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4:03 PM
Whew. Nasty close. My portfolio held up fairly well. More about this finish tonight. Remember my nasty bear candles last night? They were right again.
2:54 PM
Created limit sell GTC on 1/2 position DAN @ 7.44 (yesterday’s high) (+9.4%)
2:28 PM
Limit order for DAN @ 6.80 (pivot) filled
11:59 AM
I’m pretty much in a holding pattern until after 2:00 PM. Suspect market will make a move then.
11:16 AM
Missed my entry into DAN. Reached a low of 6.85 around 10:30 AM. It’s up to 7.01 now.
11:04 AM
Out of PIR @ 3.70, -7%. Not working On balance volume continues down.
10:52 AM
I’m going to be honest, my Bearish candles last night were right on – markets are down. Let’s hope the second part of my premonition, Helicopter Ben to the rescue, plays out.
10:43 AM
10:39 AM
Market selling off.
9:48 AM
I’m holding PIR for now for several reasons: it is nowhere near its support, and today looks to be a very bullish day, and maybe it will ride the carpet. The candle pattern is a shooting star, which is a near random bearish candle, but I believe the power of the High and Tight Flag will overpower that weak candle signal. If it doesn’t move today, I’m out. Avg cost is 3.98
9:36 AM
Sold KERX @ 3.24, +49.3%
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9:22 AM
I’m thinking today is going to be Pharma day. All my Pharmaceuticals are up.
9:18 AM
Lowering sell target on EXXI to 1.92 (candle forecast – .01) (+46.6%)
9:00 AM
KERX up 47.5 % since I bought it a couple of days ago.
8:56 AM
Lowered limit to 6.80 on DAN, will eyeball it and adjust if necessary.
8:54 AM
Putting in a limit buy day order for DAN @ 6.85. Action is up on oversold stochastics, so I don’t think I’ll hook it, but I’ll give it a shot.
8:41 AM
The power of the press. I’m up over one grand on KERX alone on the wake of their press conference last night. People don’t hold analyst days to pass out bad news.
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7:58 AM
Futures have turned slightly up this AM. Maybe my negative premonitions last night won’t play out, I am a bull at heart. I honestly believe we are going to have a slam dunk fourth quarter. We await the FOMC today, expectations are high, so Ben please don’t disappoint — you are a fellow South Carolinian, and a true Sandlapper – I trust you.
Today first thing I’m keeping my eyes on PIR, disappointing yesterday, so how it starts out first 30 minutes will be critical. The pattern has only failed about 2 or 3 times since I have been using it in early August.
I’ll also perhaps play Dan (see below). Other than that, looking to further trim some positions off the table that have some good gains. Sell into strength, buy on weakness.
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Tuesday Evening:
I’m confused. The market was up today on news of a dollar falling to a one year low, diffusing the safe haven mavens. To boot, the NYSE McClellan Oscillator has made a head fake and points North again, away from that dreaded centerline (see chart below). The NASDAQ Oscillator looks equally optimistic.
Leading economic indicators came in Monday in line. Markets in Asia are up as I write.
But something’s not right — my market candle scans are scarily bearish. Maybe I can take solace in the fact that these candles are very short term in their predictive nature.
Futures are pointing down for an open tomorrow. It’s early, so maybe they will turn in the morning, and we’ll be on our way up again.
Maybe there is a trepidation, and uneasiness before the FOMC meeting tomorrow. But maybe we shouldn’t worry about that, Ben’s got everything under control.
Maybe I’m just speculating, and perhaps I just need to stick to my daily charts.
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Here’s a play I’m considering. Dana Holding is an auto parts supplier that just announced a $27 million equity offering that will be used, among other things to retire debt. It’s chart looks nice. As you will see, stock took a hit on Monday but bounced back today with a long candle and a high and tight flag. As a former financial analyst, my first concern would be stock dilution with the equity offering. On the other hand the retirement of debt no doubt is a plus for both the static ratios as well as the operating ratios with the reduction in debt servicing.
