the Yuppie Pig

Originally found this from Mark over at fundmymutualfund.com. He comes across some of the best stuff. This is a great telling of the bank failures of BS and LEH. Definately worth watching.



It's too wide to fit in the blog column, but run it in full screen.

Wow, another nasty day with a huge 25 point range today and we're right back near the lows for another test. Given the beating the health care stocks took today to add even weight to the market, and the banks getting overbought... I think we break down below the lows this time. I also note that alot of the defensive names just got murdered. (KO, WMT, MCD) Clearly, no one is behind the thesis of the retailers of any kind today...


Oil's been up alot over the past few days so I took the opportunity to sell the rest I have as it hit resistance. I'll be back in when the 60 minute chart gets oversold again.


SQNM could have been down alot more given the health care flogging today. As a result, I'm considering just closing this out, as I think we are just starting to see pressure in this sector as it had already become a bit crowded.



I thought I'd end on a calmer note...

A quick book keeping notes first...

I sold half of USO at 26, and am looking for something closer to 28 to get rid of the rest. Still short ANF, long POT, SQNM, WMT. But overall, still at 30% cash which is a bit on the low side for me, as in this market, cash is everything. But I'm still biased up, so I want some upside potential here.

The SPX tagged that resistance line at 780 and pulled back. It still seems fairly orderly, and that we can still get some upward movement on the "the government is going to save us" thesis. But how to play this if there's more upside?

Assuming that the market continues on an upward trajectory towards the 50 day EMA, I thought some high beta names would be good to trade to the upside, but I still want a "thesis" behind them so that the hedgies could potentially get behind them. I ended up with the restaurants. Similar to retailers (based on consumer spending) but at least they have a "falling costs in the second half" thesis that the funds can get behind. SBUX fit that description and has a workable 60 minute chart with a stop somewhere from 9 to 9.25. I'd like to try it out closer to 9.25 with a target towards 10.25.


Similar story for PNRA, but for a longer time frame.


And YUM's chart looks almost identical.


And since the clothing retailers can't really rely on the "falling costs in the second half" thesis, and clothes can be made to last... I'm still bearish on the sector.


All of these LONG restaurant trades are contingent on a continued rally which at this point, I still think looks likely. As the market trends towards resistance, I'll immediately want to lighten up. Or even if the market just chops around, I'd lighten up and go neutral. No point in pressing bets in this market.

And a couple notes on gold and oil. The gold stocks could be a quick trade to the upside on a bounce here at 33.


And BP has been range bound for a long time. With oil showing some life and BP at the low end of the range; maybe a good long trade back to the top of the range.

741 holds and the technicals play out. It would appear that we could get a multi-day rally here, but I'd question how far it can go. There was no real capitulation sell off, nor a catalyst for change. The financial sector and the economy is no different yesterday than it is today - but that doesn't mean the market can't move higher.

It feels like a repeat of history all over again, but an objective target to the upside on a potential rally is all the way back up to the 50 day moving average which in the past bear market, (and this one) consistently acted as major resistance. Given how far the S&P500 is below the 50 day EMA, we could meet up with it at 825 or so, right at what was once support and is not resistance.


On the shorter term, the market still remains oversold on the 60 minute chart. We should be able to push higher to 800, where it's probably going to get choppy. At those levels, I'd tighten stops and trade more aggressively.


I'm still holding a short on ANF which I'll keep as long as I'm playing the market to the upside. I just don't see much upside for the retailers except for WMT.


Hopefully this rally continues for a while, giving me an opportunity to layer into shorts in the Commercial REITs. Last time it tanked, I wondered why I was not short loads and loads of this stuff...


It's hard to find individual stocks I want to be long, but MCD is one of them. I'm long this in my retirement account, but it also looks like a decent trade to the upside. A break of the downtrend should be a couple quick points.


I'm still long POT from last week which has been down 10% and back up. I'm using this name as my "higer beta" stock, without using a financial.


And of course, I'm still long SQNM which I plan to layer in and out of. There's a few other biotech names that have decent charts, but I think for the next few days, its the oversold and beaten down names that will outperform. I'll look to these other biotech names when the rally loses some steam.


Gold also got crowded and I'm not going to join in here. I'll wait for it to settle down.

Wow, is this market ever horrid! I entered the day slightly optimistic given the greatly oversold condition, but it was not to be. A quick 10% beating in POT once again reminded me how vicious this market can be. I also started a small position in USO which also immediately took two swift kicks, but fortunately I also started a short in ANF - the only money maker of the day for me.


