14 5/8 should be a good area to establish long positions, with a sell stop just below the most recent lows.
Tuesday, July 31, 2007
Real Time Pattern Example - ROCM
I continue to look for an entry into ROCM at the mid-point of the second candle in the pattern.
14 5/8 should be a good area to establish long positions, with a sell stop just below the most recent lows.
14 5/8 should be a good area to establish long positions, with a sell stop just below the most recent lows.
Equity Market Comment
Today was a fine example of why I would not try and capture any reflex rally that I thought was on its way.
The hedge remains in place until we reach at least the 50% level on the chart below.
Very Aggressive traders can take a long position if the market sells off early in the day. The odds of a snap back rally have increased dramatically with the price action today.
Remember that the ultimate low has yet to be put in place and any buying in this enviroment is a high risk proposition!
The hedge remains in place until we reach at least the 50% level on the chart below.
Very Aggressive traders can take a long position if the market sells off early in the day. The odds of a snap back rally have increased dramatically with the price action today.
Remember that the ultimate low has yet to be put in place and any buying in this enviroment is a high risk proposition!
Monday, July 30, 2007
The Return of the Greenback
The Commercial Traders in the dollar are pretty savvy investors as the blue line shows.
The green line are the commodity funds and they are extremely short while the
smart money is heavily long.
This combination coupled with everyone looking for a dollar collapse, should set the stage for
a dollar bottom and a substantial rally.
This outlook also supports my bearish outlook for gold.
The green line are the commodity funds and they are extremely short while the
smart money is heavily long.
This combination coupled with everyone looking for a dollar collapse, should set the stage for
a dollar bottom and a substantial rally.
This outlook also supports my bearish outlook for gold.
Educational Module #1 - Candlestick Patterns
I realize that I have not done an educational module in quite some time and it is time to get back on track with it. I am going to start completely over, so there may be some repetition for long time readers.
The first module is going to cover Candlestick patterns that are very reliable of which there are only 3. The first is the Three White Soldiers pattern as shown below. We will follow these pattern selections in real time and learn from them as they develop before our very eyes.
You can see from the chart, what it is that makes up the pattern. It is a multi day pattern (3 days) and is one of the most reliable, especially after an extensive decline.
The ideal purchase point for traders is the middle of the second candle of the pattern.
Position traders can begin their accumulation at the onset of the pattern with a 25% allocation of the full position you wish to carry.
The first module is going to cover Candlestick patterns that are very reliable of which there are only 3. The first is the Three White Soldiers pattern as shown below. We will follow these pattern selections in real time and learn from them as they develop before our very eyes.
You can see from the chart, what it is that makes up the pattern. It is a multi day pattern (3 days) and is one of the most reliable, especially after an extensive decline.
The ideal purchase point for traders is the middle of the second candle of the pattern.
Position traders can begin their accumulation at the onset of the pattern with a 25% allocation of the full position you wish to carry.
Long Term Equity Perspective
If this were to be a major top in the market, then we would see some major selling by
the smart money before the decline began. Remember the smart money is the blue line at the bottom of the chart. As you can see they are heavy buyers which translates into much higher
prices once this much needed decline is out of the way
Notice also that the Commodity Funds (Green Line) are heavily short.
This is the fuel needed to push the market higher and with these funds at the bottom
of the range it gives the market a bunch of fuel to rally once it gets back to it.
Clearly this chart is saying BUY on any weakness, PERIOD!!!
the smart money before the decline began. Remember the smart money is the blue line at the bottom of the chart. As you can see they are heavy buyers which translates into much higher
prices once this much needed decline is out of the way
Notice also that the Commodity Funds (Green Line) are heavily short.
This is the fuel needed to push the market higher and with these funds at the bottom
of the range it gives the market a bunch of fuel to rally once it gets back to it.
Clearly this chart is saying BUY on any weakness, PERIOD!!!
Lumber- Buy Half
Lumber is in the buy area.
Take 1/2 the position here and upon a ensuing rally place the second half of the position into the equation.
Take 1/2 the position here and upon a ensuing rally place the second half of the position into the equation.
USU - USEC Corp
Final downside target on USU is $14, but the first leg appears to be over.
If you are aggressive you can look to play the rally as it should be quite fruitful.
The major point here is that once the downside target of $14 is reached. the next move upwards is going to be very powerful. As a matter of fact, take a look at a chart of TNH and it will give you some guidance as to the potential!
If you are aggressive you can look to play the rally as it should be quite fruitful.
The major point here is that once the downside target of $14 is reached. the next move upwards is going to be very powerful. As a matter of fact, take a look at a chart of TNH and it will give you some guidance as to the potential!
