We have been buying support aggressively (day-trade mostly but also some swing) in the last little while and thus far it has worked like magic. as almost every support spot we have listed from the night before found buyers. This is for us the most important thing to watch for going forward -- are support buyers going to still step in as they have in the last few months?
To us this is even a better gauge of bullishness than break-out continuation. Break-outs often fail in bull markets when traders get antsy or think market has gone up too much, too fast. But major support not holding is a much more accurate sign of a change in sentiment.
We have dozens of support spots going into this week -- as soon as these stop working we will back off completely. But until then we will enjoy it for as long as it lasts: buying support with a 15-20 cent stop and easily making a point on good size (on $30-$40 stock, add a zero for GOOG type prices). It's quite possible that we've made more in the last 4 weeks than we will in the next 2 months -- we're prepared for that and know that you have to respect the market's moods. When it's this easy we will keep hitting it hard but when the strategy suddenly ceases to work then we will immediately step-back and re-assess.
This week in some ways for us will be pivotal as we are close to many important support spots. We'll be watching like hawks to see if support on our alerts hold or whether some real signs of weakness creep back into the market.
Sunday, January 17, 2010
Friday, January 15, 2010
Market Talk
We found 34 (!) support plays for the Sunday newsletter. Some we like for day-trades, some for swing.
The saying "Be careful what you wish for" came to mind as we were salivating over some of these support plays. Of course we are cognizant of the possibility that support might not hold as well it has been in the last few months. However we imagine that the the bulls will put up a good fight before that day comes, and that there will be enough warning signs to keep fast little fish like us out of harm's way.
Enjoy the long weekend and rest up as there should be some decent action next week.
HCPG
The saying "Be careful what you wish for" came to mind as we were salivating over some of these support plays. Of course we are cognizant of the possibility that support might not hold as well it has been in the last few months. However we imagine that the the bulls will put up a good fight before that day comes, and that there will be enough warning signs to keep fast little fish like us out of harm's way.
Enjoy the long weekend and rest up as there should be some decent action next week.
HCPG
Market talk
Our guess is that the lows hold here for today, we base early next week near 113.2 and then go through to test SPY 112. The more support is tested, the weaker it becomes.
Triggers
These are ALL the stocks that hit our alerts (thus far at 11:45 AM) from last night's newsletter. All worked except one (CRK) Many good day-trading opportunities. Two notes: a) Buy the first test, but never the second (so if they revisit our alert lows we would not buy them) and b) We're not swinging anything today, as we believe that we will see lower prices.
Support buying
We had TSL YGE support buys in our focus last night in the newsletter, and also posted in our twitter account yesterday.
YGE off the 50 SMA, very oversold after heavy sell-off on news yesterday:
We bought first time near 15/S1 bounce, were going to stop out at low of day, but were also watching out for a possible quick dip and over -- which happened on that second test and on which we added with a stop on the low of day, average 15.08. We were completely out of the position as the stock went to 15.5 -- not much but our initial risk was just over a dime.
TSL similar idea as we wrote yesterday we wanted to buy 49 reversal -- exactly what happened today:
We tried TSL near 49 bounce (9:46), got stopped out within a minute, and bought again on the next retest (9:50) -- stop was always around 10 cents. We took the last of the position off near 50 for over a point. All this was recorded live on our twitter account.
Also bought very small starter positions on JRCC CRK near the 20 SMA /50 SMA lines, respectively, but expecting some pain in these two and will not add until the 200 SMA.
Update: We changed our mind and sold the JRCC CRK flat. We'll come into market next week fresh and re-assess.
YGE off the 50 SMA, very oversold after heavy sell-off on news yesterday:
We bought first time near 15/S1 bounce, were going to stop out at low of day, but were also watching out for a possible quick dip and over -- which happened on that second test and on which we added with a stop on the low of day, average 15.08. We were completely out of the position as the stock went to 15.5 -- not much but our initial risk was just over a dime.
