#STOCKS – Gonna huff and puff and blow your house down…

It’s never advisable to short a sector making a straight up move in a bull market. So let’s just call this a heads-up on a sector where sometime soon heads are going to roll.

Housing stocks and housing prices have gone crazy again. Just like in…uh, 2007. History repeats here and I suppose there are those out there in major cities bidding up asking prices on the belief that it’s different this time and even if is isn’t ten years or so from now they will break even on the house they overpay for today.

But it must be noted Toll Brothers (TOL), always the leading stock in the sector, took 6.4% hit today on its earning miss and gave a blow to the rest of the sector at the same time (see the chart panel below). From a charting point of view, today left a lot of uncertainty, if not downright fright, in the sector as measured by all those bearish candle patterns in the stocks. HOV, at less than $3 a share, always get weakest fastest, but consider the doji in the sector ETF, XHB, and in the builder,DHI…

Now is this a just shot across the bow or a direct hit on the housing sector ship?

Either way, heads up! Especially investors.

And P.S. if this sector starts to sink, put a spyglass on the banks.

(click on the chart panel for a larger view)

$BABA – covering the short…

Closing this trade posted here:

THE BABA SHORT ON REDDIT

Took the trade because it was up nine days in a row and really for no other reason. Watched for weakness near the open on the 10th day, and shorted it, hoping to get at least a day trade.

Logged a bit more than a one percent scalp on the first day (yesterday) for half the position and now covering the other half for close to a three percent gain, which I suspect is about all one can reasonable expect on a trade against trend. In other words, cashing out this trade for the week.

Believe BABA will take another run to the upside next week.

(click on the chart for a larger view)

Sell, sell, sell and SELL!

Wonder of wonders.

All three of the swing signals I pay attention to – based on price, breadth and volatility — gave sell signals today for tomorrow’s open, and even long-term breadth turned down too.

I can’t remember the last time all these were in sync but I think it was back in early August, not long before the last decent dip this bull market had.

What I’d like to see now is this market take a drop like an airliner that runs out of fuel in mid-air, a slam down that falls hard and fast enough to scare the complacency out of every long-term passenger in the first-class and economy seats alike. Can’t say the C word since that would insure we get no pullback at all…but down hard and fast enough would, as they say, clear the air.

And we are still in “extreme greed” on CNN Money’s Fear and Greed Index (see chart below – SPY in blue, FGI in red) and it too has far to fall. Ideally, a three to five week pullback into “extreme fear” again would truly refuel and restart the engines.

Needless to say, as strong as this bull market has been (and probably still is) none of that is likely. So okay, I guess, a nice glide down for two or three days before a charge up to the highs again would be fine too.

Might not even get that in the wild blue yonder of this market.

SWING TRADING SIGNALS:

PRICE: Sell. (Day 1).
SHORT-TERM BREADTH: Sell. (Day 2).
VOLATILITY: Buy, (Day 23).

CONTEXT:

SPY CLOSE – 253.95.
QQQ CLOSE – 147.48.
LONG-TERM BREADTH: Sell (Day 1).
CNN MONEY’S FEAR AND GREED INDEX: (84 falling, extreme greed level).
NIFTY-50 STOCK LIST: 24 Buys; 18 Overbought, 5 Oversold, 5 new buys today, 7 new sells.

(Click on the chart for a larger view)

#FinancialStocks – after running on fumes, finally run out of gas

Since market breadth turned down with conviction on March 3, the banks (like much of the general market) have been defying an impending decline.  But that defiance appears to be over as they have been falling for the past few days, and that fall has accelerated.

GS is now down 6.7%, BAC 8.8% and JPM 4.7%.

GS, a bellwether stock, has how retraced its entire advance since early December. That is  not a good sign for the continuation of this bull market, but will see how that weakness plays out in the fullness of time.

(right click on chart for a larger view)

BANKS2017-03-21_1036

 

#MarketTiming – stock shorts

Market Context: Bearish. 

All trades on sells or shorts from open of 4/5/16.