But these scenarios really don’t matter if you play this as a day or several day swing play. Those factors will not come into play for a while, the big candle burst attested to today. Could be a good short term (maybe day) play from pivot to Resistance — 14.3 %.
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3:43 PM
I’m down on this PIR about 3%. Unless the bottom falls out in the next 15 minutes, I’m holding over night, since this is obviously one of those fade days from a gap up at open. Historically, the morning following should be a surge up early. Need to note that for the Day, the stock is very well up, which is positive.
1:42 PM
Added more PIR @ 3.86
1:11 PM
GMO looks like it is going to breakout of the upper channel of its flag. If so, it could make a monster move. I have a limit sell @ 3.81
12:42 PM
Put in a limit buy for some GTN to try to snag at 2.65
12:42 PM
PIR just sitting on 3.98. Hope for a late rally this afternoon.
11:14 AM
Sold ABK @ 1.93, +1.5 % (I bungled order and got into this too high)
11:08 AM
Sold ANH @ 8.23, +8.7%
10:26 AM
PIR appears to be holding new support (Old R1) at around 4.00; this is bullish, as overall mood on stock is bullish.
10:20 AM
Set limit sell GTC 1/2 position PIR @ 4.27, Candle 1 forecast (+6%)
9:47 AM
Bought PIR @ 4.03. This is way higher than I wanted to buy, But it has already cleared resistance at 4.01 and looks very bullish today.
9:32 AM
Sold 1/2 KERX @ 2.45, +6.5 %
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8:27 AM
Dow Futures are up 64 points, and other US futures and world markets in general up across the board.
Today I’m looking at two plays, PIR as a day/short term swing and LCC as a swing.
PIR has recently surprised the street positively, and shows improving margins ( Analyst Picks and Pans: Oracle, Pier 1, Immunogen ) . It has good day trade profit potential, with prior day High to Pivot of 8.65% and Candle 1 forecast to Pivot of 21.77%) .
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LCC is an airline, and looks better as a swing trade since there is relatively short candle length. I can find nothing related to its recent rise ( What Lifted US Airways Shares? ) . Airlines have never excited me, but macro trends may favor this as a good short term swing.
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There has been a lot made about the inverse relationship between oil and airlines, and looking at the chart between WTIC Crude and LCC seems to bear that out:
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As you can see, WTIC Crude shows potential of breaking to the downside while LCC shows a sharp uptrend. The candle forecast for USO, a proxy for oil, is for a 69 % bearish reversal. Candle 1 forecast to Pivot is 14.7 % , so it has good potential as a swing trade.
But I’m less enthused about this, since I think we are nearing a short term pull back n the market and I do not want to get caught up in any long trades if I can avoid it.
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10:57 PM Monday Evening:
Today transpired pretty much as I had anticipated — a mildly down market on low volume. As I write Monday evening, the Hang Seng is up and US Futures point upward tomorrow.
Looking at tonight’s candle scans of the market, I don’t see anything conclusive in either bull or bear direction — there is a very large number of bearish haramis, but these actually statistically act as a mild bull indicator, opposite from their theoretical prescription. I don’t see anything dramatic happening on Tuesday, sort of a sideways action, perhaps, into the FOMC statements on Wednesday.
If you really want to get a good synopsis of the world marketplace this week, I would suggest you please read Bill Cara’s Week in Review #38, 2009 . This guy does as good of a job as any I’ve seen.
I’ve got two high and tight flag (HTF) plays for tomorrow, and I’ll elaborate in the morning — I’m already going through withdrawal from the missed HTF opportunity today, which would have been another great score.
My portfolio did great again today, even on a down day. My high and tight plays appear to perform well even on down days. I scooped over 44 % on my MERC HTF play this morning.
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4:35 PM
More sandbagging by the administration on employment. Watch those numbers on Thursday.
