Week of December 15
Dow stalling at 9000. Wed was typical inside day. Slower ma’s are turning up, mf still positive.
Coal confirming 2x bottom and possible next leg higher.
US Insurance - AFL, ALL,
US Financial (IYG)- ALL, AFL, JPM
Large Cap (BGU)
Confirmed continuation moves with increasing vol. & slow/fast confirming:
XHB(a+), XL (high r/r), WFC,
STT (a+): TD13w BUY, daily inv.h/s
WED:
Question: Trade macro or drill down? Which is most efficient, most liquid, and easiest to manage risk?
Home Builders entering long term bull market wave 1. XHB
AGM will likely gap, but this is the start of another typical run. Also, ABK at primary d/t.
Watch Airlines! AAI, AMR (TD16m confirmed in September, use fast oscillators for long entries),DRYS- could continue without pulling back.
BRCM- Very strong. Continue trading long with $20-$22 initial target zone. $18 massive breakout.
NVDA- breakout holding. Momentum turned negative on daily & m.f. turned down. Monitor further.
ADI- TDw confirmed, close to SARw
AMZN- TD14w confirmed. $45 huge support.
PCLN- inv. H&S, asc. triangle. Weekly TD buy.
CRM- fast o.b. wait for pullback, limit $25
EBAY- TD14w just confirmed but fast data overbought. Monitor.
ACI- TD13w Buy signal remains valid. MA convergence at $14.50/.75
POT- Massive TD24w buy signal on weekly w/ confirmation on Monday. Intermediate term d/t line broken Monday and holding. Easy target of $80. Could be A+ trade.
AGU- 2x bottom creates H. Rally to $40 then S2
QLD/QQQQ- Is this a bull flag? or is there another big leg down coming? Watch for conviction move.
ROM- Ultra Tech. TD14w w/ confirm on Monday. If true, then Q’s will breakout soon. Buy around $20 if possible.
RIMM- TD16w. Not quite yet confirmed. Keep watching.
Week of December 8
For Thursday:
The objective for these next 2 days is to establish positions in those few stocks that are screaming A+ trades. Arbitrary rotations, regardless of what is going on in the broader market and other ares, is going to be shelved for the remainder of the week. These 2 days are going to be all about the A+ Trade section of your trade sheet. Set up the alerts pre-market for these trades. If SOLF opens above 5.20, watch closely for breakaway gap.
USO volume spike on Wed. Is BIDU shaking out or breaking down? 100 shares ERX as a position trade. Also: FAS, BGU, TNA, DBC,
Remember metals are moving: PAL, GLD, CCJ, CLF….
The CRB Index has combined daily and weekly capitulations. Purchases here in the DBC or GSG commodity ETF indices, riking 2% below Friday’s close could capture a good retracement rally back to the 20-week moving averages.
CRB index has now overshot to the downside and shows signs of capitulation on all time frames. Weekly buy signals. Focus on cmdty complex going forward. There are significant macro tailwinds here. Also, remember “infrastructure” (e.g. CAT, AA)
SPY massive support 88 from MA convergence. DOW major support 8585. Nasdaq ran into the 30-yr trendline at 1600 which crushed the market once it was tested. Should have been AWARE OF THIS LEVEL!! WTF?
MA could provide short oppty for 10 points. Monitor closely. Overall, financials seem like they became very heavy and the market followed. Pullback should continue until mid Thursday, and rally should resume.
TBT is inverse of TLT
Pairs to monitor:
SRS v. KIM
BGZ v. TNA
TNA- 3x LONG small cap
ERX/ERY - 3x Energy
AAPL looks heavy. Consider size trade short q’s or long QID.
FDX short any significant rally. Try to position short.
WED morning:
Look for specific trade set-up and be willing to put on size when the trade develops. This is opposed to scanning the market all-day and looking for trades on the fly. The latter approach causes you to hold small positions in ALL of your trades, so you’re not taking enough from your winners relative to your losers. Let the trade form, and be willing to size up for those A+ trades, and AVOID ALL OTHER trades. You might see an A+ trade early in the day, near the open, which has been happening almost every day. But because it’s the morning, you’re trading with small size to prevent going down early. This is wrong. The ideal trades this month have come during the first 90 minutes.
For now, take your trades faster and exit the trade quicker when you’re wrong until we get some settlement in the market. STOP trading your P&L.
