Read for the week of Dec 19-23

Last week the 200d MA proved to be too much resistance and we fell back into a melee of moving averages. The daily chart of the SPY is forming a triangle consolidation, which is very positive in my opinion. Price is consolidating, the daily ATR is decreasing, and volatility has also been decreasing. It seems to me that a breakout or breakdown of this triangle consolidation could lead to a possible trending environment! I don't want to get excited too early, so just watch that triangle! A great r/r trade can be taken at either of those trendlines. I'm looking ~120 this week to possibly get long for a test of the upper trendline.

On the 15 min chart, wait for a break of this descending channel or wedge for a move to the upside. Alternatively, one can play the trendline bounces. Notice that we're forming a mini-bear flag, so a breakdown of this (level ~121.40) would signal more downside for now.

Also, check out the sentiment chart on Laser Trader's blog; the similarity with the SPY chart is uncanny!
http://lasertrader.wordpress.com/2011/12/18/are-we-ready-to-return-to-the-highs-justin-mamis-sentiment-cycle-may-think-so/

cI found a lot of pretty good setups, which has been a warning sign for me lately, so just be careful out there. A lot of breakouts are failing, so I have been trying to buy in anticipation of a b/o, and if the b/o fails, then I get out around breakeven... Here's a few stocks I'm watching this week:

Long: BANR, FSII, KFN, SKH, LDK, RAS, MENT, SUNH, SNTA, OCZ, CTCT, AUDC, TRGT, GTIV, CX, AVID.

Short: ECPG, GMCR, CVGI, STI

Bounce: I'll be watching gold and gold miners for a possible relief bounce this week... check out NUGT a 3x ETF for Gold miners. Also watching these for potential bounces: MELA, ITMN, LRN, SGI, LPS.

Read for the week of Dec 12-16

It's pretty simple this week: we're still stuck in the same box that I had drawn last week... That is, we're stuck there until we breakout of it, one way or another! I'm thinking we're likely to breakout to the upside, because it seems like all the moving averages are lining up underneath price and starting to turn up. The only thing stopping us it the 200d, so we really have to get above the 200d and hold it.

There is a move coming in GLD and SLV, so keep an eye on those two this week. I feel like it will be a significant move, and it will pay to be on the right side of the break for a swing... I'll be watching those closely: my intuition is telling me there will be a break down. The only thing not supporting this hypothesis, is that the indices look poised to break out, and recently the correlation of the market vs gold has been positive. This is the opposite of what happened in Aug, where the correlation was negative (ie when the market went lower, gold went up). So if the correlation stays positive, then gold and the market should breakout in the same direction... We'll have to see what happens.

Other than that, I'm seeing a lot of great setups, and I went long a bunch of stuff on friday, in small sizes... I'm long some ZINC, GTIV, COOL, TQNT, GMXR, SANM, I think, and still short INHX, MBI, NLST.  Here's a few charts that look good on the long side: AKS, GTIV, STP, TQNT, MERC, BZH, BZ, OCZ, CTCT, HPQ, UCTT, HCBK, CVGI, NTSP

And here's a few that look good on the short side: CF, TIF, WYNN, ZAGG

Read for the week of Dec 5-9

We had quite a nice bounce last week after being oversold and finding support near 116 on the SPY. The 200d MA provided resistance on firday, and I'm expecting some consolidation after this big move. We have several moving averages underneath which are likely to provide support for now. The unfortunate thing about the move this week was that most of it happened overnight and it was not easy to get long after big >1% gaps up! I think a lot of traders are in this situation, and because of this, not many people have been involved in this bounce and people might end up chasing the idea of a santa claus rally...  which means that we might have a nice end of year, but it's still no reason to go all in! Overall, the econimic picture remains bleak in my opinion, especially in Europ, and despite the central intervention this week, my longer term outlook is pretty negative.

So, all this to say that I'm going to try to position myself long~ish for the rest of december, but it will be in small size and short time frame! I'm also looking to take advantage of the some of the parabolic runs that are happening in some of the junk small cap stocks... I remember this happened last december as well, and you can make decent gains if you can find shares to short! I sold out of the few longs that I had this week, and right now, I'm short: MBI, NLST, INHX.

