Hasta La Vista

We have decided to take a break from the blog as the end of the summer months roll in. Time to enjoy the remainder of the season and spend more time outdoors.

Thank you to all the readers and your comments.

See you soon,

ITM Staff

BTW/ our final stops are:

DRYS (close below 70)
CPTC (.88 - the price Credit Suisse paid)
LOOP (close below 50 day MA)
OTTR (43)

LOOPNET

Loopnet (LOOP) reported decent earnings last night and provided upside guidance going forward. This stock is in an enormous downtrend and looks horrible. Except...30% of the float is short and the short ratio is 21 days. Let's see if we can get a SQUEEZE going here today.

fyi..we are out of FSLR (hit our $300 price target, especially after hours last night) and we are excited about our recent pickup of Dryships (DRYS).

First Solar Earnings

Sun....Rise?

First Solar (FSLR) is set to release earnings after the close tomorrow. The chart is setting up very nicely for a run up to $300. The risk is considerable being that the stock will most likely gap up/down on Thursday morning. If you wanted to make a safer bet you could pick any of the previous high flying solars: CSIQ, SOLF, SPWR, SOL and don't forget the new solar IPO that had a horrible coming out party this week....SOLR

We wanted to highlight OTTR again as an incredible stock in a tough market.

No reason too get excited....

One of the biggest mistakes a trader can make is to keep trading in order to not miss the "bounce". This market has continually gone down with periodic upside spikes. Unless you are a very astute trader, this market will wear you down as well as the funds in your trading account. The only index that looks somewhat appealing is the Russell 2000 and the only reason for the latest spike (from what we can figure) is the huge move in financials (many of them now fall into the small cap category). Unless you think financials are coming back anytime soon..there are no safe havens.




We do not want to leave things on such a sour note! This chart on Dryships (DRYS) that we mentioned last week looks like a great risk/reward setup. You can trade this stock with a stop just below 70 (3 points downside) with a possible upside of 30 points (price target 100). Let's see what happens as we could get stopped out quickly in this volatile trading environment.

Overbought Condition

We have never seen an overbought (stochastic) condition like this:

Oversold (Stochastic - Bullish)
24 Jul 8:25PM
Dow
4 Stocks
Nasdaq
19 Stocks

Overbought (Stochastic - Bearish)
24 Jul 8:26PM
Dow
340 Stocks
Nasdaq
180 Stocks

Time to sell POT

Potash (POT) blew away earnings and is getting crushed. The commodity related issues continue their downfall as investors keep buying the down and out sectors looking for value.

DRYSHIPS

Dryships (DRYS) is making a run at breaking it's downtrend. Will it make it???

(Hint: it will need volume!)

Shine on you crazy DIA (MOND)

The indexes are hanging in there this earnings season and it is too early to make a call either way. The most beaten down sectors (financial, airlines, home builders etc) are surging higher but that still remains to be seen if they can continue this furious pace (we doubt it). The DIAMONDS are still the shining star...

The S&P closed above the 21 day MA today

The NASDAQ continues to be a laggard especially with the sour performance from Apple (AAPL) today.

As we mentioned awhile ago..the small caps continue to run!

ITM is likes POT here. Actually, Potash (POT) is scheduled to release earniings this Thursday and the chart is setting up for a bounce..

For those of you less risky folks....try Intrepid Potash (IPI). This is the second largest Potash (a component of fertilizer) maker and is a recent newbie to the stock market. The chart looks just as good and is quite a bit cheaper.

Not a bullish sign

Tonights results as far as overbought and oversold. The message is very clear...Stay put for now.

Oversold (Stochastic - Bullish)
21 Jul
NYSE:
13 Stocks
NASDAQ:
51 Stocks

Overbought (Stochastic - Bearish)
21 Jul
NYSE:
116 Stocks
NASDAQ:
147 Stocks

DIA (MONDS) are forever...

The Dow Was the only index that was able to close above (barely) the 21 day Moving Average yesterday. We are not throwing a party just yet as we need to watch for follow through especially from the S&P and NASDAQ. The Ags are selling off as the wind energy stocks continue to move up. ITM is still very cautious here.

TRADE THE 21

What does that mean???

What we are talking about is using the 21-day moving average (the average closing price of the last 21 days). Often times we use the moving averages as support and resistance to give us buy and sell points. All of the indexes are getting very close to moving above the 21 day MA (Shown as the blue line) but in this bear market we can very well see a quick reversal and continue downwards.

Chart Updates

We wanted to review two of the charts we have in our portfolio.

