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The measured move strategy (AB=CD, where C=opening low on Jan. 22/08) suggests a price target of 19.7-ish, the round number of 20 also makes sense as price target. If Yamana Gold (NYSE:AUY) can close above 17, then 19-20 is a definite possibility. AUY has also been trending up nicely over the past 4 trading sessions, so a close below 16 would invalidate the price target and break the trend.
Monday, January 28, 2008
Chart Review: Yamana Gold Inc (NYSE:AUY)
Sunday, January 27, 2008
Welcome to DayTrade City......
Summary
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ES futures are currently down over 16pts @1317.75 in the overnight session.
Hang Seng Index is currently down over 1200pts, or over 5% in the Asia trading session.
Market moving events on tap this week:
Monday:
New Home Sales, 10am
SNDK and MCD earnings after market close
Tuesday:
Durable Goods Orders report, 830am
YHOO reports after mkt close.
CFC reports after mkt close.
Wednesday:
MRK and BA earnings report before mkt. open
ADP Non-Farm Payroll report, 830am
FOMC interest rate statement, 215pm
Thursday:
GOOG earnings report after market close.
Friday:
ISM Manufacturing Index, 10am
4 daytraders (dehTrader, HPT, Boogster, and boltar1) blew up their accounts last week.
$VIX is swinging wildly but maintaining the general uptrend.
Suffice it to say that it's time to be cautious this week. The edge in going long has been all but wiped away with the way the overnight futures are currently trading, and going short just before the FOMC meeting is not such a good idea either. I'm not seeing anything setting up for a swing trade (except maybe gold stocks), so I will wait for the trade setup to come to me.
Speaking of gold, Gold Futures, on the other hand, is up over 9pts @920.5 in the overnight session.
Most of them look ready and primed to re-test their highs from earlier this month.
This could be the last bright spot in this treacherous market.
Saturday, January 26, 2008
Trade Update on Ultra QQQ ProShares (AMEX:QLD)
Summary
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As mentioned previously, I bought Ultra QQQ ProShares (ETF) (AMEX:QLD) back on Wednesday @68.
On Friday, I sold it when it broke below 73 the second time in the afternoon session. I could have, and should have sold it when it was trading at 78 in the morning, but I didn't pull the trigger.
The main problem was that I did not have an exit strategy. I think I've got a handle on picking the right time to get into the trade, but I don't put as much time and focus into figuring when to exit the trade.
Wait the for the pop from the FOMC meeting? Fade the gap? Move stop to breakeven and let the profits fall where they may? Look for a break of trend? All of the above thoughts were floating in my head and as a result I was unable to make a decision.
Obviously for the next trade, I will have to work out an exit strategy.
Wednesday, January 23, 2008
From the Black Depths of the Abyss
Summary
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As mentioned in the previous post, I went long Ultra QQQ ProShares (AMEX:QLD) @68 today at around 1130am (PST).
Why did I go long in a counter trend and in the midst of a vicious bear market? Because my analysis said that we were due for a bounce. I didn't know when the bounce would occur, and yesterday's attempted rally did not impress. But today was a different story.
I've never seen a 70pt rally in ES before. 25pts, 30pts, sure, but not 70 freakin' points. Reading about it makes me wish I was around to witness it in real-time. Right around 10am (PST), the rally started as an innocent looking countertrend pullback. But then the pullback started to take on a life of its own, and broke above some resistance levels. 
Near the last hour of trading, the heinous hounds of program trading were released to unleash their egregiously rabid fury upon the unsuspecting sellers. No shorts were spared the beatdown. Markets seldom move in such uniform fashion, but when they do, it is a powerful and beautiful thing to watch.
So, where will the markets go from here? Don't really know, but I will be watching the following support/resistance levels:
Current stop has been moved to just under 70, although I might take profits near the 7am reversal time, we'll just have to see what the markets gives us tomorrow.
scaling in long QLD
first purchase of QLD filled @68,
I plan to purchase some more @67, stoploss @64.4
Tuesday, January 22, 2008
Black Tuesday: Around the Blogosphere
Summary
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Linda B. Raschke muses about what a 5% drop in the markets mean.
Henry Blodget reports on pending layoffs at YHOO.
