Sunday, January 31, 2010

Jan10 Recap

The top line figures of January posted a bearish start to the year. While we remain just below the halfway back/50% retracement, we see that in the prior decline we chopped around this level for a while before breaking into another bull run. Be prepared for increased volatility in the weeks and months to come.

Wk04: Market Recap

With mixed earnings, positive GDP growth, the President’s State of the Union Address and a slew of other economic data the markets continue to grind lower. The Vix remains at the top of its channel poised to breakout in the next few weeks.

Wk05: Market Forecast

In the week ahead look for these news announcements to act as potential market movers

The markets broke some pivotal support levels so the next target we are looking for is roughly $1030 on the S&P500. This will more than likely happen as a series of legs lower rather than all at once, just as we saw last week. We will wait for a small bounce or sideways action to get short.

Tuesday, January 26, 2010

Monday, January 25, 2010

Pit Bull

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Sunday, January 24, 2010

Wk03: Market Recap

Week 3 produced a huge increase in volume on the movement to the downside. Pulling out to a weekly timeframe and looking once again at a Fibonacci retracement we remain at the 50% retracement level with a bearish weekly candle.

We broke down below the 20-MA and 50-MA, a bearish sign. We would be looking for a lower high to be put in on the daily’s which would indicate the end of the uptrend.

The VIX jumped up to the 27 level from down in the upper teens. It would make sense to see a move up into the 30s before pulling back.

Wk04: Market Forecast

In the week ahead look for these news announcements to act as potential market movers

There is a lot of economic news this week including GDP on Friday and the FOMC Meeting Announcement on Wednesday. We are expecting volatility to remain high, as we’re still in the thick of earnings season. We are approaching a support area so it will be important to compare the volume on a rally to the volume on the move lower. A lower high on the daily chart with lighter volume would be bearish and a move we will look to short into.

Wk04: Stocks to Watch

eek 3 was a heavy distribution week and with the jump in volatility we saw some of our long positions gap up into profitable territory and then get dragged down with the market. Whether you added some downside protection in the form of puts on Thursday or Friday you should be sitting pretty with a hefty profit on the short side so use week 4 to rebalance the portfolio. These stocks below are some that we are keeping on our radar in the week ahead.

Friday, January 22, 2010

Monday, January 18, 2010

Wk02: Market Recap

Week 2 produced sideways action, however we are starting to see volume and intraday playable price swings come back into the markets. We are still in a clear uptrend and see a flood of stocks making new 52-wk highs, are hardly any stocks making 52-wk lows. A subtle mix of economic news and earnings leaves us in a holding pattern looking to continue on higher.

Wk03: Market Forecast

In the week ahead look for these news announcements to act as potential market movers

A few important economic numbers this week as well as continued earnings announcements should make for a good week of trading. The VIX remains at its lows and as the saying goes “when the VIX is low, lookout below.” As we all have our own bias and predictions as to where the market is headed, it is important to have a “plan B” in place in case things turn against us. As discussed last week, when your portfolio is heavily delta positive, look to the SPY and QQQQ puts as a way to mitigate risk to the downside.

Wk03: Stocks to Watch

Wednesday, January 13, 2010

Watchlist Update

With a hanging man pattern on the daily SPY chart, the week started off with a bearish tone. As discussed in prior posts, we like to wait for confirmation when entering and exiting a trade. Our entry “confirmation” long is simply a break ABOVE the prior day’s candle (setup candle), and vice versa for shorts (break BELOW prior day’s bearish candle).

In the case of a gap up (as was Monday’s price action), we wait for a break ABOVE the first 15-min candle to get long and vice versa for shorts. Therefore we didn’t have many long’s trigger from this week's watchlist, but our shorts are performing nicely. This is the reason a balanced portfolio of calls and puts is so vital, you never know what the market will throw at you.

HEAT – Long

AAPL, AMZN, WDC, FFIV, GMCR, STR - No entry. Never broke first 15-min high of 1/9.
IOC – No Entry. Never broke prior day’s high of 1/8.

EXPD – No Entry. Broke 1/8 low, but it was during the first 15-min which no trades are placed according to our rules.
ERTS – No Entry. Gap lower, unable to get in.

Overall, + $ on the week. When in need of a quick hedge, as discussed before, grab calls or puts on the QQQQ, SPY, IWM, or DIA. The tight spreads allow for a quick hedge at an efficient price to be established.

Tuesday, January 12, 2010

Monday, January 11, 2010

Sunday, January 10, 2010

Wk01: Market Recap

The markets started off the year on a bullish note. Could this be setting the tone for 2010? We have some room to move higher before hitting some major resistance (prior support). The S&P was the strongest of the top line figures in week 1, but all four indices moved higher. The VIX has broke down to new 52-wk lows and we are looking for volatility to remain low throughout 2010 (at least relative to 2009).

Wk02: Market Forecast

In the week ahead look for these news announcements to act as potential market movers

A few big economic news announcements coming out this week including International Trade Tuesday, Retail Sales Thursday, and Consumer Price Index & Industrial Production Friday. In addition, Alcoa kicks off earnings season Monday, not to mention Option Expiry Friday! That being said, there are a lot of catalysts that could act as market movers this week.

We are looking for the top line figures to continue its uptrend through options expiry week with a target of 1155 on the S&P, but will shift our bias if the market reacts negatively to any of the catalysts early on during the week.

Wk02: Stocks to Watch

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Tuesday, January 5, 2010

Sunday, January 3, 2010

Dec09 Recap

December’s monthly candle produced a spinning top (trend reversal bar). This, also occurring at the halfway back retracement from the all time highs to recession lows gives the bears some merit.

The NASDAQ on the other hand closed above its 61.8% retracement and has been the leading top line figure for some time now. Volume was minuscule, but that is expected for the month of December. The VIX was tame staying in the low 20’s. Look for volume and market action to pick up in Jan.

Wk01: Market Forecast

In the week ahead look for these news announcements to act as potential market movers