Exciting week

I missed some fireworks this last week. Most ominous is the run on the Florida's school district investment fund. Considering Orange County, CA went bankrupt a few years ago, its nice to see that Orange Country, FL was able to get their funds out.

What really disturbs me is that the Florida fund managers also run the state pension plan. More to come on this.

On the plus side, the market had a follow-through day (IDB defined). I picked up some Mastercard and nibbled at Bidu. I'll have some breakout buy suggestions over the weekend.

Cheers

Just reading through some of the articles. This is a MUST read!

``We're such a small school district,'' Wilson, 55, says. ``We don't have the time or staff for professional money management. They have lots of investment advisers. It's risk free and easy.''

Guess what. Florida isn't the only state that has tax payer money being run by amateurs. I'm sure we'll have plenty more of this action.

Bloomberg has more here.

Ely Lilly: TD Combo and TD Sequential Buy

Sorry about the weak posts recently but I'm in Boston for a Materials Research Society meeting. It has been interesting, but so is the market.

Like most people, I'm still looking for a more sustained bounce. Here is another TD Combo/TD Sequential Play. Ely Lilly (LLY)

Rage against the Luddites

I usually like to keep my postings focused on the market. Every once and a while, however, I read something in the blogosphere that really catches my attention.

Enter Al Fin, a blog that's "Primary interest is seeing that the best of humanity survives long enough to reach the next level." I don't know what that means but I just read a very interesting post about nuclear batteries.

Here is a little bit from the post,

Better, safer, more reliable ways to use nuclear decay to powercivilisation (or civilisation's "restart") are coming. Anti-nuclear Luddites of limited cognition and competence are a dime a dozen--being mass-produced by modern "educational" systems and pop culture. But just as many "gray" and "black" market economies inevitably exist alongside the mainstream economy, the same is true for intellectual and philosophical streams of thought. It is highly questionable whether our "dumbed down" society could restart civilisation after a global catastrophic event.

I couldn't agree more when it comes to Luddites. Nice post Al.

One last thing, considering that the company that plans on building these nuclear batteries could possibly go public some day, I guess there still is a slight connection to the market.

King Pharma (KG) and Lloyds (LYG). TD Sequential Plays

I'm out on the road but here are a couple charts that have completed a perfected TD Sequential buy signal.

LYG has completed a TD Combo also.

Credit Suisse Group (CS): Counter-trend bounce coming?

Anyone looking for a counter-trend bounce play? I was watching Credit Suisse when all the trouble started and it seemed to hold up pretty well. That has changed recently and CS has sold off hard. Well the market can't go down forever and when we finally get that bounce, I expect CS to move up pretty well.

CS is only one more down TD Sequential and TD Combo count away from a buy signal. If we get it, I might jump in with a price target of 64.50.

The Market has Landed

Hey, remember all that talk of the lows of August? If you don't, go back and read a rant I had on V-shaped bases and the debate regarding a test of that huge reversal day of 8/16/07.

V-Shaped vs. Double Bottom

Well it took a little while, but here we are at the prices of that insane day. It looks like ol' Bill O'Neil was right.


And now about the sentiment concerns I've had. If you look at the Investors Intelligence survey on Aug 16, you'll find extremely bearish readings. Looking at this last weeks survey, you'll find a reading of over 50% bullish and still under 30% bearish, not exactly the bearish readings that are associated with a major low. The conclusion is obvious, we have more downside action ahead of us.

Market Harmonics has a free sentiment web page.

Thanksgiving Rally and the Slope of Hope

Is it me or does absolutely everyone seem to be expecting a Thanksgiving rally? Well, as we all know, the market NEVER does what everyone expects.

I'm also very concerned with what I see on Bloomberg and CNBC. No one is panicking and it seems that every "expert" they bring on is declaring that stocks are on sale and should be bought here. No one is talking about a bear market.

I like shorting stocks but, for the sake of my friends and family, I don't want to see a protracted bear market.

Step right up and get your shorts!!!

Looking for some shorts anyone? Guess (GES) is a serious leader in the retail sector and has held up pretty well, until now. GES is looking like it is in serious trouble, with plenty of downside left in it.


VF Corp is another retail leader that is only now showing signs of big trouble. It triggered a sell TD Sequential sell signal yesterday and couldn't recover today.

HOG has been building strength to go lower for a couple months. If you are looking for an entry, here you go.

Here are a couple more short possibilities. Neenah Papers (NP) and Datalink Corp (DTLK).

Expecting a shortable bounce

I'm still waiting for that bounce back up to the 50 day moving average. The longer we just hover above the August low bar, the more it worries me that we are just building strength to get even lower.

I was listening to Ken Shrieve today and he was talking about how every correction this year took place without the leaders taking big hits. Now, during this correction, Apple, Rimm, and Google are all taking it on the chin. That is worrisome. I'm also very concerned over the complacency I sense out there. No one is panicking. Here we are near the August lows and I hear some whimpers, but no yelling, kicking and screaming.

Right now, my thesis is to wait for a bounce and then get short. I have devised a brand new oscillator that has been backtesting very well for short entries. I can't wait to give it a try.

Matercard (MA) An excellent technical setup

The smart thing to do right now is to remain in cash. With that said, I have been watching MA ever since the huge breakout last month. What I found so interesting about the earnings inspired explosion was that Q3 07 was supposed to show decelerating earnings growth. Instead, growth has remained strong, catching a lot of people off guard.

The chart is showing a classic sign of a market leader. It not only had a huge breakout in a weak market, but has slowly retraced on ever decreasing volume. We are now approaching the magical point where the price of MA is only 8% above the proper buy point. MA is also approaching the 50 day moving average, an excellent add-on point for those who bought the breakout. For those who didn't, now is time to buy.

Getting even more bearish on FRPT

Here is a bearish chart for you. I wrote about Force Protection (FRPT) setting up a head and shoulders pattern a few weeks back and it looks to be coming true. Today, it broke a TDST support line and looks to be in real trouble. It would take some guts to short FRPT here, as it is very volatile, but it might be worth the risk.

Short Setup for K-Swiss (KSWS)

I've come to really like the setups where a stock closes below its TD Sequential stop loss point and then comes back up to the breakdown point only to resume its downward trend. It looks to me like KSWS is playing out this pattern.

I would start shorting at 20.80.

Counter-trend rally

Today was a low volume counter-trend bounce that is giving everyone a chance to unload or get short. The selling isn't over with a single big day, so look for a bounce up to the 20 day or 50 day moving average and think about getting short. I know I will.

Despite the huge day today, there were only two signals given by my recently devised trading rules. First we have a breakdown in Core Labs (CLB). It is holding its 50 day moving average, but I suspect this has more downside.


On the bullish side, Priceline (PCLN) flashed another buy signal today. This chart is simply amazing given the current market conditions.

Hang in there

Not much to say but it sure is ugly out there and that an epic buying opportunity approaches!

Also, I haven't kept up with my covestor account and it is totally off.

I'm Back

The wedding was excellent and the honeymoon in Jamaica was great.

Looks like I've missed all of the fireworks. This market looks extremely weak and I wouldn't be surprised to see us break the summer lows. Time to keep an eye out for the new emerging leaders.