3:49 PM
Sold PRXI @ .99, +12.5 %
1:55 PM
Created sell order GTC for 1/2 position of KERX @ 2.43 (+12%). There is a major media event tomorrow. Will hold balance.
11:58 AM
KERX is taking its time, but is setting up for a breakout. I have a target set at 3.06, which may be a bit too high, but will re-examine.
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11:41 AM
NCT now at 3.27 and I sold at 2.55. Kick me kick me kick me!
11:11 AM
Cancelling GTN order. Will look for another setup opportunity.
10:51 AM
Sold CVM @ 1.99, +41.1%
10:23 AM
Raised target sell on CVM to 1.97. This sucker’s exploding.
10:17 AM
EGMI is pressing on the upper bounds of a nice flag that it has formed. I have a target sell at 1.79, may revise upwards.
10:11 AM
Getting really sick of oil stocks. Going to let USO get to break even and then sell.
9:52 AM
Target sell on SOMX, 3.26, +22%
9:49 AM
Target sell on CVM, 1.91 +35.5%
Target sell on KERX, 3.06, + 41%
9:43 AM
See this? This is what you can do with a high and tight flag if you get in at the right time:
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9:38 AM
missed GTN, sucker’s gone
9:35 AM
sold balance MERC @ $4.03, +44.4%
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9:29 AM
holy shit, MERC up .80 pre-market!
9:26 AM
Revising sell limits on holdings.
Playing it light today, little buying today.
I do have an order in for GTN @ 2.12, support. Will revise upward if I see a bottom early this AM. This is a day/ swing trade.
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Friday night’s candles told me we would open down this morning, and global markets and US futures down now bear out that forecast. This morning we have at 10 AM leading indicators, later this week we have FOMC meeting minutes, jobless claims, durable goods, consumer sentiment, and home sales. Any and all could weigh on the market if they have negative implications in two areas: economic growth and inflation. I don’t have a crystal ball so I won’t try to predict any. I will offer an observation: I noticed President Obama on television Sunday stating that the jobs picture may take longer than originally thought, so I see that as a sandbag on the jobless claims (and perhaps the leading indicators). If you want to get clues on these indicators, just watch the statements and actions of our officials, Obama, Geithner, and Bernanke on the days prior to the release of these indicators, and you may get a clue.
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The market has recently experienced a good run, and there has been a good deal of speculative discussion about a market pullback.
Indeed, Bullish Percent Indices as of 9/18/09 overwhelmingly point toward an “overbought” situation in the market, with almost all sectors reading above 70 except for the Telecom Sector.
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However, the Bullish Percent Indices may reflect only a short term situation, and not necessarily the longer term market direction. In addition, if the market is experiencing a major breakout, then overbought readings should remain overbought for some time as the market momentum continues to push upward. As a result, I always look twice when I see overbought/oversold market indicators .
It appears to me that the overall market theme remains bullish for now (see Breadth Remains Bullish, by Arthur Hill, and Bull Market Rules Still Apply, by Carl Swenlin).
Shorter term, the market might possibly be in for a small, short correction.
A good way to get a read on the market direction is to look at the relationship between the Volatility Index (VIX) and the S&P 500 Index. You can see below that there is almost a direct inverse relationship between the VIX and the S&P 500 Index. Furthermore, the VIX has recently started to tail upwards as if it has made a short term bottom:
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A further look at the VIX in the following chart shows that the VIX is in the midst of forming a longer term Rising Wedge pattern. The VIX is currently reversing off the bottom channel of this rising wedge, with the TRIX and MACD momentum indicators confirming this move. The near term potential I see in this upward VIX reversal is for a short term move to 20 Day Moving Average and then a pullback from this short term resistance line.
This suggests a mild correction of a week or so in the S&P 500 in the very near term future.
Longer term implications for the markets are positive: the Rising Wedge pattern statistically breaks downward 69% of the time. A downward breakout in this pattern has positive long term implications for the S&P 500 and the markets in general, and suggest a subdued VIX.
