Following the 30 min chart, now is a good time to place some trades...USO is about to break into a rally and SPX and XLF failing at resistance....
long USO, ENERGY (nov, pbr, hes, etc), and Commodities (agu, xme, etc)
short SPY, IWM, EXCHANGES (ndaq, nyx, ice), FINANCIALS (ibn, etc)
Thursday, July 31, 2008
7/30 - Market Analysis
Big continuation day from yesterday's rally...good volume too...
Surprisingly, USO rallied as well...on even bigger volume. Beautiful engulfing candle to go along with that as well...oil bulls were happy...
XLF didn't do quite as well but still maintained much of its gains for the day. big selloff midday should be caution to the bulls out there though. Volume was decent again...
And a new chart, the UUP. a dollar etf...very important to the markets since it is so important to the price of oil. The drop in the dollar was the direct cause to the push up in oil today. if this dollar continues to follows its trend, i would bet that oil will continue going higher...
Analysis: Today was very impressive. A bit shocking actually. With so many big up days followed by selloffs or quiet trading days, i really wasn't expecting this much strength out of the bulls. I really don't know what to make of it. Earlier it was said that if we get a huge move up in the SPX on good volume that i would turn bullish...but i also said that if USO gets a huge engulfing candle on good volume that i would turn bearish....so my hands are tied. I wound up just holding my short position and didn't buy anything either. I think that tomorrow, either SPX or USO has to give. One will fall and one will rise....so depending on that, i will be either a bull or a bear by the end of the day. Looking at the charts though, i do favor a fall tomorrow in the markets because of the strength in commodities today. It just makes more sense as Oil is sitting on support while SPX is coming up on strong resistance. Also, the market was strong but financials and big cap tech was only moderately strong. If i had to guess, i would say that today was a bit of short selling and window dressing, not particularly the addition of many new bulls in the market. But i am very flexible at this point and don't really care if i turn bullish or bearish tomorrow. I really wonder if the market can in fact rally even if oil does not fall. And i wonder how much longer the big cap tech can stay weak as SPX rallies...notice that i took the big cap tech off the buy list today. They have been mediocre in their performance at best...weak relative strength
Game Plan: As V and DIS both beat the street today afterhours, we are more than able to open higher tomorrow. But with oil still strong and looking good with the dollar at good resistance, i would not be surprised to see a big down day tomorrow. If we get a big drop in oil back near 100 and SPX gives me a close higher than today on decent volume, i will be atleast 80% bullish by the close. But if oil pushes up higher to close at a nice bullish candle on good volume and SPX makes a lower close more than 50% retracement of today's candle, i will be 80% bearish. At the moment, i am 50/50....i don't like feeling this unbiased...especially since i do have money in the market.
Conviction Buy List:
Agriculture (agu, sqm, agu, ag)
Strong Financials (mer, wb, bac)
Energy (pbr, apv, hes, nov, xle)
Relatively Strong Tech (intc, dell)
USO
Conviction Sell List:
Weak Financials (leh, ibn, aig)
Retail (hd, low, nile)
Exchanges (cme, ndaq, ice, nyx)
UNH
Surprisingly, USO rallied as well...on even bigger volume. Beautiful engulfing candle to go along with that as well...oil bulls were happy...
XLF didn't do quite as well but still maintained much of its gains for the day. big selloff midday should be caution to the bulls out there though. Volume was decent again...
And a new chart, the UUP. a dollar etf...very important to the markets since it is so important to the price of oil. The drop in the dollar was the direct cause to the push up in oil today. if this dollar continues to follows its trend, i would bet that oil will continue going higher...
