Definition of a massive market bubble (created by Bernanke) : Stocks surge to new highs after government shuts down

Bernanke is creating the oh so perfect situation for a full scale US economic collapse, gotta love it. Push on the gas peddle until something spectacular happens helicopter Ben! He will go down as the biggest villains in US history, but for now everyone drink the kool-aid and play the game of musical chairs!

When the music will stop? Nobody knows!

Today's fed-induced bizarro world headline

Sunday Rock Blog: One More Chance (IWM breakout hasn't failed yet)

Disclosure: I own IWM puts and TZA stock.

Interesting Yen (FXY) Symetric Triangle

Wednesday Rock Blog: Breakouts fail (bull trap sprung!), but Life Goes On (Tupac)

"From failed moves come fast moves" -smart trader

Saturday Rock Blog: Day After Day > No Matter What (IWM rallies, weekly chart)

Disclosure: I own IWM puts and TZA stock

DIA Chart (bouncing soon)

Disclosure: I have no position in DIA but am looking for it to bounce significantly soon, perhaps at $146.

Sunday Rock Blog: Heavy Cloud No Rain

Disclosure: I own TZA and looking to try shorts in IWM around $104.

Friday Rock Blog: Phil Collins Shorts EWJ (Japanese stock ETF)

Disclosure: I have a bunch of EWJ puts.

Saturday Rock Blog: Frank Zappa's Hot Rats and Ugly IWM Breakouts

Disclosure: I am mostly short, including a significant long position in TZA

Saturday Rock Blog: Touch or Low risk shorts abound! (e.g., DD and JNJ)

Disclosure:  I am short JNJ own DD puts.

Saturday Rock Blog: Drop (US Real Estate)

Big Wave Riding or How the S&P 500 looks like its about to tank or Monday Night FOMC-Week Rock Blog

With the recent rapid rise in interest rates, a surging yen, plunging global equities, new bear market in gold, and spiking VIX, many investors seems to be scratching their heads at the modest ~5% correction in US stocks ($169 to $160).  If the world is going through a significant deflationary correction (like every index except for US stocks suggests), then why haven't stocks dropped more?  Its anybody's guess and there are many things to point to such as the accommodating FOMC (no tapering!), improving US economy, or possibility of fiscal stimulus.  

Its anybody's guess and there are many things to point to such as the accommodating FOMC (no tapering!), improving US economy, or possibility of fiscal stimulus.  Frankly, I think it could be just a question of leading indicators vs lagging indicators, and the US stock indexes seem to be the latter case these days (a lagging indicator).  US stock investor shave grown complacent due to the Bernanke put, and have absolutely no fear of a meaningful correction.  That could all be changing right under the bull's noses, if you put all of the puzzle pieces together.  Lets keep it simple, based on the above SPY chart I would be looking for shorts anywhere $162 to $165.  If SPY can break ~$166 then the bulls could squeeze us up to new highs.  However, I think a break of $162-ish spells doom for the bulls with ~$153-$156 (5%-7% lower) targeted by the  rising 200 dma and measure rule ($169 - $160 = A, $160- $165 = B).  

Probably what will happen is a huge move one day this week related to the FOMC.  Either the market will go into some sort of panic and tank, or the bears will capitulate and send stocks into an upwards crash/capitulation, such as I've spoken of recently.  I also wouldn't be surprised to see some sort of huge fake out, for example, a spike to new highs followed by a drop below $162 in the same day.  If you start to see the volume spike then you'll know the big wave is upon is.

Disclosure:  I have no SPY position but I have many other shorts, including S&P500-correlated indexes like the Russel 2000 and the Dow Jones Industrials.  I am long the yen and short gold.  So I am short, and I intend to stay short unless we break recent highs.  If we slide through recent lows it'll be time to hang ten.

Saturday Rock Blog: Escape

Lose Yourself to VIX

If this thing breaks 20... yikes.

Disclosure:  Yeah, I own some puts (on other stocks).

Broken Link

Looks like LNKD could head to ~$125 so long as it holds below ~$165.  I have no position but puts are tempting.

Nothing But Tears (Coming for JNJ)

There are many extremely interesting charts right now. We've are in the midst of one of the longest winning streaks (base don various metrics) in decades for US stocks and this has lead to some really nice formations.  Over the next few days I'm going to post some breathtaking charts. I think we are really close to a major turning point (based on bonds, yen, topping patterns, etc) but will we crash up in a capitulative top or has it happened already? Regardless, I am convinced the price action will be fascinating. I am going to update the blog later this week (long overdue), but first, enjoy some sweet charts. JNJ is one that has many people puzzled, the stock had been soaring until the recent correction which looks very healthy by most standards. If it weren't for the fact that we aren't having a baby boom right now, if the steep uptrend hadn't broken, if that beautiful inverted hammer candle hadnt formed at a new all time high, and if the CCI and stochastics weren't flashing bearish signals, I might be bullish on this 50 dma bounce. Instead, I'd look to get puts when the stock reaches the 87.50-88 area. I have no position currently. To quote the words of our former dear leader, "this sucker might go down".

