The Apple effect is golden

Does someone here want an iPad?

7:35 am (Hawaii) You can probably remember the sight of AAPL going up dramatically - from 80 to 200 in one year, for example - only to sell off drastically. You made a great realized or paper profit, wondering what was the justification for a selloff. Sometimes, it was about profit-taking. Sometimes, it was about hedge funds on the verge of collapse, having to raise case (from profitable trade) immediately.

I think gold (down 2.1% to 1,776/oz) and silver (down 4.1% to 39.15) are selling off in this down session for that reason. The hedgies are desperate to raise cash, and they realize they can always go back into gold, particularly, at another time. I woke up a few minutes ago to find the Dow Jones down 255 points. Not a shock since futures were down more than 100 points when I hit the sack last night.

What is a surprise is that AAPL is at 408 after hitting an all-time high of 411. The only news I found in a brief search is that 1 in 6 Americans are now using an electronic reading device. I suppose that's bullish for AAPL and AMZN. But trading in this cut-throat environment means there will eventually - later today? - be immense profit-taking in those two. Last one out, rotten egg.

My Regular watch list is 20% green. TVIX, EDZ, FAZ (+8.7%), ZSL, TZA, VXX ... it looks like 2008 or '09. CMG, GMCR, TLT, AAPL and LULU are also up more than 2%. SBUX is 1.9% up.

My Metals watch list is basically the same, 21% green. FAZ, ZSL, SCO, are the few leaders. ZSL is up 6.6% and DZZ is up 1.8%. Silver continues to be shorted by the banksters, probably the same banksters who claim to be long gold. They are stuck with these immense short positions (JPM), so what else would they do?

I might actually turn on the TV this morning, but they were chattering about Greek default and yadayada yesterday. It's probably more of the same Euro debt crisis/contagion fear. US Dollar up 1.5% to 77.78 and Euro is down 1.1% to 1.36. The FOMC meets on the 21st (Wednesday). I do not want to be extended in any way until after that meeting. Staying all cash for now.

There goes AAPL, back up to 409.90.

Photo: MKT 300 Rodgers

Kahmsahmida, Korea!

10:27 am (Hawaii) Really, is it necessary to thank the Bank of Korea for investing their wealth into gold? Tons and tons, now property of BOK. After all, that didn't help my ambition of owning fantastic amounts of physical gold and silver, buying in at cheap prices. Gold rocketed today and is near its high (1660) afterhours at 1658.

Silver benefited, as well, moving to 40.84 AH. I have a semi-stink bid in for a few shares of AGQ at 219. I almost re-opened a position at 200, but I stalled and it ran 3 bucks within 15 minutes. Or 10 minutes. It was fast. I hate to chase these days, so I figured out today's Fibonacci retrace (38.2%). Off yesterday's close at 206+ and today's high at 223+, that level is 216.69. I have the semi-stinky bid at 219, and if it drops a little more, I may get another few shares at 216+.

Otherwise, my focus is on physical. Exploring Kitco's site, I came across this "promo" item: Canadian Silver Maple 1 oz at only 43.79. I say only because that's just 3 bucks above spot and the Maple is .9999 pure. That's one extra digit compared to most fine silver coins and rounds. I know it's preferable to own coins minted in the country of your residence, but the coin fan in me wants to take this deal. It's selling at other locations for more. Provident has the Maple at 44.53 and APMEX has it at 45.29. APMEX will sell it as low as 43.79 — the same price as Kitco — but only if you buy a minimum of 500.

I like the Maple, but not quite that much. There's one catch about Kitco: spending minimum is $1,000. Also, there is a charge of $30 for shipping and a separate charge of more than $8 for insurance. Say I buy 40 Maples at $43.79. That a combined fee of $38, which is roughly 3x what I'd pay a stateside dealer. That is an extra $25 or so. That comes out to an extra $1.60 per Maple. That pretty much negates the "promo" cheapo price of $43.79. It's actually $45.39. Roughly what I would pay APMEX for the same deal. And more than I'd pay Provident.

If my attention on metal is foolish, so be it. I could ride AGQ, theoretically, to 300 or its spring-time high of 382 and bank some coin. Then I'd take that profit and buy physical ... which would then mean paying at least $50 an ounce for silver. Mathematically, it makes more sense to ride an ultra-silver ETF from 220 to 380 — a gain of 72% — than to buy silver at $50, which would be a 25% increase from the current price (40+). But that math is no guarantee of anything. If demand soars, it's possible that spot silver price could go to 50 while AGQ doesn't come close to 380 or 350 or even 300. Not probable, but possible.

