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Thursday, July 30, 2009

Oh baby... simply ripping!

Alright, so much for waiting to take on some trades :)

I was tempted to take on some day trades yesterday, but I will be on holiday until the 18th of August and not around a high speed computers. So I am limiting my trades... cause a lot about trading is not just about being correct in your thesis, but re-adjusting when needed, and I will not be able to re-adjust if needed.

Anyway... the market looks to want to keep testing the 320SMA. As such, closed out my protection. The trade was a loss, but not a loss to my portfolio. From the 320SMA level we may get a consolidation. Keep in mind, if the market wants to keep rallying we will need to consolidate somewhere. (Does not mean the market has to go down, could be flat... SQM is a perfect example.) It is still very overbought, and too bullish to maintain this momentum via multiple months.

I have a core position I plan on keeping, and will have the limit orders (in the previous post) in case I get lucky while on Holiday.

Tuesday, July 28, 2009

Waiting on a few trades

Simply going down the list...

JPM - will have limit order at mid 36 (althought the support is at 36)

GS - would like to get in around 153, via the 155 Jan Call options

BKE - will enter another position at the high 20s, if it is achieved (if it does, the sellers of this stock are idiots)

BNI - around mid 73-74

AAPL - would like to get into the 150 Jan call options at 155.

Monday, July 27, 2009

Trade - F

As indicated, I unloaded F. Missed a few cents of the high, but it is still too overbought at the current level.

Will re-enter upon consolidation.

Saturday, July 25, 2009

Trade - F

I had a limit order w/ F at 6.70 (i guess I was the 'low-of-the-day' trader today :), and it got executed. Ford is still overbought, along w/this market, but at 6.70 I was willing to enter it. IMO, I expect a consolidation around that level or at least 6.70 will not be broken downward as it is consolidating.

I am taking two approaches to this trade...

1. If F rises from here, I will unload it at 7.00-7.04.

2. If F continues to consolidate, I will enter a double down position when the CCI is between 0-100. That will probably correlate to a price of 6.40-6.50.

Also, just an FYI... I still have the market protection despite the added trading.

Thursday, July 23, 2009

man... talk about being wrong least in the short-term... The market just does not give up here. Technically speaking, the SP500 clearly broke free from any resistance holding it back. The Great Wall at 950 is no more.

As far as being extremely overbought... the market players do not care. They just keep bidding the thing up.

Luckily for the GOOG options I got into yesterday, or I would have missed this move w/my protection. (So I can not complain... and yes I did sell some stuff today... how can you not?)

Due to the upside from my trades, I kept the protection, but repositioned it via the 98 Sept Puts on the SPY (from 95).

This is the 11-12 days in a row the market has gone up, and breached resistance w/a very overbought condition. Discipline dictates protection.

Who ever said 'buy and hold' is dead is an IDIOT. Moves like these prove them wrong, and prove Buffett right over-and-over again. (I don't care are how good of a trader I am, I will never bash the most humblest of greatness.)

Wednesday, July 22, 2009

Market Thought... overbought, but bullish

Things are overbought, and there is no skirting around these conditions. Too many internals (individual stocks) are also too overbought to be outright bullish at these levels.

The SP500 is at its 950 resistance (albeit, the 950's top end resistance), and still very overbought

But the interesting thing that happened, as the market was coming down from its afternoon spike, the oscillators started coming down (ever so slightly). The action that I see may suggest the SP500 may only consolidate to the low 940 level. Although I would rather see it come down to the 930 level.

The Naz is in a similar boat, but a new higher end support is now fairly clear. Top two horizontal lines.

Although I see a short-term pullback, my limit order in GOOG got executed. GOOG is fairly consolidated, and still maintaining its uptrend.

very overbought conditions

The market, and many stocks out there, are up about 9-10 days in a row. That is not healthy. Be cautious if deciding to enter new positions here. Especially in the true players (ie. FXI, FCX, BNI, AAPL etc...)

Ultimately I think we go to the 320SMA on the SP500, but w/respect to short-term movements, the market is very overbought right now.

The protection is costing me at the moment, but my money is where my mouth is. If the markets begin to ease from the overbought condition, while moving higher, I will close out the protection for a loss. But at the moment, that is not the case, and the SP500 keeps getting more overbought.

Tuesday, July 21, 2009

AAPL... nice

Really nice AAPL quarter... was hoping for a sell off from it simply meeting the whisper numbers, allowing it to come down from its overbought position, but the market seemed to have voted favorably and continue the overbought rally.

I want to be in AAPL, but I must wait for the right moment. And I do not think right now is that moment.

After hours suggest AAPL will see 158 tomorrow. With such an overbought condition, worry it will be the best time to get in. (Especially coupled with a fairly overbought -in the short term- market.)

If I can get in at today's close (151-152) in a few days, or when the overbought condition eases (which could very well mean AAPL settles at a higher price, I will enter call options with the appropriate strike.

Monday, July 20, 2009

Trade - SPY puts (day trade)

Purchased market protection via SPY 95 Sept Puts. Will look to cover when the SP500 is around 920.