Analysis: Today was very impressive. A bit shocking actually. With so many big up days followed by selloffs or quiet trading days, i really wasn't expecting this much strength out of the bulls. I really don't know what to make of it. Earlier it was said that if we get a huge move up in the SPX on good volume that i would turn bullish...but i also said that if USO gets a huge engulfing candle on good volume that i would turn bearish....so my hands are tied. I wound up just holding my short position and didn't buy anything either. I think that tomorrow, either SPX or USO has to give. One will fall and one will rise....so depending on that, i will be either a bull or a bear by the end of the day. Looking at the charts though, i do favor a fall tomorrow in the markets because of the strength in commodities today. It just makes more sense as Oil is sitting on support while SPX is coming up on strong resistance. Also, the market was strong but financials and big cap tech was only moderately strong. If i had to guess, i would say that today was a bit of short selling and window dressing, not particularly the addition of many new bulls in the market. But i am very flexible at this point and don't really care if i turn bullish or bearish tomorrow. I really wonder if the market can in fact rally even if oil does not fall. And i wonder how much longer the big cap tech can stay weak as SPX rallies...notice that i took the big cap tech off the buy list today. They have been mediocre in their performance at best...weak relative strength
Game Plan: As V and DIS both beat the street today afterhours, we are more than able to open higher tomorrow. But with oil still strong and looking good with the dollar at good resistance, i would not be surprised to see a big down day tomorrow. If we get a big drop in oil back near 100 and SPX gives me a close higher than today on decent volume, i will be atleast 80% bullish by the close. But if oil pushes up higher to close at a nice bullish candle on good volume and SPX makes a lower close more than 50% retracement of today's candle, i will be 80% bearish. At the moment, i am 50/50....i don't like feeling this unbiased...especially since i do have money in the market.
Conviction Buy List:
Agriculture (agu, sqm, agu, ag)
Strong Financials (mer, wb, bac)
Energy (pbr, apv, hes, nov, xle)
Relatively Strong Tech (intc, dell)
USO
Conviction Sell List:
Weak Financials (leh, ibn, aig)
Retail (hd, low, nile)
Exchanges (cme, ndaq, ice, nyx)
UNH
Wednesday, July 30, 2008
Swami's predictions for 7/31
S&P 500: Up
Pick of the Day: DIS Call
All-time Records:
S&P 500: 0-1
Pick of the Day: 0-1
7/30 - signals
So what would have to happen to make me turn bullish? what about being more bearish? Here are ideal signals in terms of switching my stance to a bull or adding to my confidence as a bear:
ideal bullish signal:
- DJIA ends the day about 120-180 pts higher and closes near its highs (with spx acting accordingly) on higher than average volume
- USO makes a lower candle with high volume to confirm the breakdown of 100 level.
ideal bearish signal:
- DJIA ends the day 120-180 down, with a nice long shadow on top and closing near its bottoms (with spx acting accordingly)
- USO makes a bullish engulfing candle on above average volume
neutral stance (all cash):
- SPX off highs but above my 30" MA on its pullback today.
ideal bullish signal:
- DJIA ends the day about 120-180 pts higher and closes near its highs (with spx acting accordingly) on higher than average volume
- USO makes a lower candle with high volume to confirm the breakdown of 100 level.
ideal bearish signal:
- DJIA ends the day 120-180 down, with a nice long shadow on top and closing near its bottoms (with spx acting accordingly)
- USO makes a bullish engulfing candle on above average volume
neutral stance (all cash):
- SPX off highs but above my 30" MA on its pullback today.
7/29 - Market Analysis
huge move up in the SPX today but with slightly lower than average volume and oscillators still bearish, i, myself remain bearish. but more cautious on the short-side especially as price was unable to close below the 61.8 retracement:
USO moved lower and closed at its lowest price since early may. but i feel this is more a headfake than a start of a huge leg down. still sidelined when it comes to my oil trade:
financials were strong...mainly in MER though...the damage to the downtrend is not broken but fibonacci support might turn out to be stronger than i originally thought. but still, overall i am bearish on this sector:
Game Plan: I am still very much liking today as a good time to short stocks than to buy longs. In fact, i was damn close to opening another short position on the financials at the last hour of trading but decided not to. As the week is superwhipsawing, i felt it best to see confirmation of lower 30" candles before buying. So if i see them tomorrow, i might step up and buy another short position. One thing i found fascinating is the comparison between the USO chart and SPX. Weird how USO has fallen so much yet SPX has only risen so little. Take a look at early May in SPX when USO was back at this price, SPX was way higher than it is now. Which means that we either have much bigger problems to fix than just oil, or that an oversold rally back to the 1400 area (area when USO was around 100) is in store as value investors must feel that the markets must be way oversold when compared to the price of oil.
