"Everyone has a plan 'till they get punched in the mouth" - Mike Tyson

March 31, 2014

Markets emerging

The emerging markets have outperformed the U.S. markets of late so it's time to take a closer look.

India has really led the worldwide markets this year.  You can see they are having their own December 2012 moment breaking resistance from the 2007 highs.  


Singapore is trying to follow suit as it broke a half year falling wedge.  3300 is a huge pivot here that needs to break to get us excited about more upside.


Keep an eye on this Middle East and Africa proxy.  It's just been basing in this range since 2010 and a move higher could be the start of a multi year move.


The relative strength in emerged non-US markets (EFA) is apparently ending.  Is risk coming on outside the US?  Who knows, but what we can gather is emerged markets aren't as attractive as they use to be.


The BRIC ETF has made higher lows relative to last summer and recently ended the intermediate downtrend which is impressive given all the Russia/China noise.

With the recent pivot low around 29.50, there's very low risk here for investors.  That's not to say there is no risk, as the long term trend is still sideways.


Odds are pretty good that India will lead global markets in 2014-2015.  Does that mean emerging markets in general are set to move higher?  Who knows, but we have a few things to watch for clues.

March 28, 2014

4 stocks you can trade long right now

 These stocks all have key support near by offering low risk entries for multilple time frames.

FLDM has a short term bounce in it, maybe a re-test of highs.  Maybe.


MDSO price structure is not that favorable, but this may have a bounce to the 10 wk MA at 60.


NOW was a classic waterfall momentum reversal.  The low at 55 is very significant and an easy level to trade against.  

GEOS has the best price structure of all these and it's in a hot group.


Good Trading!

March 24, 2014

Strength and shame

Let's have a quick look at two market drivers worth watching the rest of the week.

The FXI outperformed today up 1.5% while the Nasdaq had a case of the Monday's.  Is it an aberration?  That strength will be tested as it's reached price and RS resistance.

Some Chinese web stocks like VIPS, DANG and YY fell to and bounced at high reward/risk entry levels today.  They'll offer hints for risk appetite in general tomorrow.


Biotech has been the star of the markets these last few days.  A bounce gives us a head and shoulders topping pattern and a helluva shorting opportunity around the low 250's.  If it's ever going to break down hard, this is the time due to the huge amount of damage in the individual charts. 


Position Update

Lately, momentum has really gotten smoked.  The market continues to position defensively and a ton of stocks that look promising are failing.  To me, this is a great time to do research, study mistakes and develop my trading craft.  That said, let's take a look. 




I wanted to hold FSPM as it appeared headed to 10-12 but it broke key support so it just seemed smart to dump it.  It rode up the underside of the trendline for a couple of days where I could have gotten a better price


I originally decided to ignore my stop in AWAY just because of option positioning.  It barely held the 50D and finally broke away on Friday.


UVXY tried to break below support last week, but it quickly reversed higher.  I bought it on Tuesday and then more on Wednesday with a 66.70 average.  I'm holding it as insurance as the probability of a short term pullback / volatility is high.


UPL - still holding this vs 23 and watching the LT resistance


HZNP - what a beast.  This stock continues to have one of the largest supply demand imbalances I've ever seen.  At the same time, I don't ever like seeing price treating the upper bollinger band as support.

EDIT: just after the open this started breaking the rising trend over the bollinger band, so I sold it at 16.60 and change this AM.  Of course I tweeted live on twitter/stocktwits.  The trend broke and we got confirmation shortly thereafter.  I just assumed it'd confirm because of how euphoric the daily chart was and how biotechs were trading.



IRBT is starting to look very suspect short term.  I'll continue to hold vs 39.


VIMC - This one continues to just trend higher.  Still sitting and waiting in it.  



VRA - stretched past the initial stop area, but I couldn't sell it.  There is just so much short interest (50% or so) and the intermediate trend is just now turning up.  I couldn't sell it.  I lucked out; now there's an area to trade against at 26.  


Good luck out there!

March 19, 2014

EDIT: no longer loving the Gold Miners

EDIT: the bullish signal I referred to was completely wiped out.  I was stopped out of my position and no longer have any interest in longs in the metals complex for the time being


The gold miners have been hit hard this week, but the chart is giving a unique bullish signal.  It's fallen so hard it's created a bullish RSI reversal.  RSI reversals are when price makes a higher low and RSI makes a lower low over a short period of time.  You can see that here between the March 7th low and today's candle.


The risk reward is obviously scewed bullish with price at support, but this pattern is telling us we can target a test of the old highs.  It's invalidated below the Mar 7 price low at 25.86.  There are a ton of good ways to play it, but I chose to just buy the GDX at 26.15 and use a .50 stop.  If we get a push higher I'd like to buy next week's 27-28 call spread currently trading around .20.  Good Trading!

March 18, 2014

Notes

Here's some individual stock notes from Monday:

VWO saw some near term 39 call sellers Monday on the pop.  


