Archives: 11/2000 10/2000 9/2000 8/2000 7/2000 6/2000 5/2000 4/2000 3/2000

11/30 Thu Bull Trap sprung in afterhours reporting Loss: 3.1%

After hours trading did away with a large part (1.9%) of the loss.

B: AA 27 13/16 Cash: 18%

Bought underweight position on nice cup & handle that is there on their 10 day chart. Looking for a little "safety" protection.

Yesterday was the day I was expecting for the day before. It wasn't quite a treading water day but the open close made my stocks mix end up with little open-close volatility.

The fly in the ointment is it is now doing that at new Y2k Composite lows. That is very dangerous. The only hope now is a reaction rally that lets one get out of the volatile stocks and into safety with their longs. Looking at a 60-minute chart, I see a V-bottom in place from the closing action on Wed that should give a chance for a decent trading rally here. And a chance to reduce. I keep saying those kinds of things and then holding into the next decline. This has to stop. I need to rotate my longs into "safety" but many of those stocks are in a trading range and at the high side. I'm really not expecting any to break out with any authority--lot of bull traps. So, I need to look closely at oscillators to determine points where the entry is safe. I will also maintain partial Biotech positions. My idea isn't to close out the Nasdaq biotechs but to go to underweight positions that allow for more upside off the anticipated rally without exposing excessive capital to the process.

The Dow is at the top of it's trading range and looks to be breaking out. If it continues to move up, an intermediate term position may be possible if it can confirm somewhere in the 10600 to 700 area. The Nazdaq downside is in the 2300 area--that's nasty and really makes for an ugly risk-reward.

The good move at the end of was wiped out in yesterday's aftermarket and we had a couple of warnings that should really impact the tech side. That could give a nice biotech rotation...or not. It looks like the V-bottom won't be in place until (hopefully) later in the day. I then see the oversold rally lasting into Friday afternoon.

11/29 Wed Loss: .33%

B: AHP 60 11/16 S: NT 36 1/8 Cash: 22%

Just a Bush trade. One of the better stochastics in the drug group. Wanted MRK but it had an overbought stochastic here. AHP needs another buck to get above recent resistance. Will sell if it start to pull back. The NT trade was pure panic and probably good panic. A very small profit but not a loss! All it did was pay commissions.

Well, so much for the thought of lower volatility going into the finals of the Florida fiasco. Yesterday was just plain nasty. At it went out at the bottom. Nothing here to create optimism so we probably rally. Nothing is working for more than a couple of days. Gore seems to have lost a decision in Florida as the Judge procrastinates--making the possibility of more counting very remote before the 12th. We're on the October `99 lows here so there should be strong support. But, if this doesn't hold it could be 2450 before it is over. With everything so messed up and with indicators oversold and options saying rally, things are overdue--just like the election results.

Best guess is we get a bit of a rally and then another steep drawdown that ends about the time of the electorial college and about the end of warning season. That (2300) will be the buying point for a strong rally that makes us think we are back to the good old days. Question then will be if that's the case and an end to the bear market.

11/28 Tue Loss: 4.71%

The numbers from yesterday are still in force. For all intents and purposes, yesterday didn't happen. We traded inside the support levels slash trading range from the interday chart mentioned yesterday. That seemed promising given the Gore-Bush battle. A few days ago we'd have had a lot more volatile reaction to all the news releases. To me that says bottom; but, I'm in the half-full camp and must recognize it can go the other way.

The Dow and S&P were more solid to the upside and seem to confirm the promise I exhibited above.

I didn't add to anything and doubt I will. I am getting good results and don't see a need to invest the last 25%.

11/27 Mon Gain: 4.4%

Looks like the Turkey rally is going to kick off the day in the right direction. 2950 is a double top that sits at the gap down. We need to take that out to confirm our rally. If that can happen I may put more cash to work. Support is about 2850 at the lows of the 13th and 20th. Sit right in the middle of that at the moment. A late in the day buy would probably be the safest.

Biotech leadership is becoming more a hope than a fact. The declining tops need to be addressed to make this anything more than a trading rally at this point.

