Summary
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Added to my Goldman Sachs Group, Inc. (NYSE: GS) position on the breakout above 140 as per plan. However, the sellers showed up later, and the broad based weakness led to Goldman Sachs selling off. I exited my full position at breakeven (140). Will probably need a couple days to determine whether there is any buy support at 136.6.
Started a 1/4 position in Berkshire Hathaway Inc. (NYSE: BRK.B) as per plan.
long 75.6, stop 73, target 80+
IBM (International Business Machines Corp., NYSE: IBM) has been acting the strongest during this OpEx selloff, along with MacDonald's. I will look to buy both names on weakness.
Another name has caught my eye, and that is American Capital Agency Corp. (NASDAQ: AGNC). This is a mortgage REIT that buys MBS's and CDO's and makes money on the interest rate spread. They pay a 21% dividend. They recently completed a secondary stock offering, which was priced at $25.75. I will monitor this stock to see if it can stay above 25.1 next Friday.
Tuesday, May 18, 2010
Trade Update, May 18, 2010
Monday, May 17, 2010
Deja Vu ?
Summary
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Lately, there has been quite a lot of conflicting opinions about whether the market will go down or go up. When there is this much crosscurrent of opinions, I find it best to stop reading them, and concentrate on the chart and listen to the message of the market. I did notice something interesting about today's action.
Today's action looks surprisingly similar to the hammer reversal on Feb/10. I have described some parameters which, if we are indeed putting in a bottom, I think the market will conform to.
Will look for confirmation to short 1141-43 area, and buy 1124-26 area.
Baidu Inc (NASDAQ:BAIDU) did not bounce as strongly as the rest of the leadership stocks. Therefore, it is safer to watch for signs of buying strength at the gap fill 71-71.4
Goldman Sachs (NYSE: GS) looks interesting, especially if the overall market is in the process of bottoming out:
If GS dips below 140 again, I plan to buy my other half position. stop on full position will then be 138. If a rally materializes in the afternoon, then I may even hold my position.
I didn't have a chance to buy Berkshire Hathaway Inc. (NYSE:BRK.B) because I was too busy scalping BIDU today for a few dimes. But now that the market is potentially trying to carve out a bottom, I will pay attention to the oracle of omaha. Plan is unchanged for BRK.B tomorrow:
1/4 position long at 76
1/4 position long at 75
1/4 position long at 74.5
1/4 position long at 74
initial stop on all 73
target 80
Trade Update
Goldman Sachs !!
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I only went long half of a position in Goldman Sachs (NYSE: GS) on the afternoon break above 140. I only took a half position because I believe there will be a re-test of the 138.5 lows. However, I recognize that I could be wrong, therefore, I needed to execute as per my previously described trade plan, but with reduced risk.
My stop is 139.5.
GS broke back above the 141.5 resistance level and even closed above that level, but is not out of the woods yet by any menas.
This week should tell us whether Goldman Sachs is trying to build a base at these levels (138-139).
As for my Visa Inc (NYSE: V) trade (bought 76.5, sold 78.9), I am glad the market offered me the opportunity to get out this morning. I timed my sell pretty near the Highs of the Day. That huge gap down indicates a big overhang of stuck longs, so there is no reason to look at swinging long Visa for the next few weeks until at least it can build a good base.
sold visa
Summary
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sold Visa Inc. (NYSE: V) at 78.9.
Thought about waiting for a last gasp exhaustion break above 79, but was too busy watching Baidu, so I bailed 78.9 good enough...
Saturday, May 15, 2010
Weekend Review, May 15, 2010
S&P 500 review, along with some stocks, and update to my buy list.
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This pullback feels a bit different from the previous one that occurred in Jan-Feb/10. In the previous one, BPSPX bottomed out at 64.5 before resuming its march forward. This time, we are already below 64. So, there is a potential for a deeper correction down to 1090 or so. However, I am not expecting the Feb/10 lows of 1040 to be violated. Because of the ongoing European Debt crisis, we may be entering a period of sideways movement until Sep/10.
Moving my stop in Visa Inc. (NYSE: V) up to 76, still hopeful it can dead cat bounce up to 81-ish.
Eyeing the gap fill at 71-ish for Baidu Inc. (NASDAQ: BIDU). This stock is showing amazing strength given current market conditions. I will try to get in before the start of earnings run-up next month.
