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...

ARUN
 BIDU
 EDU
 GMCR
 SPRD
 STMP
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.

WYNN, CROX, AAPL, AMZN
SINA, SOHU, FMCN, LULU

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.