The subjective odds in my mind today favor this bullish scenario for the longer term.
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To summarize, I see a short term run up in the VIX, followed by a resumption to the scenario of a breakdown in a rising wedge pattern for further decline and suppression of the VIX.
As a short term precaution, I recently bought the VXX, a good proxy for the VIX, as a hedge in my portfolio should the markets experience a pullback. I would look to sell it in the 56 range or at the 20 day moving average. I own it now for the same reason I own gold (GLD) – it’s there for rainy days.
The P&F chart below shows a recent triple bottom breakdown on September10 for VXX — I’m thinking it s going to rebound off this bottom and reach to around 56.16, the first level of resistance on the P&F chart and the 20 day moving average on the following daily chart.
Another scenario would be for VXX to have a more tepid resurgence and a peak out at around 53. This would suggest an even shorter and milder pullback in the market, and an even more bullish scenario for the overall markets:
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4:05 PM
NCT ! Do you see that it’s up to 3.05? I sold at 2.55! What I gave up! Oh well, 8.97% for a few hours work not bad anyway. I need to go with my analyses and quit selling out too early.
3:59 PM
Sold remaining DRYS @ 7.26, +9.3%. Glad I got this monkey off my back. But I’m not happy about Ameritrade, they didn’t fill this order at 7.98 and I could have had a huge win.
3:23 PM
Created closing order GTC for remaining 1/2 position CVM @ 1.79, +27%
2:58 PM
Sold 1/2 posiiton of CVM @ 1.60, +13.5%
1:04 PM
Remainder of order to sell NCT @ 2.55 filled
12:34 PM
Partial filled order to sell NCT @ 2.55 +8.97 %
10:17 AM
Created closing order (day) for NCT @ 2.67 (Yesterday’s high – .01) +14.1 %
10:10 AM
Created closing order GTC of 1/2 position SOMX @ 3.07, +15 %
9:59 AM
Sold 1/2 position SOMX @ 2.89, +8.2%
9:51 AM
Sold RPRX @ 1.16, +6.4%
9:45 AM
in NCT @ 2.34
9:35 AM
Creating closing order GTC for EGMI @ 1.79 (+11.9 %)
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9:25 AM
Asian markets now down.
8:50 AM
GRO is a dog I have had for about a month. It’s now showing signs of life, I see a 70% probability of it reaching 2.64. Setting a standing sell order at 2.62, +24.8 %.
8:41 AM
Most recent Candle Forecast for DRYS – 81 % probability of reaching 8.34; I’m putting in a standing sell order at 8.29 (+24.8 %) and gambling a bit on this. This stock can print some quick long candles, so I may get it on a spike.
Going to go lite on new stocks today, being options quadruple witching day. I have 2 day prospects, NCT and BEE, I may jump in on them but then again I may not. Will be an impulsive thing.
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8:06 AM
Futures have turned up this AM, Asian markets finished up also. Looks like it’s going to be an interesting day, perhaps abounce back from yesterday.
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Thursday Night:
After saying yesterday that I could find nothing but bull in Thursday and Friday, the market throws a curve ball to me with a down day. A quick spike at 10 AM set the tone for a solid downtrend all day. The Dow rested at the bottom of a triangle that formed during the day, suggesting some more consolidation Friday AM may be necessary before an upward breakout to finish out Options Friday. And as I write, I see that futures are down as well as Asian markets. Hard to argue against the chart pattern. Saw a ton of Bearish Engulfing reversal patterns in the scans tonight, but they don’t carry a whole lot of weight coming off the good run-up we’ve had – just not a strong enough pattern. So I am optimistic we will finish the day out positive.
As for me, I had an unusually good day today, selling a few stocks into strength, and watching several others have big gains. My CVM broke even, and looks healthy. KERX closed down to 2.12, a nickel below my cost at 2.17, but the flag forming I believe will hold, and it may break even tomorrow.
