Mar. 18, 2012

The DJIA, S&P500, and Nasdaq have all met proposed upside targets.  As of late the S&P 500 and Nasdaq are more representative of Apple than the overall market.  Nevertheless, until the upside bias is broken the complete bearish argument must remain off the table.  One should expect the usual triple digit rally mid-week, however, should the rally fail to materialize the following scenarios are likely to occur. Scenario 1 Minor short term drop:  The markets turn to the dark-side... expect DJIA 13150-13050 with moderate support at 13000, S&P500 1390-1384, with moderate support at 1375, Nasdaq 3020-3014 with moderate support at 2990.  Scenario 2 Moderate short term drop:  DJIA, 12815 S&P 500 1355, Nasdaq 2950. Scenario 3 Major short term drop:  Would predicate on the DJIA breaking the rising wedge which would occur with a drop below 12730.  S&P 1340, Nasdaq 2800.  Even if this scenario does occur, there is a likelihood of a short term bounce, barring major Geo-political events...it is at this point where the bearish argument may be entertained.  The real question focuses on US Treasuries and Bernanke's will to fight off the bond vigilantes.  Not really a question of if, just a matter of when will he make his next move.  In any event short term trading opportunities abound. For those interested in some longer term plays VE, RIG, and TBT offer some compelling opportunities.  Pullbacks should be seen as longer term buying opportunities in these plays.  Good luck and good trading.
Twitter: UMS1895

Feb. 06, 2012

Market upside bias remains intact.  Still looking for shorter term upside targets of DJIA, S&P, NASDAQ...13200, 1400, 3000 respectively.  Looking for the usual triple digit mid week trading opportunity. On a longer term perspective there is a massive cup and handle formation on a weekly DJIA originating from mid 2008. Ceteris paribus... markets should complete a typical 38% retracement of the move off the 2009 lows before breaking out to new highs.  An actual Greek default is not priced into the market.  Only the belief that a Greek default is priced into the market is priced into the market.  In any event, until the markets upside bias is broken, the bearish view must remain off the trading table.  Additional Geo-Political risks remain.  There is an African proverb:
 "Every morning in Africa a gazelle wakes up.  It knows it must run faster than the fastest lion or it will be killed.  Every morning a lion wakes up.  It knows it must run faster than the slowest gazelle or it will starve to death.  It doesn't matter whether you are a lion or a gazelle.  When the sun comes up, you better start running."  Good luck and good trading.
Twitter: UMS1895

January 24, 2012

Intraday support levels: DJIA-12680, S&P-1310, NASDAQ-2775.  Every time the weekly Tuesday triple digit turn around fails to materialize the markets experience some turbulence.  Possible downside short term target risk to 12520, 1285, and 2730.  That being said catalysts for market include the State of the Union, the Fed, Apple, and the miraculous, magical economic numbers.  If the usual rally ensues markets will make a run toward 13200, 1400, and 3000.  Note,one should not confuse the short term intraday, daily opportunities with the upside bias of the market.  Until that bias is broken the bear case is not completely on the table.  Once on the table however extreme caution is warranted.  A trader should always question one's trading bias and generate an opposing viewpoint to keep perspective.  Good luck and good trading.

The Good, the Bad and the Ugly: A look at IBM

There is no doubt IBM is the ultimate bellwether, the tried and true, the bluest of the blue chips. Quarter after quarter "Big Blue" hits the numbers, what is there not to like?  Even Warren Buffett has jumped on the bandwagon, scooping up north of $10 billion worth of stock.  According to Ryan Guina's article in US News dated Oct. 26, 2010, "Buffett and his partners famously sat out of the Dot-com Bubble in the late nineties because technology wasn't a field he was comfortable with.  While others speculated on technology start-ups, Buffett was scooping up value stocks which had fallen out of favor.  A few short years later the bubble crashed and investors went back to the value stocks Buffett had been buying all along.  Buffett not only avoided substantial losses, but he made money because he stayed true to investing in what he knows".  Does Warren know IBM?  Is he now comfortable with technology...or is he so enamored with IBM's financials that he has forgotten his own rule?  Profit margins of 15%, ROE in excess of 70%, and a P/E of 14, IBM does appear to have all the makings of a gorgeous technology play.  However, one should not make the mistake of attributing IBM's success with its own greatness as much as to HP's Neolithic incompetence.  Forecast cloudy.  IBM's new competition is coming from all fronts, including Apple and its Cloud centered devices.  There is little doubt given a long enough time horizon IBM will perform, but someone wanting to buy IBM today while it is trading at $190 with a paltry dividend of 1.5%?  I question the sanity.  IBM generated a weekly sell signal early in December.  A failure of IBM to break out above 195 will confirm the signal and could generate significant downside risk.  Near  term downside potential of 163 is possible, with an intermediate target of 132 should IBM's new CEO, Rometty, prove the Soothsayer of Omaha's crystal ball cracked. -To thine own self be true.

Markets- DJIA, S&P, NASDAQ

Markets are starting to look like they are in the nose bleed seats.  Short term sell signals will be generated for the DJIA, S&P, and NASDAQ at 12680, 1310, and 2775, respectively.  That being said, the weekly Tuesday triple digit trade setup is still in the cards.  For the bold -Potential  positional trading opportunities exist in TVIX, and TZA on a break down, or TNA, and RUSL on a breakout upside move.  RUSL has had considerable outside performance on market upside days. (Czar) Putin's coronation this March should continuously offer viable short term trading opportunities. Additional caution is warranted ahead of the Fed and GDP this week as complacency will quickly erode profits.  Next commentary later today will focus on IBM. -Weekly commentary will focus on directional trades for copper, coffee, and the Euro.   Good luck and good trading.

Progressing from surgery nicely.

Surgery on the leg went nicely, although unexpectedly, happening at a less than opportune time. (Have been waiting to hit the ground running for a while now, it should not be too much longer) Additionally, I was able to reschedule most of my courses this semester around market hours...which is a huge plus. In the eternal words of Mark Twain, "I never let my schooling interfere with my education."