Posts Tagged ‘Tim Knight’

Timeframes and Actions

Latest thoughts by Tim Knight at The Slope of Hope

Timeframes and Actions

Since – and I’m being my typically overly-polite self here – some people seem confused as to my attitude toward the market, allow me to explain. Again.Short Term (Hours/Days)

  • Open to the possibility of S&P getting as high as 1120
  • Have opened up about 10% of intended short positions already. Vast majority of accounts in cash.
  • Have a small number of long positions, and a pretty big SSO position to soften the blow if the rise continues; occasionally briefly trading ES for pops and drops. Long /ES as of this writing.
  • Opportunistic day-trading ETFs when risk/reward seems heavily in my favor

Medium Term (Next Few Weeks) 

  • Think likelihood of trend change very strong;
  • Going through all stocks in advance and preparing target entry points and stop prices;
  • Intend to hang on to already-established positions and ratchet stops down as needed

Long-Term (Months/Years) 

  • Believe people who are planning on a new bull market are incorrect;
  • Think slow, grinding bear market will continue several years;
  • Believes major government policy shifts and social unrest will accompany bear market;
  • Will trade infrequently once bulk of positions are in place

Got it? Good. Thank you.

A Close Look at the Russell 2000

The /ES continues to grind uncomfortably and annoyingly along its descending trendline of resistance. It could, of course, pop above it at any moment. Given the fact the trendline isn’t even a week in length, a break above it wouldn’t be explosive, but it would be another carpet tack in the coffin of the bearish argument.Some might assume, based on my disposition, that I am massively short the market. I’m not. I have about 10% of my buying power deployed in short positions. I’ve got 3000 shares of SSO to ameliorate the market’s strength. I’ve been spending virtually all my time getting ready for, but not executing, the trades which interest me.The Russell looks like this right now:

1007-rut 
 

Operating in the favor of the bulls……… 

  • Broad uptrend still very much intact;
  • There’s about 8% upside from here before the major resistance at that rectangle
  • And, just now, AA reported earnings which the market seems to really like.

In the bears’ favor…….. 

  • Trendline breached;
  • Massive resistance overhead

Looking closer, we can see the series of lower lows and lower highs, but one good strong day higher could break this:

1007-rutclose 
 

 


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September’s Passing

September’s Passing

Courtesy of Tim Knight at Slope of Hope 
 

 

 


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DIG Near Breakout & Hedging My Bets

Note: Tim Knight is not ordinarily bullish is likely positioned for the downside as well.

DIG Near Breakout

Courtesy of Tim Knight at Slope of Hope

I’ve been mentioning lately how some folks are seeing inverted head and shoulders patterns where they don’t exist. Well, there’s one major ETF where it definitely does exist, and that’s the ultra-bullish energy DIG. It hasn’t broken out yet, but it’s geting tantalizingly close.

0922-DIG

The one curious aspect to this is that volume is steadily shriveling up (and, because the price has been so static, it isn’t because the price has been getting out of reach for people).

0922-DIGvolume

What are your thoughts on DIG?

Hedging My Bets

I am concerned about what fun and games are left in store for us the rest of the month, particularly with the FOMC tomorrow, so I am going to populate one of my accounts with ten longs as a safety net.

All of them basically look like the graph below………

0922-longs

………and share these common properties:

  • Plenty of "open air" on the upside;
  • A nice relationship between volume and price;
  • A clean breakout above a consolidation zone

The specific stocks, and their stops, are below. These are not "lottery plays", but more run-of-the-mill long choices.

  • AB 24.69 400 
  • AIMC 9.20 
  • BBEP 10.69 
  • CPX 10.14 
  • DRYS 5.86 
  • LLL 79.86 
  • PCX 11.57 
  • SD 12.42 
  • FMCN 8.83 
  • HERO 5.63 

 


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Everything’s Coming Up Roses

Everything’s Coming Up Roses

Courtesy of Tim Knight of Slope of Hope

As regular readers know, I’m counting on a countertrend top between 1050 and 1200 on the S&P, and we’re within spitting distance of it. Today’s high was barely 1% underneath 1050. I maintain my belief that this is nothing more than a countertrend rally unless (God forbid) we were to cross above 1200.

