7:20 am MT: GDP and some preliminary employment data reported numbers that showed growth to be slightly better than expected, inflation to be slightly lower than expected, and job growth to be slightly better than expected. The market reacted positively.
HES and NOV both beat earnings, which will probably help out SLB. HES is interesting to me because it is holding up relatively well, just like SLB, and it's probably going to pop on its earnings this morning.
Remember, this is the Fed day, so there is no reason to get too loaded up with your trading. The Fed Funds Futures are predicting an 80% probability of a 25bp cut (down to 2.00%). With the announcement only a few hours away, the FFF have close to 100% reliability. The Fed is also expected to signal (or hint, wink-wink, Fed-speak, etc.) that the rate cutting cycle is on hold for after today. Now we just have to wait and see which Fed Governor shows up, Axl Rose or Barry Manilow.....
7:55 am MT: I picked up a half-position on HES. The options were crazy out of the gate, but they settled to 20 - 30 cent spreads a few minutes ago on the little pullback on the 5m charts. I also picked up a little RIMM again this morning. I sold 2 contracts (out of 10) yesterday at +1.50 right at the high. I bought those 2 contracts back cheaper, this morning. I may add a little more if it holds up. I am planning on selling some of this stuff ahead of the Fed.
5:30 pm MT: Benny was Barry. It's nice to see him Manilow out.....I mean mellow out. Two Fed Governors dissented again. I really think the Fed is a little disjointed right now. Several Fed Governors are obviously (and probably correctly) worried about commodity and energy inflation. Everything I thought would happen did happen. The Fed cut 25bp, they signaled the end of the rate cut cycle for now, and the market dropped. What I am still not sure of is whether or not we bounce from here. The Dow has four Shooting Star-like candlesticks after a short term upswing since January 30th. Today makes five. On the previous four, twice the Shooting Star led to a short term downswing, and twice the market shook it off and took another leg up. The two reversals were on March 12 and April 7. The two continuations were on January 30, and to a lesser degree, February 19. This is the type of environment we are in. I would usually give Shooting Stars at a short term peak more like a 70% - 80% probability of reversal. So it's a toss of the coin. And it's especially a toss of the coin with our current environment + the ISM tomorrow and the Jobs Report on Friday. If we get good numbers on both, then the Shooting Star will probably NOT reverse. If we get bad numbers, then we probably go down.
So look here, this continues to be a nutty market. We have had a real Chop and Slop market since January. It can be very tough trading. I like to keep a positive outlook on everything, but I also like to be realistic and honest to myself and to others.
This is what I think, and this is why I'm not even talking about trades today, and focusing on strategizing for the next few weeks, and perhaps beyond. The market has technically gone Intermediate Term Bullish. However, I have seen 2 sets of failed bounces this week across multiple industries and on 2 separate, and separated days. That's NOT what you want to see from an Intermediate Term Bullish market. It's too squishy, traders are too twitchy. We don't have strong, decisive hands stepping in with big money to push the market up the mountain with momentum and conviction. The next two days, to me, will set the tone for how things go for the next several weeks, and maybe beyond. If we get a poor ISM report and a poor Jobs report, and the market rolls over (especially a decisive drop below the low of the last two days), then we are probably going to stay in a choppier environment for awhile. That means my strategy is going to be threefold: playing Momentum Bounces on Short Swings (1-3 days), playing Day Swings (60m chart swings), and Cherry Picking High Probability Momentum Pullbacks (Short Flags). I have been playing Short Swings, but I went away from Day Swings, and I have been Cherry Picking Standard Flags (SLB, CAT, PH etc.).
If the market shakes off the Shooting Star today, and the ISM and Jobs Report come in stronger than expected (probably the shake-off would be related to the good economic reports), then I will keep playing Short Swings, and Cherry Picking Standard Flags. I may even play a few Standard Swings (3-7 days) if the market goes full-blown Intermediate Term Bullish (which it probably would if it shakes off the Shooting Star today).
Now you can see why I focused tonight's post on Strategizing for the near-term, and possibly the next several months. Because we are at a critical point tomorrow and Friday. We either shake it off and power ahead into Intermediate Term Bullishness, or we collapse back into more choppiness and tentativeness. We may not collapse back to full-blown Intermediate Term Neutral, but flopping back down tomorrow and Friday means the market is not ready yet. And therefore you have to ask yourself, when will it be ready? What catalyst is on the short-term horizon to put the rocket launch on the market? Earnings Season is winding down. The biggest Economic Reports will be in the books. The Fed has done their thing. The only thing I can see that could move things is some kind of data over the next several weeks that shows that the interest rate cuts that started last September are boosting the economy. It doesn't look like housing will turn around in a blink, and no-one really expects it to. Housing may be at a bottom, but that industry takes a little while to turn around, it's not a motorcycle, it's more like a truck. Energy and Commodity prices are at all-time highs, so there's no relief there. The bottom line is this. The economy is probably doing better than a lot of analysts think it's doing. But traders may not be willing to really power up the market until they see some signs that we are not going to just crunch along for awhile, but that the economy is really ramping up, getting closer to hotter expansion.
So the next couple of days will probably set the tone for the next couple of weeks, and perhaps beyond. And I will have my strategies in place to handle whatever the market decides to do. Every little while it's a good idea to assess the current conditions based on the charts and the big picture, and then play your appropriate strategy set. Either Bullish/Bearish Trending, Neutral Trending, or Choppy strategy sets. We are at another tipping point, the next two days will probably dictate which of the three I choose for the next several weeks, and perhaps beyond.
Wednesday, April 30, 2008
Tuesday, April 29, 2008
Commodity and Energy Stocks Sell Off
7:45 am MT: I stopped out of part of the ANR calls, and I'm getting ready to stop out of the rest. Everything else is still in my zone, so I'm just watching the rest for now.
8:00 am MT: Gary caught something that I missed, and that is the X had earnings this morning. I actually checked my earnings calendar yesterday, but I missed it. Very key mistake that I made, and it looks like it affected ANR and RIO. X beat earnings, but traders are selling it a bit right now as they sift through the report. I am out of ANR for about a 1.40 stop loss. I have a pretty good cost basis with RIO and X, but I will look to dump those later in the day if they don't move. PH and CAT look fine, especially PH. SLB is possibly headed down towards the lower end of my support zone in the 98 area, where I will pick up the other half of that trade. The X earnings was a key oversight, and I'm paying for it right now.
8:30 am MT: I stopped out of ANR for a 45 cent loss. It was minimal, but I am correcting my mistake with X right away, which was getting in the day before earnings on a stock that could - and did - affect the entire Steel and Metals/Mining area. Now I am only sitting on a half-sized position on X and watching to see where it goes. The other sectors I'm trading look fine.
8:45 am MT: I stopped out of X for a 2.27 loss on half a position. The X mistake cost me about 3 dollars total on the three metal trades. When I have a goof like that, I just start looking for as clean an out as I can get. But traders didn't give me one because they are continuing to unload the Chemicals, and X didn't do enough to get them to stop doing the same thing to all the Metal areas. So Steel, Metals/Mining, Chemicals, Copper, and Coal are all getting dumped. Because it was such a momentum trade, and we live in a dog-pile world, I'm not going to try and cherry pick the short term bottoms in those areas. In fact, it looks like Chemicals are headed towards an intermediate term consolidation, so they are probably done for awhile.
9:00 am MT: SLB is trying to turn around intra-day, so I am picking up the other half right here and placing a stop a couple of dollars below. CAT is a little squishy, but as long as it holds 80.00 I'm fine.
10:30 am MT: I picked up some calls on RIMM and ADBE. I'm not super excited about the market action today, so I'm not doing anything else on the call side. I'm thinking about dumping my SPY calls (half-position) if we can't get above 1,400 on the SPX later today. I like what I have right now, except for the SPY calls.
1:00 am MT: The SPY fought off a Bear Flag on the 30m charts and is swinging up a little intra-day. The Nasdaq is really carrying things, with big tech, like AAPL and RIMM pushing things north. I am already up over 1.50 on the RIMM calls, which cuts into the loss on the Metals earlier in the day. It really cranks my noodles when I goof the earnings reports like I did with X today. I have two redundant backups on all my data (charts, options, and news), and I'm careful to make my checkdowns. But every now and then I forget to check the backup info, and all it takes is a whammy like this morning to remind me. It's good to deeply internalize the lesson, and then it's good to move on. If I stewed on it too long, I would have missed the nice RIMM entry. This was probably an instructional lesson for you on how to handle a screw up, or a failed trade, learn from it, and move on.
7:00 pm MT: I did end up dumping the SPY calls for a 38 cent loss on a half-position. It was minimal, which is the way I like to keep the losses. I am not a big fan of how CAT looks today, but since it's a half position, I'm looking for the other half in the 80.00 - 81.00 area. RIMM and ADBE look good. Big Tech looks good, with AAPL, GOOG, and IBM helping out. I like IBM and may play calls on them tomorrow. I will go through a bullish and bearish list of stocks I'm interested in tomorrow (besides what I'm in, and including what I got in today), but keep in mind we have the Fed, then the ISM Thursday, and the Jobs Report Friday. I still think the primary focus of traders is shifting to the Jobs Report, so the Fed may be somewhat of a non-event tomorrow, we shall see.....
Bullish: RIMM, ADBE, IBM, FDX (breakout with a little volume), TYC (bouncing), NYX (trying to break out of a Symmetrical Triangle), CHRW (Pennant after a Bullish Gap)
Note: the Casinos are coming to life with LVS and WYNN, but MGM is still dead. Also, some Oil stocks look pretty good on the pullbacks like SLB, HES, and SWN.
Bearish: STT, (MET), GME (Head and Shoulders Top may be forming), MDR (big Bear Gap on heavy volume).
Chemicals, Steel, Metals/Mining, Agriculture, Copper, Coal, and a lot of Energy stocks got thumped today. The way the charts look, we may get one more thumper tomorrow, and then it may finish selling short term. So traders basically dog-piled out of Commodity and Energy stocks, and they may dog-pile tomorrow. As with any undisciplined or frenetic behavior, it usually finishes out sharp and quick. I don't know the future, but it wouldn't surprise me to see some traders dumping like there's no tomorrow, only to sell right into a short-term bottom. However, It does look like most Commodity and Energy stocks will have a tough time making a higher high from here, and those sectors are probably headed towards Intermediate Term consolidation. There are some stocks that could go back and make equal highs, or even higher highs, but I would be surprised if the majority of the Commodity and Energy stocks could bounce in the next day or two and shoot right back up to higher highs. The selling in the past several days may be due to Rising Dollar Risk as much as profit-taking. Traders are anticipating the Fed to signal the end of the rate cut cycle tomorrow, which might strengthen the Dollar a bit, and reprice Commodities (which are priced in Dollars). That means that leadership (what there is of it in this choppy market) may be shifting to Big Tech, Retail, maybe some Financials, and maybe a few other smaller areas.
I am Intermediate Term Bullish on the market right now, but all it will take is a bad Jobs Report and a sell-off short term to get me to shift back to Neutral. So I'm not Bullish but some spectacularly large margin, and I'm ready to take some puts tomorrow or later this week if the signals are there.
8:00 am MT: Gary caught something that I missed, and that is the X had earnings this morning. I actually checked my earnings calendar yesterday, but I missed it. Very key mistake that I made, and it looks like it affected ANR and RIO. X beat earnings, but traders are selling it a bit right now as they sift through the report. I am out of ANR for about a 1.40 stop loss. I have a pretty good cost basis with RIO and X, but I will look to dump those later in the day if they don't move. PH and CAT look fine, especially PH. SLB is possibly headed down towards the lower end of my support zone in the 98 area, where I will pick up the other half of that trade. The X earnings was a key oversight, and I'm paying for it right now.
8:30 am MT: I stopped out of ANR for a 45 cent loss. It was minimal, but I am correcting my mistake with X right away, which was getting in the day before earnings on a stock that could - and did - affect the entire Steel and Metals/Mining area. Now I am only sitting on a half-sized position on X and watching to see where it goes. The other sectors I'm trading look fine.
8:45 am MT: I stopped out of X for a 2.27 loss on half a position. The X mistake cost me about 3 dollars total on the three metal trades. When I have a goof like that, I just start looking for as clean an out as I can get. But traders didn't give me one because they are continuing to unload the Chemicals, and X didn't do enough to get them to stop doing the same thing to all the Metal areas. So Steel, Metals/Mining, Chemicals, Copper, and Coal are all getting dumped. Because it was such a momentum trade, and we live in a dog-pile world, I'm not going to try and cherry pick the short term bottoms in those areas. In fact, it looks like Chemicals are headed towards an intermediate term consolidation, so they are probably done for awhile.
9:00 am MT: SLB is trying to turn around intra-day, so I am picking up the other half right here and placing a stop a couple of dollars below. CAT is a little squishy, but as long as it holds 80.00 I'm fine.
10:30 am MT: I picked up some calls on RIMM and ADBE. I'm not super excited about the market action today, so I'm not doing anything else on the call side. I'm thinking about dumping my SPY calls (half-position) if we can't get above 1,400 on the SPX later today. I like what I have right now, except for the SPY calls.
1:00 am MT: The SPY fought off a Bear Flag on the 30m charts and is swinging up a little intra-day. The Nasdaq is really carrying things, with big tech, like AAPL and RIMM pushing things north. I am already up over 1.50 on the RIMM calls, which cuts into the loss on the Metals earlier in the day. It really cranks my noodles when I goof the earnings reports like I did with X today. I have two redundant backups on all my data (charts, options, and news), and I'm careful to make my checkdowns. But every now and then I forget to check the backup info, and all it takes is a whammy like this morning to remind me. It's good to deeply internalize the lesson, and then it's good to move on. If I stewed on it too long, I would have missed the nice RIMM entry. This was probably an instructional lesson for you on how to handle a screw up, or a failed trade, learn from it, and move on.
7:00 pm MT: I did end up dumping the SPY calls for a 38 cent loss on a half-position. It was minimal, which is the way I like to keep the losses. I am not a big fan of how CAT looks today, but since it's a half position, I'm looking for the other half in the 80.00 - 81.00 area. RIMM and ADBE look good. Big Tech looks good, with AAPL, GOOG, and IBM helping out. I like IBM and may play calls on them tomorrow. I will go through a bullish and bearish list of stocks I'm interested in tomorrow (besides what I'm in, and including what I got in today), but keep in mind we have the Fed, then the ISM Thursday, and the Jobs Report Friday. I still think the primary focus of traders is shifting to the Jobs Report, so the Fed may be somewhat of a non-event tomorrow, we shall see.....
Bullish: RIMM, ADBE, IBM, FDX (breakout with a little volume), TYC (bouncing), NYX (trying to break out of a Symmetrical Triangle), CHRW (Pennant after a Bullish Gap)
Note: the Casinos are coming to life with LVS and WYNN, but MGM is still dead. Also, some Oil stocks look pretty good on the pullbacks like SLB, HES, and SWN.
Bearish: STT, (MET), GME (Head and Shoulders Top may be forming), MDR (big Bear Gap on heavy volume).
Chemicals, Steel, Metals/Mining, Agriculture, Copper, Coal, and a lot of Energy stocks got thumped today. The way the charts look, we may get one more thumper tomorrow, and then it may finish selling short term. So traders basically dog-piled out of Commodity and Energy stocks, and they may dog-pile tomorrow. As with any undisciplined or frenetic behavior, it usually finishes out sharp and quick. I don't know the future, but it wouldn't surprise me to see some traders dumping like there's no tomorrow, only to sell right into a short-term bottom. However, It does look like most Commodity and Energy stocks will have a tough time making a higher high from here, and those sectors are probably headed towards Intermediate Term consolidation. There are some stocks that could go back and make equal highs, or even higher highs, but I would be surprised if the majority of the Commodity and Energy stocks could bounce in the next day or two and shoot right back up to higher highs. The selling in the past several days may be due to Rising Dollar Risk as much as profit-taking. Traders are anticipating the Fed to signal the end of the rate cut cycle tomorrow, which might strengthen the Dollar a bit, and reprice Commodities (which are priced in Dollars). That means that leadership (what there is of it in this choppy market) may be shifting to Big Tech, Retail, maybe some Financials, and maybe a few other smaller areas.
I am Intermediate Term Bullish on the market right now, but all it will take is a bad Jobs Report and a sell-off short term to get me to shift back to Neutral. So I'm not Bullish but some spectacularly large margin, and I'm ready to take some puts tomorrow or later this week if the signals are there.
Monday, April 28, 2008
Well, That Was Exciting
7:40 am MT: The market is somewhat neutral out of the gate. I am nibbling in on some of the bullish buy list. I picked up partial positions on CAT, ANR, SLB, PH, and X. I would have loved to get CMI, which was a stock I really emphasized before I left on vacation. But I needed to get CMI last week, and I was gone. As it is, I'm playing for the market to move ahead of the Fed, and the big Economic Reports. It may not, so that's why I'm taking half-sizers for now. X is a little squishy, so I took a 1/3 size position. I also picked up a halfer (notice the term getting smaller and smaller) on SPY. I'm playing it for a breakout of a pseudo Ascending Triangle on the 60m charts. The index (and ETF) are right at resistance.
