Saturday, March 22, 2008

Bear Markets do not go straight down - in this relief

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This chart is where I began thinking.

The chart shows a gap to be filled between 140 and 150 - some traffic between 160 and 170 and heavy traffic 170 to 180
The current price is above the 20 day moving average of 125.02. The stock could possibly find resistance at the 50 day moving average of 134.33.
The 200 day moving average is above at 149.01
From Andy Swan:
First, note the double top price formation. The top was 200, and the neckline was 160...indicating a 40 point (200 - 160) measured move to the downside after the high volume neckline break. 40 points from 160 indicated a move to 120.

Second, note the stability at 120...the price point at which the measure move was completed. There was a push as low as 115, but AAPL stabilized right at 120 for the most part. This created a solid support level, which provides the Bulls with confidence.

Third, note the pivot bottom that created with the pivot point at 115. The pivot bottom has matured into an ascending triangle, and AAPL is now putting pressure on the ascending triangle resistance level of approximately 132.00. A resistance break would be a bullish indication for AAPL, and the measured move indicates a push to 149.00 (just below the massive psychological barrier of 150.00).

126.73 -6.54 points (-4.91%) below the current price
119.04 - Heaviest
135.36 2.09 points (1.57%) above the current price
161.36 28.09 points (21.08%) above the current price
166 - heavier
178.78 45.51 points (34.15%) above the current price
186 - heaviest
194.84 61.57 points (46.20%) above the current price

My time frame is just beyond the quarterly earnings report- April 23rd - I'm up for extended dates - as the rise in option values streams through all the call options - yes some more than others. I'm looking for what you guys would do feeling that AAPL is going to give better than good numbers and it's been beaten down - where would you go in price and month, etc. April 17th 135 is $5.20, July150 is 7.60 and as you say 145 is 9.25. Actually, I would prefer May options, as I would sell going into earnings - I don't like holding anything going thru earnings - there are some good $'s to be made - but I'm not into the opposite - getting killed in a gamble.

Arthur C. Clark - Visionary - Rest in Peace

Today is a very sad day in our little world. It's been reported that Arthur C. Clarke, among the most influential visionaries in technology, has died in hospital care at the age of 90. Along with his many written works (such as the infamous and immeasurably influential 2001: A Space Odyssey), Clarke was possibly best known for conceptualizing the geostationary communications satellite -- clearly one of the most important technological innovations in history.

Friday, March 21, 2008

Should anyone be surprised?

Friday Morning March 21, First Day of Spring, Good Friday, Full Moon - "The Eye of The Storm:"
The center of a tropical cyclone, marked by relatively light winds, confused seas, rising temperature, lowered relative humidity, and often by clear skies.
This past week has been a volatile time for the markets. Next week through following Monday, is the end of the Month, end of the Quarter and beginning of this next quarterly earnings season. We could hear that the markets have reached the bottom and we are beginning a leg up in forecasting the end of negativity in our economy and economic markets - yes dollar rising, gold and oil falling, lower interest rate incentives - Wow! I went to visit the local Indian reservation and asked to speak with a "see'er" and was lucky to find him polishing his Mercedes. He related - "Eye of The Storm" look on the horizon "Big Bear Rising" - Cattle laying down - an indicator of a storm coming - look how foolish I look with my Mercedes" I thanked him, gave him my old Dunhill Gold Lighter for his pipe and wisdom. " He further related to plant my seeds deep" (long-term call options) to avoid the storm washing away the planting in this "eye." - That's it from the Desert of Arizona

Saturday Morning March 15: It took awhile to leave the 13,000's. Probably to begin to leave the 12000's - the momentum of a rolling stone down will increase as we approach then 1st Q results - and as we start to get "pre-announcements beginning sometime in mid-April. I believe 10,800 is in the cards - however the whipsaw effect of Traders, Shorts, etc. could catch a trader off guard. If Sovereign Trust begin to enter the "Demand Function"(price follows volume) of the market - it will throw Technical Analysis any point and for no good reason - Sovereign Trusts are the only thing that will keep the market from reaching 10,800 by June and 9600 by Labor Day. So the only thing from keeping the Bear at bay is a foreign army of money invading the shores of the USA.

Mid October to very early January in the 13,000's
Early January to Mid March in the 12,000's
so following "time and move" could project -
Mid March to end of May 11,000
The Summer to Labor day 10,000's to 9,600's
If the direction of the wind doesn't change,we
will have, What the current generations will call,
a Depression (not a real one) Americans are a
bunch of softies and will cry much sooner than
those in the 1920's

Although we are short-term traders - I believe one has to do a Long-Term time analysis - for themselves Keep that on file in your mind - and then when the markets open on Monday think in terms of 30 second bursts as to when to pull the trigger and 15 to 45 minute conclusions.

PS. If my Cash Flow continues as it has from January to Mid-March I might consider - "Sell in May and Go Away" - Maybe holding only Canadian Oil Trusts for 17% with an option hedge to protect the stock price.....

