10:00 pm MT: I am inserting this post in this spot so no one misses it. I want to make a quick comment about the Energy and Commodity setups from yesterday into this morning. Technical signals are technical signals, and many Energy and Commodity stocks had a great technical signal for puts, which were on their way to confirming this morning. Everything looked great, a lot of money was going to be made. And then it reversed intra-day. I made the comment that it could be Buyers Remorse, it could be Desperate Bullishness on the part of many Fund Managers, or it could be real Institutional buying. Whatever it is, it killed the signal. So I started scaling out of the Energy and Commodity puts, which I may finish exiting tomorrow. Now, after a failed signal, I will wait for a confirming signal to re-enter any puts if they are there. After a failed signal, I always switch from Cherry Picking mode to Confirmed Signal mode. I'm not sure what will happen in the next several days, but because of the failed signal in Energy and Commodities, I am guessing that it could be at least several more trading days, and maybe several weeks, before we know if the sectors are headed for consolidation or not. It may be that there is another round of call-trades in the current swing. That would be somewhat of a statistical anomaly, but it fits the pattern for the emotions frenetic traders. I have learned to never underestimate the freneticism of traders. You trade what you see, no matter how unbelievable or illogical it appears.
The Weekly Jobless Claims came in slightly better than expected, which put an early morning bid under Energy and Commodity stocks. Same Store Sales came in mixed, which is keeping Retail soft. It looks like the market might still fade into the close, but we shall see throughout the day.
10:30 am MT: I went through and cleaned out all the stuff I don't like right now technically. NOV was obviously a stop out with a loss of 32%. I don't like taking losses that large, but this was an anomaly. It seems that NOV lost/settled some kind of pending lawsuit and traders took it as a big positive. So NOV is up sharply, when all the rest of Energy is looking like it will roll over. From time to time a trader gets blindsided by a news bomb, and that's how it goes.
In addition to NOV, here are some more sells today: I locked and walked on IBM for a 26.5% gain. I time stopped CAT for a 14% loss. I stopped out of GES for a 25% loss, but on a half sized position, so it was minimal damage. I also stopped out of KSS for a 75 cent loss, which was 29%, so again, minimal damage. I just can't see what's going on in Retail right now.
I am still holding the MDR, CL, ESV, MUR, MON, MOS, and CF puts, which all started down today, but most of them have fought back. If we fade those into the close, then it was Big Money letting Sucker Money with Buyers Remorse get their last shot at what they think is a pullback. I'm still looking at those trades as rollovers, though, but we shall see. There is a lot of Buyers Remorse out there amongst Amateur Traders, and Smaller Money. Many of them did not participate in the big upswing in Energy and Commodity stocks this past week, and it's making for an interesting game between Amateurs and Professionals right now. It will be interesting to see what the Professionals think of those sectors in the next couple of days. CL and CF look pretty good. I also picked up puts on WFT on a Double-Top Divergence setup, and I picked up puts on BHI and XTO, which might finish the day as Harami Crosses.
I am only holding the AKAM calls, and the half-size calls on ADSK. If the market does rally a bit on a drop in Energy and Commodity stocks, it may only be a half-hearted rally, and Tech might be the only area that bumps up significantly. If selling does hit Energy and Commodities, it may be enough to take everything down because no-one wants to rotate. Retail and Financials just don't seem to want to participate in anything right now. I may be wrong, and those areas could all take off on a nice rally, but that's the way I'm playing it. If Energy and Commodities take off to the upside, then I will stop out of all the puts, ride the Tech stocks, and see if the market looks like it really wants to go stronger Bullish.
1:00 pm MT: Not much has changed in the past several hours. I'm not convinced of a bounce in Financials yet, although nibbling in on AXP or a Broker is ok. Everything seems to be hovering around waiting to see which way this breaks. We may finish the day pretty indicisive. I'm getting fairly close to some stop out points on a couple of the puts. We may not see this market go in motion with conviction for another trading day or two. It seems to almost be getting quieter.
1:25 pm MT: I stopped the WFT put for a 90 cent loss, or 17%. I'm continuing to reduce some positions as the market gets a little more indicisive. I also sold half the CL puts for a 40% gain.
1:45 pm MT: I continue to cull down the positions. I stopped out of the ESV put for a 90 cent loss, or 16%. I stopped out of the MDR put for a 70 cent loss, or 18%. I scratched the ADSK call for an 18 cent loss on half a position, so pretty minimal losses on those. I sold the MUR put for a 25 cent profit, or 6.4% gain. Also, earlier in the day I picked up a small put position on ADM. I have now culled back about 45% of the trades that I was holding - going into today. I have kept the losses very manageable, as you can see, and I had a couple of profitable trades. The only thing that zinged me was NOV, and that was a News Bomb, which I have no control over. As far as my trade management, I'm very comfortable with where I am after the culling, going into the close today.
2:15 pm MT: It looks like Buyers Remorse is winning out over Slowing Consumption for now. It will be interesting to see how the American Consumer holds up this summer in the face of pretty heavy energy and goods inflation. Today, the market looked a little leery, hence the indecisive day. So I don't want to be too loaded up on trades until I see another sign that the market is tipping its hand. I thought the tip was yesterday in Energy and Commodities, but it may be several more days until we get a clearer signal. I am having a hard time bringing myself around to being wildly bullish, even with the interest rate cuts, because those cuts are a two-edged sword. The Fed may have stopped the Financial sector implosion, but it created a lot of inflation in energy, food, and consumer goods. This is a tough read, so it's more important than ever to pay close attention to the charts, and to use shorter time-frame trading strategies if the charts start to get a little choppy.
8:15 pm MT: Sector Wrap: CNQ and ATW will probably give Energy stocks a little boost in the morning because they reported better than expected earnings, and their stocks are up a little bit after-hours. PCLN will give Tech a little boost because the company beat earnings expectations after the close. NVDA will offset that a little in Tech because the stock is down after-hours on their earnings report. I am ready to stop out of my Energy and Commodity puts tomorrow, which may happen. I would rather see Energy and Commodity stocks consolidate during the summer, and Tech, Financials, and Retail go up during the summer. That would be my best case scenario for a bullish market. But right now, it may be that just the opposite happens, which may make for some squishy times in the Global Economy for the rest of the year. We shall see.....
8:15 pm MT: Market Wrap: Asian stocks are currently down on a warning from Toyota that the company will experience the first full-year profit drop in 7 years. This is interesting because Toyota sells gas-friendly cars, whereas GM and Ford are struggling because of a drop in Truck and SUV sales. Financials, especially Banks ($BKX), and Insurance ($IUX), broke diagonal support lines, and Retail ($RLX), along with many Retail stocks, also broke diagonal support lines after some soft Same Store Sales numbers today. AIG is going to exacerbate the situation in Financials because the company reported poor earnings after the close, and the stock is down over $3.00, or down more than 7% after-hours. This underscores my theme of weakening conditions technically in Financials and Retail. This will also probably set up a key support test tomorrow for the major indexes.
The Dow has support at 12,750. A break below that number will be a warning Flag that the Dow may be going back to Intermediate Term Neutral. A drop below 12,600 would confirm the posture.
