Tag Archives: Bikini Analytics

A Letter to Readers

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Dear readers,

We are making a few changes at Bikini Analytics.  Our website started as a lark on a slow trading day, and has grown into an endeavor we are passionate about.

Looking back at the content posted, we have concluded that it does not all belong in the public domain for free.

We have discussed numerous ways to move forward with our work,  from contract research to a subscription based model.   We decided the best model for us to start with is a “pay per view” model for some of our content; not all.   Some of the costs to view future commentary will be micro payments and other commentary will cost substantially more; the work will dictate the pricing.

Our first commentary on the pay per view model is an update on Safeway Inc.  Safeway stock is up 34% since our first commentary in October 2012, and we see room for more upside.

Safeway Inc. – Ingredients for Life?

In addition to our commentary, we plan on posting a list of our daily trade signals we are taking for our fund.  Signals this week that have included long CRM, ESV, GMCR and MAS, and they put us in some great shorts too.

Our signals are a proprietary scan designed to identify pullbacks within an existing trend for optimal trade entry and risk management. The signals are based on the work of Mr. Steven Primo who is a friend, Veteran Stock Exchange Specialist, and a mentor of ours since 1986. You can learn more about Mr. Primo’s work @ Specialist Trading.com.

Thank you & Best regards, Lou Reard

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Lowe’s Companies – Selling Strength

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LOW is another of our short positions for the XHB bear theme.

LOW – Daily

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Transports set for a flush – $TRAN

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The Dow Jones Transportation Average (TRAN) closed down -2.55% today which is its largest one day drop since May 17, 2012 when it closed  -3.1%.

The move in the TRAN sets the market up for a flush, that may create an over-sold, trading bottom.

Transports and other cyclicals poised to lead the last leg down, prior to a trading bottom

TRAN – Daily

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

What Home Depot & Apple have (had) in common

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We leaned into a high-octane, high fear factor trade, and shorted Home Depot on its EPS pop yesterday.

The bear work posted here on the XHB helped ease some of sweating, but it was still intense.

We covered 1/2 the position on the gap fill near the end of trading today, and we will continue to trade HD aggressively from the short side on rallies.

The charts below should give the most ardent HD bulls pause

HD : SPX – Weekly

HD : AAPL – Weekly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

 

IYR – Another shoe dropping off the Fiscal Cliff

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The Real estate ETF (IYR) chart doesn’t need much annotation, this is a textbook 5 wave move.

We are already short Homebuilders.  Is the headline below, the rumor IYR heard this morning, and the reason both IYR & XHB are so weak?

How ‘Fiscal Cliff’ Could Affect Mortgage Interest Deduction

With the question asked, the answer (to why) does not matter to us.  The market tells us what to do, and now it is telling us to SELL!

We started new shorts in AVB, EQR, PCL, PLD & SPG

IYR – Daily

IYR – Weekly

IYR – Weekly Long-Term

IYR – Monthly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Lennar Corp – A ripe short for our XHB outlook

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We are bears on Homebuilders.

Homebuilders update: the S&P might need to find new leadership soon -$XHB

Critical trading day today for the Homebuilders ETF

Why Homebuilders are diverging and likely peaking – $XHB

Homebuilders Update – Rethinking the Housing Recovery…Again – XHB

Lennar (LEN) is giving us a nice technical trade setup for a thematic short with good risk reward and easy stop management.  LEN is showing multiple negative divergences in all time frames.

LEN – Monthly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Silver Signpost

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We are bears on Silver.

Leading indicator SLV/GLD continues its rising risk message

Silver – Commercial Hedging Suggests Prices Should Fall -$SLV

Silver following script – $SILVER

As traders we know the assets we trade don’t move in a straight line.  Being on the wrong side of the metals or their related stocks even for a short time can hurt.

Here is a chart that may help with trade entry in SLV.

SLV – Weekly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Keeping short-term trading in long-term perspective

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With a picture worth a 1000 words, this chart will be priceless to those who apply its message properly.