I had an order placed to sell DRYS at 7.98, and it hit, but did not execute at Ameritrade. Am I the only one having problems with these folks? Now it’s down to 7.40 or so, I hope to dispose of early AM tomorrow.
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1:11 PM
DRYS is a Ro -l ler- coast- ter!
12:30 PM
Out of PSUN @ 5.56, +7.8%
12:02 PM
Sold remaining 1/2 position KFN @ 4.30, +13.2%
11:41 AM
Limit order to sell GRO GTC @ 2.35 (+11.9%)
11:28 AM
Lowered sell limit on remaining 1/2 KFN to 4.30 (+13.2%)
10:17 AM
bought more KERX @ 2.12, Avg Cost 2.17
9:58 AM
Tried to sell DRYS but order would not take by Ameritrade. Have standing limit in to sell at 7.98
9:48 AM
sold ADLS @.32, -11%
9:44 AM
Bought KERX @ 2.21
9:38 AM
CVM cooking, may be able to break even on ADLS. DRYS going bananas. Looking to place day trade order fro KERX at first pullback.
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8:32 AM
DRYS is up big pre-market to 7.75. Raising sell limit from 7.71 to 8.50, and I’ll just eyeball a sell target. I have no idea how high this is going.
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Wednesday Night:
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I’ve looked at the market scans, the oscillators, and I have found nothing to suggest anything other than continued bull activity tomorrow on into Friday. And yes, as I write, Futures and Markets are up all over the world.
The Best Performing Patterns (see above in “Reading Assignments“) has more high and tight flags and other generally bullish patterns than I think I’ve ever seen. It’s so good I’m starting to get nervous. I remember feeling this giddy in back in May and I then got caught with a bunch of long positions which subsequently tanked in June.
I did two things wrong then. I did not take profits along the way, and after stocks fell I panicked and sold many of these positions at precisely the wrong time – at their low point.
So, I promise, that won’t happen again. I looked over my portfolio tonight, and I have a number of positions sitting fat. So, you’ll probably see me selling a good bit tomorrow, while everyone else is talking about all their great picks tomorrow.
Not to say I won’t play a pick or two. I’ll look over the top performing patterns above and have a couple ready to go.
My picks today have played out as follows: one looks like a huge potential winner, and one a huge loser.
I’ll dump ADLS for about a 13 % loss. It was a bad pick, and one of the very few (maybe 2 or 3 out of 20 to 30) High and Tight Flags I’ve picked that looks like a fail. So, I’ll toss ADLS into the fail bucket and look at it later to figure out why it failed, and why I picked it.
The other, CVM, is up about 5 % during the after hours, and looks like it will play out the way a High and Tight Flag should on a rebound day after a gap fade day. CVM still has a 62 % chance of reaching 2.43 — today it printed a long day black candle which is a continuation signal. I can visualize a good flag forming on this pattern.
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Bull on the Run?
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Dabbler’s totally unofficial and unscientific bull/bear market meter suggests it may be. Blue trend below is blog posts mentioning the term “Bull Market”, and it is breaking out to the upside of a descending wedge. Meanwhile posts containing the terms “Market Volatility” and “Bear Market” are either flat or declining.
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4:02 PM
Not such a great day with my picks. Both down big today. Holding overnight. If I can sell ADLS at break-even, a victory there (OTC stocks suck). Hope to get a good bounce back with CVM tomorrow. With High and Tight flags, a gap up day often results in a fade the rest of the day, and then a strong day that follows. Hope that’s the case here. DRYS is doing good, should sell balance tomorrow at 7.71. Overall, portfolio still very healthy.
1:16 PM
Added more CVM @ 1.31
12:12 PM
Limit sell GTC on CVM @ 1.80
10:54 AM
Down big in ADLS. This one giving me acid reflux.
