Wednesday, March 31, 2010
I think I am going to take a few days off so don't expect a commentary tomorrow - there likely won't be anything meaningful to write about anyway. There is one particular stock that releases earnings tomorrow that I will be watching, but that is really it. I'll be back at some time this weekend with a video, but I look forward to enjoy my break from work and spending time outside, as it is supposed to be a beautiful Easter weekend here in western Pennsylvania. I hope you all have a blessed Easter holiday and we'll see you back here in a few days. Take care.
Tuesday, March 30, 2010
Friday's lows are still holding so far as support and as long as that happens, the bulls remain firmly in control of this market. I may bump the support levels to watch up to today's lows (2395 and 1168) just because that is where the trendlines are moving up to, but that's probably just pulling hairs. The dollar got a bit of support today but oil is approaching resistance again and could perhaps break through this time, so that bears watching. Most sectors remain bullish overall including the financials, which on Friday looked to be putting in a potential top. That has failed to materialize so far.
I made one trade today but as been the recent trend it went nowhere and I was stopped out with a small loss. I went into CAST at $8.19 a bit after the open due to earnings news and an overall bullish chart. It got up as high as $8.50 soon after my purchase, but fell straight down from there and I was out at $7.98 for a 2.8% loss. I am doing a great job right now of picking stocks that spike up and then give back absolutely all of their gains and more. Unfortunately, that's not a good thing.
I didn't see much moving on my watchlist other than CSIQ but looking at the intraday chart I can almost guarantee I would have been stopped out of that if I entered. I remain in cash except for a CISG position in my IRA that was not stopped out last week. I really wish I could be more fully invested but right now individual stocks are not acting well enough to swing trade profitably, at least not for me. Day traders may be doing OK, but I don't see much out there for swing traders like me.
Good luck Wednesday - I am expecting more low-volume chop with lots of whipsaws. Be careful.
Monday, March 29, 2010
Technically, not much changed today from what I discussed in last night's video. Friday's lows are important short-term support levels on both major indices and if those are broken, I still think we test at least the 20 day moving averages. I don't know if we'll get much lower than that, however, as 1150 should act as strong support on the S&P. There would be nothing wrong with a little rest up here.
The dollar took a little dive today and after today's action, the possibility of an island top being put in on UUP is a possibility. Not saying it is going to happen, but the dollar certainly doesn't look quite as strong as it did last week. Maybe it's just a little pullback from overbought conditions - we'll have to wait and see.
No trades for me today - I watched the open but didn't see too much moving, at least much that was on my watchlist. There were some movers out there - CSIQ and CYD were two stocks that had nice moves today. Believe it or not, I actually had the chart of SERV up on my computer at my lunch - it showed up in my "top ten movers" screen as soon as my quote screen appeared and I checked it out. At that time, it was already up about 50% in about ten minutes (from $2.20 to $3.30), so I didn't have any plans to chase it. It did form a beautiful flag from there however and then broke out again at $3.30 around 12:30. It moved up an amazing $4 from there in about an hour (about 120%) - crazy action. My lunch is over at 12 so I didn't see it and there is realistically no way I can say I would have entered it then, but it is fun to think about.
I think this week may be a slow one as the holiday weekend is approaching, but it could have a slight upside bias due to window dressing for quarter one. We may see some more action like we saw today - positive but not overwhelmingly impressive. I'll go through my scans tonight and hopefully can find some long candidates, but I am not in a rush and will not force things. Sometimes boring, lower volume markets are the ones that can get you in trouble. Good luck Tuesday.
Sunday, March 28, 2010
To see the video in HD, please click "720p" and "Full Screen" on the video bar.
Here are the results from the plays given in last Sunday's video. As always, this is just a Monday to Friday summary and does not reflect realistic entry or exit points.
Friday, March 26, 2010
Technically, this is two days in a row now that we've seen a market start strong and end weakly. Maybe it doesn't mean anything, but maybe the action is foreshadowing further pullback in the near future. From a technical perspective, the lows of today need to hold (around 2385 and 1161) or there seems to be a good chance the 20 day moving averages will be tested for the first time in over a month. Those levels (2355 and 1150) are the numbers I would watch early next week.
The dollar was weak today along with the market so my idea about the inverse correlation between the two being back might have been too early. Financials look a bit toppy here to me but most of the other sectors look to just be pulling back in a normal and healthy manner.
I didn't even watch the market today and am glad I didn't - I would have likely be whipsawed a bit on any longs I may have entered. I'll be back this weekend to share any interesting setups with you. Until then, enjoy the next two days and take care.
Thursday, March 25, 2010
Technically, the action was not good today and perhaps we pullback a bit further from here. Numbers to watch for support are 2390 on the Nasdaq and 1160 on the S&P. If those are broken, then a meaningful pullback might materialize for the first time in a long while. Until that happens, however, the bulls remain in control.
