Slope Of Hope with Tim Knight

Good-Bye, Q2!

Well, the bulls managed to pull off another monthly gain - the 4th one in a row. Do you want to know how much the surging economy and trillions of dollars of new cash poured into the market pushed the S&P higher? You do? OK - - 2/100ths of one percent. In other words, 0.02%. Way to go, bulls!

I keep saying how I'm not making any money in this market, but I just ran the numbers, and June wasn't that terrible. I was up 2.9% in my big account, and about 4% in my 401-k. Nothing to write home about, but not bad either.

I am really glad Q2 2009 is history. The bulls had every possible advantage thrown their way, and what I see before me on the monthly chart is exactly what I thought I would see mid-month when I wrote about the loss of momentum: just look at the chart and you'll see. March, April, and May were all gifts from the gods (or at least gifts from Obama) to our bullish friends. June was utterly limp. I am highly confident July 2009 is going to be the first down month for the S&P since February.

I am going to try to recapture some glory on water skis this afternoon. Congratulations, Slopers, for making it through this quarter. I think we're going to start to have a much easier time starting tomorrow, in spite of pre-July 4th being historically hugely biased toward the bull side.

What I'm Doing Between Posts

Passing Gas

In spite of UNG's amazing volume over recent weeks, I have been very hesitant to get into it. I'm glad I didn't bother, because it has broken the one encouraging trendline that it had. Note how cleanly today's high is precisely beneath the former support.

Bought ERY

Yep, I'm quite the bear today. Bought ERY with stop just beneath line shown below.

Riding EEV

I just bought 2500 shares of EEV (the ultrashort on emerging markets), since I think it's going to be a nice way to play the downside. I'm setting my stop to 20.09

TBT Off to a Good Start

One of my larger positions is TBT, and with interest rates bumping higher, this is off to a good start this morning. I've got my stop set at 49.85

The Waves

First off, the folks at Elliott Wave International wrote me today saying they are kicking off a 17-city How to Trade in a Fast-Moving Bear Market tour from September 4, 2009 to February 2, 2010. You might want to click on the link to see if they'll be anywhere near you, since I really like their work and - - assuming this danged bear market fires its engines up sometime again - - I have found Elliott Wave to be helpful as we stairstep our way down.

Second - speaking of the same folks - here is a graph from their Short Term Update tonight (they allow me to occasionally republish graphs from time to time here) which I like:

As usual, click on the graph to see a bigger version - but it does a nice job labeling the past year of market activity. The horizontal line marked as a .382 retracement is the crucial line in the sand. Either the countertrend rally has exhausted itself (which would agree with the "2" labeling), or what we experienced over nearly four months was simply the first phase of a more hefty push higher.

My money is at least oriented toward the notion of a meaningful "B" wave down, but not cracking March's lows yet. What would harm me the most - and this is why I'm relatively lightly positioned right now! - would be a swift rise above that line, prompted either by (1) end-of-quarter window dressing on June 30 or (2) a surprisingly bullish jobs report Thursday morning.

You know what three words are next...........we shall see!

One More Day

Well, Q2 2009 is a quarter I'd just as soon permanently forget. It's been a tremendous amount of work for absolutely no profit. I am hoping that July 1 will bring us some relief, so I'm just biding my time until then. I've got about half the positions I would have if I were feeling really confident.

As for the /ES, we're less than a point away from breaking any potential of a true H&S pattern.

I'm content letting the final day of the quarter burn by. I've got dozens and dozens of ideas waiting in the wings, but I'm not going to move forward on any of them until right near the close on June 30, at the earliest.

Weekend at Bernie's

I suspect fewer parents with be naming their children Bernard in coming years.

The Risk of Lottery Plays

From mid-March until this month, low-priced, high-risk issues have been the backbone of my 401-k. They are definitely losing their steam, though, and it's also becoming evident that there are reasons these issues were battered in the first place

Take Lear Corp (LEA), for instance. This stock had a great run-up in the yellow tinted area, shown below. I did pretty well on this ride up. I then "re-loaded" when it headed back toward its trendline, and at first, this seemed like shooting fish in a barrel (see green tint). But look what happened - - it failed to exceed its prior high, it broke its trendline, and it absolutely fell to pieces.

Bear this in mind with such securities - - they are anything but "blue chip!"