Here's a few stocks I'm watching this week:

long: PCX, ARAY, TRGL, GTIV, BPZ, ECA, JNS, LEAP, SRZ, XCO, AFFY

short: MAKO (on a break of 28), QCOR (if it breaks below the 20d MA), ZAGG (on a break of ~10.6), OSG (on a break of 9.79), ARNA (possible parabolic play) 

The week ahead

No matter how you look at it, charts look awful this week. News coming from Europe and around the world is bad, bond yields are soaring, and the markets are tanking... We've filled that gap at ~116 on the SPY, that I had posted last week, and we are quite oversold on many measures here, so I wouldn't be surprised if we get some kind of bounce pretty soon. However, I'm getting the feeling more and more that this might just be the tip of the iceberg in terms of correction... see my weekly chart below:

That is just one possibility... but it's a very possible scenario... Needless to say, I'll be taking a much more cautious stance going forward, and instead of 'counting' on a Christmas rally, I might be looking for some short exposure into the end of the year, especially if we can bounce back up to the area around the 50d MA on the daily chart... And of course, this could all change if there are any futher bailouts or intervention in Europe!

For the week of November 19-23

There isn't much to say since my last post: we've broken some important support levels and it looks like we're headed lower. We're forming a bear flag on the hourly SPY chart, and I would expect 120 to be tested. The measured move from the breakdown of the triangle is ~115-116 on the SPY, and there's also a gap to fill at around those levels. I'm not sure if we'll get there, but it is possible. The market has been fooling everyone lately, so if it looks awful, it's possible that we rally from here... Last week was looking great, with tons of beautiful setups, and we broke down, so stay on your toes!

A few charts look good, but I'm seeing a lot of broken charts, so be careful this week. It is also going to be a low volume week, with markets closed on thursday and 1/2 day friday. Here's a few of the better looking charts: VHC, KWK, SONS, AFFY, MTG, IMAX, CISG, GTIV, LNG. I have a small position in VHC and LNG already.

Update on the box

The selling that started yesterday continued today, with a significant mid-day flush! We've now broken the triangle and the box (the box could be debated here, it's borderline), and we're below the 10, 20 and 100d MAs. Things are not looking good for the bulls, and with such a fast move, we could be headed to the 50d or the 120 level on the SPY in no time at all! If we get a gap down tomorrow (3-day selling), I will look to buy some 3x ETFs for a bounce at least. Keep in mind the selling might not be over, as we still have a nice gap to fill at around 117. And look at the increased selling volume in the last few days.

Also, and this is interesting to note, the QQQs broke down significantly as well today, but the IWM and DIA are still within their consolidation patterns. Importantly, the EUR/USD is bear flagging and looks like death and so we could see more pressure coming from the USD$.

Here's one of my favorite charts that is holding up through all this mess: LNG. The company sounds like it's doing well (but I know nothing about fundamental analysis, so don't take my word for it), and the chart looks great. It is in a bull flag on the daily, and on a weekly timeframe, it is setting up to breakout of that 12$ resistance! With a big volume gap above, it has free air up to 25$. Although it's not a good time to be buying anything long-term right now, if I had to buy something, this might be a good candidate... I think building a long-term position in the 10s, with a stop just at 9.90 would be a ecent strategy here, in my opinion.

Same box as last week

So we're still in that box that I drew last week on the SPY... I'm expecting more consolidation in this range, and I suspect we will eventually break out of this range, probably in time for a christmas rally. I'd like to see us drop down again one more time to the 123-124 area in the SPY, bounce off support on the 100d MA again, and then push higher. If we do, I'll be looking to go long some 3x ETFs for a rally into the holiday season (actually, I'll be looking to short the inverse 3x ETFs, to take advantage of the decay in those).

Also keep an eye on the USD or the EUR/USD. The EUR/USD broke down from a bear flag on the daily chart, and on friday it retested the bear flag support line (now resistance). If this resistance holds, we could see some weakness in equities next week.