Sector-wise, retail and financials were strong this morning but closed very weak much like the market and look somewhat toppy here. It is possible a pipe top was put in today on XLF as it did gap up but we would need more confirmation of that in the next few days. Commodities continue to look very weak as the dollar strengthens.
The biggest worry the bulls have here is that the inverse correlation between the market and the dollar appears to be reestablishing itself, and that is not a good thing. The chart of the dollar looks quite strong here and although it's overextended in the short-term, it certainly looks like it wants to go higher over the intermediate and longer-term time frames. You have to keep a close eye on this to see if the inverse correlation of today and yesterday remain in place.
I was stopped out of my CISG position today around $26.50 for a very minimal gain, but that was all I did. Perhaps I should have given it more room but after two days of absolutely no follow-through, I didn't feel like waiting. It was another weird morning in that I saw the market moving higher but I didn't see many individual stocks that seemed to have strong momentum. CISG is a good example - it had a great breakout Tuesday, and with the market up 100 points mid-morning, it should have been up another 3-4% today - that is, assuming it is a strong stock.
I was following some possible earnings plays as well this morning and I saw the same thing - not much momentum. CAAS and TRIT were two stocks that gapped up a good amount but could do virtually nothing after the open, even with the market up big. If you want a larger example, look at the intraday chart of ADBE, another earnings possibility from Wednesday. It faded yesterday and put in its highs at the open today. I don't know - something still just doesn't feel right to me about the way individual stocks are acting. Perhaps I am just in the wrong ones.
I haven't gone through my scans fully yet today, but the reversal today put a lot of ugly bars on a lot of charts. We'll see if it means anything. I am unfortunately back to cash and although I will keep my mind open on the long side, I don't know that there will be much out there to play tomorrow. Maybe it's best just to take Friday off. Take care and good luck.
Wednesday, March 24, 2010
Technically, we still hanging out in the middle of this tight ascending channel - not much else to say. 1160 and 2380 are numbers to watch on the S&P and Nasdaq respectively as the represent the bottom of the channels as well as the 9 day moving averages. A break of those levels and maybe we get further selling.
Sector-wise, gold got killed today as the dollar was up huge due to Portugal and that is one thing that stands out as I look at my scans. My short selection of LIHR from this weekend's video is up about a $1.50 so far - not bad for three days work. Too bad I didn't enter it on Monday as the overall market looked good. Typically, I would think a strong move in the dollar (which is what today looks to be signaling) would be bad for the markets, but who knows anymore? I am surprised the markets were down only slightly given the chart of UUP. Financials also outperformed today so that is bullish.
Not a great day trading for me - just one of those days where I inevitably went with the wrong stock and missed out on some good ones. Early on, I saw both ZANE and ZOOM moving and went into both (without thinking much about it). I entered ZANE at $2.34 and ZOOM at $8.58. In choosing these two, I passed on a few others that were on my watchlist from last night's scans like BEE and ASTC. I also passed on an earnings trade (CBPO) that popped up early as well. I did have ZANE on my watchlist as it closed right at its 20 day MA last night, but I didn't focus on it enough early on and bought too late. I ended up being stopped out of both of these positions for losses - ZANE ast $2.14 and ZOOM at $8.30.
I was also stopped out of my NEP position from yesterday as I moved my stop up to breakeven when it opened as high as $9.50. I was hoping for immediate follow-through there but didn't get it. I am still in my CISG position but that is it. My real mistake today (and something in general that I feel I need to work on) is not having a clear enough plan for the day and just kind of doing things at the spur of the moment. I had BEE on my quote board and knew it was a possibility, but ZANE and ZOOM took my focus elsewhere, even though I didn't go into the day expecting to be in either of those. This spontaneity cost me today and hopefully I will learn from it. Today reminded me that I do need to work on being more selective in the stocks I focus on - watching too many stocks can get you into trouble.
Overall, I am still not very bearish yet and will continue to take longs as they show up, but it remains a stock picker's market on the long side. It's not a market where just everything is running - you have to be selective and maybe a little lucky. There are a lot of setups that look good but not all are working well. Today, I had four main stocks that I focused on five minutes into the session, and for some reason I chose the wrong two . It's my fault because I let myself get distracted, but it proves that this market can still be tough. You have to be careful with what you buy if you want to do well. Maybe I'll choose better tomorrow. Take care and good luck Thursday.
Tuesday, March 23, 2010
Technically, the market just keeps chugging along, making new highs for the year on both the S&P and Nasdaq. The top of the tight ascending channels they are both in are still a bit above the current price, so perhaps they have a little more room to the upside here. All of the negative divergences remain firmly in place, and volume was of course somewhat weak today, but I guess it doesn't matter. We could pullback at any time but I would suspect buyers come in near the 9 day moving average once again.
