Day Trading – The Bullz And Bearz

The Long And Short Of It All – Opportunity On Both Sides

July 21st, 2009

Even with the huge move in the market since the lows in March, there are still a healthy helping of opportunity to make money on both sides of the market right now. Granted almost everything is much higher and therefore looking like a better short trade, but there are some stocks that have been beaten down and still haven’t had a significant rally to speak of. These are also the same stocks that are forming pretty substaintial bases and preparing for a big breakout.

On the SHORT front, here are some of the most clearly overbought securities. There is no possible way you could make a strong arguement for buying these right now – none. They are both extremely over-bought and ready to turn hard.

Now the LONGs. As I mentioned before, these two have clear been beaten down but have shown strong signs of stabilization. They are not making new lows and volume seems to be on the rise. Additionally, the low prices makes them a real bargin right now.

S&P Rallies On Goldman Sachs Target

July 20th, 2009

Another big up day. I know a lot of you are itching to jump in long right now, but believe me when I tell you the wait is worth it. Better long prices are sure to come over the next couple of days. As members, know I play to get long by mid-week in a couple different areas. This makes it a great time to sign up for a membership if you want to get in on the ground level!

Anyways, the S&P 500 rallied right to my 950 resistance level today before the close. I think it’s reached the max for right now and honestly predicted it will fall back down to one of the two green levels on the chart below. Those are going to be much better entry points for long trades. Member’s only video going out soon!

Protected: Member’s Only Portfolio Video – July 20th

July 20th, 2009

Goldman Sachs Predicts 1060 On The S&P 500

July 20th, 2009

Our good friends over there at Goldman Sachs came out this morning and placed a target of 1,060 on the S&P 500. A far stretch but actually pretty realistic over the rest of the year – NOT the next few weeks. Looking at a daily chart of the SPX you can see that about 952 is the first major resistance we need to break – i.e. the recent highs. Honestly, I would really like to get bullish here and buy up some longs, but I think it’s prudent that we wait for a slight pull back first. Maybe Wednesday or Thursday might be the day we can jump in. But right now it’s absolutley better to wait for lower prices on your long entries. Let’s see what the day brings us as we start to finish out the month of July!

NASDAQ Has Room To Run Before 2,000

July 19th, 2009

Hope everyone is enjoying their weekend. I spent most of my time earlier this morning looking over my hundreds of charts trying to get some feeling of the market after last week’s crazy actions. Of course nothing is as clear as I would like it to be but that’s why most people can’t make money trading right? I mean if it was crystal clear then everyone would be on the right side. However, the general theme I found was this: there is still room to move higher. Even in the fact of ridiculous pressure on the economic front as well as job front, the markets were resilient last week. Whether you agree with the move or not, we have to realize that there actually may be more room above us.

Now my word of caution: don’t get too crazy long. While I think things could creep higher over the next week, we are entering MAJOR resistance zones. Per the NASDAQ chart below, you can see in GREEN that it could absolutely move into that area next week.

BUT! 2,000 is the 50% retracement level from the top of the market back in 2007 – i.e. the MOST important and strongest retracement level. In addition, you can see that the same 2,000 level has been major support in the past which means it will be even harder to break. Even with all the recent strength it’s looking pretty toppy to me. I’ll let you all take from this what you will – these are just my thoughts using the long term charts.

Bearish Divergence In OIH After 8 Day Winning Streak

July 17th, 2009

Mid-afternoon the markets remain choppy at best. As I said this morning, getting through this whole 950-ish area is going to be a big pain in the rear. In addition Oil has been on a nice little rally over the past week – leading the markets higher. Even still, there is clear bearish divergence in the OIH with it’s volume. As you can see in the chart, every day that OIH climbed higher the volume dropped. For sustained bullish movements this is not a good indicator and we all know could happen next if we are not careful. And not only is it reaching over-bought levels quickly but $100 seems to be a HUGE resistance level to get through. Don’t say I didn’t warn you all.

Option Expiration Week – Crazy As Ever

July 17th, 2009

Yesderday’s spike up clearly broke the downtrend on the daily chart as I mentioned in the trading video last night.  One thing that is pretty amazing is how the market just paused with a brief sideways consolidation instead of pulling back to retrace even a part of the bounce that has taken place this week (see BLUE oval). The “problem” is with how overbought and over extended this move is on the shorter term charts.  These kind of conditions make it a very high risk entry for anyone thinking about taking a long position, as the risk of a pullback are very high. Per the chart of the S&P 500 below, you can see that the next area of support is not until 930 then 905 after that.

