Are Stocks Over $100 Expensive??

YOU BET YOUR SEET BIPPIE YOU THEY ARE!!!!! At least, if your name is CRM you ARE, hahahahahahaha, gee minnie crimminey fricking sake, talk about your Dot Com Bubblicious fricking valuations!!!!! Sigh, I'm sure there's some, "investor", out there, who can sit there with a straight face, and tell me AAAAALLLLLLLL the fundamental reasons they are putting the family fortunes in this thing, wad ever, I, TRULY, wish you the best of luck, heck, I want EVERY ONE to make a million bucks in the market! Just as an aside, if you want to get some real giggles, check out their, aaaaahhhhhh, metrics, on Finviz, http://finviz.com/quote.ashx?t=crm .

ANYWAY, I only bring this up because a lot of investors think they are, "expensive" that is, but that's not always true. The problem is, is that a lot of investors only have a grand, or even ten grand, to "invest", and they don't want to blow the whole thing buying a few shares of an, "expensive", stock. Also, and I can probably agree, a $1 stock probably has a hell of a lot better chance of going to $2, than a $100 stock going to $200 (hell, all Cramer has to do is mention the first letter of one of those stocks on his show and they double over night, hahahaha), and also, there's a hell of a lot more of them that do it. But the reason for that is obvious, there's just not that many stocks in the stock universe that are priced over $100, I was surprised, out of the 7,000+ stocks in the Telechart database, there's only 51 stocks that are over $100.

So, I decided to run a test, I created two new portfolio's in the FreeStockChart thing, one with the 12 most over valued stocks on a P/E basis that are over $100, and one with the least expensive valuation, and what I plan on doing is holding this until at least the end of the year, hell, maybe for a whole year, and then revisit them and see how the various darlings did. Knowing the perverse nature of the markets, I have no doubt CRM will be pushing Global Crossings valuations by next year, and probably a $2500 price tag to go with it!

SPY vs TLT vs VIX

If your like me, and looking for things that might jive with the past patterns, I'm looking at a viable candidate. At the first red circle on the left side we made our first pivot high after the dump out of April, we then dumped into the "first" major low ("first", as in there's a second and third to come, hahahaha), we then rallied up and stopped dead nuts on the down trend line, in the first green circle on the left, this of course is exactly what we are doing right now, a high in August at the red circle on the right, dump, then the current rally that stopped dead nuts on the "new" down trend line. Welp, if history does indeed repeat itself, we, "should", wallow around a few days, then come back up, and break through the trend line on the next attempt, just like we did in July. Hey, it makes perfect sense to me, which naturally scares the shit out of me.

I know you didn't ask, but I'm going to offer it anyway, my opinion of BAC that is. Now, I screw around with this thing all the time, as Uncle Ben has made it perfectly clear that he's going to save the bond holders of the major Wall Street firms, NO MATTER WHAT IT COST THE TAX PAYER! So, just like all those firms, even though it's insolvent, the possibility of BK is, "probably", pretty remote.

Anyway, this thing is in a terriffic down trend channel, and friday it hit the upper end of it almost on a gnat's ass, and left a kind of modified GraveStone doji, and after the news came out this morning about the lies regarding the European "NON-stress-tests", it gapped down with the rest of the banks (in some thing of a surprise, to me at least, is JPM is actually down MORE than BAC, maybe they have more exposure to those Stress-Less European banks), setting up a very nice Island reversal. In "Theory", this thing should go back down to the bottom of the channel (unless of course, it gets saved by whom ever it is that has been saving the indexes at critical levels), about $11.50, before it finds it's next bottom, but Theory is great and reality sucks, so based on some of the prior patterns at it's bottoms, I could see it break the prior low from five days ago, scare the shit out of every one who is long of it, then bounce back up, just like it did at a lot of those previous lows where I drew the red line under them. If it's going to go higher, it usually gets a couple of bounce around days in that area before moving higher, BUT, if it's going to go even lower, it usually goes RIGHT THROUGH the previous low, as shown in the red circles, it's actually pretty easy to read it at times. One other thing it generally does at a "bottom", is get a volume spike, as shown in the top chart, the last low, five days ago, had a slight volume up tick, but it was on a green bar, so it wasn't on a wash out day.

Of course, if your actually interested in being an "investor", you might just want to wait until it breaks that upper trend line with authority, rather than try and be a slimey bottom fisher like me.

5AM: The futures took a turn for the worse early this morning, as Europe came to a shocking, SHOCKING I TELL YA, revelation that the so called "STRESS TEST" they did, was a stinking JOKE,  "Stock futures fall on fresh European bank concerns",  http://yhoo.it/b5tCxS , hahahaha, it's not like every one of the worse case senarios that we based OUR "stress test" on the Wall Street banks here, haven't been already violated! The whole reason we rallied off the March 09' lows was because our maaaaaaavelous Government told the banks to lie, and take all the bad shit off their balance sheets, other wise, THEY'D ALL BE STINKING BROKE! Wad ever.