I'll be completely honest and say that I have absolutely no clue why this market continues moving straight up as it has the past two months, not taking a break for more than a day or two. Government involvement, short covering, computer trading - I have no idea. I am just trying to ride the trend as best I can and not really worrying about the "why's?" as much. This is hard for me to do but I am trying. They say all markets are irrational and this market is certainly proving that to be true. Being long is the only thing that makes sense right now.
I made two trades this morning - went long CISG @ $25.99 (also went long in IRA at same price) and NEP at $9.10. Both trades closed near their highs and look like they may have more upside potential. We shall see because as I've said numerous times, follow-through in individual stocks has been lacking recently. I considered CAAS as well but it reports earnings in two days and I figured I would pass until then. There were some nice movers from last night's video - BID, FTEK, CISG, FBN, CHINA, MEND, NEP, and CAAS were all up over 3% today. Hopefully you were able to catch some of them. I am still more than 50% in cash and will look to add positions if they trigger with volume.
My outlook is to continue to take longs as they become available and if I am lucky enough to get some gains, I will continue to cash them in. I still don't think this is a market where you buy a stock and hold for several months for a super-large gain. I don't know if those 30-50% gains are out there right now. Maybe the action will improve in individual stocks but until I see it, I would rather take profits at 10% and be happy. Who knows? - maybe I'll be taking some profits tomorrow. Good luck Wednesday.
Monday, March 22, 2010
For some reason, Youtube is being stupid at the moment. If you want a direct download of the video, click here. Otherwise, hopefully it will be operational by morning.
** The video will take a few minutes to process fully but will be available in HD - click "full screen" and "720p".
Technically, the market just remains in a very tight, very steep rising channel and doesn't seem to want to get out of it. A break of today's lows would signal a steeper pullback, but right now I don't know if we'll see those lows broken or not. The divergences remain but I guess they don't matter. Sector-action was bullish across the board, with commodities looking like they may bounce further from here after some weak action three or four days ago.
In terms of individual stocks, the trend continued today of not seeing much action here even though the overall market went up. I didn't show too many setups this weekend because I didn't see too many, but from my quoteboard today, the only stocks that moved at all were HAR and TIVO. That was it. I continue to think this is odd but don't know what more to make of it.
As I go through my scans right now, I do see a lot more potential setups than I saw last night. Perhaps it was the gap low and reversal that made more stocks look attractive. So I will go into tomorrow with a watchlist for potential longs just like I have for most of the past two weeks. I am just hopeful some of them will trigger with volume and actually do something rather than just sit there with no follow-through as so many have the past two weeks.
Here are the names that I will be watching - SONC, FBN, VNDA, FTEK, BID, CISG, MEA, EVOL, HVT, MEND, MCCC, JAG, CHINA, CRUS, VOLC, CWTR, STV, CNW, DEER, STC, CAAS
Let's see if we can get some follow-through tomorrow on today's move - not just for the overall market but in individual stocks as well. We are not really overbought anymore so the potential to move higher is there, even if it doesn't make sense. Good luck Tuesday.
Sunday, March 21, 2010
(These videos will be in HD after processing - click "full screen" and "720p" for this option)
Here are the stats from the stocks shown in last week's video. These are only the stocks that I said I would be watching closely during the week (video #2) and not the stocks that I said needed rest but were worth putting on your watchlist (video #3). As always, these percentages represent the week change and not what you would have made or lost by trading, as entries and exits would likely be much different. What I see in this chart is that although the market wasn't down overall this week, under the surface the strongest stocks are getting distributed in some cases. As you saw in the above video, a lot of smaller cap momentum stocks are breaking down and that is not good. I've also been talking for about two weeks now on the daily summaries that stocks just don't seem to moving up or following-through on any moves they have, and this chart proves that as well. I only made two trades this week - one from this week - and was not hurt badly on either. Hopefully you fall into that boat as well.
Entry Exit G/L
Good luck this week.
Friday, March 19, 2010
Thursday, March 18, 2010
Since it's March Madness time, it makes more sense to me to spend my time watching hoops than worry about this market, and I think that's what I am going to do. Good luck Friday - remember it's options expiration time. If the recent trend holds, that means nothing will happen. Take care.
Wednesday, March 17, 2010
Technically, the story remains the same - we aren't resting at all and continue upward. The bulls remain in control even though the negative divergences in terms of volume and the Moneystream remain fully in play. There really isn't much else to say - a pullback would be very healthy here but it just doesn't come. The longer we go without one the worse I think it will be in the intermediate to long-term, but for now, it's onward and upward I guess. A small part of me would like to get short some of the indexes up here but there is really no reason to do so, other than the fact that we've gone a long way. That's not a good reason to short at all.
I made two trades today - neither were very successful. I entered SEED at $11.36 this morning after I thought about buying it yesterday at the close. It had pulled back and bounced off support yesterday and I thought it would continue upward. It didn't, however, and I was stopped out at $10.96 for a 3.8% loss. I also entered NEP at $9.28 as it showed good early volume and after pulling back for a while now, I thought it could also run. It also faded, however, and volume really wasn't impressive after the first fifteen minutes or so. I may be out of that one tomorrow.