So when we tie all of this together it is telling us that this has been an unusual rally, one that has become quite overbought and over extended.  One that by all means can earn a spot on the shelf as one of the most dramatic moves during option expiration week. Now that we are into this 950-ish area again, more than likely we are going to see some huge swings as we fight through the over-head supply.

In all accounts, I’m ready for this crazy week to be over. Thank God we had our stops in place to lock in profits or else things would have been much worse. Though I can’t complain that much considering the OPTION WRITERS reached it’s profit goals once again this month and we are closing out all our positions today with a profit – ALL of them!

Head And Shoulders Pattern Officially Broken

July 16th, 2009

Natural Gas Breakout or Fakeout?

July 16th, 2009

Equities were for the most part today moving sideways – a little up and a little down – but have since moved slightly higher. Oil in addition continues to slowly climb higher here. As for Natural Gas however, UNG is on a rampage today. Look at this huge white candle as it moved up over 8% this afternoon. A move to at least 15.00 seems pretty realistic at this point considering the inventory data that came out this morning. More on the trading video tonight!

JPMorgan Chase Earnings Beat Estimates – Oil Drops

July 16th, 2009

To follow on the whole mantra of “big bank earnings” this morning we had another strong beat of estimates. While of course this is encouraging, let me tell you why they beat so big. You see when analysts at these big banks last year saw everything collapsing, they cut their estimates dramatically – sometimes in half or more. Now that we have seen a pick up in the markets, their same estimates are looking like a huge beat, when in reality their estimates were so low that really anyone could beat it. You have to understand here people that when they have these huge “earnings beat our estimates” times like these, they attract hundreds of customers with the headlines. Now, I’m not saying that every single analyst is doing this by all means, but many more than you think. So take this with a grain of salt and move on.

This morning the futures were fairly flat and honestly should be considering the two day monstrosity we had of a rally – everyone needs time to catch up. On the S&P today if we rally I really don’t think that we could get past 945 (BLUE). That type of three day move would be unrealistic and worthy of me buying index puts on the market. Considering how fast we rallied yesterday, if we drop over the next two days, then it won’t take us any time at all to get the the next support level at 910 so be on your toes.

FST is an old friend of ours. Members and I have made money on both sides with this stock in the past. Right now it’s shaping up to be a good looking long candidate to the BLUE area. We need to see a slight pull back here today before getting in members.

Will Oil Lead The Markets Lower? OIH And ERY Analysis

July 15th, 2009

Even in the front of this perma-bull talk out there today you have to wonder…if everyone is expecting a rally back to 1,000 on the S&P and Oil at $80 a barrel, WHAT IF the complete opposite happens. What if everyone is completely wrong about this “rally to 1,000″ as I’m seeing all over the place. As I’ve already said, the markets this week have reached a very over-bought level on some indicators in a very short time and are still well below the recent highs from June. Of course I don’t mean to sound like an ultra-bear, but I just see too much toppy action here and too much hype to scare out the beginners from the professionals.

Personally, I think Oil is just shaping up to be the big thrill ride. Take a look at ERY. It clearly moved off the lows from June (where we made 40% in a long trade if you don’t remember) and hit EXACTLY the Support/Resistance line in black. Amazing right? Now that it’s come back down, it could very well find support in the BLUE area around $20 before rallying higher (i.e. Oil falling much more).

OIH is also having a great week but still remains below it’s recent highs and losing steam very fast. Not to mention the volume really dropping off from early July. A move back down to around $90 is very possible here perma-bulls.

Protected: Member’s Only Mid-Week Update – July 15th

July 15th, 2009

Market Rallies On Intel Earnings – Closing DRQ @ 14% Profit & PCZ @ 21% Profit

July 15th, 2009

Markets sure are rallying strong on Intel’s earnings and outlook last night. On the S&P we need to watch the 930 level very closely as a CLOSE above that would mean the big head and shoulders pattern is void. Still, members and I closed out two very profitable SHORT we’ve had. And ironically, there are still some shorts that are off great for us today – weird I know. The trades are in GREEN below for you all.