Something to keep handy if you insist on trading Black Tuesday: Circuit breaker levels at the NYSE.
Monday, January 21, 2008
Black Tuesday: All Eyes on New York
"No one knows what's going to happen tonight in New York. It's like we've gone blind, you don't know what's coming. Until we see New York, all we can do is sell."
Ken Masuda, senior equities dealer at Shinko Securities in Tokyo.
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ES futures are currently at 1255, which is down over 5% from Friday's close. The Hang Seng Index is down over 8% from Friday's close, while the Nikkei is down only 5.6% from Friday's close. The FTSE is down only 5.5% from Friday's close, while the DAX is down over 7%.
Not sure what the carnage in the European and Asian markets in the past two nights will mean for the key market session in New York on 630am (EST) Tuesday. The only thing I know for sure right now is that the markets will open with a monster 4% gap down from Friday's close.
I'm reading the news and blogs, and I see traders thinking that we are close to the bottom, while others believe that there is more downside to come. All that means is we are right in the middle of true, unbridled chaos in the markets, and no one knows what will happen next.
Just for context, here's what happened to the S&P500 Index back in October 1987 (courtesy of Wikipedia):
And, here's what happened to the Nasdaq Composite Index back in 9/11/2001 (courtesy of AlphaTrends.net).
In both cases, the intraday low was not the bottom. Therefore, chances are that tomorrow's intraday low will not be the bottom either, or at the very least, will be tested.
My own plan is to only watch the markets since the risk is too great to go long or short at this point. I may perhaps try to spot the intraday high and intraday low in real-time (just so I stay sharp), but that's about it.
Final thought for the day:
If Helicopter Ben stands so ready to take substantive additional action as needed to support growth, then how should his non-sensical lack of action in the face of a 13% YoY rise in unemployment, a -20.9 reading in the Philly Fed Index, a 14% drop in residential construction activity, a frozen CDO securities market, a tepid CPI, and +4% plunge in the stock market indicies be interpreted ???
Saturday, January 19, 2008
Weekend Market Review, Jan. 19, 2008
We use technical analysis not because we think it means something, but because other people think it means something. We are always looking for market participants to take us out of a trade, and in that sense, knowing the technical points at which people are likely to be buying or selling is helpful.
- MICHAEL MASTERS
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Let's first take a look at the long term weekly chart of the S&P500 SPDR Trust (AMEX:SPY) :
From the weekly chart, it is clear that SPY spent most of the 2nd half of 2007 putting in a double top. The horizontal lines I made in the above chart highlight some zones to look for support.
The VIX was steadily creeping up to start off the year, but there was no real fear in the markets yet. That all changed this past Thursday when the VIX spiked up big time.
Just to provide context to the above VIX chart, when the previous bear market finally bottomed out in 2002, VIX peaked @44.
The daily chart of SPY isn't saying too much other than the fact that we are in a solid downtrend with a dearth of evidence that could possible pose a threat to the trend. On Dec 27/07, the downtrend that has been in place since Oct/07, started to accelerate. Key levels to watch are 130 (markets always likes round numbers for some reason), and 137-139. Volatility contraction typically follows volatility expansion, so there's an off chance we may see an inside up day on Options Hangover day (Monday). This also makes sense, since in a bull market, options Hangover day is usually a down day.
Sentiment Review
I wanted to take a look at the Bullish Percent charts from the previous bear market in 2000-2002:
The BPSPX was initially not affected too much when the tech bubble bursted in March 2000. However, eventually the tech bubble affected the rest of the markets, as most telcos stopped spending on CapEx and a few even went bust (eg. WCOM), and that eventually affected all sectors in all markets. Anyways, back in that bear market, the BPSPX bottomed out twice - the first was 9/11/2001, when it bottomed out @16-ish, and the second, true bear market bottom, did not occur until almost one year later, when it bottomed out below 14 in mid-July 2002, after a mind-numbing 9 consecutive weeks of selling.
Fast forward to today's BPSPX. If you compare that to the BPCOMPQ and the BPFINA, they are all more or less moving in the same fashion, which means that the subprime mortgage crisis has spread to other markets very quickly. The BPSPX is currently sitting @19.60, which is in the territory in which a short term bottom can form. And in glancing at what the media is reporting out there, we do seem to have fear and blood in the streets.