There were a few movers today - from this weekend's video, JAZZ staged a nice breakout and was up 11%, along with NLST (up 7%) and MIDD (3%). Overall, however, that was really about it, as I continue to see very little follow-through and strong price action in the stocks I follow and like to trade. I saw some attempted breakouts today (XTEX, PCX, TSRA for example) that started very strong but closed quite weak. So I still sense there is a lack of momentum out there even though the overall market keeps going up and up. Weird is I guess the best way to describe it.
I am still slightly confused by our current market because the action in the stocks I follow continues to lag the action in the overall market. This doesn't feel like a typical "bull market" at this particular moment to me because typical bull market stocks aren't the ones making the moves. Perhaps there is a rotation going on somewhere from growth to value - I've read several articles to that effect this week. We'll see I guess - whatever it is, it is not making things that easy for my style of trading. The stocks that can pop 10-20% in a few days just aren't there right now. Luckily I've been mostly in cash for the past week or two, but it is frustrating to see the market move higher but not much happen with individual stocks. Hopefully we'll get out of this funk soon. Good luck Thursday.
Tuesday, March 16, 2010
Technically, the important 1150 level was overcome on the S&P today but the move came on volume that was not really above average. The negative divergences I showed in the video this weekend with the Moneystream are still very much there. These divergences show up in the S&P, Nasdaq, Dow, Transports, IYR, XLF, RTH, and QQQQ. Maybe all of this doesn't matter - to be honest, I don't know. The only index I see that isn't showing this divergence is the Russell 2000, which looks quite bullish and has formed a very nice bull flag the past few days. It would be nice, however, to see more individual small caps moving higher here as well, which I haven't seen as much the past few days.
In terms of individual stocks, not much really happened again today. I watched the first fifteen minutes of trading, didn't see anything moving on heavy volume, and shut it down until the end of the session. BID (shown in this weekend's video) had a nice session but really that was it. CFSG had poor earnings and was quickly off the watchlist - it is a good reminder why you should never take positions in front of earnings reports. LIWA and CEU were two stocks that had slight breakdowns today. Others like SQNM and CAGC give me a little pause as well. Besides those, again, not much of anything did much of anything.
This is getting to be a weird market in my opinion, as I watch individual stocks pullback and look for the most part bullish, but I also watch the overall market continue to move higher with very little rest or volume, allowing negative divergences occur. It seems like the two are not moving in tandem right now (for instance, my quote board was mostly red today), and I don't know what message to take from that. If the real market was as strong as the rising prices have made it seem the past few weeks, then I would expect to see more stocks resting for only one or two days before moving higher and higher as well. I am not seeing that however for the most part - I'm seeing stocks have pullbacks of a week or two even though the market is not. Again, I am not completely sure what to make of this, but for two to three days now I have been ready to start a few positions but have found nothing worthwhile to buy. That is a bit worrisome to me. Perhaps my scans will show me something new tonight.
Overall, I will still be focusing on potential longs and am willing to take some if they present themselves but remain in 100% cash as of now. It's not that I am bearish - I just haven't found anything that has excited me for at least a week now. Hopefully that is not a sign that we are about to have a long-overdue correction, but in the back of my mind, that's what I am starting to think, a correction that might last for more than a few days. The SPY has been up now for 13 straight days - strong market or overextended market?? I guess you have to decide that. Remember that this is an options expiration week so the next few days may have some games played - trade accordingly. Take care and good luck Wednesday.
Monday, March 15, 2010
Technically, not much to say that I didn't say in this weekend's video. I'll be watching 2325 and 1125 on the Nasdaq and S&P respectively as potential support levels in case we pullback a bit further. I am not guaranteeing that we will, but it wouldn't hurt to get a few more days like today. The overbought condition is slowly wearing off and a few more days of rest would allow it to work itself completely off and then the market can take another move upward. At least that's the idea.
I made no trades today, partially because I didn't feel comfortable chasing a whole lot here but also because once again, I had problems with my Scottrade account. Their streaming quotes would not load at all this morning and after a few minutes of trying, I gave up and figured it was a sign I shouldn't make any moves. This is becoming a bit old to be honest - last Monday they had a major server issue which cost thousands of traders thousands of dollars, and then to come out today and have another issue is unacceptable. Perhaps it was just me having the problem.
There were some movers today from this weekend's videos like RINO, which was up almost 8%, but for the most part, the stocks from this weekend's video rested much like the market. I have my eyes on a few and am willing to enter over the next few days. One stock I will watch tomorrow morning is CFSG - the chart is nice and it is in a low-risk area of support, but earnings come out tomorrow before the open and there is no way I am taking a position in front of that. After earnings? - we'll see. Keep your eye on it however.