DUG is doing very well as Crude Oil sells off...

OTTR our favorite Wind Energy stock continues to move higher. We have a short term price target of 51

And the answer is..

They all have HUGE short positions. When this market turns back up the shorts will scramble to lock in their profits sending these stocks up. Obviously for a stock to get a short ratio over 30 (amount of shares short divided by the average volume) there needs to be something funamentally wrong with the company and/or their product or service. However, if these stocks do rally when things get better..the move will be exponentially greater.

What do these stocks have in common??

SRDX
42.02
+0.15
+0.36%
SURMODICS INC

NILE
36.94
+1.10
+3.07%
BLUE NILE, INC.

ARTC
37.65
+0.45
+1.21%
ARTHROCARE CP

PRAA
38.04
+0.26
+0.69%
PORTFOLIO RECOVERY

MCHX
12.75
+0.40
+3.24%

The answer after the close....

VIX comes through again

Today's intraday high was 30.81 - we are now trading just over 28 as the market has rallied dramatically. So far so good but don't count your chickens.....

VIX = 30.43

GOOD DAY??

This morning the futures are looking sharply lower, especially the financials. We believe the market is due for a decent size rally. why would we say that? take a look at the chart below. the VIX or the volatilty index, better known as the "FEAR INDEX" could spike up big today. When the VIX goes above 30, the market has shown to put in a temporary bottom as investors capitulate (sell their stocks in a mad rush as they scream, jump, and drool excessively). Will it work again? It has been a VERY good indicator in the past and we will be watching it closely today at ITM.

If a tree falls in the forest...

and no one is around to hear it, does it make a sound?



If the markets continue to fall, does anyone notice a sector starting to rebound??



The Russell 2000 (IWM) is showing signs of a "possible" bottoming pattern. This index represents small caps, or those stocks with a market capitalization (shares X price) of under $1 Billion.

We have highlighted two companies in this index that look appealing:



The first is Composite Technology Corp (CPTC). The company has a division called "Dewind" that manufactures wind energy turbines (these are the same ones being used in Sweetwater, TX as part of T. Boone Picken's windfarm). Since the company is listed on the bulletin boards they have not had enough funds to complete the orders they recieved. Along comes Credit Suisse bank who just made an additional (owned 4% of the company) investment of $40 Million.








Next is Quantum Fuel Systems technologies worldwide (QTWW). Simply put, they develop the technologies that make hybrid cars run. They seem to be in the right place at the right time as they just reported quarterly revenue groth of 211%

Don't fear the reaper

Constant Contact

Constant Contact (CTCT) is a very thinly traded stock with an enormous short position. With just about 150k shares traded on average it will take over 45 days for the shorts to buyback their shares if they want to get out of the position. If CTCT can close above 20 today it looks like the next stop is around 26. Be careful because the low volume can go against you if the breakout should fail.

Sign O' the Times

Just thought we would throw out an article that reflects the problems of our society in modern day times. Wiffle Ball could be considered one of the greatest childhood (and adult) games of all time. In an age where most youngsters prefer to stay indoors and their parents are to afraid to let them outdoors, it is wonderful to see "Whiff" games still being played. This article represents the issues with people that forget what it means to enjoy good old fashioned fun.


Build a Wiffle Ball Field and Lawyers Will Come

Rob Bennett for The New York Times
Some town-owned land in Greenwich, Conn., has been turned into a Wiffle ball field by teenagers. Neighbors are complaining. Jeff Currivan, 17, shown at bat, said, “They think we’re a cult.”