Everyone across the board is bearish these days, and that makes the short trade kind of crowded. I believe it's too late to put on any new shorts.
We need to wait for the bounce, a better bounce than what we saw last week, one that can actually break above and close above key resistance levels. Some evidence of a bounce that I am looking for include:
- market stops responding negatively to bad news
- some stocks start breaking out and the breakout sticks.
- a hammer candlestick on the SPY weekly chart
- no new intraweek lows on the SPY weekly chart
- a break above 21 for either the BPCOMPQ or the BPSPX
Obviously it's going to take time for the evidence to develop, so most likely I'll be sitting on the sidelines this week. If I do play, it will be restricted to the Aggies and Gold sector. One interesting thought: the markets started moving up around 2weeks before the FOMC meeting on Dec. 11/07. We are about now about 1.5 weeks away from the FOMC meeting at the end of this month.
Sector Review
Aggies
The three days of selling (Tues-Thurs) in the Agribusiness stocks was a definite sign of distribution. There will be churning, volatility and tests and retests of trendlines as the market tries to figure out whether or not this sector can recover.
Gold
Gold is in pullback mode, and that means to start looking for evidence of a move back to the upside. A bounce off the trendline, upmove in GLD, break above pivot point levels, whatever method you prefer, choose your poison, err.... I mean, gold stock, and start stalking.
Solars
The sun has set on the solar stocks. However, they are not good candidates for shorting right now, since they have been so oversold. Most likely a wait and see mode.
BioTech:
I tend to avoid playing biotechs, since the FDA events makes it very hard to play them. That said however, I couldn't help but notice this very nice symmetrical triangle pattern that has developed over the past 6 months. 84 and 79 are the key levels to watch. In biotech land, TEVA, BMRN, and CELG are all acting very well despite the recent market down moves.
Wednesday, January 16, 2008
Trade Update and Market Notes
Summary
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Got stopped out of my LNN swing trade. Entered @70.4, stopped out @71.
Agribiz stocks (POT,MON,MOS,TNH,TRA, et.al) are all starting to rollover. I am leaning towards not touching them until they have found some definite support level, although TNH's 5.9% div.yield is looking interesting.
Gold stocks gapped down and closed near their lows today, so that sector has sustained a bit of technical damage and will need a week or two of basing to recover.
All the solar stocks looked like someone pushed them off a cliff.
Oil stocks are also taking a beating.
In short, almost every sector that I was looking at before for possible trade ideas are pretty much not worth looking at for the next few days.
SPY still has not closed below Aug/07 lows, so I am open to idea of a bigger bounce occurring when everyone least expects it.
One new sector that I am starting to take an interest in:
Medical Equipment & Supplies:
Also on my watchlist: VMW, FCN, RIMM, OPTT, CPHD, PANL.
Monday, January 14, 2008
Trade Updates
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I got stopped out of SEED today @9.7 for a profit of just over 3.5%.
I was actually watching SEED during the last hour of trading, and as it dropped and dropped, I became more and more undecided and unsure of what to do - sell it before it took out my stop, or keep my stop in place and let the trade play itself out?
I had a stop level in place, and even a profit target objective for seed all planned out ahead of time, but unfortunately, my plan did not account a for a 20% drop in this microcap stock.
Now I look back at all that money I left on the table (over $2/share, yikes!) and wonder what I could have done differently. As a result of this SEED trade, I'm going to have to make a new rule, which is that if current price is more than a certain percentage below the current HoD after gapping up to open, then exit position, no questions asked. In SEED's case, the percentage threshold is 8%. The 8% sounds a bit arbitrary and will vary from stock to stock., but what my intention here is to attempt to quantify the price level at which there is too much technical damage done to the stock, and that the (intraday) sentiment has changed.
Anyways, on a more brighter note, yesterday I provided some trade numbers for some potential swing trades. Today, over half of them triggered, and I decided to play LNN. I got the idea for the LNN from Ugly. The reason I chose to trade LNN instead of the others is because it seemed to me to be the best behaved of the bunch that I highlighted.