Brother Turd Ferguson notes that open interest in silver is still moderate at best thanks to the May 1 shakeout by the CME mafia. So, speculators are apprehensive about re-entering these silvery waters. That works fine for physical owners and long-term holders of silver stocks. However, if today is any indication, open interest is about to take off. A market that declines by 2.2% (Dow Jones) to 2.75% (Nasdaq) takes all parties down. All ships sink with the lowering tide. That leaves only a few outlets for safety, which is why TZA was up huge today along with gold and silver.

The time to buy more physical was when spot silver was at 35, 33, even 32. I did just that. But I want and need more, so I'm leaning toward the same program of chiseling in, bit by bit, doing my version of dollar-cost averaging. It's easy to assume that a metal like gold, at all-time highs, is not the buy. Yet, nine days ago, I passed on more gold at 1600. It's now close to 4% higher. I added more silver at the time at 40.17, which is a good move so far. There's more upside, isn't there, in physical silver ... but there's also more treachery.

In both metals, there's no stopping a rising price if institutional buying is underway. Wish I knew.

Pandora's box

6:37 am (Hawaii) My Regular watch list is 15% green, 83% red. What a mess. The leaders are bearish ETFs (FAZ, TVIX, QID, TZA) along with TLT. Violence, Greece, video. And it's only Wednesday. 

Fast Money Halftime noting that Pandora's IPO today comes when Greece is riled up. 

6:54 am (Hawaii) Input from Dennis Gartman on FM Halftime:

"You do have money going into gold, but in non-US dollar terms. It's going into gold in sterling terms, yen terms, not US dollars at all. The circumstances in Greece help gold. It creates a different type of gold investment. (It's going) higher. The best that one can do is get the trend right. ($5,000) is absurd. I see gold at $1,650. Stock prices look weak, a global economic slowdown is taking place. I'm not sure we'll have a recession, but look at what copper is doing. (China) is just one-time data. On balance, purchasing data in the US and (globally) are all turning down."

Dan Norcini: European sovereign debt woes erupting once again (June 15 2011)

Dual duplicity

7:08 am (Hawaii) Just got up from a good night's rest. Such a flat market. My recently-made Metals Watch List is only 15% green, lowest level ever, with only bear ETFs green with one exception: XG (Extorre Gold). XG is up 6.9%. That's it. Spot Silver is below 40 as of the past hour. Spot Gold plunged to 1509.

The chameleon traders who rode Spot Silver up and are riding it down are banking big buccos. ZSL, the double silver bear ETF, is up 11.7% today. That's on top of the 30% gain already this week. Traders are making more money more quickly on ZSL than they did on Spot Silver. There's no way I would've leaned toward a position in ZSL yesterday when it was at 17.50. But there seems to be no apparent reason for anyone to buy silver, even at this level, and the lack of buyers is killing the price.

Nimble traders riding momentum. You can understand fundamentals to the fullest, but knowing where the big money is going matters most. ZSL was at 14 on Monday. Can it climb more today and tomorrow? Certainly. But again, as selling a decliner early or not at all is sometimes best, buying a rocket launcher like ZSL early rather than at the near-term top is preferable. After gaining 40% in 3 1/2 days, this is thin ice territory.

As for Spot Silver, 37.50 looks like a reasonable support level, a 50% retrace of the recent run to 49+. Great for physical silver buyers and swing traders on the bullish side. Painful for traders on the buy-and-hold side. AGQ, the double bull silver ETF, was at 370 or 380 last week. I got out with a $4/share loss. Now it's at 235.61, close to its low of 231.10. My regular watch list is only 20% green. The only stock worse off today is OPEN, down 14.3%.

Up today: GMCR (77.20 +20.6%), VCLK (18.48 +12.3%), HAIN (35.12 (+5.5%), TVIX (25.94 +5.3%), EDZ (18.07 +4.7%), TZA (35.89 +4.3%).

Game plan remains simple: 100% cash.

Update 7:39 am (Hawaii) It's always interesting to see bloggers with strong convictions get more balanced with changing climates. SGS (SilverGoldSilver.com) is one of my favorite blogs. I disagree with some things there, but generally, I appreciate the candor and intensity of his convictions. He realized that buying puts would help protect his assets, but his critics are flaming him. I've never used puts, but I understand the practicality and profitability of protection. It's insurance in a bloody market.

