GOOG launches into the stratosphere? That's what is commonly known as coil action.
The last time it did this, in October 2006, it went up 100 points.

Here's another possible breakout. EWJ, the Japan ETF, breaking out of a falling resistance line. You'll notice the gently rising 200-day Moving Average (blue line on the chart that I really thing you should click to enlarge and have a better view. Have I ever mentioned the fact that a chart is worth a million words?)

Boy was I wrong about TLT. What I thought was a failed Head and Shoulder turned out to be only a "complex" or "irregular" one (the right shoulder had an added bump if you will).
In any case, according to my "calculations" (very subjective of course), this should take us down to the 82 area. Got short some here at 85.6, atrociously late of course but isn't it always the case when you're caught wrong-footed?

GOOG still going. Shown above are the 30-minute and daily charts (click to enlarge).
While the first one shows a continuing uptrend, the second adds the bullish fact that a falling resistance line was decisively broken in the last few days. Bigger, better things should follow.

And now....the musings part of the blog.

I'm reading this book on commodities by Jim Rogers. Nothing to write home about but something he said about the required character traits in a trader resonated with me.

Three main things he says:

1) be absolutely candid about your own attitude toward risk

2) have the ability to admit your mistakes

3) be willing to stray from the herd.

They don't sound like much at first but when you think about it, the reason why these traits are so hard to have and/or acquire is that they run counter to peer pressure, the strongest of pressures. We're pressured since a very young age by "our peers" to:

1) show we can "do it", "take it", "handle it" whatever "it" is

2) never explain, never apologize: it's a sign of weakness

3) be a team player.

Fooled by Randomness by Nassim Taleb should be required reading for all traders and investors if only to remind oneself that most of what passes for talent, gut or genius in this business can be attributed in large part to luck and randomness.
Some flare-ups of arrogance and a very trader-like short attention span are to be reckoned with here and there in the book but overall as good an intellectual experience as one can find among the recent output on trading and the markets. Definitely a wake-up call as far as my needing to brush up on my knowledge of probability and statistics.

Now would not be a bad time to take a look at this SMH, the semiconductor ETF (daily chart shown above-click to enlarge).
It broke out of a months-long 33-36 trading band on 4/24 with a gap and on high volume. It has been consolidating since and is now a little bit above 36 (previous resistance) and "coincidentally" right above its 50-day moving average. Call me conventional but, if SMH is going to rebound and keep its bullish move going, theory says it should do so at about this level. I will probably buy some July 37.5 calls on Tuesday.

Here's what looks like a rejuvenated uptrend in GOOG (30-minute chart). It still looks good on the daily (not shown) but had not done much until 5/16. We now have a valid bullish trendline with 5 touches.
I should point out that, unlike a regular line, a trendline needs 3 points to be confirmed valid.

Today was the last day of the annual MTA education seminar in New York. Presenters were unanimously bullish. A couple thought we had just started a new leg in this bull market and therefore strongly objected to the popular notion that this bull is long in the tooth. A couple did sound a few cautionary notes though. Marc Sutin (Knight) in particular notes that consumer discretionary stocks are lagging relative to the consumer staples and that retail sales are in a clear downtrend. This might indicate that the consumer is finally tapped out and that, in that case, the economy is on borrowed time. This, however, does not necessarily mean anything for the stock market. If those heralding a reinvigorated if not brand new bull market are correct, every piece of negative economic news will only serve to feed the proverbial wall of worry and prolong the uptrend.

I just finished reading a Wall Street classic from 1960, Nicolas Darvas' How I made $2,000,000 in the Stock Market. One very interesting fact: he would make "pilot buys" of stocks that he thought behaved well. If the stock continued to behave well, then he would seriously commit (buying 3 or 4 times more stock).
For those interested in knowing more about Darvas (shown here), you can check out the original 1959 Time article that made him into a Wall Street legend. You'll notice the cheesy title ("Pas de dough") which might have passed for a subtle witticism back in those days. Or maybe not.
I'll leave you with the following statement Darvas made in 1977 which reads like a technical analyst's mission statement (emphasis is mine):

"Having decided that the investment climate is right and that the industry is right I am ready to buy the particular stock if it is rising in price on volume. My basic principle of stock-market investment is that the only valid reason for buying a stock is that it is rising in price. If the price is rising no other reason is needed, if the price is not rising no other reasons are worth considering. I am not the slightest bit interested in explanations of why it is not behaving as it was expected to. I am only concerned with realities, on what is actually happening, not in conjectures, alibis, projections, rationalizations, and excuses."