Wednesday, June 18, 2008

IBM - head and shoulders.

I had some problems with blogger today and not being the most technologically savvy cat around I accidentally deleted my morning post entitled What's with the Doom and Gloom. It is just as well as I am going to cut back on the rants and focus my mental capital on more important things such as the charts and as rising equity balance in my trading accounts.

That being said I want to bring your attention to an institutional darling IBM (chart above). I always watch what the "nifty 50" are doing as it is just a matter of habit and IBM is one of these. Notice the attractive head and shoulders position formed with a clearly visible neckline evident at $123. Now, I have a healthy short in the Dow via my 3 unit long position in the Ultrashort Dow ticker DXD.
Another institutional favourite is General Electric ticker GE (chart above) which I commented quite negatively on in my post GE Govern Yourself Accordingly in which I outlined the bearish technical case on GE's pattern. Nothing has changed in that regard and the activity of late has only solidified the bear case on GE. GE broke $31 which looks like small potatoes on the daily (above) but is mucho significant on the monthly.
Do you notice anything suspicious developing here in this market, whereby traditional safe havens are no longer safe anymore? Regular readers know I have feel the the game has changed significantly. In my post, The Old Playbook back in February summarizes my feelings on the subject. GE is a prime example of hedge fund valets and the like, like trained seals, buying the safe, defensive, big cap, multi-national, yield stocks.
Look around at GE, AIG, the drugs PFE, and MRK, health care like WPT and HUM. Something seems amiss? Isn't this supposed to be the safe place to hide. I am no rocket scientist and can assure you NASA is not in my near or distant future other than a visitors pass at the Kennedy Space Center, but what is wrong with cash? What is wrong with precious metals or commodities. And above all what the heck is wrong with CASH ?
My grandfather used to tell me no one likes 3% til they have lost 30%, then they'll beg for 3%. The same people who owned JDS Uniphase, Qualcomm and Nortel steer clear of the precious metals, base metals and the ags. Go figure.

Housekeeping notes;
I was filled on a 2nd unit short of Brinker ticker EAT at $18.98 which now leaves me with 2 units short on the venerable eatery. Great ticker, lousy biz given the state of housing and the U.S. consumer.

I was stopped out of 1 unit long position in U.S. Heating Oil fund at $60.85 for a gain of about 2 3/4pts for a small gain. Which is just as well given the volatility in the sector and the thinness of UHN trading.
In an effort to further protect profits on positions I am moving the following stops;
Moving stop down on Daimler ticker DAI to $70.12
Moving stop up on US Gasoline fund ticker UGA to $62.54

Good speculating to you all.

Open Positions:
Long 6 units Currencyshares Japanese Yen ticker FXY @ $88.55 stop at $91.40
Long 3 units Ultrashort Dow DXD@ $50.12 stops at DIA $130.26/127.34/126.42
Long 2 units Ultrashort Financials SKF @ $103.90 stops at XLF $26.72/25.54
Long 1 unit Currencyshares Swiss Franc ticker FXF @ $96.25 stop at $93.82
Long 3 units Ultrashort ReEstate ticker SRS @ $88.95 stops at IYR $71.14/70.21/68.36
Long 1 unit US Gasoline Fund ticker UGA @ $60.35 stop at $62.54
Long 1 unit Ultrashort QQQ ticker QID @ $37.05 stop at QQQQ $49.56
Long 1 unit Ultrashort S&P ticker SDS @ $57.20 stop at SPY $141.54
Long 1 unit Hecla Mining ticker HL @ $8.30 stop at $7.16
Long 2 units Kinross Gold ticker KGC @ $18.93 stop at $17.56
Long 2 units Clean Energy ticker CLNE @ $13.15 stop at $12.36
Short 1 units Daimler AG ticker DAI @ $86.20 stop at $70.12
Short 2 units Brinker Int'al ticker EAT @ $20.07 stop at $22.44
Short 2 units Darden ticker DRI @ $36.35 stops at $35.36/33.54
Short 2 units Lehman ticker LEH @ $43.70 stop at $28.32
Short 2 units Deutsche Bank ticker DB @ $117.03 stops at $105.26/99.32
Short 1 unit of Visa ticker V @ $86.25 stop at $85.36
Short 1 unit HSBC ticker HBC @ $83.23 stops at $83.52
Short 1 unit of Netflix ticker NFLX @ $31.10 stop at $34.64

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