8:00 am MT: I picked up the other half of my CAT position, which makes it a full position. I also added a little to the X position on the morning pullback, which gets it up to a halfer now.
3:30 pm MT: I picked up some RIO calls earlier in the day to finish out what I want to hold over the next day or two.
There wasn't much to say about today. I find that it is better to just let some days go by without trying to waste brain capacity over-analyzing every tick of the chart. It was what it was, nothing more. It may be that traders are going to stick their hands in their pockets until the Fed and the Economic Reports. If it smells like that theme is going to continue tomorrow, I will lock small profits (if I have them) on about half the trades and scale back ahead of the Fed. The Fed should be no surprise at all. A lot of times traders will speculate ahead of the announcement on a bigger number from the Fed. I don't see it this time around. The Fed Funds Futures have been pretty clear for several weeks about a 25bp cut. Even David Lee Roth - I mean Ben Bernanke - probably won't surprise the market on this one, and I think most traders know that. There is too much inflation concern, and we have had too many 75bp and 50bp cuts already. So I am speculating that traders aren't speculating on a 50bp cut. Which means that Wednesday could shape up to be a non-event, and traders will be more focused on the ISM Thursday, and especially the Jobs Report on Friday.
5:00 pm MT: It's on days like this that I like to take some time to ponder the mysteries of the stock market. After all, if we can't analyze something until it breaks, what's the use of being analysis retentive?
Here is my Deep Market Thought of the Day: If Robert Downey Jr. and Michael Crawford adopted a son who turned out to have super trading powers, would he be Iron Condorman? Later on, if he is bitten by a radioactive bug and develops an acute sense for trading Index ETF's, would he be SPYderman? If he mutated and could only trade one stock for the rest of his life, which was U.S. Steel Corporation, would he be one of the X-men?
What if he had a girlfriend who had superpowers for trading puts on VIP since January. Would she be Buffy the Vimpel Slayer?
What if I wanted to play volleyball in the sand, fly F-14's because I felt "the need for speed", give my buddies high-fives all the time because I thought it was "cool", carry on a manly rivalry with Maverick and Goose, and day trade the Intercontinental Exchange. Would that make me ICEman?
If Indiana Jones already had his Last Crusade, why is he still looking for a Crystal Skull? Since Harrison Ford was born in Chicago, shouldn't he be called Illinois Jones? What if he was from Pennsylvania? Why do Indiana Jones and Hannah Montana get to have States in their names? Can I have a State in my name? Can I be Delaware Dwight?
Delaware Dwight and the Swing Traders. I could have a sidekick named Massachusetts Matt, or how about Pennsylvania Jones.....
ok.....that's a wrap.
8:00 am MT: I picked up the other half of my CAT position, which makes it a full position. I also added a little to the X position on the morning pullback, which gets it up to a halfer now.
3:30 pm MT: I picked up some RIO calls earlier in the day to finish out what I want to hold over the next day or two.
There wasn't much to say about today. I find that it is better to just let some days go by without trying to waste brain capacity over-analyzing every tick of the chart. It was what it was, nothing more. It may be that traders are going to stick their hands in their pockets until the Fed and the Economic Reports. If it smells like that theme is going to continue tomorrow, I will lock small profits (if I have them) on about half the trades and scale back ahead of the Fed. The Fed should be no surprise at all. A lot of times traders will speculate ahead of the announcement on a bigger number from the Fed. I don't see it this time around. The Fed Funds Futures have been pretty clear for several weeks about a 25bp cut. Even David Lee Roth - I mean Ben Bernanke - probably won't surprise the market on this one, and I think most traders know that. There is too much inflation concern, and we have had too many 75bp and 50bp cuts already. So I am speculating that traders aren't speculating on a 50bp cut. Which means that Wednesday could shape up to be a non-event, and traders will be more focused on the ISM Thursday, and especially the Jobs Report on Friday.
5:00 pm MT: It's on days like this that I like to take some time to ponder the mysteries of the stock market. After all, if we can't analyze something until it breaks, what's the use of being analysis retentive?
Here is my Deep Market Thought of the Day: If Robert Downey Jr. and Michael Crawford adopted a son who turned out to have super trading powers, would he be Iron Condorman? Later on, if he is bitten by a radioactive bug and develops an acute sense for trading Index ETF's, would he be SPYderman? If he mutated and could only trade one stock for the rest of his life, which was U.S. Steel Corporation, would he be one of the X-men?
What if he had a girlfriend who had superpowers for trading puts on VIP since January. Would she be Buffy the Vimpel Slayer?
What if I wanted to play volleyball in the sand, fly F-14's because I felt "the need for speed", give my buddies high-fives all the time because I thought it was "cool", carry on a manly rivalry with Maverick and Goose, and day trade the Intercontinental Exchange. Would that make me ICEman?
If Indiana Jones already had his Last Crusade, why is he still looking for a Crystal Skull? Since Harrison Ford was born in Chicago, shouldn't he be called Illinois Jones? What if he was from Pennsylvania? Why do Indiana Jones and Hannah Montana get to have States in their names? Can I have a State in my name? Can I be Delaware Dwight?
Delaware Dwight and the Swing Traders. I could have a sidekick named Massachusetts Matt, or how about Pennsylvania Jones.....
ok.....that's a wrap.
Saturday, April 26, 2008
Watchlist Saturday
I'm back. I need some time to go through the market week, do some charting, and get caught up on what's been happening. I will go through 400 or so charts to get a feel for things, and then I'll put together my watchlist for the week. It looks like you have been talking to each other this week, which was a good way to use the site to support one another.
I went through your comments and trades pretty much line by line. Bob gets my "A" grade for getting on the right side of several Bull Flags in a market that is still pushing up Neutral to Bullish, and even possibly transitioning to full Intermediate Term Bullish. By the way, for those of you that got tossed around on CAT and CMI, they're both doing about the same thing, and that thing is bullish. In fact, the entire industry, along with some related areas are doing the same thing: CAT, CMI, DE, JOYG, and PH, along with X (metal fabrication). Those are some very nice players right now. Also, you can't really draw up Bull Flag Bounce much clearer than ANR. Some of you got tossed around playing those too tight this week. The reason you got tossed around is your entries weren't clean. Those stocks were a real cherry-pickers delight this week. Some of them are still playable Monday, so I'll be looking at those and others. I will get to the rest of the watchlist later.
Here is my watchlist for the upcoming week. I have included a market posture as well. I indicate stocks and sectors that are either beginning to go intermediate term (IT) bullish or bearish in parenthesis, or are a little tapped out short term. I indicate stocks that are IT bullish or bearish in a normal font. And I indicate stocks or sectors I'm most interested in because of where they are short term (ST) in a bold font. The bolded stocks are closer to buy signals, or they are extremely compelling because they could be high probability setups soon. The regular font stocks are worth keeping an eye on, and the stocks in parenthesis are something I will watch, but probably not play.
Dow: IT Bullish and ST Bullish. The Dow is flagging above IT support at 12,750. A break below 12,750 would change my posture to IT Neutral.
SPX: IT Bullish and ST Bullish. The SPX is rounding its way up the right side of the 4 month base. A break below 1,370-1,375 would change my posture to IT Neutral.
Naz: IT Bullish and ST Bullish. The Naz is rounding its way up the right side of the 4 month base. A break below the bullish gap around 2,350-2,361 would change my posture to IT Neutral.
We have a heavy week of Economic Reports, especially Thursday and Friday. Earnings continue to pile in at the usual pace, although most of the biggest names have reported. And of course we have the Fed on Tuesday/Wednesday. This is timing out for a continuation of the current upswing into Tuesday or Wednesday morning ahead of the Fed, especially if the Dow can reach 13,000-13,090, and the SPX can reach 1,425. Monday has a nice probability for being an up day, and we have a decent probability of reaching those market targets, especially if traders focus on the Fed Wednesday, and the Economic Reports on Thursday and Friday for the next catalysts. What I don't want is for traders to put their hands in their pockets and sit and spin until they get the actual reports. I want some speculation ahead of the Fed, the ISM, and the Jobs Report, so then I can stick my hands in my pockets after some nice 1-3 day swing trades.
BULLISH SECTORS/GROUPS AND STOCKS:
Steel: AKS, NUE, X
Metals/Mining: (POT), ANR, MTL, CLF, RIO, FDG, SID
Copper: FCX, (PCU)
Chemicals: (MOS), AGU, CF, PX
Energy: SWN, UPL, NFX, CHK, OXY, NE, PXP, APA, CAM, FTI, (DVN), NBL, (SII), (BHI), SU, RIG, NBR, MUR, (HES), SLB, OIH, NOV
Coal: MEE, (CNX), ACI
Railroads: CSX, UNP, BNI
Materials/Construction/Manufacturing: BUCY, (PCP), JOYG, FLR, CMI, FWLT, (DE), CAT, PH
Tech: BIDU, ADSK, (FSLR), (KLAC), AAPL, GOOG, INFY, IBM
Some Financials: AXP, GS, ICE, NYX
Some Retail: KSS, AMZN, COH, COST, NKE, WMT
Some Aerospace/Defense: BA, GR
Note: DIA and SPY, also IVGN, CHRW
BEARISH SECTORS/GROUPS AND STOCKS:
Gold: AEM, ABX, GG, GDX (nice head-fake in Gold a couple weeks ago, looks like it sold off hard again while I was gone. Now I will wait for a bounce before looking at puts.)
Some Cyclicals: WHR, MMM
Some Retail: IGT
Some Services: DST
Note: PG, PEP, ROK, MBT, CEG
I will have to ease back in to the amount of postings that I can do intra-day because I need to get caught up at work. So there will be a settling in period as I get rolling again.
I went through your comments and trades pretty much line by line. Bob gets my "A" grade for getting on the right side of several Bull Flags in a market that is still pushing up Neutral to Bullish, and even possibly transitioning to full Intermediate Term Bullish. By the way, for those of you that got tossed around on CAT and CMI, they're both doing about the same thing, and that thing is bullish. In fact, the entire industry, along with some related areas are doing the same thing: CAT, CMI, DE, JOYG, and PH, along with X (metal fabrication). Those are some very nice players right now. Also, you can't really draw up Bull Flag Bounce much clearer than ANR. Some of you got tossed around playing those too tight this week. The reason you got tossed around is your entries weren't clean. Those stocks were a real cherry-pickers delight this week. Some of them are still playable Monday, so I'll be looking at those and others. I will get to the rest of the watchlist later.
Here is my watchlist for the upcoming week. I have included a market posture as well. I indicate stocks and sectors that are either beginning to go intermediate term (IT) bullish or bearish in parenthesis, or are a little tapped out short term. I indicate stocks that are IT bullish or bearish in a normal font. And I indicate stocks or sectors I'm most interested in because of where they are short term (ST) in a bold font. The bolded stocks are closer to buy signals, or they are extremely compelling because they could be high probability setups soon. The regular font stocks are worth keeping an eye on, and the stocks in parenthesis are something I will watch, but probably not play.
Dow: IT Bullish and ST Bullish. The Dow is flagging above IT support at 12,750. A break below 12,750 would change my posture to IT Neutral.
SPX: IT Bullish and ST Bullish. The SPX is rounding its way up the right side of the 4 month base. A break below 1,370-1,375 would change my posture to IT Neutral.
Naz: IT Bullish and ST Bullish. The Naz is rounding its way up the right side of the 4 month base. A break below the bullish gap around 2,350-2,361 would change my posture to IT Neutral.
We have a heavy week of Economic Reports, especially Thursday and Friday. Earnings continue to pile in at the usual pace, although most of the biggest names have reported. And of course we have the Fed on Tuesday/Wednesday. This is timing out for a continuation of the current upswing into Tuesday or Wednesday morning ahead of the Fed, especially if the Dow can reach 13,000-13,090, and the SPX can reach 1,425. Monday has a nice probability for being an up day, and we have a decent probability of reaching those market targets, especially if traders focus on the Fed Wednesday, and the Economic Reports on Thursday and Friday for the next catalysts. What I don't want is for traders to put their hands in their pockets and sit and spin until they get the actual reports. I want some speculation ahead of the Fed, the ISM, and the Jobs Report, so then I can stick my hands in my pockets after some nice 1-3 day swing trades.
BULLISH SECTORS/GROUPS AND STOCKS:
Steel: AKS, NUE, X
Metals/Mining: (POT), ANR, MTL, CLF, RIO, FDG, SID
Copper: FCX, (PCU)
Chemicals: (MOS), AGU, CF, PX
Energy: SWN, UPL, NFX, CHK, OXY, NE, PXP, APA, CAM, FTI, (DVN), NBL, (SII), (BHI), SU, RIG, NBR, MUR, (HES), SLB, OIH, NOV
Coal: MEE, (CNX), ACI
Railroads: CSX, UNP, BNI
Materials/Construction/Manufacturing: BUCY, (PCP), JOYG, FLR, CMI, FWLT, (DE), CAT, PH
Tech: BIDU, ADSK, (FSLR), (KLAC), AAPL, GOOG, INFY, IBM
Some Financials: AXP, GS, ICE, NYX
Some Retail: KSS, AMZN, COH, COST, NKE, WMT
Some Aerospace/Defense: BA, GR
Note: DIA and SPY, also IVGN, CHRW
BEARISH SECTORS/GROUPS AND STOCKS:
Gold: AEM, ABX, GG, GDX (nice head-fake in Gold a couple weeks ago, looks like it sold off hard again while I was gone. Now I will wait for a bounce before looking at puts.)
Some Cyclicals: WHR, MMM
Some Retail: IGT
Some Services: DST
Note: PG, PEP, ROK, MBT, CEG
I will have to ease back in to the amount of postings that I can do intra-day because I need to get caught up at work. So there will be a settling in period as I get rolling again.
Friday, April 18, 2008
Gaps Away
A huge gap at the open. I sold all my positions for a very nice gain, especially for a 2 day trade. It was actually just a few business hours. If I wasn't going on vacation, I would have scaled out a bit, but I would still be out of 3/4 of everything right now, even if I was staying in town. I will tally the results up later when I have time.
The Dow broke out of 12,750, and volume looks to be tracking above average. So this looks like it will be a true breakout for the Dow. The SPX and the Naz are sitting right in their resistance zones, so they aren't quite there yet. It may be that they follow next week, or they may need a couple days to gather themselves for the next move up. The key for the breakout, and for the markets to maintain the current bullishness, is for the Dow to hold the 12,750 area, the SPX to hold at a higher low, preferably the 1,360-1,370 area, and the Naz to hold the gap, preferably above the 2,340-2,350 area.
Here are the results from the 5 call trades I entered yesterday. I sold MEE at breakeven, DIA for a 28% gain, AIG for a 30% gain, SPY for a 40% gain, and GS for a 44% gain. I bought the calls an hour before the close yesterday, and sold them 2 minutes into the open today. So I held the calls for approximately one business hour, even though they were "technically" 2 day trades. I normally would have fought with the outs a little more and gotten better exits, but I needed to just blast them out and start prepping for my vacation.
1:50pm MT: Industrials/Machinery/Manufacturing is strong because of CAT’s earnings. Tech is strong because of GOOG’s earnings. Energy is strong because of SLB’s earnings. Financials are strongish because of C’s earnings (not as catastrophic as whispered). And Aerospace/Defense is strong because of HON’s earnings.
TEX
7:30pm MT: We still have a lot of earnings next week. The only economic report that might move the market is Durable Orders. Anything can happen, but traders will probably be focused on earnings next week, just like they were this week. Industrials/Machinery/Manufacturing is strong right now, being led by CAT. Also in the group: CMI, ETN, TEX, SGR, FWLT, JOYG, JEC, PH, and FLR. Cyclicals like MMM look strong. Energy is through the roof right now, along with a lot of the Commodity-based stocks (see last Saturday's watchlist). So be selective, if you trade over there on Monday - Wednesday. Some Retail, like NKE and AMZN, are moving up. Some Financials and Tech are strong as well. Gold is weak, which means that it's more of a "flight to safety" play than an inflation hedge - because there is plenty of inflation out there. So Gold is probably being sold on the concept that the market is getting stronger, and there is not as much demand to "fly to safety." Who invented that term? It's never a "flighty little soft flutter over to nestle up with the soft, safe Gold stocks." It's more like a "screaming pile of burning, scorched-earth nosedive headfirst through a sea of broken glass end of the world, we're all gonna die stampede to safety." Well, anyway, the market is looking stronger, watch to see if it will carry through. If it does push higher on Monday and Tuesday, keep playing the short swing calls. If we have a nice clean breakout, then a second, even greater opportunity will be waiting on the first pullback.
9:00pm: A natural resistance area for the Dow is the 200 day moving average at 13,093. That is right in the middle of my resistance zone between the round number of 13,000 and a December 2007 short term bottom around 13,100 - 13,150. In fact, the 200 dma is lining right up with the December 18, 2007 bottom. Watch for that area. If we push ahead Monday - Wednesday then obviously you want to continue to trade your bullish calls list, but that will be a very important short-term resistance area, if we get to it. If we do reach that far, it will also mean I am solidly intermediate term bullish and waiting for the next pullback to pile on.