11/25-26 Weekend

I don't see great news for the broad market in the coming months. A genuine recession is being pointed to by gold and rates. The FOMC seems ready to persist in maintaining current rates. Everyone talks about a soft landing but that is getting harder to support. A weak Christmas season remains a real possibility.

So, I worry that this rally is just another trading rally that should probably be sold into. I think we can have a fall rally but that it will be very selective with lots of rotation along the way. The broad market seems unready to try to make higher highs. The BTK is about as strong a sector as there is left. And it isn't a tower of strength but does have the most potential.

11/24 Fri Gain: 8.9% Cash: 26% (change due to gain)

OH HAPPY DAY! Haven't seen this kind of action since February.

2700 is a support level and I am expecting a rally. But then, I've been expecting the rally. My year's profits are single digit and approaching zero. A little Friday rally is not out of the question but I'm not expecting much. However, the day after Thanksgiving is normally an up day.

11/22 Wed Loss: 3.4% Cash 34%

It seems the Florida court is as political as a county commissioner. I'd hope for a fair addressing of issues that at least clarified the issues. Instead they added to the confusion. And, I didn't vote for either candidate and really didn't think a whole lot of either. I'm still not a big Bush fan but I hate Gore's horrid attempts with a passion.

Ok, got that off my chest. My trading this year has been horrid. When I first started out handling my trading two years ago I was a very active trader. I saw stocks that I'd gotten out of continue and make exponential gains while my positions did fare as well. So, I changed my trading style and that worked well for me up until last winter. My fault has been in not changing that intermediate to long term style. The last week or so has really brought that home. It is time to do some serious rethinking that does more than pay lip service to my thoughts and the general market tenor.

11/21 Tues

B: ONXX 14 NT 36 S: PG 73 5/16 Cash: 27%

Smallish NT position.

Welcome to the Al Gore Capital Destruction Tournament. It looks like the market is going to have to try to ignore the Florida situation at some point. Or maybe the Supreme court is ready to act beyond the political realm.

There are some positives. The stocks that were "still up there" were the ones that got crushed. It was the market leaders that were brutalized. Some good company that had gone down were not brutalized. Look at a PCMS chart as an example. All the downgrades by the sell side were a good sign we have a bottom forming.

Today doesn't look like another down day that would create a very oversold market that could create a situation for an intermediate term rebound. We had that a month ago and will have it again. This time I think we'll get a smaller pullback/consolidation before resuming. Today could see another day like yesterday though. That will really set up a V-bottom recovery that may or may not mark the final bottom. A number of people I respect are saying this isn't it because of the lack of capitulation. But this market loves to confound the experts and it just may be a first.

11/20 Mon Loss: 6.2%

S: ONXX 15 1/5 B: ONXX 14 1/4

ONXX had good news and ramped up today in the face of the broad market. The run looked exponential and ready to pullback. Took the small profit and bought back in for a lower basis.

Looking at charts over the weekend was not a fun business for those who only go long. It is hard to find anything that looks good. That said; I still think we have a trading rally somewhere here. The short week looks to reduce activity. This is little more than a crap shoot.

11/17 Fri Loss: 4%

If this wasn't the ugliest week ever it was close. But, we have to have a trading rally soon. To do that it appears that Bush needs to win!

My personal opinion has gone to the point that if Gore walked down my street I would call him a thief and heap every invective on him that I know. It has become apparent they are try to steal the election and even using old Chicago tactics. This recount forever is designed to use an old Chicago trick. You find out how much Bush is ahead from the overseas vote report and then manufacture the votes you need to overcome that. This has gone from humorous to disgusting and to think a slimebag like Gore could be our President is a huge concern that could damage an awful lot more than just the stock market. Our neighboring countries aren't as dumb as we think or are.

11/16 Thu Loss; 2.4%

The Comp has decent support at 3100 and further support at 3050. The descending lows are a problem along with the lack of "capitulation" by the market. It is a pretty iffy situation here and the market needs to take out an earlier high to show any signs of strength.

Still looking at raising cash and still acting like a deer in the headlights.

11/15 Wed Gain: 2.2%

11/14 Tue Gain: .8%

S: PALM 49 5/8

Had a limit in that should have been cancelled; half the position.