10:48 AM
in CVM @ 1.46
10:29 AM
Placed limit sell remaining 1/2 position GTC on DRYS @ 7.71 ( C2 -.02)
10:19 AM
Sold 1/2 position DRYS @ 7.48, +12.7%
10:02 AM
Limit sell 1/2 position DRYS @ 7.48
9:58 AM
Placed limit sell good for day ADLS @ .43 (R1 -.01)
9:49 AM
Added more ADLS @ .34
9:37 AM
In ADLS @ .37
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9.25 AM
Raised sell limit on 1/2 GMO from 3.63 to 3.75
9:14 AM
CVM up .30 Pre-market. Going to be hard to get this at a bargain. Will try to catch on a dip. ADLS a better prospect and clearer to pivot, although that is up pre-market also.
8:59 AM
My Candles are saying DRYS has a 72 % probability of reaching 7.74. I may play safe and sell 1/2 before 7.50 and let the rest ride up.
8:06 AM
Futures turned up overnight, and markets are up across the world. Options expiration week. Hump day. Fasten your seat belts.
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Today I am trying my best to play both prospects I see as CVM and ADLS. Intend only as a day or very short term trade, but may keep. Both these stocks are tied to Government impetus — CVM (H1N1), and ADLS, (bioterrorism). Press and herd mentality will make them plays for some time to come.
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Tuesday Night:
My candle scans tonight didn’t give me any definitive clue on the market direction to start the morning out, about 50/50. So I wouldn’t be surprised to see futures somewhere near flat in the morning.
However, I did notice something that caught my eye. Looking at the Point & Figure Scans, I noticed a huge number of mutual funds which printed a Point and Figure Bearish Reversal. If you are unfamiliar with Point and Figure Charts, it would greatly benefit you to learn. Stockcharts.com has a chart school which helps you to learn this valuable tool.
I often use P&F charts as the last source to verify support and resistance on a chart, as well as pinpoint key price levels in a stock’s history.
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Now what this is telling me is that Mutual Funds are starting to participate in the market rally. These are the primary investing vehicles of institutional investors such as 401K’s and Pension funds. To me (and I hope these numbers are not a fluke), this would be a good breadth indicator and may suggest this rally is for real and is catching up to the laggard funds.
There could be a lot of other factors behind this reversal also, such as the percentage of low performing assets (like cash) held by these funds may have declined, leading to better portfolio performance. I’m not sure, and I’m just speculating – but one thing is for sure, there is no way the above number can be negatively interpreted that I know of.
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Below are two High and Tight Flags I’ll be researching in the morning for Day/Swing trades.
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4:02 PM
Another Great day.
Wow . GMO finished out at 3.55, up 12.3 % since I bought on Friday. Looks like it may hit my target to sell 1/2 position at 3.63 tomorrow I hope. I’m going to change my name to the “High and Tight Bandit”.
Wished I could have gotten into HURN and EGT today, I set buys at pivot and they never hit it. I may go back to my old way and just buy at the lowest point in the first 30 minutes.
DRYS, is, well DRYS. Don’t try to figure it out. I still expect it to hit around 7.48, but just in case, I’m putting in a sell for 1/2 position tomorrow at 7.28. There is ever more option activity on the call side of DRYS, which is bullish (see below):
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3:04 PM
Update on VXX. I bought yesterday after seeing the pipe bottom which followed the falling windows pattern. It would have been nice if the second pipe was white, instead of red, which would have been a more bullish signal. Today, VXX is displaying a black spinning top, reflecting indecision. I expect a reversal shortly. How high it goes is questionable — it could reverse for a short pop, and then resume the prevailing downtrend (see the spinning top on the left and the temporary reversal of primary trend). However, I’m hoping that it reverses all the way to the beginning of the falling windows pattern, which would be a nice gain. Either way, I have a hedge play against the general market. In the chart below, I would set my intermediate sell target around 57 or so, which is the declining 20 day moving average (this is a resistance area). This would give me a nice little 10.6% gain.
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1:45 PM
Still have buy orders in for HURN and EGT. Looks like I missed the boat on both them, they are up good. Leaving orders in to see if I can snag on a dip.
