Last wall of defensive offense

At some point, if the market keeps bottoming (Dow Jones -229, NAS -46, S&P -23), natty gassers will cave and give back enormous gains. Half of my tracking list remains green, but UNG has plunged from 8.22 to 8.11 in the past several minutes.

The mini-bubble could burst, which would make the sector a shorter's paradise, especially with the sub-5 issues like FTK, DPTR and HERO. Careful out there.

Just about the only real safe haven today has been (and probably will continue to be) VXX, which is up 6.4% to 30.24, off its intraday high of 30.48. FAZ is up 7.1% to 15.79, and inverse oil SCO is +6.2% to 16.07. TLT, grannie favorite TMF and TZA are also up nicely for bearish traders.

Careful riding with the VXXen!

Germany comes through for Eurozone

Futures are significantly down this morning, but not massively buried. Any sign of good news for the bulls is always welcome.

The market will digest the news from Germany, where parliament has approved the Eurozone package by an overwhelming and expected margin. The FXE (euro index) closed yesterday at 124.75, a recent high. Today will show a little more whether that leap was about short covering or other factors.

AAPL is trading at 234.07 in premarket, its lowest level in months. If the market bounces after the dreadful decline of the last several sessions, AAPL will be one of the leaders. Watching closely.

FAZ is also moving higher in early trading at 17.52 while financials are at lower prices (C 3.58, GS 135.75, IRE 5.30, STD 10.35). Until the details of the euro crisis are resolved, financials are range bound, at best.

VXX is near its premarket high at 34.89. More than $8 billion was withdrawn from the market in the past weeks since the Flash Crash. Retail investors who are still in the market are taking precautions, no doubt, by seeking VXX and treasuries. ETFs that mirror treasuries (TLT, TMF) have performed exceedingly well lately.

Still long FAZ and VXX. Still 55% cash. Ready for any kind of bounce today, next week, next month.

Mid-day of a bloodbath

Mid-day: Dow Jones -279, Nas -75, S&P 500 -32.

This is a horror flick that won't end if you're still long. All things considered, at the prices of the real leaders like Apple, 240 is a good price. If the market collapses even more, 240 is reachable in short time for AAPL after the correction is over. I wouldn't re-enter my favorite stock yet, though. AAPL is down 8.14 (-3.3%) to 240. Low was 238.05.

Another bursting balloon is BIDU, down 3.1% to 67.93.

What's working today are the inverse ETFs, of course. FAZ is at 16.23 (+8.6%) and not far off its high of 16.50).

The Wild Card, Joker, Steroid Beast known as VXX is back up to 33.48 (+12.3%), though off its high of 35.00. I lost money somehow trading it this morning, turning sensible profits into dumbass losses. But I digress.

FXP is up 6% to 47.75. So much for that bounce by FXI yesterday. China continues to sink deeper into correction.

QID up 5.9% to 44.70. It trades most times exactly opposite of AAPL.

SCO up 8.4% to 17.48; USO (US Oil) is down 4.2% to 32.08.

Financials nosediving in general. C is down 4.2% to 3.65. GS down 2.2% to 137.01. IRE down 17% to 5.77, STD is -4.6% (10.34) and NBG down 4.6% to 2.51. I didn't get into FAZ premarket because of yesterday's strong performance by financials. Apparently, yesterday was bullshit.

SKF (+6.5%), SDS (5.6%), TZA (+12.8%) and even sexy oldster TMF (+5.5%) are tearing it up.

Used to be a time when going short the market on horrific days was not really part of the mindset. Now, things are different. At the least, it's good to hedge. If I were still long AAPL, I'd hedge with QID or VXX. Takes much of the pain away.

FXE is down fractionally (0.23%) to 123.19. EUO is up a bit (0.41%).

Gold? GLD is down just 0.19% to 116.43.

Colorful wiggly lines

Below, a look at some contrary plays. Sure, the bearish stuff has been working awesomely, but irrational exuberance isn't limited to the bulls when going long is The Way. Gold has slowed down even though a whole lotta people seem 100% bullish about it. (I think it's consolidating.)

For what it's worth, the candlestick reads are interesting: SPY was rated a sell (American Bulls) today, as if it has more room to bottom. FXE (euro) is close to a sell. AB is also listing AAPL and SLV as possible buys soon. Same with TMF. FAZ and VXX are listed as holds. Note that AB doesn't have much of a track record with FAZ and VXX. Just interesting to get another point of view.

FXE (Euro) vs.

TMF (30-year Treasury Bonds 3x), FXI (Xinhua-China 25), S&P 500

2 day (5-minute bars)

10 day (hourly)

SPY (S&P 500 Index) vs.

EUO (short Euro), FXP (short FXI), FAZ (short fin), VXX, GLD

1 day (1-minute bars)

2 day (5-minute bars)

5 day (hourly)

SPY (S&P 500 Index) vs.

