Are chips stocks heating up? Updates on positions.

The only immediate set-ups I see from the chart voo-doo (technical analysis) are:

1.  CRUS actually looks strong. Should get to $25 in next few weeks. ($21.11 as I type, and I'm buying half-allocation)

2.  AMD is breaking out at $3.70, target would be $4.30; while I usually avoid stocks under $10 this one has decent volume. No position.

3. Others are close to their near-term highs (where sellers have come in before) so I'd be patient based on the charts.

4.  I plead ignorance on fundamentals of these companies, but it I infer from the buzz that the sector is heating up. (???)

Disclosure: I own INTC since December as part of the Dow Dogs dividend strategy, and will hold. Stop-loss is currently at break-even but should be raised.

Unrelated, as per my last entry:

a) I went long UA at 51.75, currently up 12%, and have reset by stop-loss at 53.50.

b) holding XLE, avg cost is 72.60, adding on dips.

New holdings in last couple weeks: BKCC, FEU, KMP.  

FWIW, I like EWW and IYM right here, but I'm not adding since I already have a full allocation in these. 

I've recently sold MSFT for +3.75, 

I wish I'd bought CAT, I had a standing order for a buy at 79.50 and it never triggered even though my computer has a print price of 79.49 last month. Now it's above 89. D'oh.

Buys and Sells: WAG, CNK,

WAG, CNK and SIX have been beasts, up quite a bit. I'm selling half a stake in each and letting half ride. Those are the only ones I'm currently holding.

I can't find any excellent breakouts here, but I'm starting half a stake in UA and adding to my long term position in XLE.  I'll be maintaining approx 3-5% stop-losses as usual.

RDN's chart looks compelling but it's only a $10 stock and not my favorite price point. MRK looks ready, too, but I already have PFE and JNJ, so I'll pass. 

CRUS is technically broken, FWIW, but on my watch list for a set up. For some reason traders are factoring in a lot of pain for AAPL which would be a good position above $470. 

Silver: $SLV

Anyone who has been long silver in the last 18 months has been suffering. My quick technical analysis of the weekly chart shows a few things:

1. The recent breakout above the descending trendline at $28 has not been confirmed with volume.

2. Long term support is $26, that's where buyers have shown up as far back as Jan 2011

3. Sellers have come in before at $34

If you are a trader, then long positions should be suspect without a breakout above $34 ON VOLUME.

If you are a long term holder, any significant break below $26 should signal trouble.

If you bought silver in the last year, well what can I say?

Elliott Wave Update

Daily SPY with Elliot Wave Counts

This is an update from last week's Elliot analysis.

Downward impulse from April took 8 weeks but finished with the A-B-C which began the first week of June.  Large volume sell-offs yesterday and today seem to portend the start of another downward impulse (Orange line).

June lows of 127-ish come into play and should be strong support for a wave 2 to start.

Elliot Waves

OK, Elliot waves have become old-fashioned and few traders look at them anymore. Here are the counts as I see then recent downward impulse. We have completed the A-wave corrective and are likely about to see how low the B-corrective will be.

Voo-doo. The Elliot Waves are usually only apparent to me after they are completed and I find them useless for trading. The low sentiment and oversold technicals from last week are pretty much played out. My guess is that we trade in a low volume range here .

Muddle.

Rising Wedge-- bearish?

Notations on chart, click to enlarge

I'm still net long in my trading account, but have instituted hedges with QID and DZZ.  Other holdings include long positions in UNG, CVX, X and TBT (short Treasuries). All are swing trades for a week or more.

Kimberly Clark (KMB) Wolfe wave

Kimberly Clark (KMB) is a swing trade I've been holding since the August lows but now it seems to be getting ahead of itself. Here is the exit strategy and even a short set-up if the market swoons. Wolfe waves are elegant when they work and this one is a classic set up.