Anyway, the five minute chart at the top has a cool little triangle working on it, "traditional" triangle analysis says we SHOULD break to the down side out of it, BUT, I have no doubt Da Boyz will find some peice of lousy economic news to pump it higher instead. The 60 minute has a big VOID under us, that goes back down to the release of the lousy payroll report Friday before the open, which brings up a sentence I found in that article above interesting, "A barrage of mostly better-than-anticipated economic data sent stocks sharply higher last week.", the key phrase there is "better-than-anticipated", not GOOD mind you, just better than what the "experts" generally miss their guess's on.

With the gap down, DOW down about 50 points, this could set up all those dreaded little terms I mentioned this weekend, like Island Reversal, Abandoned Baby or Evening Star, take your pick, which, NORMALLY, lead to big declines, especially since we are coming off of over bought conditions, and, we failed right at the major down trend line, BUT, with Da Street insisting on driving us higher by trying their best to perpetrate the "climbing the wall of worry" bull shit with their yakking screaming talking heads on the MSM outlets, it wouldn't surprise me at all to see ANOTHER magic save, and we some how manage to close it positive today, sigh, wad ever, some one wake me when it's over.

Robert McHugh sent me his latest weekend advertisement, his comments are below, but he's talking about a comparison of patterns between 2008 and now, I don't get his service but I can pretty much figure it out on my own, as if it's not obvious to any one. We had a similar down sloping head and shoulders pattern back then, and what's amazing is the time frames, almost exactly the same as far as what months are involved, and the plunge started the first week in October of that year. The only difference I see is TSV was in a better configuration back then than it is now. Wad ever, here's the rest of his cheerie comments:

"Markets are about to plunge. We show our subscribers a host of indicators and patterns this weekend supporting this view. Listen, I'm not telling you stocks are about to plunge, the market is telling all of us that it is about to plunge. Soon. We urge you to read the weekend report in its entirety at www.technicalindicatorindex.com as there is so much analysis we cannot possibly begin to do it justice in this summary.

This weekend we show our subscribers several interesting Bearish developments. We present our next phi mate turn date, and note two other cycle turn dates pointing to a sharp decline. We discuss when these turn dates are scheduled to arrive.
We also present a study of market performance in the September to November period during years in which mid-term elections are occurring. Markets have this set up once again right now. We show several of those charts in this weekend's expanded report at www.technicalindicatorindex.com
An official confirmed Hindenburg Omen stock market crash warning remains on the clock, and in effect until December 2010.
We also show an analog this weekend on page 23 comparing the price moves in 2008 versus 2010. The waves are amazingly very close, nearly identical in direction, time, turn dates, and extent of moves. If this pattern continues, a plunge is next.
Friday's release of the August unemployment and non-farm payroll numbers showed significant deterioration in the employment picture, but shamelessly, the mainstream financial media spun the terrible figures positively as if their declarations can alter reality. Here is the truth, using just the Bureau of Labor Statistics' own figures: There was a loss of 500,000 full time jobs in the month of August. Bet you didn't hear that anywhere. Now, if you add to that number the 150,000 new jobs the U.S. has to create just to break even with population growth, we see the shortfall of full time jobs in August was 650,000. This is an astonishingly awful number. We are headed for the second Great Depression of the past 100 years and this is a big reason why. Central Planner policies are failing. We present a more detailed analysis of the employment picture in this weekend's report.
The VIX has generated a set-up for a sell signal. This weekend's report discusses how this happened, and what it means. We show the history of this indicator over the past three years. We can tell you that VIX sell signals are rare and were reliable during 2008, 2009 and 2010. In each instance, there was a stock market decline after the sell signal was generated. We show each of these signals and the corresponding decline in the Industrials after the sell signals.
When we add this coming sell signal to the pile of dangerous indicators and patterns occurring at this time, one has to be very concerned that the odds of a plunge are getting pretty high. The Hindenburg Omen is still on the clock, a six observation official and confirmed stock market crash warning signal.
We discuss how market volatility, including sharp up days, preceded the 1987 and 2008 stock market crashes, and that we are seeing similar volatility now in 2010.
On page 15 we show a chart that demonstrates how the 50 and 200 day moving averages have stopped 7 out of the past 9 rallies in 2010. Prices sit at their 200 day moving average again Friday, September 3rd. This is a strong resistance spot.
On page 16 we show that the Monthly MACD in the Wilshire 5000, essentially the entire stock market, has formed a dangerous Bell Curve topping pattern.
On pages 17 through 19 we show the latest readings from our Primary Trend Indicator and its companion 20 month/40 month confirming indicator.
On page 23 we show an analog comparing 2008's price behavior (which ended in a crash) with 2010's. The comparison is alarming. It means market psychology is similar now as it was in 2008."

"Henry Ford was right. A prosperous economy requires that workers be able to buy the products that they produce. This is as true in a global economy as a national one." - John J. Sweeney

How true, and I also believe that old man Ford thought that mass producing "AFFORDABLE" cars that every American could buy was the road to success, and I think it worked, unlike NOW, when those stinking cars cost a fricking fortune, and only the RB's that work for the UAW can afford them, the average worker in the country that makes $50k a year certainly can't afford them, although he may THINK he can, hahahahahaha! The could "AFFORD" them of course, when their housing equity blew up and they were taking second trust deeds out on their house, so they could "AFFORD" it, but not any more.

