Saturday, December 31, 2011

In With 2012 and Out With 2011 (Thankfully!)

Happy New Year!   It was quite the year in the stock market.   Yes, the market went nowhere overall as I'm sure you've read in many newspapers and heard about on many TV shows.  It was a year when trends disappeared (if you consider a trend something longer than a week or so) and when gaps up or down of 2% became the norm.   To be honest, it was an awful year for trading, specifically swing trading.   There were lots of false signals this year and lots of whipsaws.   It was certainly not an easy market, and if you survived and maintained most of your capital, you should feel proud.   Staying in the game is always important, and this was type of year where staying in the game was difficult if you were not disciplined.

On a personal note, I ended up having a pretty good year, although my account spun its tires the final few months of the year and finished about 10% off of its highs from mid to late October.   My main account ended up 58% for the year, and although I am very happy with that, I kind of feel a lot of it was more luck than skill.   All of my trades are listed here if you want to check them out.   My win rate was not very good at all (only 38%) but in this difficult of a market, I kind of expected that.   If I can get that up to 50% or so for 2012, I will be very happy.

If you follow my blog, you should know that I am always very quick to cut my losses (maybe too quick sometimes) and that remained true in 2011.   My average loss was about 2%, and I only had one loss over 10% (which occured on a short that gapped up after-hours on a non-earnings news item that I had no control of) so I am happy with that.   I was able to average almost 6% on my winners and this allowed me to make the overall gains on my account.  I had two 30%+ gains (MOBI and short CROX), two 20% gains, and twenty-three 10%+ gains.   Those type of gains can add up if you keep your losses short.   Some of these were very good trades that I am happy with, but my biggest gain in CROX (short) was really just luck - it gapped down 30+% after-hours the same day I entered on a earnings warning and I immediately cashed out.   That was a big gain for my overall account.

Looking back at my trades, one goal of mine for 2012 is to be a little more selective with my trades.   I think I took too many trades and with the way the market was in 2011, a better choice instead of forcing trades would have been simply staying on the sidelines.  There were times I did do this, but in hindsight, I wasn't on the sidelines enough for the type of market we had.   As you can see below, the market really went nowhere for the first seven months of the year, had a huge drop in August, and then went back to chopping around for the rest of the year with a slightly positive bias.   Nowhere in that chart (besides the August drop) do you see a nice, smooth move of more than a few weeks and that is what made 2011 so difficult.   Hopefully 2012 will bring something different.

Nasdaq 2011

Chart from TC2000, Courtesy of Worden Brothers, Inc.

So what will 2012 bring?   I have no idea and I am not really in the prediction game.   Being a swing trader, I don't care what is going to happen six months from now.   All I care about is what will happen next week.   Besides, according to the Mayans, none of us will be here to check our 2012 predictions out twelve months from now, so what's the point?    One random prediction I will make:  whenever Facebook finally does come public with its IPO, I think it will be a flop, maybe not immediately, but I think the company has no long-term future.   I was talking to two of my wife's cousins (ages 19 and 13) yesterday and both mentioned they recently closed their Facebook accounts.   In the words of the older one, "Facebook is becoming just like MySpace."    That's not good.   I asked what is taking Facebook's place and she told me Twitter, which I can understand.   Don't know when that will come public, but I will be watching.

I'll be back tomorrow or Monday with the outlook for the week ahead.   It should be an interesting start to the new year, as we have formed quite the coiling pattern on the major indices and a big move one way or the other seems poised to occur.   I hope that's what we see - I could care less what direction it is as well.   As long as we have a trend that lasts more than a few days or a few hours, making money will be easier in 2012.   That's my wish for the new year - a trending market.    Be safe tonight and best of luck to all of you as we begin another year.    Take care.

Tuesday, December 27, 2011

Lots of Potentially Nice Charts, But Most are Thin

Hi traders - today was a choppy, low-volume day and I expect the rest of the week to be similar (choppy but with a positive bias).   There were a couple of quick spike-downs intraday that stopped me out of some positions and I think I have to adjust for this thin environment over the next three days. 