My stop was originally at 66, but I have decided to move it up to 69.5. My exit plan is as follows:
1. Exit if current price is over 5% below the current HoD after gapping up to open.
2. Price stays below the manually drawn uptrendline for more than 30min.
Current watchlist: VIP, SDTH, MGPI, PEIX, PVX, RBCN
Sunday, January 13, 2008
Sunday Nite update
Summary
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Still holding TSE:UEX and STM.v, but I am close to giving up on those two losers.
Still holding SEED, moving my stop up to 9.7.
Currently on the watchlist:
MR: buystop@40.25, stoploss @39
SONO: buystop@39, stoploss @37.8
MCK: buystop@68.01, stoploss @66.24
RBCN: buystop@23.01, stoploss @22.44
KG: buystop@11.55, stoploss @11
LNN: buystop@70.4, stoploss @66.2
NSPH: limitbuy@13.8, stoploss @13.3
Another sector that I've noticed acting strong in this market is the medical equipment and supplies sector. Over half of my picks tonight are from this sector. There's actually stocks within this sector that look even better than the ones that I've picked in this watchlist (eg. CPHD, XRAY, CVD)); unfortunately, they have already broken out and are nearing overbought levels.
Anatomy of Fed Incompetence
I composed the following post before I saw a similar line of thinking on TG's blog.
The US Fed could have mitigated the current massive damage to the markets caused by the credit crisis. Not only that, but their ineptitude actually contributed to the market damage. Here is why.
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If the market can be viewed as a loose proxy for the US economy, then during Aug/07, the market was signalling that something was not right with the economy. The US Fed decides to ignore the message of the markets by not cutting rates when it met on Aug 7/07.
But, the market is always right. On Aug. 17/07, a mere 10 days after the Fed decides to leave the US Federal Funds rate and Discount rate unchanged, it announces that it will lower the Fed. Discount Rate by 50bps., catching everyone off guard. This action meant that the Fed had to finally acknowledge that:
a.) the Market is always right.
b.) the US Fed committed an error in judgement by leaving the discount rate unchanged during the Aug. 7/07 meeting.
The defenders of the US Fed would argue that the US Feds based its decisions in part on the economic reports, and it was the economic reports that came out between the 7th and the 17th which necessitated lowering the interest rates. Well, my response would be that that is the major contributing factor the the Fed's incompetence. The credit markets were already in trouble way before the 17th, why was it necessary to wait for more information when the situation in the credit markets were very clear long before the 17th? The US Fed should be more proactive and forward looking, instead of reactive and backwards looking.
When you are bleeding, especially if you are bleeding profusely, the first thing you naturally do is to take action to stop the bleeding, not to wait for more information about the nature of the bleeding. The credit markets were in trouble by late July, and the US Feds should have acted swiftly right there and then, instead of waiting for more economic data.
The second act of incompetence came when the Feds lowered the Fed Funds rate by 25bps on Oct 31/07. At that time, they also issued a statement which effectively said, "well, it looks like everything is alright with the credit markets. So, we will go back to worrying about inflation, which means don't expect any more interest rate cuts from us." Those presumptuous comments alone were enough to drive the markets down over 9% for most of November. The message of the markets was, "no, everything is clearly not alright with the credit markets." But once again, the Fed ignored the message of the markets.
The final act of incompetence in 2007 came on the Dec 11/07 FOMC meeting. The markets were moving up in anticipation of a 50bps cut in Fed Funds rate. The markets sold off 3% in disappointment with only a 25bps cut. Colour me an armchair economist, but if I perceived the threat of a recession to be looming, I would want to take action not only swiftly, but also early, the earlier the better. What I mean is this: Fast forward now to Jan 30/08, where if the US Fed lowers the rate by 50bps, it will be effectively admitting that the 25bps cut in Dec 11/07 was yet another error in judgement. The time to cut 50bps was on Dec 11/07, in order to stop the bleeding as early as possible.
Ben Bernanke now says that he stands ready to do what is necessary to support economic growth. However, this is something he should have said on the Dec. 11/07 meeting, thereby reinforcing the error in judgement on Dec 11/07.
In summary, the US Fed, with all their arrogant PhD's and MBA's is permanently lagging in its assessment of the econmic situation, and their dearth of proactive, decisive action contributes to the problem.