By PETER APPLEBOME

GREENWICH, Conn.
Vincent Provenzano, 16 years old, experienced his Kevin Costner moment one Sunday afternoon in May after a thrilling day of Wiffle ball in a friend’s backyard. He came home, gazed at a field of weeds, brush and poison ivy in an empty lot off Riverside Lane, turned to his friend Justin Currytto, 17, and proclaimed: “If we build it, they will come.”
After three weeks of clearing brush and poison ivy, scrounging up plywood and green paint, digging holes and pouring concrete, Vincent, Justin and about a dozen friends did manage to build it — a tree-shaded Wiffle ball version of Fenway Park complete with a 12-foot-tall green monster in center field, American flag by the left-field foul pole and colorful signs for Taco Bell Frutista Freezes.
But, alas, they had no idea just who would come — youthful Wiffle ball players, yes, but also angry neighbors and their lawyer, the police, the town nuisance officer and tree warden and other officials in all shapes and sizes. It turns out that one kid’s field of dreams is an adult’s dangerous nuisance, liability nightmare, inappropriate usurpation of green space, unpermitted special use or drag on property values, and their Wiffle-ball Fenway has become the talk of Greenwich and a suburban Rorschach test about youthful summers past and present.
“People can remember how much fun it was to go out in the woods in the summer, build a fort, do something fun and creative, so there’s something pretty cool in what these kids did, especially at a time kids grow up in such an incredibly structured and stressful environment,” said Lin Lavery, one of three Greenwich selectmen, who inherited Wifflegate while the first selectman, Greenwich’s version of mayor, is on vacation.
“But we have a situation that’s escalated,” Ms. Lavery said. “Neighbors are upset that it’s too close to their property; building has been done on town property; there are issues of traffic and drainage. We’re hoping to come up with a compromise, but there are a lot of issues to address.”
There’s plenty of local history in Wiffle ball (it was invented up the road in Fairfield) and Greenwich land-use disputes (where to start?), but Vincent and Justin say they just wanted a place to play Wiffle ball. They got materials from a friend’s basement plus two big pieces of plywood being thrown away by a Shell station on East Putnam Avenue. They fished pallets out of Dumpsters and spent perhaps $200, mostly on green paint.
But even before they were finished, things began to get complicated. They were told the neighbors had complained, the field was on town-owned land, they needed a permit to put up their field and it would probably have to come down.
This being Greenwich, they decided not to go quietly. They and/or parents alerted the local newspaper and politicians up to Lt. Gov. Michael Fedele of nearby Stamford. Soon they had everyone in town talking about it, with most of them seemingly put off by the notion that even a Wiffle ball field needs to enlist the armies of adult supervision and legalistic oversight.
“BACK before we lost our collective minds and began shrieking with horror at the thought of kids having fun on their own (as in not part of an official league or otherwise organized activity), they used to do things like find a vacant field, turn it into a makeshift diamond and spend glorious hours in the summer sun,” the local newspaper, Greenwich Time, wrote in an editorial in support of the youths on Wednesday.
The regular players, mostly high school boys but including Tara Currivan, 15 (who swings a mean bat and brings lemonade to the field), and Scott Atkinson, 13, seem a little befuddled by the whole thing. “They think we’re a cult,” said Jeff Currivan, 17. “People think we should be home playing ‘Grand Theft Auto.’ ”
And they seem to get the fact that many adults are taken with the idea of kids’ doing something that’s not structured, not organized and not oriented toward improving your SAT scores.
“It’s just old-fashioned fun,” said Vincent Provenzano. “We did it on our own. Maybe people think that’s unusual.”
We’d all like our own Field of Dreams, but it’s worth remembering that Mr. Costner’s was in an Iowa cornfield. And, with all due nostalgia for simpler childhoods in simpler times, it’s possible Greenwich’s Wiffle version — on a lot valued at $1.25 million, according to the Greenwich newspaper — was too good to be true.
The neighbors, one an ultra-endurance athlete who does charity work around the globe, another building a house to accommodate her brother, who uses a wheelchair, turn out to be not that much different from most suburbanites seeing their backyard go from their own to a quasi park full of teenagers from near and far. They say that the land floods and that the area was designated by the town as a drainage area, a function largely undone when the youths stripped away all the greenery and undergrowth. The complaining neighbors want the field closed immediately.
The field had 40 people last weekend for a Wiffle tournament, which is something no one bargained on when they bought their houses.
“I’m all for Wiffle ball and apple pie and baseball and the American flag, but there are plenty of fields in town they can use instead of building something in people’s backyard,” said Liz Pate, who is building a new house behind what’s now home plate. “If I come home at 6 at night after working all day, I want peace and quiet. I can’t have that. I have dozens of people behind my house playing Wiffle ball. If their parents think this is so great, let them play at their house.”
The liability panic is adult nuttiness except when it’s not. It’s a fairly raw issue in Greenwich, where, for instance, a doctor was awarded $6.3 million a few years back when he broke his leg in two places while sledding with his 4-year-old son.
All kids deserve a Huck Finn summer. We perhaps have lost our collective minds about our overscheduled, overstressed young. But, in the end, maybe there was a reason that Kevin Costner built that Field of Dreams in Iowa and not in Greenwich.
E-mail: peappl@nytimes.com

This market....

Gives us a headache. This Friday Apple Inc (AAPL) is set to release the next generation iPhone. Take your guess as to the reaction, but there is support at 170 and resistance at 190 (as volume dissapates). We are very close to finding the next "directional trend" for the stock.



We are off to get some Tylenol....

Let the games (almost) begin...