Swing ETFs: UVXY (from 20.65), SQQQ (18.51), TZA (44.30), UPRO (62.50), NUGT (59.00).

Day/Swing Trades (short) for open of 4/11/16 (options-liquid stocks):

  • WYNN
  • SBUX
  • LLY
  • MRK
  • RTN
  • LMT
  • JNJ
  • MCD
  • BMY

Notable that so many big pharma stocks have triggered sells.

Featured short (put play): PFE.

(click on chart for a larger view)

PFE_2016-04-10_1937

I $SPY seven days of greed…

CNN Money’s Fear-and-Greed Index is, simply put, one of the most useful market-timing tools there is.

For example, the most recent rally, using the index as a trigger, bought the market on the open of February 16 (see the green vertical line on the chart below), a swing that has carried SPY, the SPX ETF, from 188 to 199 today, a gain of 5.3%, but more notably it has so far racked up gains for the 3x-leverage ETF of 17.4% in UPRO, 15.9% in the Nasdaq’s TQQQ, and a whopping 29.5% for TNA, the Russell fund.

That buy signal, now 18 trading days old, is still on and counting but …

But the Fear-and-Greed Index has now registered greed for seven days.  Call it lucky or unlucky depending on one’s bullish or bearish point-of-view but seven days of greed is often all she writes on an upside swing (see the chart) before a sudden sell-down.

As they say, it could be different this time but…

But it seldom ever is.

(right click on chart for larger view)

FG_2016-03-09_1451

$GPRO and $FIT – a tale of two “Gadget Stocks”

GoPro Inc. (GPRO) and Fitbit Inc. (FIT) sell gadgets, a versatile moving camera and mount, and a wrist fitness monitor respectively.

Not much to say about these equities that is not obvious now and was obvious from the start — they have limited product lines that appeal to niche consumers who will buy fast and quit buying as quickly. Never fails that the stocks like these run up in a hurry on what is essentially a fad and fade as soon as the fad wears off and/or the market is saturated.

Which is why, once again, market timing and technical analysis prove their worth in profiting from both runs up and sells down.

With my latest short-term market-timing signal to sell the market and short stocks from the open of November 5th, GPRO has a short profit of 8.7 percent and FIT a short profit of 15.2 percent as of the close today.  With the market oversold it is time to either tighten stops to protect profits or just take the money and run.

Should be noted that GPRO has been in a hard selloff of more than 50 percent since August and longer term shows no sign of stopping that decline.  FIT is just coming back into its IPO day, a level it better hold or it’ll soon look like GPRO longer term.

(click on chart for larger image)

Gadgets2015-11-12_1257

Breathe easier — coal’s dead-end road…

Finally President Obama has come right out and said it — coal has got to go.

For all of its history, at best a necessary evil, the coal industry was been poisoning the planet, killing mountains and streams, enslaving whole regions of people in West Virginia, Kentucky, Ohio, Pennsylvania and now in the Powder River Basin in Wyoming and Montana, and with  a wanton disregard for mine safety and health, even killing its own employees.

Even now in the waning years of coal-powered electrical generation, the financial calculations of the damage to public health by the industry exceed the market cap of many of the coal companies themselves.

With the advancement of renewable clean energy technologies in wind and solar and thermal (and probably in the end in safer nuclear), it is time for clean renewable energy to take over the future.

The President’s announced plan, as the New York Times has just now editorialized with President Obama’s Tough, Achievable Climate Plan, continues the trend that has been going on now for some time as fracking for cleaner natural gas, as well as environmental regulations, have taken a devastating toll on the coal companies stocks. It is getting to the point now that the industry’s constant blat that coal is cheaper (even if it kills you) is not going to play anymore against the better cleaner sources of energy.

These last couple of years, companies like Peabody Energy (BTU) and Cloud Peak Energy (CLD) have made a desperate attempt to advance coal exports to China and India by proposing to build shipping terminals on the West Coast but they have been met by a solid wall of environmentalist saying no way and those efforts seem doomed (although the companies are still burning maybe the last of their cash to try to overcome their fierce opposition). And on a visit to China not so long ago, President Obama reached an agreement with the Chinese to curb coal imports there.