Friday, January 11, 2008
Recession Watch
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American Express reports that cardholder spending has slowed, and delinquincies rose. MasterCard Incorporated (NYSE:MA) falls in sympathy.
US Trade Deficit soars to 14 month highs, with record crude oil prices being the catalyst.
Many retailers report weak holiday shopping numbers. This is making the ProShares UltraShort Consumer Services (AMEX:SCC), which is the double inverse of the iShares Dow Jones US Consumer Services ETF (NYSE:IYC), looking pretty nice at this point.
The big brown line that I drew in my previous post about the current dead cat bounce in the S&P500 SPDR Trust (AMEX:SPY) is THE line in the sand. If SPY closes below 138, then we could drop another 5pts (that's 50 ES points) before seeing any form of support.
Swing Trade: Origin Agritech Limited (NASDAQ:SEED)
Summary
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I mentioned some possible trades yesterday, and gave out specific entry and stop loss points.
Well, just as I expected, the Agribusiness sector bounced today, and all of my picks triggered as of this posting (726am PST), with the exception of TNH.
I have chosen only one of them, just because I want to keep a tight control on risk exposure for now, until I get more confidence with swinging the Aggies.
Origin Agritech Limited (NASDAQ:SEED) had the prettiest breakout of the 5 that I picked, plus I think it has a good chance of performing the best out of the bunch, so I bought SEED: buystop@9.30, initial stoploss@8.44.
I am moving my stop up to 8.72.
Thursday, January 10, 2008
One Hot Sector for 2008
Sector trends, gotta love them.
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Despite the recent down moves, the Agribusiness sector is still in a healthy uptrend, and it is a case of innocent until proven guilty.
How strong is the Agribusiness sector?
- 8 out of the 10 shown above are above their respective 20d and 50d EMA's.
- both the 20 and 50d EMA's are pointing up for 9 out of the 10 stocks shown above.
I find it interesting that the majority of them printed an inside day today, which make them very playable.
For instance:
CF: buystop @112.5, stoploss@107
TNH: buystop @140.05, stoploss@132
POT: buystop @137.55, stoploss@132
TRA: buystop @47.05, stoploss@45.45
SEED: buystop@9.30, stoploss@8.44
The Sun is Setting on Solars
Summary
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Look at how the 20d EMA is flattening out on over half of the solar stocks. No, there's no bubble popping, but you can almost hear the air being let out of the balloon, sort of like how a glass of pop tastes after sitting out in the open for a couple of days.
The only decent looking stock out of that whole group is Akeena Solar Inc. (NASDAQ:AKNS). It has found some decent support at just under $10, so any long position could use a stop just below today's intraday lows.
However, Akeena Solar would be more suitable as a daytrading candidate, because:
1.) It would be unrealistic to expect any break above today's intraday highs to last for more than a day, if even that.
2.) Any up move in Akeena would be very prone to failure if the rest of the solar sector continues to roll over.
Wednesday, January 09, 2008
Dead Cat Bounce
Summary
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The market behaved in an interestingly familiar fashion today.
Guess where I have seen this before? It's almost like deja vu.
There were many traders who proclaimed the swing bottom today. Good for them, I wish I was around to witness it. But the burning question that is really wetting my noodle is this: is this THE true market bottom from which hope springs eternal and from which a new bully rally takes us to new highs?
Well, before we book tickets for that bandwagon, take a look at this chart:
The red circles that I've highlighted in the above chart indicates where RSI(3) was very oversold (<10), and thus the setup was there for an initial bounce back up. However, any rally attempt from there would fail, and the true bottom would occur a few days or even weeks later. The one pattern that I get from the above chart is this:
Market bounces, the bounce runs out of steam after a few days, and the market drops back down to test the pre-bottom level (and often dropping below the pre-bottom level) and then puts in a more reliable bottom from which it can move back up to repair the technical damage. Here another example of a bottom being carved out.
Now, I don't have a clue whether that is the process we are going to see unfold. But I do know that today was not THE bottom. Chances are that it is more of a dead cat bounce. The logical place of resistance for this dead cat bounce is 144 on SPY.
Not sure whether I will initiate any trades tomorrow, as I would like to take a look at the market action to assess the size and strength of this dead cat bounce. It would also depend on what I find tonight and what sectors will perform the best in the next few days.