Two days in a row now, churned into the close. In that period, gave back the day. This can’t happen again. These are inexpensive lessons but the mistake cannot continue being repeated. Sizing up in the afternoon for no reason is amateur/stupid. The only reason to increase your size is trade dependent. Having a “feel” for the tape is not sufficient to increase size when the “feel” was coming with smaller size. The only time size goes up is when the trade set up calls for it.
Let’s try something new. Use the trade sheet to line up A+ candidates, and spend the day waiting for it to set-up. Let the trade go all day if it has to. While experimenting with this, the number of tickets and trades will be drastically less.
We are now in a market environment where a declining dollar and rising oil/CRB will push stocks higher as the market retreats from the deflationary threat. USO vol. climax and hammer. UXI 2x industrial LONG.
Remember the larger the gap the less likely it is to close. Also, try to avoid “mainstream” low priced stocks under $15-$20. Other than a few exceptions like AGM and ABK, DRYS, LVS, etc…. avoid lower priced stocks in sectors that look interesting.
AGU major hammer, pos. dvg., volume and momentum confirmations.
BGU major buy signal potential. Start small. Can you short BGZ?AMZN 13-count Demark buy signal 11/21. Low risk entry 45.
BIDU has potential for a major expansion thrust, with low risk against recent lows. This could become an A+ trade on all time scales. Small a.z. @ $129.
Watch ATHR to see what it does here.
BRCM against $13.76 p-SAR stop. Risking $1.25 for $4.
BTU atleast to $24. This is where stocks return to prior high for possible trap.
CLF against d-SAR for low risk entry back to 30.
First expansion bar in airlines. Catch ANY pullback. Set the orders out and allow market to get u into a trade.
CMD is ultra short AIG commodity ETF. Great macro instrument for general deflation trade
COF trendline breakout on rising volume and failed bear flag.
CNX perfect positive divergence trade in energy sector and nat.gas. 13 count Demark buy signal on 11/21 @ $20. Long against Nov. lows using d-sar 19.85
CRM 13-count Demark buy 11/21. Could wait for a test of $25 but confluence of ma’s underneath supports. Small position on weakness.
CHINESE and SOLAR stocks in TIGHT range contractions. Watch for breakout moves:
CSUN, SOLF,
CTRP 13 count Demark buy signal 11/21 $19. Trendline at $25
SOHU will run to $55.
SNO is China ETF based on Hang Sang. Very thin, 200-400 share long swing.
DRYS 13 count Demark buy signal 11/24. p-SAR buy on Friday! Target 9.
EOG to 90.
DE shaking loose weak holders. Multiple positive divergences. Could buy against low or buy intraday breakdown and recovery of level.
AGM and ABK opening swing size. Coal putting in higher low. CRB index making new lows but energy stocks are showing positive divergence. This is a major short-term bullish signal. Energy complex should explode.
Builders setting up potential short opportunities. This rally is likely to be all short squeeze. Find defining index to model correlation and insider activity. CTX, BHS,
In financials, there is going to be a massive short squeeze. BAC is going to result in failed bear flag as evidenced by volume spike on Friday. C is being pounded to prevent a close above $8. 10 sma at $6.80. A close above 8 will take her to 9.50 - 10.00
Natural Gas showing interesting activity. Massive HAMMER in CHK with huge vol. spike. Multiple targets all the way up to 30.
Week of December 1
FRI:Can we bring on order mgmt. clerks to serve as my trading assistants? This would allow me to fully exploit my research.
SPX likely headed for 800 then 760 IF 844 is broken decisively.
JPM closed just above lower boundary of broadening d/t channel and above short-term downtrend suggesting rally could still be alive but if Thursday’s low is taken out then 28/.10 is support.
URE & UYG likely to test Nov. lows and set up 2x bottom.
GS will trade b/w 66 and 72 until catalyst. If fails, will test 55/52/48 level. MAJOR alpha zone 84-85
Baltic Dry Index new lows.
CRB Index NEW LOWS
With all this talk of a rally 7 out of 8 days, market looks very bearish. Mondays mini crash was followed by 2 days of retracement back to resistance in the Dow w/ resistance 8740/80
Remember that with yields in virtual free-fall, stocks will NOT rally. When yields find a bottom stocks will surge. Nasdaq support 1365.