I did see quite a few setups that normally would interest me greatly but so many are low volume that I may not be as aggressive if I go long any of these names.   I put together a quick video going over these names, so check it out below.   I would also pay attention to the typical, lower-float mo-mo names this week because in this environment, they can move quickly.   Good luck Wednesday.

Saturday, December 24, 2011

Stock Market Outlook - Will Santa Stick Around a Few Extra Days??? - 12/24/11

Hi, traders.   Hope everyone has a wonderful Christmas Eve and Christmas Day spent with family and friends.  If you don't celebrate Christmas, I wish you happy holidays as well. 

We had a fairly typical Santa Claus rally this week in that it came on low volume and besides Tuesday, the sessions were slow and griding.   Monday proved to be the curveball as the selling was nasty, but then (as I discussed last week), the market screwed the bears and took off Tuesday.   The key is now to figure out where we go after Christmas - will Santa stick around or will he take off back to the North Pole at first chance?
S&P 500
Charts from TC2000, Courtesy of Worden Brothers, Inc.

The S&P was able to get above the key 200 day moving average level that has been so much trouble for the past two months, and Friday's move also took it out of this 2-3 month coiling pattern.   Hopefully, we can see further upside from here and get a nice little trend going into the new year.   The Nasdaq, however, continues to lag the S&P and still has some work to do, with several levels of resistance ahead.   Honestly, I am open to anything here - I have setups ready on both sides.  Typically, the week after Christmas is bullish and since I get the sense that many people are going to be expecting a pullback after four straight positive sessions, I guess I'm leaning bullish this week.  If the S&P tanks Monday, however, I'll be looking to short.   This remains a market where loyalty to one side or the other will get you hurt big-time.

I made two short videos for the week ahead - one looking at long candidates and one looking at potential shorts.  I am actually seeing more short candidates right now in my scans, which is another reason I am leaning slightly bullish this week.   Yes, that makes no logical sense, but with this market, doing the opposite of whatever makes sense seems to be the best game plan.   Regardless, I repeat - be ready with both short AND long candidates and you should be OK.

Long Candidates
Short Candidates

Best of luck this week and again, have a very merry Christmas and happy holidays to all!  In Pittsburgh, this video is sort of a tradition with our Steelers.   If you want to see an NFL Hall of Famer and well-respected coach recite The Night Before Christmas, check this out.   Pretty cool.   Take care everyone.

Thursday, December 22, 2011

S&P at Key Resistance - Big Breakout or More Chop???

Tomorrow should be interesting as the S&P is bumping right into key resistance levels.  A move above the trendline shown below would also likely be enough to take the 200 day MA back and trigger a lot of short covering.   Maybe we'll see a decent move into the end of the year.   Of course, maybe we'll see a breakout reversal that would frustrate everyone, as that is what this market is best at - remember that.   We're not real oversold here but another day or two up would get us there so remain careful - you don't have any other option in this market.
S&P 500

Some names I am watching long are below.   Right now I am in two longs and took profits on my BZ position from a few days ago.  

I did see some interesting potential short setups in my scans tonight and have those ready to go if the market fails here.   Check those out below.  


Bottom-line here is keep your options open.  I am leaning long but won't hesistate to get to cash or go short tomorrow if the S&P shows it can't get over that key resistance level it is at now.   Hopefully we can get a breakout and a nice little year-end rally but the way this year has been, I somehow have my doubts.   Good luck Friday.

Wednesday, December 21, 2011

Rough Start, Good Ending - Still Somewhat Bullish

I wasn't watching the market much today due to commitments at work, but after some heavy early selling, the afternoon bounce back was at least nice to see.   I was stopped early on two of my three longs from yesterday - it happens (a lot in this market).   I went into a few small positions today as I still expect the market to attempt to rally a bit more from here.   We're getting to some interesting levels that (if broken) could lead to some nice year-end action.
Russell 2000
 S&P 500

A few names I am watching here are shown below.   I am not being very aggressive with anything here as the market remains too volatile to be aggressive, but it's worth keeping a watchlist ready now because you just never know when the market will end this miserable chop and get a bit of a trend going.   Not saying that it's going to be now, but you always want to be prepared.