Counter Trend Rally has Commenced
Counter rally looks to have begun.
Keep in mind that this decline is NOT over and the last leg down
should scare the daylights out of people unawares.
Don't be one of the unawares, take full advantage of the decline.
Keep in mind that this decline is NOT over and the last leg down
should scare the daylights out of people unawares.
Don't be one of the unawares, take full advantage of the decline.
Sunday, July 29, 2007
FORD - Turning The Corner Can Be Sweet
The evidence continues to mount that Ford is pulling itself out of its self inflicted slump that has been going on for what seems to be a painfully long time.
The stock should reward loyal stockholders who took advantage of the huge bump in Ford's road with a potential double in the stock price over the next 9 months, perhaps sooner.
On a personal note, please understand that Fords problems were not and are not derived from
labor costs. Anyone with elementary mathematical skills can do the math on this one. So don't swallow the propaganda, common sense tells us exactly where the problem derived from and we all know from where.
The stock should reward loyal stockholders who took advantage of the huge bump in Ford's road with a potential double in the stock price over the next 9 months, perhaps sooner.
On a personal note, please understand that Fords problems were not and are not derived from
labor costs. Anyone with elementary mathematical skills can do the math on this one. So don't swallow the propaganda, common sense tells us exactly where the problem derived from and we all know from where.
Saturday, July 28, 2007
TNH - Terra Nitrogen
Terra Nitrogen rewarded us far more than we could have thought.
The great news is that once we see a pullback of some serious magnitude then the real
fireworks to the upside will begin.
The great news is that once we see a pullback of some serious magnitude then the real
fireworks to the upside will begin.
Fording Coal
Fording is going to make itself available for those who missed it at the previous low.
Long term this stock offers some excellent potential.
Long term this stock offers some excellent potential.
Friday, July 27, 2007
No Major Low Yet!
Notice on the Three Line Break Sentiment chart that further downside is needed before
any confirmation of a major low being put in place can be called.
This is one of the reasons that I strongly believe the market is not done with its decline.
While a sharp short term rally has very strong odds it will be the precursor to lower prices yet again.
I still have my August 24th time frame as the date for the low.
Time will tell.
any confirmation of a major low being put in place can be called.
This is one of the reasons that I strongly believe the market is not done with its decline.
While a sharp short term rally has very strong odds it will be the precursor to lower prices yet again.
I still have my August 24th time frame as the date for the low.
Time will tell.
Secular Reversal?
The potential start of a meltdown in the foreign currency markets.
Position traders stand to make a small fortune from the short side of the market in the
Euro and Pound.
Position traders stand to make a small fortune from the short side of the market in the
Euro and Pound.
Lumber - Stay Alert
Lumber is getting very close to our first buy target of 2.72, so stay alert on this one.
Crossroads Sugar
The first pullback in sugar is going to tell us much about the health of the market.
If it can find support in the 9.19 to 9.44 area and begin a fresh leg up then it will be strong confirmation that a new long term trend is underway.
Keep your powder dry for this one!
If it can find support in the 9.19 to 9.44 area and begin a fresh leg up then it will be strong confirmation that a new long term trend is underway.
Keep your powder dry for this one!
Short Term Fear
There seems to be enough short term fear created here to warrant some type of rally.
Look for this rally to calm the nerves just in time for the final squash to upset the applecart once again.
The final push lower should see a mad rush into bonds and quality, so once we see sentiment turn very bearish coupled with a flight to quality into bonds, we will know it is time to remove the hedge and get back in.
Look for this rally to calm the nerves just in time for the final squash to upset the applecart once again.
The final push lower should see a mad rush into bonds and quality, so once we see sentiment turn very bearish coupled with a flight to quality into bonds, we will know it is time to remove the hedge and get back in.
Thursday, July 26, 2007
Crude - Scalp Some Short Profits!
Very typically a move such as we saw today in crude will lead to a sharp sell off over the next 3-5 days.
I continue to remain bearish long term on crude.
I continue to remain bearish long term on crude.
Cotton - One More Push to New Highs
Look for cotton to make one more push up to new highs for this most recent move, before
a decline of substance occurs.
Look to sell cotton short on that push to new highs!
a decline of substance occurs.
Look to sell cotton short on that push to new highs!
WCI - Incredible Bargain
It is almost criminal what Wall Street is doing to many of these quality companies that are
related to housing.
Take full advantage of these conditions and buy WCI while there is blood on the streets, the value is incredible!!
related to housing.
Take full advantage of these conditions and buy WCI while there is blood on the streets, the value is incredible!!
