the Yuppie Pig

Wow, this market just doesn't stop moving up. Today, we got a break of that 875 area, but failed to close over it. What started 2 months ago, with the financials, has spread over into multiple rallies in various sectors. There was a lot of interesting moves today; some intuitive; some not.

WMT was up nicely, stating that discretionary item spending was up for their stores.

SQNM - in after hours.... WOW!

Coal names - I can't quite figure out what the rally was for.

I also started a stake in OCN in a "can't beat em - join em trade" Despite this, I remain bearish on the market in the short term but I'll concede that I don't know when this run is going to end.


Some of the infrastructure stocks are also looking interesting to me as part of a second derivative/thesis play. Specifically, FLR for me. The rally has broadened enough that money can just rotate around giving time for individual sectors to base (like the financials are doing now) and for others to move higher, before swapping roles again. Sooner or later, the music stops, but until then, let's just enjoy the party with a foot out the door.

Another volatile day. This market is really starting to grind up and down. For most of the month, the S&P500 has been skipping rope around the 845 price level. To me, this does appear to be the latter stages of froth in a bull run where the most speculative of names make their moves.


My targets for this pull back are 820 and 780, but if we make new highs, I think it could potentially trap a pile of bears.

Seven weeks. That's pretty much how long its been going for. No sense in looking and fundamentals, technicals - just the animal spirits.

The SPX is right off its highs and pushing against major resistance in the 870 area. I had incorrectly thought that the market began to roll over on Thursday, but Friday's push above a corrective channel drawn out has to make me reconsider the pattern. However, as I type this, the SPX futures are down a whopping 16 points. I can't see exactly why, but I can see that considerable commodities futures are off. (something about China's stimulus not getting through to earnings?) We'll see if this is just another shallow dip that is snapped up soon enough. I'll say overbought again, but every time I say that, I get gored by the bull.


Here's a perfect example of treading, yet taking on water. Each rally I short, and take a partial position off, only to have the remaining position run me over - each time FASTER than the previous! Rinse and repeat. I'll concede that the credit market is loosening up which will help this sector, and that creditors MUST be more flexible on existing covenants/terms. But this sector has excessive capacity in a new world where personal savings/balance sheets have been torn to shreds.


To add frustration to it all, some of my long positions (MCD and WMT) - consistent growers with stable earnings and cash flows lag the index. Clearly, the defensive names are out of style and money is fleeing quality for the casino's as quickly as possible.



See what I mean? I don't know about you, but when one's life savings is destroyed, a trip to Vegas only mentally helps for the weekend.


Perhaps all those winnings can be spent on new Harley's!



Sector rotation? Okay - noted. But really.. Seven weeks? Something doesn't add up. Net short, and feeling every bit of the Bull's horns.

It's interesting to see how the stock market has moved with the bond market; particularly the high yield, corporate bonds given the credit crisis we've just been through. One of the reasons I think we will not re-test the lows is that the credit conditions are actually much better. Corporate bond have rallied substantially giving companies a chance to re-capitalize.


We can see that both bottomed at the same time, and the high yield corporate bonds have been off to the races along with the market since. Only in the past few days has it shown any weakness, but is still within the uptrend.


If a correction plays out in the market and the SPX pulls back, then we should also see a confirming move in the HYG. This hasn't happened yet, but something to look for.

This correction seems to be underway with a late day sell-off. The fundamentals are better (for stock prices, not the economy) than they were at the recent bottom. For that reason, I don't see a re-test of that low and am expecting more of an orderly pull back over the next couple of weeks. Perhaps it forms a sort of a bull flag in choppy trading. My first short term target is the 820 level where I could take in some shorts and open longs again.


Ultimately, I think this correction takes us down to 775-800 area. This would be up to a 50% re-tracement of the move up and form a nice right shoulder on an inverse H&S pattern.

Huge moves in some sectors such as Commercial REITs. Talk about manic!

I'd like to see some more weakness on this pullback to pick up some copper (aka china) thesis exposure. As per usual, CAF took off and left me in the dust, so I'll have to take an arms length proxy position with FCX.


I also like the chart of FLR, as some industrial type names are getting some attention. Perhaps we get a bit of a money flow rotation into these names.

It finally came - today the SPX broke the bear wedge forming over the past several weeks. I'm expecting some further downside, but I think we will not see a real re-test of the lows. It still remains a trading environment so this will be a dip I'll look to get long.


IYR just flips back and forth in some huge moves. I'll cover this short once the 30/60 minute chart firms up and look to re-short individual names later on.


Some the Ag names got hit hard along with the entire commodity complex. I closed out my MON position as it broke down, but the selling after that point seemed rather weak given the overall market. I'm planning to get back into this name once the selling subsides, and DBA holds firm.


CAF - the China ETF is something I wanted to start trading for the longest time. But it typically has gotten away from me. I'll give it another shot once the chart settles down.


I added to a short here, and in WFMI (same chart) as a short on the broader market. So far so good, but another day like today, and I'll cover.

It's a grueling market between fundamentals and technicals. Just taking it one day at a time right now. The bear wedge continues to form on the 60 minute chart and the market is quite overbought. But that doesn't mean much in this market. I have a mix of positions that I hope will outperform over the next 8 hour;)

I started a short on BBBY as this failed to break out.


Similar for WFMI.


I started a position in MON as this chart looks like its firming up again. I'm presuming that the sector rotation will shift to some later cycle names as the early cycle names should at least be tired.


Still holding an IYR short, but I have to admit that if the government is going to just dole out money, this is no longer a sector short - and perhaps stock specific shorts.


Long IMA on this break.