It's no far-fetched guess that if all of us had known Spot Silver would crash like this, most of us would've protected our positions by getting some ZSL. I got out with SLV at 46.75 and AGQ at 369.44. That was that. But if I'd opened just a tiny position in ZSL — it was at 13 last week — it would've been a good momentum read. I'm just not that astute.

Update 7:53 am (Hawaii) The news on Extorre Gold Mines (XG) last week was about "high grade to bonanza grade gold-silver results from the first 3 of 21 diamond drill holes completed to date on a discovery named Zoe at Cerro Moro, Santa Cruz Province, Argentina." Now XG says it's up to 10 drill holes that are showing this level of gold and silver. The Zoe spot is familiar for anyone who watched the company's video recently. I like the way they market their stuff. The co-chairman seems quite transparent. But I didn't believe enough to invest even a tiny position.

ZG closed at 9.03 yesterday. Now at 9.64, off the HOD of 9.91. XG has pulled back 31% on its gain today, which is approaching a level I like. I am NOT a gold bug, never bought a miner stock before. But this video from last week is entertaining enough, especially on a rotten day for precious metals.



Update 8:14 am (Hawaii) Other gold miners with positive news today are Continental Gold (CNL) and Kirkland Lake Gold (KGI). See the story here.

Also, PAAS is one of the rare silver plays that is positive today, up 1.6% to 34.37. A report says PAAS has "provided an update on the situation in Boliva and San Vicente."

Update 8:43 am (Hawaii) Spot Silver is rebounding a bit. EXK has risen steadily and is now back above 10. PAAS continues its comeback and is at 34.50.

Some thoughts on the smaller gold and silver miners. NGD has floundered lately, but is one of the gold miners that really pops when momo is on its side. Currently down 1.8%to 10.01. No news lately.

Extorre is a spin-off from Exeter. Yale Simpson, a co-chairman at Extorre Gold Mines, is executive chairman of Exeter, which is trading just above $3/share. Exeter's focus is in Chile; Extorre is in Argentina. The company logos are virtually twins. Here's a video of Simpson talking about Exeter's projections last November.

As the host of the video (done by Even Keel Media) indicated at the end of another video, Extorre is a sponsor of the program and the program is an investor in the company. Good transparency, but I'm more impressed by their marketing/PR efforts than anything. I don't know jack about mining.

Spot Gold was below 1510, but is now at 1517. Spot Silver is off its low, now 39.75.

Update 9:25 am (Hawaii) This video is a couple of weeks old, Max Keiser with Brad Cooke, CEO of Endeavour Silver. 

Part 1

Part 2

2010 Financials

This is pretty funny.

Update 10:37 am (Hawaii) This guy figured out how to cast his own silver ingot out of scrap silver and a tiny bit of .999 silver. He created a .925 sterling silver bar. Looks like a lot of work, but he probably had fun doing it. If the world ever goes to shit, this guy's skills will be invaluable. 

Terrifying Tuesday

8 am (Hawaii) Isn't it odd that the root of terror is also the root for terrific? Terra, terra, terra. Tora, tora, tora. I woke up a half-hour ago and enjoyed a local morning chit-chat show. I admired the flow of news, stuff about traffic (slow as molasses) and enjoyed the fact that I am not sitting in it.

Switching over to CNBC and seeing the Dow down more than 100 points also made me grateful to be out of this bitchy market. I can watch the flow of traffic and stay far away, getting my beauty sleep. While geniuses like Le Fly continue to pound the table for oil refiners (crack spread is now over $26), it is always intriguing to see lifers like Cramer acknowledge (early in the week) that though there are numbers on the bullish side, he was staying clear out of this market. Hate Cramer all you like, but when he gets word from the Street that shit is about to hit the fan, he usually shares the information.

As always, the dude who bought truckloads of AAPL at 12 is relaxed and sleeping until noon, for he has not a worry in the world. The rest of us need to be nimble and astute.

Update 8:18 am (Hawaii) My watch list is 31% green, 69% red. Not as extreme as yesterday (20% red). AAPL has stabilized at 330 and stands at 332.46 (+0.5%). This is clearly not showing signs of an all-out collapse. The machines are still buying MWW (+3.6%), CMG (+2.9%), HGSI (+2.8%), NFLX (+2.1%), GMCR (+1.8%).

