Day Trading – The Bullz And Bearz

Tying Up Some Loose Ends – The End Of March

March 31st, 2009

Allow Me To Introduce…Mr. Investor Fear

March 31st, 2009

Well, that mid-day rally was short lived. If you were looking at any intra-day chart – like the one I have posted below of the S&P – you would have noticed the huge area of overhead resistance at the gap from Monday morning – in green. Clearly, we rallied up to that area during the day and then a funny thing happened before the close. INVESTORS GOT SCARED. They sold off everything right before the close. Notice how steep the decline was right before the close.

Evidently traders are not willing to take the risk of holding stocks over-night for FEAR that something might go bad tomorrow morning. Of course this has played in our favor with member’s shorts. Granted, the markets closed the day up about 1%, but like I said this morning, it’s very normal to see some sort of retracement. Again, technical analysis and day trading is not rocket science. Once you learn and master some basic patterns, you will profit from these situations time and time again. My target for the S&P is still around 750 before we get another bullish bounce. I’ll be back later this evening for a New Trading Video.

G20 Summit Meeting Begins, Auto Industry Clock Ticking

March 31st, 2009

Good morning traders! As always, if you didn’t check out last night’s Trading Video I suggest you do that first thing this morning. On another note, the Affiliate Program that I started last week has been a huge hit. I already have 17 people who have earned Free Memberships in less than one week! I’ve tried to make it as profitable as possible and there are people who are absolutely taking advantage of it. Why not try it out right?

Now, getting back to the markets, the US futures are modestly higher this morning. My general feeling is that most of this is short coverings – similar to me closing half of my SPY puts yesterday. Yesterday the market dropped a bunch. It may need to rest, and perhaps it will continue up at a slower rate (shallower trendline). But what most investors don’t recognize is that other traders - including myself – still have some other shorts to ride down a little more. Although, a little upward movement is very healthy and actually gives anyone who missed the big fall a chance to get back into the action at better pricing.

Or of course a top could be in place. Some internals trading indicators suggest we are closer to a tradable top than bottom – or at the very least some overbought readings still need to be worked off before the next leg up can begin. The Put/Call hovered in the 0.70 – 0.75 area. It would have been unlikely to rally from that level, and as of now, more time is needed for it to rally and top out – i.e. we need more fear before the market can rally again.

Having said this, I have updated a couple of my stop levels on member’s shorts given how great yesterday was. I don’t want to give up everything we have gained thus far, but want to give these stocks room to run down. Below are the updated S&P support and resistance targets.

I’ve Been Waiting For This Day – 70% Profit On SPY Puts

March 30th, 2009

Closing Out Some SPY Puts At Great Profits

March 30th, 2009

Okay, haven’t I been saying this was going to happen for a week now? Guess all those ultra-bullz should have listened to my advice and multiple warning messages. Given the GM (now Government Motors not General Motors) news, I have close out half of my very large SPY put position from late last week at amazing profits. A chart of the complete trade is below in Green. As for our other shorts, they are all doing amazing today!

Getting Prepared For Next Week – OIL Will Lead Rollover

March 29th, 2009

Good early Sunday morning! As is typical on Sunday’s I am up at the crack of dawn sifting through all – over 300 – charts to get a feel for this coming weeks movement in the markets. It should come as no surprise but I think we should see a very modest pull back here very soon. Some people foolishly think that the recent moves by the Feb and Washington in general to step into the free market and try and “protect” investors and consumer is going to help send us into the next bull market. Well, it isn’t! It may take the markets on an artificial – but very slow run – over the next couple of months, but by no means is it going to start a 3-5 year bull markets. While there are a variety of reason, the simple answer is that printing money, propping up dead companies, and leveraging an already leveraged consumer is not the quick fix. Okay, now onto the charts.

I know that I probably won’t convice everyone that some things – not all – are very very overbought and should be shorted. There will obviously be those critics out there who only think in one direction – i.e. bullish – and well, how effective have they been these past two years? Still, I’ll try to build a strong case and sway them. As such, I have put together a couple of interesting charts.

As I said before this rally began, we needed to see Oil lead the markets higher. We got just that these past two weeks as Oil has been on a very strong bullish move. Notice on the chart of Oil below that the breakout from the flag pattern is starting to loose steam very fast. I think I even mentioned it that other night on a trading video that Oil would roll-over and it saw a 3.6% fall the next day. Good timing I guess. But this correction is not over yet. My target is still somewhere between $40-$45 or about $10 lower than where we are now.

Now looking at a chart of the markets (NASDAQ this time) you can see that we have hit the underneath of a major ascending trendline. These type of retracements back to the breakout of the flag or pennant formation is very normal. So everything who thinks we started a new bull market is going to be very upset when we start to move away from this area quickly. Again, retracements are normal – they are not however a new trend.

Here is just one of the couple dozen securities that I have on my radar for members to short. BEN has been following the descending channel for the better part of six months now. As you can probably already see, it’s due for another downside move – which would mimic the move Oil is likely to make soon as well. The chances of this falling to $40 pretty good with an excellent risk/reward trading set-up.

