Wednesday, February 23, 2011

Support Trades still working

We have been wanting these alerts since last week when Ags started selling off and they have been in our newsletter for days.    Big reversals on ALL our support trades that triggered today.   We were involved in all of these and tweeted the Ag buys (and CMI which we included in the basket) right at the bottom today in stocktwits.   We sold all of them for profit but not as much as we would have liked, but we did get a bit of revenge with XME as we got back in after the SPX headfake lower (while Trannies held -- as we tweeted real-time, that was bullish).

These are all the triggered alerts from the HCPG newsletter last night.  Arrows represent alerts. Epic reversal in the Ags.

A few were overshoots (we have a whole strategy around support trades and when they only grind instead of panic move down, we go to overshoot mode).  If you don't know what we're talking about read about it here:  Overshoot strategy

Don't confuse buying support with buying a falling knife.  Our best trades over the years have come not from breakouts, not from shorting breakdowns, but from buying support.  

All of today's lows in the following now represent "line in sand" areas, also keep eye on today's low on XLF (50SMA) and IYT (89 support).  

AGU our alert was 86.5-87 -- perfect.

CF 127.2-128 overshot as panic completely took over -- incredible reversal.  The most consistent strategy we have in our arsenal is to buy when others are panicking (not news nor earnings though!) as a whole oversold sector hits support. 

MOS we liked 77.5-78, overshot to trend-line.

POT 164.7-165 was our area to watch.

Wrote in newsletter last night to look for reversal on CMI in the 98 zone on gap fill.

Trend line bounce.  69 was 50SMA but we wrote in newsletter last night that we liked 68 more for overshoot.