Sunday, December 18, 2011

All Signs Look Bearish, Which Means We'll Rally Big-Time, Right???

If you watched last week's video summary, you'll know that most all signs pointed to a market that looked like it wanted to rally.   There were quite a few bullish chart setups on individual stocks.   After pulling back to the 50 day moving averages, stocks bounced hard two Fridays ago and the S&P and Nasdaq looked like they were done with a slight, normal pullback.   So what did we get this past week???

You guessed it.   In hindsight, I should have known the ball was going to pulled out again by this market.   That is what it is best at right now - tricking and confusing all traders, bulls and bears alike.   It has done it so many times now that we should all be expecting it.  Trading it however is a lot easier said than done because what we see with our eyes is certainly telling us one thing, whereas the market seems to just keep throwing curveballs at us that our eyes can't judge correctly.

To be perfectly honest, this market sucks but there is nothing we can do about it except accept it and try to not let it affect our returns too much in a negative way.   That's easier said than done, which is one reason I really didn't follow the market at all the past three days.   I thought it was better to just step away as I didn't see any edge at all.   After doing my scans today and looking at a bunch of charts, things do look pretty clear (just like they did last week.)

If you look at the S&P and Nasdaq above, you see a LOT of bearish action.  We had the 50 day MA broken to the downside on both indices this week.   The past two days have produced a weak bounce back into the short-term moving averages (9 and 20 day EMA).   If you look very closely, you'll notice that although there were gains both Thursday and Friday, there was also possible distribution under the surface as both days the market finished near its lows for the session and well off of its highs.   What we have now are the beginnings of what look like textbook bear flags.  

Normally, I would get my list of short setups ready and share them here.   After the past few months, however, I am officially saying "screw it" and going the other way.   I hate to use the word "think" to describe what may happen this week because there isn't much logic to it, but a rally seems to be in the cards based on how stupid this market has acted the past few weeks/months.   Every time we've seen this situation (a big breakdown followed by a very weak bounce forming bear flags), the market has then had a big up day and proceeded to grind its way higher from there for a few more days, screwing over the bears.   I can see the same thing happening this week.    The bulls got screwed early this past week - isn't it the bears turn?

If we get above Friday's highs on the Nasdaq, I may put a buy order in on some ETFs and see what happens.   Here are some names that came up in my scans today that could rally a bit if the market decides to fool everyone again.

All Charts from TC2000, Courtesy of Worden Brothers, Inc.

It is going to be a thin week volume-wise with the holiday coming up but traditionally these are bullish weeks on Wall Street.   Who knows though?  This is as unpredictable a market that I can remember (although my memory only goes back six or so years).   I will either be in cash this week or some small long positions to see if the "do the opposite of what seems obvious" really will work.  This outlook makes no sense, but neither does this market.  Good luck this week - we all need it.

Sunday, December 11, 2011

Stock Market Video - "Hoping For A Bullish Move Into Year End" - 12/11/11

Hi, traders - here's the video for the week ahead.  We're in a position that a nice bullish breakout could occur soon and lead us into a year-end rally (which I discuss in the video) but the way this year has gone, nothing is a given.   In the video, I go over key levels to watch as well as some long setups that should be on your radar for the week ahead.

I do apologize for not writing much recently, but to be honest, I just haven't felt the desire to do so with the way the market has been.   With so much news out there, analyzing what could happen tomorrow has seemed pointless at times because an unpredictable 2-3% gap up or down seems to occur every other day these days.   If we can get some smoother action that is more conducive to swing trading, I will post more.  Unfortunately, we haven't had that type of market for quite a while now.   It's been a real grind and actually feel fortunate my account is only off about 6% from its all time high earlier this year.