Saturday, July 18, 2009

Market Thought... the wall

The SP500 is currently at the 'great wall' of around 950, and overbought. Not a good combination, for the very short-term.

On top of the market's overbought position, its internals are itching for a pullback as well. The only important measure that may not need a pullback is energy/oil, but its technically weak at the moment.

In any case, I am expecting a slight market pullback of the SP500 to around the 910 level. Ultimately, I think we continue upward.

With the pullback, I will definitely get into GOOG via the Dec 420 calls, AAPL (pending where it settles after earnings, and will indicate via another post) and GS. Entries for JPM and FCX will take place as well, if interested in the names.

Also, SQM is a buy right now despite the markets desire to want to ease up.

Friday, July 17, 2009

Trade - GOOG

With the GOOG after hour action in the red, I am hoping to enter GOOG around 420. Or so the chart says.

I like the fact that YouTube will be making money sooner-than-later, and so long as the 420 or so (on the lower side) is maintained, the integrity of upward move is very much intact.

I will be entering the trade via 420 Dec calls when GOOG is around 418-420.

Wednesday, July 15, 2009

Charts and Time

Time is by far the most valuable commodity, screw Oil and Copper :). At work, I recently got promoted and since early June I have been transitioning from my previous position to a manager role. Like anything, there are positive and negatives, but one of the most challenging aspects of the new position is that I have little time to actively watch the ticker moment to moment, the way I like to. It actually calms me. Because of this transition, I have been spending consistent 14-16hr days at work w/overtime none-existent. It sucks balls when I can not be by a computer to readjust limit orders based on real time market observations, and partially miss out on added gains. (Gains to which would have covered my increase in pay, to which this manager position has given me, in a few days vs a full year. And then a certain socially inept beeach wonders why I have the ability to openly tell people they are ass backwards wrong... in the most politically charming sort of way :)

Anyway... the charts of the XLF and VIX are below.

The XLF clearly shows a break out:

Then there is the VIX that was up nicely w/the market being up:

If the VIX indicator is correct, and the market goes down look to take advantage. The XLF suggests to add to financials. My favorite is JPM, and if GS pushes lower, I am looking to play GS if it sees the 145-150.

Mix signals

Talk about a mix signal... there are plenty of signals to indicate we are breaking out. Most importantly the XLF has broken from the negative trend I pointed out in the last post.

However, the VIX is up fairly nicely today. It is up while the market is up. I always get uneasy when I see this. And what makes it worse is that today is a Wednesday. I do not recall any index reshuffling going on on Wed.

This to me raises an eyebrow, and will probably force my hand at some light SPY short-term protection. (via the Sept 95 puts) If we rally into the close I will enter a few puts, and will cover them on any kind of relative market dip. (The day trader in me tells me 920 on the SP500 should be my covering point... FYI, this protection trade will basically be a day-trade.)

No time to post charts... will do it later tonight to showcase what I see. (I will also explain later why I have little time to upload charts during the day anymore.)

Monday, July 13, 2009

Market Thought... oh baby

Could it be the babe-o-lishious older woman, Meredith Whitney :), moved this market with her bullish GS call so publicly displayed on CNBC this AM? When the market opened, there was hesitation, but throughout the day, the bullish interest is unquestionable. The market trend was a 45deg up angle.

Since the March lows, the banks have been up very nicely, but they have also been consolidating in a slightly negative trend for 3 months since May. With today's action, the internals of the financial index are changing. The most obvious is WFC breaking out. (ie... I would not be short the banks, as I am expecting a break out in this trend.)

In a previous 'Market Thought' post I highlighted the fact that she started turning bullish on the banks due to the loan modifications, and this could allow the banks to lead this market. Well, now we maybe getting it. (This also proves CNBC is so much more powerful a vehicle than Forbes magazine to get a message across.)

The market has been sitting on its 870-880 support for a few days, and today was a very nice bounce off.

The market looks to be holding, and if the financials break the 'consolidating-negative' trend, it will continue to rise. Mind you, breaking this trend, will be technically significant, as the SMAs will be breached. It could lead to breaking the 950 SP resistance, and lead the market to the 320SMA resistance.

Wednesday, July 8, 2009


I entered an initial position in FXI at high 35. Looking to double up around 33.

Desired positions...

BNI looks really interesting here. Will place a limit order for 65 (double up)

F - at 5

FCX - 42.5 (double up)

GS 130 Jan Calls when it is at 130. (Although 120 may seem like firmer support.)

JPM - around mid 30 (double up)

MA - around 150

PBR - around 32.50

PWR - around 18 (double up)

SQM - around 33 (double up)

ITRI looks interesting here, but I would rather have others as a core position. Will look to enter (if I do not get some of the other names) at 47.5 or so.

Will post charts later in the day, but due to a lack of time I can not upload them quick enough.

I like a bunch of names, but do not expect all the price targets to be achieved. With this break down I plan on positioning myself to a very low cash position. (Basically to have enough cash to make my daytrades, when they come up.)

The fact that we are breaking down has not escaped me, but as stated previously I am using these moments of weakness to replenish my portfolio.