ChicagoStock: Wave 5

Friday Rock Blog: Get Lucky

Friday Rock Blog: Jane Says

As you can see from the above, I see the potential for this past week's high to be a major top.  Some aspects of the recent price action look like capitulation but neither the volume nor the severity of the decline have me convinced.  I have come around to thinking that the only way this five year bull market ends is with a capitulation event where price and volume spike, then reverse.  Upward breakouts from rising wedges (see weekly below) usually end in tears, but we still have a few more months till the wedge apex.  If this is capitulation, then it feels more like the beginnings of it rather than the end.  More and more people are talking about the stock market these days, and it seems like the public is getting in now, finally... 1000 points later (150%).  I have longs and shorts but I'm long SPY aggressively long via calls right now.

Disclosure: I own SPY calls

Saturday Rock Blog: Space Oddity

Saturday Rock Blog: Any Way You Want It

Disclosure: I am long DGLD (short GLD x3)

Saturday Symphony Blog: Four Seasons

The S&P breaks 1600!!!

Yen and Dow Seasonal Since 2007

Saturday Rock Blog: Good Enough

Saturday Rock Blog: Sky is the Limit

The Russell 2000 (small caps) broke hard today

In today's lovely daily candlestick, IWM broke through two seemingly important price points and more importantly  its flattening 50 dma.  The small cap ETF did all of this on 100M shares traded, second only to the first trading day of the year (~3x avg vol).  This now brings into focus previous a previous area of support around ~$89, then nothing but air for another -$4.

Disclosure:  I own TWM (inverse IWM)

LOL: DGLD +26% today as gold tanks

Disclosure: I own PHYS as of today

Sunday Rock Blog: Iko Iko and FSLR's +50% week via a massive short squeeze on x7 avg daily volume

Disclosure: I am long FSLR, but hedged with cover calls.

FSLR 1 yr chart (+possible support levels)

Disclosure:  I am long FSLR and short $40-strike June calls against the entire position.  The calls make me nervous, because I think FSLR is in the early stages of a long term uptrend which started almost a year ago.  That being said, the bulls would do well to consolidate their (massive) gains of late, but not to beyond recent levels of resistance (i.e. build support above $30).  So I'd like to see FSLR hang out here or drift lower to these levels ($33.3-35.6) for a few weeks at least (i.e. form a bull flag and wait for MA's to catch up).  Plus, hedging against a broad market decline seems prudent given the circumstances.

Saturday Rock Blog: Jump In The Line

Wednesday Rock Blog: Sundown

Sunday Rock Blog: Satellite (IWM)

As sort of an update to this post, IWM (above) has been push higher consistently for about four months but recently consolidating some of those gains over the past few weeks.  The CCI and stochastics look a lot like they did back in November, right before we broke out and made new all time highs.  The trend is up on all time frames here so you have to give the bulls the benefit of the doubt.  However, its interesting to note that we never tested that $84 support after the gap n run to start the year.  Also, the steeper uptrend that started the year ended in late February, and we have been trying to get back up to it ever since.  I am becoming increasingly skeptical of the recent gains and have increased bearish bets on IWM. 

Disclosure: I own TWM and IWM calls.

The S&P 500 Top? (ChicagoStock)

St. Patrick's Day Rock Blog: Kiss Me!

Pi Day Rock Blog: Dow reaches cup n' handle target at record high for tenth day in a row

Sunday Rock Blog: Inspector Norse

 

Disclosure: I own CMCSA puts, first target is $37.80, stop at $40.35

My internet went down again this weekend, fuck comcast.

Saturday Rock Blog: Ham 'N' Eggs, IWM Cup 'N' Handle

Disclosure:  I am currently long TWM (x2 inverse IWM)

Sunday Rock Blog: Promises

 

Disclosure: I am short ICE with a $142 target

Sunday Rock Blog: No Rain

Sunday Rock Blog: Let my love open the door

Sunday Rock Blog: Fade the Yen Apache

Last October I posted this chart to argue my position in FXY $123 puts:

It turned out to be my best trade of the year as the yen completely collapsed down to $110 recently (from $126).  I think the yen sell off is nearly complete with FXY nearly reaching its ~108.50 measured rule target.  Furthermore, the 14 day RSI hit 10 recently (extremely oversold) and divergences have appeared on the CCI and RSI (foreshadowing a trend change).  I still think the long term bull market in the yen has officially ended, but FXY needs to consolidate the recent decline and the world need to adjust to lower yen exchange rates.  I could see this retracing back to ~$117 in the near future, at which point, new shorts would be of appropriate risk/reward.