SIRI has formed a descending triangle.  It doesn't necessarily have to break lower and it would be a huge buying opportunity if it were to break higher


SNMX had earnings and an FDA catalyst last week.  The long term chart says this can still go way higher. Let's see if it can hold this support line


BDBD continues to bull flag beautifully.  


Apple broke a rising pennant Friday and stalled at the 10D Monday.  This is a sell versus the 10D.


CLR appears to be cup and handling.  


Biotech INCY appears to be forming a large rounding top.  It breaks down under the black line and we'd flip bullish over the blue line


March 14, 2014

Chasing Volatility

If there was ever a time to chase volatility, this would be it.  Why?  Let's dig in.

The VXX is forming a higher base.  This is a very rare formation and it gives us some very valuable information about the market.



How rare is it?  Looking at a longer term chart we we see this pattern hasn't occurred since the spring of 2012.  That led a 10% pullback in the S&P 500.


This leads us to market sentiment via the put call ratio.  A clear trend has developed of increasingly bullish sentiment throughout 2013.  That trend has now capitulated and this week it reversed.  This is telling us to sell rallies short term and prepare for a wipe out of the excessive bulls.  


All the information we have tells us there is a great chance volatility will persist and increase before heading lower.  If we see a few day bounce in the market and a dip in volatility, it's likely an opportunity to get long vol and position for market downside.  Have a good weekend!

Stocks to watch

BBRY has defined a two point range and risk reward favors bulls (closed Friday 9.31)


MPC is trading sideways after a large base break.  Many other refining stocks look good as well.


Boulder Brands appears to be bull flagging during this pull-back.  Very few food stocks are trading near the highs.  Over 18 is new all time highs.


Celgene is at a critical point in time.  Smart money showed up to buy the first test of the 200D since 2012.


Channel Advisor is trading in a possible cup with handle pattern.  Note the 10D and 50D are very close by offering a safe entry.


GM has seen heavy volume while breaking below this head and shoulders top neckline.


STAAR Surgical has caught a nice bid off support.  If it can recapture the 50D relative strength may continue.  Note the heavy volume in early March off the same support level.


ADEP is presenting at a conference next week.  They'll be showing off their robots.  Big buyers stepped in again this week.  Maybe it'll burst higher.




March 12, 2014

Position update 3/12/14

Hey just thought I'd write a catch up post.  For those of you who don't know I post trades live on twitter/stocktwits.

There have been lots of caution signals of late, and the damage is building slowly but surely.  Some of the best names out there are shaking out weak holders as viciously as possible



I bought VRA yesterday at the open. You're probably wondering why.  I'm guessing the popular criticism goes something like this:  it's so extended, how can you possibly buy anything with an RSI over 80.


Well, it's got a tight float with a lot of shorts in it and the chart is one of those setups where it starts to move then it accelerates faster and faster.  At the same time, the stock had a high volume doji daily candle yesterday.  My guess is bears will continue to have nothing here.

My basis is 28.23 and the stop is around the 200 MA on a 30 minute chart which equates to a 15 day MA, roughly 26.70.


I took a 2% loss on XON last week at 25.98.  It's much higher now and actually is setting up.


I sold the rest of the MTW long from 22.40 at 29.93 and it already reversed back above my stop.  Keeping too tight a stop on big winners appears to be a theme in my trading of late.  That info (to me at least) is invaluable going forward.


I also sold the UVXY hedge for a 1% loss last week as the big Russian fear event was 'resolved' and the paralympic games were set to get started.  They end Sunday and it wouldn't be surprising to see Putin stir up shit once again next week.  I'll look back into this instrument as we head into the weekend.


NMRX sold off on earnings and breached my stop level.  Frankly I've held it awhile and 8% is more than enough of a loss.  There were signs that the most recent rally was bullshit and it was just getting dragged up by the market.  Note RSI, MACD and volume were incredibly weak on the last push  


Every dip in HZNP is bought aggressively.  I re-added it at 13.13 last week.  Earnings are out tomorrow.  Who knows how it goes.  It's trading like many previous leading drug stocks.  This morning's low around 12.30 is shaping up to be a reasonable stop area on a potential earnings sell-off.


My stop in AWAY was this 44.50 area that was support 5 times or so, but it gapped below it this AM and by in no time it was sitting on the 50D.  It's pretty stupid to sell right at the 50D so giving it some room down to 41 is the only choice.


IRBT is still rangebound.  Maybe it's a head and shoulders?  I'm not that worried about it.


FSPM trading near the highs.  I'll hold it against 7.


VIMC what a winner.  Print out the chart on this one.  The setups and patterns were textbook.  The long term picture here still screams much much higher.  With only a partial position there is nothing to do here.



UPL still working on that long term resistance break.  Notice it's not really selling off, but traded sideways.  That's good as long as it holds up.  The stop continues to be 23.


We've seen why it's so important to thoroughly review positions and actions; there are a lot of things to learn!!

Good Trading!

Reminder:

All ideas shown on this blog represent the authors opinion based on the data available.