If the picture isn’t clear, read: 100 Year (Stock Market) Storm? and the story will come into focus.

SPX : BKX : TRAN : SMH – Weekly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

MSFT losing more than its chief Windows architect

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On October 01, 2012 we posted bearish commentary on Microsoft titled Windows Halo Effect on Microsoft Fading Fast – $MSFT  

We were short MSFT coming in yesterday and covered on the gap fills; ”C’est la vie.”

The stock looks like it has more downside coming.

MSFT – Daily

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Natty Gas breaks short-term downtrend

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We are long-term bulls on Natural Gas.  The last several weeks natgas corrected its recent breakout.  The correction set up a positive technical picture.  We see a 50% correction that tested and held a rising daily 50 sma, and improving momentum oscillators in daily and weekly time frames.

We are long natgas futures now.  Stocks with gas exposure were hammered recently and we will being doing more work on them over the day.

NGZ2 – Daily

NGZ2 – Weekly

NGZ2 – Daily

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Pullback indicated in the VIX, an oversold bounce in the S&P — nothing more

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At Bikini Analytics we are laying out a big picture of where we see the market headed (lower).  This morning we posted a 30 year view of the NYSE Primary Exchange Index with long-term bearish implications titled 100 Year (Stock Market) Storm?  

We want to stress to readers that is a MONTHLY chart, working on a topping formation since 1997!  That said, we are no less bearish on our market outlook.

But, as traders we have to keep in mind that markets do not move in a straight line.  Bear market rallies can be brutal.  Their typical characteristics are moves that are up quick, sharp and steep, lasting one to three days on low volumes.

The big picture is clear. To navigate it successfully, we have to  follow the short-term road map or risk poor trade entry and stop management that can wipe us out.

The $VIX is down 8.9% as I type.  It is suggesting the market has some short-term bounce potential.

VIX – Daily

SPX – Daily

VIX – Weekly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Leading indicator SLV/GLD continues its rising risk message

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$Silver : $Gold – Monthly Spot

$Silver : $Gold – Weekly Spot

$Silver : $Gold – Daily Spot

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

100 Year (Stock Market) Storm?

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Major Technical Principal: The significance of a trendline is a function of its length, the number of times it has been touched, and the angle of ascent or descent. – Martin Pring, Technical Analysis Explained Fourth Edition.

I used to love watching horror movies, but I can’t anymore; they just freak me out.  Same goes for my wife. I tried to watch American Horror Story – Asylum with her, and she left the room.  I wouldn’t be surprised if I had a bad dream from seeing the website picture while creating this link; it is a freaky show!

We have another type of horror show unfolding in front of us, but we have to watch this one because it is our business.

We don’t know how this show ends, but the trailer is annotated in the chart below.

Developing long-term NYSE pattern bears monitoring – Beachcomber

$NYSE Idex – Monthly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Trapped Longs – EW

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On October 09, 2012 Edwards Lifesciences (EW) dropped 21% after the company lowered guidance warning that austerity measures in Europe and lower insurance reimbursements in the US would hurt Q3 sales.

The company threw hopeful bulls a bone, with CEO Michael Mussallem saying they “anticipate a strong rebound in the fourth quarter” 

Sounds like a slope of hope to us. From our experience, it is safer to listen to what the stock says, than what company management says.

Noting the gap overhead, and knowing how the market hates a void, our bet is the stock wants to fill its spring 2012 gap @ 74 before it tries to workout the giant hole it just left in investors pockets above.

We see a lot of trapped longs and doubt they will be hanging around to see if Mr. Mussallem’s reassurances of a Q4 rebound bear fruit in this market environment.

We rate EW Red in the Bikini State and we will start building a new SHORT position Monday.

EW – Weekly

EW – Daily

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Sandy’s Aftermath – CINF

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Cincinnati Financial (CINF) is trading at about the same price the stock was trading the week before Sandy made landfall.  On October 29, 2012 CINF gapped down about 9% at the open of trading expecting losses from Sandy, but the stock regained most of those losses by the close.