The SPX has support at 1,380. A break below that number will be a warning Flag that the SPX may be going back to Intermediate Term Neutral. A drop below 1,365 would confirm the posture.
The Naz has support at 2,400. A break below that number will be a warning Flag that the Naz may be going back to Intermediate Term Neutral. A drop below 2,350 would confirm the posture.
Thursday, May 8, 2008
Wednesday, May 7, 2008
Market Fades Away
Nothing huge on the Economic Front pre-market. CSCO is giving Tech a little boost, but Energy and Commodity stocks rotating out a bit this morning is probably doing more to prop up Tech.
7:40 am MT: I sold the last of SII at the open, and I just finished scaling out of the last of NYX at the 75.70 area. I am getting ready to start selling some AGU into this bump up, and I will be done with SLB soon, ahead of the Oil Inventory Report.
7:50 am MT: This is a warning that Energy stocks may be done short term. I am all out of SII and SLB, and I also think Chemicals may be done, so I'm locked on AGU as well. This might be the end of Energy and Commodity stocks short-term, at least until the Oil Inventory Report later today.
7:55 am MT: Tech is on the move, this is probably a rotation from Energy and Commodity stocks short-term to Tech, and maybe Financials. IBM is on the move.
8:00 am MT: I picked up the rest of my AKAM call position. I am also nibbling into ADSK right now.
8:20 am MT: I picked up puts on CL, MDR, MOS (nibble), (I have a MOS put nibble from yesterday), NOV (nibble), and MUR (nibble). If the Oil Inventory Report doesn't do it for Energy stocks and the puts look good technically, I will get more.
8:35 am MT: Here is the final tally on the last four call trades that I closed today: SLB was a 20% gain for 2 days, SII was a 33% gain for 2 days, AGU was an 11.4% gain from yesterday, and NYX was a 52% gain from yesterday.
Also: IBM is on the move, so I will look to lock down about 1/4 of the trade here at 125 and another 1/4 of the trade in the 126 area if it hits that later today. I just locked down some of the IBM calls for a 29% gain so far (5 days).
9:00 am MT: The Oil Inventory Report came in much higher than expected, which may be bearish short-term for Energy stocks (and Commodity stocks). It will be interesting to see how the day finishes out in those areas.
1:30 pm MT: With Chemicals breaking down a little, I added to the MON and MOS puts and I picked up CF puts. I have full positions on 3 Energy puts and 3 Chemical puts, along with puts on CL and MDR, which look great right now. I'm in the money on most of the stuff already, except NOV.
4:30 pm MT: Market Wrap: The major indexes faded away throughout the day. The Momentum Pullback bounce from yesterday is gone. The Dow climbed back down the Hammer from yesterday and then some. The Naz and SPX fared the same. Every index looks headed for the 20-Day Moving Average. Now watch that area because the 20dma and key horizontal support on the Dow both line up right at 12,750. The Naz has horizontal support in the 2,400 area, and guess where the 20dma is lining up on that index? And the SPX has horizontal support in the 1,375 area, and lookie lookie, there's that 20dma again. So this is lining up for a KEY TECHNICAL BATTLE tomorrow. Can the indexes hold those areas?
The answer is going to come from Sector Rotation. If traders rotate out of Energy and Commodity stocks, they must rotate into Tech, Retail, and Financials, and not completely out of the Stock Market, or the major indexes will most likely lose the battle of the Key Technical Area to the Bears. We're really lining up for a key battle in the next day or two. Here we go, this is the first real test of our new, Intermediate Term Bullish posture on the market. If the market fails at this then we go back to Neutral. If the market holds and bounces with authority, then we strengthen the Intermediate Term Bullish posture. If the market futzes around, and kind of bounces, then we will go tight and more tepid, with smaller swings.
The best case scenario, for the entire summer, is for Energy and Commodity stocks to rotate out for several weeks or longer, and Tech, Financials, and Retail to rotate in. This would be an indication of lowerering inflation with at least some economic stability. If the entire Stock Market rotates out, then at least we should have some solid put plays for several weeks. But it would mean tougher economic conditions for awhile. If we futz around, it will get tighter, like it was prior to last week.
Remember a couple of weeks ago when I said the market was at a key point that would probably set the tone for several weeks?
http://dwightanderson.blogspot.com/2008_04_01_archive.html
And I said I was going to strategize accordingly. Then the market tipped bullish and I switched to pretty much 100% call-trading, and really made some (paper trade) money, even when I was gone for 1 of the 2 weeks on vacation. I gave the warning, and indeed it was a key tipping point that set the tone for 2 weeks. Well, we are at a key tipping point again, so watch things closely the next two days, just like before.
I am positioned with about 3/4 of my trades in puts (mostly Energy and Commodities), and 1/4 of my trades in calls (Tech and Retail). I changed from 100% call-trading mode in a blink - because the lower highs and consolidation I thought might happen in most Energy and Commodities stocks, may be happening. As always, we shall see.....
7:40 am MT: I sold the last of SII at the open, and I just finished scaling out of the last of NYX at the 75.70 area. I am getting ready to start selling some AGU into this bump up, and I will be done with SLB soon, ahead of the Oil Inventory Report.
7:50 am MT: This is a warning that Energy stocks may be done short term. I am all out of SII and SLB, and I also think Chemicals may be done, so I'm locked on AGU as well. This might be the end of Energy and Commodity stocks short-term, at least until the Oil Inventory Report later today.
7:55 am MT: Tech is on the move, this is probably a rotation from Energy and Commodity stocks short-term to Tech, and maybe Financials. IBM is on the move.
8:00 am MT: I picked up the rest of my AKAM call position. I am also nibbling into ADSK right now.
8:20 am MT: I picked up puts on CL, MDR, MOS (nibble), (I have a MOS put nibble from yesterday), NOV (nibble), and MUR (nibble). If the Oil Inventory Report doesn't do it for Energy stocks and the puts look good technically, I will get more.
8:35 am MT: Here is the final tally on the last four call trades that I closed today: SLB was a 20% gain for 2 days, SII was a 33% gain for 2 days, AGU was an 11.4% gain from yesterday, and NYX was a 52% gain from yesterday.
Also: IBM is on the move, so I will look to lock down about 1/4 of the trade here at 125 and another 1/4 of the trade in the 126 area if it hits that later today. I just locked down some of the IBM calls for a 29% gain so far (5 days).
9:00 am MT: The Oil Inventory Report came in much higher than expected, which may be bearish short-term for Energy stocks (and Commodity stocks). It will be interesting to see how the day finishes out in those areas.
1:30 pm MT: With Chemicals breaking down a little, I added to the MON and MOS puts and I picked up CF puts. I have full positions on 3 Energy puts and 3 Chemical puts, along with puts on CL and MDR, which look great right now. I'm in the money on most of the stuff already, except NOV.
4:30 pm MT: Market Wrap: The major indexes faded away throughout the day. The Momentum Pullback bounce from yesterday is gone. The Dow climbed back down the Hammer from yesterday and then some. The Naz and SPX fared the same. Every index looks headed for the 20-Day Moving Average. Now watch that area because the 20dma and key horizontal support on the Dow both line up right at 12,750. The Naz has horizontal support in the 2,400 area, and guess where the 20dma is lining up on that index? And the SPX has horizontal support in the 1,375 area, and lookie lookie, there's that 20dma again. So this is lining up for a KEY TECHNICAL BATTLE tomorrow. Can the indexes hold those areas?
