Here are a few long ideas of stocks which, long-term, don’t necessarily look great, but short-term, look prone to a bounce higher after selling off the past couple of months.
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Hurricanes Suck (by Nathaniel Goodwin)
I wasn't planning on doing a post this week, I'm terribly busy working on some sort of shelter to protect me from this hurricane that might hit. Stun Gun and I are working around the clock trying to reinforce our cardboard home.
Here are some quick chart updates….
I think TLT has topped, it hit resistance. $TNX hit support. Bears couldn't crack that down-sloping black trendline in SPX, now the rising black trendline is going to be some support. Unless we plunge down with force below it very quickly, it could act as support and we might keep drifting up.
Finally, I saw some great advice from many on an earlier post. I hope everyone is okay. My biological father would drink whiskey and gin to help him through tough times. I suffer from acid reflux, and don't recommend that at all. I prefer boxed wine mixed with 7-up or gingerale. I also like good tunes to lift my spirits. (I apoligeze for any spelling errors in this post and the crude charts, I'm drunk and my spell cherker is not working)
xoxo
Nathaniel
The Devil and the Deep Blue Sea (by Springheel Jack)
The move off 1040 SPX this week was a familiar sight.Since the beginning of October last year there have been six previous moves up from 1040 or below and it is worth noting that not one of those failed to make it to at least 1099 SPX. That's what I'm expecting to see this week as well.
I was thinking about Trader1's BAR (Big Ass Range) yesterday and looking over the SPX over the last twelve months we have spent a majority of the last year, and over ten of the last fourteen weeks, trading in the range 1040 – 1105 SPX:
I'm wondering whether we will see a major break out of this range anytime soon. The bears are expecting a significant break downwards, and the bulls are expecting a significant break upwards, but it's possible that we could just chop around here for quite a while longer, trapped in this range between the devil (Fed threats to intervene if assets prices fall) and the deep blue sea (a US economy that is failing to produce much in the way of good news).
I was talking a couple of days ago about the possibility that the markets saw a technical low (the bottom for several lead indicator markets) in late May, with USD peaking slightly later in early June. One of the things I was thinking of was EEM, the Emerging Markets ETF, which saw the low in late May and diverged sharply from SPX from there. It is interesting to see on the daily chart that EEM has just bounced at wedge support from that low:
There are several commodities, currencies and markets that are now close to their April highs. Copper is one and another is AUDUSD. I posted a right-angled and descending broadening formation on AUDUSD back near the SPX April top with a suggestion that it looked shortable for a move down to the 81.5 to 82.5 area within that pattern. You can see that post here. Since making a double bottom near 81 in late May & early June, AUDUSD has moved back up towards the top of the pattern, with a target in the 93.85 area and it looks very likely to make it to that target. The pattern may break up from there but if it doesn't then the next downside target will be in the 72.5 to 75 area, so it looks like a very interesting short from the next hit of the top trendline.
In the short term on ES / SPX, yesterday's close raised the possibility that we have just completed the head on an IHS indicating to 1123 SPX. I'd be disappointed to see a significant pullback today to make the right shoulder, as a move to that target would break the upper trendline of the main declining channel on SPX from the April high, which will be in the 1105 SPX area early next week. A break of that trendline would blow a huge hole in the bear case over the next few weeks:
We have a rising channel on ES that I'm expecting to hold today and tomorrow. The lower trendline of that channel will be at about 1086 ES by the close tomorrow, which fits with the sideways to up chop that I'm expecting to see until then:
I've been receiving the (free) daily charts from Clusterstock Chart of the Day for a long while now and they often have something worthwhile to show. Yesterday's was very interesting showing a strong positive bias for the week before Labor Day, with a particularly strong bias for the first day in September. I'm expecting to see a short term swing high tomorrow or early next week followed by a sharp retracement so it was good to see that COTD's chart is showing a significant negative bias for next week. You can see the full COTD post here:
Leisa here, reminding you that it is NOT too late to join in the fun of Slope-Fest East in Myrtle Beach. You can read about it here http://www.slopefest.com/2010/09/slope.html or e-mail Iggy here: iggyslopefest (at) gmail (dot) com
Resilience
Let me start with an important premise: I love trading. Because if I didn't love trading, days like today would have compelled me to quit long, long ago.
My love for trading makes the thousands of hours I put into charting and doing this blog each year seem almost effortless. Most of the time, there's really nothing else I'd rather be doing.
So I've had thoughts racing through my head all day long, particularly after the close. I've been questioning myself, my methods, my approach………everything. By "question", I don't mean "dismissing"; I mean critically analyzing. I still believe my style and approach to the markets work best for me, although, unfortunately, it has been very out-of-synch with the market for far too long.
So what has all this thinking yielded? Two important questions I've been posing to myself:
Why not just resort to day-trading? It's tempting. When I read about nummy having something like 28 profitable days in a row, and Market Sniper having – what was it? – something like 50 – – not to mention day traders not having to worry about overnight gaps, it is horribly tempting to throw all the knowledge I've built over the past quarter-century into the shredder and just take that approach. But, simply stated, that just isn't me, and it's not my style. There's a reason I approach the markets the way I do; sometimes it works brilliantly; sometimes it seems foolhardy. Lately, it seems to be more of the latter. But throwing my arms up and completely changing styles just because I'm frustrated doesn't seem prudent to me, although I'm willing to hear other opinions.
What worries you more than anything? It isn't pre-election shenanigans; it isn't monthly OPEX silliness; it isn't the Fed; it isn't Geithner. What worries me above all is…….what if I'm wrong about the economy? What if all this government intervention, in the end, turns out to be a brilliant stroke, and it really does set the economy on the road to a robust economy complete with healthy, growing earnings, growing employment, and worldwide prosperity? What if my sense of "balance" and "natural" is just misguided, and the modern knowledge of economics has yielded a situation where things simply aren't going to roll over again? I have no answer. That's simply my question.
A Harrowing Session
Today was my worst trading day ever, measured in dollar terms.
I came into the day not just fully short, but margined to about 135%. Virtually every one of my positions was in the red, and I trimmed the quantity of my positions substantially. I picked up three large long positions – GDX, FXE and IWM – although obviously it would have been nice to have bought them at yesterday's prices instead of today's.
All in all, a day like this is disheartening beyond words and makes me wonder what all the hard work is for.
It seems that 1040 as a buy-everything-you-can point has been a good rule lately. If we pass the area marked in yellow (1098.50), it will weaken the bear case. It we cross the green tint (1129.50), it's time to hang it up.
I'm done for the day and will probably just go crawl under a blanket now.