There are a lot of stocks setting up nicely on the daily charts. It's still not time to swing trade full size positions, but there might be some decent opportunities nonetheless. Here's a few that I'm watching:
ALR, AMKR, CIEN, GNW, HLIT, JDSU, NTCT, S, VHC, VMW.

Week of November 7-11

It seems to me like the market could be putting in a new range for the next few days... Also notice a little triangle consolidation over the last 10 days or so.... this is positive in my opinion... And diven that the pullback last week was quite shallow, I'm expecting the market go higher from here. As long as we hold the lows of the box in the chart below, at around 121, then I think we're headed higher. I've noticed a lot more good looking setups the last couple of days and this weekend, so I've started adding some swing plays in my account. Right now I'm long some MU, MTG, TRGL and SHZ and short some TVIX.

Update and targets

After a big gap down today, we closed the second gap that I mentioned yesterday. I'm now looking for the 120 level on SPY, near the 50d MA on the daily... Below is the 30min chart. If we get gap down again tomorrow, below today's lod, I'll look to buy in the area highlighted by the circle. If we open in today's range, I probably won't do much unless we breakout of that range, one way or another. If we gap above the range, I'll look for support near the 123 area to get long.

I covered my FAS short from 2 days ago, for some nice gains today, also took a day trade long in some TNA and short TVIX right at the open. Otherwise, my swings aren't doing much, RENN and MU are back to breakeven for me (only 1/2 size), I added some GNW and took a small loss in YOKU today.

Starting up the blog again

After some time off from blogging, I'm coming back to it and will try to write a weekly post with some thoughts.... for now, here's a chart of the market. I'm expecting a little correction, at least down to the 38% Fib of this recent move up, and this also coincides with significant volume at price. On the 30-min chart, you can see the unfilled gaps... I'm thinking we might close 2 of those gaps, but we'll have to see...

Right now, I'm short FAS, long RENN (took 1/2 off already), long TRGL, long MU (took 1/2 off already). There are quite a few nice looking charts out there, but I'd rather wait for at least another pullback day, ideally a total of 3 pullback days before looking to add any long swings...

Chatroom

Hey, I'm testing a new free chatroom... click on the chatroom link on the right if you would like to check it out!

Week of May 2nd

I haven't written in a while, so I'll start with a review of the market. I was expecting a little cup and handle pattern in the SPY, and was getting pretty long about 2 weeks ago. We put in more of an inverted head and shoulder pattern, rather than a cup and handle, but the psychology of the consolidation and the expected move is basically the same.

For this week, I'm expecting a slight pullback or a sideways consolidation to digest the recent fast run that we had from ~129 to ~137 in the SPY. After that, I'm expecting the market to continue higher, and my target to take more profits off the table is ~139-140. The NYMO was pretty overbought coming into today, so it should come as no surprise that we had a small pullback. The Osama Bin Laden news provided a nice gap this morning, and I sold partial positions into this gap.

I have several long positions, and I added back at the end of the day some of the shares that I sold this morning. All in all, I'm long some FNSR, FTK, LNG, WNR, WPRT, and added PANL and OVTI as well today. I'm also short some TZA from a few weeks ago (which is the 3x short ETF for the IWM): basically, I am long the Russell index...

One of the swings I added today was PANL. Although it broke out of the triangle today and couldn't hold the breakout, it is still consolidating nicely inside a flag pattern on the daily. Also note the decreasing volume inside this consolidation, and the strong volume on the previous up days.

Watchlist for the week of April 11th

This is going to be a short post, but I'm watching these stocks this week:
Short: HOG, SGMO, FTNT, APH, CCL
Long: CHK, CNQ, OCR, AHD, NG, MELA, UCBI

I'm expecting a small pullback in the market this week, maybe for a couple of days, as highlighted in my previous post, but I won't be trading aggressively to the short side. If I short anything, it will be for 1-2 days max... I will also be paying attention to earnings plays in the coming weeks and months, while companies report Q1 earnings and there will be lots of opportunities. Good luck this week!

