Slope of Hope Blog Posts
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Good evening, everyone.
I had a lot of meetings this afternoon, so my blog-writing time sort of got gobbled up.
I was delighted and thrilled to see AAPL getting slammed after-hours. For nearly a decade, AAPL has almost never disappointed the public with its earnings. This evening is a delicious exception. During the completely ridiculous run-up in price late in the regular trading day, I shorted the bejesus out of QQQ. At the risk of looking like a complete doofus in case QE3 through QE12 is announced before Wednesday, I will let you know that I have 116 short positions. (One of which, NFLX, is in a virtual free-fall this evening).
Let's get started on Part 2 of How to Predict Market Action From the 1st Hour of Trading by discussing the Heavy Market Gap-Ups.
You'll remember yesterday how I discussed gap-downs can be very difficult for the bears to hold on to the weakness. So the obvious conclusion then is that bulls would have a difficult job of holding on to gap-ups. But that comparison really doesn't work with gap-ups. They are completely different in personality and how the market responds to them.
There are a lot of major players in the market with tons of buying power that simply cannot short the market or any stock for that matter. As a result, the only choice they have is to buy or sell (short/cover isn't a viable option).
Further to my post of July 17th, once again, Oil finds itself testing rising channel support on the Weekly chart below. At the moment, it's trading in between the 50 sma (red) and the 200 sma (pink) in an attempt to break out of this range either to the upside or the downside. Its recent rally didn't quite make it all the way up to the "mean" (mid-Bollinger Band).
I've been touting for-profit education stocks as good short opportunities for quite some time. I laid out my argument in this post from January, in which I reported shorting DV when it was in the 40s. Please re-read the post to see the fundamental arguments I made against for-profit education companies.
Well, fundamentals are definitely catching up with reality. The stock was trading in the teens earlier today, having lost about a quarter of its value right at the opening bell. Ultimately, I think some of these education companies will be as bankrupt as the students that graduate from these pathetic institutions.
I was saying yesterday morning that there would most likely be a bounce before any test of the 1325 SPX support level, and we saw that yesterday afternoon. So far that bounce looks like a bear flag, and if we see more upside today I have a target in the strong resistance area 1357-63, with the gap fill from yesterday morning at 1362.66 SPX of course. The middle bollinger band held on a closing basis, and if we see a close below 1350, and a break of rising support from the June low on the daily chart then the next obvious support and target are the lower bollinger band and the 200 DMA in the 1315 area: