America's Bankrupt Banks

This is the first part of a six of an hour long show about the meltdown. If you liked this part you can find the rest the clips here. Hat tip to a Chicago for pointing these out.

A Chart a Day #8: VIX: Increasingly Relaxed Markets

A Chart a Day #7: Nasdaq Composite Breaks Out!

A Chart a Day #6: The S&P 500

As I pointed out a few weeks ago, the market is acting very bullish. The S&P 500 repeatedly has found support at it's 200 dma, albeit a declining moving average. None of us beleived that the market could really form a v-bottom, but hell, there it is. Plain as day! The short and intermediate terms are clearly bullish and you could make a strong argument that a new bull market has begun (in the long term). I won't do that, because the notion is absurd to me, but I could after the S&P breaks 956, without much difficulty. Today was obviously a strong day, with all the major moving averages up about 3%. This confirms my suspician that the S&P will make a run for 1000 or more. Take a look at the stochastics and CCI, they look almost identical to how they did just after the March lows.

So am I long? Do I want to be long? No. But I am licking my chops for a tremendous opportuntiy to sell into strength soon. The biggest moves for a trend tend to be at the begining and end. Thats because most trends begin and end with capitulation, which I'll loosely define as an extreme movement in price acompanied by a surge in volume. I am looking for those valiant shorts who held true to capitulate, along with all those sorry bastards who have been too scared to get long but wanted to. They'll all buy at some point surging the indexes and the volume too. Thats when I want to get short, and stay short for a while. I don't have a crystal ball or anything, but I have a feeling that it will be obvious when the time is right. Don't be trigger happy and may the force be with you.

Ok, I couldn't resist... I unveil the Goldmanfinger

A Chart a Day #5: Goldman Sachs (GS)

I know what you're thinking; "he's gonna go on a rant about how Goldman runs the US government, scams the taxpayer, creates bubbles, etc, etc." Well, you'd be thinking wrong because I'm not going to call Goldman a vampire squid, or harp on how people are pissed that they profit huge while America wastes away. Nope, I'm just gonna post a chart, cause thats all that matters if you want to make money in stocks.

On this three year chart, weekly time frame, I see a massice head and shoulders top which completed about a year ago. Within months the target had been met, a staggering 66% decline from the neckline. I see that GS has since recovered all of that loss and now is finding resistance at the neckline. While expected resistance is being felt at the $150 neckline, the chart remains bullish. There is a solid up channel in place that GS currently lies near the middle of, the 50 dma is above the 200 dma and both are rising. About the only negative thing I have to say about the GS chart is that volume has declined on this rally. Agressive traders might try to make a move near the $150 pivot, playing a breakout above or trying to swing it lower. Personally, I wouldn't bet against GS unless that upchannel broke on a surge in volume and given the overhead supply I wouldn't go long either. But thats me.

The Fed Under Fire

No chart tonight, I got bogged down with some other things. Instead, I hope you'll enjoy this video about the Federal Reserve and I hope you will continue to support Dr. Paul's bill to have them audited. This is a major issue that needs to get more national attention. I found this video in this article that you might also enjoy.

A Chart a Day #4: US Oil Fund (USO)

A Chart a Day #3: United Breaks Charts (UAUA)

If you're like me then anytime you hear news about a company (or watch a cheesy viral youtube video about it) you wonder what the chart looks like. The "fundamentals" or the news is always secondary to the chart. Obviously, United breaking some dude's guitar is not exactly bankrupting news but just the mention of United makes me think "I wonder what that pos stock chart looks like." And sure enough, there always something interesting in the charts of crap companies like United (bankrupted just 5yrs ago). The first thing that catches my eye is the scale of the three year chart. Last year UAUA staged a 470% rally in less than two months! Of course it gave that all up, but it was a nice looking "v-bottom" while it lasted. So thats what "v-bottoms" look like, cool, I'll have to write that one down. I don't really have a clue what UAUA will do in the short run, it could collapse through multi-year lows or rally back up into the triangle. Long term this stock has bankruptcy written all over it, compare it to any competitor.

Saturday Rock Blog: United Breaks Guitars

A Chart a Day #2: Fibonacci on ICE

Long time readers know ICE has always been want of my favorite stocks to watch. Yeah, the IPO was on my birthday but thats not why I like it so much. I like it because it moves. Well that and they seem to have a pretty solid business model, and I like a nice bedtime story to go with my charts.

ICE worked on a base for many months between $50 and $85 before breaking out early this year. It broke out and had sported a very nice, innocent looking, up channel for about six months until last Monday when.. WHAM! ICE lost 23% in two trading days. It simultaneously broke the up channel and lost it's upsloping 50 dma on well above average volume. CCI watchers were on there toes after it crossed zero last week, way to go guys. ICE seems to have found support at the top of the base ($85) which also turns out to be the 50% retrace of this year's rally.

Now if you ask me, I'd say ICE is not done dropping yet, in the near term. Today ICE closed below that key $85 level after holding it the past two days. Also, the 200 dma and the 62% fibonacci lie not too far below at $79.67 and $77.29 respectively. Given today's weakness and how obvious the $85 support is, I'd bet ICE sees at least $80 if not a few bucks lower before bouncing. After the bounce, bulls better re-take and hold $85 or the cracking ice just might melt.