11/13 Mon

S: GENE 14 1/4 B: ONXX 14 11/16

Repositioned some of my biotech; sold half the GENE and got a similar position in ONXX which has a conference call tonight. It moved well the last time it had news.

Well, the VIX is sitting above it's Bollanger band. That's calling a bottom. Although, a bit of congested bouncing above is typical for a few days. So we will see a rally. That's kind of a sun comes up tomorrow headline--ignoring the fact there will be heavy overcast and you have to take that on faith.

MLNM failed the test when it presented at a recent conference. So replacing it the other day was a really dumb move. The HP miss this morning will impact the DOW and techs in general. There could be some very temporary rotation into my favorite biotechs but that should be fleeting. Expecting a down open that makes a new low a reality; hard to expect a major recovery.

11/11-12 Weekender

Friday's action is terrifying. The Composite broke support. So did the N100, but not as noticably. The Dow has a declining M-top. The S&P and Russell 3000 are dead on support. Many of my stock either broke support or are on the ragged edge of support. We have a political situation without parallel. Most folks are looking for it to be quickly resolved. The market seems to be saying that view is wrong. Monday is key! Could Gore (or somewhat less likely, Bush) be the petulant rich boy who will never give in? Just what does the market do if Bush decides on recounts in 3 more states?

Support: Composite 2890, 2600 -- N100 2550 2100 -- Dow 10400 10975 -- S&P 1370 1305 -- R3K 735 718

Those numbers have to cause some fright here. One can't rule out a 1987 type of a down day sometime next week. I am trying to remember all those "capitulation hasn't happened" calls. If the scenario is a bad one, the only good thing will be that we do have capitulation. In the meantime the risk:reward ratio has become about as negative as it could go. We could get some recovery here or a lot of blood on the street. I just can't stay this heavily invested.

I have a small profit for 2000 here and am going to protect it better. Trouble is I do like most of what I hold. Probably pull HGSI down to a full position or maybe half and dump the VRTX. The two defensive stocks still look ok. (IVX and PG) May run the Palm out that I added.

11/10 Fri

Well, it is a week from today to the certification of the Florida vote. Hope the market survives it better than it has to date. 3175/3250 are levels I want to watch today. If it is broken, I may try a day trade on some of my holding--hoping to buy them back later at a lower price. This volatility is a trader's dream--if you can do the short term thing which isn't my strength.

I thought doing some reducing yesterday was prudent and took profits at about the lows of the day. As they rallied I bought back the MLNM a buck up. The sale and buyback was a full position. I didn't buy the IMGN back it was still 37% profit and the stock probably needs a cooling off period. Intend to keep an eye on it though.

11/9 Thu Cash 24% Loss: 3.5%

B: PG 70 5/8 68 5/16 S: IMGN 39 3/4 MLNM 73 1/8 73 3/16 B: 74 3/16

Probably sold at low but looking to gather some cash and buy more safety.

Bought a "safe" stock to try to get more diversity. Bought more when it pullback and have an overweight position.

I have two scenarios in my mind. Worst is testing the lows in the composite again. Question for that one is can it hold again; I have some doubts. The other is we selloff early from the knife edged declines that came in late and then rally back above all that just broken support. Neither one makes me believe this rally can attack any serious (longer term) resistance without a lot of work. So, it is time to cut things back. I hope I can guess right and make a bit back in the process.

I'd like to throw some money at oil service & natural gas. I will have to sell to do this as I don't want to have less cash.

11/8 Wed

S: TRLY 24 Cash:21% Loss: 2.2%

The afternoon was as nasty a tape as you could ask for. If you owned drugs and tobacco, (bush bias) you may have survived the day better. I didn't or at least not enough. The fact that it came after I was up 3% just added insult to injury.

Made pennies on the TRLY; covered the commission and not much more. Sold it at the worst time of the day based on the weak Nasdaq indices. Cash was more appealing than waiting for an afternoon rally.

Well, the election outcome sure resolves everything. And check back with me in a week or two. Kinda looks like Bush but wouldn't place any bets. Looks like the market keeps churning. You think it is a Chinese Menu with two columns and all of a sudden you find Column C...

11/7 Tue

B: PALM 60 1/8 Gain: 2.4%

Filled out the Palm position; should have waited yesterday. Voted for Brown as a protest vote.

