Tuesday, June 3, 2008

Not Many Long Candidates, Coal Stocks Going Parabolic

First of all, I am trying a new setup with the pictures of the charts I put on the blog. Please tell me if they look better than usual or if they are worse than usual. If they work better, I will stick with this format.

Let's start with the indexes. I still see the head and shoulders pattern, although they have still not completely broken down. The Dow (not shown) did break below recent lows today, and the S&P 500 is very close to breaking down. Today's lows need to hold or I believe this pullback will pick up steam.

S&P 500, Nasdaq

With crude down $4, the XLE and OIH broke down through trendlines today. Based on these charts, oil stocks will likely head lower, but I still see a bunch (HK, EAC, XCO, FST, WLL, CLR for example) that are holding up extremely well and haven't sold off at all. DUG gets you short XOM, COP, CVX, SLB, and OXY among others, so it might be worth a shot here. (I am kicking myself for getting stopped out of this - probably should have let position ride without stop).

XLE, OIH
DUG

My PCX short was based on some of the patterns I see in the coal stocks. ANR also looked very climactic. Based on the super high volume today, I think these may be ready to pullback like the oils did last week.

PCX, ANR

I didn't see any new short candidates in tonight's scans besides some of the ones mentioned last night. I may go back into BOOM - it still looks like a great candidate to me. The charts below are the only stocks I see that may be worthwhile on the long side. STEC is still my favorite. There is very little else I would consider entering for more than a one or two day swing trade like OMNI today. Perhaps that is a sign for where this market is headed.

VRGY, CYD
GGB, STEC
All Charts from Telechart2007, Courtesy of Worden Brothers, Inc.

If you have more patience and discipline than me, you are probably sitting this market out right now. That's likely not a bad move at all - things are choppy and volatile. I'll see if any of the shorts I have start working soon - I have made a little progress this week but still get the feeling I am just kind of spinning my wheels right now. Maybe that's because we are in one of those "stay out of the market" times and I just don't realize it yet. We'll see what the market brings tomorrow - the bulls had a chance to do something today with a bad day yesterday and oil being down so much, but they did virtually nothing. Because of that, I still feel it is just a matter of time before things get worse and the bears take more control of this market. Best of luck Wednesday.

3 comments:

Mac said...

I think I figured out the chart issue - I was always saving them as bitmaps because it was the biggest file, figuring it would be the most detailed. The charts tonight were saved as PNG files and they seem to look clearer. I feel stupid I did not realize this at any point in the last six months. I will use this technique from now on. Sorry for any problems previous to this.

Anonymous said...

New charts are looking great!

my25k said...

thanks mac for addressing the chart issue so promptly. They look better than what it was, although making it a little bigger will be better as changing the colors is not an option..

I noticed you mentioned saving the chart files as bitmaps etc. that makes me think, you are not using the blogger UI to write your posts are you?? I suggest you try out Windows Liver writer.. saves me a ton of time..

Thanks again for all your hard work.