Bottom Line: Overall, the downtrend is very much in tact. I wanted to drop a few names from the conviction buy and sell lists, but after doing a scan of a few charts, i realized that nothing has been damaged in terms of the daily chart of the stocks. I can't even find any new longs, except for MER which made a strong case for a double bottom with today's huge capitualation-like volume. Today might very well be a sucker rally brought on by buying for window dressing. Hard to believe today's huge day up fundamentally as MER had the only moderately big news of the day. But in terms of news, it was merely a yawn. Tomorrow we will get a better picture....
*edit...i decided to drop a few names as a way to condense the watch list into only the best trades i see, but because i changed my stance on the stocks (MER is the only exception)
Conviction Buy List:
oversold big cap tech - aapl, goog
agriculture - agu, mos, sqm
pharmaeuticals - jnj, amgn
USO
MER
Conviction Sell List:
exchanges - nyx, ice, ndaq
retailers - nile, hd, low, bare
financials - xlf, lm, leh, ms, wb, aig, ibn
gaming - mgm, lvs, wynn
UNH
FDX
USO moved lower and closed at its lowest price since early may. but i feel this is more a headfake than a start of a huge leg down. still sidelined when it comes to my oil trade:
financials were strong...mainly in MER though...the damage to the downtrend is not broken but fibonacci support might turn out to be stronger than i originally thought. but still, overall i am bearish on this sector:
Game Plan: I am still very much liking today as a good time to short stocks than to buy longs. In fact, i was damn close to opening another short position on the financials at the last hour of trading but decided not to. As the week is superwhipsawing, i felt it best to see confirmation of lower 30" candles before buying. So if i see them tomorrow, i might step up and buy another short position. One thing i found fascinating is the comparison between the USO chart and SPX. Weird how USO has fallen so much yet SPX has only risen so little. Take a look at early May in SPX when USO was back at this price, SPX was way higher than it is now. Which means that we either have much bigger problems to fix than just oil, or that an oversold rally back to the 1400 area (area when USO was around 100) is in store as value investors must feel that the markets must be way oversold when compared to the price of oil.
Bottom Line: Overall, the downtrend is very much in tact. I wanted to drop a few names from the conviction buy and sell lists, but after doing a scan of a few charts, i realized that nothing has been damaged in terms of the daily chart of the stocks. I can't even find any new longs, except for MER which made a strong case for a double bottom with today's huge capitualation-like volume. Today might very well be a sucker rally brought on by buying for window dressing. Hard to believe today's huge day up fundamentally as MER had the only moderately big news of the day. But in terms of news, it was merely a yawn. Tomorrow we will get a better picture....
*edit...i decided to drop a few names as a way to condense the watch list into only the best trades i see, but because i changed my stance on the stocks (MER is the only exception)
Conviction Buy List:
oversold big cap tech - aapl, goog
agriculture - agu, mos, sqm
pharmaeuticals - jnj, amgn
USO
MER
Conviction Sell List:
exchanges - nyx, ice, ndaq
retailers - nile, hd, low, bare
financials - xlf, lm, leh, ms, wb, aig, ibn
gaming - mgm, lvs, wynn
UNH
FDX
Swami's predictions for 7/30
S&P 500: Down
Pick of the Day: DVN Put
July Records:
S&P 500: 0-0
Pick of the Day: 0-0
Pick of the Day: DVN Put
July Records:
S&P 500: 0-0
Pick of the Day: 0-0
Tuesday, July 29, 2008
7/28 - Market Analysis
Today, and from maybe today onward, i am using the SPX chart instead of the SPY. a better picture of the entire market and not just a summarized look with the etf. Overall same story as support broke big today on light volume:
USO had an upday which was a great sign But its still lacking strength. Tomorrow, with a good push up, oil will be a very good buy. Again, i am concerned about the volume here as well:
XLF lead the way down today as i expected. A slight area of support is where we stand now. the light volume makes me very cautious and hesitant about shorting any stock with more than just a small position:
Game Plan: Great day today as everything predicted occured. The only thing that caught me off guard was the extremely light volume. I don't see any reason other than the end of the month and the upcoming economic reports for the low volume. Because of the light volume, i am going to be playing this week very cautiously. I believe that the next big volume day will predict the next leg, whether up or down. I still favor the downside and believe in the theory that markets don't need big volume to fall (but they do help with confidence)...Tomorrow, if we get an orderly recovery rally from today's losses, i intend to buy another small short position. Most likely it will be in the financials but HD and UNH look very good as well. My watch list is the exact same as yesterday's. I was really tempted to get in on a short position in the first hour of trading today but decided to play it cautious as we were on slight support and the fact that these past trading days were very light on volume.