As I am wont to do on long holiday weekends, I piddled around with some "portfolio" thoughts this weekend, here's one I came up with. "IF", you started your portfolio the last week of December 07', right before the huge crash in 08', AND, you started with 100K, AND, you invested equal amounts into the SPY and TLT, and adjusted the share count based on the next LOWER number of shares based on the 100 minimum share lots, you would have brought 300 shares of the SPY and 500 shares of the TLT, THEN, you take the balance, which would have been about 10K in this instance, and brought the VIX, you would have had 500 shares of the VIX. You then, "REBALANCE", on the last trading day of each year, where you do the SPY/TLT split again with the same parameters, and buy X amount of  VIX sharres with what ever you have left over. I'm not going to go through all the math on the rebalancing, do it yourself, but if you had done that, your portfolio would now be worth $123,800, vs $70,000 if you had just held the SPY. This does NOT include the average 3% dividend you would have gotten in the SPY/TLT split, which would have added $8,000 to your portfolio, making it $131,800. This does not include any minor little trading ideas you may have come up with, like selling your VIX shares when they hit $90, as you lost half of that amount by waiting to rebalance in December of 08'. Plus, it doesn't include any minor little things like selling OTM calls every month on all of those items, or even weekly calls like they have now on the SPY and VXX.

Speaking of the VXX (I was, wasn't I??), Bill Luby sounds pretty excited about the new volatility product, VQT, http://vixandmore.blogspot.com/ , it's basically going to be a dynamic hedging product that is actively managed, read about it your self, but my personal opinion is that I'm getting EXTREMELY concerned with all these Volatility products coming out, as I can't help but think they are going to totally screw with the basic idea's of the VIX and such with their daily rebalancing, or what ever they will be doing to manage their risk's.

MSW Weekly Update

The futures have been basically flat, DOW up about 12 and the SPX up about 1 point, Asia was up big time, Japan over 2%, the rest generally over  1%, Europe is up about .30%, so I imagine we gap up tomorrow.

The software is bullish on the daily time frame on the ETF's, with about four new buys for every new short, over all it's still extremely bullish with about 12 current buy signals for every 2 sell signals, it had a huge number of NONE signals as it stopped out of a bunch of existing trades this past week.

I have USO on the long chart as it looks as good as any thing, DIG and OIH look just about exactly the same, although MSW seems a little confused as it has OIL as a new short, hahahaha, wad ever, if oil DOESN'T go higher with the markets, then some thing is wrong.

I have the new short of TLT on the chart, the software nailed the new short on the weekly time frame last week, although you had a one day shake out attempt, on the weekly time frame it put on a confirmed short, where it issues a new short signal within an already existing signal, IE, it thinks it's going down more.

It gave a lot more new weekly signals than the daily signals, and surprisingly it's almost evently split between new longs and shorts, on an over all baisis it's on six long trades for every eight short trades, so it's fairly split with a slight bearish baisis.

I have the Q's on the new long chart, as they are in the blog name, but ALL the indexes look pretty much the same, they all have a bullish engulfing candle.

The LQD is on the new short chart, as it's about the best looking short setup I could find, as most of the new short charts look almost exactly like the new buy charts, JNK looked more interesting to me, as in contrast to the indexes it had an inside bar on the weekly chart, it generally follows the regular indexes around, IE, it's a decent yeild producer when used in an allocation strategy with bonds, the software put on a confirmed short signal this week after issuing a new short signal last week. I hope the stupid thing goes back to $25, it was yielding about 16% at that point. Besides the larger number of bond funds in the new short signals, it came up with quite a few new shorts in International funds, like ADRU, EKH, EWN, ADRA, EEM, EFV, EEN, EWW, EEB, etc etc, I always find it interesting when the software comes up with a number of new signals in a certain sector asset class, obviously it was wrong as far as today is concerned, but this is a longer term signal.

I run the Russell 1000 through the software just to see what it thinks about the broader market's individual stocks, I have NO opinion on the individual signals, on the daily charts the software is very bullish, with about four new buy signals for every new short signal, on an over all basis it's extremely bullish, as it's on about

18 existing buy signals for every 3 short signals.

The software is even MORE bullish on the weekly signals, spitting out six new buy sginals for every three new short signals, on an over all basis it's on 10 existing buy signals for every 10 short signals, that's, aaaaaahhhhhhh, pretty evenly split.

Like I said, I have NO opinion on individual issues, I have the chart of ASH on the new buy chart, but most of the energy stocks look similar, and also like I said, if the markets are going higher I can't imagine oil won't go higher with them, as the whole purpose in life of the oil trader's is to squash any hopes of a budding economic recovery.

Just as a note, the new short signals on MCD on the daily chart, and CREE on the weekly chart, look "interesting", Big MAC put a gap up hanging man on, on friday, and a gap down open tomorrow will set up a number of big reversal pattern setups, like an Island reversal, abandoned baby, etc etc, but it's probably suicide wish to try and short it. CREE put on an inside weekly hanging man NR7 candle, and will probably have a huge move no matter which way it breaks.