Disclosure:  I am long FXY Feb $115 calls.

Saturday Rock Blog: We Are Young

Disclosure: long SPWR stock and short Jan $9-strike covered calls on the entire position

New Year's Day Rock Blog: MCP Rapture?

Happy New Year folks! As we head in to 2013 I'm bullish on a number of stocks, and one of them that seems promising in the near term is MCP. I think the chart below speaks for its self with potential to run to $16-17 over the next few months. Bloomberg recently had a good article about the potential for MCP to be acquired above current prices. Watch for the CCI to turn positive, the bullish pennant/flag to break up (>$9.75), and for MCP to hold above its 50 dma (currently $9.3).  Good luck in 2013 all!!!

Disclosure: I own MCP stock and calls.

Saturday Rock Blog: Last Christmas

Short set-up on DD

In October DD broke below former support at ~$45.45 on very strong volume and has since sold off much further ($41.67) before recovering back to almost $45.  This sets up a low risk shorting opportunity as DD encounters its rapidly declining 50 dma at $44.79, with a stop somewhere around $45.70 and a measured rule target of ~$38.40.  If you want to lower your risk try entering shorts higher (but below $45.31).  DD seems like a great investment otherwise, its a blue chip with a ~4% dividend, so I might want to be long a break of $46.  For now though, I like the odds short, and so I am.

Disclosure:  I own DD puts.

Sunday Rock Blog: Dance of the Sugar Plum Fairies

Last weekend I posted a long term AAPL chart showing rising support at $530, this trend line broke with volume and follow through last week. The next level of support on the weekly chart comes in around $350-$425, roughly, in my humble opinion. Taking a closer look at the daily chart below, I am seeing a pretty bearish looking intermediate term trend here which does not bode well for the Nasdaq:

I wouldn't say the AAPL bulls are going to definitely get coal for Christmas just yet, if it can retake $530 without going lower then this could start to look like a double bottom. If AAPL gets back above $550 then it brings a test of the falling 50 dma and soon to be falling, higher, 200 dma into play. But the benefit of the doubt goes to the AAPL shorts, and various indicators are setting up new shorts right here right now. My guess is AAPL heads sharply lower.

 Disclosure: I have sold or hedged all of my solar positions and have some broader shorts on now.  I have no position in AAPL but I am short RIMM as of the close Friday.

Saturday Rock Blog: Time to Pretend

Sunday Rock Blog: Time For Shorts to Fry

Taking a look at the (market leading) small caps (IWM), its pretty clear that something violent has just happened. Stocks were in the midst of a healthy correction (pennant pattern) and finding support at the rising 200 dma in late October. After a shaky bounce IWM got slammed through its 200 dma but ultimately reversed in a V-bottom-like pattern retaking its 200 dma. Recently the CCI and stochastics have given buy signals and now that IWM has regained its 50 dma I see nothing but pain ahead for shorts in the coming weeks:

While most people point to the poor performance of former market leaders (like AAPL and GOOG) new leaders are emerging. Take a look at FB over the past few weeks, the rally is relentless and on strong volume. The ~3.5 month base is really paying off now:

Whether they are new leaders or just heavily shorted stocks getting squeezed (shorts fear higher taxes in 2013), 100%+ gains in popular stocks like FSLR, GMCR, and RIMM over the past six months makes for some very positive sentiment. FSLR seems to be just getting started after breaking $26 last week. It should see ~$32 by Christmas:

Shorts seem to be panicking on GMCR as it has soared 100% on huge volume spikes:

RIMM, the stock that everybody loves to hate, bulls sure aren't hating it right now. Volume has been through the roof as RIMM surged above its 200 dma (declining):

The point is, despite all the negative press lately about the "fiscal cliff" stocks have rebounded very strongly from the November lows and appear to be starting a new leg up. While many stocks have struggled lately, others have been exploding higher (see above). I'd be surprised if we don't see a continuation of the recent rally to new 52 week highs on the indexes by the end of the year. Happy holidays to all!

Disclosure: I am long IWM calls and FSLR stock.

PS.  I see all solar rallying strongly here (I am long TAN, SPWR, JASO, ASTI, ENPH, MCP also)

Saturday "Rock" Blog: Saturn in Time

Outer Space from Sander van den Berg on Vimeo.

Saturday Rock Blog: Dance This Mess Around

Disclosure: I'm long PHYS (pretty much the same as GLD)