Long Watch List:
oversold big cap tech - aapl, goog
agriculture - agu, mos, sqm
pharmaeuticals - jnj, amgn
USO
SKF
Short Watch List:
exchanges - nyx, ice, ndaq
retailers - nile, hd, low, bare
financials - xlf, lm, leh, ms, wb, aig, v, mer, ibn
gaming - mgm, lvs, wynn
solars - cy, spwr
UNH
FDX
USO had an upday which was a great sign But its still lacking strength. Tomorrow, with a good push up, oil will be a very good buy. Again, i am concerned about the volume here as well:
XLF lead the way down today as i expected. A slight area of support is where we stand now. the light volume makes me very cautious and hesitant about shorting any stock with more than just a small position:
Game Plan: Great day today as everything predicted occured. The only thing that caught me off guard was the extremely light volume. I don't see any reason other than the end of the month and the upcoming economic reports for the low volume. Because of the light volume, i am going to be playing this week very cautiously. I believe that the next big volume day will predict the next leg, whether up or down. I still favor the downside and believe in the theory that markets don't need big volume to fall (but they do help with confidence)...Tomorrow, if we get an orderly recovery rally from today's losses, i intend to buy another small short position. Most likely it will be in the financials but HD and UNH look very good as well. My watch list is the exact same as yesterday's. I was really tempted to get in on a short position in the first hour of trading today but decided to play it cautious as we were on slight support and the fact that these past trading days were very light on volume.
Long Watch List:
oversold big cap tech - aapl, goog
agriculture - agu, mos, sqm
pharmaeuticals - jnj, amgn
USO
SKF
Short Watch List:
exchanges - nyx, ice, ndaq
retailers - nile, hd, low, bare
financials - xlf, lm, leh, ms, wb, aig, v, mer, ibn
gaming - mgm, lvs, wynn
solars - cy, spwr
UNH
FDX
Monday, July 28, 2008
Swami says...
"market remains bearish. will the market make a higher low?
S&P is still 35pts off of the low, but it's disppearing fast."
S&P is still 35pts off of the low, but it's disppearing fast."
Swami says...
"final minutes of trading in financials may be an early indication of hope for bulls at market open.
the sharp rally needs time to fizzle.
bulk of price movement to the downside could be on hold for the time being."
07/28 outlook
Sunday, July 27, 2008
7/25 - Market Analysis
SPY still shaping up for a pullback:
USO had a lower close, but support is still in tact. Still looking like a bullish pullback is developing:
XLF continues to fall. SS confirmed cross and weakness overall in the sector looks good on the short side:
A new chart this week, the SPY weekly. Looking at this, we are actually at a strong weekly support (but weirdly, SPX is not and broke below it last week)...its good to see this to see that we should be cautious but for timing, this chart is not very important.
Game Plan: Friday was a good day to take a small short position into the market. I liked the pause day after a big drop on Thursday and a small short position was exactly what i bought. I do emphasize small though as this market is oversold on the weekly chart and we are straddling support in many charts. Financials continue to be the weak spot and oil seems to be following the market which is quite a contrast from the previous months where the market has followed oil. USO continues to me on my long watch list with the inclusion of several new stocks. On the short side, i am holding my stance on financials and gaming. Tough time to trade so its great to just nibble here and there with small positions as the market tries to figure itself out. Window dressing these next couple days might spell good things for the market's big cap bringing up the market and this week's economic data as well as some earnings might shake the market giving a more foggy technical picture, so beware. Overall though, i still like my stance of Bearish Neutral for the upcoming 2 weeks.