TSL similar idea as we wrote yesterday we wanted to buy 49 reversal -- exactly what happened today:
We tried TSL near 49 bounce (9:46), got stopped out within a minute, and bought again on the next retest (9:50) -- stop was always around 10 cents. We took the last of the position off near 50 for over a point. All this was recorded live on our twitter account.
Also bought very small starter positions on JRCC CRK near the 20 SMA /50 SMA lines, respectively, but expecting some pain in these two and will not add until the 200 SMA.
Update: We changed our mind and sold the JRCC CRK flat. We'll come into market next week fresh and re-assess.
Thursday, January 14, 2010
Today's triggers
Day is young but we had two good alerts already trigger:
WYNN had been in our newsletter for days and as posted in our twitter account we got long 69.2 yesterday in anticipation of a 70 breakout.
CMG 98 from last night's letter also is working well:
Update one more trigger from last night: AXP 42.5. Stock is right at the trigger but we're not involved. As we wrote in the letter last night financial stocks lend themselves more to swing trading than daytrading and we're not in the mood to swing trade this stock.
WYNN had been in our newsletter for days and as posted in our twitter account we got long 69.2 yesterday in anticipation of a 70 breakout.
CMG 98 from last night's letter also is working well:
Update one more trigger from last night: AXP 42.5. Stock is right at the trigger but we're not involved. As we wrote in the letter last night financial stocks lend themselves more to swing trading than daytrading and we're not in the mood to swing trade this stock.
Wednesday, January 13, 2010
Today's triggers
May the bull market live on. All the triggers from last night's newsletter -- white arrow indicates the support buy price listed in newsletter. We weren't involved in all of these, for example we didn't buy AAPL this morning at 205, but these are all the alerts that triggered.
Lots of levels now that bulls have to defend -- next sell-off most likely will not be this easy.
Lots of levels now that bulls have to defend -- next sell-off most likely will not be this easy.
Trade updates
We traded the plan from last night from the blog post and newsletter picks. It worked very well and once again buying support in this bull market paid well.
We have sold all the positions we added into this rally and some partials from yesterday (CTRP sold into the open, WYNN took some off, sold partial DRYS) are now left with small core positions we'll keep -- with stops probably around today's low on most of them.
The arrows represent the buy spots we either put in newsletter or in the blog post last night.
Today we kicked ass -- but we are fully aware that a day will come when we're going to get our asses kicked from buying support. Until then, enjoy.
Update: we sold the rest into this rally and are now completely flat in all accounts.
We have sold all the positions we added into this rally and some partials from yesterday (CTRP sold into the open, WYNN took some off, sold partial DRYS) are now left with small core positions we'll keep -- with stops probably around today's low on most of them.
The arrows represent the buy spots we either put in newsletter or in the blog post last night.
Today we kicked ass -- but we are fully aware that a day will come when we're going to get our asses kicked from buying support. Until then, enjoy.
Update: we sold the rest into this rally and are now completely flat in all accounts.
Tuesday, January 12, 2010
New positions
As you know we sold most of our swings yesterday (CAT DTG PCU CVX), and as we posted to our account this morning we also sold remaining positions (MICC QCOM).
In the late afternoon we started filling up our empty swing account with starter positions on the following stocks all close to support, be it daily support, 20 SMA or 50 SMA. The only stock we did not buy on support was WYNN, anticipating a 70 break-out. We would add on all the other stocks on further support but with WYNN we would be stopped out through today's low as there is no support nearby for a while.
APC on the 20 SMA, will add on 50 SMA if this level does not hold.
CHK near the 20 SMA, would add at 50 SMA.
CNQ on the 20 SMA, would add at 70 and then 50 SMA if level does not hold:
CTRP we bought very late in the day on the 50 SMA -- we'd probably get out of this position on weakness through 70 and possibly try again at 68 support.