Arbor Realty - BUY BUY BUY
I had brought up Arbor Realty earlier and talked about the $21-$22 area on the stock
as a prime place to purchase.
Well here we are!!! So lock in that 10 1/2% dividend yield and profit from the gross
imbalances that are staring us in the face with anything quality related to housing!
as a prime place to purchase.
Well here we are!!! So lock in that 10 1/2% dividend yield and profit from the gross
imbalances that are staring us in the face with anything quality related to housing!
First Leg Down Looks Completed
The first leg of the correction looks to have concluded today.
While a retest of the lows we saw today is possible, the next move of substance should be up.
Look for heavy resistance to come in at the 1510 area on the S&P 500.
Don't get me wrong here, I am not covering my hedge I have put in place.
I still believe there is more to come on the downside, but short term sentiment is telling
us that this first move down is just about over.
While a retest of the lows we saw today is possible, the next move of substance should be up.
Look for heavy resistance to come in at the 1510 area on the S&P 500.
Don't get me wrong here, I am not covering my hedge I have put in place.
I still believe there is more to come on the downside, but short term sentiment is telling
us that this first move down is just about over.
Wednesday, July 25, 2007
Copper - Pare back your long positions
Copper remains in its intermediate term bull market, but looks poised to move lower short term into the $3.09 area.
Use this area to purchase long positions.
Use this area to purchase long positions.
Gold - Marking Time
Gold remains in its 5 month trading range and we await a break on either side.
Aggressive traders can play the downside here to the bottom of the range.
The Commercial Traders data is of no help at this point.
Aggressive traders can play the downside here to the bottom of the range.
The Commercial Traders data is of no help at this point.
Sugar - At A Telling Point
This pullback in sugar is going to tell us much about the intermediate to long term trend.
If the market finds support in the 9.32 to 9.19 area then we can safely say a new strong uptrend is underway and a long position should be established.
The Commercial Traders data certainly tells us that Sugar should move higher.
If the market finds support in the 9.32 to 9.19 area then we can safely say a new strong uptrend is underway and a long position should be established.
The Commercial Traders data certainly tells us that Sugar should move higher.
Lumber - Tells A Story About The Housing Market
Lumber has completed its first minor trend leg up and also has confirmed a long term trend change change from down to up.
Look to establish long positions in the 272 - 273 area.
There is some excellent upside potential here!
Look to establish long positions in the 272 - 273 area.
There is some excellent upside potential here!
Housing Stocks - History Repeats Again and Again
The great thing about Wall Street and Equity Markets all over the world is that if you are patient and you do your homework then huge opportunities will come your way.
One of the greatest ways to make money in equities is to find a sector that is being shunned like the plague and look for value. This is especially rewarding when such a huge imbalance of what is real and what has spooked people has a wide spread.
WCI is not the only Housing related stock that offers a tremendous value in this area, but it is one that I like and currently trades at a price that I LOVE!!
This meltdown in Housing, Real Estate and Mortgage Stocks is a great lesson to how at times there are huge imbalances in the markets. If the majority of why this imbalance has occured seems unfounded and overdone then take advantage of it!
One of the greatest ways to make money in equities is to find a sector that is being shunned like the plague and look for value. This is especially rewarding when such a huge imbalance of what is real and what has spooked people has a wide spread.
WCI is not the only Housing related stock that offers a tremendous value in this area, but it is one that I like and currently trades at a price that I LOVE!!
This meltdown in Housing, Real Estate and Mortgage Stocks is a great lesson to how at times there are huge imbalances in the markets. If the majority of why this imbalance has occured seems unfounded and overdone then take advantage of it!
Blackstone - Certainly has lived up to the STONE part of the name!
Blackstone is very close to offering us a great value, so keep it on your radar!
Sunday, July 22, 2007
Simply More Proof
Here is yet another piece of the puzzle, that clearly shows how weak the current state of the market is.
As you can see, price continues to move higher, but the participation of stocks continues to erode.
With the markets holding up as well as they have in the face of such divergences, it is very possible that we might experience a mini crash that will scare the hell out of people and get them
to all throw in the towel. From this point the real upside of the market will begin.
As you can see, price continues to move higher, but the participation of stocks continues to erode.
With the markets holding up as well as they have in the face of such divergences, it is very possible that we might experience a mini crash that will scare the hell out of people and get them
to all throw in the towel. From this point the real upside of the market will begin.
AGL Test and Lesson Time
Take a look at this weekly chart of AGL and tell me if it would be prudent to purchase the stock now, or wait for it to settle back and test the lows.
The answer is in the past.
