Buzz Bits: Dow, Nasdaq Take a Dive
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The Looming Shoe - Todd Harrison - 3:06 PM
Alrightee then, it's that time of the day again--you know, the "I can't afford to go to the bathroom time" that has seemingly consumed us these last few weeks. And you thought it was gonna be a lazy summer season! Some thoughts from the front as I type hard and grunt:
- The Looming Shoe? It sure feels that way, doesn't it? We touched on the incessant chattering by the powers that be--and how odd it is that they're this loud with the world "up"--which furthers the collective sense that there is something we're not seeing.
- The Good News? If we continue melting into Old Mother Hubbard, we might get a tradable bounce. That's how things work in a bear market--sell the rumor, buy the news.
- You wanna know what else "works" in a bear market? Nothing. Bulls don't make money. Bears don't make money. Nobody makes money. The market is whippy and haphazard, with massive swings from one day to the next. Sound familiar? That's why discipline is so very important--it'll keep you in the game even if the game changes.
- So, along those lines, I' sold another 15% of my S&P puts (discipline) and wanna roll down my "stop" below BKX 106 (see the five day chart) if and when we Ba-rake Obama.
- I still think S&P 1370 (trendline) is the most intuitive longer-term support but trades are meant to be taken--or at the very least defined--in this kinda choppy slop.
- Hey, it could be worse! For instance, in addition to trading this tape, you could be "out there" every day sharing your thoughts with the world! Talk about a recipe for humility, that's why I always say to stay humble or the market will do it for you.
- Fare ye well into the bell and may peace be with you and yours.
Doin' Business with EMC - Sean Udall - 2:56 PM
If EMC Corporation's (EMC) symbol was EMCC, EMCX or any other letter after the C then I believe it would be trading flat to up. This sets up a mini-arb opportunity in the shares of EMC today, buy the EMC weakness based on the NYSE selling pressure.
We all know about VMware -- but how about all the other business EMC is doing? The balance sheet is cleaner than a French maid's uniform, the P&F & weekly charts are gorgeous and the valuation level is… well not dirt cheap but EMC probably shouldn't be dirt cheap at this point in its business cycle. It certain was under $12 a few months back.
Stocks that make this kind of sustained move usually don't stop on a dime and go straight south so if you felt you needed stop protection there are plenty of levels to put stops in. I'm not using a stop on this name currently.
Cascade? - Jeffrey Cooper - 11:19 AM
The hourly S&P chart shows support at 1460ish. If the pattern from the February/March shakeout diverges a point of recognition will set in that this is not just a market 'adjustment', as many stocks have been screaming.
A cascade set up comes into play if the weekly S&P turns back down as it will be a reversal of a reversal (a reversal of an outside week up) and can be seen in the weekly chart in "Follow the Trend, Outlast the Swings," as well as the hourly chart mentioned above.
The cascade would be triggered from a Rule of 4 Break of a 3 point trendline up from the '06 lows on the weekly. If the quarterly chart on the S&P turns down and price accelerates (through 1416) and 1402, which is 360 degrees down from high, is broken and stays broken it sets up in turn a violation of the March low, which should see a waterfall.
The February/March decline was 14 (2x7 days), the recent decline has taken 15 trading days.
Once we over balance the time of the last big correction a point of recognition will also set in that a deeper decline is in the works.
The time count off the high in July points to the Gann Death Zone as somewhere in the first two weeks of September.
Specifically 9/11, which is a solar eclipse and 6 years (6 squares of 360 on the sq of 9 chart) and an important square out (a cube of 6 sides, a true square) from 9/11/2001. Given the news I am reading about Pakistan, it is very troubling to consider what the implictions of this square out may indicate. The events in Pakistan may be the snake that we don't see that bites us in this "perfect storm".
View from Q - Quint Tatro - 8:15 AM
Good morning Minyans.
While you're sipping on that coffee and catching up on the news flow, here are some ideas to consider for the day:
Oil and Gas Service stocks have bounced and look ripe for short opportunities. Here are some I am considering:
- Energy Select Sector SPDR (XLE) short on a move below $68.16
- Atwood Oceanics (ATW) short on a move below $64.38
- Ensco International (ESV) short on a move below $57.60
- China Petroleum & Chemical (SNP) on a move below $99.99
- W-H Energy Services (WHQ) on a move below $59.36
A few other dark side plays of interest to me today are:
- Amazon (AMZN) on a push through yesterday's low of $76.56 looking for a gap fill or move to the 50 day.
- Blackboard (BBBB) short on strength should it fill the gap around $42.48
- Chicago Bridge & Iron (CBI) through $37.14
And last but not least, a long play of Layne Christensen (LAYN) on a high volume move over $45.40.
Be careful out there, today's action is sure to keep us on our toes.
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