I hope you find the video helpful and informative.   As always, feel free to email me with questions or comments - I enjoy hearing from my readers.  If you like the videos, please take a moment to leave a review on Investimonials and feel free to retweet the links to your friends.  I would appreciate it.  You can also review my Twitter feed here.

Sunday, December 4, 2011

Not Much to Do Here (and Not Much to Comment On)

No video this weekend - if any of you were looking forward to it, I do apologize.   I've been working on some home improvement projects the past four to five days (flooring) and am absolutely beat.  One more room and probably another two days or so of work so my focus may remain on other things rather than the market.  I just now took a look at my charts and really, this is not the time to be making any new moves in my opinion.   My breath signal is on a buy so I have a really hard time getting short here, but based on Friday's action, the market is very tired (it has reason to be) and needs some rest.   If that happens early this week, then I will look to get long again as setups appear.   I did try a few longs Thursday and Friday but none worked out.  Even a day or two of sideways action would be great for the longer-term outlook of this potential rally.  We have to see what they can do - the only time we tend to see sideways action anymore is intraday after a huge gap up or gap down. 

As I said a week or so ago, a big part of me still believes the best the bulls can do over the next month or so is some sideways chop, and if that happens...boy, it would suck.   This market remains extremely difficult to swing trade as gaps are now seemingly the norm and predicting what will happen from day to day is very hard.   Europe is not going away no matter what the central banks do, so longer-term I remain bearish.   Nothing surprises me however anymore.  

Good luck early this week if you're trading, but I just don't see much edge at this particular spot.  Depending on how the next few days go, I think some potentially nice setups will emerge.   I'll share those as they come up.   Take care.

Tuesday, November 29, 2011

A Few Short Setups to Consider

Don't know if this market is going to fall back down toward the abyss anytime soon, but today certainly wasn't an impressive follow-through to yesterday's relief bounce.   We may move a little higher in the short-term, but I think there are much better setups on the short side than long right now.   Here are some to consider...

All Charts from Telechart, Courtesy of Worden Brothers, Inc.

Sunday, November 27, 2011

Stock Market Video - Three Part Look at This Market and What to Expect in the Week Ahead - 11/27/11

Hi traders - hope everyone out there had a great Thanksgiving holiday (at least that it was better than Wall Street's Thanksgiving.)  It was certainly an awful week in the markets last week and I don't know if it is going to get any better soon.  We're back into a bear market and any bounces we get look very shortable.   Since we are quite stretched here to the downside, a reflex bounce is a strong possibility early in the week, but longer-term, the long side is not the place you want to be.

Video one looks at the overall market outlook and what my game plan is for playing a potential bounce this week.

Video two looks at some potential short setups for LATER in the week depending on when the market bounces and what the bounce looks like.   Do not short these stocks now because it is likely too late to do so and you are setting yourself up for major pain.

Video three looks at the few stocks that are still holding up well in this market.   Although it's pretty clear we're back in a bear market, you always want to be prepared for any possibility, so doing due diligence on the long side is still smart.   Who knows - maybe we'll get a miracle solution for all of Europe's woes this week and the market will take off....yeah, I don't think so either.   Anyway, it is still a good idea to keep track of what is strongest because those will likely be the stock that are the future leaders when or if the market turns.

I hope you find the video helpful and informative.   As always, feel free to email me with questions or comments - I enjoy hearing from my readers.  If you like the videos, please take a moment to leave a review on Investimonials and feel free to retweet the links to your friends.  I would appreciate it.  You can also review my Twitter feed here. 

Saturday, November 19, 2011

Stock Market Video - "Expecting the Market to Try to Make Us All Look Like Turkeys This Week" - 11/19/11

Hi, traders.   I have a bearish bias heading into this week based on the action of the past three sessions on Wall Street (including Friday, which I discuss in the video), but this week will be a tricky one due to the holiday.   Monday, Tuesday, and Wednesday will all likely have lighter than normal volume, conditions that the computers just love to play with.   Friday will likely be the lightest volume of the year.   Thanksgiving week typically has a positive bias, but throw in the constant soap opera across the Atlantic along with the debt "Super Committee" deadline coming Wednesday and your guess is as good as mine as to which way we head this week.   It likely will be a choppy one so be careful and trade light.   Don't let the market make you look like a turkey by placing huge bets and being super aggressive.  This is likely not the week you want to do anything like that.