Here's a common sense portfolio thought for typical IRA and 401 "investors", the Nifty Fifty portfolio, http://yhoo.it/avqLaw , which puts equal amounts in stocks and bonds. The equity portion is divided between US and International funds, and if your a yield Hog like me, JNK HAS to be a part of any US equity allocation, as even now it still yields about 11% and basically just follows the general equity markets around, so if you are going to lose money on the equity side of the portfolio in the coming years, you might as well get some yield while you are waiting on them to turn around. As I've shown in the past, the Q's are a great way to trade a "hedge" against them, like, if you want to use puts. I would also probably split the international portion up by including EEM, and a lot of Asia stuff, and speaking of south America, have you seen the charts of Chile, ECH, and Columbia, GXG, hahahahahaha, naturally, they are only one Hugo Chávez away from going to ZERO, wad ever, you can get over all South American exposure with EAZ. Speaking of Chavez, a few of the smaller Asian markets are even more wild than the South Americans, like Thailand, THD, Malaysia, EWM, and Indonesia, IDX, there's a number of Asian funds you can use to reduce the, aaaaahhhhh, "risk", if you are so inclined.

Weekend Musings and a look ahead at Armageddon

AAARRRRRUUUGGGHHH! I know I shouldn't do it, but I watched the weekly wrap shows on da tube, my god, I swear CNBC thinks we are in the middle of 1999 again, hahahaha (Hmmmm, come to think of it, with the DOW sitting at 10,450, we ARE in 1999, STILL)! Bloomberg was not nearly as bad, for of course they actually have REPORTERS, who leave the analysis up to their "expert" guests, rather than like CNBC, where they claim their in house reporters ARE the "EXPERTS"! Anyway, the, "REASONS", they claim we pumped higher the last three days, are just so, like, totally stupid, that it's not even worth mentioning! So, with that said, I'll mention them, HAH!

The Economic reports were AALLLLL GOOD! NOT! This is just me putting on my Economist hat of course, a true student of Economic's will roast my fricking ass, wad ever, personally, I don't believe in "expected", or, "better than expected", for just like a stock chart, I want to know if it's going up, or down, and it's obvious to me that they were going DOWN. In the list at the top, I circled in RED the ones that went down, and I circled the ones in GREEN that I feel actually went, aaahhhhh, eeeerrrr, uuuummmm, oh, yea, UP!
You can go over them and decide for yourself, but one thing I did was look at the three important ones, the Manufacturing and Services ISM, and the payroll report. I actually included the inside stat's on the Manufacturing ISM that came in "good", the bottom list. By the way, the ISM outfit that put's the numbers out is as bad as the NAR when it comes to pumping the stat's, hahahaha, it wouldn't surprise me to find out they hired some of the NAR economist's (For instance, where do they come up with an INCREASE in employment, while the monthly NFP showed layoff's of 27K???)!! Anyway, I circled in red some of the items I didn't think looked to hot, plus, I put question mark's on the far right on items that I had to kind of had to scratch my head, and wonder why they claim the up trend is intact for X number of months after they obviously went DOWN, well, the answer was obvious to even me, and it goes back to the NAR people they hired, they don't want to talk about the "REAL" trend, only if the number stays above 50, which is the demarcation line between contraction and expansion, you can get the actual report yourself at http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942 .
One thing that cracks me up is, I believe, CNBC didn't mention the ISM Services numbers once, obviously because they were pretty fricking BAD! But that's ok, as the Services side only covers about 80% of the economy vs about 12% for the manufacturing ISM, hahahaha, it obviously don't mean diddly fricking squat.
Finally, I have to really crack up at the payroll report, any one who believes it was good that the number came in at the same NEGATIVE number as last month, and the PRIVATE payroll numbers came in 37% BELOW the prior month, AND, the unemployment rate ticked UP to 9.6%, truly does live in La La Land. Wad ever, I'm glad they didn't bother to mention the U3 to U6 number's that show a TRUE unemployment rate of close to 22%, that depress's even me, and since I'm on depressing, this article makes me want to just go out to the ranch and watch the cows piss on the flat rocks, "The Crisis of Middle Class America", http://bit.ly/bY8kvI .

We were OVER SOLD! NOT! Hahahahaha, this is easily one of the stupidest of the week, the stocks above their 40 MA wasn't even CLOSE to being over sold, I mean, at the July bottom, well, yeaaaaa, they got over sold, but starting at 40%, like they did this week, is NOT over sold, and WORSE, we are almost immediately OVER BOUGHT, as we pumped up close to an area that has resulted in pull backs in the past. To be fair and balanced though, the stocks above their 200 MA, even though they have not been CLOSE to over sold, have a lot of room to move higher before getting into over bought conditions.

I have to also say that based purely on the STOCH on the daily chart, then, yea, we did get over sold on the 12/3 reading, although the 60/3 reading didn't come close to getting over sold. I bring that reading up, because when it gets into over sold alignment with the 12/3 reading, as it did at the July low, it, "can", present a decent buying opportunity. Also, the RSI at the top did a little dinky divergence at the last low, versus the prior August low, so that was good, plus it's moved to a new high above the mid August high along with price, also good with a positive convergence. Of course, RSI is now getting back into over bought territory all ready, although both STOCH's have quite a bit more to go higher before getting there.

