February 2005 Archives

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote a little dissertation about short selling on his blog. The post is mainly about naked shorting but also has comments about just plain old, legal, shorting as well. I basically agree with everything Cuban has to say. Here are some key points:

I also believe that since short selling is rarely if ever offered as an option by traditional brokers to their customers, there is always going to be a bias towards demand trying to push the price of a stock up. That in turn creates an opportunity for short sellers who get to take advantage of that upside bias.

[SNIP]

The more shorts, the more shares shorted, the more pent up demand there is for the stock. For a company that is well run and operationally successful, short shares are like an insurance policy to protect the downside for the price of your stock and more likely push the stock price ever higher. When we had broadcast.com I used to beg people to short our stock. If they didn’t like what we were doing I would actively suggest to them that they short the stock. Sure, it might have slowed the rise of the stock in the short term but who cared. I knew we were going to be able to hit our numbers, so why not. If we did our jobs, it just meant they would have to cover the stock and in a down market, that helped keep the price up and in an up market, that could cause the stock to run. Both very good things.

Which leads to one of the things I look for when I short a stock.

The louder a company complains about the shorts, the worse the company. Companies bitching and moaning about shorts trying to hit their stocks are companies that are far too worried about their short term stock price and are looking for an excuse to give their shareholders. [read the whole post...]

There's also a heated discussion in the comments section of that post. It looks like Mark and some dude named Bob are going to debate this topic on pay-per-view. ;-) He also has a follow-up post about Naked shorting.

It may not seem (feel) like it but the S&P 500 actually made a new closing high for the calendar year and it just a couple of points away from its 2004 high. So while the Nasdaq is still 5% off of its 2005 high there is a lot of money being put to work. Below are charts of some of the sectors (Housing, Steel/Industrial Metals, Oil/Energy, Emerging Markets) that have been rallying over the last few weeks. Many of the stocks in these sectors have absolutely been on fire. If you're looking for longs these sectors are the place to be right now.

Currently holding:

I just got a request for a chart of the ever-popular Google. Earlier this month I said I'd look for a long entry unless it closed under $200, which it did 3 days later. I'm decidedly neutral on GOOG right now as it sits in the middle of its 4-month range. The one play that I do see is to go in the direction of the break of the symmetrical triangle that the stock is forming.

eBay is about to come out of an ascending triangle that it's been forming for about 5 weeks. I guess one could just play the break, long or short, depending on which way it breaks but personally I wouldn't want to be long eBay as long as it's under its 50 and 200-day moving averages.

This is a stock that shook me out a couple of times last year. One of those stocks that I just knew was going higher but I couldn't ever hold on to it. I'm glad that somebody nailed it though. Com sent the following request for a chart of NVDA:

I've been long in NVDA since August, sustaining a heavy loss after 3rd quarter revenues but enjoying quite a run over the last few weeks. I wondered if you had any thoughts on the chart. Nvidia is trading at/near its 52 week high. Personally I expect resistance at 29.5... but I'm looking for an informed opinion. Thanks.

The first thing I would say is that I would consider taking partial profits if you haven't already. Any time I get a double in a stock I look to sell half to get my initial investment back and take a 'free' position. That makes it much easier for me to let the stock do its gyrations -- with a loose trailing stop.

As you'll see on the weekly chart, NVDA has just broken out of a long consolidation. I don't see much to worry about on either the daily of the weekly chart. It looks like there's a little bit of resistance around 30 and again at 40, but frankly, I'd be more concerned about support levels. The top of the range it just broke should be support now, so I'd be a little concerned if it slipped back into the range.

It was a really choppy day yesterday until 2:00 when the market moved decisively higher. The Dow and S&P have almost recouped all of Tuesday's losses and are back above their 50-day moving averages. Similarly, the BKX is back above its 200-day moving average. All of the indices are flashing stochastic buy signals so we may be in for a bit of a follow-through on this rebound.