Finally, I just wanted to show the EUR/USD pair which I mentioned on the trading video the other night. I said it would be moving back down near the closest Fib retracement level, and that’s exactly what it has started to due. Notice the move in blue that I predicted. Happy Trading!

Continued Weakness Through Mid-Day – The Breakdown Begin

March 27th, 2009

Following reports of more bad news from banks coming soon and the horrible jobs numbers this morning, the markets are starting to slowly show signs of another bear-market rally break down. While there is still much more downside room to run, you can definately see it in charts that we are running out of steam. Now with regard to the member’s portfolio, all of our positions are showing profits today – not amazing 10% moves or anything but 3-4% moves. What’s even more exciting about our shorts is that they all look like slow forming cracks in a window – i.e. we are going to see more downside in the next couple of weeks.

Here is an interesting chart of the NASDAQ. Notice that we have successfully re-tested the underneath of the ascending trend line and pennant formation breakout from mid-Feb. This really just is confirmation for our tech short which is already in the money. Isn’t it amazing how accurate technical analysis can be when you use it correctly! Let’s hope for no suprises throughout the rest of the day. I personally don’t think anyone will be buying into the weekend after the week we just had. Happy Trading!

Futures Lower, Let’s Be On Our Toes

March 27th, 2009

Good Morning! If you didn’t get a chance to watch last night’s Trading Video I suggest you do that first thing this morning. I went over GOLD, OIL, S&P, and the EUR/USD – which has moved exactly as I said it would – in depth with some very important stuff regarding some up-coming trades. As for the markets, the futures are down modestly this morning – about 1% as of this writing. They are by no means in crash area but still we should start to see the nice pull back I have been expecting. As many of you know I have a SPY put position that I might be looking to close out today if we get a good intra-day sell off. Though I may hold out until we see a correction down to 775 on the S&P.

It’s been a wild week. Lots of gaps and tons of intraday movement and volatility surely knocked the beginning traders out of the market with frustration. This day trader’s paradise is somewhat frustrating for swing traders like us, but if you have the ability to get in and ignore the intraday noise, you can make even more money with less commissions. And without the stress of staring at a screen all day. Below is the updated S&P support and resistance levels. My short term – next couple of days – is 770.

If You’re On The Sidelines Waiting, You Are Losing Money!

March 26th, 2009

Buying Up Puts At These Levels

March 26th, 2009

Okay, the bullz are still trying to take over and not give up. I have to hand it to them though, they really only have one person on their side – the government. Because of various indicators, retracement levels, etc. I am buying up puts at these levels for a correction. Members know what we have added to the portfolio…

Set For Another Rally Today, Or Are We Setting Up To Fall?

March 26th, 2009

Here we are bearz. Looking at the pre-market futures up again. Just seems like a bad dream. Before we get too sad and jump ship on our shorts let’s recap the week. Monday – gap up and huge rally all day. Tuesday – gap down, rallied to fill the gap and test the highs, sell off and close at the lows. Wednesday – gap up, rally to a new high, huge sell off followed by solid buying that recaptures about two-thirds of the sell off. Thursday – as of an hour before the open, we’ll get a big gap up that puts us right near yesterday’s highs. I think I smell the beginning of the end – again at least short term. Even with better than expected GDP numbers, we have to consider how far we have come.

All in all these types of weeks I must remain patient and calm. I would rather wait for the right trades than to try and make little trades all day. Some people still don’t get this! Listen, low prices are brought up so the pros – like me – can sell them down…then they’re brought up again to offer an opportunity to sell short….then they’re brought down to allow them to cover…and then brought down a little further so they can buy. Members and I were in at the bottom floor so you had better believe we are going to be in during the fall.

REMINDER: Trading is more about patience and letting positions mature than anything else! Before I get too mad to all the people emailing looking for a $1 million overnight trade, here are the new S&P targets.

Large Swings Lead To More Indecision, S&P Finishes Up 1%

March 25th, 2009

Okay, so let me get this straight. We open the day up nearly 2% this morning, then sell off during the afternoon – down nearly 1% – just to finish the day all the way back up 1%. In my years of trading, this is nothing more than flat out market indecision. There is a huge battle going on between buyers and sellers. The people who were long during short term rally are still holding on for dear life, while the bearz are out there licking their lips. All in all it makes for these crazy but fairly needed battled. Believe me, those people who are on the right side (aka members) are going to make a ton of money when the move happens.

If we take a step back and ignore all the news and media – like we should be doing anyway – we would look at a market that has dramatically moved from ultra-bull to an indesisive-bull. Granted we have made huge strides in just these past two weeks and members and I have made a ton of money on going long, but risk right now dictates that we tilt more and more bearish as this particular move runs out of steam.

