Month: December 2004

On Analyzing Information

Never assume the obvious is true.

-William Safire

Good quote except for the use of the word "never," which, along with the word "always," should usually be avoided.

Marchex Inc. Intro

Here’s one to check out: Marchex Inc. (Nasdaq: MCHX).  Flying below most people’s radar and making bold moves in the domain name, paid search, and internet advertising markets.  Highest volume since this one came public in late March 2004.  See following chart for weekly picture.

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CRYP Update

Nice 10% pop after retest of 50-day moving average.  See my previous posts for more info (11/17 and 11/30).

On Mistakes

Mistakes are, after all, the foundation of truth, and if a man does not know what a thing is, it is at least an increase in knowledge if he knows what it is not.

-Carl Jung

More Smoke on the Horizon

From CBS.MarketWatch.com

U.S. Nov. new home sales down 12% to 1.125 mln units

By Corbett B. Daly
Last Updated: 12/23/2004 11:45:37 AM
 

WASHINGTON (CBS.MW) — Sales of new housing units in the United States fell in November at the sharpest pace in more than a decade after October’s increase was revised higher, the Commerce Department said Thursday.

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Catchn’ the Wave

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What does the birth of a stock market winner look like?  Shit, if I knew that I wouldn’t be sitting here writing a blog, I’d be managing my hedge fund from a beach in Santa Barbara or something.  But…

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Quick Update

Not much has changed since my last few postings, which means that since cracking last week the market has failed to reassert itself to the upside.  That means the multiple yellow flags remain in effect.  The easy money from the August and October lows has been made and its time to take a vacation from the long side.

5-Yr High – Bullish Newsletter Writers

Just a quick note to mark the fact that the weekly Investors Intelligence survey of newsletter writers registered 62.1% of surveyed newsletter writers bullish and 21.1% bearish.  That’s a 5-year high on the bullish side.  While not an accurate timing indicator, it is another warning not to get overly aggressive on the long side.

And the Warning Gets Louder

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Today the Cubes hit a new 52-week high by about 10:00 and then turned tail to decline on accelerating volume into the close, posting a clear distribution day and placing the Cubes right on their 10-day EMA.  The upward sloping RSI line was broken to the downside.  And the Nasdaq traded a hefty 2.7 billion shares, highlighting the selling.  Well see what any forthcoming recovery attempt looks like, but if it is weak it will be a sign to stand clear.

Argument for Pause Gets Stronger

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As shown on the chart, the Cubes hit a new high on low volume today, which is a yellow flag.  Another interesting fact is that the Nasdaq TRIN (ARMS Trading Index), a ratio of advancing stocks and volume to declining stocks and volume, flashed its most overbought level (0.75) since 1/12/04, two weeks before the January top.  On the one hand, that is a sign of strength, but on the other it is a warning that a pause may be due.  Also, even though the Nasdaq and the Cubes have been moving up the past few days, they have been led by a shrinking number of stock hitting new highs.  Of course, none of this is a problem until it is a problem, so just take it as a caution.  Cheers!

Still Going But May Pause Soon

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The rally’s still going, but is starting to flash some subtle warning signs that it may be due for a pause.  The two most recent sessions painted significant upper shadows, while on Friday we closed near the low (see circled area on the chart).  We also see the RSI failing to make a new high along with the Cubes, which suggests waning momentum. These technical chinks, coupled with the fact that the dollar has done nothing but fall and interest rates have done nothing but rise since W. got reelected mean it’s no time to chase extended stocks.

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CryptoLogic Follow Up

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Today Cryptologic (Nasdaq: CRYP) took an 18% pop on volume of 930,000 shares.  That’s the highest volume since October 2002, CRYP’s all-time low point.  The stock’s only traded more shares five times in its entire history.  See my 11/17/04 post for some more info on CRYP.  And see below for what Briefing.com had to say about CRYP today.

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