On the price charts I'm starting to see some VERY positive developments, SIGH, I say, SIGH, because of course, I'm a Bull and as such, I want to see lower prices and better valuations, but I'm afraid those nasty Bear's may get their way with us early next week, the daily chart at the top did what it had to do on the TSV, it popped over the down trend line, PLUS, the MACD just did a nice positive cross, all very good stuff, and it wouldn't surprise me at all to see Da Boyz on Tuesday gap us over the all important down trend line that comes in from the April high, SIGH! I say, "SIGH", of course, because there's no legitimate buy signal, just the unreal FED induced pumping binge. The last "TRUE" buy came with the cool divergences that both the TSV and MACD made at those July lows, just the complete opposite of what we have now, for at the close on Tuesday we were on the verge of "ARMAGEDDON", as every thing said DOWN, with the break of the July lows opening up the flood gates, sigh, it was just a stinking miracle save I tell Ya, congrat's to who ever it was that managed to pull it off.

Anyway, looking forward to next week, since 1950, the standard MO for the markets the week AFTER Labor day has been for the first three days to be negative, with Friday being positive, however, I have no doubt we go up on Monday, and probably tuesday, then maybe a turn around Wednesday, with a little weakness on Thursday, then an up day on Friday. The Stat's I gave you before last week worked out very close, with Monday a big down day, Tuesday "should" have been down if it wasn't for the last 10 seconds of the day, hahaha, then the big up days on Wednesday and Friday, the only day that missed was the up day on Thursday, so, History does repeat itself.

I'm a little mixed as far as that weekly chart at the bottom, I mean, it's a nice candle and we "should" go higher, but the TSV indicator is NOT good, the upper trend line shows the divergence we had against the dumb ass rally off the July low, as TSV was NOT supporting it, and damn it, it was right as evidenced by the abrupt turn downward in August, and the CURRENT week did NOT show any up turn in it, it's still WAY below it's MA, and the WORSE thing is, is that bottom trend line, we've made a LOWER LOW, than the July low, that is NOT GOOD, at all. On a positive note, the MACD "may" be trying to hook up.

Another thing that bother's me is about how throughly convinced I am that we go up the first couple of days next week, sigh, being the "average" trader I figure there's a lot of us thinking the same thing, and as such, it open's the door wide open for a major SHOCK if it doesn't happen, for if, for some completely UNREAL reason, Da Boyz gap us DOWN on Tuesday, Woooooo Weeeeeee, that sets up an Island reversal, Abandoned Baby or Evening Star, wad ever you want to call it, and could be very BAAAAAAAAAAD (Damn Sheep!)! I mean, I would PREFER that senario, hahahahahaha, since I'm a bull, and it's not out of the realm of possibilities, as we ARE at about the single most critical point we could be, that is, sitting right under that main trend line, and obviously, a gap higher and it breaks the major down trend, PLUS, for the second time, it would break the Head and Shoulder formations every one keeps talking about, and ESPECIALLY when we get over the August highs, hahahaha, geeze, that would totally screw the Elliott Wavers, as the COUNTS would have to be completly changed. On Da Udder hand, a failure to launch here would just about put the final hammer to the bears, with the July lows coming back into play.

Should be a fun week.

Finally, kind of an interesting little "Dow Theory" situation going on here, we had a nice little NON-confirmation at the February lows when the Transports, IYT, failed to confirm the DOW after the DOW took that low out in July, good stuff. However, we currently have ANOTHER NON-confirmation in place, as the DOW took out the June high in August, while the IYT did NOT, and if you look at an intraday chart of the IYT on Friday, it was very weak compared to the rest of the indexes, my point being that should the IYT fail to take out those August highs along with the DOW, and INSTEAD, for some Unreal reason, turn DOWN, that could be a major warning that things are not, aaaaahhhhhh, right, in La La Land. Of course, should they both break over the August highs, then it's pile in time, as Da Boyz are going to totally screw any one who was planning on waiting for the September and October swoons before getting in when it SAFE, after the election, hahahahahaha, geeze, that would be just sssoooooooo typical of those ROACH'S!

Premarket 9/3/10

8:18AM: AAAARRRRGGGGUUUHHH: It pisses me off, I got so caught up in the payroll bull shit I completely forgot that we were going to get the ISM Services number at 10AM ET, normally this one doesn't get much of a reaction, but it did this time as it came in so bad, 51.5 vs the 53 "expected", but was also down from 54.3 last month. The reaction to it at the upper red arrow on the price chart wasn't that bad, but it wasn't five stinking minutes after that, that the White House decided to release some details of it's latest SPENDING PLAN, eeeeeeerrrrrrrrr, excuse me, "STIMULUS PLAN", or some times referred to as "Whore Houses for Acorn", or on Capital hill as "IT'S GOOD TO BE A CONGRESSMAN". Anyway, Da Street obviously didn't take to kindly to it, I'm tellin Ya, if they try to jamb this through before the elections, Da Democraps are going to lose BOTH houses, and even WORSE, is the Republican Guard will be the beneficiary, and they're just as bad, if not WORSE, than the udder guys, wad ever.

Anyway, the $ADD triggered a sell on the move down, it could be quite a shock to the higher prices crowd if we fill that gap today, sigh.

