TA for the week

Advance/Decline suggests that we have reloaded adequately for a multi-week run up, but I don't see it in other charts: Chart

Consumer discretionary is now at major multi-year resistance and should make a pull-back: Chart

The Dow is in need of further correction to catch up to the NDX. Perhaps we'll have a +NDX/-Dow day early next week. Dow 10,100 would be a logical target. Chart

The TICK 10-day moving average signaled an interim top has occurred. At least a multi-week downturn should follow. Chart

Picks 11/18

Ticker	Price	Stop	Target
AHT	4.40	4.15	5.71
AKS	18.64	19.64	12.00
ARG	47.76	46.90	65.00
AVP	35.02	33.95	45.00
BXP	65.00	63.80	79.00
BZ	5.00	5.80	0.75
CCC	13.46	14.01	11.60
CECO	24.00	22.90	35.00
CLF	40.00	37.00	65.00
CNO	5.35	6.00	1.00
CQB	17.50	16.50	24.00
DOW	27.00	26.00	35.00
ENZ	6.00	5.60	12.50
EPI	21.10	20.50	24.00
FULT	8.86	8.22	13.00
HOTT	6.50	7.25	4.20
LVS	17.65	16.50	45.00
MNP	13.00	13.40	12.00
MT	39.00	40.00	30.00
PZZA	22.24	23.08	18.90
QGEN	22.47	21.96	30.00
RIMM	61.99	61.80	47.00
SHOR	6.02	6.42	3.40
SIGM	11.20	12.00	8.80
SSI	12.40	13.00	8.70
SSS	32.00	30.00	37.25
TECUA	12.00	11.50	15.60
TESO	10.50	9.70	16.25
TRW	22.53	22.60	43.00
TSO	13.74	14.55	9.50
TSRA	24.25	25.00	17.50
USMO	10.99	10.80	9.10
ZLC	5.00	5.60	1.25

Buffett deux

And the stock split? Well, it is akin to Goldman taking itself public after all the money has been made. He's basically selling out (or making it much much easier to do so at a later date with the added float).

Buffett's purchase of BNI

Makes me wonder if this is his thinking..."This has been a technical rally, and fundamentals have yet to catch up, so it is easy enough for it to roll over on technicals. The transports have begun leading these markets down and that will cause the technical traders to pile on the short side. If I buy up BNI at a nice premium, then the Transport stocks will reverse and maybe just maybe I can save the rest of my holdings from going down by getting the shorts to stay away."

Won't work, of course, but if I had enough money to manipulate the markets, this is what I'd be doing. Let's see if he can figure out a way to restore the dollar decline, quickly, since the downtrend line was broken overnight.

As I recall, the last time he was buying anything, the markets dropped like 30% from that point.

Joe

Where we are...

Still not completely clear, but a whole lot of things are breaking down to suggest that a rollover is occurring. Whether the folks that have waited for an opportunity come rushing in with a bid or not is to be seen, although I have a feeling that they will get alligator arms and we will watch another waterfall like last Fall.

I'm positioned with some longs to play a bounce the next 1-2 days, but there are a lot of indicators telling us this bear market rally is over:

1. While the dollar is holding its trendline, the Canadian dollar has broken its trendline. This is currency pair tells us that commodities are going to take a breather. However, it is at pretty strong support here, so I'd like to see that broken as well before getting confident with this perspective. The Aussie currency is holding up, so that it not confirming the trend.

2. The Euro is holding up, let's see what happens tonight.

3. Nasdaq sentiment dropped quickly. This either refuels buying anew or marks the start of an exit.

4. Fear is back - the VIX got up over 30. It is now a little overbought, which is why I took a long position in SSO over the weekend. But I'll be quick to get out of that trade Monday/Tuesday.

5. We had major distribution on Friday. In fact, each time we had a distribution day of this magnitude on NYSE since March, that particular level (if not day) roughly marked the end of the counter-trend rally. This is the other reason I went long on Friday with a tight stop.

6. Advance/Decline on Friday was super-low, which usually causes a snap-back rally.

7. Energy sentiment has rolled over. Look for a nice pull-back in Crude, and hopefully that continues to correlate w/ a higher $, causing follow-thru on the equity sales.

8. Most indices have taken out their uptrend lines.

Anyone who is confident that the rally since March is intact isn't trading technicals. That is not to say that it isn't , it just seems like the best stance now is to be a patient bear rather than a nervous or confident bull.

Joe