Bull Rally Steam Running Out, New S&P Targets

March 25th, 2009

I don’t know if it was the overbought indicators that caused yesterday’s selling or if that was just happened because the market needed it anyways. In any case, after pushing close to their highs, the market sold off in fairly orderly fashion throughout the rest of the afternoon. Volume wasn’t too heavy, and there wasn’t anything overly alarming about the action to scream “crash.” My internal indicators (funny feeling type stuff) are still of the mind frame that we are way overbought. So, I’m pretty confident another explosion higher won’t happen anytime soon.

As for the downside target, I’m more interested in a general pullback lasting a couple days making its way to the 750 level at the least. People have become quite bullish out there – practically ever newscaster and commentator out there said SPX fair value was 900. A correction to shake the market’s confidence is more than needed. Then we can sit and watch as all the bullz climb the slippery wall or worry. Be patient out there with your shorts. We just went through a couple weeks of easy trades. Now we have to wait for the charts to re-set.

Closing Out MAR & IR Longs – 38% & 29% Profits

March 24th, 2009

Good morning! The markets have opened down this morning on some natural profit taking following yesterday’s 7% moon-shot. Considering how overbought we are, members and I closed our remaining long positions this morning at amazing profits. The trades are below and shown in green. Not bad for just two weeks of work right? Current members know how I feel about the next move, and we are going to make some more money when it happens.

MAR

IR

Market Bottoms Don’t Form In One Week, MAR Long Up 40%

March 23rd, 2009

Markets Rally More Than 7% On $1 Trillion Dollar Plan

March 23rd, 2009

WOW! Again – wow! What a huge day for stocks heading higher. Let’s face it, this government is going to do everything imaginable to stabilize the markets. While most of our shorts took a nice little bath today, I’m actually not as worried at all about their outlooks. Many are still way overbought with all types of indicators screaming “short!” On the other hand, our long positions were up over 9% today along and are up over 40% since we opened the positions. Clearly I am not upset with today’s movement. Taking a look at the chart of the DOW, once we blew through 7,500 we quickly headed towards 7,850 where I think we are going to see the next reversal take place. Any sane investor knows there is no way on earth we are getting to 8,500 without a pull back. With this said I have a ton of amazing more shorts on the radar for later this week. Guns loaded.

Futures Higher On Public-Private Treasury Plan

March 23rd, 2009

Good Morning all! Last week the market rallied into and out of the FOMC meeting but then sold off Thursday and Friday as I had been expecting pretty much all week. The 800 level on the S&P proved to be a tough level to overcome.  Besides the resistance levels coming into play on all the daily charts other internal indicators I typically follow were at very over-bought levels that have typically led to weakness.

Heading into this new week, I am still looking for a little more of a pull-back. But there will be no such weakness today. Althought the futures have pulled back from their highs, the markets are up over 2% across the board. Below is the S&P intra-day targets. We have a thin area between 806 and 827. I don’t think that the 806 level would be a good area to go short just yet. We really want to let this hype run its course and then jump in shorting. Still, members and I do have some longs which will continue to show profits during this rally. Be back later today!

Protected: Member’s Only Portfolio Update – March 22nd

March 22nd, 2009

S&P Falls Just As I Was Expecting, MET Now At 20%+ Profit

March 20th, 2009

First, if you haven’t already noticed I added a “Testimonials” page to the blog. I have been slowly collecting these for a while now and felt I had enough to actually put up without it looking bare. In addition, as you know I will be sending out a Member’s Only portfolio video this weekend with my new ideas for next week. Just FYI.

Moving on to more important stuff, have I or have I not been waiting for this correcting to begin? Granted I have been calling this pull back for nearly a week now and would have like to have it happen early, but members and I got in at great prices Wednesday on our handful of shorts – which are already in the money. Of course the standout for us has been MET. I don’t want to make this a blog all about trading MET, but I just goes to show that anyone can make money in any direction! If you remember we went long last week and made about 40% and here we are again making money on the same stock – this time shorting it to the downside (shown in green). As it stands we have had two amazing days of selling for MET and we are sitting very comfortably with a profit over 20%. Depending on what happens Monday morning, we will probably move down our stops to lock in this profit.

Turning to the markets you can see on a chart of the DOW that we continue to be fairly overbought. On the chart below you can see my two support targets as we head lower. Clearly I’m not expecting a big drop here – though the chance still exists – but rather a very smooth bounce off the 7,000 level. If we break that then 6,500 would be the next logical support level. Regardless, if the markets are going to put together a rally that lasts longer than say two weeks, they need to re-test support.

Finally, I wanted to post a chart of OIL. As you can see Oil broke out of the triangle pattern a couple weeks ago and has been on the rise ever since. Really this is what is helping the markets rise so far and steadily. As we now get into the $55/barrel level I think we are going to hit some major resistance and at least pull back to the blue area on the chart. As you can see this area is right above the FIB retracement level and the ascending trendline on the bottom. Clearly a very good area of support. I’m going to look to short some Oil stocks and ETF’s possibly next week and take advantage of this pull-back.

I’ll post a Trading Video later this weekend so be on the look out! Happy Trading!

Making Money On Both Sides Of The Trade, MET Down 12%

March 19th, 2009