Tomorrow should be INTERESTING! This evening I went over the holders again. BBH looks ok and just ok; gorish bias. The HHH looks interesting with a bit of a cup and handle formed; no bias. The BDH looks committed to come down to its recent low and test that level; no bias. B2B may be top heavy and ready to pullback and make a strong stand at 38 where it would make a strong 3rd touch of the short term trend; no bias. TTH is pretty close to a level of support that could make it attractive; let see if it can turn up or avoid going down more that a half-buck. Any upturn builds a new lower, short-term trend line. PPH sold off big today; gore bias.

11/6 Mon

B: PALM 62 3/4

Started a position in PALM with another buy in at 60 if it fills the gap it will give me a full position. Nice saucer formation here that makes me optimistic on a good run by PALM.

Didn't think the Dow would rally yet and it did. Have to rethink the weak/strong outlook I had. Be funny if the only index to go out at years end with a high was the DOW. Not an impossible scenario.

Well, I remain the eternal optimist. Love to see the market close up 50 or so and even retrace a small amount. Same goes for tomorrow. If we move up I hope it isn't a huge move. I'd like to see it make a bit of a gap up on Wed. And then a gradual walk. 3700 is my real key area--not 3500. Although we do need to move above that, the real key seems to be getting to 3700 and not coming back to 3500. That's what we need to confirm a decent fall. Coming back off the 3700 to the new 3500 support is showing us a real possibility that'd make me more dubious about the traditional fall run happening. That'd make me think we'd done little more than find a new trading range that could run us into the rest of the year. The arguement for a solid move is with the new high/lows which have definately started turning around to a bullish position.

11/4-5 Weekender

I've had 7 consecutive winning days here. Can't remember the last time I strung together 3 or 2-2's with a loser between.

Well, Friday fit nicely in with my plan B. It waffled away the day. Some winners and some losers but an overall upward bias. I think Monday and Tuesday bring more of the same or a small pullback on one day. The key is Tuesday's election outcome. If Gore wins, it will be a sell at the open kind of a Wednesday and the Bushy stock will hit the handle on the toilet. If Bush wins you won't be able to get your hands on enough drugs or Mr. Softy or cigarette stocks as I'd expect him to provide them with a better business climate.

Fibonacci numbers on the Comp seem to be valid. The retrace levels are at 3496, 3645, & 3790. This fits right into the 3700 recovery that I'm looking for in this cycle. The two numbers seem to suggest the range one might expect and fairly bracket portions of the June, August & October congestions. This should also work well to fill the 6/2 gap of 3683-3729.

I'm only playing a Bush win with one "real" drug stock--IVX. It has a trend going and shouldn't get as badly punished as the rest of the sector--I hope.

P.S. My vote (I'm in Indiana and it is a Bush sure thing.) will go to one of the third party candidates--probably Nader, whose party I have little respect for; but, at least said things he believed in.

11/3 Fri Gain: .8%

Its been a week and a day of gains up to this point. During that time the markets and talking heads have gone this way and that. Owners of any number of sectors or stocks have been seriously punished. So, it is no bragging here; it is here but for the grace of god...

I think today is one of those fulcrum points. Taking out that evil 3500 number is a possibility but I wouldn't be surprise if the breakout takes place the day after the election if there is a Bush win. Gore comes across as just too anti-business to make me think we can run the market up with him. The Composite's progress to date has been very orderly. Tuesday was a genuine reversal day in all respects. Thursdays action provided an O'Neil Follow-through day and the info about it is also in the above link. So we have a couple of very solid indicators call bottom. We can couple that to the seasonal optimism and we have a great opportunity here. I believe bad news would have to be pretty strong to stop this move in it's track.

Where to from here? The next resistance is around the 3700-50 level associated with the congested portion of the August low and the June gap up. If we can act well going through that area, I think a realistic goal for the year's end is 4500.

The ultra conservative trader will wait until after the election. I am still 25% cash. At this point start looking at the declines. I'm thinking 50% recovery for those that were really hammered and a full measured move on those that have held up well and are at or near highs. Have to remember those are only goals.

11/2 Thu Visit here for insider info Gain: 4.16%

I remain about 5% below 9/1 level.