Not much new to say today - good day overall for the bulls in that they continue to give very little back even after moving so far. A few more days like today would be tremendous in the long run and that's what I am hoping we see. Take care and good luck Tuesday.
Saturday, March 13, 2010
If you click "full-screen" and "720p" in the above videos, they will be much more detailed. YouTube takes a little time to process the videos fully to get them at the highest quality so if there is a delay or the quality is lower at first, I apologize - it will be in HD when fully processed.
Here are the results from last week's video - as I said last week, these aren't necessarily that accurate as some of these were up much higher than they show now (CPSL, NLST for example) and could have been sold for 10%+ profit. Others would have been cut must quicker that the loss shown here as well (THM). But it gives you a general idea of what last week's video was like.
Best of luck next week. Take care.
Friday, March 12, 2010
Since the weekend is here, I'll make this post short and be back later with more information in the weekend video. I do have quite a few stocks that are looking very good to me right now on the long side - I just have to decide what is more important. Do I follow what the individual stocks are saying or do I focus more on the overall market, where I still believe we are long overdue for a pullback? I'll talk about both of these outlooks in the video so watch for it.
Take care and enjoy the time off this weekend.
Thursday, March 11, 2010
Technically, what can you say? I've been preaching that it would be very healthy and normal for the market to rest at some point this week, but it just hasn't happened. I am wondering if we are in the middle (or second half) of a run like we saw in July and August of 2009, when stocks were extremely overbought but just kept running higher. That move was kind of surprising back then in terms of how long it lasted, and this is one is just as surprising in that regard.
The close on the S&P was quite interesting today. The most recent high was at 1150.43, and the closing high today was 1150.21. Can't get much closer than that, can you? I am going to stick to my guns and not chase things here - at some point the market will rest and pullback and the more we go here without a rest or pullback, the harsher that pullback will be. I am not bearish here - please don't think that. I am just saying that markets can't move up forever, and we are pushing the extremes as of now. I still think it pays to be cautious here on the long side.
Interestingly enough, as I look through my scans, I don't think I've missed that much the past few days from being in cash and waiting for some rest. All of the stocks I sold Monday are either at or below the prices I sold them at, which is good. I continue to see a lot of stocks setting up nicely, however, and I will be looking to buy them as they consolidate further. Perhaps I need to ignore the overall market and just focus on the setups I see. Again, not many of these are ones I would buy at this very moment, but many are worth watching for possible entries next week. They are listed below.
MIDD, CISG, TSRA, SEED, HVT, BID, XTEX, CMFO, STC, SNIC, SXCI, RINO, JAZZ, CVVT, EJ, APL, KNDI, CNAM, NLST, ZOOM, CYD, ANF, GFRE
We kind of have a weird market in that it continues higher in the face of very overbought conditions but individual stocks in many cases are pulling back and consolidating. I am not quite sure how to take that - does it mean the market is rising with fewer and fewer stocks moving with it, or does it mean individual stocks are getting ready to move again to push the overall market even further, regardless of overbought conditions? Should we pay more attention to individual stocks or the overall market? Any ideas out there? Feel free to share. I know what I think.
Overall, I will probably be taking tomorrow off and staying in cash until the start of next week. I am not discounting the possibility that this market will work off its overbought condition as it moves higher - that doesn't make any rational sense, but it happened back in 2009 several times so it is possible, depending on how intraday trading goes. I continue to think however it is better to wait as a swing trader for a little consolidation before getting long again. If you're day trading, then just keep watching the plays and go with them. Good luck Friday.
Wednesday, March 10, 2010
Technically, we certainly remain very overbought but it doesn't seem to matter. This market is acting very much like it did in July of 2008, when it just chugged higher without any rest and went further than most thought it could. I don't know if we'll see that again here, but things do look similar. It is a little bothersome that the S&P still hasn't broken to new highs - 1150 is the number to watch there. I continue to believe that rest would be very good and healthy for this market but I don't know if we'll get it. I actually worry that further moves higher here without rest will set us up for more than just a little pullback, but I as always could be wrong.
I was quickly stopped out of my QID test position from yesterday at $17.59, giving me a small loss. No big deal I guess but probably should have just stayed in cash. That's where I am at right now and probably will remain that way for the rest of this week. As I said yesterday, I see a lot of stocks that I am interested in on the long side, but they are so extended that buying them here and chasing them is just not something I am comfortable doing. So I wait. I may miss out on some gains, but I am OK with that. Actually, checking out the stocks I sold on Tuesday (CPSL, AMCF, SEED, CFSG) I am still happy I got out when I did. It is still a stock picker's market I guess.
We'll have to see if we continue higher from here (and it would not surprise me if we do) but I have to wait until I get some nice individual setups before joining in the party again on the long side. I am not shorting up here and the bulls obviously remain in total control, but a rest would be healthy and very beneficial in the long run. Hopefully we get it. Good luck Thursday.