4:00pm MT: I write up my profitable (or unprofitable) trades for you each day. I would like to hear from you. If you had some nice trades today, real or on paper, leave me a comment. I want to see how you're doing, and if my instruction is having a positive effect. This is also an opportunity to show each other some success stories. It can be very helpful to a struggling trader to see the good trades that your peers are making. It gives new traders a sense of hope, which is an important element in perseverance.
The Dow broke out of 12,750, and volume looks to be tracking above average. So this looks like it will be a true breakout for the Dow. The SPX and the Naz are sitting right in their resistance zones, so they aren't quite there yet. It may be that they follow next week, or they may need a couple days to gather themselves for the next move up. The key for the breakout, and for the markets to maintain the current bullishness, is for the Dow to hold the 12,750 area, the SPX to hold at a higher low, preferably the 1,360-1,370 area, and the Naz to hold the gap, preferably above the 2,340-2,350 area.
Here are the results from the 5 call trades I entered yesterday. I sold MEE at breakeven, DIA for a 28% gain, AIG for a 30% gain, SPY for a 40% gain, and GS for a 44% gain. I bought the calls an hour before the close yesterday, and sold them 2 minutes into the open today. So I held the calls for approximately one business hour, even though they were "technically" 2 day trades. I normally would have fought with the outs a little more and gotten better exits, but I needed to just blast them out and start prepping for my vacation.
1:50pm MT: Industrials/Machinery/Manufacturing is strong because of CAT’s earnings. Tech is strong because of GOOG’s earnings. Energy is strong because of SLB’s earnings. Financials are strongish because of C’s earnings (not as catastrophic as whispered). And Aerospace/Defense is strong because of HON’s earnings.
7:30pm MT: We still have a lot of earnings next week. The only economic report that might move the market is Durable Orders. Anything can happen, but traders will probably be focused on earnings next week, just like they were this week. Industrials/Machinery/Manufacturing is strong right now, being led by CAT. Also in the group: CMI, ETN, TEX, SGR, FWLT, JOYG, JEC, PH, and FLR. Cyclicals like MMM look strong. Energy is through the roof right now, along with a lot of the Commodity-based stocks (see last Saturday's watchlist). So be selective, if you trade over there on Monday - Wednesday. Some Retail, like NKE and AMZN, are moving up. Some Financials and Tech are strong as well. Gold is weak, which means that it's more of a "flight to safety" play than an inflation hedge - because there is plenty of inflation out there. So Gold is probably being sold on the concept that the market is getting stronger, and there is not as much demand to "fly to safety." Who invented that term? It's never a "flighty little soft flutter over to nestle up with the soft, safe Gold stocks." It's more like a "screaming pile of burning, scorched-earth nosedive headfirst through a sea of broken glass end of the world, we're all gonna die stampede to safety." Well, anyway, the market is looking stronger, watch to see if it will carry through. If it does push higher on Monday and Tuesday, keep playing the short swing calls. If we have a nice clean breakout, then a second, even greater opportunity will be waiting on the first pullback.
9:00pm: A natural resistance area for the Dow is the 200 day moving average at 13,093. That is right in the middle of my resistance zone between the round number of 13,000 and a December 2007 short term bottom around 13,100 - 13,150. In fact, the 200 dma is lining right up with the December 18, 2007 bottom. Watch for that area. If we push ahead Monday - Wednesday then obviously you want to continue to trade your bullish calls list, but that will be a very important short-term resistance area, if we get to it. If we do reach that far, it will also mean I am solidly intermediate term bullish and waiting for the next pullback to pile on.
4:00pm MT: I write up my profitable (or unprofitable) trades for you each day. I would like to hear from you. If you had some nice trades today, real or on paper, leave me a comment. I want to see how you're doing, and if my instruction is having a positive effect. This is also an opportunity to show each other some success stories. It can be very helpful to a struggling trader to see the good trades that your peers are making. It gives new traders a sense of hope, which is an important element in perseverance.
Thursday, April 17, 2008
Mixed Day But Resilient
IBM held up its end of the bargain, but PFE and the Philly Fed Survey reported really ugly numbers. NUE would appear to have given the Steel stocks a little tailwind, but that's being offset by the drop in RS after earnings.
It looks mixed out there, so I liquidated everything.
I don't like the Steel stocks reaction to the earnings, even with NUE propping things a bit. I stopped AKS for a 40 cent loss and STLD for a 38 cent loss. I also locked and walked on MEE, which finished out as an 87 cent, or 21% profit. I also took my profits on DIA, which was 38 cents, and on SPY, which was 34 cents. The gains today nullified the two small losses, and not only kept me close to break-even on the day, but preserved all my profits from the past several days. That is the essence of risk management.
Speaking of risk. The markets look too squishy right now. It may very well be that we continue going up on the short-term, so I will still look at some potential call plays after this mid-morning consolidation. But I need to see something pretty solid to go wading back in ahead of the weekend. This is typical Earnings Season. In fact, it's not quite as volatile, yet, as I expected. We are still in a Chop and Slop market until we're not, so I still don't have a problem liquidating a trade intra-day to three days. We just aren't in a 3-7 day swing market yet.
The Naz is forming a Head and Shoulders top on the 30m charts right now, which means we may actually head back for a test of the gap.
The Naz fought off the Head and Shoulders intra-day. Stocks that may still be on the move are GS, AIG, MET, SUN, and perhaps IR and CAT. ICE had a nice follow-through today, but it's moved a little too far for me now.
Sighhhh.....I know, I know, not much happening today, but I couldn't resist picking up a couple of little nibblers on GS and AIG, which both look like they can swing a little more. The markets seem to be holding up, sellers aren't winning the day. There is still some resilience in the current upswing.
The DIA and SPY are in Ascending Triangles intra-day, so I bought calls just before the (potential) breakout. They are trying to push through as I write this.
I picked up calls on DIA, SPY, GS, AIG, and MEE. I will look to sell into any pop in the morning. I would normally hold a little, and maybe even look for some more if the markets break out, but I'm going on vacation Saturday to the following Saturday, and I don't want to have anything on the books while I'm gone and can't watch it.
GOOG beat earnings and is up 17% after-hours. SNDK added to the Nasdaq's tailwind by beating earnings and rising 5% after-hours. COF didn't mess up earnings so far, and is holding up after-hours. Tomorrow morning, before the open, if CAT, HON, and C, along with SLB, don't mess up too badly, or even come out positive, we could gap up right into intermediate-term resistance areas. The Q's are set to gap right to resistance in the morning. I will sell into the gap. Once again, I would normally keep half my positions in case we do break out, and even add more if we do. But I'm going on vacation, so I'll just exit if we gap open. If the earnings come in decent to good before the open, look for a gap up in the morning. It will be interesting to see if the market can break out tomorrow, or if it will fade into the close. We may be close to a key tipping point in the markets.
We shall see what tomorrow brings.....
It looks mixed out there, so I liquidated everything.
I don't like the Steel stocks reaction to the earnings, even with NUE propping things a bit. I stopped AKS for a 40 cent loss and STLD for a 38 cent loss. I also locked and walked on MEE, which finished out as an 87 cent, or 21% profit. I also took my profits on DIA, which was 38 cents, and on SPY, which was 34 cents. The gains today nullified the two small losses, and not only kept me close to break-even on the day, but preserved all my profits from the past several days. That is the essence of risk management.
Speaking of risk. The markets look too squishy right now. It may very well be that we continue going up on the short-term, so I will still look at some potential call plays after this mid-morning consolidation. But I need to see something pretty solid to go wading back in ahead of the weekend. This is typical Earnings Season. In fact, it's not quite as volatile, yet, as I expected. We are still in a Chop and Slop market until we're not, so I still don't have a problem liquidating a trade intra-day to three days. We just aren't in a 3-7 day swing market yet.
The Naz is forming a Head and Shoulders top on the 30m charts right now, which means we may actually head back for a test of the gap.
The Naz fought off the Head and Shoulders intra-day. Stocks that may still be on the move are GS, AIG, MET, SUN, and perhaps IR and CAT. ICE had a nice follow-through today, but it's moved a little too far for me now.
Sighhhh.....I know, I know, not much happening today, but I couldn't resist picking up a couple of little nibblers on GS and AIG, which both look like they can swing a little more. The markets seem to be holding up, sellers aren't winning the day. There is still some resilience in the current upswing.
The DIA and SPY are in Ascending Triangles intra-day, so I bought calls just before the (potential) breakout. They are trying to push through as I write this.
I picked up calls on DIA, SPY, GS, AIG, and MEE. I will look to sell into any pop in the morning. I would normally hold a little, and maybe even look for some more if the markets break out, but I'm going on vacation Saturday to the following Saturday, and I don't want to have anything on the books while I'm gone and can't watch it.
GOOG beat earnings and is up 17% after-hours. SNDK added to the Nasdaq's tailwind by beating earnings and rising 5% after-hours. COF didn't mess up earnings so far, and is holding up after-hours. Tomorrow morning, before the open, if CAT, HON, and C, along with SLB, don't mess up too badly, or even come out positive, we could gap up right into intermediate-term resistance areas. The Q's are set to gap right to resistance in the morning. I will sell into the gap. Once again, I would normally keep half my positions in case we do break out, and even add more if we do. But I'm going on vacation, so I'll just exit if we gap open. If the earnings come in decent to good before the open, look for a gap up in the morning. It will be interesting to see if the market can break out tomorrow, or if it will fade into the close. We may be close to a key tipping point in the markets.
We shall see what tomorrow brings.....
Wednesday, April 16, 2008
Earnings and Economic Reports Come Piling In
The perfect earnings setup for the bulls played out. Three Dow companies and the biggest Chip company that were expected to do better than their peers had earnings that beat lowered expectations. INTC started it off yesterday after the close, and JPM, WFC, and KO put the maraschino cherry on top of the whipped cream by beating lowered expectations today. Here are a couple of things to keep in mind: JPM and WFC were the two most responsible National Banks during the real estate bubble. KO is not a good economic barometer. And INTC was taking market share away from AMD, and only guided up expectations slightly. So those four companies should have beat lowered expectations.
The economic numbers were not quite as glittery, but OK. Housing Starts and Building Permits came in worse than expected, and at a 17 year low. CPI came out in-line with expectations (which means that producers continue to try to hold back price increases to consumers). And Industrial Production beat expectations, while Capacity Utilization missed a little.
My thoughts on the market are that we may get a bounce short term, but I still don't see the catalysts to change the intermediate term trend. I don't think we have a broad enough cross-section of corporate earnings to change the picture just yet, but we shall see.....
I may play the Q's (INTC), and the DIA (JPM, KO, and INTC) for quickish call plays today, maybe.....And I will watch my bounce list from yesterday.
RIG is a gap and fade right out of the gate, so I got rid of it. I lost 93 cents on a half sized position on RIG, so a minimal loss. The Energy play is starting to get fairly old on the current short term swing, and traders faded the gap immediately. This tells me that a bunch of money put in market sell-at-open orders, which I don't want to be a partaker of. Also, INTC gapped right to resistance, just as I said it would yesterday, so traders are fading the stock right now. I will wait for a pullback before playing the DIA or Q's, if I do play them.
The SPY is right at the gap at 135.00, the DIA at the gap at 125.00, and the Q's sitting just below the gap at 45.00. Me and MC Hammer have one thing in common right now, I can't touch this. We may get a Momentum Day, but I just don't think so.....Call it a hunch based on too many earnings to come, and only decent to soft economic reports. I think this will at least swing back a little from the gaps. I may be wrong, but I'm not treating this as a chaser day, and I'm still a nibbler in this market. I haven't dramatically changed my posture.
I nibbled on STLD calls, which may confirm a bounce today. The steels look strong, so I'll keep an eye over there. Even though X and AKS are stronger stocks, STLD has more buying pressure this morning, but I'll watch all three. Almost all the stuff I was watching gapped away this morning, and frankly, I would be scaling out of a little of it right now, if I owned it. So I will pick and peck here and there on swing backs, but I'm not chasing. MRK is rolling over, and APOL continues its incredibly reluctant fade, with another drop and pop. I dumped the last of my APOL puts and locked down a 33% gain on the total trade. APOL has way too much goofiness on the fade. I don't know who's buying it on the rollover. But if the buyers are short-covering, then they are being a little too weird about it. The term spastic colon comes to mind. If they're covering they should just let it go and then cover, but someone over there has a really itchy trigger finger, so I'm taking my money and walking.
I nibbled a little on DIA calls just in case this is a Momentum Chaser Day. I will nibble on some Q's in the upper 44's as well. Only small positions, but I want to be a part of this move if we are just going to dog-pile all the way into the close.
I sold my MEE calls for a 25% profit just ahead of the Oil Inventory Report, which is good enough for a 2-day play.
The oil inventory report must have come in strong, because Energy is spiking right now. I may look for another trade over there now. I did buy back into MEE calls, and I bought some SPWR calls on the intra-day Symmetrical Triangle. Both are profitable already.
I sold the SPWR for a 13% gain in 12 minutes. MEE is running hard, and I'm up 28% in 2 hours. I bought some SPY calls to go along with my DIA. I added to STLD, and I nibbled on AKS and X calls. I will sell the AKS and X by the end of the day if I can, but those are small positions right now anyway. STLD is a full position and so is MEE.
I got tired of fussing with the MRK puts, even though it has rolled over. So I sold it for a 10% gain and walked away. It may roll down a couple more dollars, but I have too much to watch, and I'm focused in other areas now. I also goofed around with a RIG intra-day trade, but only made 15 cents, which offset the 93 cent loss earlier, and gave me a net loss of 78 cents on a half sized position. RIG has been my only losing trade since April 9th.
I took profits on part of MEE for a 30% gain intra-day on the positions I sold. I am still holding 6 of my 10 contracts. I sold all of X for a 14% gain intra-day. I still have DIA, SPY, MEE, AKS, and STLD calls.
Chemicals were the biggest movers today after Goldman Sachs blew some sunshine on the industry. Some chips that I talked about yesterday, like KLAC and SNDK (confirmed bounce), moved up on the INTC news, just as I speculated. By the way, for any stock traders who like cheap stocks (which I don't trade), here are some cheap Chips that bounced out of Bull Flags: KLIC, MIPS, and MU. Also, JPM and WFC gave Financials a tailwind, but that should have been expected since those were the two most responsible banks during the subprime mess. And the Dow moved on the positive reports from INTC, JPM, and KO.
On the economic front, well.....it was OK. Nothing to shout about, and maybe some things to be cautious about. The positive was Industrial Production rose just a little. The ripples around a potential iceberg were CPI reporting in-line with expectations. And the negative was the Housing data, which showed the lowest level of Housing Starts and Building Permits since 1991. In addition, Oil hit another all-time high of $115.07 intra-day. I'm not convinced we have an all clear signal on the economic front. But we will know what Big Money thinks if the Dow breaks out above 12,750. And you know by now that you go with price over any other information.
You can pretty much throw a dart at the Bullish Watchlist from Saturday to get an idea who moved today. As usual, Commodity and Energy stocks led the way, especially Commodity stocks. Chips, Tech, and Financials also contributed to the move. Gold is off the Bearish list. APOL is off the bearish list for now. RTN is off the Bearish list.
Here are some stocks that may be early enough in a swing to still play: QQQQ, FWLT, STLD, ANR, SUN (broke out of Symmetrical Triangle with volume), ATI, IR, (maybe PCU and FCX), (maybe DE, PH, and CAT), (maybe SLB and APC), RIMM, (maybe DOW), (maybe some Financials: GS, AIG, ICE, MET, and NYX), (maybe AMZN), AMX, and ERTS.
Only 26 out of 309 stocks in my Universe moved down today. I am very selective about my Bearish Watchlist right now. MRK did continue to roll over.
IBM beat earnings and raised guidance after the close. The stock is up about 3% after-hours. IBM is probably the biggest focus for traders going in to tomorrow's trading. However, EBAY and GILD tonight, and MER, PFE, and LUV will carry some interest as well. In steel, NUE and RS will be important earnings reports before the open tomorrow. I will be ready to jettison my steel calls if those companies dump the sector.
On the economic front, Initial Jobless Claims will hold some interest, and Leading Indicators and Philly Fed will probably take a back seat.
Barring catastrophic numbers from one of the above, IBM and Initial Claims should be the focus, and so far we have 1 out of 2 going strongly bullish. I would say that the probability is moving towards a bump up tomorrow, maybe a gap, and the move early in the day may finish out most of the current swing, because it will take the markets right into resistance areas. We are still Intermediate-Term Neutral, so a big move early in the day and I'm a seller, not a buyer. Until we break Intermediate-Term resistances, I am still playing shorter swings.