Saturday Morning Mar 8:
On January 29, this continuing memo predicted breaking and closing below 12,000 on the Dow would happen in the month of February - well it was a week late closing yesterday at 11,893. The government, in reporting such things as Payroll, Unemployment, GDP, Inflation, etc. are using outdated methods, and politically adjusted methods in altering the reality of these numbers. They have moved toward Faith Based "Perceptive" methods that do not conform to reality. As these methods are uncovered, they "re-perceive" the "tripped-up" method into a new lie. The then corrected numbers, arive in later months, what should have been presented originally. It all means - that as each "crack in the wall" begins to show, they demand that you focus on what isn't cracked - as the wall weakens - considerably. To this point, thing are definitely worse then what was considered, maybe a mild Recession. OK, enough of my bullshit - I believe in the month of March, the Dow will briefly go above 12,000 to maybe 12,300 and then retract toward 11,600 - "The Line in the Sand" all the guns will come out to protect this "line." More dishonesty will surface and in desperation by April 15, we should see a one day drop of 800 points to 10,800. If some positive reality comes out, that should be it, what is called "conciliation," Big Volume, big price drops (to 10,800) irrational fear. If more lies and irresponsible wordage surfaces - we shall move toward 9,600 by July 1st- (Full Moon!) If things don't get better by Labor day, we shall see deep dark clouds for the remainder of Fall 2008 - a modern day of "maybe it's not a recession - maybe it the "D" word - can you imagine the commentators? God will be punishing us for having and accepting George W. Bush and his Ilk as our leaders. God is not "Faith Based" he belongs to everybody!
Wednesday Morning Feb 27: This is a continuation of a letter started more than a month ago. We are almost back to 12,800, same as February 6th and when I started this letter in early January. During the time frame it has never reentered 13,000 - and is now destine to return to 12,400, 12,100 and break 12,000. The original letter, within, has predicted the pattern. Earlier I had expected we would be below 12,000 by this time looking at some bottom thinking until March. The government has actually prolonged a "Bear Bottom" which leads me to believe we will be into Jul - Aug - Sep before we may get a glimpse of the depth - and the depth will probably be deeper than had been expected by the stonewalling of the "emergency to come" problems. Nobody ever admits to Murder until the evidence is referenced, cross referenced and put in their face. The Auditors are in the banks as this letter is being written - They have seen what happened to Arthur Anderson in Enron - they'll have to come out with the real facts. Unless and of course there will be a new kind of "Faith Based Financial Statements" needing no auditors opinions - "under God!"
Sunday Morning, Feb 17: The markets - they are in a holding period (like trying to land at JFK - being moved to different elevations - but not landing at their current destinations. The pattern has been consistent as discussed below and when the heavy traffic of Bulls and Bears have worn themselves out - down it will go and land somewhere between 10,800 and 11,600 - assuming another financial storm does not appear and current storms stay at their level.
Saturday Morning, Feb 9: The Dow closed 12,182 yesterday. It has below 13,000 for more than a month (Jan 4). On Jan 22, the Dow reached a low of 11,634, all of the prior writing in this section has previewed what has been happening. Many investors now think they are purchasing great value in Apple, Microsoft, Cisco Systems, to name a few - which will keep the Dow near the 12,000 mark, even though the aforementioned securities are NASDAQ. Since value is measured - at the time it is measured - there may be greater value to come if the Dow closed more than a few days below 12,000.
Wednesday Morning Feb 6:
The Dow closed 12,200 yesterday. I wrote this 3 weeks ago: The Dow closed at exactly 12,800 it will either rebound to 13,100 or down toward 12,500. If no rebound from 12,500 then it could drop between 400 and 500 from there - should stay between 12,000 and 12,800 for about 3 weeks - if it never sees 13,000 during that time it will drop below 12,000 and darkness will prevail until March.
Sunday Morning Feb 3: My original statements in this post were three weeks ago and it (this post) still is working effectively in creating boundaries and break-outs in the current market. The Market Closed at 12,743 on Friday. It is in the upper range of my 12,100 - 12,999 channel. Irrespective of the current discussions that we have reached a bottom and are regaining toward a better market - I believe the current market will reach a first resistance of 12,850 (the 50EMA) and maybe the 2nd resistance of 13,100 (the 200EMA). If it hits 12,850 and retraces, I believe it will return to the 12,300 - 12500 range. If it hits 13,100 and retraces, I believe it will return to 12,800 getting to (maybe) break upward into the 13,100 - 13,300 area. The Government is desperately trying to stabilize the markets by creating laws and interest relief to their benefit. I believe this will fail (personal,) the market will retest 11,634, its most recent low on Jan 22, 2008 - T0 support this I also note, that on a monthly basis, we have experienced lower highs and lower lows - to date - a breakout and break of pattern would be a cause of reassessment of the markets.

Sunday Morning Jan 27: Friday the market started to "set in stone" - for the optimists maybe with all the news next week it may approach 12,999 - and if the news is not so good 11,600. People who are holding AAPL and RIMM may have big gains from when the got in but since the highs they might shaved off up to 40% of their value if AAPL retraces to 120 after it hit 200 and RIMM breaks 80. When we start seeing the effects of Government stimuli not having positive influence on the markets - We will be faced with "The Humpty Dumpty" scenario. The longer they try to save "this thing" the harder it will fall. The clouds approaching from a distance seem to be gathering and getting darker.

