Semiconductor ETF (SMH)

No chart, just an opinion. With Semi's up strong today, CNBC had a guy touting the sector and how to get in.

Tomasulo talking up SMH. He likes SMH but not INTC?!! WTF? SMH is 24% INTC, 14% AMAT and 19% TXN. Of all the ETF's this one is not worth buying, IMO. Tomasulo's reasoning is flawed. 60% of this ETF is three companies.

I like the smaller players in this sector, FWIW: CY and MRVL. Maybe a little speculative for some traders, but if INTC is going to go up, these should fly.

Tech names in other sectors outside of Semi's that are reasonable Lotto tickets: PEGA, FIRE.

The Swine flu narrative infects talking heads: Update

SPY looks to be range bound but the gap fade this morning is impressive. I keep looking for he bottom to fall out of this thing and it never happens. Resistance is 87.50 or so and it has bumped up against it a few time now, so one of these times it may break through to the upside.

The bounce off the mauve line this morning was abrupt and the action is now constructive. Gap fades like this are nice to catch on the upside and it may develop into an upward trend day. Horizontal support, not depicted on the chart, is 83.5 or 84.

The QQQQ looks even stronger here on a technical standpoint. Software and semis.

CNBC is becoming unwatchable. Everything that happens is "because" of some horseshit news item. I realize they need to earn a paycheck by creating a narrative around something and with swine flu, consumer confidence, Mike Huckman's next "blockbuster drug", Obama's first 100 days, BAC needing more money, etc... today seems like a more target-rich environment than usual.

The swine flu hysteria is ridiculous, and comparing it to the 1918 Spanish flu epidemic borders on insanity*. Folks, this is more bullshit narrative that has no basis in reality. More young people will die this weekend in the US from .38 caliber handguns than will die from swine flu the entire year. Endemic social diseases are more costly by far than viral epidemics.

The strategy now is a combination of long and short swing trades. I've pretty much stoppped the day-trading since it was driving me nuts and not really improving my performance. I'm using Invivoanalytics (thanks Eric, T.Lo and Pete) and also Barry Ritholtz' FusionIQ quant sites for professional opinions and portfolio advice

My theme lately is long semis (MRVL, CY) and software (BMC, maybe I'll add ADBE), APH, FCX for gold and copper, GLD, SLV, DD, NMO, and looking to add TLM (this morning looks like maybe a good opportunity.)

RWF, ARK, GTY and others are in the IRA.

Shorts currently are HRB, TYC, APOL, ALKS and recently added BG. Stops are set on all shorts!!

The move back to swing trading will likely delay any further graying of the hair. I'll try to cover some individual charts if/when I get time.

___________________

*UPDATE

Bespoke has a great chart on the effect the 1918 Spanish flu had on the stock market. My great-grandfather was a general practitioner in Chicago at that time and the legend is that he would travel the neighborhoods with his holy water as the sole weapon against the viral scourge that killed tens of millions. Despite the utter despair, the market dropped a mere 10% and recovered more quickly than the populace.

Strong Performers Hitting Resistance

GLD is trading near the 50 dMA and the lower trendline.  I see no fundamental, technical or sentiment reason to sell at this point.  I continue ot hold the metal but have recently sold half my position in the mining index.

MS moves fast and has been a good trading vehicle, although not as volatile as WFC.  Today I added some near the day's low and expect this to make a run for 30

FCX continues its upward trajectory off a solid base with the next 

resistance level at 45.7.  Materials in general are working off the best developed basing pattern.

IYM has a beautiful base and may be developing an inverted head and shoulders now as it approaches some resistance.  This may take a couple weeks to break out, but with the violent moves, who knows?

SMH is likewise struggling with some overhead supply after a 20% run.  This is due for a pull-back.  I recently took some profits in CY, but will re-enter on any correction.  MRVL also could be a buy with any pull-back.

Bullish chart patterns

UN looks to have thrown out a morning star doji which is bullish.  I took a couple bucks off this bad boy going short last month and have been following it for another short entry.  Now, it looks like it may be reversing.

CY has had a pretty ascending triangle for several weeks and looks to have finally broken through the upside resistance.  This one could run.