Tuesday, March 9, 2010
Technically, we've been overbought for a few days now and certainly are in a position where we could pullback. Does it have to happen? Of course not. The market kept churning its way higher or at the very least sideways several times in 2009, most notably in July. It could happen again. With the S&P closing in on its former highs, I still think it is likely however.
As I said yesterday, just sitting in this area for a few days and not doing much of anything would give the market a chance to work off some of that overbought condition and gather itself for further price gains. I would love to see some action like we saw about two weeks ago, starting on February 18. Maybe we pullback to the 9 day moving averages around 2295 and 1125. If we pullback further that that, it would probably be even more beneficial in the long run but I don't know if it will happen. I continue to believe a pullback should be bought.
The individual charts I am seeing also push me to think we sell off a bit soon - saw some reversals today and stocks that are not following-through on breakout attempts. I sold all of my long positions yesterday, and when I see the action in CPSL, SEED, AMCF, and ZOOM, it tells me I made the correct decision in the short-term. That being said, I have many, many charts that I would jump all over with a few days of rest. There are a lot of stocks that look like they want to go higher - they are just very extended. I just can't chase them and because of that, I will stay away from longs for a few more days. It's possible we just keep moving higher and I miss out, but that's a chance I am willing to take.
To back my short-term outlook up, I took one small short position in QID today at $17.88. This is a test position and I have a tight stop on it in case it doesn't work. If it does work, I'll take profits in a few days and look to get back into some long positions. Besides QID, I am totally in cash.
Good luck tomorrow - I have a feeling we should be able to tell early on if the late action was something to take notice of or just a blip for the bulls. Again, I am looking for a three to five day pullback, but what I look for (or want) I rarely get, so be aware. Take care.
Monday, March 8, 2010
Technically, the story remains the same - we are very overbought and the market was moving slightly higher today on low, low volume. That is not a great recipe for buying success, so I think it pays to be careful here in terms of swing trading. A rest or a pullback makes a lot of sense. If we just rest, move sideways, and have some more days like today, it would be perfect. That's what I need to see in order to get aggressively long here - I am not going to chase other than for a day trade here and there.
It was a good day for me trading, but a very weird and sometimes stressful one. I was off work today so I was able to watch the market more than usual, and I did plan on exiting many of my long positions into any strength we saw today. As such, I sold SEED at $11.76 for a 13.5% gain and CFSG at $16.18 for a 7.1% gain. I also entered CPSL pre-market at $2.32 for a short-term trade and it popped nicely as well. So far, so good.
Then things got weird. Scottrade had major server problems this morning and from about 9:40 until around 10:30, no trades could be made. I couldn't even get logged into my account for a certain period of time. Calling in also didn't help, as most numbers were busy and overloaded, and when I did finally get through to talk to someone, they didn't have any answers for me. At that point, I was still in AMCF, USEG, and CPSL. I had a stop on USEG, so I wasn't worried on that one, but I tried to sell AMCF into strength around 9:45 and it just showed "pending approval". I couldn't cancel it, couldn't change it, and had no clue if it went through or not. It was eventually filled at $8.07, giving me a 10.75% gain, but I originally put the order in when it was around $8.30, so I lost a little profit there. USEG was stopped out as well at $6.07, giving me a small 2.9% loss.
So overall, it was a weird morning, but I guess I can't complain too much in that I was able to keep most of the profit I had entering the morning and that was my goal going into the week. It is a helpless feeling, however, seeing a stock move around and not being able to do anything about it. Hopefully, no trader has to experience that feeling too often again.
CPSL worked well for me today although I flubbed it up a bit through sheer carelessness. I decided to take profits in the afternoon around $2.65 and put the order in. I went away from my computer for an hour or so, figuring I was done on the day. I checked back in during the final hour and noticed I had one position showing - didn't make sense to me. Well, instead of selling my shares of CPSL, I bought more at $2.66, so my position had doubled without me realizing it. That could have been very bad because I did walk away and if it tanked I would have been left holding a big loss. As it is, I sold out of it all at $2.60, costing myself a little profit from what I would have earlier. It may still go higher from here, but the measured move off the flag pattern was around $0.40, so this seems like a good target.
I did enter one more short-term trade later in the day - ZOOM at $7.73. This was designed to be a day-trade and hopefully catch a pop off of an intraday breakdown, but it never happened. I was stopped out at $7.47 for a 3.5% loss. It popped back later in the session and tried to break out of a flag pattern, but I wasn't holding it for long if it broke its low at 1:45.
After the success I had today, I probably will now take a few days off, because as a trader, I know I tend to follow up a series of good trades with stupid ones, perhaps due to a little overconfidence. So I would rather step back and take a few days off than make some stupid trades (like my ZOOM trade for instance.) After the CPSL trade, I don't think I want to press my luck any further as well.