If you get bored tonight, here's a little ditty that's sure to get you square dancing a merry little jig. It's from Old-School Market Wizard Ed Seykota. He is one of my favorite wizards when it comes to focusing on PRICE ANALYSIS and ignoring fundamentals. In fact, he coined a great trading term about price vs. fundamentals for trend traders. When asked if he used fundamentals to pick stocks, he replied, don't you mean "funny-mentals." Still one of my favorite terms.....
Here he is in all his splendor:
http://www.seykota.com/tribe/essentials/vimeo.htm
you just can't argue with a guy who plays the banjo, didn't Steve Martin set the standard?
The economic numbers were not quite as glittery, but OK. Housing Starts and Building Permits came in worse than expected, and at a 17 year low. CPI came out in-line with expectations (which means that producers continue to try to hold back price increases to consumers). And Industrial Production beat expectations, while Capacity Utilization missed a little.
My thoughts on the market are that we may get a bounce short term, but I still don't see the catalysts to change the intermediate term trend. I don't think we have a broad enough cross-section of corporate earnings to change the picture just yet, but we shall see.....
I may play the Q's (INTC), and the DIA (JPM, KO, and INTC) for quickish call plays today, maybe.....And I will watch my bounce list from yesterday.
RIG is a gap and fade right out of the gate, so I got rid of it. I lost 93 cents on a half sized position on RIG, so a minimal loss. The Energy play is starting to get fairly old on the current short term swing, and traders faded the gap immediately. This tells me that a bunch of money put in market sell-at-open orders, which I don't want to be a partaker of. Also, INTC gapped right to resistance, just as I said it would yesterday, so traders are fading the stock right now. I will wait for a pullback before playing the DIA or Q's, if I do play them.
The SPY is right at the gap at 135.00, the DIA at the gap at 125.00, and the Q's sitting just below the gap at 45.00. Me and MC Hammer have one thing in common right now, I can't touch this. We may get a Momentum Day, but I just don't think so.....Call it a hunch based on too many earnings to come, and only decent to soft economic reports. I think this will at least swing back a little from the gaps. I may be wrong, but I'm not treating this as a chaser day, and I'm still a nibbler in this market. I haven't dramatically changed my posture.
I nibbled on STLD calls, which may confirm a bounce today. The steels look strong, so I'll keep an eye over there. Even though X and AKS are stronger stocks, STLD has more buying pressure this morning, but I'll watch all three. Almost all the stuff I was watching gapped away this morning, and frankly, I would be scaling out of a little of it right now, if I owned it. So I will pick and peck here and there on swing backs, but I'm not chasing. MRK is rolling over, and APOL continues its incredibly reluctant fade, with another drop and pop. I dumped the last of my APOL puts and locked down a 33% gain on the total trade. APOL has way too much goofiness on the fade. I don't know who's buying it on the rollover. But if the buyers are short-covering, then they are being a little too weird about it. The term spastic colon comes to mind. If they're covering they should just let it go and then cover, but someone over there has a really itchy trigger finger, so I'm taking my money and walking.
I nibbled a little on DIA calls just in case this is a Momentum Chaser Day. I will nibble on some Q's in the upper 44's as well. Only small positions, but I want to be a part of this move if we are just going to dog-pile all the way into the close.
I sold my MEE calls for a 25% profit just ahead of the Oil Inventory Report, which is good enough for a 2-day play.
The oil inventory report must have come in strong, because Energy is spiking right now. I may look for another trade over there now. I did buy back into MEE calls, and I bought some SPWR calls on the intra-day Symmetrical Triangle. Both are profitable already.
I sold the SPWR for a 13% gain in 12 minutes. MEE is running hard, and I'm up 28% in 2 hours. I bought some SPY calls to go along with my DIA. I added to STLD, and I nibbled on AKS and X calls. I will sell the AKS and X by the end of the day if I can, but those are small positions right now anyway. STLD is a full position and so is MEE.
I got tired of fussing with the MRK puts, even though it has rolled over. So I sold it for a 10% gain and walked away. It may roll down a couple more dollars, but I have too much to watch, and I'm focused in other areas now. I also goofed around with a RIG intra-day trade, but only made 15 cents, which offset the 93 cent loss earlier, and gave me a net loss of 78 cents on a half sized position. RIG has been my only losing trade since April 9th.
I took profits on part of MEE for a 30% gain intra-day on the positions I sold. I am still holding 6 of my 10 contracts. I sold all of X for a 14% gain intra-day. I still have DIA, SPY, MEE, AKS, and STLD calls.
Chemicals were the biggest movers today after Goldman Sachs blew some sunshine on the industry. Some chips that I talked about yesterday, like KLAC and SNDK (confirmed bounce), moved up on the INTC news, just as I speculated. By the way, for any stock traders who like cheap stocks (which I don't trade), here are some cheap Chips that bounced out of Bull Flags: KLIC, MIPS, and MU. Also, JPM and WFC gave Financials a tailwind, but that should have been expected since those were the two most responsible banks during the subprime mess. And the Dow moved on the positive reports from INTC, JPM, and KO.
On the economic front, well.....it was OK. Nothing to shout about, and maybe some things to be cautious about. The positive was Industrial Production rose just a little. The ripples around a potential iceberg were CPI reporting in-line with expectations. And the negative was the Housing data, which showed the lowest level of Housing Starts and Building Permits since 1991. In addition, Oil hit another all-time high of $115.07 intra-day. I'm not convinced we have an all clear signal on the economic front. But we will know what Big Money thinks if the Dow breaks out above 12,750. And you know by now that you go with price over any other information.
You can pretty much throw a dart at the Bullish Watchlist from Saturday to get an idea who moved today. As usual, Commodity and Energy stocks led the way, especially Commodity stocks. Chips, Tech, and Financials also contributed to the move. Gold is off the Bearish list. APOL is off the bearish list for now. RTN is off the Bearish list.
Here are some stocks that may be early enough in a swing to still play: QQQQ, FWLT, STLD, ANR, SUN (broke out of Symmetrical Triangle with volume), ATI, IR, (maybe PCU and FCX), (maybe DE, PH, and CAT), (maybe SLB and APC), RIMM, (maybe DOW), (maybe some Financials: GS, AIG, ICE, MET, and NYX), (maybe AMZN), AMX, and ERTS.
Only 26 out of 309 stocks in my Universe moved down today. I am very selective about my Bearish Watchlist right now. MRK did continue to roll over.
IBM beat earnings and raised guidance after the close. The stock is up about 3% after-hours. IBM is probably the biggest focus for traders going in to tomorrow's trading. However, EBAY and GILD tonight, and MER, PFE, and LUV will carry some interest as well. In steel, NUE and RS will be important earnings reports before the open tomorrow. I will be ready to jettison my steel calls if those companies dump the sector.
On the economic front, Initial Jobless Claims will hold some interest, and Leading Indicators and Philly Fed will probably take a back seat.
Barring catastrophic numbers from one of the above, IBM and Initial Claims should be the focus, and so far we have 1 out of 2 going strongly bullish. I would say that the probability is moving towards a bump up tomorrow, maybe a gap, and the move early in the day may finish out most of the current swing, because it will take the markets right into resistance areas. We are still Intermediate-Term Neutral, so a big move early in the day and I'm a seller, not a buyer. Until we break Intermediate-Term resistances, I am still playing shorter swings.
If you get bored tonight, here's a little ditty that's sure to get you square dancing a merry little jig. It's from Old-School Market Wizard Ed Seykota. He is one of my favorite wizards when it comes to focusing on PRICE ANALYSIS and ignoring fundamentals. In fact, he coined a great trading term about price vs. fundamentals for trend traders. When asked if he used fundamentals to pick stocks, he replied, don't you mean "funny-mentals." Still one of my favorite terms.....
Here he is in all his splendor:
http://www.seykota.com/tribe/essentials/vimeo.htm
you just can't argue with a guy who plays the banjo, didn't Steve Martin set the standard?
Tuesday, April 15, 2008
Inflation Says Hi
PPI came in higher than expected, and is up 6.9% year over year. Core PPI excluding Food and Energy was in-line with expectations. Nothing else was really a market mover.
I sold MUR for a 51 cent gain, which was a modest 8.4% profit since yesterday. I also sold more APOL for a nice gain. I am averaging about a 30% return on APOL so far. I dumped XLI for only a $70.00 gain, just a scratch trade. I am sitting on just a little bit of stuff ahead of the BIG 3, which are INTC tonight, and JPM and PPI tomorrow. There is so much information to come tomorrow with earnings and economic reports that it won't do much good to micro-analyze all the minutia.
There is a lot of news out, a lot more to come, and a lot of ways you can read it and speculate. In fact, there is so much that it may be best to just sit and watch, and wait for Big Money to tip its hand as to where they want to take the market in coming weeks.
Here are some Bullish movers: INFY (breakout), MEE (bounce), SPWR (bounce), RRC (bounce), BHP (bounce), DRYS (bounce), MDR (bounce), and AMX (bounce). Steel may be on the move again and X, STLD, MTL, and AKS bear watching. Gold may be on the move as an anti-inflation play, with AEM and GG looking the strongest. If INTC pops the Naz and Chips tomorrow, I may play the Q's, and also look at SNDK, KLAC, and CY (but CY has earnings in 2 days so I would be quick or not at all).
Here are some Bearish movers: LVS (breakdown), WYNN (breakdown yesterday), RTN (rolled over, then broke down yesterday), MRK (may be ready to roll over), and the short ETF's (SDS, DXD, and QID look like they want to roll over, which would coincide with the market bouncing short-term).
There is so much information for the market to digest by the open tomorrow, and throughout the day, that I still want to be nimble, and keep my positions smaller.
Some days are tougher for me to post than others, like today. I am usually trying to throw something on here or there, between phone calls, or on a break. I answered the last comment questions from yesterday and today this evening. Eventually I may be able to focus strictly on trading with you, but for now, I have to squeeze things in as I can. All in all though, I think things are going pretty well. A lot of you are making good progress. Keep up the good work.
I sold MUR for a 51 cent gain, which was a modest 8.4% profit since yesterday. I also sold more APOL for a nice gain. I am averaging about a 30% return on APOL so far. I dumped XLI for only a $70.00 gain, just a scratch trade. I am sitting on just a little bit of stuff ahead of the BIG 3, which are INTC tonight, and JPM and PPI tomorrow. There is so much information to come tomorrow with earnings and economic reports that it won't do much good to micro-analyze all the minutia.
There is a lot of news out, a lot more to come, and a lot of ways you can read it and speculate. In fact, there is so much that it may be best to just sit and watch, and wait for Big Money to tip its hand as to where they want to take the market in coming weeks.
Here are some Bullish movers: INFY (breakout), MEE (bounce), SPWR (bounce), RRC (bounce), BHP (bounce), DRYS (bounce), MDR (bounce), and AMX (bounce). Steel may be on the move again and X, STLD, MTL, and AKS bear watching. Gold may be on the move as an anti-inflation play, with AEM and GG looking the strongest. If INTC pops the Naz and Chips tomorrow, I may play the Q's, and also look at SNDK, KLAC, and CY (but CY has earnings in 2 days so I would be quick or not at all).
Here are some Bearish movers: LVS (breakdown), WYNN (breakdown yesterday), RTN (rolled over, then broke down yesterday), MRK (may be ready to roll over), and the short ETF's (SDS, DXD, and QID look like they want to roll over, which would coincide with the market bouncing short-term).
There is so much information for the market to digest by the open tomorrow, and throughout the day, that I still want to be nimble, and keep my positions smaller.
Some days are tougher for me to post than others, like today. I am usually trying to throw something on here or there, between phone calls, or on a break. I answered the last comment questions from yesterday and today this evening. Eventually I may be able to focus strictly on trading with you, but for now, I have to squeeze things in as I can. All in all though, I think things are going pretty well. A lot of you are making good progress. Keep up the good work.
Monday, April 14, 2008
Market Gets Quiet Near Support
Market Futures are down pre-market, but off the wost levels on a slightly better than expected Retail Sales report. My first check of the week ahead, last week, was focused on the heavy slew of earnings hitting the market. But this is also a heavy week for economic reports. We have 3 key reports (including Retail Sales), and 3-4 semi-important reports. Retail Sales ex-auto was in-line with expectations, which didn't move the market much early on. We also get PPI Tuesday, CPI (more important) on Wednesday, and some lesser, but important reports Wednesday (Housing Starts/Building Permits and Industrial Production/Capacity Utilization, along with Oil Inventories), and Thursday (Fed's Beige Book, Initial Claims, and Philly Fed). I won't be micro-analyzing every single report, however, I am aware of the heavy economic week, which will only add to a potentially volatile ride we are in for the next few days. Trade softly and carry a big stick to ward off the news blows we are going to get hit with.
APOL broke ST support at 46.50 - 47.00. It took a quick dump to 45.00. I am starting the scaling out process now. I sold a little of the trade for a 23% gain, I'm watching to see if it will break down below 45 and then I'll look to sell more.
I nibbled on some XLI puts when it was around 36.70. The May 38 put was pretty cheap, with a high delta. The stock looks like it may have one more day to the downside.
I started a baby nibble on MEE calls. The coal stocks don't announce earnings for 4-5 days, and MEE is holding up. I don't want a lot of anything this week, so I'm not doing much, just nibbling and getting out of current positions. I may time stop MRK today, and be out of half of APOL as well. So far a dull day, it even looks like traders are playing on the 30m charts at the high-end of the time frames, which will make it a dull day. Maybe we will Doji around these support areas until INTC.
Energy and some Commodity stocks are propping the market, sound familiar?.....Toss HES of the bearish list. Here are the Energy and Commodity stocks making noise today: HES, AGU, CNQ, DO (breakout), BG (bounce), NE (bounce), CNX, RIG (bounce), MUR (bounce), CF, MOS, PXD (bounce), CLF (bounce), CAM, (bounce), APA (bounce), DVN (bounce), WFT (bounce), and RRC (bounce). There are more, but those are the strongest. There is a real desperation by Institutions to get into any bullish stocks, and so much money trying to push and squeeze through the same door. It's a very crowded trade. Still, I may take one or two Energy stocks before the end of the day - on the current intra-day consolidation, we shall see. Since Energy is consolidating intra-day, the market has no props, and predictably is fading to the lows.
I did nibble a little on MUR and RIG calls. I took MUR around 88.65 and RIG about 151.00. There is so much freneticism in Energy and Commodities, that this trade might carry through for another day or two.
The market finished fairly quiet, with the Naz underperforming, and the Dow throwing a Doji. There is not much to take away. Once again, Energy and Commodities propped the market and kept indexes from reaching support levels. And once again, any bullishness was fairly narrow based, and concentrated in those two sectors.
Earnings Season still stands front and center as the key driver for the Intermediate Term posture. But Inflation is going to come more and more into focus as we keep hitting new highs on Commodity and Energy prices. Food prices were up 4% in 2007, and are projected to be up 4.5% in 2008:
http://biz.yahoo.com/ap/080414/inflation_squeeze.html
That means PPI tomorrow, and especially CPI on Wednesday, become more of a potential market driver this week. If inflation is up, traders will most likely be very unnerved, as it takes away the Fed's ability to keep aggressively cutting rates. I know I keep beating this drum, but we could have a pretty volatile week, one way or the other.
For those of you who are still trying to understand the Financial sector mess, and how the Banks, Brokers, Insurance companies, Bond Insurers, and other institutions gambled foolishly on the subprime real-estate market, here is a nice article. Think of it as a microcosm for all that was wrong with what many company's did:
http://seattletimes.nwsource.com/html/businesstechnology/2004347122_wamu14.html
APOL broke ST support at 46.50 - 47.00. It took a quick dump to 45.00. I am starting the scaling out process now. I sold a little of the trade for a 23% gain, I'm watching to see if it will break down below 45 and then I'll look to sell more.
I nibbled on some XLI puts when it was around 36.70. The May 38 put was pretty cheap, with a high delta. The stock looks like it may have one more day to the downside.
I started a baby nibble on MEE calls. The coal stocks don't announce earnings for 4-5 days, and MEE is holding up. I don't want a lot of anything this week, so I'm not doing much, just nibbling and getting out of current positions. I may time stop MRK today, and be out of half of APOL as well. So far a dull day, it even looks like traders are playing on the 30m charts at the high-end of the time frames, which will make it a dull day. Maybe we will Doji around these support areas until INTC.
Energy and some Commodity stocks are propping the market, sound familiar?.....Toss HES of the bearish list. Here are the Energy and Commodity stocks making noise today: HES, AGU, CNQ, DO (breakout), BG (bounce), NE (bounce), CNX, RIG (bounce), MUR (bounce), CF, MOS, PXD (bounce), CLF (bounce), CAM, (bounce), APA (bounce), DVN (bounce), WFT (bounce), and RRC (bounce). There are more, but those are the strongest. There is a real desperation by Institutions to get into any bullish stocks, and so much money trying to push and squeeze through the same door. It's a very crowded trade. Still, I may take one or two Energy stocks before the end of the day - on the current intra-day consolidation, we shall see. Since Energy is consolidating intra-day, the market has no props, and predictably is fading to the lows.