In the video, I go over why I am leaning bearish here and share some short setups that could look real nice with another few days of consolidation.   I also share the stocks holding up best after last week because I realize this market is completely unpredictable here and a few really positive sessions early in the week would not surprise much at all.

I hope you find the video helpful and informative.   As always, feel free to email me with questions or comments - I enjoy hearing from my readers.  If you like the videos, please take a moment to leave a review on Investimonials and feel free to retweet the links to your friends.  I would appreciate it.  You can also review my Twitter feed here. 

To see the videos in HD, please click "720p" and "Full Screen" on the video bar - HD will be available after processing.

Saturday, November 12, 2011

Stock Market Video - "Making Sense of a Senseless Market" - 11/12/11

Hi traders - I did a video this week to go over the charts I am looking at going into next week (and there are quite a few.)  This past week was all over the place and this market remains extremely difficult to play from day to day.   We're either in a consolidation/range here that will lead to higher prices eventually or a topping pattern, but because it's so choppy (and news-driven), it is almost impossible to figure out which one it is.

Best advice here is to keep your head up, try not to get frustrated, and just stay in the game. Trade smaller positions if you have to trade at all.   No one out there is making a killing right now because it's just too tough.   Keep your mind open and options ready and you'll be fine (well, as fine as you can be in this type of market).

I hope you find the video helpful and informative.   As always, feel free to email me with questions or comments - I enjoy hearing from my readers.  If you like the videos, please take a moment to leave a review on Investimonials and feel free to retweet the links to your friends.  I would appreciate it.  You can also review my Twitter feed here. 

To see the videos in HD, please click "720p" and "Full Screen" on the video bar - HD will be available after processing.

Wednesday, November 9, 2011

This Market is a Blast...

A blast of frigid cold air that is as you leave your cozy, warm house on a dark February morning that punches you in your gut, leaving you gasping for air and wondering "where did that came from?"

Let me start by saying that I only have one long position on right now and have been mainly in cash over the past few weeks, so my rant here is not because I am angry about this big gap today.   Luckily, I shouldn't be hurt badly.   I have attempted to make some trades, but the success rate has been very low.   Breakouts seem to reverse back just as much as they succeed over the past week or so.   Earnings trades do move, but only after having crazy volatility and large shakeout moves after opening that would stop most sensible traders out of their positions (see FIO as a good example).   It's still a market in which it is very difficult to hold positions for more than a few hours because if you do, you're likely to see your gains go up in smoke, only to reverse as soon as you get out. 

It is what it is I guess, but that doesn't make it any easier to play.   We just saw three or four days in a row where dips were bought intraday.   Many of those dips came on less than rosy news.  This would normally be bullish - seeing bad news get bought.   We get more news overnight and now we're looking at a big gap down.   News-driven markets are always difficult to play, but I think this one takes the cake.   Not only is the news impossible to predict, but what seems really bad can get bought up in a heartbeat.  The next day, similar bad news can get you a big gap down.   This market over the past few weeks has done a great job at conditioning traders that things are OK even with bad news, and then - BAM - a punch in the gut. 

Right now, you basically have to guess what is going to happen overnight AND what the market is going to think about it to make money, or just stick to trading intraday.   I can't do that (intraday), so I guess I need to just continue to stay mostly in cash.   It's one thing for the market to sell off, but when it does it with a big gap down, it makes starting positions very, very difficult.   Swing trading is not very conducive to markets that gap up or down big at a moment's notice, but that's what we still have.  