400 is a critical level for OEX. Short market aggressively if this breaks but remember support at 360
Dollar looks short term bearish.
Watch NYSE New Lows.
3x Long Fin’l: FAS
3x Short Fin’l: FAZ 55-82
Financials:
LONG - STI above 31; EV closed barely above t/l so could rally or fail/trap watch both ways; LM watch for 2nd breakout attempt or major bull trap;
AGM MA support 3.58 fib. levels 4.75 & 6; FIG held above 1.85 for 2nd day in row w/ tail could rally to 2.90
SHORT - AXP at centerline lower boundary 15.90 upper 23.75;
STSA
BX
WFC
XHB
THUR:
Bears definitely made a stand and pushed back today, following big tails with big shadows. Amazing and bizarre.
Good results relative to market action. Some key observations requiring strategy modifications:
- The “11:30″ mark is now “11:00″. Beginning at 10:50/55, regardless of opinion, begin hitting “Alt + F6″ to reduce size across book, and by 11:05, should be flat.
- Technical levels on index ETF’s are valid, and action until last hour is to fade new highs and lows. However, during last hour, new highs and lows tend to follow-thru.
- Triple ETF’s BGU/BGZ have plenty of volume and tight spreads for tradable ranges.
WED am:
Reduce your scope. Focus on 3 ETF’s and 5 stocks. Go after extremely high probability trades. Do not buy into rallies or short into sell-offs. Fade new lows and new highs. This will improve risk v. reward. Not getting paid for trading size right now. Keep trading small size until you see a streak forming, then go to tier 3. Remember, many watching over shoulder. Stay tight and stay focused. In the afternoon/last hour, defer to Marc and allow him to lead the chat room. You must focus and mustn’t get distracted. Your talents are in macro observations and trading. You have the experience and ability to portfolio trade. Your greatest error right now is not having faith in yourself and instead trying to lean on someone else, as if that can somehow absolve you of your errors. Stay confident. It’s there. Right in front of you. Keep your risk tight and this month will be productive. Do whatever you need to do get your head in the game and keep it there. Your picks are highly accurate. YOUR individual execution is terrible. This is where the losses and errors are occuring. Perhaps try reverting back to idea of spreading orders out at price points you would be happy with and let the market come to the orders. Whenever you have a small loss for the day, you tend to follow it with a huge day. Wed should provide the oppty’s to knock down $25-$30k. Be smart and it’ll be there. Remember to get enough sleep.
AGM flagging. ABK tails.
C higher vol. inside day sitting on 10d-SMA, AXP higher low, going to 30. BBT higher vol. today v. black monday.
Dow trapped b/w 10 & 24 day SMA’s. Resistance 8665 Support 8150.
Tails tails tails everywhere!
TUE:Markets held a higher low following Monday’s rout. Higher low in the form of a 2x bottom. The last 30 minutes of the day is increasingly becoming extremely whippy and dangerous. Size must be reduced at this hour. Best trading times are:
9:45-11:15
12:00-12:40
1:15-1:45
2:45-3:15
It’s occurred on 3 separate occasions now that when trading the markets “independently”, you are in good shape, grinding out but as soon as you see Maestro’s gains and get all green eyed, you throw your own 12 years of experience away and start riding coattails. This is not you. Use Maestro as guidance and education. See what he does and learn why. Do not try to chase his trades. If you find yourself on the opposing side of one of his trades, tighten your stop but don’t just close the trade indiscriminately. Moving on…
Financial stocks showed courage, but I’m still worried about potential write-downs in the pipeline.
Major Naz resistance 1610/15. Rally remains in large cap. Small cap not participating other than weak bearish bounce. Tech still weak (especially chip stocks) relative to other sectors. Avoid unless intraday compelling oppty’s.
Japan Index (JPN) working on inv. H&S. Hang Seng Indexes higher lows. Nikkei 225 s/t bottom confirmed.
SPX alpha zone resistance 935-945. d-SAR went LONG on Friday
OEX continuation/follow-thru on Friday. Makes sense this rally still in big-cap’s. Fib resistance 465. NYSE TICK showing continued improvement in breadth. NYSE NH vs. NL improving but not drastically. VIX put in possible reversal on Friday, but low volume skews this reading, so watch for another spike higher, in which case, see SHORT ideas…
OIX- Good looking 2x bottom, confirming DB Energy Index bottom. Break above 625 confirms rally in oil stocks, negating any short ideas here:
XAU showing higher low/2x bottom but approaching primary d/t line. Throw a couple gold/silver stocks up on your monitor to see if this is defensive posturing or based on bullish macro theme:
BX- Multiple buy signals. TD, SAR, Momentum, Stoch…. 3-day flag. 6.67 & 6.98 are trendline resistance points.