I did nibble a little on MUR and RIG calls. I took MUR around 88.65 and RIG about 151.00. There is so much freneticism in Energy and Commodities, that this trade might carry through for another day or two.
The market finished fairly quiet, with the Naz underperforming, and the Dow throwing a Doji. There is not much to take away. Once again, Energy and Commodities propped the market and kept indexes from reaching support levels. And once again, any bullishness was fairly narrow based, and concentrated in those two sectors.
Earnings Season still stands front and center as the key driver for the Intermediate Term posture. But Inflation is going to come more and more into focus as we keep hitting new highs on Commodity and Energy prices. Food prices were up 4% in 2007, and are projected to be up 4.5% in 2008:
http://biz.yahoo.com/ap/080414/inflation_squeeze.html
That means PPI tomorrow, and especially CPI on Wednesday, become more of a potential market driver this week. If inflation is up, traders will most likely be very unnerved, as it takes away the Fed's ability to keep aggressively cutting rates. I know I keep beating this drum, but we could have a pretty volatile week, one way or the other.
For those of you who are still trying to understand the Financial sector mess, and how the Banks, Brokers, Insurance companies, Bond Insurers, and other institutions gambled foolishly on the subprime real-estate market, here is a nice article. Think of it as a microcosm for all that was wrong with what many company's did:
http://seattletimes.nwsource.com/html/businesstechnology/2004347122_wamu14.html
Saturday, April 12, 2008
Watchlist Saturday
Here is my watchlist for the upcoming week. I have included a market posture as well. I indicate stocks and sectors that are beginning to go intermediate term (IT) bullish or bearish in parenthesis. I indicate stocks that are IT bullish or bearish in a normal font. And I indicate stocks or sectors I'm most interested in because of where they are short term (ST) in a bold font. The bolded stocks are closer to buy signals, or they are extremely compelling because they could be high probability setups soon.
Dow: IT Neutral Neutral and ST Bearish. The Dow is sitting above ST support at 12,200. A break below 12,200 would change my posture to IT Neutral to Bearish and set the stage for a possible re-test of the January and March lows (hereafter known as the Bernanke Pavlov Zone or BPZ).
SPX: IT Neutral Neutral and ST Bearish. The SPX is sitting above ST support at 1,315 - 1,325. A break below 1,315 would change my posture to IT Neutral to Bearish and set the stage for a possible re-test of the BPZ.
Naz: IT Neutral Neutral and ST Bearish. The Naz is sitting above ST support at 2,256 - 2,279. A break below 2,256 would change my posture to IT Neutral to Bearish and set the stage for a possible re-test of the BPZ. I would be highly surprised if traders took the Naz below 2,256 before INTC announces earnings (on Tuesday after the close, or in other words, before Wednesday morning).
If the market indexes bounce on Monday, or more likely Tuesday, (if they hold supports and bounce), then it will probably be a speculative rally ahead of INTC's earnings, and perhaps JPM's earnings Wednesday morning. I anticipate Wednesday of next week to be the most volatile trading day of the week, unless earnings come in really ugly, and then Thursday and Friday will be volatile as well.
BULLISH SECTORS/GROUPS AND STOCKS:
Steel: X, STLD, (ATI), AKS, MTL
Metals/Mining: ANR, CLF, WLT, POT, (RIO), FDG, BHP
Copper: FCX, PCU
Chemicals: MOS, CF, APD, (MON), TRA
Energy: UPL, USO, PXD, PXP, RRC, RIG, APA, DVN, NE, NOV
Coal: ACI, CNX, MEE
Railroads: CSX, UNP
Transports: (FDX), CHRW, (EXPD)
Materials/Construction/Manufacturing: MDR, (CAT), PH, FLR, CBI, (VMC)
Tech: RIMM, ERTS, AAPL, FSLR, BIDU, (ADBE), (KLAC)
Electronics: SPWR, STP
(Biotechs: GILD, CELG)
Conglomerates: PPG
Exchanges: ICE, (NYX)
(Homebuilders: RYL, TOL, DHI)
Some Financials: PRU, AOC
Some Retail: NKE, WMT, (AMZN), GME
Utilities: this group is strong, but option spreads are too wide, just like the REIT's
Note: BA is holding its breakout for now
BEARISH SECTORS/GROUPS AND STOCKS:
(Gold: NEM, GDX, ABX, AEM, GG are right at ST supports, a break through might drop them another day)
HMO's: AET, HUM
Hotels & Casinos: (HOT), MGM, (LVS), WYNN
Some Cyclicals: WHR, (UTX), XLI
Some Retail: JCP, IGT, ANF, (TGT)
Some Financials: LEH, MER, LM, BAC, PFG
Some Drugs: MRK
Some Education: APOL
Some Energy: VLO, (SUN), (MRO), (HES)
Note: FWLT has broken an uptrend line
One Note of Caution - Repeated Again:
We are entering the heart of Earnings Season, and it will probably get volatile. So I am repeating what I wrote Friday about how I'm looking at the week, at least until Wednesday.
The Dow, SPX, and Naz all broke diagonal support and are getting close to short term horizontal supports. The Dow has horizontal support at 12,200, the SPX at 1,315, and the Naz has a support zone between 2,260 - 2,280. I wouldn't be surprised to see the markets drop a little more on Monday and test those areas. I also wouldn't be surprised if those areas hold short term until we get the INTC numbers after the close on Tuesday, and the JPM numbers before the open on Wednesday. I will stay with my puts through Monday, for now, barring any signals from the market to do otherwise.
Dow: IT Neutral Neutral and ST Bearish. The Dow is sitting above ST support at 12,200. A break below 12,200 would change my posture to IT Neutral to Bearish and set the stage for a possible re-test of the January and March lows (hereafter known as the Bernanke Pavlov Zone or BPZ).
SPX: IT Neutral Neutral and ST Bearish. The SPX is sitting above ST support at 1,315 - 1,325. A break below 1,315 would change my posture to IT Neutral to Bearish and set the stage for a possible re-test of the BPZ.
Naz: IT Neutral Neutral and ST Bearish. The Naz is sitting above ST support at 2,256 - 2,279. A break below 2,256 would change my posture to IT Neutral to Bearish and set the stage for a possible re-test of the BPZ. I would be highly surprised if traders took the Naz below 2,256 before INTC announces earnings (on Tuesday after the close, or in other words, before Wednesday morning).
If the market indexes bounce on Monday, or more likely Tuesday, (if they hold supports and bounce), then it will probably be a speculative rally ahead of INTC's earnings, and perhaps JPM's earnings Wednesday morning. I anticipate Wednesday of next week to be the most volatile trading day of the week, unless earnings come in really ugly, and then Thursday and Friday will be volatile as well.
BULLISH SECTORS/GROUPS AND STOCKS:
Steel: X, STLD, (ATI), AKS, MTL
Metals/Mining: ANR, CLF, WLT, POT, (RIO), FDG, BHP
Copper: FCX, PCU
Chemicals: MOS, CF, APD, (MON), TRA
Energy: UPL, USO, PXD, PXP, RRC, RIG, APA, DVN, NE, NOV
Coal: ACI, CNX, MEE
Railroads: CSX, UNP
Transports: (FDX), CHRW, (EXPD)
Materials/Construction/Manufacturing: MDR, (CAT), PH, FLR, CBI, (VMC)
Tech: RIMM, ERTS, AAPL, FSLR, BIDU, (ADBE), (KLAC)
Electronics: SPWR, STP
(Biotechs: GILD, CELG)
Conglomerates: PPG
Exchanges: ICE, (NYX)
(Homebuilders: RYL, TOL, DHI)
Some Financials: PRU, AOC
Some Retail: NKE, WMT, (AMZN), GME
Utilities: this group is strong, but option spreads are too wide, just like the REIT's
Note: BA is holding its breakout for now
BEARISH SECTORS/GROUPS AND STOCKS:
(Gold: NEM, GDX, ABX, AEM, GG are right at ST supports, a break through might drop them another day)
HMO's: AET, HUM
Hotels & Casinos: (HOT), MGM, (LVS), WYNN
Some Cyclicals: WHR, (UTX), XLI
Some Retail: JCP, IGT, ANF, (TGT)
Some Financials: LEH, MER, LM, BAC, PFG
Some Drugs: MRK
Some Education: APOL
Some Energy: VLO, (SUN), (MRO), (HES)
Note: FWLT has broken an uptrend line
One Note of Caution - Repeated Again:
We are entering the heart of Earnings Season, and it will probably get volatile. So I am repeating what I wrote Friday about how I'm looking at the week, at least until Wednesday.
The Dow, SPX, and Naz all broke diagonal support and are getting close to short term horizontal supports. The Dow has horizontal support at 12,200, the SPX at 1,315, and the Naz has a support zone between 2,260 - 2,280. I wouldn't be surprised to see the markets drop a little more on Monday and test those areas. I also wouldn't be surprised if those areas hold short term until we get the INTC numbers after the close on Tuesday, and the JPM numbers before the open on Wednesday. I will stay with my puts through Monday, for now, barring any signals from the market to do otherwise.
Friday, April 11, 2008
GE Dumps The Market
So GE missed.....Here is one report I read, "The news has shocked the market, as analysts generally expected decent earnings from GE - especially since the company typically reports earnings near its guidance."
Uh huh, Okey Dokey.....I'm shocked too, I can't explain it.....who would have known? Smart Money couldn't possibly have known. There's no way GE could have missed earnings! It must be a miss-print. Can we have a do-over?
Soooooooo, I don't want to get started on my theories for what happened the past 7 days and what happened today.
I sold my SPY and DIA puts for a small profit. I took half out on my IGT put for a 27% gain in four days. I am watching my JCP and APOL puts because they are both right at a short term support with the market still weak and fading a bit. If we can't punch through I will liquidate both. Despite the GE miss, I'm still INTERMEDIATE TERM NEUTRAL on the markets until the price action gives me a new signal. So I'm still in Chop and Slop mode and taking profits sooner rather than later.
JCP is too fussy for me, so I dumped it for a small 11 cent gain and walked away. APOL is trying to break down just a little below the 46.75 - 47.00 support area, so I'm still hanging with it. IGT is throwing too many Dojis these days, so I dumped the rest for a 25% final gain on the entire trade. I want to be fairly flat the market going into the weekend, and I'm getting there today.
Well, GE dumped the markets today. The Dow, SPX, and Naz all broke diagonal support and are getting close to short term horizontal supports. The Dow has horizontal support at 12,200, the SPX at 1,315, and the Naz has a support zone between 2,260 - 2,280. I wouldn't be surprised to see the markets drop a little more on Monday and test those areas. I also wouldn't be surprised if those areas hold short term until we get the INTC numbers after the close on Tuesday, and the JPM numbers before the open on Wednesday. I will stay with my puts through Monday, for now, barring any signals from the market to do otherwise.
I will put out a watchlist tomorrow.
Uh huh, Okey Dokey.....I'm shocked too, I can't explain it.....who would have known? Smart Money couldn't possibly have known. There's no way GE could have missed earnings! It must be a miss-print. Can we have a do-over?
Soooooooo, I don't want to get started on my theories for what happened the past 7 days and what happened today.
I sold my SPY and DIA puts for a small profit. I took half out on my IGT put for a 27% gain in four days. I am watching my JCP and APOL puts because they are both right at a short term support with the market still weak and fading a bit. If we can't punch through I will liquidate both. Despite the GE miss, I'm still INTERMEDIATE TERM NEUTRAL on the markets until the price action gives me a new signal. So I'm still in Chop and Slop mode and taking profits sooner rather than later.
JCP is too fussy for me, so I dumped it for a small 11 cent gain and walked away. APOL is trying to break down just a little below the 46.75 - 47.00 support area, so I'm still hanging with it. IGT is throwing too many Dojis these days, so I dumped the rest for a 25% final gain on the entire trade. I want to be fairly flat the market going into the weekend, and I'm getting there today.
Well, GE dumped the markets today. The Dow, SPX, and Naz all broke diagonal support and are getting close to short term horizontal supports. The Dow has horizontal support at 12,200, the SPX at 1,315, and the Naz has a support zone between 2,260 - 2,280. I wouldn't be surprised to see the markets drop a little more on Monday and test those areas. I also wouldn't be surprised if those areas hold short term until we get the INTC numbers after the close on Tuesday, and the JPM numbers before the open on Wednesday. I will stay with my puts through Monday, for now, barring any signals from the market to do otherwise.
I will put out a watchlist tomorrow.
Thursday, April 10, 2008
Stock Market Still Stuck In Neutral
The stock market got better than expected Weekly Jobless Claims but worse than expected March Same-Store Sales in the Retail sector. An upgrade of Intel and a drop in crude oil prices tipped the balance in favor of the bulls this morning. Retail actually caught a tailwind because two big stores beat expectations - WMT and COST. Now this is very interesting to me. This is EXACTLY what I expected and predicted if the consumer went a little tighter with their wallets. People are spending at the two stores that they get the best bargains for food and supplies. They are not spending as heavily on discretionary items, which you find at stores like JCP and ANF. So higher gas prices and some softening in employment, offset by the uncertainty - but possibility of good corporate earnings next week, and the anticipation of the positive effect of rate cuts just around the corner, continues to keep the market consolidating.
As for my three puts from yesterday. If the Dow clears the 12,650 highs just set on the 60m charts intra-day, I will stop my DIA and SPY puts. If JCP clears 41.00, I will stop out. IGT is just fine, but I may nibble out some profits. APOL may be making a run for the 20 day moving average, and I don't want it going much above 50.00. The market continues to slosh and chop as it positions ahead of Earnings Season next week.
Here is where I take a big SIGHHH.....and say, the market just hasn't been much of a trading vehicle this week. I have chipped at it here and there with little trades to see if I can catch something, but nothing is materializing. I can always tell when I get into these conditions because I will take 6-8 small losses and some scratch trades. We might roll over intra-day, but I will probably use the rollover to lighten some of my positions. It really appears that the market is "desperately bullish" and doesn't want to do ANYTHING significant until we get a bunch of corporate earnings on the books. And even beyond that, the market may not want to trend until traders see the effects of the interest rate cuts that started last September. We may get a trend starting out of Earnings Season, but we may have to wait a week or two for the signs to even begin. For now, it's the same old chop and slop since the beginning of the year. I have made good money in the Chop Market, but I have to work harder, be more nimble, and stay patient.
Here are some stocks that are in Bull Flags that may confirm a bounce today or may end the day with a Hammer: ESI, SWN, GME, CELG, GILD, SLB, ICE, QQQQ, PAYX, WMT, FWLT, and PRU. Also, RIMM is in a variation of a Bull Pennant that might confirm.
Most traders will be watching GE tomorrow morning, and perhaps some of our resilience is Big Money anticipating a great earnings report from GE. Unless GE blows us away, the market may react a little (up or down) and then go back to chop ahead of the weekend. There aren't any big Economic Reports tomorrow, so we may be in for a dull Friday as well.
The market just dropped as I was writing this, so we are getting a little bit of a rollover. I will look to scratch out (breakeven) of my DIA and SPY puts.
Just a final note on today. Those of you who stopped out of JCP, APOL, MRK, or even the DIA and the SPY puts today, that's OK. Keeping it a little tighter in this chop and slop is just fine. A lot of times I will go tighter than 1% above highs and lows when I smell that everything is all wrong. Perhaps I have been in this garbage market for so long that my nose is getting used to the smell.....As it is, I may be stopped out of most of my puts tomorrow anyway. Even if we get a bad earnings report out of GE, I am not looking for a big drop. Traders are still too desperately bullish, and they most likely will hold out for more big-name corporate earnings next week. And even if we get terrible corporate earnings and the market sells-off, I still think the market will battle with the January and March lows for two reasons. One is that traders will still hold out hope for positive news from the rate cuts that started in September. The second reason is that the market has been Pavloved at those levels by the intervention games of Benny and the Feds.
We'll see what GE does to things tomorrow.....
As for my three puts from yesterday. If the Dow clears the 12,650 highs just set on the 60m charts intra-day, I will stop my DIA and SPY puts. If JCP clears 41.00, I will stop out. IGT is just fine, but I may nibble out some profits. APOL may be making a run for the 20 day moving average, and I don't want it going much above 50.00. The market continues to slosh and chop as it positions ahead of Earnings Season next week.
Here is where I take a big SIGHHH.....and say, the market just hasn't been much of a trading vehicle this week. I have chipped at it here and there with little trades to see if I can catch something, but nothing is materializing. I can always tell when I get into these conditions because I will take 6-8 small losses and some scratch trades. We might roll over intra-day, but I will probably use the rollover to lighten some of my positions. It really appears that the market is "desperately bullish" and doesn't want to do ANYTHING significant until we get a bunch of corporate earnings on the books. And even beyond that, the market may not want to trend until traders see the effects of the interest rate cuts that started last September. We may get a trend starting out of Earnings Season, but we may have to wait a week or two for the signs to even begin. For now, it's the same old chop and slop since the beginning of the year. I have made good money in the Chop Market, but I have to work harder, be more nimble, and stay patient.