The answer is going to come from Sector Rotation. If traders rotate out of Energy and Commodity stocks, they must rotate into Tech, Retail, and Financials, and not completely out of the Stock Market, or the major indexes will most likely lose the battle of the Key Technical Area to the Bears. We're really lining up for a key battle in the next day or two. Here we go, this is the first real test of our new, Intermediate Term Bullish posture on the market. If the market fails at this then we go back to Neutral. If the market holds and bounces with authority, then we strengthen the Intermediate Term Bullish posture. If the market futzes around, and kind of bounces, then we will go tight and more tepid, with smaller swings.
The best case scenario, for the entire summer, is for Energy and Commodity stocks to rotate out for several weeks or longer, and Tech, Financials, and Retail to rotate in. This would be an indication of lowerering inflation with at least some economic stability. If the entire Stock Market rotates out, then at least we should have some solid put plays for several weeks. But it would mean tougher economic conditions for awhile. If we futz around, it will get tighter, like it was prior to last week.
Remember a couple of weeks ago when I said the market was at a key point that would probably set the tone for several weeks?
http://dwightanderson.blogspot.com/2008_04_01_archive.html
And I said I was going to strategize accordingly. Then the market tipped bullish and I switched to pretty much 100% call-trading, and really made some (paper trade) money, even when I was gone for 1 of the 2 weeks on vacation. I gave the warning, and indeed it was a key tipping point that set the tone for 2 weeks. Well, we are at a key tipping point again, so watch things closely the next two days, just like before.
I am positioned with about 3/4 of my trades in puts (mostly Energy and Commodities), and 1/4 of my trades in calls (Tech and Retail). I changed from 100% call-trading mode in a blink - because the lower highs and consolidation I thought might happen in most Energy and Commodities stocks, may be happening. As always, we shall see.....
Tuesday, May 6, 2008
Momentum Pullback Goes Green
UBS ( lost $17b in first quarter, mostly on subprime writedowns, on top of previous losses in subprimes), C ($41 billion in subprime writedowns so far), and MER (biggest exposure of any company in the world to subprime derivatives) are cutting jobs.....what a surprise.....
UBS is cutting 5,500 jobs, MER is cutting 5,220 jobs, and C is cutting 15,200 jobs.....
Oil hit another intra-day record high this morning.
Energy up, Financials down, sound familiar? This is playing out short-term just as I warned it might. I will look to sell some of my Energy calls into any pop up this morning. I am not holding any Financials, Tech, or Retail right now. We'll see if those areas continue to pull back. Ironically, the job cutting may actually give Financials a boost in the next several days, maybe even today, we shall see.....
7:45 am MT: The overall market is down early and Energy stocks popped up at the open. So the theme is carrying out. I sold the Day Swings from yesterday on RIG (5% gain), and DVN (12% gain). I also to half profits on EXM (9% gain so far), and the DVN daily swing (45% gain so far). I locked and walked on the last of the CNX trade for an 82% gain. I am still riding SII and SLB, and parts of DVN and RIG.
8:15 am MT: I decided not to futz around with EXM any more, too much Doji-ing going on right now, so it's done with a 9.4% gain from yesterday. I continue to take profits on the way up with RIG, and I'm still riding SII, SLB, and parts of DVN. I goofed an order on AGU yesterday and sold when I meant to buy, so I ended up losing 6.4% on a half-position. It was a very small loss, but goofs are goofs, and I don't like them.
8:30 am MT: I took profits on a little less than half the SII trade from yesterday for a 28% gain so far.
8:45 am MT: I locked and walked on the last of RIG since earnings are scheduled for after the close today. This RIG trade was the Daily Swing and it netted me a 77% gain. I am also down to the last 1/3 of my DVN trade for the same reason, earnings are after the close today.
9:00 am MT: I locked and walked on the last of DVN. This DVN trade netted me a 54% gain. I am still riding partial positions on SLB and SII.
I warned yesterday that the market looked more like a Momentum Pullback than a Rollover. With the little Hammer potentially forming on all 3 major indexes, it looks like that will be the case. We shall see how the day finishes out to confirm or deny the rumor..... Financials are actually helping out with the Hammer as they get bought off the lows a bit, just as I stated could happen on the job cuts announcements. I am going to go searching around and see if this looks real or not, and see what the next play looks like it's going to be.
The strongest areas are right now are Energy, Steel, and Metals/Mining. Agriculture/Chemicals are bigger movers today, especially AGU and POT. The other Agriculture/Chemical stocks, MON and MOS (and maybe CF) look like they are putting in Bear Flags, so if the Commodity stocks roll over at lower highs, then these two will be worth looking at for puts.
The Energy and Commodity plays are starting to look very mature on the short term swing. Perhaps those areas have another day or two to rally, especially if we make higher highs. I am going to keep riding what I have, look around, and see what looks good for the next series of swings.
10:00 am MT: Energy is getting pretty extended, but I may do a little Day Swing on something like NBL, HES, or CNQ. Same story for Commodity areas, but I might do a little Day Swing on something like AGU, POT, or CLF. NYX and EMR both broke out. There are some interesting potential put plays forming up in some areas like Gold, Chemicals, and a some other areas. But I'm not interested in those just yet.
11:00 am MT: Tech is bouncing, led by stocks like AKAM (and of course AAPL). The overall market is starting to confirm that is was a Momentum Pullback and not a Rollover, just like I warned. The longer we go today in the green, the more it looks like it will end that way.
12:10 pm MT: I nibbled in on NYX calls, and I nibbled in on AGU calls earlier. As crazy as it sounds, I actually nibbled in on a small amount of MON puts.
2:30 pm MT: Trade Wrap: I took out half of the SLB and SII Day Swings (from yesterday) during the day today for a 20% gain on SLB so far, and a 32% gain on SII so far. I also took out 1/3 of my NYX Day Swing from today for a 32% gain in about an hour and a half. I picked up AGU calls later in the day, and I picked up AKAM calls just before the close.
A general note: For those of you that are wondering what it's like to finally get a good swing while the market is intermediate term bullish, just review the gains I have been posting from all the trades since last Thursday. I hit it as hard as I could, and I'm still hitting it. I would have hit it harder if I didn't work in a call center answering random calls all day. When I smell MoMo I GoGo, and I MEAN GO HARD! You may not be there quite yet, experience-wise, but you should have learned from these past several days what to do when you do have enough experience, and when you see things line up in an A to A+ type of way. You HIT IT HARD!
7:00 pm MT: Market Wrap: The Dow Hammered, and the other two majors bounced. The price action confirmed that we were in Momentum Pullback mode and not Rollover mode, just as I wrote about yesterday and this morning. This kind of bounce may lead to a quick 1-2 day jump in the markets just like the last two bounces. I am not doing a lot with puts yet, we still look like a call-trade market for another day or two. And we are Intermediate Term Bullish, although it is a little too wedgie for my liking, so 98% of my trades are calls for now, even if the market is a little tight.