The folks over at Elliott Wave provided a very interesting graph on sentiment today:

0824-optimism

Not to put too fine a point on it (.…..say I’m the only bee in your bonnet…….), investors are now even more doe-eyed optimistic about the prospects for equities than they were when the S&P peaked at 1576! All this crap about tons of cash on the sidelines and people waiting to pile into the market is just that: a load of crap. They’re already in! And they’re expecting things to keep soaring! (Just like, ummm, in October 2007).

The "cash on the sidelines" thing drives me nuts. The "cash" was destroyed in the 58% decline – remember? The notion that people:

  1. Sold at the top
  2. Tucked their "cash" away somewhere really, really safe
  3. Now have all that cash at-the-ready to buy stocks

is…….that’s right!…………utter crap.

It’s lovely that today was a good day for me, but I’ve been through the past five months and know it doesn’t mean squat. You know the last time we had a good, solid down week? June! So it pays to take it one day at a time and assume Goldman is just playing games with us all until things start to seriously, seriously crack.

And, I assure you, ladies and gentleman, that is a day to which I eagerly look forward.

****

Song for Tim :-)

 


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Yes, Virginia

Yes, Virginia

Courtesy of Tim at Slope of Hope

Sloper Virginia Jim posted a chart so danged beautiful I’m going to show it here (plus I am frantically doing a zillion things and don’t have time for an original thought of my own!) I hope VJ doesn’t mind me sharing:

0810-virginia


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H&S, R.I.P.

A tired and battered bear lays the beloved H&S chart pattern to rest and gathers up the will to take on the somewhat repulsive task of climbing the Slope of Hope.Ilene  

H&S, R.I.P.

Courtesy of Tim Knight at Slope of Hope

Well, this pattern had a lot of promise, but it’s dead, Jim.

0715-spx1, spx

So here is a broader view of the S&P cash market:

0715-spx2, spx

The bulls own this market now. For the bears to take over, the S&P would have to blow below this month’s lows (around 875). The odds of that happening went way down over the past few days. 875 is very strong support, we can plainly see.

The huge yellow zone shows that there is very little in the way of the bulls ultimately being able to push this market to about 1,150. They will have to get past about 975 first, though (circled above), since that is the underside of a major broken channel. It also seems that every attempt to make a higher high does succeed to get a little higher, but then it starts faltering again (June 11th being the most recent example).

A lot of people have been writing to me about sentiment. I respect the value of sentiment indicators, and I generally agree that until we get to the point where the public is absolutely convinced that Happy Days Are Here Again, it will be very tough (still) to be a bear.

I just read the Elliott Wave Short Term Update, and they’ve pretty much thrown up their arms and have said an S&P between 1,000 and 1,100 is in the cards. From a big picture perspective, as I’ve said repeatedly, having the S&P in the quadruple digits in September would be a marvelous opportunity. My problem is that, frankly, I had such a blast trading between October and February, I got used to cashing in heavily on downsweeps, and I’ve been looking for them ever since. It’s been an uphill battle, and it’s exhausting.

Although lottery longs are getting more and more sparse, they are still out there. My 401-k hit a new high today, and that was even after I saddled it down with a big DUG and TWM position in the middle of the day. Rinky-dinky stocks that can climb double digits in


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Zero Hedge

Italian Cases Soar Past 300 As EU Stubbornly Refuses To Close Borders; 10 Dead: Live Updates

Courtesy of ZeroHedge View original post here.

Summary:

  • WHO warns the rest of the world "is not ready for the virus to spread..."

  • CDC warns Americans "should prepare for possible community spread" of virus.

  • Italy cases spike to 322; deaths hit 10

  • HHS Sec. Azar warns US lacks stockpiles of masks

  • Italy Hotel in Lockdown ...