Will also be looking to buy IBM (NYSE:IBM) for an earnings run-up. Note that it is also above its pre-crash levels. Baidu and IBM are one of the few stocks that I have found so far that are above its pre-crash levels. Well, Google (NASDAQ: GOOG) is just barely above its pre-crash levels, but since it is similar to Baidu, I will swing Baidu instead of Google.
no action yet until I see how it behaves under 141.5. My original plan still applies:
Goldman Sachs (NYSE:GS):
wait for the dip below 140, and then buy the breakout back above 140
stop 135
target 150
Berkshire Hathaway Inc. (NYSE:BRK.B) is just barely above its pre-crash levels. Trading plan for this stock is a bit trickier. I think I will have to scale into this position.
1/4 position long at 76
1/4 position long at 75
1/4 position long at 74.5
1/4 position long at 74
initial stop on all 73
target 80
Plan for General Electric (NYSE:GE) slightly changed from original post :
buy any dip below 16.5
stop 14.0
target 21
All other plans for stocks that I mentioned previously are cancelled.
Friday, May 14, 2010
bought visa again
Summary
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bought back visa at 76.5
stop 75.65
target 81-82
hold over the weekend unless i get stopped out
exited longs
out Visa (NYSE: V) at 77, will wait for better entry on Visa to swing long
Still holding BIDU, raising sell stop to 72.5
Update:
Exited BIDU 73.35.
Currently no positions.
Was hoping for some buying strength into the close, I don't think that's going to happen.
Wait for next week to see if buyers show up.
Get Ready to Buy - Update part II
bought BIDU, and V
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In my previous post, I discussed a list of stocks that I planned to buy on a correction. One stock in my previous post has triggered, and I bought another which I did not previously discuss.
Long Visa (NYSE:V) 76.67
stop 74.5
target 81-82
Long Baidu (NASDAQ:BIDU) 72.83
stop 70
target 79
Saturday, May 08, 2010
Get Ready to Buy - Update
Update on my shopping list
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Here's what I plan to do in my retirement account if the following stocks reach my levels:
General Electric (NYSE:GE) :
buy any dip below 16.5
stop 14.5
target 22.5
Goldman Sachs (NYSE:GS):
buy breakout above 140 if there is a dip below 140
stop 135
target 150
Visa (NYSE:V) (look at MA for confirmation)
buy 80-81
stop 77
target 88
Barclay's (NYSE:BCS):
buy breakout of 16.5
stop 15.5
target 19.5
McDonald's (NYSE:MCD):
buy 68.25
stop 67
target 72
MasterCard (NYSE:MA) (look at V for confirmation)
buy 220
stop 210
target 245
And no, I don't think it's a coincidence that they are all NYSE stocks.
If any of these trades trigger, I will make another update here.
One More Flush
Setup for Mutual Fund Monday.....
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The action in 2007 is eeriely similar to what we are witnessing today:
- big 85+ pt drop
- hammer reversal
- low volatility run-up to new contract highs
- volatility expansion that leads to an even bigger drop
- 50d EMA rolling over, but 200SMA still rising.
Back in 2007, NYMO peaked first, and then put in a higher low (+ve divergence). That, along with a high volume white candlestick marked the short term bottom.
So, here's where we stand today:
- big 100pt drop
- hammer reversal
- low volatility run-up to new contract highs
- volatility expansion that leads to an even bigger drop
- 50d EMA rolling over, but 200SMA still rising.
However, NYMO has not yet put in a higher low. Also, on Friday we had a 40pt selloff, but no bullish response to it (couldn't close above 1122.75). So I don't think the short term bottom is in yet.
We could see new contract highs after this correction. My rationale is that the 200SMA is rising, and this is the very first time it has been tested.
However, my own analysis based on past corrections (Aug07, Jan10) suggest that we could see one more capitulative flush down before we march on to new highs. Certainly the current downtrend of lower highs and lower lows needs to be broken before any meaningful rally can take place.
As for Monday, well, I think we will conform yet again to Mutual Fund Monday (+88% chance of close > open). But I think it will be a dead cat bounce that does not affect current market structure.
Friday, May 07, 2010
Get Ready to Buy
Buy when there is blood in the streets..... we're getting close
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My shopping list includes:
Goldman Sachs
McDonald's
Visa
MasterCard
Barclay's
NetVibes Me!
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