MOS we bought in support area, would add at 61
PCU we sold yesterday close to 37 and picked up today at 34.87. We would add to this position on 34
SU we bought on the 20 SMA test, would add on 50 SMA
UPL we bought on 50 support but would add at 49 on 50 SMA
WYNN we bought not near support but on anticipation of break-out. We wouldn't add to this position and if weakness would sell through today's low.
The best thing for us would be if these levels hold and we rally tomorrow (already in the money for most of the positions thanks to a late day rally). The worst thing for us would not be weakness tomorrow but instead flat action. Why? Because if we selloff tomorrow we would be very oversold on most of these stocks -- we would add (all positions are starter 25% positions thus far), lower our average, and most likely get a nice bounce. However if the stocks do nothing but base at these levels then most likely we will go lower without any meaningful bounce for a while. Consolidation is never a good thing when you're buying support.
In the late afternoon we started filling up our empty swing account with starter positions on the following stocks all close to support, be it daily support, 20 SMA or 50 SMA. The only stock we did not buy on support was WYNN, anticipating a 70 break-out. We would add on all the other stocks on further support but with WYNN we would be stopped out through today's low as there is no support nearby for a while.
APC on the 20 SMA, will add on 50 SMA if this level does not hold.
CHK near the 20 SMA, would add at 50 SMA.
CNQ on the 20 SMA, would add at 70 and then 50 SMA if level does not hold:
CTRP we bought very late in the day on the 50 SMA -- we'd probably get out of this position on weakness through 70 and possibly try again at 68 support.
MOS we bought in support area, would add at 61
PCU we sold yesterday close to 37 and picked up today at 34.87. We would add to this position on 34
SU we bought on the 20 SMA test, would add on 50 SMA
UPL we bought on 50 support but would add at 49 on 50 SMA
WYNN we bought not near support but on anticipation of break-out. We wouldn't add to this position and if weakness would sell through today's low.
The best thing for us would be if these levels hold and we rally tomorrow (already in the money for most of the positions thanks to a late day rally). The worst thing for us would not be weakness tomorrow but instead flat action. Why? Because if we selloff tomorrow we would be very oversold on most of these stocks -- we would add (all positions are starter 25% positions thus far), lower our average, and most likely get a nice bounce. However if the stocks do nothing but base at these levels then most likely we will go lower without any meaningful bounce for a while. Consolidation is never a good thing when you're buying support.
Monday, January 11, 2010
Evening Update
As we posted this afternoon we sold all of our swings save MICC QCOM (sold CAT CVX DTG PCU) as we are looking for a further pull-back in the markets.
We still have many nice-looking charts but few of them are ready for prime-action (at least in the commodity space -- there are a few non-commodities that look good that we've been tracking for a while).
We're also looking to pick-up some commodity trades on support tomorrow so are hoping for a bit more weakness into the open.
Also going to watch some of the leader stocks tomorrow to see if they can hold support (GOOG on 50 SMA, AAPL on 208 support, GS on 50 SMA, etc.)
We posted this morning that today could very well be a short-term top (especially in commodities) and we're looking for consolidation. As we wrote late last week, we won't get too concerned until there is a broad selloff across multiple sectors without rotation. Until then all we're going to do is to switch capital from one sector into another.
Until tomorrow HCPG/BTG
We still have many nice-looking charts but few of them are ready for prime-action (at least in the commodity space -- there are a few non-commodities that look good that we've been tracking for a while).
We're also looking to pick-up some commodity trades on support tomorrow so are hoping for a bit more weakness into the open.
Also going to watch some of the leader stocks tomorrow to see if they can hold support (GOOG on 50 SMA, AAPL on 208 support, GS on 50 SMA, etc.)
We posted this morning that today could very well be a short-term top (especially in commodities) and we're looking for consolidation. As we wrote late last week, we won't get too concerned until there is a broad selloff across multiple sectors without rotation. Until then all we're going to do is to switch capital from one sector into another.
