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Hank Pym
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Hank Pym is a professional writer, former hedge fund manager and principle of a registered investment advisory firm in California and Texas. He enjoys reading, taking quiet strolls along oily beaches, and gazing up at the stars, wondering why we haven't been invaded yet.
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  • Indecisions, Indecisions
    Perhaps Horatio Alger was right.  Rags to riches, all that.  Or maybe you should just stay the heck out of the stock market.  Day by day, week by week, this seems to be the pendulous message.  

    A few weeks ago, I mentioned that 113 was a key level in the S&P 500.  Once again Herr Market did not disapprove, flopping back into itself after briefly staking claim to that military objective.  Now the soldiers are restless, milling about the countryside, taking scalps.  A move below 106 in the SPY means trouble.  Several technicians are already whispering of "consummated head & shoulders" patterns, etc.  I have heard this line of reasoning before, the entire past year, in fact.  So I am not completely buying it just yet.  But that doesn't change the fact that between 102 and 113 is a no man's land and it would take a crowbar and/or a very large female bartender to convince me that getting involved here is the right maneuver.

    Oh, and there is a Hindenburg Omen.  I am sure you have all heard.  I cannot remember a time when this overheated balloon got more press or air-time.  Bespoke ran an interesting report on the Omen this past week, citing the number of fixed income securities now trading as stocks on the major exchanges, and how this may "put the fix" into the numbers that help form the underlying calculation.  In reality, I don't think it matters.  The true value of the Hindenburg Omen is to demonstrate empirical indecisiveness, and to be frank I am not sure we really needed much help in establishing that.

    Speaking of fixed income, treasuries keep going.  And going.  Every pullback gets bought, every move higher gets bought, every consolidation -- bought.  There is a near-parabolic steep forming here, ladies and gentlemen, and it is certainly worth standing at attention.  TLT in particular has been zooming to catch up -- or better yet, take a look at my favorite trade, shorting the TBT (the UltraShort 20+ Year Treasury ETF).  There is a lot of disparate data out there regarding whether or not stocks should be following higher, whether bonds are due to implode, etc.  I say don't get caught watching the paint dry.  Parabolic moves tend to resist coming back down to earth right away.  

    Whether you fear a coming apocalypse or not, it makes sense to heed the warning of young Johnny Appleseed, who after staring up at his trees all day, waiting for them to grow, said:  Ouch.

    Tags: TLT, TBT, SPY
    Aug 19 5:51 PM | Link | Comment!
  • Watching SPY 113
    The Tape

    As per usual, the stock market is a fortune teller, a fate sealer extraordinaire.  That, or human expectation is that predictable.  Whichever way you lean, the SPY bounced right at 105 on its recent pullback (the level we highlighted as the area to expect a bounce if this wasn't a resumption of the downtrend), and then rifled out of the previously negative pattern. 

    Volume has picked up on this recent bounce.  It may simply be that the market is more inclined to melt higher.  130 looks like a key level in the SPY (1300 in the S&P 500).  A break above 130 would technically inaugurate a new intermediate uptrend.  This could usher in sharp buy-side interest from big money managers, given that the market is horribly under-invested at the moment; furthermore, pundits and market soothsayers (even myself!) have been looking for a further breakdown.  On the flip side of that coin there are decent valuations to be had, especially in technology (my favorite "Future World" sector to plant new money), and a decent yield on the S&P 500.

    The Tack

    Right now I find it extremely tempting to dwell in the sour patch.  I get a twisted feeling in my gut whenever I read headlines associated with our ballooning deficit, or the future direction of tax policy.  I am sure we are all united by our excitement! However, part of living in the patch requires a relative degree of pessimism regarding the future direction of our investment dollars, and if the market decides to shake this off and move higher I am not the sort to ignore the development.  While I maintain that we could be facing a multi-year expanse of rough road ahead of us, there is no question I am growing more excited about the possibilities of investing in the world of the future -- as opposed to throwing more cash into the ideas of the past.  If this is a market low of some importance, we should look at the price action of new, dynamic movers, and that is what I will be spending a lot of my time doing over the next few days and weeks.

    The Tickers

    Some stocks I'm watching:  TIP, LQD, TBT, TLT, MGEE, GLD, SPY, SSO, MELI, FTLK, MGEE, SOLR, NFLX, AAPL, APEI, TSLA, BEXP.

    Jul 26 11:15 AM | Link | Comment!
  • Running Tired
    The Tape

    Technically speaking, this morning's gap higher looks like the end of the road for the most recent rally.  Sometimes it's rough to make such a comment when the market is rising, and rising, and rising... but keep in mind, big rallies always occur during bear markets, and this advance (five, six days running) would appear to have crossed the finish line. 

    A quick few charts:





    We are running into the 50-day moving average and the downsloping trendline from April.  And while the "undercut" low a few weeks back does bear the warning signs of a snap-back rally, it's hard to justify getting on the train now when volume has been declining at the same time that risk assets are rising.

    The telling move will be the next move, whether she (the S&P 500) can hold above 105 or whether we get a vehement next leg lower.  For now, tighten stops on your successful trades and take some well-earned cash off the table.

    Jul 13 12:13 PM | Link | Comment!
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  • GLD quietly staging another nice day with FXE and weak dollar taking a breather. GLD probably tests that 96-7 level in the next day or two.
    Aug 4, 2009
  • 2-3 month range break-outs occuring in FXE, UDN. GLD perking up as well.
    Aug 3, 2009
  • Sitting on my hands. This a.m. gap & go squeeze in SPY needed to test the top of the expanding range. Failure @ 1000, shorts play reversal.
    Jul 30, 2009
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