I will post the answer this week.
Also look below at the daily chart of AGL.
The answer is in the past.
I will post the answer this week.
Also look below at the daily chart of AGL.
If you recall when we were looking at AGL as an educational tool that demonstrated a consolidation zone. The stock broke out of the zone in the opposite direction, but you can plainly see that it is a very useful tool and something you should always watch for.
Notice also, that once the stock broke below the bottom of the consolidation zone, it came back to test that level once more and failed. From there the true decline began.
The Only Inflation Gague is The Growth In The Monetary Base
If you follow this headline alone, it will put you ahead of 99% of the PH.D holding economists.
While they are busy making their complicated Econometric Models to predict inflation, we can do a very simple calculation and be done with it. On top of the simplicity is the accuracy.
So, simply take the Current Monetary Base, found in the St. Louis Fed Data and then this same data from a year ago. The percent change in the data is the inflation rate and best of all is a leading indicator.
There! Now you are armed with what amounts to a full semester of graduate classes, except this little diddy is actually useful.
While they are busy making their complicated Econometric Models to predict inflation, we can do a very simple calculation and be done with it. On top of the simplicity is the accuracy.
So, simply take the Current Monetary Base, found in the St. Louis Fed Data and then this same data from a year ago. The percent change in the data is the inflation rate and best of all is a leading indicator.
There! Now you are armed with what amounts to a full semester of graduate classes, except this little diddy is actually useful.
Secular Highs Being Put In Place?
Monthly chart of the British Pound is starting to look very much like 99% of this strong
move is over.
Sentiment about the U.S. Dollar would confirm this thought.
Ask yourself what it is that I see on the chart that would indicate this secular move is over.
move is over.
Sentiment about the U.S. Dollar would confirm this thought.
Ask yourself what it is that I see on the chart that would indicate this secular move is over.
Saturday, July 21, 2007
Keep The Stop Close
Corn is at the crossroads here.
The second leg down has not equaled the first leg down in price, so there is room for a bear market rally here. However, the lows were taken out and this would call for lower prices yet still.
The best plan of action is a tight trailing stop that will lock in our profits on corn should the market begin to rally.
One thing remains clear and that is the fact that the ultimate bear market low for corn has a long way to go before it gets here.
The second leg down has not equaled the first leg down in price, so there is room for a bear market rally here. However, the lows were taken out and this would call for lower prices yet still.
The best plan of action is a tight trailing stop that will lock in our profits on corn should the market begin to rally.
One thing remains clear and that is the fact that the ultimate bear market low for corn has a long way to go before it gets here.
After The Correction Look To Corus
They say a picture is worth a thousand words.
In the case of Corus (cors) it will be many multitudes of a thousand.
Keep an eye on this one as it will offer a chance of a lifetime in the very near future.
In the case of Corus (cors) it will be many multitudes of a thousand.
Keep an eye on this one as it will offer a chance of a lifetime in the very near future.
Friday, July 20, 2007
If You Talk About It Long Enough You Are Bound To Be Right : )
For those of you who have rode this great bull market in oil and oil related stocks I say
great job on massive profits!
What I also say however is that all good things come to an end and with the vast majority of investors extreme bullishness on oil stocks it is starting to look like 1980-1981 all over again.
In case you are to young, take a look back at the late 70's and early 80's and you will see a very eerie resemblance to now.
great job on massive profits!
What I also say however is that all good things come to an end and with the vast majority of investors extreme bullishness on oil stocks it is starting to look like 1980-1981 all over again.
In case you are to young, take a look back at the late 70's and early 80's and you will see a very eerie resemblance to now.
Thursday, July 19, 2007
Nanotech
While Nanotechnology is an excellent long term investment, the sector currently looks rather weak on an intermediate term basis.
Use any weakness to add to existing positions.
Use any weakness to add to existing positions.
How Many Chances Do You Want
If you have yet to begin your purchase of White Mountain, then now is an excellent time.
The stock has pulled back and looks to push higher, perhaps sharply so!
Remember this is an Ultra Long Term position and the Next Berkshire Hathaway, You simply have no excuse on this one.
The stock has pulled back and looks to push higher, perhaps sharply so!
Remember this is an Ultra Long Term position and the Next Berkshire Hathaway, You simply have no excuse on this one.
Simply Way Over Done
While it may prove to be just a bit early to purchase AHM, I simply cannot resist the bargain prices it has reached.
I plan on purchasing my line over time just in case all the downside has yet to terminate.
This would be considered very Aggressive
I plan on purchasing my line over time just in case all the downside has yet to terminate.