While the Naz didn't move strongly it also didn't fall back seriously and looks stronger for the stabilizing that went on. The DOW didn't really croak either but it should retrace from here and continue the divergence between it and the Naz. I consider the Naz action yesterday a positive although all the nightly new folks can only say down.

It is funny what a different market we can see. Those who owned the "save" cyclical yesterday got clocked. If you'd owned safety this year on selected days you were clocked like it was a lowly net stock. For me yesterday was glorious. I didn't even mind the Sept-Oct draw-down all that much. I was punished but can come back. Those down on fundamentals old economy types are down but sit there with a lot less upside.

The average life of a corporation is something like 40 years. Some remake themselves and continue (GE etc.) and others get acquired or pieced out toward oblivion like T. You can still buy a buggy whip! I used to show horses and promise that's right. But, you wouldn't invest in a buggy whip corporation or startup. I could make the case that it is a steady and very profitable business. Hell of a value play. But, growth???

You can get savaged anywhere in this market. My buy yesterday was my "safety" play. It is a "real" and boring drug and not a glorious biotech. I own enough of that for now. I like the fact it went up for Sept-Oct. I worry a bit about the fact it got clocked by it's last quarterly and has that ahead. But that's a great consolidation that almost has (famous last word) to resolve itself much higher.

Yesterday's "great" gain ends up being a so-so trading credit. The BBH had nearly triple my gain. I hate that! I did beat about all the rest though.

11/1 Wed Gain 2.8%

B: IVX 44.82

IVX has pulled back a bit after my buy. It is one of the decimal denominated stocks and has weird cup and handle that is really just a V-bottom with a following congestion. Lot of upside potential off that long enough congestion. This is a full position. Potential to pullback to 44. Probably should have just vested but I'm pretty bullish here. The money for the trade was at TD Waterhouse and it is all but impossible to buy right on that site. There wasn't a morning self-off and the afternoon one was light and looks to be rebounding nicely as I write--2:30.

The market is again approaching the evil 3500. Like my day before yesterday's comment on support, the more times you touch resistance the weaker it becomes. I'm thinking the stars might be aligned to get through it on this try. There's more resistance at the June 1 gap up of 3582. There were any number of gaps in this 3400-3600 on the Comp. The area is a real battleground. The bear scenario says it is too strong to break without another draw down. If we can and then proceed to reach 3750, then it looks more bullish through year's end. The in betweener is where we have another trading range but between 3500 and 3750--which seems way too narrow for the volatility we have seen. So, I'll discount the tweener and look to 3750 as the major overhead resistance who's busting would confirm an intermediate bull. If that happens I think we could do 4500 by 2001.

Wise heads are looking to the banks and SOX as their leading indicator. I'm not as wise but I see them more of a trailing indicator in a bull market. Although, they would lead in a bearish scenario. I think of them as the negative tell. But with all this volatility they are likely to be a hard read for me to try to rely on. So, I'm trying to look elsewhere. I have a BTK goal in the high 800's, if it is turned back from that I'd be disappointed. It has been the more solid chart that been the strongest of leaders...to me anyway

Took a look at the holders: BBH has a mini up-trend. Needs to get above 190. BDH is a real crip that needs to do a lot of repair to want to own. BHH has a decent consolidation and narrowed Bollanger band that makes me think it will try for 45. The HHH looks like it needs to stabilize further. The PPH is trending and unbroken and has a mini consolidation at the top of the Bollanger that makes it one of the stronger ones and a definite one to watch. The TTH looks like it wants to retest before trying for the 70 level

I don't want another day like yesterday. Although, it was a pretty good day other than my being so stupid by using TD Waterhouse as one of my brokers. If you didn't read about that fiasco, take a look at last month's diary via the link above.

That VRTX move at the close yesterday was wild. Happy I was able to get on board. Almost bought that one between 94 and 95 earlier. Glad I had a bit of discipline for a change. Those who got it the 2-bucks below my buy cut a fat hog. After it hit 89 in roared back and left me with a 3.5% profit in about 5 minutes. Would love to find more of those. This could be a great sell at the open but I'm looking out. This stock has been one of those that has already begun a nice trend with great money flow.