Well folks, it's time to play the Beijing 8.8.08 summer olympics. What better way than an ETF that has been hammered and trading close to a low. We here at ITM feel the energy of the olympics starting to brew (Tsingtao). Yes we are usually early but what are you going to do.


Good luck and lets go for the gold!!

OTTR revisited

T. Boone Pickens is a man I respect and has been very good at forcasting oil prices. He has a new website (http://www.pickensplan.com/ ) that goes into detail about a new "plan" to ween the U.S. of oil. I am not promoting his plan but he makes a great case for wind power. Our only wind stock in our portfolio currently is Otter Tail (OTTR) as it continues to look good.

Cheap(er) way to play oil

Finally, CRUDE OIL is taking a breather. Will it last? who knows. What we do know is a decent way to play the possible decline.

You will see in the first chart highlighted below, DUG is the Ultra Long Oil ETF.

Ultra ETF'S have a 2:1 ratio of the underlying index or sector (issued by proshares.com).




The second chart shows DUG, the ultra short. By going long DUG you will save yourself about 300% instead of shorting (or buying puts) on DIG at 110ish.




Sounds confusing but the DIG-DUG trade looks prime for profits.

Wait and watch

After reviewing hundreds of charts, there still is no reason to dip your toes in this market. The Agriculture stocks look interesting here (our two favorites are highlighted below) for the riskier investors but we are going to remain on the sidelines until we see some confirmation of support.

Notes from a blogger

We wanted to show you what other bloggers have been writing about lately. Joshua Hayes ( http://www.bigwavetrading.net/) is a very good trader and charges a fee for his stock picks. I have read his blog for awhile and thought our readers would be interested in his last post:

Confused
July 3, 2008

I am not sure how anyone can stay active in this market. What drives people on CNBC to talk about this market like it is the most exciting thing since the roller coaster. This market is extremely depressing and I have to tell the God’s honest truth about this market: There has NEVER been a harder market for me to trade in my life. I am selling a ton of positions today and I just basically want everyone to know that I am extremely depressed as for 12 years of my investing life I have KILLED the market. Now I am only beating it in my personal accounts. THIS IS THE HARDEST MARKET I HAVE BEEN IN except….the market right before 9/11 which is exactly how this one is acting (but more stocks were trending lower and not setting up in false breakouts like now) and the early 2002 market which STILL HAD PLENTY OF SHORTS TO MAKE a good amount of money on.

The bottom line is that this is how I make my living. There is no other way for me to make a living. And I tell you what folks, I feel like a homeless bum this year. IN 1999 and 2003 I returned over 300%. Do you think that I ever would have thought I would be waiting this long for another 1999 or 2003 year????? Do you think I would have actually have thought that we would not have drilled the OCS and ANWAR by now????? What country do I live in? Is this the same country I fell in love with? Something tells me it isn’t. How sad and how hurtful. This market sucks. If I were you, I would raise cash and wait for more charts to setup like my PAST PERFECT BIG WINNERS. I have a sinking feeling we are a long way aways from seeing them again, However, I still want to be ready. Aloha and I hope your having a better life than me right now. “The dog days of summer”…..are so TRUE!!!

Goodbye darling

DAR broke down on VERY light volume. The retail investors are starting to run scared...

The Agriculture ETF is getting crushed



The Solar ETF is getting crushed



The Wind ETF is getting crushed




Let's enjoy the 4th and wait till next week to see what happens..

Getting close to 100% cash

We sold off WGOV and are close to being all cash (minus our QQQQ puts). We have tried to identify support for the market but have come up empty. Usually the best time to buy is when things look the worst. We will wait until things look better.

Nothing is safe

WGOV is very close to breaking down. Depending on what your risk level is, you may want to sell and add to your cash position. The only positive is low volume.

After the fire....

Just when we thought is was safe to go on vacation... all hell breaks loose. The market looks as ugly as we have feared and we can see no signs of support in the near future. As we saw today, the market is prone to huge bounces as the shorts periodically lock in their profits. We sold two positions that technically broke.

BWEN will have to wait for another day as a bulletin board stock is no place to be right now.



We really like HQS and the Aquaculture story but we need to send it down the river for now...



DAR is still a Darling here



BCPC did what any stock would do with a short ratio of 23 that's about to break down. It surged today and we will keep it in the portfolio



OTTR..our favorite stock hanging in their with the Big Dogs



WGOV held it's gap and we are holding on too!




Our thesis on alternative energy has not changed and if the market should enter into a multi-year bear...these stocks (and others to follow) should still outperform nicely.