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Phil's Favorites

World economy flashes red over coronavirus - with strange echoes of 1880s Yellow Peril hysteria

 

World economy flashes red over coronavirus – with strange echoes of 1880s Yellow Peril hysteria

Courtesy of John Weeks, SOAS, University of London

As the novel coronavirus pandemic continues to unfold, travel restrictions are being imposed around the world. China is the main target, with various countries including Australia, Canada and the US placing different restrictions on people who have travelled through the country ...



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Biotech & Health

World economy flashes red over coronavirus - with strange echoes of 1880s Yellow Peril hysteria

 

World economy flashes red over coronavirus – with strange echoes of 1880s Yellow Peril hysteria

Courtesy of John Weeks, SOAS, University of London

As the novel coronavirus pandemic continues to unfold, travel restrictions are being imposed around the world. China is the main target, with various countries including Australia, Canada and the US placing different restrictions on people who have travelled through the country ...



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Kimble Charting Solutions

Dow Industrials Reversal Lower Could Be Double Whammy for Stock Bulls!

Courtesy of Chris Kimble

Dow Jones Industrial Average “monthly” Chart

The Dow Industrials have spent the past 70 years in a wide rising price channel marked by each (1). And the past 25 years have seen prices test and pull back from the upper end of that channel.

The current bull market cycle has seen stocks rise sharply off the 2009 lows toward the upper end of that channel once more.

In fact, the Dow has been hovering near the topside of that price channel for several months.

But just as the Dow is kissing the top of this channel, it might be creating back-to-back “monthly” bearish ...



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Insider Scoop

Benzinga's Top Upgrades, Downgrades For February 25, 2020

Courtesy of Benzinga

Upgrades
  • Sidoti & Co. changed the rating for FormFactor Inc (NASDAQ: FORM) from Neutral to Buy. For the fourth quarter, FormFactor had an EPS of $0.41, compared to year-ago quarter EPS of $0.31. The stock has a 52-week-high of $28.58 and a 52-week-low of $14.20. FormFactor's stock last closed at $23.16 per share.
Downgrades
  • Dougherty downgraded the stock for Palo Alto Networks Inc (NYSE: PANW) from Buy to Neutral. Palo Alto Networks earned $1.19 in the second quarter. The stock has a...


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The Technical Traders

Yield Curve Patterns - What To Expect In 2020

Courtesy of Technical Traders

Quite a bit of information can be gleaned from the US Treasury Yield Curve charts.  There are two very interesting components that we identified from the Yield Curve charts below.  First, the bottom in late 2018 was a very important price bottom in the US markets.  That low presented a very deep bottom in the Yield Curve 30Y-10Y chart.  We believe this bottom set up a very dynamic shift in the capital markets that present the current risk factor throughout must of the rest of the world.  Second, this same December 2018 price bottom set up a very unique consolidation pattern on the 10Y-3Y Yield Curve chart.  This pattern has been seen before, in late 1997-1998 and late 2005-2008.

...

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Chart School

Oil cycle leads the stock cycle

Courtesy of Read the Ticker

Sure correlation is not causation, but this chart should be known by you.

We all know the world economy was waiting for a pin to prick the 'everything bubble', but no one had any idea of what the pin would look like.

Hence this is why the story of the black swan is so relevant.






There is massive debt behind the record high stock markets, there so much debt the political will required to allow central banks to print trillions to cover losses will likely effect elections. The point is printing money to cover billions is unlikely to upset anyone, however printing trillions will. In 2007 it was billions, in 202X it ...

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Members' Corner

Threats to democracy: oligarchy, feudalism, dictatorship

 

Threats to democracy: oligarchy, feudalism, dictatorship

Courtesy of David Brin, Contrary Brin Blog 

Fascinating and important to consider, since it is probably one of the reasons why the world aristocracy is pulling its all-out putsch right now… “Trillions will be inherited over the coming decades, further widening the wealth gap,” reports the Los Angeles Times. The beneficiaries aren’t all that young themselves. From 1989 to 2016, U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. More ...



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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Promotions

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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