Tuesday, July 7, 2009

Market Thought... of mice and men

Will the market break or will the market hold? The Markets are now sitting smack on their supports. Now its time for them to decide.

Its moments like these that make me rethink my thesis, and force the difficult task to second guess myself. On May 11th I had a similar thought with my "Market Thought... the challenge" post, debating with myself whether there was enough juice to make the markets keep going up. (subsequently re-reading the post, I realized I got the top end of this recent rally dead right :)

Well, now its time to re-evaluate the overall thesis...

Is there still a bullish case?...

1. Treasury’s rate rising signals, IMO, an increase tolerance to risk and benefits the stock market. At the moment this does not appear to be the situation. Looks like the yield wants to settle at 3.35 or so. However, it could bounce from there.

2. Inventories are too low and the replenishing of them spurs economic activity. I have not seen any reports or articles to state inventory replenishing is over. I do hear a lot of the talking heads speak to this cycle ending, but I think they are getting their ques from the market and not data points. (Although I am of the school of thought that certain inventories will remain low until credit starts to expand in this country again.)

3. Volatility is declining. Although the VIX has been up the past few days, it is still in a negative and declining trend. And barring a catalyst I do not see it breaching the current trend, let alone reaching the mid 3os.

4. The financial media has become blindly bullish. This is no more. LOL. They are following the pack.

5. Perceived stability within the financials. Stability with the financials is no longer a question, and with potential write ups do to mortgage modifications, financials can be potential leaders.

6. Global trade stability via the Baltic Dry Index. With all the negative talk recently, the BDI has been very stable, and rose pretty nicely in June. This is a true indication to global trade, and speaks to goods being moved, which makes me question certain negativity.

As for the negatives... all the negatives are still in play, except now the commodity prices are correcting. IMO, this can lead to a decoupling (at least in the short-term) of commodity prices and the market. With lower input costs, profits can rise. (I think this is why we are seeing names like PG, CL and the like are seeing money going into them. Not so much that they are defensive names.)

What will happen is ultimately any one's guess, but individual names are not pricey with the market at current levels. Now taking the above reasons into account, we have a very real reason to purchase stocks if they get too low in price. If the markets break the current support, we will have this.

The only caveat that will merit a lower market and individual stock prices will be the uncertainty that Cali/US Gov. will create if they have to go to a showdown. Uncertainty reduces values, hence provides a fundamental reason to a decline.

Basically, if we break down... I will be a buyer.

Monday, July 6, 2009

Market Thought... more clarity

Not to be a bearer of good news (with the risk of being horribly wrong :), the indicators are suggesting the markets will hold the current support levels.

The SP500 is oversold, and just about sitting on support.

The Naz is the same. Not as oversold, but very close to its 62SMA.

IMO, the Naz will bounce off the 62 SMA and lead the markets sideways to up. When I say sideways, I mean to the upper band of the market resistance until earnings come out.

I was reading a Forbes article today, indicating Meredeth Whiteny was forecasting higher short-to-midterm profits for the banks due to mortgage modifications. (read it on Yahoo Finance headlines earlier in the day, but their headlines are not functioning at the moment. And the Forbes website simply sucks at searching current articles, so I could not find it to link it.) This to me suggests banks can lead us higher after this earnings. Potentially allowing for the SP500 to hit the 320SMA or 1000-1050 mark.

Now, could I be wrong, and the markets break down from here so-much-so that the SP500 sees the low 800s or the Naz sees the low 1600s? Obviously. After all this is a probabilities game, and there is always a chance. The only reason I can currently think of that would have that impact would be defaults at the state level... ie Cali. Such defaults would cause a mini credit freeze up, and a spike in the VIX to the mid 30 level. (At which point I would be a heavy buyer of equities.)

Some would point to oil. If oil goes, so goes the market. However, oil is a good position to test its the low 60s, but it can test there with the market maintaining current support levels. The markets are not yet fully testing their support levels yet, and oil already saw the bulk of its declines.

Trade - PBR

Entered another position at high 36. Will wait for the next leg down, if it happens.

still waiting to see what develops before allocating more capital to established positions. (too early in the day to go gangbusters)

Friday, July 3, 2009


Here is a look at the PBR trade... the first area of support is at low 39

It obviously looks like it is breaking down, and the CCI suggests it will test the mid 37 level before fully oversold.

However, you look at Oil, and it is oversold and sitting on support.

IMO, the two set up to merit an initial position. BUT, if the the current level for Oil is broken there is nothing but air until the low 60s. (62.5 being the top end support, but 60 being firm support)

If Oil breaks down, expect the energy stocks to follow. (Its only natural.) With this, PBR has the potential to see 35 area.

But, I will not waiver. (Sell into the whore's hype, and buy into their fear) I will enter a second position at 37.50, and if when oil is in the low 60s I will enter a third position in PBR. (Where ever its price maybe, but I'm expecting around 35.)

Thursday, July 2, 2009

Trade - PBR

Re-entered PBR... the theory goes, sell on the way up, buy on the way down.

I will post a chart later in the day. (No time due to the work load of my normal job, can only give a heads up)

Entered at low 39, will double up if mid 37 is seen.

Also, waiting on other trades to develop.