Here are some Bullish stocks that might have another 1-2 days in their upswing: AKAM, HES, NYX, PCP, CLF, EMR, APA, ECA, NSC, AGU, XTO, (SLB)
Note: the Energies will probably be driven by the positive earnings from RIG and DVN, but watch yourselves on these, it may be one more day and done, we shall see.....
Here are some Bullish stocks that are bouncing with the market: AXP, LNC, (MER)
Here are some Bullish stocks that might make a move up from short-term consolidations soon: ADSK, (KSS, COH), IBM, CAT
Here are some stocks poised for a lower high (or equal high): CF, NOV, MUR, POT, GDX, (DO), MOS, MDR, ESV, MON, (ABX), AEM, (OI), (GG), (AMX), CL
Note: LM is selling off on heavy volume.
By the way, the sky is still blue, rivers still run downhill, the Earth still revolves around the Sun, and AAPL is still going up.....
UBS is cutting 5,500 jobs, MER is cutting 5,220 jobs, and C is cutting 15,200 jobs.....
Oil hit another intra-day record high this morning.
Energy up, Financials down, sound familiar? This is playing out short-term just as I warned it might. I will look to sell some of my Energy calls into any pop up this morning. I am not holding any Financials, Tech, or Retail right now. We'll see if those areas continue to pull back. Ironically, the job cutting may actually give Financials a boost in the next several days, maybe even today, we shall see.....
7:45 am MT: The overall market is down early and Energy stocks popped up at the open. So the theme is carrying out. I sold the Day Swings from yesterday on RIG (5% gain), and DVN (12% gain). I also to half profits on EXM (9% gain so far), and the DVN daily swing (45% gain so far). I locked and walked on the last of the CNX trade for an 82% gain. I am still riding SII and SLB, and parts of DVN and RIG.
8:15 am MT: I decided not to futz around with EXM any more, too much Doji-ing going on right now, so it's done with a 9.4% gain from yesterday. I continue to take profits on the way up with RIG, and I'm still riding SII, SLB, and parts of DVN. I goofed an order on AGU yesterday and sold when I meant to buy, so I ended up losing 6.4% on a half-position. It was a very small loss, but goofs are goofs, and I don't like them.
8:30 am MT: I took profits on a little less than half the SII trade from yesterday for a 28% gain so far.
8:45 am MT: I locked and walked on the last of RIG since earnings are scheduled for after the close today. This RIG trade was the Daily Swing and it netted me a 77% gain. I am also down to the last 1/3 of my DVN trade for the same reason, earnings are after the close today.
9:00 am MT: I locked and walked on the last of DVN. This DVN trade netted me a 54% gain. I am still riding partial positions on SLB and SII.
I warned yesterday that the market looked more like a Momentum Pullback than a Rollover. With the little Hammer potentially forming on all 3 major indexes, it looks like that will be the case. We shall see how the day finishes out to confirm or deny the rumor..... Financials are actually helping out with the Hammer as they get bought off the lows a bit, just as I stated could happen on the job cuts announcements. I am going to go searching around and see if this looks real or not, and see what the next play looks like it's going to be.
The strongest areas are right now are Energy, Steel, and Metals/Mining. Agriculture/Chemicals are bigger movers today, especially AGU and POT. The other Agriculture/Chemical stocks, MON and MOS (and maybe CF) look like they are putting in Bear Flags, so if the Commodity stocks roll over at lower highs, then these two will be worth looking at for puts.
The Energy and Commodity plays are starting to look very mature on the short term swing. Perhaps those areas have another day or two to rally, especially if we make higher highs. I am going to keep riding what I have, look around, and see what looks good for the next series of swings.
10:00 am MT: Energy is getting pretty extended, but I may do a little Day Swing on something like NBL, HES, or CNQ. Same story for Commodity areas, but I might do a little Day Swing on something like AGU, POT, or CLF. NYX and EMR both broke out. There are some interesting potential put plays forming up in some areas like Gold, Chemicals, and a some other areas. But I'm not interested in those just yet.
11:00 am MT: Tech is bouncing, led by stocks like AKAM (and of course AAPL). The overall market is starting to confirm that is was a Momentum Pullback and not a Rollover, just like I warned. The longer we go today in the green, the more it looks like it will end that way.
12:10 pm MT: I nibbled in on NYX calls, and I nibbled in on AGU calls earlier. As crazy as it sounds, I actually nibbled in on a small amount of MON puts.
2:30 pm MT: Trade Wrap: I took out half of the SLB and SII Day Swings (from yesterday) during the day today for a 20% gain on SLB so far, and a 32% gain on SII so far. I also took out 1/3 of my NYX Day Swing from today for a 32% gain in about an hour and a half. I picked up AGU calls later in the day, and I picked up AKAM calls just before the close.
A general note: For those of you that are wondering what it's like to finally get a good swing while the market is intermediate term bullish, just review the gains I have been posting from all the trades since last Thursday. I hit it as hard as I could, and I'm still hitting it. I would have hit it harder if I didn't work in a call center answering random calls all day. When I smell MoMo I GoGo, and I MEAN GO HARD! You may not be there quite yet, experience-wise, but you should have learned from these past several days what to do when you do have enough experience, and when you see things line up in an A to A+ type of way. You HIT IT HARD!
7:00 pm MT: Market Wrap: The Dow Hammered, and the other two majors bounced. The price action confirmed that we were in Momentum Pullback mode and not Rollover mode, just as I wrote about yesterday and this morning. This kind of bounce may lead to a quick 1-2 day jump in the markets just like the last two bounces. I am not doing a lot with puts yet, we still look like a call-trade market for another day or two. And we are Intermediate Term Bullish, although it is a little too wedgie for my liking, so 98% of my trades are calls for now, even if the market is a little tight.
Here are some Bullish stocks that might have another 1-2 days in their upswing: AKAM, HES, NYX, PCP, CLF, EMR, APA, ECA, NSC, AGU, XTO, (SLB)
Note: the Energies will probably be driven by the positive earnings from RIG and DVN, but watch yourselves on these, it may be one more day and done, we shall see.....
Here are some Bullish stocks that are bouncing with the market: AXP, LNC, (MER)
Here are some Bullish stocks that might make a move up from short-term consolidations soon: ADSK, (KSS, COH), IBM, CAT
Here are some stocks poised for a lower high (or equal high): CF, NOV, MUR, POT, GDX, (DO), MOS, MDR, ESV, MON, (ABX), AEM, (OI), (GG), (AMX), CL
Note: LM is selling off on heavy volume.
By the way, the sky is still blue, rivers still run downhill, the Earth still revolves around the Sun, and AAPL is still going up.....
Monday, May 5, 2008
Momentum Pullback Day
8:15 am MT: YHOO thumped down this morning on MSFT pulling its offer to buy the company. The market is a little soft as a result. It looks like the market could roll over short-term. But Energy and Commodity stocks are continuing the bounce. Energy and related areas are particularly strong. I have been scaling out of some of the Energy positions and holding on to full positions on some of the rest. The Energy trades have been HUGE profits for me so far. I locked and walked on PH for a total gain of 36%, and I scratched out of GS for a breakeven trade. If the Energy stocks (and some Commodity stocks) finish the day strong, despite the market softness, then I will hold some of those positions overnight. I did pick up calls on EXM and AGU near the lows of the pullback intra-day. AGU is probably going to be a quick play.