7:35: Here's the actual open, we opened right on the gap down number from 8/11, this area of course is sitting right on the MAJOR down trend line from the April highs, which is that yellow line inside the red circle. Since this is the FIRST test, it will "probably" fail, just my personal opinion, the GOOD part for those of you who love higher prices and worse valuations, is that above here and we get into the HUGE Air Pocket, or VOID, left over from the 8/11 gap down, in the green circle, once we get into that zone we should have a clear shot at the gap fill at $112.42, although I seriously don't think that's going to happen today, BUT HEY, stranger things have happened.

7:00AM: Welp, welp, welp, a good payroll report! The reporters on Bloomberg are going nuts, hahahaha, they can't talk fast enough, wad ever, the rate ticked up a little, and the total was MUCH better than expected at -54K vs the -105K expected (this, of course, includes 115K DEAD people that the government included in the Birth/Death adjustment, http://www.bls.gov/web/empsit/cesbd.htm , but who's counting), but the important number was the private payroll, it was up 67K, whew, much better than expected, Da Street was actually worried it might come in negative.

Anyway, the LOOOOOVE is over whelming, that's the up to date daily chart of the SPX futures, we are going open just about on the MAIN down trend line that comes in from the April top, I doubt if we get over it today, as they've expended a huge amount of energy in the run up after the report, but it just makes next week that much more important, that is, when Da Boyz come back from the Hamptons.

This being the WORST day to try and game the market, I figure it will be all over after the first half hour, as every one leaves for the long weekend, but personally, I'll be around for the last hour, as those 2,000 Chinese traders sitting in that one room, that BZ used to talk about, use their power to try and move us all over the place in the extremely low volume period during that time.

Good luck to you, and if I don't see you again, have a great Holiday weekend.

4:30AM: I SPY a rising bearish wedge on the SPY 30 minute chart, most people see a rally that will NEVER stop, hahahahaha! Wad ever, we have a severe divergence on TSV as "inwestors" were quietly leaving Dodge ahead of the payroll report in the morning, the MACD has a slight divergence working. A completion point for the wedge (they ALWAYS complete early by the way) comes in right at the gap fill from 8/18, just uinder $110, or 1100 on the SPX. There's also a bearish wave count that can be justified,  basically MY guy says the rally is the "C" leg of an A-B-C corrective wave to the April down trend.
The other indicators, in the bottom chart, are all over bought, NATURALLY, and as the results of the Strength vs Weakness shows, you ALWAYS buy over bought stocks, RIGHT????!!!! The RSI 5 at the top has hit the maximum it can hit, +100, since it can't get any MORE over bought, for bearish traders who just LOOOOOVE higher prices and worse valuations, the moving average I have inside of the indicator, a 13MA, is not YET above 100, I circled on the 9th of last month where it got over that 100 level, and it led to quite a pull back. The 60 period STOCH is just sitting there as over bought as it can get, BUT, it can stay that way for long periods of time, as shown in the circles on the left. The CCI at the bottom has a little dinky divergence in it. Speaking of divergences, that ending chart I sent out yesterday showing the huge divergence in the five minute chart WORKED, yea, it worked for a whole 13 lousy cents, hahahahahahahahaha! Wad ever, ya gotta do wad ya gotta do.
ANYWAY, you can throw all the bull shit above out Da window, as the payroll report rules the day. The word I have, is to forget most of the numbers, there's going to be more lay off's from the census side of the equation, rather concentrate on the PRIVATE payrolls portion of it, Da Street is "expecting" a gain of more than 40K, if we meet or beat we probably blow up, in fact, with all the LLLOOOOOVE being shown right now, it would take quite a miss to get bulls driving prices down to better valuations levels. The payroll report is the ONLY time I ever have the TV on during the day, I'm usually watching Bloomberg when the number comes out.
Good luck to you.

PS: Sigh, SPWRA, which I mentioned yesterday, had a very nice rise the first 30 minutes as the ChangeWave bunch piled in, BUT, I was just looking at the 30 minute chart of it, and it has had a HUGE drop in TSV, YIKES, it looks to me like "some body" was using the pop to get out, IE, I'd been verwy verwy careful with this one if you are in it.

Strength vs Weakness, week of 9/2

Here's the results for the first week of our little experiment, that is, what works better, buying stocks with an over bought RSI 2 or buying stocks with an over sold RSI, Ta Da, drum roll please............................ hahahahahaha, it's not even stinking CLOSE! You averaged a 1.01% gain buying stocks with an RSI above 80, and you averaged 6.87% gain buying the over sold stocks, with a reading of under 20. These gains were made during a solid UP week of course. Remember the BASE parameters, the stock has to be ABOVE the 200 MA, AND, have a 50% volume surge the day you buy it, that's 50% more volume than it's 50 day average volume.

So, ok, here's the list for this coming week, the over bought stocks are the top list, and the over sold stocks are the, aaaaahhhhhh, uuuuummm, hhhhhmmmm, eeeeeerrrrrr, oh, yea, the bottom list.

Premarket 9/2/10

"IT'S "FREE""

HAH! The "FREE" word always get's the attention of a cheap bastard like me, hahaha, EWI, Elliott Wave International, start's their yearly free week tomorrow, just click any of the adds on the page and, if you haven't already, sign up for the free membership. I only bring this up in order to take some of the pressure off me, as I look like a typical brainless flaming BULL compared to their outlook, hahahahaha!!!