For tomorrow, I still can't be overly bearish given that the 5, 15, 60 and daily charts are all oversold. The VIX is at 53, nearing psychotic trading levels and imminent panic. Of course, these observations alone are not reason enough for the market to bounce here. At this point, its anybodys guess but I tend to believe that nothing moves in a straight line.

Of all the stocks I monitor, I can only truly get behind WMT, which I will add should it get below 46 again.

The retest of the S&P500 at 750 wasn't that hard to predict but deciding if it was going to break through it in a major way is significantly more challenging. I said last week that I felt I could no longer be overly bearish after 2 weeks of straight declines, but certainly, could not be bullish. After Friday's price action, I can at least be constructive in my expectations for next weeks trading. Towards the end of the day, I covered my CCL short and closed out half of my WMT position. And as things rallied in the last hour, I scrambled to find some length with led me to a position in POT and adding to SQNM.

The SPX looks like it could be putting in a reversal here, but to be honest, the selling was not climactic. The VIX did not spike and selling was primarily focused on the Financials. Without some sort of washout, we may simply be entering a new trading range from 750 to 825 or so.


The 60 minute chart is extremely oversold and I'm merely waiting for some type of short term strength for a trade to the long side. While bottom picking (aka gambling) with the financials here could yield significant reward should a reversal take place, these aren't positions I would feel comfortable holding overnight.


As I mentioned, I wanted some length towards the end of the day. I settled on POT which looks like it could move up on a little broad market strength and this is one I dont have to worry being nationalized on Sunday night.


It's a similar story for SQNM - a stock I have slowly been building a position in. First layer at 18 and this one at 16.


As I'm moderately bullish, I want to be ready with some names for the long side. FXI is back on the table for a possible trade, however, given the run in the China thesis recently, I wouldn't be surprised if it first broke down from this mini head and shoulders pattern. Either way, I'm looking to get long once it clears the downtrend line on the 60 minute chart.


Oil's been a total dog as of late, but with some recent activity in securing long term supplies of oil by China; this may be the start of a new thesis that the funds will get behind. Again, this is something I want to get long, to at least fill the gap and move a bit higher.


WFC is a gamble here as are all the financials. But if some type of "bad bank" solution is implemented, I think this name has the best risk:reward profile. That is, major risk and major reward! This really does look like a reversal here, but im playing this one day at a time... if at all.


I let go of half of my WMT, which I doubled down on recently.. I'll look to sell at the gap fill, or add at the recent lows. This is a fundamental play.


And the market would not be so interesting if it occasionally did not provide total mysteries to me. Why ANF (and some of the retailers) would be rallying here for the past two weeks perplexes me to no end. I'm looking for a safe short entry but it concerns me here, that if the market rallies, these stocks should get taken even higher.

The market has fallen over 10% in the past 2 weeks so I can no longer be TOO bearish on the market. If anything, this market has been notorious for fake-outs and who's to say that it wont happen on the downside either. While there does not seem to be any catalysts for upside movement, there also doesn't seem to be any (at least for the moment) for downside movement as well. (you know - other than unimportant stuff like earnings and all) I guess that's a positive?

The 5 min chart has formed into a tight little symmetrical triangle here and I've illustrated it below on this 60 minute chart. Here, it looks like a nasty bear flag but I'm willing to play the break either way for a trade. Overall, the 60 minute chart is very oversold and if the chart wasn't screaming "RETEST RETEST!!", I'd be a more bullish.


WMT continues is strength. It's back up to 50, where it stalled out last time - but this time on very nice volume.


And as for the China trade, it's now getting oversold, but I suspect that its going to take a few more days at the very least to unravel, so despite its oversold condition and being near support, I'm not too aggressive here.

But in slow motion...

I don't have much to comment on this chart except maybe we bounce at the November lows. Breadth was horrible and ended at its lows. The China thesis reversed in a big way today. There doesn't seem to be a place to hide, so I don't think buyers will be stepping in this time. Short of a random government intervention, a test or even a breach of the lows appears likely.


Fear is back, and Govies are back in style! Why did the market have to open up so badly? I never got a chance to pick up some TLT. I'll still enter in, if it gets a bit of a pull back, but I don't really expect that to happen.


Why aren't I short piles and piles of this commercial real estate stuff??? This one, I just feel like an idiot.


I started a short in CCL today even on the gap down. I sorta broke my own rules by doing that, but I needed some short exposure to hedge out WMT which was one of the few bright spots of the day. But when WMT rallies like that, it doesn't speak well of the rest of the economy.