DRQ – 14% Profit

PCZ – 21% Profit

S&P 500 Resistance Level At 905 Holds – Goldman Short Analysis

July 14th, 2009

Closing TWM With 15% Profit, GRA With 17% Profit

July 14th, 2009

After moving up our stops on our TWM long trade, we got stopped out this morning. But, we had already locked in a 15% profit on the trade (show in GREEN). Not a bad chuck of change if you ask me! Way to go members!

We also closed out our GRA short with a 17% profit. Again the trade is show here in GREEN.

Goldman Sachs Earnings Beat, Sun Mircosystems, Retail Sales

July 14th, 2009

The good and the bad seems to be the theme today. Looks like Goldman Sachs came out with some pretty strong numbers – as they usually do. Again, they made a significant about of money from “TRADING REVENUE” which just goes to show you that these big banks also day trade stocks, options, futures, forex etc. I’m told you all before that they are doing the same thing we are each day.

Sun Microsystems, the owner of JAVA, said this morning that they are expecting a 4Q loss of nearly 16 cents per share – not good news for the NASDAQ and tech sector in the least. But, we still have to see what other big tech companies come out first. And finally, retail data come out showing that there way a slight up-tick in sales from summer sales – nothing big though.

With regards to the markets, I had mentioned yesterday that after breaking the 880 and 890 levels on the S&P, we were headed up to 905. We closed just 4 point shy of my targets, so not bad at all for technical trading I think. 905 is still a likely target (BLUE) for today’s impending rally. It seems to be a pretty hard line in the sand, so a break would need to stay below 915 at the most to keep the downtrend in place.

Since we are all talking about GS, here is their chart since 2007. I may be the only person out there saying this today, but GS is actually looking like it’s hit a major resistance level at $150. Notice all the times that $150 has been either support or resistance (BLUE OVALS). Just saying…

S&P 500 Breaks Two Resistance Levels – 905 Here We Come

July 13th, 2009

Seems like the news this morning on earnings outlook for the big banks this week is clearly pushing things higher. Of course outlook may not always be the actual results – but I guess we will have to wait and see what happens.

For now, the S&P has easily broke both the 880 and 890 levels. Next stop 905 right above us. In other news, members and I closed out a short at a profit to take money off the table.

Option Expiration Week Upon Us All

July 13th, 2009

Morning traders! Hope everyone had a great weekend. Outside DC we spent some time at a local wine festival on Saturday. It was great weather, food, and of course wine. Couldn’t have asked for a better summer day.

Now that I’m done dreaming about being back outside, let’s talk about option expiration week. Typically as we all know, these weeks can be a real bear to navigate. Throw in some more earnings releases, relatively low volume trading over the past couple months, and some critical support/resistance lines near by and we have one heck of a week ahead of us. For some reason my FFI – “funny feeling indicator”- is going off this morning in anticipation. On the technical side, we are sitting right at 880 (the big line in the sand) and need to either move significantly lower or start to creep higher before resuming the fall. If we do manage to make the trek higher, I think 905 may be the highest we go. See the chart below for today’s S/R levels in GREEN.

On the Oil front, the USO is also at a very key level of support. A break below the current level would send this down to 27.50 very quickly – believe that. But a rally from here could also take it to 37.50 in a hurry. Either way…watch OIL this week like a hawk.

Protected: Member’s Only Portfolio Strategy – July 12th

July 12th, 2009

880 Proving To Be A Bear To Break Through

July 10th, 2009

Well, the mini-rally we saw this afternoon has been short lived to say the least. Notice once again that the markets rallied RIGHT TO my 880 level before falling away. PEOPLE – USE TECHNICAL ANALYSIS! DON’T YOU SEE HOW POWERFUL IT IS! I just can’t get over how great these levels have been – it makes trading much easier right now.

Here’s a chart I haven’t posted in a while – the EUR/USD. Mainly it’s been trading sideways for the last month so there was no need to talk about it. But now, it’s getting closer to the APEX of the HUGE TRIANGLE PATTERN. Remember I’ve said before that when this breakouts, it will send ripples through other major sectors (gold, oil, etc.). This should be on your radar each day from now on!