11:00AM: WOOOOOOO WHEEEEEE! WHOA! UUUUUGGGGILLLY! Wad ever, I gotta get back to the T and T, the truck and tree, but that is one ugly looking five minute chart, the 15 minute looks pretty much the same, with the 30 minute looking a little more constructive. It looks to me like SOME BODY, is LYING!!

5:30AM: After being down as much as 50 points last night, the futures have clawed their way back up to basically flat. I like this better than opening lower by a decent amount, as it sets up the possibility of a Doji type "continuation" day, that is, we open close to flat, then go up and down, and close basically close to where we opened, this may set up a continuation of higher prices tomorrow, some what similar to the day after the big up day I have circled in the red at the July low, that Doji gapped higher, it's better if it opens flat.

HOWEVER, I circled all the big up days we've had since the April highs, and, "almost", all of them had down days the following day, the one in Mid July eventually led back up to the high of the range.

Speaking of, "The Range", we are, "probably", headed back up to the upper end of it again, TSV popped it's head above the down trend line, and the MACD is trying to do a bullish cross. As per that chart I posted yesterday, first major resistance comes in at that down trend line around $110, all of this of course, depends on the monthly payroll report that comes in tomorrow.

With all the kind of Bullish bull shit of mine above, my over all bearish baise hasn't changed one iota, if any thing I'm getting even more excited. The action yesterday was basically horrible, as all the gains came in the premarket and the first 40 minutes, as we went DEAD after that, I did a "RUN" rate on the volume at various times during the day, and the first hour and a quarter we were looking to get TWICE the normal daily volume, and by the close we barely managed to close above the 50 day average, with less volume than tuesday.

Also, the idea that the ISM was "good", and the cause of the "rally", was pure bull shit, as even Bloomberg was talking about the short comings in the report, as outlined here by Larry Levin:

"The "savior" was the ISM manufacturing report that came in at a reading of 56.3 when the market was expecting 53.0. Bloomberg, however, didn't pump up the details like I expected..."Lagging factors gave what is a bit of a deceptive boost to the ISM's manufacturing index masking a further slowing in the key leading index of new orders...But this growth is in general business activity: production, employment, inventories. These three factors all accelerated in August with a special note on inventories where the gain may reflect in part an unwanted build. New orders slowed but just a bit, down four tenths to 53.1 for its lowest reading since the manufacturing recovery began in the second quarter of last year. Unfilled orders also slowed, down three points to 51.5 and its weakest reading since December. The slowing in order build is certain to limit future improvement in business activity."

Even John Hussman, in one of his recent posts, said that despite his belief that the economy goes back into contraction mode, some of the upcoming data may show some improvement, but it will only mask some of the more stuctural weakness's, the most crucial point coming in late September and early October during warnings season, when we may get a "Recognition Day", when more companies join INTC with earnings warnings of their own, causing the analyst to rachet down their UNREAL expectations for earnings for the rest of this year and next.

Wad ever, have fun out there in La La Land today.

6:45AM: We had a slight dip after the weekly jobless claims, they came in a little lower than expected, by 3K, but the continuing claims came in way HIGHER than expected, 4456 vs 4435 "expected", but I think the dip was due more to the Productivity number for Q2 being revised LOWER by 100%, minus 1.8% vs the minus 0.9% initially reported, hahahahaha, nice miss there Mr. Government, wad ever, Da Boyz are intent on taking us higher as the futures have clawed back up to flat. We get a couple of possible market movers at 10AM, Pending home sales and Factory orders, who cares about home sales, but, the "experts" "expect" a BIG rise in Factory orders, so, be careful around that time frame.

We aren't going any where without the Semi's going along for the ride, they were higher with the general market yesterday, but rather muted looking in comparison, however, it popped it's head above that down trend line before closing under it, a successful break over it and we would get the break over the TSV down trend line that it needs.

It's obviously being held back by the over weight INTC in it, as "inwestors" are a little worried about INTC's giving up on it's own growth, and is trying to "Buy" it instead.

One stock I like in the bunch is MRVL, very, very, nice ascending triangle on the daily, and money has been flowing into this thing in bunches as shown on the TSV.

The 60 minute chart is even better, as your R/R is VERY clear, as not only do you have the ascending wedge triangle to determine Long or Short on this thing, but it has a terriffic bottom trend line coming from the 12th that it held on the NUT on tuesday, this set's up an even better STOP for a Long trade.

I mentioned SHORT above, because a break of the lower trend line will set up an "almost" automatic test of the gap fill from the 19th, for about a dollar gain. If it breaks over the top of it, it has very clear target area's as shown on the daily chart above.

I've been in and out of this thing, and I'm currently OUT.

I HATE SOLAR!!!!!!!!!!! BUT, this chart is just a classic, sigh. It had big volume and a huge break higher back in June, then it had a slow roll over and then a big dump the last couple of months with the rest of the solar peices of junk, then last week it had that beautiful day when it took out EVERY ONE from that June low, and reversed the last week. It didn't quite have enough of a volume surge on the take out day to suite me, but it had terriffic volume on a follow through day four days ago. TSV had finally popped it's head above the down trend line, and both TSV and the MACD are making divergent lows against the drop in price, all very nice "stuff", plus, your stop is so obvious I won't even mention it, it's probably more like a buying opportunity. I also bring this up, because ChangeWave told it's 30K members to sell their disaster in STP and put ALL their money into this thing, wad ever, it could get a pop.