JPM- Has lots of room, 38, 40 resistance. GS also has room.
LM- Major 2x bottom. Multiple buy signals. All asset manager stocks showing strength. Target 22.50. GROW looks good too.
POT- Holding prior low around 60. Fast MA resistance 63.15. Next MA at 72.71 = d-SAR & t/l resistance. Try to buy around 60 to lower risk, or on any pullback. Do NOT buy into a rally.
CMED- Great short-term bottom could evolve into larger 2x bottom. Weekly TD buy signal. Momentum and Money Flow sharply higher following multiple positive divergences.
FCSX- Continues to show strength after 2x bottom. MAJOR TD Sequential buy signal on weekly. THIN. No Radio.
FSLR- Resistance 148-150.
JASO- TD Buy signal on wkly. w-SAR & 10w-SMA converge at 5.94 (75%). Major MA at 11, n/l @ 14. d-SAR went long on Wed. Abov e 3.67 is breakout.
SOL- daily & wkly TD buy signals. Center t/l 4.62. Primary d/t $6.
CTX- Weekly momentum,money flow and a/d all positive divergence during CTX plunge to new lows. Recovered secondary d/t line on Wed and held on Friday.Trendline now at $8.35 for entry. MA support 7.76. Target 15
DHI- Multiple buy signals. Weekly TD buy on Friday’s close. Daily TD buy on Monday. Big reversal in progress, possible important 2x bottom. 5.70 - 6.06 MA support for entry zone.
AAI- Target 6.70 Momentum & MF turned sharply higher.
DAL- Resistance @ 9.50, Target $12.20. MA support $7.75
ABK- Valid 2x bottom in progress. Bracket between $2 and $10. Continue to accumulate. Pending announcement pertaining to TARP and insurers likely to come soon. TD Sequential buy signal, same as 1st bottom, triggering rally to $10. Momentum and Money Flow did not turn down on this retest of $2.
AGM- Inside day on Friday. Have to pay up if you want to own this. Let’s build it before it goes above $5. Buy any pullback. THIN
AMZN- Stay on this. Building base to rally from. Daily & Weekly buy’s on TD Sequential. d-SAR long on Friday’s close. IDEAL ENTRY $40. Breakout buy > 43.35. Heavy resistance 46.70
CLF- Very tight range on Friday. Major resistance b/w 30 - 34. Buy above 24.40. Daily & weekly TD buy signals simultaneously.
DE- Massive bullish engulfing bar on Wed. Held on Friday. Monitor for entry. Partial retest of 31 area. $32.80 MA support entry level.
DRYS- Pushed back at MA near 5.50. Target 10. Resistance 6.44, d-SAR 7.64. IDEAL entry 3.90 - 4.
OCNF- Up huge last week. Monitor further.
CRB Index can run another 10% - 17% from 245. Massive TD Sequential buy signal on daily and weekly, d-SAR went long on Wed. DB Energy Index close to confirming 2x bottom after recovering key technical levels:
APA- Closest match to above index. inside day Fri. with strong close and long tail. >78 is breakout. Support at 70.
CEO- Possible inv. H&S confirmed. Neckline @ 78. Multiple buy signals:
DO- Inside day Fri. Possible move to $90 if energy catches bid
VLO- 2x bottom, inside day, good close above fast MA’s. Buy around 17.50 - 18. Targets: 20, 22
LNG- S2 completing. n/l ~$4.50
Coal stocks had inside day on Friday. Should continue to see bids due to Soros buying of ACI.
ACI- Major resistance at $17. Watch for b/o.
Bank Index recovered key support line at 46.70. Next resistance 54-55 (15%).
C- Breakaway & continuation gaps galore. First resistance $15!
BAC- Approaching major resistance 18.50 - 19
MS- Sitting ON d/t line. Watch for breakout through 15.
MTB- Swing position. Targets: 70, 75, 80
ABK & MBI- Continue accumulating.
AGM- Inside day Friday. This stock will run away.
