Not General Jackson, but “the Earl” himself!
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Oh my, did you see that egregious sell-off in the last hour of trading?  

My heavens, I almost had the vapours (sic).   I high-about had a hernia.   In a fit of panic, I frisked the cat thoroughly for hidden weapons.

Almost everything sold off, including our friends at the [[SPY]] , our “tell” index.   

Well, almost everything.   [[BIOS]] was strong into the close, almost as if everyone was watching all the buyouts happening in its industry.   (That’s The PPT information I’ve been linking in the notes, fyi.   Have you signed up yet?)

But you know we’ve had these swoons for months now.   In fact, I count seven of them in the last three.   And yes, we are nearing a dollar bottom, so there’s likely to be some weakness here,  just as we’ve had those seven times in the past.    What’s important is that the trend, as herky jerky as it’s been has stayed UP (thanks to [[UUP]] , maybe?

Check it, Chekov, and chillax:

 What to do?  Oh what to do?

Sell some calls, trim some wins, stack your bologna for the next round, maybe?

Better yet, consult with the earl for your favourite (sic) bread-bordered meat & cheesy comestible.  

I am out all day tomorrow on a coastal state excursion, so my interraction will be spotty.    I will be checking comments.   Ciao.

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No, no!  Not Obamacare!  Not yet, at least… not if these “scary mobs” have anything to say about it , at least.

No, I was just talking about my vacation next week, when I will be away from the office and away from this blog for quite a bit.   So much so that I have decided to hire on a Vacation Blogger to deal with you all during the week I’m gone.

I’m putting him/her through his/her paces now, so we shall see what we shall see.   I have known this person for a long time, and, somewhat like a Jedi Master and his paduan leaner, I believe we have forged a special bond that will result in him carrying on the Jacksonian tradition here with honour (sic).

Oh, and he will also light into any Canuckistanian leftoids with very little prompting.   Which is always good.

That all said, we had a wacky day today in the market, did we not?   Up, up and “bonk” on the [[SPY]] 38.2% retracement line (well, almost), instead of “away.”  

Remember this chart from some weeks back?

Well, let’s look at what it’s grown into — we just hit that second resistance line today!:

Now that’s a ton of money flow moving into this surge, and we still look like we’ve got more room to go.  Don’t be surprised, however, if that resistance line forces a breather here.   I hope I’m wrong, as I’m egregiously long, but I have to expect this second line will act as a similar “rest” area for our raging bull, just as the first one did.

So we have some work to do and a dollar resurgance to fight next week.  Unfortunately, I will not be here to hold your hand for that.   I will be here through most of the weekend however, and will try to get you a Jackonian update  tomorrow, in between packing and other errands.

In the meantime, gird your loins for a week of…. Vacation Blogger!!

Best to you all.

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Before you all get all loose wheeled and boot-rollicky because Timmah Geithner decided to extend the last few remaining TARP nickels  to carnival midway operators, portable potty lessors and, oh yeah — bullshit life insurance companies, let’s keep in mind it’s the Transports ($TRAN) that run this market.

And the Trannies look a little ailing …or to be less dramatic — fatigued:

Note how we’ve broken through the 20-day EMA that’s been support since the March lows?    After such a massive (9 week run) a pullback here to the 50-day EMA would not be unusual and in fact is a healthy circumstance… if  it’s just a pullback to the 50 day EMA.   Anything further and we could be talking a wholly different Devil Dawgian scenario.   

But   for now let’s let the Zone of Indecision be our guide since it so fits with our EMA’s and support levels.   Below that level, there be dragons I fear.    

The weekly $TRAN chart gives me pause too.  Check out this bearish engulfing somnabatch:

And right off the 34-week EMA too!  I expect we should flirt with that support level at least, and if we break through it, it could get far nastier.   I have already hedged my largest transport position — UPS, but in the event of a break of that support at around 2900, I will be getting short in everything save the Core Porfolio in a much larger manner.

Now let’s look at the $SPY weekly chart one more time for synthesis:

As expected we did pause in that 940-950 area, and are in fact retracing to what looks to be the 13-week EMA, which has been support for almost six weeks now.  Whether we head back to our second target zone (in the 1010 area) will depend on the bounce, or lack thereof, left in the 13 week EMA here.  

 Personally, I think we head back up one more time after a pause, but that’s almost as instinctual a call as it is a chart reading one.    In any case, we can continue to use the reliably signalling Trannies, as well as the above $SPY weekly, to provide us a rough guideline for the weeks ahead.  