Premarket 9/1/10

6:30am: AAAAHHH, the MSM, Ya gotta love'em, hahahahahaha, this was the head line from Rueters earlier, "Futures up as economic worries ease", when I clicked on the link, it didn't open to that head line, it opened to a NEW ONE, hahahahahaha, stinkin ROACHES, "Stock futures trim gains slightly after ADP data", http://bit.ly/bEeLYy , sigh, wad ever, anyway, the ADP came in MUCH WORSE than "expected", MINUS 10,000 vs an "expected" GAIN of 13K, this of course, after the number last month came in MUCH WORSE than "expected", sigh, anyway, the futures went down, INTO, the number, and then went UP, AFTER, the numbers, back to where we were before the release. Da Boyz are trying to play their favorite game, and my most HATED game, that is, it gives their mouth peices ammo to start the old "Climbing the Wall of Worry" bull shit, sigh (a lot of "sighs" this morning, hahahaha), I say I hate this, because of course, they use this bull shit until one day they gap us down a hundred points off of some bad data, investor's get their ass's kicked, and they scream at Da Street that you were saying we were going higher, and their answer is always, well, YOU KNOW, the data has been BAD, couldn't you see that YOURSELF???!! Wad ever, the ISM at 10am is going to be huge.

Good luck to you out there in La La Land today.

By the way, congratulations to Sysin for calling the 100 point gap up in the comments section, you would do well to listen to him once in a while.

Hahahaha, I'm glad to see I'm not the ONLY conspiracy nut around, "Hedge Fund Manager Dan Loeb: "The Whole System Is Rigged", http://yhoo.it/avGEh8 .

WOW! It hasn't happened very often, but according to the research done by http://quantifiableedges.blogspot.com/ , on that link on the blog list on the right side, a WEAK August has led to some HORRIBLE Septembers in the past, Hmmmmmmmmmmmm!

5:30AM: Futures are up over 1%, DOW has been up over 100 points, as China's PMI came in WORSE than expected, hahahahaha, yea, you can't make this shit up, in all fairness it was under the "expected" 51.7 by a tenth, but sitll HIGHER than last month, I don't know, maybe Da Boyz are pumping us because by some strange coincidence (I'm SURE that's all it is!), two months before the elections, Obama said they were finally going to concentrate on the economy, wad ever.
ANYWAY, the gap is going to screw over the Elliott Waver's, as they may have to reconsider the counts, the chart at the top, the daily of the SPY, is just my personal thoughts.
With the gap up, we are leaving the recent bottom behind (or aaarrrrrreeee we???), which means I can start to count that as a low, and a very important low at that, as that's the "Income Tax" low from June, at 1040 on the SPX, or $104 on the SPY, or the Blue line. It's been a wild consolidation the last seven days, with EACH day reversing the prior day, IE, UP, DOWN, UP, DOWN, etc etc etc, IE, A PEICE OF SHIT!! But if we've made a significant low, I can now draw in a huge triangle from the July low through our "new" low, and the April top down through the August top, so these triangle lines will become EXTREMELY important support and resistance area's, IE a break of either side is going to lead to the next HUGE move, unfortunately, the action INSIDE of that triangle is probably going to be a whippy peice of doggie Poop. With the gap up we are going to be sitting right under the GAP FILL point from a week ago monday, that was $107.12, in the premarket we are currently sitting at $106.58, so we are only .50 cents away from it. If the latest MO holds true for today, we've been selling the shit out of 1%+ gaps, so I could see us open up, go higher and fill that gap, right before the release of the ISM at 10am ET, and then sell the shit out of it off a mediocre report, wad ever. On a side note, the SSO is above that upper trend line that I showed on the 30 minute chart yesterday, currently $34.13, but it's UNDER the high from Monday, around 34.40, SO, that will act as first resistance after the open, with a break through THAT area going into the NEXT resistance, which will be that gap fill from a week ago friday, at 34.54, so that will act as the SECOND resitance area, which hopefully, happens around the release of the ISM number. At that point, I would want to see any pull back contained by a BACK TEST of the broken trend line, IE, a higher low, we should NOT fill the over night gap today, if we do that may be very BAAAAAAAADDDD!
On a longer term basis, I, "could", make a case for an inverted head and shoulders formation, with the neck line being the June and August highs, and the recent pull back being the HANDLE, with the Income Tax lows being the shoulders. Long term inwestor's would probably serve themselves well to wait until we break the neck line, wad ever, that's every one's own personal risk parameters.
The TSV is just awful, in a severe down trend, BUT, a break through the down trend line would be VERY positive, the MACD is trying to hold the UP TREND line, so that's good.
On the indicator chart at the bottom, and starting at the top, the RSI 5 needs to break over that down trend line, I don't like the configuration of the longer term STOCH just under that, BUT, I LIKE the shorter term STOCH, it has just triggered a buy. The CCI at the bottom is also GOOD, as it's been diverging against price during this pull back.
All in all, I feel pretty comfortable about the risk parameters, we "could" move higher here, with the MAIN area's coming at the inside confines of the "new" triangle, a break either way will lead to a decent move.