Until tomorrow HCPG/BTG
CAT swing
We posted this chart last week (Jan 07) on Chart.ly (and posted our entry at 2:07 PM of same day) on our account
Sold it today into the rally:
As you know we mostly day-trade but once in a while we like to swing these type of old-school stocks that need to be held for a few days. Lovely base on the stock -- we'd like to get back in on a re-test.
Sold it today into the rally:
As you know we mostly day-trade but once in a while we like to swing these type of old-school stocks that need to be held for a few days. Lovely base on the stock -- we'd like to get back in on a re-test.
Market Talk
Concerned to see futures flying last night because a ) that always invites selling especially in markets that have moved a lot and b) we had dozens of great alerts that we knew would be ruined.
All we've done today is sell partials on our swings in CAT CVX MICC and sold out completely DTG PCU, holding QCOM for longer term -- more fundie pick on their Snapdragon chip. No daytrades (which is astounding -- when do we ever go to 10:45 AM with no daytrades?)
Market needs a lot of time now to regroup. It's time to relax and look for support prices on daily instead of chasing break-outs.
All we've done today is sell partials on our swings in CAT CVX MICC and sold out completely DTG PCU, holding QCOM for longer term -- more fundie pick on their Snapdragon chip. No daytrades (which is astounding -- when do we ever go to 10:45 AM with no daytrades?)
Market needs a lot of time now to regroup. It's time to relax and look for support prices on daily instead of chasing break-outs.
Sunday, January 10, 2010
Excerpt from tomorrow's newsletter
Posting often within Twitter's constricting 140 character policy has made us want to write long narratives/ This possibly is quite similar to how a teenage girl who grows up in a strict family (and who wasn't allowed to date boys) acts when she finally moves out and lives on her own in a college dorm.
In bull markets anticipate the breakouts, wait for confirmation for the breakdowns. In bear markets anticipate the break-down and wait for confirmation for the breakout.
There are some stocks we like to day-trade and there are other stocks we know we have to give more room to and which lend themselves more to holding overnight. FSYS for us on Friday was a nice little day-trade (unfortunately small because stock is so thin) but CAT is a name which we were already long and did not daytrade at the number knowing it would whip us around. We are currently long QCOM PCU CVX CAT DTG MICC. We took some DTG off late Friday after the break-out as we're not crazy about the stock and don't really know much about the sector. We rarely put on full size on a stock we are not acquainted with or in a sector we don't follow.
When the market is rough we elevate our standards and only put the best set-ups on our platform. When the market is as benign as this one we loosen our standards somewhat in order to broaden the horizon of opportunities. This is an amazing market right now for traders like us in which every break-out can be anticipated -- if it works, great, if it doesn't work, just add more on the dip and hold as it will breakout the next day. We have no fear right now and we haven't taken a real loss for a long time. This of course is a very rare occurence. Right now stocks that are extended take a break while other stocks rally -- perfect sector rotation. When we start to sell off broadly across all sectors then we'll get cautious.
There is one thing we can tell you with 100% guarantee: this type of tape will not last. One day we'll get smacked in the face and lose a chunk of money as the dips cease to be bought but until then we hope to milk it as much as we can. To put it in simple monetary terms: one day things change and the dips you have been buying just keep going down. You recognize that the sentiment has shifted and you exit for a nice loss of 10G. However because of the way you have been aggressively trading in the previous weeks you're up 100G on the same strategy. So yes you got your head smashed with a big one day loss but overall the strategy worked handsomely. The biggest condition of course is to know when the sentiment has changed (instead of just doubling down) but that's also where we come in to help. How will we know? Because of the base. Everything we do always comes back to the base. Our entries are never on top of extended moves. We buy near a base, we add on dips near base support zones -- and if the base goes, we take the loss. We don't freeze, hesitate, or change our strategy. It's simple -- 10 ninjas surround you in a dark, isolated alley and give you two options: they cut off your pinky or they cut off your legs and arms. As much as we hate the thought of the loss of our pinky, we don't hesitate in our decision. Ninjas, thank you for giving us a choice. Please proceed in cutting off our finger.