Long Watch List:
oversold big cap tech - aapl, goog
agriculture - agu, mos, sqm
pharmaeuticals - jnj, amgn
USO
SKF
Short Watch List:
exchanges - nyx, ice, ndaq
retailers - nile, hd, low, bare
financials - xlf, lm, leh, ms, wb, aig, v, mer, ibn
gaming - mgm, lvs, wynn
solars - cy, spwr
UNH
FDX
USO had a lower close, but support is still in tact. Still looking like a bullish pullback is developing:
XLF continues to fall. SS confirmed cross and weakness overall in the sector looks good on the short side:
A new chart this week, the SPY weekly. Looking at this, we are actually at a strong weekly support (but weirdly, SPX is not and broke below it last week)...its good to see this to see that we should be cautious but for timing, this chart is not very important.
Game Plan: Friday was a good day to take a small short position into the market. I liked the pause day after a big drop on Thursday and a small short position was exactly what i bought. I do emphasize small though as this market is oversold on the weekly chart and we are straddling support in many charts. Financials continue to be the weak spot and oil seems to be following the market which is quite a contrast from the previous months where the market has followed oil. USO continues to me on my long watch list with the inclusion of several new stocks. On the short side, i am holding my stance on financials and gaming. Tough time to trade so its great to just nibble here and there with small positions as the market tries to figure itself out. Window dressing these next couple days might spell good things for the market's big cap bringing up the market and this week's economic data as well as some earnings might shake the market giving a more foggy technical picture, so beware. Overall though, i still like my stance of Bearish Neutral for the upcoming 2 weeks.
Long Watch List:
oversold big cap tech - aapl, goog
agriculture - agu, mos, sqm
pharmaeuticals - jnj, amgn
USO
SKF
Short Watch List:
exchanges - nyx, ice, ndaq
retailers - nile, hd, low, bare
financials - xlf, lm, leh, ms, wb, aig, v, mer, ibn
gaming - mgm, lvs, wynn
solars - cy, spwr
UNH
FDX
Friday, July 25, 2008
07/24 - Market Analysis
SPY had a great pullback today. The bears were definitely in control with no bulls in sight. Its a great start to the pullback we've been looking for. Technically very sound.
USO didn't show much strength today. It definitely didn't affect the markets as much as usual. Maybe the next leg up in oil will be caused by a down leg in the markets instead of the other way around. No better place for traders to run than oil for a long play. the pause day today is a good setup for a huge rise in oil tomorrow.
XLF definitely was the leading loser today. great to see this as it made much sense technically as it was the one sector that benefited the most from the strong rally in the markets these past few days.
Game Plan: I sold off all of my longs during the first hour of trading. If i was able to wake up earlier, i would have sold at the open. The prices i got were fairly good though...was atleast before the huge fall in the market with DJIA breaking 150 down later in the day and never looked back. I am bearish now and looking to take a dip to the short side tomorrow (buying at most 1 short in the morning and 2 positions by the end of the day) on any intraday pullback. I will ease myself into these short positions as volume today was not heavy and we need one more down day to have a great confirmation. I still like the same stocks i mentioned yesterday with an addition of a few more. I'm happy to see that the stocks on my list moved down more than the market today. If the market closes short of yesterday's close, i will be fully bearish and adding more short positions.
Sell List: nile, ice, nyx, cy, spwr, ndaq, mgm, lvs, ibn, v, leh, wb, xlf, trn, hd, fdx, bare
Buy List: skf, uso
USO didn't show much strength today. It definitely didn't affect the markets as much as usual. Maybe the next leg up in oil will be caused by a down leg in the markets instead of the other way around. No better place for traders to run than oil for a long play. the pause day today is a good setup for a huge rise in oil tomorrow.
XLF definitely was the leading loser today. great to see this as it made much sense technically as it was the one sector that benefited the most from the strong rally in the markets these past few days.
Game Plan: I sold off all of my longs during the first hour of trading. If i was able to wake up earlier, i would have sold at the open. The prices i got were fairly good though...was atleast before the huge fall in the market with DJIA breaking 150 down later in the day and never looked back. I am bearish now and looking to take a dip to the short side tomorrow (buying at most 1 short in the morning and 2 positions by the end of the day) on any intraday pullback. I will ease myself into these short positions as volume today was not heavy and we need one more down day to have a great confirmation. I still like the same stocks i mentioned yesterday with an addition of a few more. I'm happy to see that the stocks on my list moved down more than the market today. If the market closes short of yesterday's close, i will be fully bearish and adding more short positions.