According to an article at 24/7 Wall Street, Credit Suisse put CINF’s potential 4Q12 EPS impact @ -57% using preliminary estimates for damage.

We don’t think the street’s analysts, or the tapes discounting mechanism, is through crunching the numbers on Sandy’s impact.

Due to CINF’s technical picture we are rating the stock Amber in the Bikini State. The uncertainty of the impact to EPS, the clear distribution in the volume profile, the diverging momentum oscillators, and the broadening top pattern all show CINF’s current uptrend is in jeopardy.

In addition, the inside day, or the inside week, gives speculative traders a very tight risk range for a short entry.

For our trading, we will be modifying our typical inside day strategy.  We will use a break of Friday’s inside day low @ 38.86 to enter the trade short, which will have our trade entry below the daily 50 SMA which we prefer, but we will use the looser high of the inside week @ 39.91 for our STOP.

CINF – Daily

CINF – Weekly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

 

Copper not Saluting QE

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Copper signaling with increasing clarity

$Copper – Weekly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Natty Gas – Trading Roadmap update

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Here’s the natgas daily. Although the nearly $4 top was slightly divergent, it may not have been divergent enough. There could be room enough still to allow one more bounce into that overhead, before selling off even more sharply than it already has. As bottoms go, the current rumored bottom isn’t at all good, or the least bit reliable. I wouldn’t call it a bottom at all. Not that we won’t bounce first, before we sell off further; we could. But if I had any natgas left, I’d use such a bounce to blow out the rest. I think it’s going to at least 3.44.

Natural Gas Globex – Daily

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

Macy’s – SELL

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On July 20, 2012 We wrote bullish commentary titled  Macy’s Inc, Seasonality / Bacchanalia – M  and gave Macy’s a Green rating in the Bikini State.

We were trading Macy’s short before we published the chart on the bullish seasonality, and we switched gears and started trading Macy’s long at that time.

We wrote back then, “that switching gears on a stock is hard.”  It is easy to get emotionally attached to the bull or bear side.  You can make a lot of money long a stock, and miss a great short trade, because of emotional attachment.

This morning we switched gears on Macy’s again due to the weekly double top and diverging momentum oscillators.

We started building a new short position in M and now rate the stock Red in the Bikini State.

The position won’t get serious until we see Macy’s break its daily 50 sma with conviction, which will signal a trend change.  That is the point where we will start to press the short. A move back above the double top will send us to the sidelines to re-evaluate.

M – Daily

M – Weekly

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

 

Another Frankenstorm on the Way?

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We normally post Beachcomber’s work without comment because it speaks for itself. And, rarely do we share the  private conversations we have with him. We were discussing the charts below, and what he sees is one of the most threatening H&S tops ever. If it is, it will unfold in stages, over a long period of time; just know the picture isn’t pretty.

The main takeaway from our conversation, and the point he wanted to make, is for us to “remember, this is a market that could be down for years!”

If you think that is overly bearish, and indicative of a bottom, I offer the chart Beachcomber posted yesterday that most people ignored.

Nasdaq 100 – Risk is rising  this post received less than 10 views yesterday when the average Beachcomber post sees 50-100.

Integrating the S&P’s short- and long-term price patterns suggest another possible Frankenstorm this season. – Beachcomber

SPX – Monthly

SPX – Weekly

SPX – Daily

To see the complete body of Beachcomber’s work select “Beachcomber” from the Category drop down on the right side of our Home page

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)

HES update – Failed breakout

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HESS Corp was a new long for us yesterday and it broke one of our trading tenets for this tape “we fade breakouts because this tape likes to punish the obvious.”

We were punished today and sold the stock.  As I type this, the hourly looks a little oversold but we are going to leave this alone and watch for a smarter entry.  A better buy on a breakout is a pullback that tests the breakout and then starts to moves higher.

HES – Daily – Failed Breakout

Disclaimer: This communication should not be construed as an offer to sell or the solicitation of an offer to buy any security. (Click here for full disclaimer)