Technical Analysis of Stock Trends

Too late to hedge?

Posted on Jul 10, 2011 by WHC Bassetti.

We were of two minds about Friday’s action.  Our rational mind said, a natural reaction to a surging upwave.  Our irrational and paranoid mind (which got reinforced Sunday) was it looked funny.  Today, Sunday, the Times reports that Boehner has thrown in the towel on a deal with the White House on the debt ceiling– says he can’t pass a deal with “tax increases”  (thought we were going to call them “revenue enhancers”).  Whatever we call them it’s not going to happen, which means we are one day and one giant step closer to default.  The market which has been blithely speeding across the bridge to nowhere should at this point throw up convulsively at the prospect (increasingly likely) that economic troglodytes will allow the most powerful and richest country on earth to act like Greece (Ireland?  Iceland?  Portugal?  or worst of all, like Italy (viva Berlusconi — what a macho!))

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Squirrel markets. Bulls bears mules hibernate. Playing defense better than the 49ers.

Posted on Nov 22, 2010 by WHC Bassetti.

http://stockcharts.com/h-sc/ui?s=$INDU&p=60&yr=0&mn=2&dy=0&id=p25782902376&a=202457238

Squirrel markets can drive you nuts.  It certainly drove us nuts to write this commentary.  And it’s probably driving our readers nuts.  It was not till we went to the hourly chart that it became clear to us.  As you can see we are in a clear downwave, now 12 days long and about 3 and a half  percent.

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Fool’s errand.

Posted on Oct 30, 2009 by WHC Bassetti.

At 10:27 San Francisco time with the market looking like this we increased our hedges and are now net short the indices.  As we said earlier attempting to trade these minor waves is a fool’s errand.  Of course we have an analysis, and it is based on the earlier intraday chart, which shows a prevailing short term downtrend.

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Bulls retreat, noses bloodied.

Posted on Oct 30, 2009 by WHC Bassetti.

30 minute chart of Dow, last 10 days.  So we put a partial hedge back on.  We’re beginning to feel like day traders and we don’t like it at all.  Yesterday appeared to break the 10 day down trend but today appears to cancel yesterday.  We are beginning to feel that some serious bear attacks are being made on the market and urge readers to find ways to hedge or protect their portfolios.  We have prevIously mentioned the leveraged ETFs –SPXU, FAZ, QID.   The recommended way to do this is to scale into the hedge, just as one would scale into any position.

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Bears retreat, noses bloodied.

Posted on Oct 29, 2009 by WHC Bassetti.

What a difference a day makes.  This looks to us like the end of the flush, so we lifted our hedges.

Don’t get too comfortable though.  We think there re a lot of smart traders short, though squeezed, and they are desperately looking for reinforcements to drive the market down.  Too bad they can’t analyze trends.

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