Search This Blog

Thursday, June 16, 2011


The SP500 is off by a bit, compared to yesterday, yet the VIX has skyrocketed some 15%. Basically, the VIX is up about 30% in two days. That's a lot.

Also, I am feeling max pain on my Apple position. And ATI looks really interesting here, especially with Boeing announcing their current market outlook this morning. Normally I would ease into the name now, as it is sitting on its 200SMA support. But the negativity in AAPL and POT is forcing me to be very disciplined and initially adding where my double up position would be, around mid 55.


  1. Theo, it`s been awhile. While I`m still a bit confused about "some" graphs,charts, Bollinger bands, and all these technicals,at this point in time, I came across a You Tube Video which may interest you. The content of it may make a lot more sense to you,than it does to me,and i`d like your input on it. I still remain optimistic,even though his forward looking predictions are all doom and gloom. Best wishes, cm

  2. Technical analysis (TA) is tough. Many people think its bullshit because they do not understand the subjectiveness in the assessment. (And if someone can't understand it, they usually belittle it.)

    Basically the guy is saying what everyone is already saying. Either the market will bounce or it will collapse here. (Except he uses far more technical verbiage and drawings.) He also paints a more negative picture because of minor supports that were broke (supports levels so minor that I do not even considers worth while to even mention). This is why, in my 'summer of discontent' post, I only highlighted the major supports. Because aside from a day-trader, these are the only supports that matter.

    Although I use TA a lot, I ultimately use it as an indicator and short-term trading tool, but it plays second fiddle to my fundamental analysis. Its no secret that the market has been discounting a ton of information and assumptions, a ton. This means all the big-boys are, very obviously, anticipating something. When the big-boys act so openly, that 'thing' does not have the same effect as it would have.

    For instance, in 2008, Mon-thrus before the weekend Lehman went under, I saw some weird action within my charts. The action was not obvious. It was subtle, and market valuations were not discounted at all. The subtleness made me nervous something was going on behind the scenes that made me sell my entire long positions on thurs, and maintain my shorts. But today, the over all market has been discounting for some event (maybe a hard restructuring of Greece or debt ceiling not being raised) over that past few months. It may also have been discounting for slower economic growth due to top-down fears, but discounts have gotten too severe for that. (Discounts are so severe that I can make a very real argument that many stock valuations are similar to where they stood in March 2009, when we were knee deep in a financial shock.)

    So, will the market go up or will it go down? That does not depend on charts, but on the actions of the EU leaders with their handling of their debt issues and whether or not our political leaders get their act together w/the deficit and debt ceiling. (more on this in my next post 'power play' later today)

  3. Theo,
    as usual,thank you for your insightful thoughts.