As the market is now, I think it is probably smart to do that anyways - I don't know how much further we can go without some sort of rest or pullback. It is certainly possible but I wouldn't say it is likely. I was tempted to short a few stocks today and see some decent setups (GG, LIHR, SAP, TCK, AMT, AMSC, LL, PWRD) but decided to pass for now. If we see more action like today, it will be extremely bullish as markets that don't give anything back are great to see. Even we get a little 2-4% pullback from here, I do believe it is buyable and that's what I'll be looking to do later this week or early next week. Take care and good luck Tuesday.
Saturday, March 6, 2010
If you click "full-screen" and "720p" in the above videos, they will be much more detailed. YouTube takes a little time to process the videos fully to get them at the highest quality so if there is a delay or the quality is lower at first, I apologize - it will be in HD when fully processed.
One thing that I want to do more consistently, both for readers and myself, is to try and be more disciplined about posting results from the setups I put out there. Good or bad, I will try to do this more. Here is the first of what I hope is a consistent look at the video from last weekend and the setups presented on that video. Now, of course, these percentages are not exactly what you would have made, because entries would be different along with exits - some may have been stopped out with losses and some profits may have been taken quicker. But it does give you a look at what the setups did and if they were good or not. This past week, the video definitely showed some nice setups, with 5 out of 17 closing the week more than 10% higher than the previous week, and only three showing lower prices. Not bad at all.
Friday, March 5, 2010
I did make some trades today as I liked some of the charts I saw early on. I went into CFSG at $15.05 - this has an inverse head and shoulder pattern and had a lot of resistance to deal with around $15.20 (I have posted this chart before - it was also listed in yesterday's post). Once that was overcome, I thought it had some room to run, and it did act fairly well today. Volume was rather heavy early on and that's why I went in before the breakout. Soon after I went into SEED at $10.32 and USEG at $6.23 - both were anticipatory trades and probably made due to other successful trades I had going. Neither did anything and I may be out of both soon.
My one bad move today was getting rid of NFP at $12.54 early in the session. I did end up with a 4.2% gain there, but it ran further after I sold it. I didn't like the volume of the previous two sessions and with the market overbought, I decided to take profits. Oh well. I am still holding AMCF from $7.25 and have a decent sized gain in it as of now, but am hopeful it may run a bit more.
I will be back this weekend with a video or more thoughts - I plan on getting rid of most of my positions Monday morning, hopefully on a little gap up, as I do think we really need some rest. I would not be chasing longs if you are not already in positions. Enjoy the weekend.
Thursday, March 4, 2010
Technically, I said yesterday we are either consolidating or churning here and I still think that holds true, although today's action makes me think maybe we can move higher from here. The main problem is that we are back to being quite overbought, so I would like to see further rest here but I don't know if we'll get it. You just have to ride the trend I guess until you see clear signs it is ending, so I am not going to try and anticipate a big pullback here. It certainly could happen, especially with a bad jobs number tomorrow, but I will wait for it rather than guess.
I am still holding my two long positions in AMCF and NFP, but didn't make any other trades today. I am up slightly in both - no big gains yet however. I am still a little hesistant to get more aggressively long with the overbought conditions but if opportunities present themselves, I'll take them I guess. I am watching CFSG, USEG, CPSL, THM, and SEED for possible entries on strength.
That's it for me - I really don't have much else to say. It's been a pretty slow week overall although there have been moves in some individual stocks to keep traders busy. We'll have to see what the jobs number does to trading tomorrow. Good luck Friday.
Wednesday, March 3, 2010
Technically, I think we are either consolidating here or churning here, but I don't know for sure which one it is. I tend to lean toward churning as stocks have been higher early on in each of the past two sessions only to give up those gains. I've also been mentioning the fact that the S&P continues to lag the Nasdaq, and that's its weak volume is a sign for concern. I don't think the bulls are necessarily done yet, but I continue to look for a pullback very soon. Hopefully it won't be one that does a lot of damage and is more one that can just work off this overbought condition we now again face.
Sector-wise, not much is going on - the dollar had a breakdown today which pushed commodities up a bit. They are, however, also somewhat overbought so be careful. Most sectors look very similar to the indices - it is possible they are resting here but it is also very possible they are losing steam.
I made one purchase today - went into AMFC around $7.25. This was a low-float Chinese stock that popped on earnings and I felt it had the potential to move. It did early on, all the way up to $7.80, but faded mightily from there so I don't expect to hold it much longer. I also exited JADE at $2.84 with a small loss - just no follow-through there at all. I still hold NFP but even that looked a little tired today with volume coming in weaker. I don't think I will be adding to or starting any new positions tomorrow given where the market is at. I need to see some success from the longs I have and right now they are just mixed.
Good luck tomorrow - I don't have much more to say. I don't plan on doing much but managing positions as I think a pullback is likely soon. This week hasn't seemed to have much "steam" behind it - maybe I am just missing something. We'll see I guess. Take care.