Tuesday, January 08, 2008
Uranium Chart Review
Time to take another closer look at the market that no one knows about.....
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A lot of uranium stocks are popping up today, so it is prudent to find the more interesting plays. I actually put together the charts on the weekend, but they are all still valid, imagine that.
As mentioned yesterday, I keep track of my own custom Uranium Index, and a break above 18000 in my Uranium index would confirm a double bottom and also that the buyers are taking control.
Strateco Resources Inc. (TSE:RSC) - 
Strathmore Minerals Corp. (CVE:STM) - bought some @2.26 yesterday near the close
UEX Corporation (TSE:UEX) - bought some this morning @7.36
Uranium One, Inc. (TSE:UUU)
Paladin Energy Ltd. (TSE:PDN)
Monday, January 07, 2008
Sector Review
Broken Trends Everywhere, but there are still some good sectors to be in.
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Stopped out of HOKU @13 today for a loss of $0.5/share. Was up a dollar at one point, but I felt I needed to let the trade play itself out.
Solar sector is starting to look not so pretty.
Certainly none of them look tradeable since almost all of them put in wide ranging red candles today, with the only possible exception being ESLR. And even then, the rest of the solar sector would have to behave more rationally in order to even take a stab at ESLR. At the very least, the trendlines need to hold.
Shipping looks even worse than the solar sector:
At least with the solar stocks, the trendlines were still rising. That is not the case with the shipping stocks. They are breaking down for sure.
On the other hand, the Agribusiness sector looks healthy still:
Although many of the aggies stocks tagged their trendlines today just like in the solar sector, the big difference is in sentiment. Many of the solar stocks have doubled in 2months or less, whereas the aggies stocks are trending up more rationally, suggesting that they still have more room to run.
I actually tried to trade POT again today, but got stopped out for breakeven. Most likely a few more days of consolidation is required before a low risk entry point can be identified.
Gold sector is looking even better:
The whole gold sector should get a boost when the US Federal Reserve meets at the end of this month and lowers US Federal rates by at least 0.25 percent.
And the sleeper sector of the year:
My own custom Uranium Index is currently sitting at 16291. A close above 18000 confirms the double bottom, and that buyers are taking control, and also my signal to go long on some uranium stocks.
Stick a Fork in the Hang Seng
Summary
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Despite the misleading name, the iShares FTSE/Xinhua China 25 Index (NYSE:FXI) does not track the SSEC (Shanghai Comp. Index), but actually more accurately tracks the Hang Seng Index.
So what this means is that FXI is actually a good way to play the Hang Seng, which is known to be more volatile than the S&P500 or even Nasdaq for that matter. Most of the Asian indicies have a tendency to follow the lead of the American Exchanges, meaning that most of the Asian indicies are trading in the red right now, led by the Taiwan Index with a 4% plunge that rivals the COMPQ.
Anyways, I just thought it was interesting that ProShares came out with the inverse ETF that tracks the inverse of FXI - the FXP. I will be watching that one for this coming week. Based on the current action in the Hang Seng (down over 1.2% currently), FXP will most likely gap up tomorrow (Monday) to start off the week.
Saturday, January 05, 2008
Research In Motion Limited (NASDAQ:RIMM)
Summary
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I got spanked by Research In Motion Limited (NASDAQ:RIMM) today.
I bought @113.5, had my stop @111, but today it gapped below my stop, so I had to manually sell it @108. Lost $5.5/share on that trade. 
It's getting harder to make a case for swing trading RIMM. In fact, I see more and more stocks with broken trends (FSLR, GRMN, CMG, RSTI, ISRG, etc.) which means less and less opportunities to swing trade. Probably safest just to stick with playing the Aggies for now, although uranium is starting to look interesting as well.
On the other hand, many of the inverse ETF's are starting to look very interesting:
Most of them formed very nice bases during Nov-Dec/07. Furthermore, something interesting happened on Dec. 27/07, and most of these inverse ETF's turned around. When so many markets are reversing like that in such a coordinated fashion, you have to pay attention. It's too late to buy the inverse ETF's now, but on the next pullback, I plan to be ready.