Huge reversal and the end of the day! The 60 minute chart did break down, but I have to second guess its strength, with the end of the day move. A bit more, breaking back up, would quickly negate this pattern. I've got plenty of charts on the long and short side today.


I started a short here with a stop above the day's high. Any strength here is going to kick me out. This is basically my short side play on the market. I've swapped to the 30 minute chart on this as I've realized that this name has far too much speed/beta to be using the 60 minute chart.


My short here is doing well. Moved the stop down a bit.


QCOM looks like it kinda broke down, but there is a downtrend that could give a buy signal. We'll see how GOOG does tomorrow, which might have some effect on the tech sector.


I still like the Ag space. A break of this little bull flag should point higher.


Everyday, I feel like I'm doing battle with this sector. It runs up, I short some, take a gain, and move my cost basis higher. Then it runs up again. Rinse and repeat. Also swapping to the 30 minute chart on this one. It just moves way too fast.


BP is forming an interesting pattern here. Could go either way, but I'm looking at it for the long side.


I'm a long term gold bug, but right now, I think its a short it if it breaks here.

A tough day on the market, but the SPX is still holding in this bear wedge pattern. It's now sitting right on the bottom of the wedge and seemed to close weak on the day. I'll add, that the futures are off 5 points, so its likely we will open lower and out of the wedge.


I thought the GS numbers were decent, but it was perhaps the most anticipated earnings beat - hence the run up before, and the sell-off after. The price action here, makes me pretty bearish over the next few days at the least, as it seems like every piece of good news are priced into the stocks. It might now be a "sell the news" market for the upcoming earnings. It's all priced in... The BKX is showing this. INTC is also trading down - there goes the TECH thesis? I really think the market is rolling over this time, to a pull back more meaningful than the previous ones.


I started a short in WFMI again as it broke out of the wedge for a trade on the broader market.


I also topped off my short in IYR this morning, and quickly took a gain on that portion of the trade late in the day. Still short, and looking to close out when the 60 minute rolls up - where ever that may be.

I also closed LQD as it hit my target. Easy trade, little profit... I'll take it in this market.


I'm staring at WYNN again as this has pushed up even higher that the high a few days ago. Looking back, I was really lucky with this short. Do I want to double down? Thinking about it, but I want to see it, and the market show some weakness.


For some other names on the short side, I'm looking back at HOG, but earnings are up shortly, BBY, and BBBY. (liking BBBY the most) TAN also interesting.

The SPX eek out another gain, but this market is looking tired. The chart has clearly formed a bearish wedge and the MACD is starting to roll over, but has yet to give a sell signal.


Outside of index watching, there are some other interesting charts. I might play these assuming volume and momentum is there.

IMA looks interesting with a break out and measured move to 35.


MSCC could make a quick move to 14, on a break over 12.5


Similar pattern. Break at 20, target 25.


If the market starts to roll over, WFMI is again looking like a potential short with a stop above the recent highs. This chart has started to lag recently giving it a safe short entry.

Yep, that's the secret to making money! Have to admit, its a great business. What happens if the amount lent is not repaid you ask? Backstop it with taxpayer money!

The SPX had another huge rally today off the pre-announcement by WFC, which is perhaps one of the better banks. The earnings power vs the write downs were somewhat of a wash. But write downs are one off events, while government handouts occur into perpetuity!

All kidding aside, the market is pushing up into an area with major supply. Even after ths huge run, It's hard to ignore the changes in "company fundamentals" - not to be confused with the economy. It's actually easy in this market for mainstreet to get the beat down, while wallstreet racks it up from taxpayer handouts. Is it fair? No. Is it a necessary evil? That's a debate for another time. The 60 min chart is back into overbought territory, so while I want a mix of long's and shorts, it's hard to add longs right now. I'm not one to chase markets up in a recession, but I'll concede it has been the right thing to do in the past 4 weeks or so.


I used wed's sell off to cut some short exposure. Specifically, I cut ANF on weds, and WYNN on the thursday open. Both turned out to be the right move. What wasn't the right move was not cutting all my shorts and longs!

I remained short a position in IYR. Despite taking 1/3 of the position off, this one still stung hard and wiped out the gains from WYNN. I'm debating if this sector is still a "sector short", or has it become an area where individual stock picks matter. Starting to believe the latter.


And to add insult to injury, my long position in WMT did not participate at all here. As recessionary names fall from grace as the perception of recovery makes its round, this isn't a name that is going to do well. Add to it, that I think the USD weakens here, which should be bearish for the company which imports from overseas. I had hoped it would close the gap, and came literally pennies from hitting my sell order, but alas, it was not to be. View on WMT - neutral.



I don't have any names in my sights right now as the market is at new highs, but not quite enough to short anything at the moment. I still think we are in a choppy market where both directions should be played.

I like oil on the long side, but I want to see a break of support. Right now, its just a little too top heavy, but I want to be ready should the opportunity show up. 26 looks like a great place to try to start a position.


I also like tech, but im not sure what names to own, so I've got a broad sweep with SMH. I'm less concerned with a breakdown of support here, as SMH has not had a huge run (relative to some names), so I'll play this one with the 60 minute chart signals.


I want to avoid a lot of the US financials as there's just too much uncertainty. Canadian bank's are where its at. V, GS are interesting.


This looks like a short. I don't think this is going to break out to the upside, as solar is just too expensive.


I see pretty much every commodity coming off right now, but copper is holding in there. I just dont see this continuing to buck the trend. But is it China? Well, now the Baltic dry index is coming off, so there goes that thesis. And this is PCU, not FCX. Looking for this name to move back towards 15.