Here are some stocks that are in Bull Flags that may confirm a bounce today or may end the day with a Hammer: ESI, SWN, GME, CELG, GILD, SLB, ICE, QQQQ, PAYX, WMT, FWLT, and PRU. Also, RIMM is in a variation of a Bull Pennant that might confirm.
Most traders will be watching GE tomorrow morning, and perhaps some of our resilience is Big Money anticipating a great earnings report from GE. Unless GE blows us away, the market may react a little (up or down) and then go back to chop ahead of the weekend. There aren't any big Economic Reports tomorrow, so we may be in for a dull Friday as well.
The market just dropped as I was writing this, so we are getting a little bit of a rollover. I will look to scratch out (breakeven) of my DIA and SPY puts.
Just a final note on today. Those of you who stopped out of JCP, APOL, MRK, or even the DIA and the SPY puts today, that's OK. Keeping it a little tighter in this chop and slop is just fine. A lot of times I will go tighter than 1% above highs and lows when I smell that everything is all wrong. Perhaps I have been in this garbage market for so long that my nose is getting used to the smell.....As it is, I may be stopped out of most of my puts tomorrow anyway. Even if we get a bad earnings report out of GE, I am not looking for a big drop. Traders are still too desperately bullish, and they most likely will hold out for more big-name corporate earnings next week. And even if we get terrible corporate earnings and the market sells-off, I still think the market will battle with the January and March lows for two reasons. One is that traders will still hold out hope for positive news from the rate cuts that started in September. The second reason is that the market has been Pavloved at those levels by the intervention games of Benny and the Feds.
We'll see what GE does to things tomorrow.....
Wednesday, April 9, 2008
Market Rolls Over After Early Stalemate
We have a fairly neutral open this morning. BG gapped a little out of the gate and ran to the 105 area and the 50 day moving average. I sold the rest of the position on the pop up. I made a little over 14% return for two days on the trade, which just about offsets the loss on the DIA and the SPY from yesterday, and leaves me in position to continue to make money on the puts if we roll down.
I may be way off here, but it smells like we've lost some of our momentum on the markets. The strength was fairly narrow anyway, with Commodity and Energy stocks leading the way for awhile, and the modest strength yesterday mostly coming from Coal, Metals/Mining, and Steel. The dilemma for the markets is Earnings Season. The dilemma for me is that I don't like to be short the market (in a lot of puts) on the weekend or Monday morning ahead of the first big week of earnings. I rarely make that work. So, if we don't get a rollover in the next day or so, I will liquidate everything and go Flat for the weekend. Perhaps if I see some kind of really high probability buy signal (preferably bullish) ahead of Earnings Season, I may take it, but I'm planning on being fairly flat (out of everything) the market for the weekend.
I sold the ABX puts for a small profit of $150. I don't like how frisky Gold is acting right now - is it going to act as a flight to safety if the market rolls over? The market is breaking down near the short term support and traders are running to Gold a bit. I also don't like that DBA is going up while the market is going down. I'm keeping the GDX and the AEM Gold puts for now, just in case this is nothing, but they are getting very close to my intolerance zone.
I dumped AEM and GDX, right or wrong the signals were for a downswing and we popped beyond 1% above yesterday's high. I lost about $1,100 after the dust settled on the 3 Gold puts.
I stopped out of my DBA puts for a 51 cent loss. I picked up some JCP puts, and nibbled a little on DIA and SPY puts after the break of the short term support. The IGT puts I'm in are looking good. I may pick up some MGM puts if it will rally back into the 56 area intra-day. I don't want to hold the SPY and DIA puts beyond Thursday afternoon unless they are making me money. Oil has spike over $112 per barrel, which is bullish for Energy stocks and bearish for a lot of other stocks and sectors, and even to some extent the economy.
The Nasdaq followed through with its rollover and made it down near short term support levels. The SPX also followed through and rolled down. The SPX has short term support in the 1350-60 area and also down in the 1340 area. The Dow is fighting to hold up and not confirm a rollover. If we drop another point on the DIA and the SPY, I will lock down those put trades and walk. I am still planning on being fairly flat the market going into the weekend.
BA broke out to the upside today with volume. Gold wiped out its confirmed rollover with a bounce back to resistance. The Energy sector was, by far, the biggest performer on the day. However, once again bullishness in the market was fairly narrow and concentrated, and a lot of Energy stocks finished off the highs with Shooting Stars (DVN, PXD, CAM, SII, APC, PDE, and FTI). And a couple Energy stocks broke down (VLO and FTO, and MRO rolled over), which is interesting when coupled with the fact that Oil hit another record today above $112. Energy, Metals/Mining, and Steel continue to be the strongest sectors, but they are getting pretty toppy on the short-term. I am looking to play calls on these sectors, but not before a several-days long pullback.
Brokers rolled over pretty good today, with LM and LEH leading the way down. Financials were weak, but many Financial stocks are still holding at higher lows. MGM broke support on heavy volume. UPS put the whammy on transports and made FDX a risky play now. JCP confirmed a rollover and Retail was weak. DE had a Bearish Engulfing right around resistance in a sideways trend.
If the markets do continue down tomorrow and we go -100 to -150 on the Dow, I will be locking and walking on most of my puts. We are too close to Earnings Season, and the market is almost "desperately bullish" after last quarter. Anything can happen, but I'm not playing for a big downside move yet, we are still too Neutral and Choppy. I'm not sure that we can get a big upside move either, unless corporate earnings start beating expectations pretty good next week.
So as always, we shall see what tomorrow brings.....
I may be way off here, but it smells like we've lost some of our momentum on the markets. The strength was fairly narrow anyway, with Commodity and Energy stocks leading the way for awhile, and the modest strength yesterday mostly coming from Coal, Metals/Mining, and Steel. The dilemma for the markets is Earnings Season. The dilemma for me is that I don't like to be short the market (in a lot of puts) on the weekend or Monday morning ahead of the first big week of earnings. I rarely make that work. So, if we don't get a rollover in the next day or so, I will liquidate everything and go Flat for the weekend. Perhaps if I see some kind of really high probability buy signal (preferably bullish) ahead of Earnings Season, I may take it, but I'm planning on being fairly flat (out of everything) the market for the weekend.
I sold the ABX puts for a small profit of $150. I don't like how frisky Gold is acting right now - is it going to act as a flight to safety if the market rolls over? The market is breaking down near the short term support and traders are running to Gold a bit. I also don't like that DBA is going up while the market is going down. I'm keeping the GDX and the AEM Gold puts for now, just in case this is nothing, but they are getting very close to my intolerance zone.
I dumped AEM and GDX, right or wrong the signals were for a downswing and we popped beyond 1% above yesterday's high. I lost about $1,100 after the dust settled on the 3 Gold puts.
I stopped out of my DBA puts for a 51 cent loss. I picked up some JCP puts, and nibbled a little on DIA and SPY puts after the break of the short term support. The IGT puts I'm in are looking good. I may pick up some MGM puts if it will rally back into the 56 area intra-day. I don't want to hold the SPY and DIA puts beyond Thursday afternoon unless they are making me money. Oil has spike over $112 per barrel, which is bullish for Energy stocks and bearish for a lot of other stocks and sectors, and even to some extent the economy.
The Nasdaq followed through with its rollover and made it down near short term support levels. The SPX also followed through and rolled down. The SPX has short term support in the 1350-60 area and also down in the 1340 area. The Dow is fighting to hold up and not confirm a rollover. If we drop another point on the DIA and the SPY, I will lock down those put trades and walk. I am still planning on being fairly flat the market going into the weekend.
BA broke out to the upside today with volume. Gold wiped out its confirmed rollover with a bounce back to resistance. The Energy sector was, by far, the biggest performer on the day. However, once again bullishness in the market was fairly narrow and concentrated, and a lot of Energy stocks finished off the highs with Shooting Stars (DVN, PXD, CAM, SII, APC, PDE, and FTI). And a couple Energy stocks broke down (VLO and FTO, and MRO rolled over), which is interesting when coupled with the fact that Oil hit another record today above $112. Energy, Metals/Mining, and Steel continue to be the strongest sectors, but they are getting pretty toppy on the short-term. I am looking to play calls on these sectors, but not before a several-days long pullback.
Brokers rolled over pretty good today, with LM and LEH leading the way down. Financials were weak, but many Financial stocks are still holding at higher lows. MGM broke support on heavy volume. UPS put the whammy on transports and made FDX a risky play now. JCP confirmed a rollover and Retail was weak. DE had a Bearish Engulfing right around resistance in a sideways trend.
If the markets do continue down tomorrow and we go -100 to -150 on the Dow, I will be locking and walking on most of my puts. We are too close to Earnings Season, and the market is almost "desperately bullish" after last quarter. Anything can happen, but I'm not playing for a big downside move yet, we are still too Neutral and Choppy. I'm not sure that we can get a big upside move either, unless corporate earnings start beating expectations pretty good next week.
So as always, we shall see what tomorrow brings.....
Tuesday, April 8, 2008
Oh Look, Another Doji, That's Different.....
Alcoa missing earnings and Oil prices coming down are contributing to the softness in the Commodity and Energy stocks. The market is rolling over a bit on the news. I am stopping my half-sized SPY and DIA calls and picking up a little more Gold puts. We are right at short term support, so the SPY and DIA stop may not be ideal, and I will lose about 95 cents on average, but they are half positions and I don't want to mess around with them anymore. The breakout yesterday never materialized and the market will have to gather itself again for another try. It may not happen today, and we may roll over, we shall see......
I did pick up some more BG calls on the little gap down this morning. I think BG could still ramp up a bit and outperform the market, it popped up 2 points after I bought the calls. I picked up puts on GDX and ABX, and I added to my other puts from yesterday.
We are at an important tipping point hear at 9:55am - 10:00am MT. The Dow, SPX, and Naz had a potential Bear Flag on the 30m charts after bouncing off support. The Naz also tested into a little Bear Gap at the same time. The market is starting to roll down a little and may confirm that Bear Flag. If it does, it's possible that we don't hold short term support and we roll over for a day or two. It is interesting that the International Monetary Fund said "total losses due to the financial market turmoil may grow to $945 billion. This is a substantial increase from the current write-down total of $232 billion." Write-downs, by the way, are mostly due to losses from gambling on CDO's. Now, this isn't necessarily going to change the Neutral Intermediate Term market posture, but it could facilitate a short term rollover.
I started taking profits on BG. I'm nibbling out just a little in the 104.50 - 105.00 area for a nice little profit so far.
The Bear Flag did take us back to support intra-day, and that's where we sit.....and sit......and......We'll see if the market bounces into the close or not. Maybe the market is trying for a new record for most Doji days in a row.....
Heeyyyy, look at that, another Doji.....The market had a Doji Day, we haven't seen a Doji for awhile. I think we need another Doji.....Alright, so that's 5 Dojis in a row. Well, the good news for the bulls is that the market doesn't want to toss in the towel short term. The bad news for traders is that you really have to cherry pick around to get some stocks that are moving. I like the Gold puts, the IGT put, and the DBA put. BG is banging its head against the 50 day moving average, so I may scale out of a little more if it bangs it again tomorrow (104.50 area). There really isn't much to say about today. I do like the way ABX and GDX confirmed rollovers today, and after a Tombstone Doji / Shooting Star candle yesterday. Gold is a little range-bound, but if Gold stocks drop a couple more dollars down, I will have some very nice put trades.
The market didn't do much today but Coal, Metals/Mining, and Steel went strong to the upside. The outlook in the Coal sector is viewed as bullish by traders after positive comments by ACI. A lot of the strength for the market to hold support came out of those 3 Sectors/Groups, because a lot of other areas were softer or even rolling over. The short covering continues in HMO's, so they aren't ready for puts just yet (HUM). AOC still looks good, but I'm tossing TRV off the bullish list.
Here are some interesting stocks from today:
Bullish:
BEN bounced and is right at a critical resistance - can it break out?
LVS may be ramping up - can it break resistance at 84? WYNN is in a Bull Flag.
MET is in a Bull Flag, can it bounce? AOC is the strongest stock in the group.
CAT is pulling back to support - can it bounce?
FDX is in a Bull Flag and had a Hammer today - can it bounce?
PFG is in a Bull Flag - can it bounce?
ESI may be in a Rising Three Methods (mini Bull Flag).
Bearish:
BA is right at support - can it hold?
Gold rolled over - will it keep going down?
As for tomorrow, we are still in a holding pattern, and it's still a toss of the coin for me, although I am playing more puts than calls. If the market does rally through resistance I may look at FDX, MET, the DIA and SPY, and continue with BG. I will also look at who the movers are to the upside. On the downside I'm set the way I want to be. So, we shall see what tomorrow brings.....
I did pick up some more BG calls on the little gap down this morning. I think BG could still ramp up a bit and outperform the market, it popped up 2 points after I bought the calls. I picked up puts on GDX and ABX, and I added to my other puts from yesterday.
We are at an important tipping point hear at 9:55am - 10:00am MT. The Dow, SPX, and Naz had a potential Bear Flag on the 30m charts after bouncing off support. The Naz also tested into a little Bear Gap at the same time. The market is starting to roll down a little and may confirm that Bear Flag. If it does, it's possible that we don't hold short term support and we roll over for a day or two. It is interesting that the International Monetary Fund said "total losses due to the financial market turmoil may grow to $945 billion. This is a substantial increase from the current write-down total of $232 billion." Write-downs, by the way, are mostly due to losses from gambling on CDO's. Now, this isn't necessarily going to change the Neutral Intermediate Term market posture, but it could facilitate a short term rollover.
I started taking profits on BG. I'm nibbling out just a little in the 104.50 - 105.00 area for a nice little profit so far.
The Bear Flag did take us back to support intra-day, and that's where we sit.....and sit......and......We'll see if the market bounces into the close or not. Maybe the market is trying for a new record for most Doji days in a row.....
Heeyyyy, look at that, another Doji.....The market had a Doji Day, we haven't seen a Doji for awhile. I think we need another Doji.....Alright, so that's 5 Dojis in a row. Well, the good news for the bulls is that the market doesn't want to toss in the towel short term. The bad news for traders is that you really have to cherry pick around to get some stocks that are moving. I like the Gold puts, the IGT put, and the DBA put. BG is banging its head against the 50 day moving average, so I may scale out of a little more if it bangs it again tomorrow (104.50 area). There really isn't much to say about today. I do like the way ABX and GDX confirmed rollovers today, and after a Tombstone Doji / Shooting Star candle yesterday. Gold is a little range-bound, but if Gold stocks drop a couple more dollars down, I will have some very nice put trades.
The market didn't do much today but Coal, Metals/Mining, and Steel went strong to the upside. The outlook in the Coal sector is viewed as bullish by traders after positive comments by ACI. A lot of the strength for the market to hold support came out of those 3 Sectors/Groups, because a lot of other areas were softer or even rolling over. The short covering continues in HMO's, so they aren't ready for puts just yet (HUM). AOC still looks good, but I'm tossing TRV off the bullish list.
Here are some interesting stocks from today:
Bullish:
BEN bounced and is right at a critical resistance - can it break out?
LVS may be ramping up - can it break resistance at 84? WYNN is in a Bull Flag.
MET is in a Bull Flag, can it bounce? AOC is the strongest stock in the group.
CAT is pulling back to support - can it bounce?
FDX is in a Bull Flag and had a Hammer today - can it bounce?
PFG is in a Bull Flag - can it bounce?
ESI may be in a Rising Three Methods (mini Bull Flag).
Bearish:
BA is right at support - can it hold?
Gold rolled over - will it keep going down?
As for tomorrow, we are still in a holding pattern, and it's still a toss of the coin for me, although I am playing more puts than calls. If the market does rally through resistance I may look at FDX, MET, the DIA and SPY, and continue with BG. I will also look at who the movers are to the upside. On the downside I'm set the way I want to be. So, we shall see what tomorrow brings.....
Monday, April 7, 2008
Push Comes To Some Shoving Back
With the early pop out of the gates on Commodities and Energy stocks this morning, I was selling the last of my ACI and CNX, and I sold most of my STLD, all for terrific gains. I am keeping a little of the STLD because it could still run a little more. On CNX I finished with a 36.5% return, on ACI I finished with a 50% return, and on STLD I'm working on about a 31% return so far. Remember, these were all 2-3 day trades (trading days). I am still watching this move to see if it looks like I want to buy calls on the SPY and the DIA.
I am NOT a buyer this morning on Commodity and Energy stocks. They are getting too extended short term. I may be wrong, but I'm OK with that. I've made 6 Commodity and Energy call plays since last Thursday, and made money on every single trade, while averaging about 35% - 40% return. I'm a seller on Commodity and Energy this morning. That's the way it is. Again, I may be wrong, so that's how it goes.
If I do anything in those Sectors, it will be an intra-day nibble on a nice setup, and I will sell within a few hours. I am mostly looking at other Sectors now to see what the next move is going to be - up or down.