It’s getting so coal finally has no where to turn.

And the stocks show it (see the panel below). These stocks not only have little to no chance for investment growth, they are in fact risks to all shareholder equity as more and more of them, like Patriot Coal and James River Coal and Walter Energy, go bankrupt.

The time has come it appears to wave goodbye to the coal boys and breathe easier all over the world.

(Click on chart for a larger image)

coal_2015-08-03_1910

$AAPL – Will the “Next Big Thing” be a huge stock stumble?

First the good news.  AAPL will make scads of money no matter what.

Now the bad news.  The company, built on innovation and disruptive technology under Steve Jobs, has become a me-too company while slowly slipping on the tech fronts it once totally dominated.

When once the company revolutionized the computer market with high-end desktop computing and tablet computing, and completely transformed the music industry with the iPod and ITunes, and the personal phone world with the IPhone (it’s been calculated that people now spend and average of 46 minutes a day just checking their smartphones), the company appears now to have no more worlds to conquer, or at least worlds IT can conquer.

The “Me-Toos” include the iPhone sometimes chasing Samsung Android instead of the other way around, an Apple watch that makes so sense at all against the wristwatches of older generations and smartphones of the younger generation (what, are millennials too lazy to check the phone time and email? hardly); a TV service that is sort of Netflix-Amazon and sort of Roku-Google-Chrome and as such Apple is entering one of the most competitive business arenas in which they are already far behind; and now there is talk Apple might build an electric car to complete with Tesla (huh?) to say nothing of Toyota, GM, Mercedes, BMW and the rest of the auto world.

More bad news.  Check out this link from The Street: 7 Incredible Apple Patents Than May Hint At The Next Big Thing. That headline may sound like good news but not so.  Despite the hyperbole the “7 Incredibles” include a personal remote control, a virtual reality headset (to compete with Oculus — more “me too”),  an “IPen” (it writes), a flexible phone (thought they already manufactured that…by accident), and a couple other noodles.

This is obviously not Steve Jobs’ Apple anymore.

So what about the stock?

First off, AAPL stock has generated an unprecedented market cap of more than $700 billion when the previous record was just over $600 billion (MSFT), and only four other companies in history have exceeded $500 billion market caps (CSCO, GE, INTC, XOM) and Apple spent more than $100 billion of the company’s massive cash trove to get there. They likely will have spend more to stay so high (which, granted, they certainly can do since they have more than $200 billion in reserve and the means to make more).

But more importantly, time and history is not on the stock’s side (all of those companies that flew over a $500 billion market cap with the exception of XOM have had their stock cut in half or more eventually, and XOM has lost more than 20 percent).  That time too will come eventually to AAPL’s stock also — when a company’s stock is priced to perfection and over-owned by everyone the “next big thing” is an inevitable tumble.

So let’s consider the chart of AAPL below.  The good news — it is at the bottom and a long-time range and it can move back up within that range (MSFT went sideways for 12 years after its fall), and AAPL with all of its cash might hold high ground going sideways.  The bad news, the stock drops below 119-120 and all hell breaks loose when everyone who bought it basically this year realizes they are losing money.

The time for the tumble could be right now.

That’s it, one way or the other.

(Click on the chart for a larger image)

AAPL_2015-08-03_0953

Selling Stocks Short On A Negative Market Signal

Market timing – negative (3 days old).

(Update: 07/24/15)

(Updated chart below. On a negative market day, all six stocks sold short on the open were in profits at the close, particularly BIIB up 8.2% for the day.)

As the market indexes continue to slide toward oversold territory, individual stocks giving sell-short signals for Friday’s open include ALR, BIIB, GWPH, as well as AXP and MRK in the Dow.

They have joined SUNE which was a short on today’s open. At six percent into profits on a single day, it now has a break-even stop in place.

Each stock is a short and hold until the red color coding on the chart below turns yellow again.

(Note: these trades are not recommended for anyone other than as a journal record for myself.)

(Click on the chart for a larger image)

Short_stocks_update_2015-07-24_1306