Market read for the week of April 11th

I was hoping for a little correction, and if you read my last post, you know that I've been cautious and was not initiating any swing positions. The market didn't really sell off all that much today (Friday April 8th), but enough to test the 10day MA, which is good. I would love another selloff to test the 132 level and would be buying with both hands if we get to the 50d MA again at ~131.  In fact, a little cup and handle formation on the SPY here, before a move higher would be perfect in my opinion!

(NB: the MAs on this chart are not exactly right, so please disregard... I can't figure out how to put a daily 10d MA on the 30 min chart without having discrepancies vs the daily chart. If anyone knows, please let drop me a comment!)

Here's a daily chart that shows the possible cup and handle forming. As I said above, I'd be a buyer in the 131 area, but for now, I will just focus on trading less. It is also possible that today WAS the pullback, and if that's the case, then I will be buying on a breakout above this resistance level.

Even though I said I wouldn't trade much this week, I still did. This was a bad idea, and I knew it from the start. I should have just sat on my hands, but instead I got chopped up in the market. Made a few bucks here, lost a few bucks here, and overall I lost a couple hundred bucks, mostly commissions, and instead I should have been sleeping in! The good thing is that I did only half my usual number of trades, so I'm starting to get better at identifying periods where I need to be trading less.

I'll try to post a watchlist on sunday for next week! Have a good week-end!

Markets and watchlist for the week of April 4th

I woke up late this morning, so I didn't really trade much. I did only 3 trades, with 1/2 size only, which is probably a good thing... I don't like being unprepared for the morning, and so for me, it's best to just sit and watch when that happens! Here's one trade I took today, which worked out ok:

I had been day-trading VHC last week as well, because I had a feeling there would be a lot of short sellers trapped in this name, and any break of a hod would cause some to cover. A similar story is happening in  TZOO, where a lot of shorts are being caught and the stock is rising on short squeezes. It's always a good idea to keep some of these names on your list, to play both on the long and short side! I think VHC and TZOO will eventually make good short candidates, but not just yet!

In other news, the markets have been consolidating lately, which is healthy after the big run up we've had in the last 2 weeks. I'm being fairly cautious here (not initiating any swings long or short) because of this wedge formation. Keep an eye on this to see which way we break... Or we may just move sideways for a while... But I wouldn't be surprised to see a small correction here. In any case, I'm being patient.

In terms of watchlist, I'm looking a only a few things right now: mostly in the oil and gas names! LNG, XTEX, AHD, HNR, CPE, CXO. I'll also be watching LULU on a break of 91.

Good luck this week!

Watchlist for March 29th 2011

The markets are consolidating here and it seems like we may be setting up a range from ~1,260 to 1,340 on the S&P... I wouldn't be surprised if we touch the top of the range, near 1,330 - 1,340 and head back down... but we'll see!

Either way, I'm already long some LNG, NVDA and WNR. And here's what I'm watching for tomorrow: ICO, WTI, TFSL, TRC, GWW, EXEL, MOTR, BEXP, MRO, ARAY, SRZ, KLAC. You can see some of the charts below...

I have buy stops on several of these, and if the market rips higher, I'll be entering several positions!

Consolidation Period

I just wanted to do a small post on my take of the market right now. We're in a consolidation period, and have been in it for about 2 weeks. If you look at the SPY 30-min chart below, you'll see we've been holding this triangle formation for the duration of the consolidation. I expect another test of the lower trendline, and then a breakout to the upside, but anything is possible. Just keep in mind that we could also break down. However, with the US government pumping money into the market, I'm leaning towards the bullish bias.

Also, check out this chart posted by @donaldT44 on twitter. It shows the ES chart from back in November, when the market broke out of the triangle consolidation:

So for the time being, I'm playing it safe, have reduced the number of trades I enter every day and have also reduced my sizes. It's not a great swing trading environment, so just be cautious. As of today, I'm short some FAZ, VXX and long 1/3 size in SRZ, which is flagging on the daily:

Best month ever!

I haven't had much time to blog lately, mostly because I've been busy at work, and have also been shoping for another investment property. So the latter it now out of the way, I have investment property #4, and hopefully it will take care of itself and give me a nice little return at the same time!

