There are a lot of stock calls here…BUT

March 24, 2008 11:28 PM

The reason I have not given many long stock calls here is that I am simply not a huge believer in this rally….The long term downtrend is still in play ( I am not a big believer in trends unless supported as I have mentioned) ….and the volume today or lack thereof, tells me I am not alone. The volume on the Dow was very, very low. If people actually believed in this, you would see far higher volume, IMO.

The best and safest trades remain on the short side or to buy above critical low points…..and see if they hold. I would avoid the financials here like the plague or cancer, take your pick. But look to be long them above their lows.

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Fed Day

March 18, 2008 11:12 AM

The fed will be cutting rates today. Most expect a .75 cut. Not surprisingly, the futures are up this morning. At 6 CST they are at 1295.

It is generally best to avoid Fed days and see where everything shakes out.

The feeling I get is people are going to buy the market “because the market held after Bear news”. As my other posts stated, this would be the first real bottom of a bear market that I have ever seen without a true reversal in the SP. Is it possible? Anything is always possible. Is it likely based on history . No way.

I understand that Dow did finish positive and that is what this nonsensical bottom talk is hanging their hats on. Bottom line is the SP generally leads the market, long term. The Dow is just 30 stocks…and is always skewed to the upside as they simply remove stocks that are long term dogs and add new ones.

All I am saying is, I trust history, I trust the charts…they both tend to repeat themselves…day after day, month after month, and year after year. Take this bounce for whatever it is worth - but it is not the bottom, IMO. Again, unless this is the first time in history….

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Well, Big rally…now what

March 11, 2008 8:26 PM

The Fed got the financials turned around in a big way by taking $200 billion of their crap and said they would take more. Nothing like giving away a few hundred billion to get the markets going.

The significance of this move, as opposed to huge rate cuts, which I believe would have plunged the markets, is that they may not have to cut as much near term now. Rate cuts are plunging the dollar and causing major inflation fears - and rightfully so. So throwing gas on that fire is a huge mistake, IMO.

I believe this rally will last at least through tomorrow. After that it gets dicey. There are no reversal points on the futures to at least 1244 if I recall correctly and not much news tomorrow. Shorts will let this run and then scalp the hair off the longs again as soon as reality sets back in.

The thing that I do not like here is that we have ONE point of reference to be long to stop selling in the future 1386.25 on the futures. Therefore, once ugly news sets in down the road, we will most likely revisit this issue again.

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Forget the SP Jan Low

March 10, 2008 11:40 PM

I do not consider the Jan low on the SP “critical” anymore to prevent a market collapse because of where the Dow is. I suspect we will take out the Jan low on the SP rather easily, but the Dow low was 11508. That is where the eyes will shift for this month, IMO. Will it spike down once we clear it the SP Jan low?? Almost certainly. Will the market collpase? Most likely not as everyone will be watching the Dow low once the SP clears…

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Any Long Trades in March

March 10, 2008 12:34 AM

Keep in mind that my outlook on the overall market is very negative for March and any positions taken long should have hard stops where I say. At this point, any long positions on VLO, XOM, and MON would be countertrend trades hoping a specific price point will hold or at least provide a one time sharp bounce. I just wanted to point out to not go against my advice when I say exit a stock at a certain price. My “posse” of readers will recall that I said to exit or short JPM if it cleared $42.01 (currently $37.56), to sell or short XOM if it cleared $89.04 (it fell to a low of $77.55 before reversing), to sell or short AAPL if it cleared $176.99, etc. etc. I also said to short Apple at $200 with a hard stop above $202.96 on Dec 28th, but that was a different type of trade. The countertrend trades are the best BUT far better if there is a recent reversal point so trades long on VLO, XOM and MON are not my favorite trades here. But my readers have interest in those stocks, so I wanted to provide insight into what I see on them.

If it clears my points, exit and wait until I give another price or move on to another better stock. There is always another trade or another stock. Patience and discipline.

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Long Term Chart Patterns Suggest Negative March

March 9, 2008 2:51 PM

I was studying the long term chart patterns this morning (yes, I know, I have no life)…and it does not appear favorable from a risk/reward standpoint. The charts suggest that we may have already seen the highs for this month. In fact, I would say it is highly likely. The SP long term charts suggest that the max high for this month should be one of the following areas….1360,1380 or a max top of about 1440. The odds of 1440 appears exceedingly small, and the most likely outcome appears to be a max high of either the 1360 or 1380 range with 1360 range being far more likely. The charts also suggest where a bottom would be for the month. This will be a …gasp…for the longs…..the bottom should be no lower than 1140 range. I am not saying we WILL go there…but if we do get there…bet the house on long. We will not go lower than that area in March on any panic selling. I am almost certain of it. I coined a name about a year ago looking at chart patters…. V and Reverse V…and March is in what I call a Reverse V. This is the worst possible formation to be long in and it suggests March should finish negative and possibly heading lower, maybe far lower. Keep in mind, the chart pattern does not say this is where we WILL go or will finish the month. It is just suggesting that we should finish the month between a high of 1360 or a low of about 1140. The long term chart pattern did predict the Jan low as it predicted we should not exceed 1260 - 1270 range in January. The only reason I say “range” is that charts suggest resistance and support “areas”. They provide insight as to what people are most likely to do in that range - until proven otherwise.

Looking at the Dow charts, it is a very similar pattern, which is not surpising. The Dow was in a Reverse V in January, and the chart predicted a likely high in the 13400 range for January…which was the high….and a max low of 11,500…which also was the low. The Dow is also in a Reverse V in March. The march chart predicts a max high in the Dow of either 12400, barely over 12500 or all the way to 14000 and a max low of…again…far lower…of about 10,400. It also appears very likely that we have already seen the highs for March for the Dow. It is always possible that we could break out of the Reverse V pattern. If we did, we would likely spike to the upside in huge fashion….but it is always very unlikely and would take dramatic news to do so I believe.To go up in April, the Dow would need to close above 12000, ideally a couple of hundred points above it, then the April high could be as high as just over 13000 and the likely low would be 12000. That appears to be a big “if” at this point….

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