Today is Friday
- The Dow is at the 12,400 level - it may retrace to 12,100 - 300 or move up to 12,500. Next week it could approach 12,800 to 13,100 leading up to the dramatic urgency of the FED to keep it up while lowering rates in historical chunks. I doubt that the market will ever go above 13,100 - 300 (remember the high in October was 14,200) If it does not close above 12,999 in the next two weeks - you can revert to the original statement below

posted this 2 days ago:
Currently we are at 11,900 - there should be a rebound - it may go to 11,700 - but it should rebound to 12,100 - very short term 1-23-08

I posted this three weeks ago. It is an outline of what is happening now and should happen over the next few weeks to a month. Too many Officials trying to correct!

The Dow closed at exactly 12,800 it will either rebound to 13,100 or down toward 12,500. If no rebound from 12,500 then it could drop between 400 and 500 from there - should stay between 12,000 and 12,800 for about 3 weeks - if it never sees 13,000 during that time it will drop below 12,000 and darkness will prevail until March - If there is no reversal in our economy by spring there will be several crisis's - Housing, commercial real estate, Ford will have to do something - maybe break up - have a truck division and suv's - no cars. There will be a credit contraction including credit card balance disasters. There will be new laws to help - around debt, bankruptcy, etc. Many Hedge funds will go belly up - problems with government pension plans, etc. If all this happens before June (which I doubt) the war will end and our troops will be pulled home. Many corporations will go into default on their debts - retailers going out of business--- with no positive stuff happening the market could settle between 7500 and 8000. Just some thoughts after dinner - probably none of it will happen - things will get lucky - and every story will have a happy ending!

Another Opinion

Investors should evaluate their risk exposures and tolerances now, in order to allow for substantial further market weakness. Market conditions presently feature a Pandora's Box of rich valuations, vulnerable profit margins, rising default risk, rapidly deteriorating market internals, failing support levels, and accumulating evidence of oncoming recession. As I noted in my December 17 comment, "there is one particular scenario that would be ominous in my view.
That would be if we see a relatively uninterrupted series of declines that breaks cleanly through the August and November lows, followed by a one-day advance of 200-400 Dow points. That's a script that markets tend to follow pre-crash." -
- John Hussman

Saturday, March 15, 2008

Emotional Review and Support - Gives way to Panic

Denial was when the Dow was moving around 13,300 to 12,100
Fear is beginning at 12,100 to 11,600
We are missing a "stunned" position which will be between 11,600 to 11,200
Panic will set in from 11,200 to 10800 (maybe severe Panic to 9,600)

Wednesday, March 12, 2008

In Answer to the Question - What did you think of the 400 point surge in the market, yesterday?

"there is one particular scenario that would be ominous in my view. That would be if we see a relatively uninterrupted series of declines that breaks cleanly through the August and November lows, followed by a one-day advance of 200-400 Dow points. That's a script that markets tend to follow pre-crash." -
- John Hussman

If I get this right - The Fed took out 200 billion dollars and offered it to the banks for their worthless Mortgage Backed Bonds - that pushed up the market up 275 points, then the market started to turn back later in the day - Charlie Gasperino on CNBC got on the TV and related that Ben had related that this was just a beginning, if it need be to correct the problem - and the market turned again to 400 points up.

I filled up the fuel tank of My Chevy Diesel for $115 at 3.85 a gallon before I went to the Grocery store and spent an 120% of what I had spent several months ago for the same groceries. I can afford this - no effect on me - how about people on pay checks who have to commute to work?

I listened to Fast Money this evening, and they talked of how Ben finally came out with something that will work and it caused spirited buying on Wall Street. You know it's a panel of 4 people, so they went around the table and none of them bought anything today, as a matter of fact they used the day to sell into the rise. They hustled good buys and good plays and the probably that this is a major sea change. "None of them bought anything!"

The $200 billion dollar rescue - as a package sounds like the greatest corporate welfare program ever devised - It's a package - open it - it's a can of worms - how do you administrate it - Just walk up to the window - with a package of worthless documents and take a billion dollars back to your bank?

Are you getting the scenario? Let's just add, Cramer related today, that Ben finally had listened to his program last Thursday and Friday - when he, Cramer, had related this exact program as a cure.

"Comedy is Tragedy plus Time: - Woody Allen

Today I lost 1.2% of my liquid net worth - I had earned this same amount last Friday and Monday - But it was mine TODAY before this shit. The 1.2% was after I had made several hits this morning or it would have been 2%.

Hype talk: "This did it - the markets will follow up into a 5 day return upward"

Nothing has changed - this country is headed for the shitter - prolonging the arrival - will increase the pain, the depression, the rot and fear...and prolong the recovery - I'm afraid they don't sell Long Term Options - far out enough to profit......


Tomorrow, I'll get up and "watch the tape" in the pre-market beginning at 5am here in AZ. Just like I do every trading day - when I "feel" something I'll pull the trigger, like I always do every trading day......what else can I do, I'm 65, I don't know any better....How has yesterday affected me?