This would be considered very Aggressive
Long Term Perspective On Interest Rates
The Secular Monthly chart of the 10 year note is clearly stating that the next major move in the price of the notes will be up.
This thus translates into lower interest rates.
This thus translates into lower interest rates.
The Continued Demise of Crude Oil
I realize that we continue to get battered with all the $100 oil opinions, but I continue to stick
with my assessment that the petro complex is in the process of a long term top and the next major move will be DOWN!!
Take a look at the C.O.T. Data:
Big Money is Selling, Selling, Selling
Fund Money are Huge Buyers
Small Traders are Huge Buyers
This all adds up to lower crude oil prices.
with my assessment that the petro complex is in the process of a long term top and the next major move will be DOWN!!
Take a look at the C.O.T. Data:
Big Money is Selling, Selling, Selling
Fund Money are Huge Buyers
Small Traders are Huge Buyers
This all adds up to lower crude oil prices.
Sunday, July 15, 2007
TNH - Thank You!
It was an incredible ride, much higher than I thought it could go in such a short time.
The party however is temporarily over and now I look for a pull back into the low 70's before
I get back in.
The great part is that once this pullback has completed, the rally that will ensue will be even more powerful then what just occurred, so keep a close eye on this one.
The party however is temporarily over and now I look for a pull back into the low 70's before
I get back in.
The great part is that once this pullback has completed, the rally that will ensue will be even more powerful then what just occurred, so keep a close eye on this one.
Get Ready For the Unexpected!! - American Cars Back In Vogue
The Auto Sector is the next to bloom.
The purchases by private equity of Chrysler and Tower Automotive could not have been better timed. They were purchased at fire sale prices and if I could have gotten in on any of them I would have!!
Ford offers some great potential!!
The purchases by private equity of Chrysler and Tower Automotive could not have been better timed. They were purchased at fire sale prices and if I could have gotten in on any of them I would have!!
Ford offers some great potential!!
Pfizer - MRK all over again!!
While Pfizer may appear to most to be in a world of trouble, it is not how it should be viewed.
PFE offers exceptional value at these prices and as I have said before, it is in much the same
position that MRK was before it promptly doubled!!
Not to mention the stock offers a 41/2 % dividend yield.
If PFE decides to dip back into the $22-$23 area, please feel free to buy everything you can get your hands on. Your Children will thank you.
PFE offers exceptional value at these prices and as I have said before, it is in much the same
position that MRK was before it promptly doubled!!
Not to mention the stock offers a 41/2 % dividend yield.
If PFE decides to dip back into the $22-$23 area, please feel free to buy everything you can get your hands on. Your Children will thank you.
MRK - A Lesson To Apply To PFE NOW!!
I have spoken about MRK in the past and especially the bargain prices we were given in the upper 20's.
The stock has more to go on the upside, perhaps the $70-$80 range, however it needs a pullback here of 10% or so so don't be alarmed when it comes.
The stock has more to go on the upside, perhaps the $70-$80 range, however it needs a pullback here of 10% or so so don't be alarmed when it comes.
IndyMac - Accept the GIFT
If you have not been purchasing IndyMac over the last 4 months, then you have been given yet another gift!!
You will look back 18 months from now and be very sorry you did not pick up this powerhouse
company that has NO SUB-PRIME Mortgages!!!
Did I Happen To Mention That IMB Has 54% of Its Stock Sold Short!!!
What will happen when all these short positions have to buy back in??
Can you say EXPLOSION!!!
You will look back 18 months from now and be very sorry you did not pick up this powerhouse
company that has NO SUB-PRIME Mortgages!!!
Did I Happen To Mention That IMB Has 54% of Its Stock Sold Short!!!
What will happen when all these short positions have to buy back in??
Can you say EXPLOSION!!!
Equities Continue to Deteriorate
Just a very quick note on the Equity Markets as a Whole.
Friday was yet another day of distribution by the smart money, so please do not get fooled by
the price action of some indexes.
It is important to note however that the bulk of the distribution by the big money has been
in a hedge type fashion. Which really helps to confirm our outlook for a sharp correction of 8%-15% followed by a hell of a rally.
I am not a bear by any means. I just recognize a market that is very tired and needs some
fear put into the players before it can continue the secular bull market!!
Friday was yet another day of distribution by the smart money, so please do not get fooled by
the price action of some indexes.
It is important to note however that the bulk of the distribution by the big money has been
in a hedge type fashion. Which really helps to confirm our outlook for a sharp correction of 8%-15% followed by a hell of a rally.
I am not a bear by any means. I just recognize a market that is very tired and needs some
fear put into the players before it can continue the secular bull market!!
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