10:36 AM
Placed limit sell on $PRXI @ 1.05 (C2 – .01) (+19.3%) GTC
10:15 AM
GMO now up 6.3 % at 3.36
10:10 AM
Sold 1/2 position EXXI @ 1.87 (+42.7 %). Setting limit sell for remaining 1/2 balance @ 2.49 (C2- .04) (+90%)
9:39 AM
Everything pretty much on auto-pilot. Limit buys and sells on almost everything. Watching DRYS.
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9:21 AM
Day Order for Day/Swing Trade HURN @ 20.95
9:17 AM
Day Order for Day Trade EGT @ Pivot .34
9:05 AM
DRYS is up to 7.27 pre-market, right below my initial sell point of 7.28. I’m holding out on selling, this will blow right through 7.50 at this rate.
8:27Am
This just in, Producer Price Index rises more than twice expected for August. Watch gold, perhaps the ramp up in prices last week were foreboding.
7:26 AM
Futures are very slightly down, Asian markets very slightly down, Europe/Africa markets for the most part slightly up overnight. Producer prices and Ben today. Nothing radical on the horizon.
I keep looking for some signs we are getting ready to have a surprise downturn, but I can’t find anything. I’m looking for Short ETF’s which may be bottoming and may be a contrarian indicator ( I wouldn’t put too much faith in these ETF’s as an indicator, I think they are hokie financial gimmicks anyway). I’m looking at the Oscillators, and see no turning point.
I did buy VXX yesterday, primarily because it had what appeared to be a pipe bottom and looks a dead ringer to rise. I realized afterwards that as the S&P VIX futures ETF, it is a beautiful hedge trade.
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Below are some High and Tight plays I’m looking at:
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Monday Evening:
Well, the candle scans are a flip flop of Friday night’s scan — Kind of reminds me of that old R & B song by Don Covay and the Goodtimers, “Seesaw“.
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As you can see, bullish patterns are overwhelming the bearish patterns. Told you not to get too upset over all those bearish engulfing patterns on Friday night. I’m thinking pretty bullish week, of course news (or politicians) can change all that, but given the fact that we have had some crappy news releases lately, this market keeps wanting to believe, so I’m inclined to believe the bulls will not be denied.
Let’s see what’s on the Economic Calendar for the rest of the week:
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Probably most watched this week will be the inflation indices, to see if there are any clues about future inflation direction and impetus. Helicopter Ben speaks tomorrow, so there could be a little boost in the AM from Ben. He never disappoints. And then, of course Friday is quadruple witching. Not really seeing anything that is going to derail the bull this week.
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4:10 PM
Another good day for me, despite the political sideshows. GMO (below) closed at 3.27, held support and is well within its flag. If ever there was an opportunity to break down, it was today.
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DRYS (below) finished very strong at 7.22, high of day. Like I said, this will probably hit 7.50, I need tonight to plan an exit strategy.
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And then today I bought VXX (below) – It has what appears to be a pipe bottom after a falling windows pattern. I expect good gain out of this, and I’m still playing with this theory. This is a live test of my theory I’m going to be back-testing.
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3.11 PM
Bought VXX @ 51.56
2:21 PM
DRYS
12:35 PM
Here is a vote of “no confidence” from Wall Street on President Obama’s Speach on Wall Street Reform.
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11:35 AM
AVII, a pharm I bought at 1.87, has formed a high and tight flag on the intraday. Setting limit sell at 2.27 (C1-.01) (+21.4%) and will sell balance at 2.36 (C2 -.01)
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11:22 AM
YRCW, another HTF from Friday (which I did not play), is up .58 to 4.24 today.
11:14 AM
Sure wished I had bought some more stocks today. But I just wanted to watch the action this AM. There’s opportunities every day.
11:09AM
Dow doing what I thought it might. Little blip at the open, fairly steady uptrend since. Setting up to be a bullish week, barring any surprises from our wonderful Political leaders.