In bull markets anticipate the breakouts, wait for confirmation for the breakdowns. In bear markets anticipate the break-down and wait for confirmation for the breakout.
There are some stocks we like to day-trade and there are other stocks we know we have to give more room to and which lend themselves more to holding overnight. FSYS for us on Friday was a nice little day-trade (unfortunately small because stock is so thin) but CAT is a name which we were already long and did not daytrade at the number knowing it would whip us around. We are currently long QCOM PCU CVX CAT DTG MICC. We took some DTG off late Friday after the break-out as we're not crazy about the stock and don't really know much about the sector. We rarely put on full size on a stock we are not acquainted with or in a sector we don't follow.
When the market is rough we elevate our standards and only put the best set-ups on our platform. When the market is as benign as this one we loosen our standards somewhat in order to broaden the horizon of opportunities. This is an amazing market right now for traders like us in which every break-out can be anticipated -- if it works, great, if it doesn't work, just add more on the dip and hold as it will breakout the next day. We have no fear right now and we haven't taken a real loss for a long time. This of course is a very rare occurence. Right now stocks that are extended take a break while other stocks rally -- perfect sector rotation. When we start to sell off broadly across all sectors then we'll get cautious.
There is one thing we can tell you with 100% guarantee: this type of tape will not last. One day we'll get smacked in the face and lose a chunk of money as the dips cease to be bought but until then we hope to milk it as much as we can. To put it in simple monetary terms: one day things change and the dips you have been buying just keep going down. You recognize that the sentiment has shifted and you exit for a nice loss of 10G. However because of the way you have been aggressively trading in the previous weeks you're up 100G on the same strategy. So yes you got your head smashed with a big one day loss but overall the strategy worked handsomely. The biggest condition of course is to know when the sentiment has changed (instead of just doubling down) but that's also where we come in to help. How will we know? Because of the base. Everything we do always comes back to the base. Our entries are never on top of extended moves. We buy near a base, we add on dips near base support zones -- and if the base goes, we take the loss. We don't freeze, hesitate, or change our strategy. It's simple -- 10 ninjas surround you in a dark, isolated alley and give you two options: they cut off your pinky or they cut off your legs and arms. As much as we hate the thought of the loss of our pinky, we don't hesitate in our decision. Ninjas, thank you for giving us a choice. Please proceed in cutting off our finger.
Friday, January 08, 2010
Great Entry, Awful Exit
We found this TC chart at the end of December and were wowed by how gorgeous it was:
We exited much too early as the stock is still running:
Note to self -- it doesn't come often when one finds an aesthetically drog-dead gorgeous chart. Next time, have faith, put on more size, and then HOLD!
What went wrong? We have this inherent disdain for cheap stocks that we need to overcome. We didn't put on enough size on the stock so didn't take the trade seriously.
We exited much too early as the stock is still running:
Note to self -- it doesn't come often when one finds an aesthetically drog-dead gorgeous chart. Next time, have faith, put on more size, and then HOLD!
What went wrong? We have this inherent disdain for cheap stocks that we need to overcome. We didn't put on enough size on the stock so didn't take the trade seriously.
Numbers for the week
Percentage moves from trigger numbers posted night before for this week (Jan 04-08 2010):
We're mostly daytraders but our entries are based on daily charts so they often tend to also work well for swing trades.
We're mostly daytraders but our entries are based on daily charts so they often tend to also work well for swing trades.
This week's triggers
Here are our triggers for this week -- arrows/lines were the buy spots put the night before the trigger. A few flat, a few losers, and decent amount of winners. This represents ALL the stocks that triggered from our newsletter Mon-Friday this week. As you a week full of opportunities for day-traders and swing-traders. We're going long into the weekend QCOM PCU CAT CVX DTG MICC
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