8:45 am MT: The market is holding up ok. Tech seems to be doing fairly well despite YHOO, which is a good sign. Energy and Commodity stocks continue to bounce, which is also good. There is still a long way to go today, so we shall see.....
One thing that always makes me a little nervous is phone call volume. I am getting slammed on the phones right now with people wanting to buy the market. The contrarian in me gets a little apprehensive when all the retail traders think the market is a buy today. We shall see part II.....
10:00 am MT: YHOO is down, but is being offset by gains in MSFT and GOOG, which benefit from the pulled offer. Financials are softening up on a warning that AIG may write down $12.7 billion in CDS or subprime derivative losses. I am completely out of SWN and CHK, and I am down to half a position on CNX. All those trades were big, big gainers. I did a day swing on RIG last hour for a 7.5% profit in 20 minutes, in addition to the huge gains I have made or locked in on RIG from the Daily Swing that started Thursday, and the Day Swing from Friday.
8:00 pm MT: The market pulled back a bit today, although it looks more like a Momentum Pullback rather than a true rollover. The market is poised for another down day tomorrow if the last two Momentum Pullbacks are any indication of the current chart pattern. ISM Services reported stronger than expected numbers indicating that the economy continues to hold up despite the predictions of analysts, economist, and politicians. This should come as no surprise as I have pointed out countless times on this Trading Page that the economic reports have yet to show true recessionary numbers. In fact, I have been thumping the table time and again that the market/economy would have been better off if it was allowed to consolidate more than it did. I have warned over and over of Energy and Commodity inflation since the beginning of the year, and that is exactly what we got today with oil hitting another all-time high because of the solid ISM Services number. Factor in the summer driving season, the interest rate cuts that are starting to take affect, and the fact that the economy never really slumped like the yappity yappers kept saying it was (of course the yappers all have their own agenda, but we'll leave that out of this discussion.....), and we could keep seeing record oil prices all summer long.
Well, what is there to say other than we might as well make money trading calls on Commodity and Energy stocks.....
Every single bolded stock from the Commodity and Energy related areas on my Bullish Watchlist from yesterday went up, some rather sharply. The only bolded stock that went down was a Retailer, KSS, which is exactly what I warned of yesterday. I said that a run up in Energy and Commodity stocks would probably be the catalyst for a drop in other sectors like Tech, Retail, and Financials.
Today I just absolutely whaled away on Energy and Commodity stocks. I have been hitting them hard and often since last Thursday, when I warned you about the big Hammers forming that I started jumping. Here is one example: I played the Hammer on RIG Thursday and sold half the position today for a 65% gain in 2 1/2 trading days, and I'm still holding half the trade. While I'm riding the Daily Swing I did another trade, a Day Swing on RIG Friday. I sold half at the end of that day and the rest today for a 22% gain in a day and a half. I hit RIG again for another, shorter Day Swing today and made 7.5% in about 20 minutes. And I hit RIG again before the close for another Day Swing, which I'll look to take out tomorrow.
Here are the other trades from last week until now (some of which I have reported): CAT and IBM, which I'm still holding for a bump. PH 36% gain, RIMM 12% and 4% gain on two trades, ADBE 43.5% gain, (HES 3.4% loss), (SLB 13.5% loss but I am still holding the position and I expect it to be a gain since SLB is in a confirmed bounce today), SWN 30% gain, ANR 21% gain, CHK 41% gain, MS breakeven, GS breakeven, CNX 69% gain locked down so far, with 1/2 the position left, and DVN 25% gain so far, still holding the entire position with DVN in a confirmed bounce.
In addition, I picked up EXM and AGU for a couple of Short Swing plays today, and I picked up another trade on SLB and DVN for Short Swings after the confirmed bounce today. I picked up SII for the same trade as well, (and also the RIG Day Swing mentioned above). One thing I haven't mentioned, which should be obvious from the charts, and the Saturday Watchlist, these are all call trades.
To say that I was whaling away on the Energy stocks would be an understatement. At this point I am continuing the process of scaling out and locking down most of the Energy and Commodity trades, although some of the bouncers today might have a couple more days in their upswing, we shall see.....
If the stocks, or the market crack down hard tomorrow, I am ready to lock and walk. I'm keeping the rest of my Energy and Commodity stock trades on a short leash right now to preserve the huge gains from the past several trading days. If we have an orderly pullback on the markets and start to bounce, I will assess the catalyst for the bounce and which sectors are going up or down, and play it accordingly.
By the way, the Klingons, Ferengi, Jar Jar Binks and the Gungans, along with all people who's last name starts with the 27th letter of the alphabet are now trying to get into AAPL because they just heard the stock was going up. When the Romulans, Dacta Eels, Jabba and the Hutts, along with all the people who stamp the m's on m&m's for a living finally get in, then AAPL may actually roll over. Until then, long live the cult.....and don't drink the Kool-Aid.
We'll see what tomorrow brings.....
8:45 am MT: The market is holding up ok. Tech seems to be doing fairly well despite YHOO, which is a good sign. Energy and Commodity stocks continue to bounce, which is also good. There is still a long way to go today, so we shall see.....
One thing that always makes me a little nervous is phone call volume. I am getting slammed on the phones right now with people wanting to buy the market. The contrarian in me gets a little apprehensive when all the retail traders think the market is a buy today. We shall see part II.....
10:00 am MT: YHOO is down, but is being offset by gains in MSFT and GOOG, which benefit from the pulled offer. Financials are softening up on a warning that AIG may write down $12.7 billion in CDS or subprime derivative losses. I am completely out of SWN and CHK, and I am down to half a position on CNX. All those trades were big, big gainers. I did a day swing on RIG last hour for a 7.5% profit in 20 minutes, in addition to the huge gains I have made or locked in on RIG from the Daily Swing that started Thursday, and the Day Swing from Friday.
8:00 pm MT: The market pulled back a bit today, although it looks more like a Momentum Pullback rather than a true rollover. The market is poised for another down day tomorrow if the last two Momentum Pullbacks are any indication of the current chart pattern. ISM Services reported stronger than expected numbers indicating that the economy continues to hold up despite the predictions of analysts, economist, and politicians. This should come as no surprise as I have pointed out countless times on this Trading Page that the economic reports have yet to show true recessionary numbers. In fact, I have been thumping the table time and again that the market/economy would have been better off if it was allowed to consolidate more than it did. I have warned over and over of Energy and Commodity inflation since the beginning of the year, and that is exactly what we got today with oil hitting another all-time high because of the solid ISM Services number. Factor in the summer driving season, the interest rate cuts that are starting to take affect, and the fact that the economy never really slumped like the yappity yappers kept saying it was (of course the yappers all have their own agenda, but we'll leave that out of this discussion.....), and we could keep seeing record oil prices all summer long.
Well, what is there to say other than we might as well make money trading calls on Commodity and Energy stocks.....
