The Dow and SPY have frustrated the bulls and the bears alike in the past few weeks. Well, the charts show exactly that. We have been bouncing around in a triangle in the SPY, DOW and even in the transports. Triangles are explosive creatures, akin to keeping a spring coiled up within a box. Whichever edge rips, there is bound to be explosive action in that direction. We are slightly bullish still, we believe this market could rip higher next week. We believe the first target on the SPX could be around 1310-1320 or so.
On possible plays, look at XLV (the biotech sector - thanks to hil_feld for pointing us there). The sector has indeed been among the best performing since July 15th. It seems all the hot money is going into biotech. XLV looks to be consolidating nicely on the 200d. It just looks ripe to make another move.
Looks like an up day...but I am ok with that! My UAUA is up and I bought some DUG and that is up.
ReplyDeleteI traded UAUA, bought around 10.1 and sold around 11. My UNG has me heavy hearted though. Looks like hedge funds are playing games to drive other hedge funds out of business. Eitherways, bought some more energy stocks for next week.
ReplyDeleteIt is looking like today upday on light volume is good for bears, next week when volumes comes on lets see.
Good luck to you
btw just curious? are you in an investment firm or something?
ReplyDeleteGod your so cute...me an investing firm? I dont know how to buy puts or calls..
ReplyDeleteIf you dont mind me asking...what $ did you buy UNG? I am surprised that you bought more energy stocks.
I dont believe oil will go up much...elections are coming.
not at all. I started buying UNG at 45, 42, 38, 36. I literally caught a falling knife. My average is around 42. So, I am still heavily under water. But I believe, this will see 55-60 in about 3-4 months atleast, if not now. Due to this, some 20% of my pf is locked away for 3-4 months. I am having fun trading with the other 80%. I traded UAUA, FXI, CHK, SWN etc. in the last 2 weeks. So not bad.
ReplyDeleteI made the mistake of buying the commodity instead of the company. I should have bought CHK, SWN, DVN instead of UNG. I am seeing CHK now, it doesn't look like the bounce is done yet. I still think USO will bounce, this is not done yet. Yesterday and today, I bought some ACH
That was a bad guess then, but you do seem to be a voracious reader.
ReplyDelete42 is not to bad.
ReplyDeleteSRS is getting hit pretty hard today. It may hit 82 tomorrow?
It definitely could. But the line for SRS is a descending line, we may need to see some signs of accumulation before buying in.
ReplyDeleteI have no plans on buying SRS...I will stick to the airlines.
ReplyDeleteAs long they are making you money, there is no need to shift. I have been largely day and swing trading airlines. What is your entry point on them?, ofcourse if you don't mind
ReplyDeleteVolatility on UAUA is too much for me. What a rollercoaster! I don't have the stomach for that type of trading like the two of you.
ReplyDeleteYesterday and today's action brought home to me the importance of diversification. I started a small position in SKF, a mere 50 shares. Once it went a dollar to the profit side, I put a stop in place. I got stopped out before the close for a mere $20 or $40 or so profit. The insurance deal on financials deal came through this morning and financials went through the roof. The last time I looked at SKF it was trading $8.00 below where I got stopped out yesterday. That would have put me $400 in the hole overnight on a mere 50 shares. And that is not even on an individual equity, but an ETF, even though it is an ultra. I think I'll stick with QLD, DDM, SSO, and MVV for the most part and let sector holdings be my minor holdings, although I did buy back into ag today via MOO, five weeks after I pulled out of ag.
Dell is down 10% afterhours.
This market sure seems unstable. Big swing either which way. UAUA is also volatile for me. I have gotten stopped out couple of times with losses in the last month. Unfortunately, I wish I had the hindsight to have used stops in my UNG position. Oh how I wish. Whenever, I veer from discipline in trading, it comes back to bite me, never fails.
ReplyDeleteI would say Mimi is the most courageous of the lot. She is holding onto UAUA overnight. I would dare not hold it overnight. I wouldn't mind USO, but airlines are like short on steroids. On the flip side, she is also getting rewarded.
ReplyDeleteAlso hil, Ag looking due for a bounce here. Mimi doesn't like farming anymore after the MOS episode.