How strange that just after posting that I don't see Apple as a short I read an article laying out the bear case. Ken Kurson wrote the article, entitled "iPod, iTunes, iSell: Time to Short the One You Love", for the March 2005 issue of Esquire Magazine (The article doesn't appear to be online but its on page 112 of the mag). Kurson runs through the numbers and the story on Apple's resurgence then proudly announces that he's short AAPL at $65. His reasons all seem logical yet he's down 37% right now, assuming he's still short. He seems pretty convinced that he's right, but as we all know the market's aren't about being right, they're about making money. Ken made no mention of what it would take for him to be wrong and cover his trade at a loss. Nor did he mention where he would cover at a profit if the trade went (goes) his way. If he's still short, and let's say he wanted a risk/reward of at least 2-to-1, Apple would have to damn near go bankrupt for his trade to be work out.

I just wonder how much pain he'll accept before covering. In his article he says (emphasis is mine):

If Apple is worth the $65 or so it was trading for at the beginning of the year, then why not $100 Why not $200? In fact, when a stock takes off on the back of its hot product, the best thing to do is to bet against it. But remember: Fighting the tape takes balls, a big bankroll, devoted attention, and a lot of luck.

Hoping to prove I have all four, I'm short a bunch of AAPL at $65.

Here's why it takes balls. First of all , remember that shorting any stock is inherently riskier than buying it long, since your downside is unlimited...

Oh boy! Is it any wonder that AAPL keeps going higher. No doubt many a short is getting forced out of it on an almost daily basis. The idea of shorting something solely because it's running due to a hot product seems like financial suicide. That flies in the face of what William O'Neil teaches. New (and hot) products are a key thing to look for in long candidates.

As for fighting the tape, he forgot to mention "a high threshold for pain." Ken sounds like he's a glutton for punishment and is out to prove that he's smarter than the market. If you have to short AAPL to prove you have balls....

Finally, as I always have to do when I see the comment about shorting being riskier than going long, I must point out that shorting is only riskier if you allow it to be by shorting thin and/or volatile stocks, or by not adhering to any kind of risk control plan.

David wanted to know if I agreed with him about Apple looking like a short. My answer is an emphatic 'no'. I don't see any signs of AAPL rolling over in the chart right now. I posting a weekly chart to give a longer term view. The bears have been screaming about the valuation on Apple for about two years now but it just continues to rise. This is a great example of why shorting on valuation alone is not a good idea. I'd combine those fundamental reasons with a little trend analysis and wait for the uptrend to be broken before trying to short this bad boy.

Daredevils may want to try to short it when (if) it gets close to 100 (or 50 after the upcoming split). :-)

The meme about the WSJ and its policy of charging for online content continues with this article by Wired -- Whither The Wall Street Journal? Some key points from the article (emphasis is mine):

Because the Journal sells more ads than it can possibly run, Dow Jones, the Journal's master, plunked down half-a-billion dollars in November for MarketWatch, which operates MarketWatch.com.

Nevertheless, the Journal faces an intractable problem. Because you have to subscribe to access both current news articles and the archive, the Journal is leaving only a faint footprint in cyberspace. As with The New York Times, which insists that readers register to view news and pay $3 per article in the archive, the Journal barely shows up on Google or any other search engine. I googled "Enron" -- an issue the Journal covered exhaustively, and which two of its reporters even wrote a book about -- and not one article appeared within the first 25 pages (250 results.)

Then I rigged the test by plugging in "Wall Street Journal" and "Enron" and still struck out (although I did pull up a couple of Journal stories specially edited for high school classes.) If you can input the name of your publication into a search engine and not come up with any stories, you must be digitally tone-deaf.

And in the rare event a Wall Street Journal article does pop up and you click on the link, you will likely encounter a message that informs you, "The page you requested is available only to subscribers." To access the article would cost you $79 a year, or $7 a month ($39 a year if you also subscribe to the print edition).

Since most people refuse to pay for WSJ stories, most bloggers are reluctant to link to them. It also has an impact on anyone who uses the web for research -- and there are a lot of us. As importantly, the next generation of readers is growing up by accessing news over the internet, and one place they are not surfing to is WSJ.com. With their habits being formed now, there is little chance the Journal will become part of their lives, either now or in the future.

The internet search-related stocks are having a tough morning due to downgrades of Yahoo! and Google and FWHT's earnings. I would probably try to short GRU today if I could find any shares to borrow.

The Dow and S&P were able to climb back above their 50-day moving averages yesterday but it looks like those levels will be tested early today.

Currently holding:

Your boy Cubes (as the guys on PTI would say) just wrote