So we wait. And wait, and wait, and wait.
My expectation, naturally, is that we can resume the party sometime soon. I sure hope so. If we have another big pop like Tuesday, we could be really hosed for a while. At the moment, the market has returned to its complacent recess period, which it seems to do every ten weeks or so. I've highlighted on the $VIX chart below these "time out" periods before we bears can start to have fun again. It's a drag.
The IWM remains tantalizing (or terrifying) close to its resistance line. I'll be sweating this one out at 5:30 a.m. Friday when the employment numbers hit. Of course, now that the market has returned to its bizarre way of embracing horrible news, it's hard to imagine any employment report that would be anything but positive. Citicorp could declare bankruptcy, and its stock would double instantly, given the logic of the market these days. Witness the surge this week on UBS after its $14 billion writeoff.
The Dow 30, likewise, is twiddling around the 12,700 area, waiting for a break in either direction. I am bellying about the market a lot right now, but honestly, if we're still in the midst of a bear market, there is never a better time than now to be gobbling up puts, because in retrospect they will look dirt cheap.
One chart which scares me a bit is the Transports. This has a well-defined inverted head and shoulders pattern. Of course, this pattern isn't exactly at the bottom of a long, multi-year downturn, which would make it exciting for bulls. The pattern is there, yes, but typically these things are explosive after a market's value has been ground down to absurdly cheap levels. In this instance, it may pop, but I doubt it would rise to the 6,000 point level that is suggested by traditional measurement techniques.
Now, a few stocks. I've actually turned bearish on gold. It stinks that the XAU's options are so thinly traded, so I have to stick with stuff like ABX instead, on which I bought puts today.
ACL is enticing. It's got a clean stop at around $155, and a break below that horizontal line at $128 would be sensational.
CEPH is a terrific little graph. The neckline, as I've pointed out before, has a tilt to it, but the stop price couldn't be cleaner.
I got back into ICE today, too (puts, naturally). The $155 stop price is a few bucks off, but I'm willing to be a little early.
As for the investment banks, they still don't know what to do with themselves. I've got puts on JPM's gigantic megaphone pattern. To me, the likelihood of this stock goer lower far exceed its chances of going higher.
Good night, everyone. I'm exhausted……time for some rest!