I nibbled in on a BG call (break of a Double Bottom), and on some DIA and SPY calls ($SPX breaking out slightly). I don't know how much we have left in the short term move, but another day or two is all I need to make money on those. I also just nibbled on IGT puts, and also APOL, DBA, and MRK puts. I will add to the IGT puts if it rallies to 39.80 - 40.00 intra-day. I am also interested in AEM puts. If we do roll down sometime in a day or two, I can add to the put positions and roll down with it.
I did start a little bit of an AEM put. I added to the DBA puts, and I added to the IGT puts. The market continues to be indecisive in this resistance area. I did also add a little to the BG calls, as it looks like it will hold the breakout just fine.
We finished with our 4th Doji in a row on the SPX and the Dow, and a small Bearish Engulfing on the Nasdaq. The Small Caps ($SML) really look like they want to roll over. This is still a flip of the coin to me on whether or not the major indexes break resistance on this current short term swing. There aren't any really big economic reports this week, and the only big name company reporting is GE on Friday. I don't see a lot of catalysts outside the technical charts. So maybe this week we will get some more normal price swings ahead of the bigger slew of earnings next week.
Here are some notable movers or updates on the day:
I liked the break of a Double Bottom by BG and I played calls. Take KLAC off the bearish list and just clean it off the watchlist for now. DRYS broke a Double Bottom. FLS is very strong, and so are AKS, CLF, MOS, MEE, X, PXP, APA, SII, CF, CHRW, and SWN. I just think all of those are tapped out short term, so I'm not playing them. Insurance is still alive with AOC and TRV (confirmed bounce) being added to the list. NIHD is bottoming out and looks like it can make a higher low off the next pullback. FDX is pulling back, but so far it's fairly orderly.
MGM is close to breaking support. IGT confirmed a Bear Flag (which I played). KSS and ANF confirmed rollovers. HUM is slowly rolling over. VLO is very close to breaking support. Gold may be getting ready to roll over.
There are a lot of indications that the short term swing in Commodity and Energy stocks is about to roll over. I think it will be tough for the major indexes to break resistance right now without them. We need Financials, Tech, maybe Retail, and one or two other areas to make a strong move up tomorrow if the market is to overcome a rollover in the Commodity and Energy stocks - and break out. Otherwise we could roll down. I'm still in the toss of a coin camp right now, though, so I'm comfortable with the call and put positions I took today. I have more puts, I suppose because I'm leaning that way a little more.
We shall see.....
I am NOT a buyer this morning on Commodity and Energy stocks. They are getting too extended short term. I may be wrong, but I'm OK with that. I've made 6 Commodity and Energy call plays since last Thursday, and made money on every single trade, while averaging about 35% - 40% return. I'm a seller on Commodity and Energy this morning. That's the way it is. Again, I may be wrong, so that's how it goes.
If I do anything in those Sectors, it will be an intra-day nibble on a nice setup, and I will sell within a few hours. I am mostly looking at other Sectors now to see what the next move is going to be - up or down.
I nibbled in on a BG call (break of a Double Bottom), and on some DIA and SPY calls ($SPX breaking out slightly). I don't know how much we have left in the short term move, but another day or two is all I need to make money on those. I also just nibbled on IGT puts, and also APOL, DBA, and MRK puts. I will add to the IGT puts if it rallies to 39.80 - 40.00 intra-day. I am also interested in AEM puts. If we do roll down sometime in a day or two, I can add to the put positions and roll down with it.
I did start a little bit of an AEM put. I added to the DBA puts, and I added to the IGT puts. The market continues to be indecisive in this resistance area. I did also add a little to the BG calls, as it looks like it will hold the breakout just fine.
We finished with our 4th Doji in a row on the SPX and the Dow, and a small Bearish Engulfing on the Nasdaq. The Small Caps ($SML) really look like they want to roll over. This is still a flip of the coin to me on whether or not the major indexes break resistance on this current short term swing. There aren't any really big economic reports this week, and the only big name company reporting is GE on Friday. I don't see a lot of catalysts outside the technical charts. So maybe this week we will get some more normal price swings ahead of the bigger slew of earnings next week.
Here are some notable movers or updates on the day:
I liked the break of a Double Bottom by BG and I played calls. Take KLAC off the bearish list and just clean it off the watchlist for now. DRYS broke a Double Bottom. FLS is very strong, and so are AKS, CLF, MOS, MEE, X, PXP, APA, SII, CF, CHRW, and SWN. I just think all of those are tapped out short term, so I'm not playing them. Insurance is still alive with AOC and TRV (confirmed bounce) being added to the list. NIHD is bottoming out and looks like it can make a higher low off the next pullback. FDX is pulling back, but so far it's fairly orderly.
MGM is close to breaking support. IGT confirmed a Bear Flag (which I played). KSS and ANF confirmed rollovers. HUM is slowly rolling over. VLO is very close to breaking support. Gold may be getting ready to roll over.
There are a lot of indications that the short term swing in Commodity and Energy stocks is about to roll over. I think it will be tough for the major indexes to break resistance right now without them. We need Financials, Tech, maybe Retail, and one or two other areas to make a strong move up tomorrow if the market is to overcome a rollover in the Commodity and Energy stocks - and break out. Otherwise we could roll down. I'm still in the toss of a coin camp right now, though, so I'm comfortable with the call and put positions I took today. I have more puts, I suppose because I'm leaning that way a little more.
We shall see.....
Saturday, April 5, 2008
Bounce versus Breakout
I get questions from time to time on the differences between a Bounce and a Breakout. If you would like me to post an informational blurb on Bounces versus Breakouts, leave me a comment response to the affirmative. If I get a lot of responses, I will go ahead and create the post.
One thing about posting comments. I purposely allowed even anonymous responses so it would be easy for any viewer to respond. This is a free, open web page, so anyone can view it. You don't have to "sign up" to comment, and you don't have to give your name.
I have gotten enough responses that I will go ahead and post some information about a Bounce versus a Breakout. I'll work on it throughout the week.
One thing about posting comments. I purposely allowed even anonymous responses so it would be easy for any viewer to respond. This is a free, open web page, so anyone can view it. You don't have to "sign up" to comment, and you don't have to give your name.
I have gotten enough responses that I will go ahead and post some information about a Bounce versus a Breakout. I'll work on it throughout the week.
Watchlist Saturday
Here is my watchlist for the upcoming week. I have included a market posture as well. I indicate stocks and sectors that are beginning to go intermediate term (IT) bullish or bearish in parenthesis. I indicate stocks that are IT bullish or bearish in a normal font. And I indicate stocks or sectors I'm most interested in because of where they are short term (ST) in a bold font. The bolded stocks are closer to buy signals, or they are extremely compelling because they could be high probability setups soon.
Dow: IT Neutral to slightly Bullish and ST Bullish to Neutral. The Dow is sitting just under key resistance at 12,750. A Breakout above 12,750 would lead to a solid IT Bullish posture for the first time since last September.
SPX: IT Neutral to slightly Bullish and ST Bullish to Neutral. The SPX is sitting just under key resistance in the 1,385 - 1,395 area. A Breakout above 1,400 would lead to a solid IT Bullish posture for the first time since last September.
Naz: IT Neutral to slightly Bullish and ST Bullish to Neutral. The Naz is sitting right at key resistance in the 2,380 - 2,420 area. A Breakout above 2,400 would lead to an IT Neutral to Bullish posture and a Breakout above 2,420 would lead to a solid IT Bullish posture for the first time since last September.
If the market indexes roll over early next week before they break out, then it is probably an indication that traders want to see how earnings shape up in the middle of the month before attempting a breakout of key resistances.
BULLISH SECTORS/GROUPS AND STOCKS:
Steel: X, STLD, NUE, ATI, AKS
Metals/Mining: ANR, CLF, WLT, POT, RIO, MEE, FDG
Copper: FCX, PCU
Chemicals: MOS, CF, AGU, APD, MON
Energy: CAM, RDC, SWN, PXP, NOV, NE, APA, RIG, CNQ, MUR, ESV, DVN, WFT, SII, SLB
Coal: ACI, CNX
Railroads: CSX, UNP
Transports: FDX, UPS, CHRW, EXPD
Materials/Construction/Manufacturing: MDR, CAT, PH, ITW, EMR, FLR
Tech: RIMM, ERTS, AAPL, FSLR, LDK, BIDU, LRCX, (ADBE)
Services: ADP, CRM, ESRX, PAYX
Electronics: SPWR, STP
Biotechs: GILD, CELG
Conglomerates: PPG
Exchanges: ICE, (NYX)
Homebuilders: RYL, TOL, (DHI),
Some Financials: AIG, PRU, (TRV), MET, PFG, HIG, AXP, (MS)
Some Retail: NKE, WMT, AMZN, GME
Some Education: ESI
(Aluminum: AA)
BEARISH SECTORS/GROUPS AND STOCKS:
Gold: NEM, GDX, ABX, AEM, GG
HMO's: AET, HUM
Some Retail: JCP, IGT, (ANF), (TGT), (JWN)
Some Financials: LEH, MER, LM
Some Drugs: MRK
Some Education: APOL
Some Utilities: PEG
Some Energy: VLO, (SUN)
Some Tech: KLAC
Dow: IT Neutral to slightly Bullish and ST Bullish to Neutral. The Dow is sitting just under key resistance at 12,750. A Breakout above 12,750 would lead to a solid IT Bullish posture for the first time since last September.
SPX: IT Neutral to slightly Bullish and ST Bullish to Neutral. The SPX is sitting just under key resistance in the 1,385 - 1,395 area. A Breakout above 1,400 would lead to a solid IT Bullish posture for the first time since last September.
Naz: IT Neutral to slightly Bullish and ST Bullish to Neutral. The Naz is sitting right at key resistance in the 2,380 - 2,420 area. A Breakout above 2,400 would lead to an IT Neutral to Bullish posture and a Breakout above 2,420 would lead to a solid IT Bullish posture for the first time since last September.
If the market indexes roll over early next week before they break out, then it is probably an indication that traders want to see how earnings shape up in the middle of the month before attempting a breakout of key resistances.
BULLISH SECTORS/GROUPS AND STOCKS:
Steel: X, STLD, NUE, ATI, AKS
Metals/Mining: ANR, CLF, WLT, POT, RIO, MEE, FDG
Copper: FCX, PCU
Chemicals: MOS, CF, AGU, APD, MON
Energy: CAM, RDC, SWN, PXP, NOV, NE, APA, RIG, CNQ, MUR, ESV, DVN, WFT, SII, SLB
Coal: ACI, CNX
Railroads: CSX, UNP
Transports: FDX, UPS, CHRW, EXPD
Materials/Construction/Manufacturing: MDR, CAT, PH, ITW, EMR, FLR
Tech: RIMM, ERTS, AAPL, FSLR, LDK, BIDU, LRCX, (ADBE)
Services: ADP, CRM, ESRX, PAYX
Electronics: SPWR, STP
Biotechs: GILD, CELG
Conglomerates: PPG
Exchanges: ICE, (NYX)
Homebuilders: RYL, TOL, (DHI),
Some Financials: AIG, PRU, (TRV), MET, PFG, HIG, AXP, (MS)
Some Retail: NKE, WMT, AMZN, GME
Some Education: ESI
(Aluminum: AA)
BEARISH SECTORS/GROUPS AND STOCKS:
Gold: NEM, GDX, ABX, AEM, GG
HMO's: AET, HUM
Some Retail: JCP, IGT, (ANF), (TGT), (JWN)
Some Financials: LEH, MER, LM
Some Drugs: MRK
Some Education: APOL
Some Utilities: PEG
Some Energy: VLO, (SUN)
Some Tech: KLAC
Friday, April 4, 2008
Mixed Drop and Pop
The Jobs Report came in worse than expected and dropped the market right out of the gate. However, Commodities and Energy stocks gapped up and ran hard this morning, so I sold all or parts of POT, MON, RIG, CNX, and ACI - all for big, big profits, especially for trades I started just before the close yesterday and mostly finished off this morning. I am holding a little of the Coal still (CNX and ACI), because it may have some more room.
The market is rebounding a bit from the poor Employment Report because the Commodities and Energy stocks are getting sharp buying. We have a potential Double Top on the 60m charts (on the Dow and other indexes) with a negative divergence. But unless it breaks the neckline at the 12,530-50 area I'm not playing puts. If the DIA goes north of 127, and the SPY goes north of 138, I may play calls instead - because the market will be shaking off a poor Jobs Report and focusing on the "brighter" future. I may even look at getting back in to some Commodities and Energy stocks or some Financials or Tech on a quick play as well.
The markets continue to stay range-bound. Three Narrow Bars (Doji's) in a row on the Dow. The Naz tried to make a little noise, and I was tempted to go with some Q's calls, but the DIA and the SPY didn't follow, so I was immediately suspicious. As it is, I'm sitting on my hands, and probably will do that for the weekend. I sold a little more Coal right down to the last 20% of all my call positions. Some really nice profits. We have some crosscurrents out there with attenuating Employment but ramping Commodities and Energy. Probably what's happening is that Energy and Commodities are ramping on a falling Dollar and not rising demand. The fact that Commodity stocks like MOS have had positive earnings is adding to the speculative move in those sectors. So the market is caught in an indecisive crosswind and is playing it tight ahead of the weekend. I won't be surprised if the markets finish the day right in these areas.
I decided to nibble just a little on STLD since it is breaking out and has a nice pullback going just before the close. I picked some calls off at 35.75, and the best case is that it rallies back a little at the close. I don't like the lack of momentum in the overall market, but I don't mind nibbling on Commodity and Energy stocks. I am looking at MOS and CF as breakouts as well, but I think I may wait for Monday on those, or just nibble a tiny bit. The swings in Commodities and Energy look very mature, so I'm probably only going to play the STLD, (and MOS, CF if I get them) for 1-2 days max.
We did close with our third Doji in a row. MON was a Doji today, so selling into today's pop, right near the high, was exactly right for me, a nice 14% gain in less than a day. RIG was a Shooting Star type candle today, so ditto on RIG, selling right near the high for a 33% gain. POT was a small body candle, which gapped into Star position, so once again - sold almost exactly at the high for a 33% gain. ACI and CNX were strong moves and I sold most of those but kept a little. I am averaging about a 38% return on ACI and a 33% return on CNX. I nibbled on STLD calls, but I held off on MOS and CF. I am curious about Gold, it looks like it could roll over again soon, and AET is barely clinging to support. JCP is acting like it's topping out a bit, but we will see. I still think that when we break the 3 Narrow Bar range on the markets that it will go in the direction of the break hard for a day or two. I don't know if it will be up or down, so I will watch and be ready.
The major indexes are sitting right at the low end of resistance zones. We should find out soon, perhaps Monday or Tuesday, whether or not the market can break out, or whether it will roll back down short term. I will review and post an updated watchlist tomorrow.
The market is rebounding a bit from the poor Employment Report because the Commodities and Energy stocks are getting sharp buying. We have a potential Double Top on the 60m charts (on the Dow and other indexes) with a negative divergence. But unless it breaks the neckline at the 12,530-50 area I'm not playing puts. If the DIA goes north of 127, and the SPY goes north of 138, I may play calls instead - because the market will be shaking off a poor Jobs Report and focusing on the "brighter" future. I may even look at getting back in to some Commodities and Energy stocks or some Financials or Tech on a quick play as well.
The markets continue to stay range-bound. Three Narrow Bars (Doji's) in a row on the Dow. The Naz tried to make a little noise, and I was tempted to go with some Q's calls, but the DIA and the SPY didn't follow, so I was immediately suspicious. As it is, I'm sitting on my hands, and probably will do that for the weekend. I sold a little more Coal right down to the last 20% of all my call positions. Some really nice profits. We have some crosscurrents out there with attenuating Employment but ramping Commodities and Energy. Probably what's happening is that Energy and Commodities are ramping on a falling Dollar and not rising demand. The fact that Commodity stocks like MOS have had positive earnings is adding to the speculative move in those sectors. So the market is caught in an indecisive crosswind and is playing it tight ahead of the weekend. I won't be surprised if the markets finish the day right in these areas.
I decided to nibble just a little on STLD since it is breaking out and has a nice pullback going just before the close. I picked some calls off at 35.75, and the best case is that it rallies back a little at the close. I don't like the lack of momentum in the overall market, but I don't mind nibbling on Commodity and Energy stocks. I am looking at MOS and CF as breakouts as well, but I think I may wait for Monday on those, or just nibble a tiny bit. The swings in Commodities and Energy look very mature, so I'm probably only going to play the STLD, (and MOS, CF if I get them) for 1-2 days max.
We did close with our third Doji in a row. MON was a Doji today, so selling into today's pop, right near the high, was exactly right for me, a nice 14% gain in less than a day. RIG was a Shooting Star type candle today, so ditto on RIG, selling right near the high for a 33% gain. POT was a small body candle, which gapped into Star position, so once again - sold almost exactly at the high for a 33% gain. ACI and CNX were strong moves and I sold most of those but kept a little. I am averaging about a 38% return on ACI and a 33% return on CNX. I nibbled on STLD calls, but I held off on MOS and CF. I am curious about Gold, it looks like it could roll over again soon, and AET is barely clinging to support. JCP is acting like it's topping out a bit, but we will see. I still think that when we break the 3 Narrow Bar range on the markets that it will go in the direction of the break hard for a day or two. I don't know if it will be up or down, so I will watch and be ready.