Happy Preakness, and Victoria’s Day to our Northern neighbors.   I should be back tomorrow with a weekly update on the Core.   Best to you all.

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Remember when I started posting for the start of competiton,  a little bit less than a month back?   I put up this look at the S&P 500 chart, to give an idea of where our regression to the mean (200-day EMA) targets might lie …

Well, here’s where we’ve come since that first chart, and perhaps some signs of where we might be going….

As you can see from the above chart, the obvious resistance point is right ahead of us, at the segmented red line, which is also the not-so-coincidental meeting of the 200 day EMA (@ 950) and the early January cycle highs of about 945.   I think it’s highly likely we pause and at least digest for couple of days at this level, if not complete a pull back all the way to the 50-day EMA in the 840’s region.   

That said, given the power of this recent move, and the very convincing money flow into the large caps here, I think we may have even one higher push to go after this pause at 945-950.   I think this market will continue to confound the bears by continuing to overachieve in the face of  “not horrible” news.  I think we go all the way to that second (blue) line at around 1010, and with very little provocation.  

In addition, there’s one other observation that’s been intriguing me here.   Do you see how there is very little resistance (via the price-volume bars to the left) before almost 1200 on this chart, once we’ve broken through that second target line?  

How ironic would it be to see the few remaining bears’ backs broken as the market galloped heedlessly through that light resistance “free air” all the way to that more formidable resistance bar in the 1250-1300 region, only to finally turn poisonous once again, and decimate every true believer who had hopped on the treachourous bull bus of certain death by that late date?  

I hear you all telling me to put the Vick’s Vapo-rub away as you read this conjecture, but take heed.   It could get severely, almost Andrea Dworkin–level ugly, and yet, I don’t see that “catch the market idiots” move as a fantastic scenario, given the current inflationary bubbles beginning to percolate in the PM , Earl, Ags and materials sectors.

But let’s face it, we don’t know what even tomorrow will bring for the SPX.   What we can use as a proxy crystal ball, however, is the Large Cap Techs as illustratrated by the following Cube Chart:

Note that the Cubes have already broken out of their consolidation zone, and are currently testing those levels on a pullback.   Note also they have breached their 200 day EMA, and are again, re-testing those levels on the pull back.   Note also how the Cubes’ oscillators have also turned down in response to this pullback?   

I expect the S&P 500 to follow its more ADD-HDAD tech-nerd brother in the same fashion over this next week.    And I believe the Cubes behaviour (sic) will continue to act as a “tell” for our overall market as well, so let’s keep a gimlet eye on both charts for the return of the bear, which I have no doubt is only on torturous hiatus here, and will be back soon to set fire to both young and old alike.     

Until then, peace be unto you and yours.

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UPDATE:  Covered 60% of my TSO June 17.50 short calls @ 0.70 ($0.52 profit), Bot 10k PLLL @ 2.15 – 2.20, bot 10k SVA @ 2.73- 2.75 (hat tip to Caveman Forecaster – post found here ).

Caveat:  If you choose to put on any of these trades there’s ample chance your wife will force you to live in a cave until early winter, and you could lose money, quickly.

UPDATE:  Bot 2k ELN @ 7.33 (hat tip to CA and RC’s  Circus of the Stars)

Caveat:  If you buy ELN at this juncture, and Irish drug addict could decamp on your front stoop, warbling “Black Velvet Band” til all hours of the morning and putting off your cats, AND you may lose money.

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UPDATE:  Bot another 2k  of SLW @ 8.62 .  Acorns for a rainy day, see caveats above.

 

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Cadged from WFMU.org with my thanks.

 Twenty-Four Reasons to hope for a stock market crash in the new millennium
By Dave Mandl
Art by Bob Piersanti

 

Cheap TriBeCa real estate

No more discussions of the NASDAQ on sports call-in shows

Twenty-three-year-old former wunderkind founder of The Globe.com arrested for beating up a transvestite in West Hollywood

No more damn books about Warren Buffett

Startling revelation: Microsoft is no more than a slave labor camp for twenty-year-old white kids that sells hideously bad software at criminal prices; Bill Gates is a pudgy, semi-autistic dweeb whose mother still dresses him

Cheap SUVs

Eighty percent of the world’s biggest assholes stranded in the Hamptons without carfare to return to New York (Note: requires summer crash)

