HOTHOTHOT

I'm putting together a little list of "HOT-HOT" "mo-mo" type of charts. Many of today's list comes from uglychart.com.

ABXA, BPA, CKCM, CRNT, HRVE, HURC, KCI, OSTK, SIRI, WEB, XMSR -

Though they are nice up-trending up-volume charts, many are just shy of their highs, without clean breakouts, (except for OSTK, which is arguably a breakout) but not real pullbacks either.

In other words, I'm waiting on these till either a clean breakout above resistance, or a nice pullback to support.

the dollar

If everybody says the dollar will continue to slide, can they all be right?
Isn't the crowd always wrong?
Check that--the crowd is always wrong at the extremes, the turning points.
When the trend is in place (e.g. Nasdaq 1999) the crowd is right.

UPDATE I guess if I were really good at this, I'd have made the above a haiku.

All say dollar fall
Can the whole mob be correct
Yes until they're not

Or something like that

BPA

a pharma, was on the RevShark's buy list today, based ( I guess) on a high volume breakout of a previous high at 10.50. I thought about it at 10.70, but then saw it slide before my eyes. Its now at 10.30--looks like a failed breakout, for now, at least.
I didn't swing, but if it comes by again, I may take a cut at it.

"gap up"

Though I guess this AM was not really a gap-up, Trader Mike makes a good point about buying AM strength. The bottom line is, buy above the 10 or 10:30 AM EST high, as the big boys often use this pop to sell to the saps.

UPDATE and CORRECTION: Michael is of course correct, it was a gap up. I was sloppy and in a hurry, looking at daily charts after the pull back, and I blew it. My overall point, that buying AM strength can be a sucker's game, is still correct. However, Trader Mike was kind enough now to teach me two more lessons.

1. In the blogsphere, somebody is always watching.
2. If I am going to play this game (games, actually, both trading and blogging), I need to be more precise and accurate.

Thanks Mike.

Interest Rates

The Fed is raising rates--I thought stocks were supposed to fall!
Seriously, I can't remember how many times I heard, as the rates were lowered, that we'd get a rally. We heard this all the way to the bottom (both of them). Eventually, we got our rally.
I have heard much lately about how raising rates will choke off a rally. Well, you're hearing it now.
Eventually, we'll get another bottom.

KO

Trader Wizard lays out the case for KO as a long term buy. Among other things, financial postion is strong, its lower priced, both absolutely and relatively, than it has been in years, further weakness in the dollar should help, and there is intriguing word of the new CEO buying $8million of stock at 40.50 on the open market.
I'm interested at 40 or below; below 38.5 I'm backing up the truck.

Google . . .

. . . just keeps finding support in that 165-166 range. So, the more times support holds, is it more or less likely to hold the next time? I guess its a indication of demand at that level, so its more likely to hold . . .until the demand is satisfied, in which case it will then be more likely to not hold.

Or something like that . . .

Suck Inc.

So Kmart is to buy Sears. . . despite the snarky title above, there is something of a fit there, something very red state about the whole thing. (And I mean that as a positive--I've bought plenty of $2/12-pack Coke at Kmart). But what does this mean for Lampert's plan for Kmart as a vehicle for world domination a la Warren Buffett?

Monday morn

More GOOG lock-up released tomorrow, that will almost double the float. I'm still looking for some nice downside on this.
Possible AIG settlement this AM--reported in the WSJ and also mentioned here .
Maybe a pop in some of these insurers today--although I guess the potential settlement is with the DOJ and not Eliot Spitzer.

the year

Both INDU and COMPQ have traded in relatively narrow ranges since hitting highs at the start of the year . . .
Narrow ranges at some point give way to trending . . .

Google, FOMC

Keep a watch on Google--lock-ups are starting to expire, thus increasing the available float, and the stock is at the top of a big gap, that's either begging to be filled (bear case) or will provide support (bull case). I've got puts.
FOMC interest rate day--there has been some back and forth on these days in recent memory, so it might be a good day to place some limit orders above or below--you might buy a nice pullback or short a spike.

My Principles of Money Management

1.-I don't know what's going to happen next.
2.-When I think I know something, I can always be wrong.
3.-What matters is not how right I am, or how good my BS sounds, but ONLY what I take home in the end. (Its all about the Benjamins.)
4.-The market nearly always proves the majority of participants to be wrong.
5.-It may be "different this time" but not necessarily in the way you think it is.
6.-Trends remain in place until they reverse.
7.-Buy when support is held, sell when support is broken.
8.-Keep track of the timeframe.
9.-I won't use that "we" or "us" crap; *I* am responsible for *me*.

The Long Term

THE LONG TERM VIEW
My long term view is
1) equities will go down
2) the US dollar will go down
3) commodities and other hard assets (e.g. precious metals, real estate, timber, oil, gas, potash, etc) will go up.

Why?
1)In the end, people buy stocks for their earnings. Bull markets start from undervaluation, and end at overvaluation. Bear markets, then, start at overvaluation and end at undervaluation. The equity market now (11/04) is by no stretch of any historical imagination (price to earnings, price to sales, price to book, dividend yield) anything other than overvalued. The only question is how overvalued. Thus, we are either at the end of a long bull market or the beginnings of a bear market. Over the long term (several years), it is hard for me to see equities in general going up. Certainly, however, the long term is made up of many instances of the short term.

2) Nixon took us off the last vestige of the gold standard in 1971. The smart old guys say that fiat currencies always get inflated away to nothing. We've done okay for 30+ years, but the last 3-4 years the Fed has increased the money supply at a historic clip. Use any measure you want--monetary base, M1-2-3 whatever, they're printing it like crazy. (parenthetically, I sometimes wonder why they bother with anti-counterfiting measures--seems like the criminals are doing the Fed's work for them). This, along with the low short term rates the Fed seems committed to can only mean the dollar continues to go down.

3) Stocks go down, dollar goes down, short term rates are low, what can people buy? Stuff--real estate, gold, silver, oil, gas, timber, copper. It doesn't hurt that China is awakening from a slumber of several hundred years, and needs all this stuff.

What It Is . . .

. . . is a forum to share my thoughts about money and markets. I'll be introducing my thoughts and views in the next few posts.

Just what the net needs . . .

Another blog.