I sold SKF yesterday for a $500 loss, but it would have been greater if I kept it. I made $1000 last week off of SKF. I think I am going to stay away from SKF and SRS..they are to stressful.
ReplyDeleteMy average for UAUA is 10.38.
If dollar moves up oil will go down?
ReplyDeleteI don't know if it will. But it is definitely a negative for oil. On the other hand, I think the dollar is done here, sooner or later it is going to have to pullback before any further leg up.
ReplyDeleteIt is such a drowsy day here in NY, feels like London.
ReplyDeleteOn your question about the dollar, this is my take, the dollar is weakening short term. Look at the consolidation it is sideways and look at the momentum indicators, all of them are diverging. This is what I suspect will happen.
There will be a break of resistance, the 23.93 level, but this will most possibly be a fake breakout, and then the dollar will go down like oil did.
Also, I read some blogs yesterday night, . You are right that there are so many diverging views out there. Well the focal point is the question of whether America will face hyperinflation or deflation. There are heavy weights on either side. Only time will tell who is right.
It is hot here in Texas...
ReplyDeleteOne website that I love is slopeofhope.com. check it out.
I am surprise that my DUG is up with oil being up...maybe a sign?
ReplyDeleteI heard this morning from mid-September to the end of the year (historically) oil is down, and natural gas is up. Maybe a win-win for both of us.
well DUG shorts the stocks not the commodity. Market is down, stocks are down.
ReplyDeleteI checked out slopeofhope. It is quite nice. Thanks mimi. I will bookmark it. The writer is also a bear like you?
DUG shorts oil and gas...so if oil is up DUG should be down? I bought it yesterday when market was up and DUGwas down.
ReplyDeleteYes he is a bear and long on DUG :)
I have learned alot by reading his blog..If you go through his blog you will see my questions (Mimi66)..I am such a newbie.
As far as I know, DUG shorts DIG. DIG has holdings of chevron and other companies etc.
ReplyDeleteYou sure are learning fast as hell. I also saw your dollar question and the reply. I will disagree here, sure the dollar may break out from the sideways consolidation, but in 2-3 weeks the dollar is headed down - for the short term.
It can probably rally again in late october or so, but the buck needs a rest, the run up has been tremendous in the last month.
why do you always disagree with me :)?
ReplyDeleteDid you buy anything today?
Oh boy! I could turn the question around too. You always disagree with me. Last week you were right about the indices, lets see what happens next week.
ReplyDeletedid not buy anything. Did not sell anything. My account is down .6%.
DIG is double long IEO and DUG is double short IEO. If you want to trade either of them, you should chart IEO. The top holdings of IEO are here:
ReplyDeleteLink
See how the chart of DUG and IEO are mirror opposite 2x images:
DUG and IEO
But DIG and IEO is another story. Don't know exactly why, other than the constant percentage fluctuation difference effect of an ultra on daily volatility, but that doesn't seem to explain the difference in the two charts. Something else must have happened regarding DIG in January to make the chart go amiss.
DIG and IEO
Usually when oil and gas are up (the commodity itself), the equities of the energy companies are also up, but it is not a 1:1 ratio. Some companies like Valero get hurt if oil is too high, because their crack margin is squeezed. Other companies are affected on the side like the pipe fitters and drillers and pumpers. If you want to short oil itself, short OIL or USO. If you want to short natural gas, short UNG.
To draw an analogy from another blog writer we all have read, he never would distinguish between the commodity and the equities in ag. There was a relationship between POT and MOS and DBA and John Deere, but it wasn't 1:1.
Today I sold my MOO and SOLF at the open for small profits and found myself 1/2 in cash mostly with defensive health -- RXL. Once the DOW seemed to bottom, I bought DDM and bought back 1/2 of my MOO shares for the same price I got them for yesterday (I love to do that). Then I added some DBC as my hedge, sort of, heading into the long weekend. One hour to the close, I'm back on margin a little bit and bouncing around about $100 in the red for the day but the last hour may get ugly.
Thanks Hi for the explanation.
ReplyDeleteI am wondering if S&P will go as high as 1325 before the fall. September is known as the worst month for equities.
Clarke, if you get a chance can you post a chart for UAUA for me?
ReplyDeleteI was reading that UAUA had completed a H&S and price target is 18.