Crude oil continues its pullback. UCO is down 5.6% to 56.41. EXK is down 4% (10.94) after lifting above 12 recently. WNR, the oil refiner I Should Have Entered, is up nearly 1% (17.30) thanks to those increasing (aforementioned) crack spreads. Sure, the few stocks that are up could join the selloff before the close in 100 minutes.

QID, TZA, the usual bear plays in skittish markets are doing okay. But they often break down when a catalyst arrives. Earnings season is here. The bear play could turn into a bear trap.

I'll stay away from the forest and leave the trapping to professionals. Still 100% cash.

Update 8:36 am (Hawaii) Taking a closer look at WNR. If crude continues to fall but crack spreads stay up (or get higher, as is the case in recent weeks), somebody's going to eventually make money when the selloff is over. If not for today's pullback, WNR would not be up just 1%. It would be 3-4%, my guess. 

WNR doubled from below 9 to 18 between mid-December and mid-February. That's why this pullback to 17ish is not a big deal long term. Demand for energy will grow as summer nears. Japan needs to import more than ever. America is willing to pay $4/gallon, it appears, but chaos will ensue if it gets near $5 for any duration. As long as business owners are willing to figure $4 gas into the equation, it is possible the economy can continue to recover. Therein lies the rub. Most CEOs and mom-and-pop operators will look to slash costs. The current climate is exactly why they refrained from hiring en masse in the past year. 

But all in all, WNR is very appealing here. I refuse to play the crack spread. Human psychology matters more, and so far, the populace is content to let crack spreads spiral into deep space without a current correlation to refiner stock prices. For now. 

Dressing up

12 pm (Hawaii) So is this it? Has the end-of-month/end-of-quarter window dressing begun? When I hit the sack around 5 or 6 am Hawaii time (noonish Eastern), it seemed the market was going to drift in small currents forever. Of course, nothing stays the same in the market for long. The market went bozo bullish as I slept, sending 75% of my watch list to the green side after being inept earlier.

DJIA 12,279 (+0.67%), Nasdaq 2,756 (+0.96%), S&P 500 1,319 (+0.71%). Again, volume wasn't impressive, but it was about 20% higher in the "axis" of stocks, AAPL. Monday was a low in volume for the year. Tuesday saw more action. Wednesday is the 30th of March and Thursday is the end of the month. I'd say odds are 70% that window dressing has begun. By that math, the edge is 40% (70 vs. 30), but am I willing to indulge myself with 40% of my roll in play? Or to be risk-addicted about it, place some bets that allow for 40% swing down? Yes to the former and no the latter. We're still somewhat toppy here and the chances of a) a selloff after window dressing and b) negative news about QE3 would easily send the market down the mountain like a wild eagle pushing goats off the ledge.

For now, however, just about everything finished green today, and big on the win side. WNR gained 1.9% to 17.10 after being in red early. Le Fly wins again on his call for oil refiners to slice through any market turmoil. He's right.

AAPL, which sold off to a hair above 346 early, is at 351.30 in afterhours trading. My position in AAPL at the end of last week was opened at 346.75 and I sold at 350.65, which clearly is a range within the larger range (326 to 365). There are too many AAPL bulls who want this stock to lift, for the PE to hit 25 or 27 or 30, and that would be fair. But with the slowdown due to Japan's tragedy, I really don't see any eye-popping sales numbers in the near term. Demand huge, but customers will have to wait. AAPL will be fine long term, but it just won't hit 400 as soon as I or anyone else had expected.

This is not a bad thing. I could buy at 345 (mid-point of the larger range) and sell at 350 over and over again without extreme concern over risk. I didn't do it today, but it's there. What other stock are you going to ride as comfortably? CHGS? LULU?

CHGS 3.54 (+20.4%), MCP 60.10 (+8.3%), CLNE 15.20 (+4.8%), LULU 89.37 (4.8%), CMG 268.00 (+3.9%), RLOC 20.55 (+3.2%), VLO 30.50 (+3.2%), AMZN 174.62 (+3.1%), EXK 9.28 (+3.1%), YZC 34.50 (+2.9%). It goes on and on. Huge gains for momo stocks. Silver plays. Even coal (YZC). China is in heat. US stocks hot, and that's with crude oil up. UCO is at 54.78 (+1.7%).