BAC- Rally to continue to 17.40, then 18, possibly testing 19.50-20 level. Good for 1 1/2 points with SIZE, consider selling short on test of resistance. MA support at 14.50 for entry on weakness.
AIG- Is there a 2x bottom developing?
BIOTECH:
CI- D, W & M buy signals from TD Sequential. Daily d-SAR LONG. Support $11.30 for entry. Target $14.50 PE=4, Beta=2.
CVD- Outsource drug development company. Should continue to thrive in current economic climate. Deeply oversold. Broke out last week and followed through on Friday. Watch for Monday continuation. Targets: 43-45
KNDL- Same sector as CVD. Weekly TD buy signal followed by weekly bullish engulfing bar. Breakout on Wed, with follow thru Friday.Closed above fast MA. Has room to 26.
NKTR- Weekly 2x bottom. Breakout on daily. Multiple TD buy signals. Closed above resistance on Friday. Start building small line
MDT- Short term bottom setting up rally to 34-35
MYGN- At critical support.
OSIP- At lower boundary of multi-year channel. Upper boundary around $50
IVGN- huge tail and vol. spike due to merger of Applied Bio and Invitrogen to create Life Technologies. Could rally to 26
AMLN- TD Buy weekly. Room to 9.20
TRIPLE ETF’S:
BGU- Large Cap LONG. Range 22-58! TD Squential buy signal nailed exact low!
BGZ- Large Cap SHORT. Range 61 -
HI-BETA TECH:
BIDU- Heavy a.z. resistance around 180. Support at 134. Bracket is 135 - 180.
BRCM- Inside day Fri. Trapped b/w 2 MA’s @ 14.80-15.90. Potential 2x bottom in progress. Buy around 14.80-15 for tight stop. Looking for $19. Resistance $18
CRM- d & w TD buy signals. 22 very significant support. Ideal entry 25-25.50. Alternate, 27.25 or > 29.25.
CTRP- Multiple buy signals. Resistance at 25. Not yet overbought. Stoch actually just gave buy signal from oversold levels. Trendline @ $27, ma @ $25. Heavy resistance $23.90 from prior low.
CCRT- Target 4.23.
Bearish views: Gold Index put in higher low and treasury yields trying to make new lows. Both are short-term negative for stocks. Alot hinges on ECB rate cut. Markets expecting 75bp, ECB has done nothing to prevent market expectations, so perhaps a surprise of 100 bp would be catalyst for stocks. Anything below 75 bp would send global equities down.
SHORT IDEAS:
AGU- Approaching alpha resistance zone at ~$36. Look for intraday breakout above then failure as high prob. short entry. Also consider trading long to 36, then reversing.
BTU- Declining vol. retracement. Massive resistance and downtrend @ 27.60. Sell near m.a. $27.25
BAC- Approaching massive overhead resistance. However, do not short first test of 18-19
CNX- Gas stocks can’t manage to rally. CHK broke down. CNX now at primary downtrend line and intermediate downtrend line. Sell around 29-30. Or, look for intraday break above 30.50 followed by a failure to sell into.
CVX- Massive resistance $79-80, XOM showing strength and energy index could be bottoming.
ATHR- Sitting at primary d.t. line. MA resistance converges at 14.65. Middle trendline at $13. Low risk trade against Friday’s high.
CAT- $43 major resistance. Low risk short entry.
CE- bear retrace to major d/t line. Trapped b/w 2 ma’s. Look for intraday break 11.60. Sell at MA $12.25. If breaks back below 11.75, add to position. d-SAR 13.20 as STOP.
WAT- healthcare short. at major d/t line. Look for intraday break above 41.75 then failure to short.
XNPT- Massive H&S top. N/L penetration with breakaway gap. IDEAL LIMIT SHORT $37
COF- 39-39.50 good short entry.
LIMIT ORDER TRADES:
ADI- Fib. projection 168% at 12.75-13.20.
DIG- Look for initial small position as swing trade opener. LIMIT 29 - 29.30
PPDI- Another outsourcing company. Good looking technicals but close to t/l resistance. Ideal entry LIMIT 24
SQNM- LIMIT 13-14
CBST- Breakout on MONTHLY chart. daily highly volatile. Look for dip back into $19 range. LIMIT 19.50
XNPT- Massive H&S top. N/L penetration with breakaway gap. IDEAL LIMIT SHORT $35 & $37