I'm really not fond of this type of trading where one needs to operate using a time frame more fine that the 60 minute chart. I do have a day job, so this leaves small yet frequent potential trades inaccessible to me. Nevertheless, this is the market we live in. As you can see below, the market has been in a relatively tight range between 810 and 870 for the past 4 weeks, with major moves occurring in a 1 hour time periods. You basically have to be there for that exact hour to capitalize on that move, thus I've have been and continue to be out of this market.


The bigger picture suggests additional downside from here. My analysis puts S&P500 at 600, as a real possibility, so I'm not going to simply be bullish as the tape reaches support levels here.


This is all the more compelling when I look at the Commercial Reit situation, which is once again, starting to get some attention in the media and probably explains why its been under more pressure than usual at least in '09. The chart has clearly broken down and will likely lead the S&P500.... down.


I wrote several days ago, that it seemed to me that the Short Govies trade was getting crowded. That seems to be playing out as TBT broke its uptrend as it reached resistance. At this point, I'm neither bullish or bearish on the Govies as the massive mortgaging of the future is being offset by China's need to finance the US, at least for the foreseeable future until its own domestic economy develops. Thus, at these levels, I'm moving the Govies into a trading range. As its near the bottom, I'll become bullish and it's there now. Just waiting for a good chart setup which seems to be developing.


I noticed a couple of nice short charts, (courtesy of Blogger Extraordinaire TraderMark over at FundMyMutualFund.com) I'd like CCL to move up a little but. If we get some lift early next week, shorting closer to resistance looks like a good bet.


And as for SIG, this chart looks like a short right now.. Either now with a stop above, or when it breaks down. Plenty of gaps below make this enticing.


And both have the kicker of being not just technical shorts, but fundamental shorts as well.

The market sits on the bottom of the range again. While this might not be conventional thoughts, I suspect that even a break here will in fact, not trigger a major panic sell-off. As long as the government basically keeps its mouth shut, the market should slowly order itself. And clarity on what they will do, when they do open their mouth should help. More clarity and information will let fundamentals eventually prevail.


With that in mind, and the oversold market conditions, I'm looking for some long positions and a surprising number show up. MON, POT, DIG, USO and FXI are starting to look interesting again, for trades to the long time based on the 60 minute chart. They aren't quite oversold, but the risk:reward profile looks constructive as long as the market doesn't go into a tailspin. All of these 60 minute charts are posted on my stockcharts listing as usual.

Unfortunately, I wasn't able to take advantages of all the moves in the past couple days, but the situation hasn't changed much. We're still in the range, but now on the lower end and thus, I've simply missed one of many good trading opportunities this range bound market presents.


TBT did in fact get crowded. I'd like to see this rally back up a little to form a double top. We'll see... momentum traders typically don't give much of a retest at least from anecdotal experience.


And IYR - I was really hoping to get a chance to short this... It's looking rather scary here on the cliff yet again.

The way I see it, the market is smack dab in the middle of the range and I'm going to continue to operate under the assumption that the symmetrical triangle will act as resistance to the upside and downside. The market seems to have taken a good swig of Kool Aid, so I'm leaning towards believing we have another day or two of upside. But I won't be chasing it up, other than some intraday trades. I've already missed the recent tech/china run after selling out of FXI and POT. It seems I was a week too early. For now, S&P500 at 900 seems likely but as I said, I wont chase it. I do indeed hope that it makes it up there, to set up some lower risk trades to the short side. (more on that below) As long as the market is chopping around in the middle of the range, anyone not watching the tick by tick action is at a disadvantage and that includes me.


I'd like to see IYR trade back up to the top part of the range. (40ish) That's going to need a nice size Kool Aid chug, but it would set up a nice opportunity for a short position. I'm hesitant to be short these names when the government is screwing around with the markets as it will be this week.


HOG is another short setup towards 16. I wouldn't mind if it broke the downtrend and headed towards 17.5 or even 20.


In this market, I've all but abandoned investments, but SQNM intrigues me. I started a position, and wish I had a little more. Unless this story fundamentally changes, this is going to be one of my "buy the dip" stocks. Despite its recent move in the past 2 days, it remains very oversold. I'll at least give it some time to work that off, before thinking about selling it.


It's much the same thing for WMT. I continue to like the fundamental story despite it trading near its 52 week low. I was able to add to my position as it broke the downtrend on the hourly chart so I'm now in the black on my only truly fundamental investment:) (SQNM is a bit spec)


And finally, I think the "short government bonds trade" is getting a bit crowded. It's soon going to push up against resistance, and it has formed quite a nice uptrend line. A break of that should trigger significant profit taking.