It almost didn't matter what people bought today. The bull gored every bear in sight. Big losers on my watch list were TVIX 37.49 (-5.5%), EDZ 19.12 (-3.3%), DG 30.52 (-3.1%), TZA 36.84 (-3%), VXX 29.95 (2.7%), QID 51.65 (-1.9%). Also OPEN 102.90 (-1.3%). OPEN's huge run had to stop for a breather at some point.

I wouldn't be shocked if the market reverses before tomorrow's opening bell. There's still time for hedgies to take it down fast and still re-enter before the end of the month. Unlikely, but entirely possible. I'll be waiting for a unlikely discount on my favorite plays with 100% loaded gunpowder.

Monday bull party

(11:30 am, Hawaii) Talk about complete melt-up. At one point, when I wasn't sleeping through the session, my watch list was 83% green. That's basically bullish to the extreme since the other 17% are mostly bear plays.

DJIA +1.5%, Nasdaq +1.8%, S&P 500 +1.5%.

Volume wasn't great in AAPL (14.7M), but the 2.7% run from 330.67 (Friday) to 339.73 (afterhours today) is incredible. The 100-day moving average was tested three days in a row (Wed/Thur/Fri) before bouncing today. Will the 50-day MA (346+) prove to be a ceiling?

Everything with a pulse move up, from BIDU (+3%) and GOOG (+2.6%) to Japan (EWJ (+2.2%). The yen softened; FXY slightly down (-0.4%).

LVS gained 6.4%, while other recent gainers like OPEN (+2.4%) and HAIN (+2.5%) rose.

Precious metals roared. SLW gained 5.9% to 42.25 (afterhours). EXK +5.1% to 9.62, PAAS +3.6%, PHY +2.4%, SLV +3.2%. NGD +3.4% and GLD +0.7%. Great day for the metal bugs. SLW and EXK ranked second and third on my list of gainers.

WNR, Le Fly's favorite oil refiner play, gained 4.4% to 21.59. UCO gained 1.1% (53.33).

Big losers were TVIX (-15.4%, 44.85), VXX (-7.5%, 32.70), TZA (-7.1%), EDZ (-5.1%) and QID (-3.6%). PSUN also sold off again, down 1.9% to 3.62. C also fell 1.6% to 4.43. Interestingly, X dropped 0.6%.

I'm content to stay in cash here until the puzzle is solved. Which is probably never going to happen. AAPL is my vehicle of preference, and if the runway clears for a flight to new highs, I'll get a ticket. Until then, this is a range-bound titan, from 326 to 360, and there is money to be made in that space. Hat's off to those who bought at 330 on Friday.

Bloomberg: Tokyo Electric says Fukushima fuel rods damaged, leak to sea (Mar 21 2011)
Reuters: Oil lifted by Mideast unrest, Libya conflict (Mar 21 2011)
Bloomberg: Japan futures, nuclear stocks advance as reactor crisis eases (Mar 21 2011)
Business Times: AT&T's big deal lifts Wall St (Mar 21 2011)
AP: Developments in Japan's disasters, nuclear crisis (Mar 21 2011)
Business Insider: What about the Plutonium MOX? (Mar 21 2011)
The Guardian: Google accuses China of interfering with Gmail system (Mar 21 2011)

Now that is a beautiful wig

5:21 am (Hawaii). What else would you say if someone asked you about their beautiful wig? Would you ask why they had to wear one? Isn't the truth sometimes not so preferable? It is what it is. The market is wearing a wig.

After being away for most of the night, I'm home in early morning. I knew futures were imploding and the market was way, way down at the opening bell nearly two hours ago. My watch list is 18% green, 82% red and I figure it was far worse at the opening bell. But AAPL has rallied from its LOD of 340.10 and is now trading at 345.10. I didn't step in. I'm still watching from the rafters, amazed and horrified by everything going on in this global village of ours. I've been in 100% cash for many days now, with the exception of an overnight trade in AAPL (more like over-weekend) that broke even.

Though AAPL and many stocks are off their lows, I hardly believe they're about to return to yesterday's closing prices. There will be a penalty assessed to the market whether justified or not. The heroism can be someone else's trait. I'll wait until the aftershocks wane and the radiation levels peter out. It could be awhile.

Off the edge: NGD 9.40 (-7.5%), UCO 49.21 (-6.8%), FAS 27.80 (-6.7%), EXK 8.42 (-6%), SLW 39.40 (-5.5%).