Friday, January 04, 2008
Lessons from Swinging Potash Corp. (NYSE:POT)
Summary
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I had done almost everything textbook with my swing trade in Potash Corp. (NYSE:POT).
I entered on a pullback, defined my risk, and wait for the trade to play itself out.
Unfortunately, there is the matter of the exit, and here is where I need more work. I mentioned previously that the current run-up in POT was getting a little bit long in the tooth, and the consolidation of the past few days was not enough to relieve overbought conditions.
I knew all along that I wanted to sell into strength. Well, today, that strength came. I saw price action gap up today, and then it proceeded to bounce around between 148 and 149. A 2point gap means nothing to a stock that can move up to 10pts in a day. So the more I watched the price action, the more I got the urge to just sell and be done with it.
Of course, after I sell, POT proceeds to hit my original price target of 150.
I sold too soon, but the bigger issue is that I didn't let the trade play out, as I did not let this winner run.
It may have been watching the tape too much, and reading too much into every tick. I need to practice watching the tape less often, and instead, let my stops and targets do their work.
I am done with POT for now, but will continue to watch it (along with the rest of the Aggies) for more swing trade opportunities, as there will be plenty of them for this year.
More Chart Reviews
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Kind of in danger of overtrading here, so I have to keep my watchlist down to only the best of the best low risk and high probability plays.....
I was stopped out of BPOP @9.94, for a loss of $0.11/share.
So now I have only 2 current Positions:
Research In Motion Limited (NASDAQ:RIMM) -
The reason I bought it is because I saw that my risk would be low. But this is not a high probability trade, since RIMM might still try and fill the gap.
My stop is still at 111.
Hoku Scientific, Inc. (NASDAQ:HOKU) -
Went long @13.5, initial stop was 13.
I bought this after Brian Shannon's mentioned it in his blog. Interesting to note that HOKU has supply agreements with two solar stocks, STP, and SOLF. HOKU typically reports it earnings in the third week of January, so there is still time for an earnings run-up; in fact it may have already started.
WATCHLIST:
VMware, Inc. (NYSE:VMW)
The plan for VMW is to wait for evidence that buyers are starting to take control. In retrospect, this is what I also should have done for RIMM.
MasterCard Incorporated (NYSE:MA)
Also watching PANL @21, SXC @40.
There are plenty of bullish stocks to go around. Current hot sectors are the Agricultural Chemicals, Solar, BioFuels, and most commodities. First it was $10 wheat, then $100 WTIC, then $850 Gold, and now, also Uranium is starting to "twitch":
I originally thought tomorrow would be a quiet day, but it looks like now I will have more than plenty to keep me busy.
Thursday, January 03, 2008
Trade updates
Summary
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Long MA @214.12, Sold @210.55, loss of $3.57/share.
Long POT @143.1, Sold @148.85, gain of $5.75/share.
Still holding onto BPOP, stop=9.95, target=10.9-ish.
Bought RIMM @113.5, initial stop=111, target 120.
Wednesday, January 02, 2008
Chart Reviews
Summary
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S&P500 SPDR Trust (AMEX:SPY) -
SPY got dragged down by the financials again. First, the daily view:
Today's volatility was more like an appetizer of what is in store for this month. BPSPX doesn't look too good at this stage. The follow 10day chart describes more the market structure at this point:
The eMini Futures (ES) is creeping back up in the overnight session. Will be watching XLF and my tells for more insight.
Amazon.com Inc. (NASDAQ:AMZN) -
Price action was a bit messy, but nonetheless it has to be considered bullish and relatively strong when the rest of the market was failing.
Popular, Inc. (NASDAQ:BPOP) -
BPOP was on my watchlist. I came, I saw, I bought.
The 10d and 50d EMA lines are both between 10.2 and 10.3. Failure to close above that level tomorrow and I will tighten my stop.
MasterCard Incorporated (NYSE:MA) -
Because of my indecision, "hopefully" I will not be even given the opportunity to decide whether to add to my half position in MasterCard. Target of 224 still stands.
Potash Corp. (NYSE:POT) -
The longest that POT has been in overbought conditions was for 11 sessions at most. Today was session #8. It is time to look for an exit, perhaps on the next surge of buying.
I've added RIMM, HOKU, OPTT, VMW, VIP, SKF and FXP to my watchlist.
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