Tuesday, March 2, 2010
We saw a mixed day today on Wall Street, as stocks opened slightly higher but could not move any further and chopped their way sideways for most of the session. They tried to break to new highs and really get moving in the early afternoon, but around 2:00 started selling off and did not close well, although they did still finish with very slight gains. Volume appears to be the same as yesterday - a good bit lower on the S&P but strong on the Nasdaq.
Technically, it is a bit worrisome to see the Dow and S&P lag the nice action in the Nasdaq for the past two days, both with price and volume, but perhaps I am making a bigger deal about that than needs to be made. We'll see I guess. The Russell 2000 barely broke to a new high today but could not close with one. I am sensing we could use some rest in this area, but it is not a given. I am a little more hesistant to chase longs after the past two days but am definitely not looking to short. Bulls are still in control for now - they just may pullback here a little, that's all.
I had one of those days today that just makes me not want to trade for much longer. I had basically six stocks (JADE, SEED, CGA, USEG, MERC, NFP) on my watchlist today and planned on entering a few of them. I thought SEED had a chance to pop just because it hasn't done much lately and it seemed due so I put it on there, but I wanted to see a little strength first. MERC was a setup from the video this weekend, as was NFP. USEG and CGA were from my scans last night. Anyway, I went into JADE at $2.87 a little after the open as an earnings play - it is the type of stock I felt could run if it got some momentum. Unfortunately, it didn't do much of anything after the opening gap. I also entered NFP at $12.00 as it broke above its flag and posted very heavy volume in the first ten minutes of trading. It also did very little after its initial pop.
I kept watching SEED but it did absolutely nothing for the first fifteen minutes of trading and I ended up shutting the quotes off around 9:45 due to my job - I can catch the opening few minutes on my break but that's it until the end of the day. I ended up also passing on MERC - I don't know why exactly. I guess it ran a little too quickly for my taste and volume wasn't as heavy relatively speaking as NFP. Of course, SEED took off almost immediately after I shut the quotes off and had a huge day, as did MERC - the volume there came in around 10:15. I was in neither and in hindsight, probably couldn't have done anything about it.
This type of day is so frustrating - out of all the stocks out there, I had two of the biggest winners of today on my screen at the open. I obviously can find good candidates or I would not have had these and others this week move like they did. For some time now, however, I just don't get in the ones that move higher. It seems like I inevitably pick the ones that don't do anything and skip the ones that move much higher. All four stocks looked good today - why did I go with the ones I did? I don't really know. I almost feel cursed or something. Missing SEED feels like just bad luck but it hurts nonetheless. Anyway, I am quite ticked off right now. It is what it is and I'll get over, but today was not fun. Sometimes it just takes one good trade to get you over the hump so to speak and those were two trades that had that potential.
We'll see what tomorrow brings, but I am leaning more to a little pullback. I fully expected a strong move up once the 50 day moving averages were reclaimed, and I don't that I would call the past two days overwhelmingly strong. The Nasdaq has performed well, but the other indices lagging is weird. Maybe it doesn't matter - we'll find out soon. I will still consider longs as opportunities become available, but I don't think I will be super-aggressive at this moment. I want to see if either of my current longs get moving before doing much else. Take care and good luck Wednesday.
Monday, March 1, 2010
Technically, the major indices closed above both their 50 day moving averages and key resistance (1112 on the S&P and 2251 on the Nasdaq). The Dow however did not - something to watch. To be honest, I expected the type of move I saw today in the Nasdaq to also occur for the S&P, and we didn't see that, although commodities were lower and that may be the reason why. Financials also lagged, which might explain some of the S&P underperformance. With the Nasdaq and Russell 2K doing so well today, it makes sense to focus on those types of names if you're going long, as they certainly appear to be the leading indices now.
From the video last night, we did see some nice movers - UCTT, SFLY, KLIC, RDWR, and PCLN all were up over 4%. I was all ready to get some long positions started today but there was no real volume on the stocks I was watching in the first 20 minutes of trading and so I passed once again. With my work schedule, that is really all the time I can spend checking out the action until the end of the day, so it makes it tough. I can't catch the midday movers and so I am missing out on some nice plays. I almost went into SFN on a slight breakout early on but again, volume was lacking, and I am glad I passed based on how it finished. Meanwhile, a stock that did not make my final cut last night (XTEX) had a great breakout today. Go figure.
I think this remains a stock-picker's market and opportunities are out there if you're careful. Is it an easy market? Heck no - prime example is the trading of CAAS and TSTC today. Both are China stocks, and before today both of their charts looked quite similar. So how do you pick? I don't know - one was up 10% and one was down 10% today.
I am still looking to get long and will do so if the opportunities present themselves but I am also not rushing into things. I have my names on a few stocks from yesterday's video in particular that I think can make large moves in a short period of time, but I have to wait for that trigger. As I go through my scans tonight, I will share any other setups that look appealing and are new. Take care and good luck Tuesday.