The few: TVIX 53.45 (+12.4%), EDZ 22.63 (+7.5%), VXX 35.35 (+6.1%), NFLX 211.48 (+5.1%), TZA 43.98 (+4.9%), QID 55.65 (+3.9%).

These winners, all contrary plays with the exception of NFLX, are off their highs as the market rallies from today's lows. TVIX opened at 57.94. EDZ opened at 23.49. VXX opened at 37.05. TZA opened at 44.73. QID opened at 56.70.

Can't help but wonder how much of the mini-comeback today is due to Fed injection and how much is truly coming from retail and street.

Also, Le Fly remains genius. His call on oil refiners, namely WNR, remains stout. WNR is up 1.6% to 16.24. It opened at 15.50.

Update, 6:32 am (Hawaii). AAPL above 347 for some time, a nice bounce off LOD (340+). Trader's dream. If anything is going to rally off a low, it would the maker of iPad 2 (and the whole smorgasbord of space-alien technology). If only Apple had a solution to the potential meltdowns in Japan. 

Market is remotely healthy now: DJIA -1.5%, Nasdaq -1.5%, S&P 500 -1.46%. 

WNR up 2.75% to 16.43. Refiners look rock solid today and possibly for some time to come. So why won't I step in? 

Odd movers include PSUN (+3.1%), NFLX (+6.7% to 214.57) and F (+0.9% to 14.42). NFLX up on an upgrade. Really. 

Update, 6:41 am (Hawaii). AAPL finally cooling off after the runup off the LOD. Another case of 50% factor. AAPL closed yesterday at 353.56, bottomed today at 340.10. A 50% retrace of the drop puts AAPL at 346.83. AAPL wound up rallying to 347.84, now at 345.87. Human nature can't be measured perfectly, but there are often some fairly reliable areas worth observing. 

Tuesday reading

Sign of the times: Nukalert keychain

AP: Security official says Saudi soldier shot dead by opposition protester in Bahrain (Mar 15 2011)

Run Red Hot: Silver toppings 2 (Mar 12 2011)

Business Insider: Did lunar perigee amplify the Japan quake? (Mar 11 2011)

Business Insider: Dennis Gartman: Nobody's laughing at me anymore for my warning about the 'super moon' (Mar 11 2011)

Timeout Tokyo: Japan earthquake: How you can help

ChessNwine: Defense wins championships (Mar 15 2011)

Longings of a madman

9:24 pm (Hawaii). One convenient aspect of watching futures charts is that I don't have to follow global news to figure out what might be going on. Dow Jones, S&P 500 and Nasdaq futures are tanking overnight. Crude oil was back above 105 (now 104.85). Gold is back over 1430 and silver is staying above 36. For now.

Copper continues to be ravaged and pillaged. Who knows what happens by the opening bell, but apparently, someone in Libya is not in a good mood.

Day of Rage just two days, no, 1 1/2 days away.

I don't trade futures, have no plans to do so. I don't care much about the details of copper and cotton, etc., except for the one thing the commodities tell me in general: when demand for industrial metals plummets, we're all in for a long, mediocre ride. The market goes flat (especially without QE3) and there are few winners on either side of a trade. 

I'd love to see silver explode as much as the next guy, but it still reeks of overconfident, arrogant bullish mania as Dendreon did a few years back. We don't know exactly who's playing who, and we don't know exactly who's a shill or not in some cases. We don't know if JP Morgan is truly teetering on the brink of collapse due to (fill in your theory here), or if they're simply honoring a longtime tradition of planting shills among the rest of us, encouraging the average Joe to dive headfirst and 100% into a "sure thing" like silver. Then came the rush of DNDN naked shorts that hammered the masses in "flash crashes" that were precursors to the actual market-wide Flash Crash of two years ago. 

That's part of the reason why I enjoy the view from the rafters. I'll get in and out occasionally, but long-term holding is out of the question. Marrying any stock (or short) right now warrants a thorough mental examination. 

Update, 9:52 pm (Hawaii). Adding EDZ and TZA to the watch list in the morning. Still like UCO as a hedge if I dare go long AAPL, but that's not a comfortable situation, not even close. The only way I'd go long AAPL is if the situation in Libya, Yemen and Saudi Arabia were cooled off, starting with the removal of said madman. Appears that won't be happening anytime soon, at least not with help from US naval forces. Unless this info is all a trick. Then that would be a very cool trick. 

