bulls for the last 3 months and most indexes are flat..... $COSTAverageMAN
I (currently) only trade Energy and Home Builders.....but that reversal in Crude over the last couple hours is just scary.. I was long in two accounts and covered one as the move progressed up this AM and gave back most of the $$$ in the other account as I gave it a much bigger wiggle (I realllly though crude was finally gonna bust up). Was only long from very early this morning (right after the open)
I slashed my positions in the oil sector in half during the sell-off today....I'm really not sure if I made the right move, but I had 5% gains on many stocks in that sector and I only opened the positions up 7 days ago....Nice swing trade to say the least....Still holding the airliners short.....At least I got 10% to the downside, before I'm in the red on the open positions....This Oil volatility is hard to manage....Dumped out of GOLD as well....Needless to say I'm in the red today like every other diversified long, but not as bad as it could of been.....Had an overweight on OIL positions today and took half off the table while they were in the green.....Stop losses were firing left and right.....The bounce may still be a few days away and I would hate to see a late stage sell-off.... $COSTAverageMAN