I wish I could tell you how to play today, but I am really not sure.   It honestly wouldn't surprise me to see the market finish positive today, but a 3-4% down session wouldn't surprise either.   I've continued to see some nice setups in my scans, but today could very well eliminate many of those charts.  I guess I'll manage my one position and sit back and watch.   I shared both long and shorts this weekend, but big gaps like this make it hard to get started on the short side.   Oh well.   Have fun today and good luck - I'm sure it will be a "blast".

Sunday, November 6, 2011

Stock Market Outlook for Week Ahead - "Lots of Bullish Charts, But Also Lots of News" - 11/6/11

It was a tough week for the overall market and for swing traders this past week (at least it was for me.)   The overall market was down about 2% for the week but the action was extremely choppy both day to day and intraday.   Monday and Tuesday were about as bad as you can get on Wall Street, but that was followed up with a marvelous session on Thursday.   It was hard to get gains as stocks moved above many trigger points but then right back below sensible stop points, leading to some whipsaws.   Looking back, it was a week best spent on the sidelines in most cases.   Unfortunately, that's much easier said in hindsight.

Friday could be considered a good consolidation day, especially considering the market bounced off of some heavy selling in the morning and closed near its highs for the session.   My main concern here, however, is that I am seeing some mini head and shoulder patterns set up on the main indices and if we close below Friday's lows, I fear that those patterns will be confirmed.  I also continue to see somewhat extreme numbers in my momentum scans which normally lead to pullbacks. See the charts below (click to see larger image).

Major Indices

The U.S. dollar is also setting up a bullish flag pattern which is not good for the overall market.   
 U.S. Dollar

News remains the driving force of this market and until this mess in Europe is figured out one way or the other, the roller coaster ride will continue.  It remains a difficult environment to hold stocks for more than a day or two (and in some cases less that that), so you have to adjust.   Until the news dies down, I just don't think we're going to see many opportunities to start a position, hold it for a week or two, and take a nice 20-30% gain.   The market is just too volatile for that unless you don't use stops (which is a no-go in my book). 

I am still leaning long because that's where most of the individual charts are pointing me, and these are the setups I will be watching most.   PLEASE CHECK EARNINGS ON THESE NAMES - I HAVE NOT DONE SO YET.   I usually eliminate any name that is reporting earnings during the week ahead automatically.  

High RS Flag Patterns
Lower Level (or Thinner Names) FlagPatterns
Potential Bottoming Patterns
Momo Names to Watch (Daytraders Especially)
Solars Worth Watching Here?

If we do fall soon, I am going to look at the big cap former leaders on the short side, many of which continue to look like they are topping or have indeed topped.   TVIX is also on my list.


Good luck next week.  Hopefully it will be a little less news-driven and a little easier to trade.  I somehow doubt it, but it is what it is.  Adjust as best you can and hope for some luck.  Take care.

Monday, October 31, 2011

Was Today Just a Shakeout or the Start of Something More Serious?

After last Thursday's massive up move, a pullback on Wall Street was certainly to be expected.   Friday fit the definition of a "pullback" or "consolidation day" perfectly.   Today did not, as it was quite a bit worse, especially with the nasty selloff into the close.   Last Tuesday was similar to today and it turned out to be a buying opportunity.  Is today a similar "opportunity"?   I think we have to wait and see.

I'm looking for one very simple thing here as a clue as to whether it is time to buy this dip or time to be more cautious.  Anyone who follows my blog knows that I like to use the 9 and 20 day EMA as my "short-term" signals for the market and the stocks too.   I think they work very well.   So far since the 9 and 20 day EMAs crossed on October 11, the Nasdaq has not CLOSED below the 9 day EMA.   It has been tested a few times on big gap downs, but both of those gaps were quickly bought and the market proceeded higher for the next few days.

We are looking at a very similar situation here and tomorrow should give us a big clue as if today was something to worry about or not.   The charts below give you some clues as to why and also what to watch for.   I am in cash but ready to go with some longs as long as the market tells me it's OK.   Good luck Tuesday.

Russell 2000
All Charts from TC2000, Courtesy of Worden Brothers, Inc.