Advantage Disadvantage

Any measurement or indicator of the market has its strengths and weaknesses. Example: trendliners look for a break in direction according to simple lines on a chart. Nothing to do with news or products or catalysts. Example: breakout specialists just want a new high, sometimes buying if there is an increase in volume.

Then there are candlestick chartists. I like candlestick analysis because there's no bottom picking involved. It's been proven effective, though not perfect, for centuries as a measure of market sentiment in individual issues. It's not going to tell you how to handle a white-hot steroid-laden ETN like FAZ, but it can give a forecast of possibility, like any other system.

I'm not a purist of any indicator, but candlesticks are effective as any over the long haul for those who maintain discipline and balance. A combination of news awareness, technical analysis and fundamental analysis are good places to start.

Here's a look at candlestick analysis via American Bulls on some of the stocks I'm watching.

AAPL: "Wait"
BIDU: "Sell Confirmed"
C: "Wait"
CLNE: "Wait"
DNDN: "Sell If"
F: "Wait"
FAS: "Wait"
FAZ: "Hold"
FCX: "Hold"
FXE: "Sell If"
FXI: "Sell Confirmed"
GLD: "Buy If"
GS: "Wait"
IMAX: "Wait"
IRE: "Hold"
JMBA: "Wait"
LULU: "Wait"
NBG: "Buy If"
NFLX: "Sell If"
QQQQ: "Wait"
SLV: "Sell Confirmed"
STD: "Sell Confirmed"
TLT: "Hold"
TZA: "Buy Confirmed"
UNG: "Sell Confirmed"
UUP: "Buy Confirmed"
VXX: "Wait"
WPRT: "Wait"

I like keeping an eye on the pennies — NBG and JMBA — for a good idea of market topping. When pennies explode, we're usually at a top. Note that the only "buy confirmed" issues are conservative plays: TZA (Small cap bear 3x) and UUP (US dollar).

LULU isn't a penny, but when shares are topping out, the market is out of steam. Just look at the history of the stock. It's not a frontrunner by any means, and when shares top out, it's a nasty fall.

This is as bearish as I've seen the candlestick analysis in some time. The market is always about growth, not value, over the long haul. Growth has been stagnant since the enormous climb from the short-term March 2009 bottom came to an end. With China's news today, there isn't a bullish catalyst in sight.

Hail to the bears, at least for now.

Bears block party

Holding inverse ETNs, particularly the ultra sort, can be hazardous to one's trading account. Overnight, the readjusting that goes on can swoop in and steal your profits. VXX declined 400,000% in the past year. OK, I'm exaggerating a bit, but it was painful for anyone who dared to buy VXX a year ago and simply hold. It's not a buy-and-hold vehicle and never was intended to be.

Today, though, was a win for bears and ETNs. Here's how the list I compiled a few months back did today:

BGZ +9.32%
DPK +10.28%
DRV +9.58%
DXD +5.24%
DUG +6.22%
EDZ +11.72%
EEV +7.97%
EFU 6.75%
EFZ +3.39%
EPV +7.47%
EUO +1.29%
FAZ +10.48%
FXP +7.96%
LHB +13.97%
QID +7.58%
SDS +6.07%
SKF +7.44%
SMN +8.33%
SRS +6.13%
TMF +3.49%
TWM +7.54$
TYP +10.89%
TZA +11.25%
VXX +9.26%
ZSL +2.73%

The time to commit to these inverses was before today, of course. Getting in now is perilous considering the news today from China, Europe, Venus, the Dark Star and beyond isn't any worse than it has been in the past months. None of it was really unexpected. If the market bounces tomorrow or Thursday (first day of the new quarter), that won't be a shocker.

But keeping a close eye on all these inverse ETNs and the movement is key. Know the pulse before entering.

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!

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.

Balance and recognition

I am fairly prepared to trade from a position of balance in this bipolar (tripolar?) market. It's the recognition that I am lacking in. I approached today with almost extreme caution, overdoing it with the hedge position. That cost me.

Now that we're practically in overbought condition again, where will the market open tomorrow? I'll pass on an overnight position in BIDU. It's a snapper of a stock in both directions. Tough to handle here at 79ish.

Positions: 43% short-term long, 57% cash.

How long until gold finally capsizes a little? That massive ship can only hold so many passengers. What a spectacle. Now that I've lost interest in hedging (a typical crowd follower), VXX, SKF, SDS and TZA will probably run in the morning.