No more articles on investing in Family Circle, Allure, Entertainment Weekly, or Car & Driver Magazine

Computer programmers stop dressing like Oscar Wilde and dating supermodels, go back to watching Deep Space Nine and eating Munchos like they’re supposed to

Every day is sale day at Barney’s

Born-again day-trading “genius” Barbra Streisand and her evil sidekick Donna Karan lose it all

Inane commodity-prices ticker at Shea replaced with Jerry Koozman monument

Price of Trump Hotels stock actually falls below zero

So long forever to Smart Money, Upside, Worth, Fast Company, and Cigar Aficionado; more room on newsstands for SweeTarts

Parade of TV market pundits swear they’ve been 80% in cash all along

New York magazine special issue: “Staten Island: The Undiscovered Gem in New York Bay”

CNBC Market Babe Maria Bartiromo back working in Nellie’s Pizza on Bay Ridge Avenue

Online brokerage firm E-Trade, its stock price under intense pressure, branches into dry-cleaning business

Web-page-designers begin to lie when asked what they do for a living

Re-emergence of OTB as a viable gambling venue

No reservations necessary at Nobu, even on Saturday night

Federal government drops its proposal to invest Social Security funds in stocks, decides to put the money in a huge stamp collection instead

Amazon.com stock certificates replace Pokemon cards as latest kids’ trading craze

Top-rated TV game show: Who Wants to Win a Roll of Quarters?

(Highlights mine.)

Will attempt to get a weekend update up about the S&P and the Jacksonians between wedding festivities.  Silver and gold and their miners still looking very stable here, which is important.  Ciao* for now.

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* (in a good way)

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A reader asked me about Silver Wheaton (SLW) on the pull-back today, so I figured I’d take a second to show you why I like silver here for the “secular bear run.”   Let’s start out with an interesting chart  {$SILVER:$SPX}  which plots silver against the S&P 500 since the start of the dot-com meltdown:

  As you can see, silver has been on a bull run since about April of 2002, when it crossed over the 200-week moving average.  Even through the subsequent four year bull cycle of 2003-2007, it continued to outperform the S&P 500 on a trending basis.   What’s more, this ratio has never become oversold on an RSI basis (below 30), with only two trips in that period below 40.  The ratio is also showing a possible turn (vs. the $SPX) on the slow stochastic as well.  Silver is also cheap compared to gold, with gold currently priced at 73 times the price of silver (as of 3:00 today).  The traditional “classic” gold/silver ratio was that held from the 17th to the 19th centuries was 16 times, and in 1980 the ratio at their respective heights was about 17 x, when silver spiked to $48 an oz, and gold to $850.   Inflation adjusted, we’d need to get back to $129  and $2,200 an oz. respectively to re-acquire those heights.     At double the 16 ratio (ie, 32x), however silver would still trade at almost $28 an oz. even with gold remaining at it’s current price! 

Now to a silver mining stock dear to my heart.   Let’s face it, most publicly traded silver mining companies are run by inbred families of feuding Romanian dwarves more interested in “Friday Night Rasslin'” and trading silver shaving for Natural Light 30-packs than they are those boring “balance sheets” and “income statements.”     As a result most silver mining companies tend to frustrate investors even in good times for precious metals.   

Silver Wheaton is different.  It’s run by the same cockney Canuckistanian cads that brought us Wheaton River Gold, the successful gold startup that eventually took over Goldcorp (GG).    The Wheaton River Gold guys have done what they’ve said they’d do now for almost ten years running, which in precious metal mining circles is the equivalent of a weekend full of “36, Winnah!”s on the roulette wheel in Vegas.   It so much doesn’t happen that I’m researching the theory that they are in fact, Raelians sent to make those of us worthy enough (and who purchase the proper sneakers), rich.    Ack! Ack! Ack-Ack!

See the annotated chart below — where SLW has finally filled that gap that’s been driving me crazy for weeks:

CAUTION!  Investing in Precious metal miners is NOT for the faint of heart.    While I think that SLW and PAAS are two of the best out there, that’s like saying I find the Phillipino black mamba and the South Rhodesian Stuttering Asp  the most appealing of deadly poisonous snakes.  I recommend a basket of miners in both gold and silver, as well as a core position in SLV and GLD, and the “fizzical” metals themselves.   These are shelters in the storm, but they must also be watched.   Build positions judiciously, and sloooowly.   I will go over additional miners as we move forward with the Silver Surfer.   Best to you all.

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