Every single bolded stock from the Commodity and Energy related areas on my Bullish Watchlist from yesterday went up, some rather sharply. The only bolded stock that went down was a Retailer, KSS, which is exactly what I warned of yesterday. I said that a run up in Energy and Commodity stocks would probably be the catalyst for a drop in other sectors like Tech, Retail, and Financials.
Today I just absolutely whaled away on Energy and Commodity stocks. I have been hitting them hard and often since last Thursday, when I warned you about the big Hammers forming that I started jumping. Here is one example: I played the Hammer on RIG Thursday and sold half the position today for a 65% gain in 2 1/2 trading days, and I'm still holding half the trade. While I'm riding the Daily Swing I did another trade, a Day Swing on RIG Friday. I sold half at the end of that day and the rest today for a 22% gain in a day and a half. I hit RIG again for another, shorter Day Swing today and made 7.5% in about 20 minutes. And I hit RIG again before the close for another Day Swing, which I'll look to take out tomorrow.
Here are the other trades from last week until now (some of which I have reported): CAT and IBM, which I'm still holding for a bump. PH 36% gain, RIMM 12% and 4% gain on two trades, ADBE 43.5% gain, (HES 3.4% loss), (SLB 13.5% loss but I am still holding the position and I expect it to be a gain since SLB is in a confirmed bounce today), SWN 30% gain, ANR 21% gain, CHK 41% gain, MS breakeven, GS breakeven, CNX 69% gain locked down so far, with 1/2 the position left, and DVN 25% gain so far, still holding the entire position with DVN in a confirmed bounce.
In addition, I picked up EXM and AGU for a couple of Short Swing plays today, and I picked up another trade on SLB and DVN for Short Swings after the confirmed bounce today. I picked up SII for the same trade as well, (and also the RIG Day Swing mentioned above). One thing I haven't mentioned, which should be obvious from the charts, and the Saturday Watchlist, these are all call trades.
To say that I was whaling away on the Energy stocks would be an understatement. At this point I am continuing the process of scaling out and locking down most of the Energy and Commodity trades, although some of the bouncers today might have a couple more days in their upswing, we shall see.....
If the stocks, or the market crack down hard tomorrow, I am ready to lock and walk. I'm keeping the rest of my Energy and Commodity stock trades on a short leash right now to preserve the huge gains from the past several trading days. If we have an orderly pullback on the markets and start to bounce, I will assess the catalyst for the bounce and which sectors are going up or down, and play it accordingly.
By the way, the Klingons, Ferengi, Jar Jar Binks and the Gungans, along with all people who's last name starts with the 27th letter of the alphabet are now trying to get into AAPL because they just heard the stock was going up. When the Romulans, Dacta Eels, Jabba and the Hutts, along with all the people who stamp the m's on m&m's for a living finally get in, then AAPL may actually roll over. Until then, long live the cult.....and don't drink the Kool-Aid.
We'll see what tomorrow brings.....
Saturday, May 3, 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 either beginning to go intermediate term (IT) bullish/bearish in parenthesis, or are a little tapped out short term (in other words, I'm watching but not likely playing). I indicate stocks that are IT bullish/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 tested a resistance area of 13,100-13,150 on Friday. It may try to re-test the 13,100 area on Monday based on a Bull Flag bounce on the intra-day charts. But watch closely, because we are getting close to a potential short-term reversal in both price and time.
SPX: IT Bullish and ST Bullish. The SPX tested the low end of a resistance zone between 1,420-1,435 on Friday. It may have some room to push a little further into the zone Monday based on a Bull Flag bounce intra-day. But watch closely, because we are getting close to a potential short-term reversal in both price and time.
Naz: IT Bullish and ST Bullish. The Naz may be reacting to the round number of 2,500, since it hit 2,499.14 on Friday and pulled back. If the Naz has a more extreme move in it short-term, it may try to go and test resistance around 2,535-2,550. But like the Dow and the SPX, it could be getting close to a short-term reversal Monday.
We have a light week of Economic Reports, and Big Name Earnings are starting to taper off. There are still a lot of earnings to report this week, but we are shaping up to have more of a "Technical" move type of week rather than a "News" move type of week. It looks like the markets could still move up a bit on Monday, perhaps even Tuesday. If the indexes do roll over, look for Tech, Financials, Retail, and a few other areas to lead the pullback. At the same time, Energy and Commodity stocks may continue their bounce. In fact, a move up in Energy and Commodities could very well be the short-term catalyst for a short-term drop in Tech, Retail, and Financials. The Naz may roll over tomorrow on YHOO selling after MSFT pulled its offer to buy the company over the weekend. It looks like a lot of turmoil in Yahoo land as the CEO tries to convince shareholders the company is worth more without MSFT. Guess what, the shareholders are gonna let him know what they think of the value of the company pretty quick. Look for YHOO to lose billions of dollars in market cap tomorrow, and look for the CEO to eventually lose his job.....
BULLISH SECTORS/GROUPS AND STOCKS:
Energy: MRO, NE, RIG, OXY, NBR, PDE, HES, SWN, CHK, DVN, SLB, HAL, WFT, SII
Coal: ACI, CNX
Oil Shipping: DRYS, EXM, ATW
Metals/Mining: ANR (but earnings are Monday), WLT
Chemicals: AGU, CF
(Steel: AKS, NUE, X, CLF, MTL, RIO)
(Copper: FCX, PCU)
(Railroads: CSX, UNP, BNI)
Materials/Construction/Manufacturing: PH, CAT, BUCY, JOYG, (CMI, FLR, EMR, ITT, DOV)
Tech: ADBE, ADSK, RIMM, (AAPL, GOOG, VMW, BIDU), also some Chips NVDA, (KLAC, SNDK, CY)
Some Financials: GS, (AXP, MA, MER, ICE, NYX, LNC, ALL, AOC)
Some Retail: KSS, COH, (COST, WMT)
Some Aerospace/Defense: (BA, GR)
Note: BG, FLS, (IVGN, CHRW, GILD)
BEARISH SECTORS/GROUPS AND STOCKS:
Engineering/Construction: CBI, MDR, VMC
Some Services: DST
(Some Cyclicals: WHR, MMM)
Note: CL, ENR, MBT, ROK, MRK, OI, ZMH, AGN, ISRG (perfect Bear Flag so far)
Also note: Gold stocks have earnings this week, so lay off the sector for now. In addition, some Energy stocks look poised for lower highs: ESV, NOV, MUR. One last note on Chemical stocks, POT looks very poised to make a lower high, and MOS looks like it's in a Bear Flag. So watch those Chemical stocks, they may be headed towards consolidation sooner than any other Commodity or Energy stocks.
The market looks like it might run out of gas on Monday. Don't look for much more in the short-term swing from Tech, Retail, and Financials. Energy and Commodity stocks may bump up another day or two, but don't be shy about locking down partial profits in those areas late Monday or early Tuesday. Energy and Commodity stocks may continue up for several days, and may even be the catalyst for the market to pull back a bit short-term. By far, the strongest bouncers right now are in Energy, Coal, and especially Energy Shipping (Water Transportation).