I just wanted to post a little update on my trading recently: February started off as a great month, with gains in the indices practically every day! In the third week of Feb, I started adding a few short positions, mostly in some parabolic stocks, and when the big drop in the market happened on Feb 22nd, I was well positioned, so I actually made money on that day! Some of my shorts were TA, KV/A, SHZ and TTHI. I also got short the FAZ yesterday, Feb 24th, after 3 down days in a row in the market. I knew we were going to bounce, at least a little. Another trade that I have been building into, is a short in the VXX. The decay on this ETF is spectacular, to the tune of 40-70% per year, so if I hold it short forever, I can make 40-70% per year! Anyway, I added nearly 40% of my portfolio to this short position, and I was underwater for a while, but it is now starting to pay off. My first target is $27, and here's the daily chart:

I also added a position in AAPL yesterday, as it tested the 50day MA for the third time. I liked the setup since my stop would have been very close, and it would have been easy to know I was wrong. A solid breakdown under the 50d and I was out. I got into this position via the sale of 1 March 340 Put. I liked this better than a call purchase because the volatility premium in the option market was much higher than normal.

I still have a few positions open, but here are my returns for the year so far:

January	6.27%
February	15.01%

Playing earnings gaps in after-hours and pre-market Part 3

I just wanted to follow-up on my previous 2 posts, because a bunch of people have asked me questions about this little strategy! Well, it's not really a strategy per se, but more like a shot in the dark and see if you hit your traget! It doesn't always work out, so here's an example where I didn't get filled at my desired price. But that's ok, sometimes you get lucky, sometimes you don't! I just don't want to get filled at a higher price where the risk/reward was not as good, and then you end up chasing the stock. The important thing is to that you identify your price targets accurately, where the risk/reward ratio is heavily on your side!

So last night I watched JDSU trade in AH, and notice a nice little area of support around 20 to 20.25, so I set an order to buy some shares at ~20.11. I knew that 21.5 would be an area of resistance, so I didn't want to buy higher than 20.5, otherwise my r/r would not have been good. I never got filled unfortunately, but that's ok, because I still played JDSU after the open!

On the other hand, I did get lucky with YRCW in AH though. I had put an order to buy shares at 4.04, which was 1 penny above the low of day from 2 days ago. So I got filled this morning ~8am, and the stock rallied straight up afterwards! I scaled out along the way up, where the second arrow is, but I'm still holding some shares as I write this post.

Playing earnings gaps in after-hours and pre-market Part 2

Ok, so someone in Charts Gone Wild chatroom pointed me to the web-based platform from Think or Swim for AH and pre-market charts... It turns out I already had setup a paper trading account with them, so now I can get real-time charts in AH and pre-market, even when I'm at work (and for free, which is even better)! So anyway, here's the BIDU AH chart that I meant to post a couple of days ago, with my entries and exits. It's important to note that you won't always get filled at the price you set, so don't be disappointed if you didn't get filled. There's no point in chasing a stock in AH, just move on and find another earnings trade!

So for tonight, I set an order to buy JSDU in AH at 20.11, where I saw some support. And I also set an order to short LVS at 47.97, where there was some resistance. I may not get filled, but if I do, I will be long/short these stocks at a price that gives me a good R/R.

Otherwise, I took a few good trades in CELL, GMCR, TA and SGI. Here's a quick view of the trade that I took this morning in SGI. The stock had gapped up significantly on good earning:

And I had one terrible loss in BORN today, as I got filled ~$0.60 lower than my stop:

Playing earnings gaps in after-hours and pre-market Part 1

It's been a while since my last post, so I thought I'd go over a new strategy that I have been using successfully lately. It involves playing stocks that report earning after the market close. This is a little more risky than trading during market hours, because the bid/ask spread is usually quite wide, and you can have some really bad fills if you're not careful. So you should always use limit orders in AH!