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11:04 AM
Action on DRYS has been generally positive all morning. Thinking of taking 1/2 position off at 7.28, but still contemplating.
10:51 AM
Boom. There goes GMO 3.21 and climbing. Love high and tight flags.
10:27 AM
Created Limit sell on 1/2 position GMO @ 3.63 (C1-.01), GTC (+14.9%)
9:34 AM
GMO holding up well at 3.14
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9:25 AM
GMO is oversold here and momentum and TRIX turning up. I expect an uprun shortly.
9:15 AM
GMO is down to 3.08 pre-market. Support is 3.02, I’ll watch closely and hope support holds. If it drops below support to 3.01, I’ll Sell for 4.7 % loss. I won’t hold out in the negative environment today. PSUN I think will be a definite keeper. ARIA, a pharma I have held for a while, is up .30 a share to 2.96 pre-market. I don’t have a target sell as of now.
8:48 AM
Below is the planner I produced daily on High and Tight Flags. My posture today is hold, I don’t plan on playing any of these today (unless I see a screaming bargain I can’t refuse). Have been quietly taking profits last week. I don’t want to get caught out on a limb like I did in June, so I’m watching the size of my portfolio.
GMO which I bought on Friday will be watched closely. If it looks like a breakdown (which I doubt), I’ll sell. DRYS will be watched closely. I expect more runup in DRYS up through Friday.
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Sunday Night:
First, the bad news: I could have told you Friday night that markets are going to open lower Monday, as soon as I looked at the Candle Scans. Overwhelmingly Bearish engulfing, 79 % Reversal.
Now, the good news. These reversals really do not do well after an upward breakout, which is what we have had for the last week or so. So, we may just see a little blip on the screen Monday.
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Now for some more bad news. The tone of our international trade relations took a nasty turn when our President chose the route of trade tariffs on Chinese imported tires. China immediately threatened retaliation. Uncertainty like this is not what the market needs.
As an economist both educationally and past vocationally, I can unequivocally say there is nothing positive that could result from trade tariffs such as this. Trade wars result in restrictive international commerce. This is not what we needed coming out of the worst international recession in modern history. Furthermore, China (and perhaps other countries) will inevitably curtail their consumption of the already dwindling US Export base. Not good.
To complicate matters even more, the last I checked the numbers, China has purchased approximately one trillion US Dollars of our Treasuries and Agencies, essentially our National Debt. China is our Banker!
Now let me ask a question: if you borrowed money from your banker, say, $100,000, $500,000, or shoot, even $1,000,000, would you go to him and piss him off by threatening to yank your deposits out of his bank? What do you think the banker would do to you? Who has the leverage here?
What stupid boneheads do we have running our country?
Enough of that.
Now, let’s end with some good news. Quadruple witching week, which means we should see some real volume and price movement this week, particularly on Thursday and Friday. I’m hoping it will be positive price action, and my DRYS play is based on this premise, will sell it sometime this week.
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PIPE BOTTOMS:
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Charts below show the 10 Pipe Bottoms that kicked out on my PATTERNZ software on 9/11/09. When I trade, I look for patterns that have a high probability of success (low failure rate) and at the same time offer high profitability potential. As you can see below, out of all ten of the pipe bottom patterns (these are reversal patterns) that occurred on 8/31, only one did NOT show a high profit turnaround. Nine out of ten would have given a swing trader an excellent high profit trade.
The problem with this pattern in the PATTERNZ program is that it does not identify the pattern soon enough to benefit a trader – the stocks below had already had a good run-up before they showed up on my screen.
So I’m running some tests which may take a week or so so that I may be able to screen for pipe bottoms AS THEY OCCUR.
I’m noticing that in a lot of cases, falling window candle patterns occur before many of the pipe bottoms. What I am looking for is a SYSTEM by which I can monitor stocks on a daily basis to identify pipe bottoms no later than a day after they occur. If I can set up such a system, I can have another high probability trade pattern in my arsenal.
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