My cost basis is 65.29 and I set my sell-stop on the long position at 70.50 (white trend line). The short set-up is good only for the next few trading sessions on this test of top. If KMB drops below the red trend line then I'll enter a short with a target at the green line or Oct 23rd, whichever comes first. There's a chance that KMB takes off to the upside in which case I'll ride it. If it pulls back it may just trade in a range between the white and red lines in which case I won't have a position. This strategy takes patience but feels great when it works...ie, a fun vanity trade.

Is sentiment too high for gold?

Marc Faber has been bullish on gold for a long time and I've followed him into GLD as well, but now he's calling for gold to hit $10,000. Sentiment is as high as ever now. The inflation adjusted high form the 1970's is $2200.

One aside on this video, as pessimistic as Faber has been on the world economy (and history as proven him correct), he says that he is "not a heavy short-seller" and states his wealth is divided in equal quarters of 1) stocks, 2) gold/silver, 3) real estate and 4) cash. Not bad advice, although I think it's time to take some gold and US Treasuries off the table.. the risk-off trade is getting overdone.

SPY technically oversold

...and due for a (little) bounce. No question, there are structural problems in the macroeconomy and some major technical damage to the indices, but bears would do well to claim a small victory, take some profits and either go to the sidelines or reverse gears for a day or two.



It's time to get your list ready of stocks you want to own: GS, MSFT, PFE, KMB are some safe names. The last two have dividends larger than the 10-year Treasury. Even MCD and PEP have yields that are safe, although their stock price may pull back. For more aggressive investors, HCN, FTR, NLY are high yielders.

Remember that company earnings are still healthy regardless of what employment and other economic indicators may say.

Don't listen to me, these are not recommendations to buy or sell anything.

The Fed's "Fatal Flaw"; Nothing has changed

In fact, it's worse since the banks that were too big to fail are now bigger than ever.

What the Cool Kids are Watching:

We are at support on the daily. See if the dip buyers come in here. MA's are still positive, but it could get ugly. Momo traders are all "talking about" going to the sidelines with lots of momo names getting taken out one by one. Today it's retail's turn. Transports are also at support, finnies have been dead for a while... altho Doug kass bought Goldman Sachs a couple days ago, so it might be a bottom, or Kass is wrong (again.).

Looking at the SPY (just to be more like Brian and to piss off Eric.)

GNW: Bearish Wolf Wave

Hedge time again for my net long portfolio. Let's try this GNW short set up. Remember to set stops for loss and gain. Don't forget to take gains in corrections.

SPX overbought; AAII bullish

This is not favorable for bulls, short term. Gentlemen, start your hedges!

GLD, DBC shorts covered at target

Gold and commodities (discussed previously) have corrected and shorts were covered today. I had also gotten short silver with the ETF ZSL. Now I'm flat on precious metals. At the close today, with the market oversold on short term indicators, I opened small long positions on CAT and PBR.

Size. I trade f*cking SIZE. Bitch

Hilarious.

(hat tip barry)

Gold and Commodities overbought

Update on SPX Bearish Wolfe Wave

Yesterday I presented the targets and stops for the bearish Wolfe wave that developed. Target is the 1168.20 level and stops are the red trendline. The numbers on the chart are Wolfe numbers. Not drawn would be Elliot wave numbers, and by my calculation we are currently in Elliot Wave 4 since this morning and Wave 5 should start before the close today.

Disclosure: I am long FAZ, UUP, DZZ, QID; short WFC, AMZN. These holdings may change before the close today, but UUP is a longer term holding.

$SPX 30-min Bearish Wolfe wave

On short term basis the SPX is bearish. Stop is the red trendline.

Update of GLD Bearish Wolfe wave

A couple weeks ago I showed that GLD was giving us a test of top. As of today, the weekly is showing a bearish Trader Vic2B reversal which is consistent with a developing Wolfe Wave.

I sold all my longs since January and even starting a tiny position in DZZ (ultra-short GLD). Shorting individual miners could be another strategy-- many are exhibiting bearish patterns as well.

QQQQ: Bearish Wolfe Wave

QQQQ on 65-min chart is showing a developing Bearish Wolfe Wave and also a double top formation. If trendline breaks, enter short (or long QID) with target 48.80. Stop 51.75