Anyway, so the strategy is not very complicated, but basically I just watch the bids after a company reports earnings, and look for key support levels, where the stock may trade only a few hundred shares, but jump right back up. The stock will often test this significant level twice during the after-hours period (4pm-8pm). So if you're fast, you can grab it there the second time around. If you're like me and you work during the day, then a good strategy is to place a GTC order to get filled around that support level. Then you go to bed, and surprisingly the next morning you find out you've been filled at a great price, and the stock is already well above your cost at the open!

Here's an example for BIDU that I traded today, from information that I got yesterday in AH. I watch the quotes go by on Nasdaq.com, and have to refresh every few minutes or so, but if you can get AH charts, that would be much better! Once I figured out that BIDU had a good support level ~113.8 to ~114.6 and offers were taken up there very quickly, I placed a GTC order to buy at 114.10. I got filled at 1:00am according to my broker, while I slept, and when I got to my computer this morning, shares of BIDU were already at 117.50.

I'll try to post a chart of the AH price action when I get home tonight! But in the meantime, here's what I'm talking about when I say I follow the quotes on Nasdaq.com:



I used the same strategy to play AMZN and SNDK last week. So I'm adding this one to my trading plan!

Watchlist for the week of January 18th, 2011

It's nice to have a forced day of holiday once in a while! And although today is not a holiday in Canada, it was nice to sleep in an extra couple of hours before going to work!

Anyway, the markets seem unstopable these days, and I think we continue higher for at least another week or more. As I am writing this, Nasdaq futures are down most likely because of Steve Jobs' medical leave, but I suspect tomorrow will be a good buying opportunity in AAPL. I'm sure a lot of fund managers would be more than happy to get into AAPL at a discount. But be careful, as AAPL reports earnings tomorrow after market close.  Anyway, here are a few stocks I'm watching for next week:

KWK is forming an ascending trinagle on a long-term weekly chart, and it looks great on the daily as well, inside a flag pattern. Notice the decreasing volume inside the flag on the weekly chart, with increasing volume in the last 2 weeks, which could be an early sign of a move to come:

ASTM is another favorite for this week: it's forming a beautiful flag, and when ASTM breaks out, this thing can really get going. I'm long already 1/2 size and I'll add another 1/2 size on the actual breakout of 3.28, and my target is around 4.40, with as stop below the flag low ~2.90.

Other than KWK and ASTM, I'm also watching for possible breakouts:

ACOM, ALKS, AVNW, EQIX, GPRE, HCBK, JOE, KCG, KWK, LEAP, NE, RAS, ROIAK, SD

 

Good luck this week!

Morning gaps

So I wanted to go over a strategy that I often try in the morning on stocks that are gapping up. It doesn't alway work out, but sometimes you can make your day in one trade! This morning, I noticed APWR was gapping up around 5% in premarket on good volume, above a recent consolidation and into a nice gap from November 30th. It announced a 43$ million contract with another company, and I thought this was likely significant enough to sustain the gap.  My target was the top of that gap, at around 6.30-6.35. Unfortunately, I got in prematurely, and got shaken out.... This often happens to me, and I need to find a way around this! Anyway, here are the daily and the 1-min intraday charts, let me know if you have any comments! Thanks!

Otherwise, I had a decent day and played the PWAV breakout along with many people in the Charts Gone Wild chatroom! We banked some good coin on that one!

Great day!

I had a great day and entered several new positions this morning. In fact, I got triggered in almost all the buy stops that I had set the night before. I was even long 150% at some point (on margin), so I decided to scale back and take profits on most of my positions before the end of the day. Now I have only 1/2 or 1/4 positions left. I don't recommend using margin overnight, as you never know what can happen!

Anyway, the solars have been on fire lately, so here's one trade in JASO that I closed today.

I also had some successful daytrades in CPE, GTE, NCT. I took a loss in STP, and I'm still holding onto AVNW, CPE, CSIQ, ETFC, JAG, RDN, RFMD, RRD, WFSL, XNPT  and XING(short).

And here are a few names to watch tomorrow (some have low volume so be mindful of checking this first before you buy): ACOM, AEL, AHS, BCSI, BBEP, IBCP, GMXR,  MMR, MU, PWAV, THRX, TIVO.