Sell List: nile, ice, nyx, cy, spwr, ndaq, mgm, lvs, ibn, v, leh, wb, xlf, trn, hd, fdx, bare
Buy List: skf, uso
Thursday, July 24, 2008
Swami says...
"carefully observe the strength of the bounce.
window of opportunity for downside trade
may occur."
07/25 outlook
Swami sees...
"another lackluster trading day.
stay on the sideline.
trading unfavorable for both calls and puts."
07/24 outlook
7/23 - Market Analysis
Starting with the most important chart, SPY, we are more likely to face a pullback leg next before another push up. I see SPY going as far north as the 132.50 level on this current leg. Technically though, any day now a pullback can occur to take us back to the 125 levels and if it holds, it will be very bullish for the market.
USO is a very important chart as oil has recently been the main reason (along with financial earnings) for the huge leg up in the market. USO is definitely oversold and in need of a pullback. A very sharp push up in the next few days would be very healthy, scaring many shorts and giving the SPY a much needed pullback. the oversold levels in the SS should make many shorts take profits now.
XLF has been the best performer in the past few weeks. It has moved up huge, almost in a straight line since a bottom was put in place early last week. but now it is hitting resistance. A gravestone candle was formed today and if tomorrow shows a lower candle, i would say that XLF will most likely pull back to the 19-20 level. And if XLF falls, it will be very likely to see the entire market fall. I would avoid buying financials at this moment as they will be the sector to lead the pullback down as they are the most overbought.
Game Plan: Take profits in longs. OK to hold AAPL and GOOG as they have seemed to have found a nice bottom and i doubt their investors would sell at levels like this. I would get ready for the next leg down. It can be a weak pullback, but since we are in a downtrend, it might fall much lower than i expect, therefore, it would be good to put on some short positions. A sector i like to short is financials. Specific stocks i like are NILE, ICE, CY, MGM, LEH, and WB. any one of these shorts should be good hedges on whatever long positions you might still be holding. A huge pop in the market tomorrow will cause me to sell most of my longs.
USO is a very important chart as oil has recently been the main reason (along with financial earnings) for the huge leg up in the market. USO is definitely oversold and in need of a pullback. A very sharp push up in the next few days would be very healthy, scaring many shorts and giving the SPY a much needed pullback. the oversold levels in the SS should make many shorts take profits now.
XLF has been the best performer in the past few weeks. It has moved up huge, almost in a straight line since a bottom was put in place early last week. but now it is hitting resistance. A gravestone candle was formed today and if tomorrow shows a lower candle, i would say that XLF will most likely pull back to the 19-20 level. And if XLF falls, it will be very likely to see the entire market fall. I would avoid buying financials at this moment as they will be the sector to lead the pullback down as they are the most overbought.
Game Plan: Take profits in longs. OK to hold AAPL and GOOG as they have seemed to have found a nice bottom and i doubt their investors would sell at levels like this. I would get ready for the next leg down. It can be a weak pullback, but since we are in a downtrend, it might fall much lower than i expect, therefore, it would be good to put on some short positions. A sector i like to short is financials. Specific stocks i like are NILE, ICE, CY, MGM, LEH, and WB. any one of these shorts should be good hedges on whatever long positions you might still be holding. A huge pop in the market tomorrow will cause me to sell most of my longs.
Friday, July 11, 2008
KM: 7/10/08 Full Disclosure
Position: GPN putClosing Price: 44.94
Target: 40
Stop: 47
Price Pattern: H+S with bearish break down from a rectangle pattern in the 30min chart
Pro's: the pattern had a good breakdown today and didn't gain much strength towards the end even when many other stocks rallied.
Cons: The huge drop today was followed by a near sized pop. I am unsure what that means but since it was unable to pull above prior support, that target is now good resistance and a good reason to stay bearish of GPN
Note: I decided to buy this back as i see GPN as one of the best short positions on my watch list. It is used as a hedge against my AZN call. The breakdown in the morning looks very good for GPN, but i am slightly concerned with the huge shadow on today's candle.