I am still holding part of PH, all of CAT, and a half position in GS and IBM. But those areas could get liquidated Monday. I am loaded in Energy/Coal (CHK, CNX, DVN, RIG, SLB, and SWN) and putting orders in on Energy Shipping (EXM). I have already locked some big partial profits in Energy/Coal, so I'm in great shape even if they roll over a little sooner rather than later. I am also doing a little play on AGU (Chemicals), but it is very likely to be only a 1-2 day play.
As always, we shall see what tomorrow brings.....
Dow: IT Bullish and ST Bullish. The Dow tested a resistance area of 13,100-13,150 on Friday. It may try to re-test the 13,100 area on Monday based on a Bull Flag bounce on the intra-day charts. But watch closely, because we are getting close to a potential short-term reversal in both price and time.
SPX: IT Bullish and ST Bullish. The SPX tested the low end of a resistance zone between 1,420-1,435 on Friday. It may have some room to push a little further into the zone Monday based on a Bull Flag bounce intra-day. But watch closely, because we are getting close to a potential short-term reversal in both price and time.
Naz: IT Bullish and ST Bullish. The Naz may be reacting to the round number of 2,500, since it hit 2,499.14 on Friday and pulled back. If the Naz has a more extreme move in it short-term, it may try to go and test resistance around 2,535-2,550. But like the Dow and the SPX, it could be getting close to a short-term reversal Monday.
We have a light week of Economic Reports, and Big Name Earnings are starting to taper off. There are still a lot of earnings to report this week, but we are shaping up to have more of a "Technical" move type of week rather than a "News" move type of week. It looks like the markets could still move up a bit on Monday, perhaps even Tuesday. If the indexes do roll over, look for Tech, Financials, Retail, and a few other areas to lead the pullback. At the same time, Energy and Commodity stocks may continue their bounce. In fact, a move up in Energy and Commodities could very well be the short-term catalyst for a short-term drop in Tech, Retail, and Financials. The Naz may roll over tomorrow on YHOO selling after MSFT pulled its offer to buy the company over the weekend. It looks like a lot of turmoil in Yahoo land as the CEO tries to convince shareholders the company is worth more without MSFT. Guess what, the shareholders are gonna let him know what they think of the value of the company pretty quick. Look for YHOO to lose billions of dollars in market cap tomorrow, and look for the CEO to eventually lose his job.....
BULLISH SECTORS/GROUPS AND STOCKS:
Energy: MRO, NE, RIG, OXY, NBR, PDE, HES, SWN, CHK, DVN, SLB, HAL, WFT, SII
Coal: ACI, CNX
Oil Shipping: DRYS, EXM, ATW
Metals/Mining: ANR (but earnings are Monday), WLT
Chemicals: AGU, CF
(Steel: AKS, NUE, X, CLF, MTL, RIO)
(Copper: FCX, PCU)
(Railroads: CSX, UNP, BNI)
Materials/Construction/Manufacturing: PH, CAT, BUCY, JOYG, (CMI, FLR, EMR, ITT, DOV)
Tech: ADBE, ADSK, RIMM, (AAPL, GOOG, VMW, BIDU), also some Chips NVDA, (KLAC, SNDK, CY)
Some Financials: GS, (AXP, MA, MER, ICE, NYX, LNC, ALL, AOC)
Some Retail: KSS, COH, (COST, WMT)
Some Aerospace/Defense: (BA, GR)
Note: BG, FLS, (IVGN, CHRW, GILD)
BEARISH SECTORS/GROUPS AND STOCKS:
Engineering/Construction: CBI, MDR, VMC
Some Services: DST
(Some Cyclicals: WHR, MMM)
Note: CL, ENR, MBT, ROK, MRK, OI, ZMH, AGN, ISRG (perfect Bear Flag so far)
Also note: Gold stocks have earnings this week, so lay off the sector for now. In addition, some Energy stocks look poised for lower highs: ESV, NOV, MUR. One last note on Chemical stocks, POT looks very poised to make a lower high, and MOS looks like it's in a Bear Flag. So watch those Chemical stocks, they may be headed towards consolidation sooner than any other Commodity or Energy stocks.
The market looks like it might run out of gas on Monday. Don't look for much more in the short-term swing from Tech, Retail, and Financials. Energy and Commodity stocks may bump up another day or two, but don't be shy about locking down partial profits in those areas late Monday or early Tuesday. Energy and Commodity stocks may continue up for several days, and may even be the catalyst for the market to pull back a bit short-term. By far, the strongest bouncers right now are in Energy, Coal, and especially Energy Shipping (Water Transportation).
I am still holding part of PH, all of CAT, and a half position in GS and IBM. But those areas could get liquidated Monday. I am loaded in Energy/Coal (CHK, CNX, DVN, RIG, SLB, and SWN) and putting orders in on Energy Shipping (EXM). I have already locked some big partial profits in Energy/Coal, so I'm in great shape even if they roll over a little sooner rather than later. I am also doing a little play on AGU (Chemicals), but it is very likely to be only a 1-2 day play.
As always, we shall see what tomorrow brings.....
Friday, May 2, 2008
Mixed Day Following Decent Jobs Report
The Employment Report numbers reported in better than expected results, which is giving the stock market a solid boost before the open. The unemployment rate dropped to 5.0% from 5.1%, and beat the expectations for a rise to 5.2%. Non-Farm Payrolls fell to 20k from 80k, and beat the expectations for a loss of 75k jobs
In addition, the Fed announced it is increasing its Term Auction Facility to $150 billion from $100 billion. The Fed is increasing its swap lines to the Swiss National Bank from $6 billion to $12 billion, increasing the line to the European Central Bank from $20 billion to $50 billion, and expanding its TSLF to include AAA asset-backed securities. Based on the timing of the announcement with the Jobs Report, it looks like the Fed is trying to make sure the current rally sticks.
Look for more movement in Financials and Tech, and of course movement in most of the other sectors. Keep an eye on Big Tech, perhaps IBM is ready to move. Tech stocks may have 1-2 more days in the current swing, especially those that aren't over-extended. Financials could also run for another couple of trading days. We shall see.....
12:40 pm MT: I sold all out on ANR at this 60m swing high intra-day. I made 21% return on the trade, which I entered yesterday. I took a little out on CNX for a 48% return since yesterday, and I'm still holding most of it. I sold half my PH just now for a 35% return.
1:00 pm MT: I sold all of my MS calls for a small 15 cent profit. It's probably just me, but MS looks a little too squishy. It may still swing up some more, but I'm cutting it loose anyway. Earlier in the day I sold the rest of my ADBE calls and finished the trade, which ended up as a 43% return. ADBE looks like it has a little more gas in the tank, so it's probably ok to ride a little through the weekend.
1:20 pm MT: The SPX is at a critical point intra-day today. It is bouncing in a Bull Flag on the 60m charts. It would be better for Monday if it can close a little stronger than it is today. We had a gap and fade on the markets today (although Commodities and Energy are strong and bouncing). The only positive on the gap and fade is that is was looking like a decent Bull Flag on the 60m charts, so it would be nice to see it bounce a little into the close.
