Damaged Goods

Home later than I wanted to be. Had to pick up car from the service station. 30k mile service for the car, costs a few bucks!

Damaged Goods
In almost a drive by shooting, the markets have gone from flying higher all of October to suffering bad damage over the past two weeks. The easiest way to see this is to go to the charts.

Daily for SPY:

It's clear the SPY has fallen out of the green ascending channel.

You may recall back at the start of October I traded in and out of both CVLT and NI. I cloned those positions in my long term account and here is how they are looking now (both closed out).

NI:

CVLT:

I don't mention longer term trades usually because I like to keep that close to the vest as not to have my thinking be affected by outside discussion. I am showing these two stocks because they were two of my strongest ideas for the October run that I was thinking would happen. You can see where the stocks violated the uptrend lines and they were dropped then. NI was dropped on 10/31 and CVLT, one of the better performers I have seen, was closed out on 11/18.

Things are very oversold now and a bounce higher is probably going to happen. I look over the big picture and I don't like what I am seeing.

Between the MF Global fraud, accounting issues at GMCR, and today's Chinese burrito news on FMCN there seems to be too much bullshit out there to be comfortable. I have been a proponent of the idea for run higher to year's end. I am backing off on that now. If the Euro weenies get their act together and Bernanke unveils some kind of new pony, maybe I would change my mind. At this point after the damage lately I think performance chasers may just start licking wounds and manage funds, not run blindly after a rally that has fizzled out.

The big problem is that charts are so damaged it will take time for them to set up. It's November 21st now which does not leave a ton of time. Any fast improvement will be suspect I believe. The way well supported moves up are being abandoned feels more dangerous to me than a vanilla correction. Just my 2 cents. Things probably go vertical from here on out the way this autumn has been.

Have a good night.

Sick and Tired of Being Sick and Tired

Another banner drive home in the rain. Looking forward to a New York mini vacation without driving.

Sick and Tired of Being Sick and Tired
"I'm sick and tired of being sick and tired; I used to go to bed so high and wired" -Ozzy, I Just Want You

This morning started off shaky for markets and the S&P 500 quickly fell to 1074, which was about 9 points higher than the 1065 I mentioned last night as a long term support area. Things rallied from there, but later in the day the all too familiar fade came, and things started looking very bad. Then what?

Markets exploded higher going into the close in a wild move of panic buying. There were some rumors of Euro banking bailouts and all that but it just seemed like shorts had packed it in for the day and maybe everyone was just sick of feeling sick about the markets.

I still have not seen the kind of wash out capitulation that would make me super constructive on things, and we may never get one at this rate. This action is not healthy, but it is what it is. Can it last a few days? I think it could and I even made a buy today.

I have been watching the stock NI for some time. Here is a daily chart and you can see the reversal candle today right at $20.50 which is a key price for this stock:

I bought some stock before the close. I am not ready to commit much to this market, it still has to negotiate some very serious hurdles, but for the time being it seems a run may be in place.

In case you want to get all glassy eyed and party with this market, I would point you to one of the best essay's I have ever read which was published today. Josh Brown's "Season of the Witch" is the absolute must read for anyone here. Small snippet:

Now there are those who look at the recent data and say that it is only a slowing of growth, not an actual economic contraction. "So what if year-over-year GDP declines below 2%," they'll say. My response is that they may be right - but they should be aware that every single instance of Y-O-Y GDP growth slipping beneath 2% since 1948 has led to a recession. Every single time we've slowed down to this extent in the last 60 years we've gone down to the zero line (11 instances) and into negative territory (10 instances). The ship is not so easily turned.

This earnings season upcoming will be the final arbiter for how active I want to be in the markets going forward. Sick of feeling sick about the market? I understand, and maybe a rally will improve morale out there. Just don't forget there is some important information coming soon that demands your attention.

Have a good night.

Sunday Night

I ran out of time today! Went fishing on the kayak this morning at 6am. Caught a bunch of little smallmouth, nothing worth taking a picture of.

I have my follow up doctor appointment tomorrow, everything feels really good. That was a rough span of 2-3 weeks. I am dumb for not going to the doctor earlier.

Did a bunch of homework tonight. Best ideas for the coming week:
-NI
-CSU
-WM
-I hold GFIG from last Friday.

Added:
I used the PPT Hybrid scores on my other charts (CSU, WM) so I cannot include them here. Here is the chart for NI that I was looking at tonight:

The big volume spike may push NI over the topping price of $20.50. Of course it could get turned back like before as well. If you are feeling froggy, then LEAP!

Shipped out all "Creep" book winners on Saturday morning. I used priority mail so the books should arrive by Wednesday. Let me know when they show up.

That's about it, sound off in the comments if you have something to say.

Have a good night.