The major indexes are sitting right at the low end of resistance zones. We should find out soon, perhaps Monday or Tuesday, whether or not the market can break out, or whether it will roll back down short term. I will review and post an updated watchlist tomorrow.
Thursday, April 3, 2008
I Dub Thee Little Squishy
Yaawwwnnn!.....Oh sorry, did I do that out loud? The markets are in a two day narrow range bar consolidation off of the big move Tuesday. Worse than expected Weekly Jobless Claims and Downgrades in Financials were the bearish news, while a better than expected earnings report from RIMM, and a slightly better than expected ISM Services Report were the bullish news. I dumped the last little bit of my calls this morning and the JCP put I have from yesterday looks nice. I'm not sitting on very much at all right now because the market is fixated on the jobs. You could see the strongest reaction came after the Jobless Claims were released. It looks like traders are sitting and waiting for the big Employment Report tomorrow.
Basic Materials (Commodity Stocks), Energy, and Tech have been strong. Some Financials are still hanging in there as well. Semiconductors are the strongest area in Tech. Retail is a little weak.
My favorite news of the day was LEH lowering its earnings estimate for GS.....and GS turning right around and lowering its earnings estimates for LEH. They are tossing mud in each other's eyes right now in Brokerland. I was eating an apple when I read about it and nearly coughed up a chunk on my keyboard I was laughing so hard.....
There's not much to do right now as far as positioning for tomorrow. I would like more positions, but I've made great money the past week in calls and puts, and I'm content to just sit on a little like the rest of the market and see how it goes tomorrow. Whichever way we go outside the two day narrow range bars (or Doji's), we will probably go hard for at least a day - so I want some calls and puts in my back pocket for either scenario. My speculation is that we finish out the day like we are, and tomorrow's Jobs Report becomes the catalyst for the resolution of our two-day Narrow Range Bars and also possibly the resolution for whether or not we break out above 12,750 on the Dow or roll over the short term upswing. I will post a list of potential bullish or bearish plays later, besides what I already threw out the past few days.
Bullish List: I decided to nibble a little on ACI and CNX. There are a lot of strong areas in Commodities and Energy, so I'm nibbling in a little on RIG, MON, and POT. It sounds a little weird to say I'm nibbling on a little POT, but there it is.....
The markets just closed, and we did stay in the Narrow Range Bar, so it looks like it's all up to the Jobs Report tomorrow morning. I found it very interesting that Commodities and Energy were ramping up again today, so I nibbled in. I always go under the assumption that somebody else knows something I don't, so I speculate when I see chart signals. I didn't want to fill the backpack up to the top, because I'm not sure how much weight the market can carry tomorrow until I see the reaction to the Employment numbers.
Here are some bullish and bearish stocks:
Bullish:
Metals/Mining: WLT, ANR, POT (broke out today), RIO, CLF
Chemicals: CF, AGU, MON, MOS
(Aluminum: AA)
Steel: X, AKS
Copper: FCX (broke out today), PCU (broke out yesterday)
Coal: ACI, CNX (both bounced today)
Energy: PXP, NOV, ESV, RIG (broke out yesterday), MUR, SLB, APA, WFT, NE, SII
Tech: RIMM, ERTS, LRCX (and a bunch of other semiconductors)
Construction/Materials/Manufacturing: ERM, FWLT, CAT, FLR
Services: ESRX, PAYX, ADP
Utilities: FPL, SO, SRE
Homebuilders: RYL, CTX, KBH, (and a bunch of others)
Exchanges: ICE (and others)
Some Retail: NKE, WMT, GME, AMZN
Railroads: UPN, CSX
Transports: FDX, UPS, EXPD
Some Financials: PRU, HIG, MET, (AIG), PFG, AXP, COF, FNM, FRE
Bearish: (I am more interested in these IF the market rolls over)
Some Retail: JCP, TGT, JWN
Energy: SUN (on support break), VLO, (USO), XTO, EOG, ECA
Steel: NUE
Healthcare: HUM, AET (on support break)
Miscellaneous: LMT (on support break), MMM, BA
It will probably take a pretty big jump in the Unemployment Rate to 5.1% combined with a Non-Farms Payrolls loss of 60k-70k or greater to get the market to dump down tomorrow. If we get in-line or better numbers then the market may make a run to 12,750 - 12,800 on the Dow and 1,400 on the SPX for a couple of days (probably Friday and Monday). If that happens, I will add to my calls, monitor my one JCP put for a potential stop, and ride the calls up. If we go down hard, I will stop my calls and start picking up puts for the same type of couple-days long drop.
Basic Materials (Commodity Stocks), Energy, and Tech have been strong. Some Financials are still hanging in there as well. Semiconductors are the strongest area in Tech. Retail is a little weak.
My favorite news of the day was LEH lowering its earnings estimate for GS.....and GS turning right around and lowering its earnings estimates for LEH. They are tossing mud in each other's eyes right now in Brokerland. I was eating an apple when I read about it and nearly coughed up a chunk on my keyboard I was laughing so hard.....
There's not much to do right now as far as positioning for tomorrow. I would like more positions, but I've made great money the past week in calls and puts, and I'm content to just sit on a little like the rest of the market and see how it goes tomorrow. Whichever way we go outside the two day narrow range bars (or Doji's), we will probably go hard for at least a day - so I want some calls and puts in my back pocket for either scenario. My speculation is that we finish out the day like we are, and tomorrow's Jobs Report becomes the catalyst for the resolution of our two-day Narrow Range Bars and also possibly the resolution for whether or not we break out above 12,750 on the Dow or roll over the short term upswing. I will post a list of potential bullish or bearish plays later, besides what I already threw out the past few days.
Bullish List: I decided to nibble a little on ACI and CNX. There are a lot of strong areas in Commodities and Energy, so I'm nibbling in a little on RIG, MON, and POT. It sounds a little weird to say I'm nibbling on a little POT, but there it is.....
The markets just closed, and we did stay in the Narrow Range Bar, so it looks like it's all up to the Jobs Report tomorrow morning. I found it very interesting that Commodities and Energy were ramping up again today, so I nibbled in. I always go under the assumption that somebody else knows something I don't, so I speculate when I see chart signals. I didn't want to fill the backpack up to the top, because I'm not sure how much weight the market can carry tomorrow until I see the reaction to the Employment numbers.
Here are some bullish and bearish stocks:
Bullish:
Metals/Mining: WLT, ANR, POT (broke out today), RIO, CLF
Chemicals: CF, AGU, MON, MOS
(Aluminum: AA)
Steel: X, AKS
Copper: FCX (broke out today), PCU (broke out yesterday)
Coal: ACI, CNX (both bounced today)
Energy: PXP, NOV, ESV, RIG (broke out yesterday), MUR, SLB, APA, WFT, NE, SII
Tech: RIMM, ERTS, LRCX (and a bunch of other semiconductors)
Construction/Materials/Manufacturing: ERM, FWLT, CAT, FLR
Services: ESRX, PAYX, ADP
Utilities: FPL, SO, SRE
Homebuilders: RYL, CTX, KBH, (and a bunch of others)
Exchanges: ICE (and others)
Some Retail: NKE, WMT, GME, AMZN
Railroads: UPN, CSX
Transports: FDX, UPS, EXPD
Some Financials: PRU, HIG, MET, (AIG), PFG, AXP, COF, FNM, FRE
Bearish: (I am more interested in these IF the market rolls over)
Some Retail: JCP, TGT, JWN
Energy: SUN (on support break), VLO, (USO), XTO, EOG, ECA
Steel: NUE
Healthcare: HUM, AET (on support break)
Miscellaneous: LMT (on support break), MMM, BA
It will probably take a pretty big jump in the Unemployment Rate to 5.1% combined with a Non-Farms Payrolls loss of 60k-70k or greater to get the market to dump down tomorrow. If we get in-line or better numbers then the market may make a run to 12,750 - 12,800 on the Dow and 1,400 on the SPX for a couple of days (probably Friday and Monday). If that happens, I will add to my calls, monitor my one JCP put for a potential stop, and ride the calls up. If we go down hard, I will stop my calls and start picking up puts for the same type of couple-days long drop.
Wednesday, April 2, 2008
Early Pop Leads to Late Drop
The futures are up a bit after the ADP jobs data came in positive. The report is largely unreliable, but it could start the speculation on a positive Employment Report on Friday. BBY also had positive earnings, which is good for the retail sector and positive for consumer spending. We may go right out of the gate and head to 12,750. If we do, then I will just ride my four calls from yesterday and maybe nibble on some DIA and SPY calls. If we run right now, we may end up consolidating for the second half of the day, we shall see.....
We did gap up a little right out of the gate - a common gap, not a breakaway gap. If we Flag off this gap then I might have an entry for my DIA and SPY.
The market is fading the gap, so we may get the consolidation this morning, which bodes well for a possible mid-day or later-day rally into the close. I am sitting on what I have and watching how this potential intra-day pullback forms up to decide whether or not I get some more calls.
I will pick up a half-sized position on the DIA and SPY in the upper 125's and 135's respectively, if I can get it. Then I will watch for a double-move on the 15m charts, which would be a Flag on the 30m charts down to 125 on the DIA and 135 on the SPY. If we get that, I will pick up the other half of the positions. I want to see 124 and 134 hold, and the markets hold, in order for me to remain bullish short term. I want to get out if yesterday ends up being a one-day short-covering wonder. My sense is - for whatever it's worth - is that we will carry through today or tomorrow. By the way, I'm not doing the Q's because of RIMM risk. If RIMM blows away earnings after the close, then the Q's gap up tomorrow. If RIMM blows chunks on earnings, then the Q's gap down tomorrow. I don't feel like playing that game today.
The market is still trying to press up after Bernanke talked about recession and the IMF is lowering global economic growth. I think shorts are still on the run, and this may go Flash Bang right now. So I am actually nibbling out of a little of my four calls from yesterday on this upswing, with really nice profits. If we swing back intra-day on the 30m charts and hold, I will add back and look for another leg up. If we just go Bang to 12,750 then I'm out of most of the rest of the calls.
And there you have it.....The early pop led to a late drop, just as I thought. If the market had flagged early it had a chance to finish closer to the highs, but it shot for the moon too early and got too close to resistance immediately. Therefore.....selling more than half my calls into the early bump right up to the market resistance areas was correct. I'm not doing anything with the DIA and SPY other than a small position on the SPY I picked up before the close yesterday that I took profits on today. Overall, it was a nice two day Flash Bang. What I want to see is how the market closes out the day. If we are weak, then it is probably going to be up to RIMM to give us a pop in the morning, if they can do it. I'm not looking for a break above the highs of today until Friday. It may happen tomorrow, but I think it's going to take a great Jobs Report to bump us up to 12,750 or beyond.
RIMM is up 4-6 points after hours, so tomorrow morning the market will probably get a little bump back to today's highs. I don't see enough volume from yesterday, and enough conviction from today, to lead me to believe the markets will break key resistances tomorrow. It may do it.....but it's more likely that the markets will wait for the Jobs Report before making the next swing move, either a breakout or a rollover. The RIMM report will probably give me a nice exit tomorrow for the rest of the calls I'm still holding.
Evening Post:
Here are some bullish movers on the day, or stocks that have been relatively bullish: Gold bounced and looks like it's headed towards tighter consolidation. ICE broke out of a Rectangle Base and might Bang to 153-155. Steel&Mining is a strong area with CLF, AKS, and X, although the swings are probably just about done. Energy caught fire with Oil Services leading the way (SII, NBL, NE, and SLB), although that swing looks just about done as well. Some other Energy looks strong too, like MUR, RIG, APA, and DVN (swings mostly done). PCU just broke out today and may be a candidate for a 1-2 day type play. Some Biotechs continue to be strong like CELG and GILD (reversed today and swings mostly done). Some Tech is performing well like ADP, RIMM, ERTS, and AAPL (swings mostly done). Some Retail is strong like AMZN, NKE, URBN, WMT, and GME (swings mostly done). Some Financials are doing better like HIG, COF, PFG, PRU, FNM, FRE, and AXP (swings mostly done). Coal appears to be in a Bull Flag (ACI and CNX). Some Transports and Machinery/Construction are doing well like FDX, FLR, PH, and CAT (swings mostly done). MMM is right at a clear resistance so it's make it or break it time for the stock. KO is testing support.
Some potential Bearish setups are: PEG, NRG, JCP, and AA.
The market looks like it's most of the way through the current swing. Tomorrow, RIMM may bounce us back to today's highs and maybe even to the 12,750 resistance level on the Dow and 1385-90 on the SPX. However, we may have to wait for the Employment Report on Friday to see if the markets break out above Intermediate Term resistance or if it rolls over on the Short Term upswing.
We did gap up a little right out of the gate - a common gap, not a breakaway gap. If we Flag off this gap then I might have an entry for my DIA and SPY.
The market is fading the gap, so we may get the consolidation this morning, which bodes well for a possible mid-day or later-day rally into the close. I am sitting on what I have and watching how this potential intra-day pullback forms up to decide whether or not I get some more calls.
I will pick up a half-sized position on the DIA and SPY in the upper 125's and 135's respectively, if I can get it. Then I will watch for a double-move on the 15m charts, which would be a Flag on the 30m charts down to 125 on the DIA and 135 on the SPY. If we get that, I will pick up the other half of the positions. I want to see 124 and 134 hold, and the markets hold, in order for me to remain bullish short term. I want to get out if yesterday ends up being a one-day short-covering wonder. My sense is - for whatever it's worth - is that we will carry through today or tomorrow. By the way, I'm not doing the Q's because of RIMM risk. If RIMM blows away earnings after the close, then the Q's gap up tomorrow. If RIMM blows chunks on earnings, then the Q's gap down tomorrow. I don't feel like playing that game today.
The market is still trying to press up after Bernanke talked about recession and the IMF is lowering global economic growth. I think shorts are still on the run, and this may go Flash Bang right now. So I am actually nibbling out of a little of my four calls from yesterday on this upswing, with really nice profits. If we swing back intra-day on the 30m charts and hold, I will add back and look for another leg up. If we just go Bang to 12,750 then I'm out of most of the rest of the calls.
And there you have it.....The early pop led to a late drop, just as I thought. If the market had flagged early it had a chance to finish closer to the highs, but it shot for the moon too early and got too close to resistance immediately. Therefore.....selling more than half my calls into the early bump right up to the market resistance areas was correct. I'm not doing anything with the DIA and SPY other than a small position on the SPY I picked up before the close yesterday that I took profits on today. Overall, it was a nice two day Flash Bang. What I want to see is how the market closes out the day. If we are weak, then it is probably going to be up to RIMM to give us a pop in the morning, if they can do it. I'm not looking for a break above the highs of today until Friday. It may happen tomorrow, but I think it's going to take a great Jobs Report to bump us up to 12,750 or beyond.
RIMM is up 4-6 points after hours, so tomorrow morning the market will probably get a little bump back to today's highs. I don't see enough volume from yesterday, and enough conviction from today, to lead me to believe the markets will break key resistances tomorrow. It may do it.....but it's more likely that the markets will wait for the Jobs Report before making the next swing move, either a breakout or a rollover. The RIMM report will probably give me a nice exit tomorrow for the rest of the calls I'm still holding.
Evening Post:
Here are some bullish movers on the day, or stocks that have been relatively bullish: Gold bounced and looks like it's headed towards tighter consolidation. ICE broke out of a Rectangle Base and might Bang to 153-155. Steel&Mining is a strong area with CLF, AKS, and X, although the swings are probably just about done. Energy caught fire with Oil Services leading the way (SII, NBL, NE, and SLB), although that swing looks just about done as well. Some other Energy looks strong too, like MUR, RIG, APA, and DVN (swings mostly done). PCU just broke out today and may be a candidate for a 1-2 day type play. Some Biotechs continue to be strong like CELG and GILD (reversed today and swings mostly done). Some Tech is performing well like ADP, RIMM, ERTS, and AAPL (swings mostly done). Some Retail is strong like AMZN, NKE, URBN, WMT, and GME (swings mostly done). Some Financials are doing better like HIG, COF, PFG, PRU, FNM, FRE, and AXP (swings mostly done). Coal appears to be in a Bull Flag (ACI and CNX). Some Transports and Machinery/Construction are doing well like FDX, FLR, PH, and CAT (swings mostly done). MMM is right at a clear resistance so it's make it or break it time for the stock. KO is testing support.
Some potential Bearish setups are: PEG, NRG, JCP, and AA.
The market looks like it's most of the way through the current swing. Tomorrow, RIMM may bounce us back to today's highs and maybe even to the 12,750 resistance level on the Dow and 1385-90 on the SPX. However, we may have to wait for the Employment Report on Friday to see if the markets break out above Intermediate Term resistance or if it rolls over on the Short Term upswing.
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