2:30 pm MT: The good news is the Bull Flags on the 60m charts of the Dow, SPX, and Naz all bounced before the close. Tech is getting tired on the short term, which was to be expected. Financials were a bit disappointing to me today, I wanted more follow-through, and that, more than any other factor, probably kept a lid on the market. Energy and Commodity stocks did their part by bouncing. Some areas were a little weaker, some a little stronger, but all and all a good day for those sectors and groups.
It's late, after a long trading day and work day. So I will talk more about next week in tomorrow's Watchlist Saturday post. I will also give a tally of my positions, and all the stocks with confirmed buy signals.
In addition, the Fed announced it is increasing its Term Auction Facility to $150 billion from $100 billion. The Fed is increasing its swap lines to the Swiss National Bank from $6 billion to $12 billion, increasing the line to the European Central Bank from $20 billion to $50 billion, and expanding its TSLF to include AAA asset-backed securities. Based on the timing of the announcement with the Jobs Report, it looks like the Fed is trying to make sure the current rally sticks.
Look for more movement in Financials and Tech, and of course movement in most of the other sectors. Keep an eye on Big Tech, perhaps IBM is ready to move. Tech stocks may have 1-2 more days in the current swing, especially those that aren't over-extended. Financials could also run for another couple of trading days. We shall see.....
12:40 pm MT: I sold all out on ANR at this 60m swing high intra-day. I made 21% return on the trade, which I entered yesterday. I took a little out on CNX for a 48% return since yesterday, and I'm still holding most of it. I sold half my PH just now for a 35% return.
1:00 pm MT: I sold all of my MS calls for a small 15 cent profit. It's probably just me, but MS looks a little too squishy. It may still swing up some more, but I'm cutting it loose anyway. Earlier in the day I sold the rest of my ADBE calls and finished the trade, which ended up as a 43% return. ADBE looks like it has a little more gas in the tank, so it's probably ok to ride a little through the weekend.
1:20 pm MT: The SPX is at a critical point intra-day today. It is bouncing in a Bull Flag on the 60m charts. It would be better for Monday if it can close a little stronger than it is today. We had a gap and fade on the markets today (although Commodities and Energy are strong and bouncing). The only positive on the gap and fade is that is was looking like a decent Bull Flag on the 60m charts, so it would be nice to see it bounce a little into the close.
2:30 pm MT: The good news is the Bull Flags on the 60m charts of the Dow, SPX, and Naz all bounced before the close. Tech is getting tired on the short term, which was to be expected. Financials were a bit disappointing to me today, I wanted more follow-through, and that, more than any other factor, probably kept a lid on the market. Energy and Commodity stocks did their part by bouncing. Some areas were a little weaker, some a little stronger, but all and all a good day for those sectors and groups.
It's late, after a long trading day and work day. So I will talk more about next week in tomorrow's Watchlist Saturday post. I will also give a tally of my positions, and all the stocks with confirmed buy signals.
Thursday, May 1, 2008
Market Tips Bullish
7:15 pm MT: The economic numbers weren't spectacular, and some of them missed expectations, but the ISM beat expectations slightly, and the market rallied. The rally was being pushed by Tech and Financials. About mid-day traders decided that Commodity and Energy stocks were oversold and started buying in those areas. The result was a continuation of the intra-day market rally. Then the market closed strong, which is interesting because Big Money knows very well that the Jobs Report is first thing in the morning. Was Big Money indicating that they believe that the numbers will come in better than expected? Probably so, especially since the estimates are pretty low. It may not be that hard to beat the estimates of -70k on the Non-Farm Payrolls.
The market continues to push into Intermediate Term Bullishness, although it's more of an easing into bullishness, and not a rocket blast into bullishness. Nevertheless, the market tipped towards bullish. I wrote at length how important today and tomorrow were going to be for the near-term outlook in the market, and so far, that has been exactly correct. Now, I am leaning more towards my IT Bullish strategies instead of my IT Choppy strategies.
Energy, Metals/Mining, and Coal in the Commodities/Energy sectors were strong bouncers from short-term oversold conditions. There were a lot of hammers out there today in those areas. I added to my SWN, and picked up calls on RIG, DVN, ANR, and CNX. ANR will be a Friday exit because it has earnings on Monday. I don't like Chemicals, Steel, and Copper as much just yet. But I will look at MOS and maybe a Steel stock tomorrow if it plays out right. I also wanted some Financials, so I picked up calls on MS and GS, although AXP, MER, and several other looked good. PH bounced, and CAT is holding the consolidation, so I am comfortable with my Machinery/Manufacturing trades. I took most of my profits on ADBE for an average of about 39% profit so far. I also took profits on RIMM for about a 12% gain. I may look at IBM tomorrow if I want to have a little more tech, most likely if we get a positive number on the Non-Farm Payrolls. There were a lot of hammers in Energy and Commodities, so consult your Bullish watchlist from those areas for potential buy signals tomorrow. And keep an eye on Financials, some Tech, some Retail, and some Cyclicals (Machinery/Manufacturing etc.).
The market will be looking very closely at the Jobs Report tomorrow. If we get a -30k to -50k then we will probably continue the bounce, but it may only last Friday and possibly Monday. If we get a +10k or greater, then we might bounce all the way to Tuesday, maybe Wednesday. We would also probably move strongly enough that the next Flag/Pullback would present the best swing trade buying opportunity since the Bear Pullback in January.
If we get a bad number, lets say -80k or greater, then it could get very, very dicey tomorrow.
The market continues to push into Intermediate Term Bullishness, although it's more of an easing into bullishness, and not a rocket blast into bullishness. Nevertheless, the market tipped towards bullish. I wrote at length how important today and tomorrow were going to be for the near-term outlook in the market, and so far, that has been exactly correct. Now, I am leaning more towards my IT Bullish strategies instead of my IT Choppy strategies.
Energy, Metals/Mining, and Coal in the Commodities/Energy sectors were strong bouncers from short-term oversold conditions. There were a lot of hammers out there today in those areas. I added to my SWN, and picked up calls on RIG, DVN, ANR, and CNX. ANR will be a Friday exit because it has earnings on Monday. I don't like Chemicals, Steel, and Copper as much just yet. But I will look at MOS and maybe a Steel stock tomorrow if it plays out right. I also wanted some Financials, so I picked up calls on MS and GS, although AXP, MER, and several other looked good. PH bounced, and CAT is holding the consolidation, so I am comfortable with my Machinery/Manufacturing trades. I took most of my profits on ADBE for an average of about 39% profit so far. I also took profits on RIMM for about a 12% gain. I may look at IBM tomorrow if I want to have a little more tech, most likely if we get a positive number on the Non-Farm Payrolls. There were a lot of hammers in Energy and Commodities, so consult your Bullish watchlist from those areas for potential buy signals tomorrow. And keep an eye on Financials, some Tech, some Retail, and some Cyclicals (Machinery/Manufacturing etc.).
The market will be looking very closely at the Jobs Report tomorrow. If we get a -30k to -50k then we will probably continue the bounce, but it may only last Friday and possibly Monday. If we get a +10k or greater, then we might bounce all the way to Tuesday, maybe Wednesday. We would also probably move strongly enough that the next Flag/Pullback would present the best swing trade buying opportunity since the Bear Pullback in January.
If we get a bad number, lets say -80k or greater, then it could get very, very dicey tomorrow.
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