KM: 7/10/08 Sales
Sold: V put
Closing Price: 77.25
Reason: the daily triangle pattern was not a strong enough reason to hold this position. In the middle of the day, as it recovered its morning losses and was beginning to rally back up, my 30 min chart told me that V will most likely go sideways than down. My system was not a sure 100% sell but using money management, i believed that my portfolio was actually way too bearish for such a sideways market. It was a hard decision to sell it, but in the end i got a good price for the day. I sold when V was down 0.5%. In looking at the daily chart now, i see that 75 is a very strong support and until V can close below it, i don't see much reason to get back into a put for Visa.
Closing Price: 77.25
Reason: the daily triangle pattern was not a strong enough reason to hold this position. In the middle of the day, as it recovered its morning losses and was beginning to rally back up, my 30 min chart told me that V will most likely go sideways than down. My system was not a sure 100% sell but using money management, i believed that my portfolio was actually way too bearish for such a sideways market. It was a hard decision to sell it, but in the end i got a good price for the day. I sold when V was down 0.5%. In looking at the daily chart now, i see that 75 is a very strong support and until V can close below it, i don't see much reason to get back into a put for Visa.
Wednesday, July 9, 2008
KM: 7/9/08 Through My Eyes
Market Outlook: Slight Bearish Neutral
Portfolio: 50% Bear, 20% Bull, 30% cash
today: weakness continues as the gains of yesterday were completely wiped out. A sideways day that ended up very down. If today was able to recover back in the last hour of trading, i would be at a slight bullish neutral stance, but since it could not even hold onto 1/2 the gains of yesterday, i remain a little more bearish. today i decided to sell a put and buy a call position as i feel the market can really whipsaw in these next few days as we are in an oversold bearish market straddling a main support.
tomorrow: the most bullish sector on my list is the pharma stocks. tech and financials are moving with the market so i am overall bearish on them, despite buying a call option on AAPL today. I believe that pharma can fight the weakness in the market and if it were to turn bullish and hold its ground against the bears, big tech especially GOOG and AAPL will lead the market. On the way down, i am liking the breakdown in sectors such as materials, casino, and energy.
Portfolio: 50% Bear, 20% Bull, 30% cash
today: weakness continues as the gains of yesterday were completely wiped out. A sideways day that ended up very down. If today was able to recover back in the last hour of trading, i would be at a slight bullish neutral stance, but since it could not even hold onto 1/2 the gains of yesterday, i remain a little more bearish. today i decided to sell a put and buy a call position as i feel the market can really whipsaw in these next few days as we are in an oversold bearish market straddling a main support.
tomorrow: the most bullish sector on my list is the pharma stocks. tech and financials are moving with the market so i am overall bearish on them, despite buying a call option on AAPL today. I believe that pharma can fight the weakness in the market and if it were to turn bullish and hold its ground against the bears, big tech especially GOOG and AAPL will lead the market. On the way down, i am liking the breakdown in sectors such as materials, casino, and energy.
KM: 7/9/08 Sales
Sold: GPN put
Closing Price: 46.67
Reason: Despite a great looking H+S top in the daily chart, on the 30min chart, with yesterday's spike and the continuation in the morning today, it was able to make a strong top pushing GPN to a neutral stance. I would not like to go long on GPN either though. I can still see GPN breaking down, but for now, it might just move sideways. I didn't want to get out so early, but from its strength today, i felt it best to play it safe especially since the market itself is quite unclear.
Closing Price: 46.67
Reason: Despite a great looking H+S top in the daily chart, on the 30min chart, with yesterday's spike and the continuation in the morning today, it was able to make a strong top pushing GPN to a neutral stance. I would not like to go long on GPN either though. I can still see GPN breaking down, but for now, it might just move sideways. I didn't want to get out so early, but from its strength today, i felt it best to play it safe especially since the market itself is quite unclear.
KM: 7/9/08 Full Disclosure
Position: AAPL call
Closing Price: 174.25
Target: 205
Stop: 176-177 range (if the next pullback cannot penetrate above this area, i'm out)
Price Pattern: pivot point breakout
Pro's: strongest big tech name, sellers only present at end of day when all was dropping
Cons: tech was extremely weak today, it broke clear support at 177, when toppling late, it fell hard, QQQQ failed to keep gains from yesterday and is in neutral bear territory in the 30 min chart now too.