TMF (30-year treasury bonds 3x), GLD (Gold), XOI (Oil & Gas)

2 day (1-minute bars)

10 day (hourly)

Inverse Oil ETFs peaking?

A look at inverse ETFs betting against crude oil. The short side has been successful lately, maybe too hot to keep rising. Crude could bounce here; already did intraday from $70 to a $72/barrel close.

DTO (PowerSharesDB Crude Oil Short) vs. USO (US Oil Fund)

I tossed in GLD, TMF (30-year Treasuries 3x) and SPY for good measure

YTD (daily)

2 day (hourly)

DUG (ProShares UltraShort Oil & Gas) vs. USO

YTD (daily)

2 day (hourly)

SCO (ProShares UltraShort Crude Oil 2x) vs. XOI (NYSE Arca Oil Index)

Added euro (FXI) and SPY, as well

YTD (daily)

2 day (hourly)

I like looking at these inverse ETFs for future reference and study. But I would not bet against crude oil right now. The run may be done for bears, at least for the near term.

Momo Monday

Dow Jones 10,625.83 +5.67 +0.05%

Nasdaq 2,354.23 +7.30 +0.31%

S&P 500 1,136.94 +1.26 +0.11%

Trading range, indeed. After a drop to 170 or so points on the Dow, the market finished positive. I'm underwhelmed, but comfortable enough to stay in cash for now. Those who went short the past few days were geniuses. One of them is ChessNwine over at iBankCoin.

He got out of his inverse ETFs and longs today and is now 100% cash. I'm not smart like him, didn't hang in there with my inverse stuff like FAZ, but I didn't lose any money today either because I was flat. So I'm either a semi-genius or a semi-dunderhead. Fine.

Slept well through most of the market. A long weekend of work and meetings didn't help me catch up on that sleep debt, but I'm feeling almost right now. It's partly cloudy in Honolulu this morning. Traffic isn't bad. My loved ones are OK. Things could be worse, I know.

• AAPL (254.22 +0.40 +0.16%) sold down to 24.71 before rallying. The final 38 or so minutes were a rocket liftoff for many stocks. AAPL went from 250.51 (another higher intraday low) to 254-plus, then sold back below 254 and I thought about starting a position again. But the indicators were too high and I decided to wait for a little bit more of a pullback, maybe tomorrow.

• BIDU (73.18 -0.80 -1.08%) had a low of 71.64 today, still way off its high last week above 80. Intraday high was 75.10 shortly after the opening bell.

• C (3.88 -0.12 -3.02%) really stood out earlier at 3.76. I'd gotten up at that minute, saw that price and started thinking this might be the start of a serious hammering for finnies. As usual, that kind of guessing is opposite of reality. With Europe likely to have unprecedented financial issues, traders may not buy into euro printing press solution the way it happened in the US with dollars after March 2009.

• FXE / EUO. The euro rallied from a low of 122.47 to a close of 123.48 to finish just above neutral (+0.01 +0.01%). Euro is still at a critical point technically. EUO fell from its high and finished near its low (24.49 -0.03 -0.12%). The swings in these two are not as severe as other ETFs and stocks, but I watch anyway.

• F (11.95 -0.16 -1.32%) hit a low of 11.49 before buyers stormed in. Ford hasn't done anything different, hasn't done anything wrong since shares ballooned to 14-plus a couple of months ago.

• FAS / FAZ (13.77 -0.02 -0.15%). This was a big bump for FAZ to 14.71; it was in the low 12s a few days ago. Then the reversal sapped profits for FAZ traders and it finished up only 2¢ to 13.82. FAS broke even at 28.00 after dipping to 26.08. Crazy train!

• GLD (119.36 -1.01 -0.84%) still correcting slightly. Low of the day was 119.29, not a huge move at all. Hard to argue against gold's value as a hedge against currencies. This might be just a consolidation period unless debt-ridden nations start unloading their gold stocks.

• GS (142.64 -0.59 -0.41%) fell to 138.53 before rallying.

• HAUP (2.82 -1.11 -28.24%) cratered, as expected, after the weak earnings report. Shares got down to 2.77 and hovered above 2.90 for some time, but selling pressure was still strong through the late rally. The retracement is a little more than 50% since the run-up on Thursday afternoon. Staying listed on the NASDAQ is more likely now.

• IMAX (19.60 +0.30 +1.55%) was one of the stronger players today, well off the low of 19.19. Shares have stabilized since the massive insider selling a couple of weeks ago.

• IRE (7.41 -0.34 -4.39%), NBG (2.65 -0.06 -2.21%) and STD (10.36 -0.08 -0.77%) all rallied off their lows. Trillion euros or not, they'll keep getting hit until the next infusion of freshly printed money.