FCX has been my baby.  Classic ascending triangle with a breakout above resistance with the third try... now it's off to the races.  There really is no more resistance until $40, and that's pretty weak.  This has seen triple digits just last year.  I took some profits, but will add it back on any pull-backs below the middle regression line.

"Six percent rallies don't happen in bull markets."

...and that is directly quoted from Macroman.  Well, we'll just have to see about that.

Or, for Rambo fans: "Nothing is over."

Needless to say, I took some profits.  First, let's go to the charts:

IBM looks good for a long here.  Very good price movement and has formed a classic double bottom.  Conservative traders should look for a breakout above 89.50 to get serious.

SLV long. You either love precious metals or hate 'em.  I just decided to keep 5-10% of my trading portfolio in this sector and split it equally between GLD and SLV.  No emotion, no fallout bunker, no ammo, no SPAM.  When they get above the regression line, I sell some; when they get below, I buy some.  It works for me.

Sprint (S) is a nice pattern for a long position.  This is snugging up to overhead resistance should break through one of these times.  Could double.  Use the lower trend line for a sell-stop.

MRVL has been reviewed before as a long candidate.  Like a wimp, I got stopped out in the past-- which is further evidence of Teresa lo's advice not to set stops too tight.  Any pullback in this could be a buying opportunity, but this could just run away from here.  CY also is a strong chart.

While I remain skeptical by nature and I have no trust in the bull thesis here, I could not find any classis short set-ups.  AXP, COF, FRX and CEG all look like decent shorts, but not outstanding.  I sold half my FCX in the pop, but will add it back with any pullbacks... I still think it's going to $40 or beyond.  MS, likewise, was sold for a gain. 

Update: CY, FCX and new pick: DELL

Long CY is not working as expected.  We were looking for the big break-out and it seems to be breaking down.  It's within earshot of the sell stop, so we'll stick to our discipline.  Same with MRVL, which hit the sell-stop and I got out with a 4% loss.

Long FCX still bouncing around below resistance and I'm still expecting an upside breakout, but my sell stop is currently at $26.

Long Dell is the new kid.  I know this chart looks ugly with a sell off last week on HPQ's lousy number.  I got some dirt cheap at $8.10 pre-market on Friday.  It had an "almost outside reversal day" on Friday and I may be able to pull 10% off on a swing trade.  Earnings come out Thursday after close and I'm very hesitant to hold it that long.  Low risk only here.

Tuesday Recap and a look ahead

The bloodbath was impressive and gave me pause on entering any long positions at all.   But since I presented a few stocks I went ahead and got some CY at $5.09 and even went commando and went long FCX at 27.64 which was not a good price and one I may regret.  MS dropped so preciptously that it broke the support that I had mentioned, so I never opened that position.

The short side is working much better.  AVB continues it's descent into hell, and I did not short the other REIT, VTR, due to the gap down open.  I chased BBBY a little and sold it short at 21.34 for the next leg down.

Of course, GLD and SLV are the place to be and those are still being held.

The stink of blood still lingers and Asian markets are down as I write this.  No end is in sight for this free fall, but the futures point up at the moment and we should stay vigilant since we all know how violent bear market rallies can be.  Eric is predicting no bounce until Thursday at the earliest and more likely Monday.

Longs for Tuesday 2-17

Let's just say, for argument's sake, that the four horsemen take a detour and the world somehow pulls out of this descent into chaos.  Which stocks will do well?  These are all lottery tickets... looking for four baggers in the next few months, or they could all go bankrupt.

FCX mines for a lot of stuff: copper, platinum and gold.  The chart looks great.  Loose stops are okay on this one.  It could double with any rebound in the markets.  NG is also an adrenaline junkie's dream.

CY is in the semiconductor space but also is involved with design and manufacture of solar panels.   Could double, or could go to zero.  Careful.  Still holding MRVL and still like LLTC.

MS along with GS may be the last soldiers standing... and post-Mad Max investors will have to go somewhere once Citi's "mall" gets shuttered.  MS was trading at $50 six months ago, and while it may not double we could see a 20% pop very soon.