Closing Price: 174.25
Target: 205
Stop: 176-177 range (if the next pullback cannot penetrate above this area, i'm out)
Price Pattern: pivot point breakout
Pro's: strongest big tech name, sellers only present at end of day when all was dropping
Cons: tech was extremely weak today, it broke clear support at 177, when toppling late, it fell hard, QQQQ failed to keep gains from yesterday and is in neutral bear territory in the 30 min chart now too.
Tuesday, July 8, 2008
KM: 7/8/08 Full Disclosure
Position: V put
Closing Price: 79.06
Target: 65
Stop: 79 (if the price holds above 77 on pullback, i'm out)
Price Pattern: symmetical triangle
Pro's: consumer spending is weak, financials are still weak sector
Cons: huge spike in market in the midday, the consecutive streak of green 30 min candles today after the price hit 72 on the low.
Position: GPN put
Closing Price: 47.02
Target: 40
Stop: 47 (very near stop after late rally)
Price Pattern: Daily Head and Shoulders
Pros: daily chart and 47 is strong resistance
Cons: range bound last few days and huge spike at end of day with heavy heavy volume
Position: AZN call
Closing Price: 47.22
Target: 55
Stop: 45.5
Price Pattern: Inverse Head and Shoulders (daily and weekly)
Pros: Strength in Pharmaceutical stocks lately, big volume on breakout of neckline
Cons: market still bearish and stock has already moved much lately
Closing Price: 79.06
Target: 65
Stop: 79 (if the price holds above 77 on pullback, i'm out)
Price Pattern: symmetical triangle
Pro's: consumer spending is weak, financials are still weak sector
Cons: huge spike in market in the midday, the consecutive streak of green 30 min candles today after the price hit 72 on the low.
Position: GPN put
Closing Price: 47.02
Target: 40
Stop: 47 (very near stop after late rally)
Price Pattern: Daily Head and Shoulders
Pros: daily chart and 47 is strong resistance
Cons: range bound last few days and huge spike at end of day with heavy heavy volume
Position: AZN call
Closing Price: 47.22
Target: 55
Stop: 45.5
Price Pattern: Inverse Head and Shoulders (daily and weekly)
Pros: Strength in Pharmaceutical stocks lately, big volume on breakout of neckline
Cons: market still bearish and stock has already moved much lately
Monday, July 7, 2008
KM: 7/7/08 Full Disclosure
Position: DE put
Closing Price: 69.82
Target: 56
Stop: 71-72 range
Price Pattern: Weekly chart's double top breakdown
Pros - AG is breaking down, dollar strengthening, sector rotation out of commodities and material
Cons - MOS, AGU, and POT have strong trendline and MA support presently and if they bounce, DE will follow.
de - daily chart
Closing Price: 69.82
Target: 56
Stop: 71-72 range
Price Pattern: Weekly chart's double top breakdown
Pros - AG is breaking down, dollar strengthening, sector rotation out of commodities and material
Cons - MOS, AGU, and POT have strong trendline and MA support presently and if they bounce, DE will follow.
de - weekly chart
de - daily chart
Tuesday, July 1, 2008
KM: Technical Analysis Revealed
Following is taken from an analysis of a book on AMZN.com:
the real use of technical analysis is not that the patterns mean anything in and of themselves, its having the experience and judgment to know which pattern applies in a given situation that makes them truly useful, and the fact the traders themselves believe in them, so to some extent they become a self-fulfilling prophecy. So the field of technical analysis is itself a combination of art and science.
the real use of technical analysis is not that the patterns mean anything in and of themselves, its having the experience and judgment to know which pattern applies in a given situation that makes them truly useful, and the fact the traders themselves believe in them, so to some extent they become a self-fulfilling prophecy. So the field of technical analysis is itself a combination of art and science.
And actually, the most important aspect of trading is loss control and sell discipline, and understanding position sizing relative to risk and reward, since understanding the technical indicators is actually fairly straightforward, and many charting packages will do that for you anyway, so you don't even know how to understand how they're derived. And the charting packages will generate buys and sells by whatever indicator you want, but remember, it's knowing when to apply a given indicator that's the hard part. Finally, if you're planning on starting in on trading yourself, make sure you read up on and understand what's known as "money management" thoroughly before you set out--such as proper position sizing (not risking too much money on a given trade) and not selling your losers promply--an almost universal mistake among novice traders--and even pros who should (and do) know better. Good luck and happy trading!
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