• NFLX (106.35 +5.79 +5.76%) was the biggest mover on my list despite a low of 101.31. I liked NFLX in the 80s, missed the run to 100-plus on the earnings report and positive guidance, but haven't been a staunch believer since. There's competition (Coinstar, Apple, Amazon) in the digital world, and the run last week to 120 was based on takeover rumors. Shares could run again on the rumors, but I'll stay out.

• TMF (36.32 -0.55 -1.49%) finally pulled back after a nice run. For awhile, though, 30-year bonds were quite sexy.

• VXX (27.48 +0.62 +2.31%) finished with a nice gain despite pulling back from 29.00. After making and losing money on this steroid-laden robot, I'm still not sure how to define the volatility that is measured by VXX (and VIX). There's always price action, though, and this was very active. Kooky.

• X (51.15 -1.66 -3.14%) sold off again. Last week's run was short-lived.

Oil and the market have traded together. Oil is at $70 a barrel now, at a possible breaking point or reversal point.

Aloha Friday

Dow Jones 10,620 -162.79 -1.51%

NASDAQ 2,346 -47.51 -1.09%

S&P 500 1,135 -21.76 -1.88%

Can a 162-point drop on the Dow ever be a positive sign? After dropping about 230 or 240 points intraday, the Dow rallied into the close. So did the Nasdaq and S&P 500.

I didn't get up until about 5 am Hawaii time, 90 minutes into the session. I missed HAUP's gap up and run to 4.85. Like yesterday, when it ran crazy in the final two hours on a press release involving Apple, I wanted a retracement to Fibonacci levels. It didn't happen. That's what happens when a 92-cent stock increases in one day by five-fold.

A down market is one thing, but this one had a range underwater and I wanted some AAPL, which bottomed at 249.50, but ran to 252 or so in the second half of the day. But FAZ and VXX intrigued me; aside from HAUP, there was nothing else on my screen that was green aside from inverse ETFs/ETNs. It was a great day to be short the market coming in, not after the fact.

Still, I tried. FAZ settled into a range between 13.80 and 14.00, and I got shares at 13.96. Teetered, tottered and I held up and down, revising my exit point along the way several times. However, when I added more shares at 14.06, that was basically the all-points-bulletin for shorts to pile in. It ran to 14.13 for a second, then sold off and I got out at 13.86. Could've been worse, but I should've gotten out at break-even or somewhere above 14. It was a good trade in the sense that I limited the loss in a turbulent market. But timing is still an issue. I sold these shares of FAZ yesterday before the bell at 12.51 for a 10-cent loss. I didn't want to hold anything overnight, which cost me $1.50 on today's gain.

By the close, AAPL had run from 250 to 254. The banks ran, too, to no surprise. C was at 3.92 for most of the afternoon* before closing at 3.98.

The inverse ETFs/ETNs closed weaker but were still green. Nice green, too.

• EUO 24.60 (+0.57, +2.37%)

• EPV 25.94 (+1.52, +6.22%)

• FAZ 13.75 (+1.08, +8.52%)

• FXP 44.11 (+1.62, +3.84%)

• SDS 32.05 (+1.12, +3.65)

• SKF 19.76 (+1.06, +5.67%)

• TMF 36.87 (+1.95, ++5.58)

• TZA 6.10 (+0.33, +5.71%)

• UUP 25.21 (+0.23, +0.92%)

• VXX 26.86 (+2.13, +8.63)

EUO is a steady short on the euro, not a high flyer like VXX, but very consistent. FXP (short China) is interesting, but I'm not comfortable touching that yet. Getting more familiar, though. No good news out of China for awhile. In other words, the slightest good news will wreck the FXP and fuel the FXI (down 21% the past year).

TMF (30-year treasury index) is killing it. Go Grandma! UUP, the U.S. dollar, is also solid.

GLD and SLV are down fractionally. Overbought, yes, but people will stay in for the most part. Or go to treasury bonds, maybe TMF.

US Steel (X) sold off 5.66% today. Other big sells were in NFLX (100.56, -9.45, -8.59%) and ETFs like FAS (-8.74%), STD (-7.28%), and financials like IRE (-4.44%). GS is down 1%. C rallied into the close from 3.91 to 3.99 (-0.11, -2.69%).

HAUP held up fairly well, despite the tape, and closed at 3.93 (+0.90, +29.70%). Missed my opportunity there, but it could be interesting on a retracement to 3.38 and lower.

IMAX down just 0.57% to 19.30. A nice rally since dipping to 17 last week.

Next week is a mystery to me. My gut says better hedge than go long, but anything can happen over the weekend, especially with the Euro league of nations.

An AAPL/VXX pairing sounds interesting, but I don't want to deal with any slippage by VXX again. Staying 100% cash for now.

The week was a series of losses, mostly small, with a few wins. Study time. I think one key note is that I'm sticking better to discipline now, an improvement from earlier in the week. No matter how much I like AAPL, it's subject to the whims of the market like everyone else. Dry powder rules.