Some traders like to focus on a few stocks and pile on the indicators and do micro analysis. That's great and if they can earn a decent living from that type of trading, then all the power to them. However, that's not the way we trade -- we like using very few indicators (volume, 20EMA, and pivot lines on intraday; volume, 20,50, 200 SMA on daily) and instead do comparative analysis on different stocks/futures/currencies looking for divergence (on top of of course the traditional support/resistance zones we trade off every day).
Of course spotting divergence is not too useful if you don't know what it means or how to use it. The only way divergence will mean anything to you is to constantly look for patterns in your studies and more than anything else, THINK. What commodity was leading the sell-off and what does it mean now that it has stabilized? What were the financials doing while small caps were running? Remember that rotation that was going on a few weeks ago as one sector sold off but another rallied -- it's not happening now and what does that mean? Market is trying to rally but leader stocks are lagging -- what should you do, fade the rally or hope they catch up? (hint, leader stocks are called leader stocks for a reason, never wait for them to catch up).
Comparative analysis won't just make you a better trader -- it will also force you to use your mind and stay sharp, and, at least for us, make the job infinitely more interesting.
Saturday, February 06, 2010
Friday, February 05, 2010
Position Update
We took a lot off but have at least some shares left in all our positions -- posted real-time in our Twitter acct and blog.
Here is the Performance near close since the buys 2 hours ago (The % movement on symbolic 1 share each):
As we wrote yesterday and today we were looking for gold/copper to bottom before anything else -- that is exactly what happened this afternoon as SPY made a new low but gold and copper held.
Also another bullish tell was that everything was not going down the hole as tech was holding strong all day.
Looking for divergences is key to our trading and to reading price action in general.
Here is the Performance near close since the buys 2 hours ago (The % movement on symbolic 1 share each):
As we wrote yesterday and today we were looking for gold/copper to bottom before anything else -- that is exactly what happened this afternoon as SPY made a new low but gold and copper held.
Also another bullish tell was that everything was not going down the hole as tech was holding strong all day.
Looking for divergences is key to our trading and to reading price action in general.
Market Talk
Bullish things we see:
- we wrote yesterday that we were looking for gold and copper to bottom first and lead the way up for commodities and this is happening today with both commodities green.
- we like the divergence here with tech acting strong (semis especially) as everything is not being sold in a basket
Bearish things we see:
- some of the ETFs we're looking for to buy on the 200 SMA are not there yet meaning that could act as a magnet for one more woosh down.
Mixed signals for us meant to take quick profits on the bounce here but still stay long half positions in order to be involved.
- we wrote yesterday that we were looking for gold and copper to bottom first and lead the way up for commodities and this is happening today with both commodities green.
- we like the divergence here with tech acting strong (semis especially) as everything is not being sold in a basket
Bearish things we see:
- some of the ETFs we're looking for to buy on the 200 SMA are not there yet meaning that could act as a magnet for one more woosh down.
Mixed signals for us meant to take quick profits on the bounce here but still stay long half positions in order to be involved.
New Positions
It's 2:11 Friday afternoon and we started some swing initial positions into this death grind down:
CENX 10.37, SQM 34.98, NUE 39.29, XLE 52.99, FCX 67.11, MOS 53.33, BVN 29.46, ANR 39.33, MEE 37.89, SMH 24.65, TC 11.09
We'll add into any gap down on Monday.
Update: Sold half of everything for some quick profits, swinging rest into Monday.
In 1 hr we're up 4% in CENX TC FCX over 3% in ANR MEE BVN. We're taking more profits but keeping at least a bit in each name. Our worst performing thus far is SMH which is up only 1.5%.
CENX 10.37, SQM 34.98, NUE 39.29, XLE 52.99, FCX 67.11, MOS 53.33, BVN 29.46, ANR 39.33, MEE 37.89, SMH 24.65, TC 11.09
We'll add into any gap down on Monday.
Update: Sold half of everything for some quick profits, swinging rest into Monday.
In 1 hr we're up 4% in CENX TC FCX over 3% in ANR MEE BVN. We're taking more profits but keeping at least a bit in each name. Our worst performing thus far is SMH which is up only 1.5%.
Thursday, February 04, 2010
Ideas
The only trades we took today were short and we ended the day in cash in all accounts. However if we do get some accelerated panic we like these levels for a trade long (lines show entry points-- click to enlarge):
Copper
We've been harping about copper for a few days now in our Twitter Acct. If you want to attempt to catch a potential bounce then at least wait for copper to show some signs of reversal. As we wrote yesterday -- it was the first to sell-off and it will most likely be the first to bounce.
JJC is too thin to trade but watch that 38 level in order to time your other buys-- for a trade.
JJC is too thin to trade but watch that 38 level in order to time your other buys-- for a trade.
Some ideas
We have a rule that has worked well for us over the years: buy the first test of support but never the second. Last week was the first, today is the second. Our strategy this morning was to simply go over whatever we had short alerts on and start getting short before the number (on base and break down); at the number cover some and put in stop.
Here are some ideas that haven't triggered yet:
Here are some ideas that haven't triggered yet:
Wednesday, February 03, 2010
What's on our screens
On our monitors we always watch at least 10-20 stocks from each of these sectors:
Oils and Natural Gas, Coal, Precious Metals, Metals, Miners, Ag-Chem, Financials, Chinese momo, and Tech leaders. We also have small watch-lists on home builders, solars, REITS, Trannies, and semis. For charts we have 1 min, 3 min, 5 min, 15 min, 30 min, 60 min, and daily on each stock we highlight. The only indicators we use are 20,50,200 SMA on daily and 20 EMA on intraday along with P, S1 and R1.
For futures we watch the E-minis, crude, natural gas, copper, and gold and of course we always have an eye on the USD.
If you don't want to (or have the option of) watching 300 stocks then you can take a short-cut and watch the following ETFs:
DIA FCG FXI GDX GLD IYR IYT JJC KBE KOL MOO OIH QQQQ SLV SLX SMH SPY UNG USO UUP XHB XLE XLF XME
Even if you don't want to watch multiple stocks from each sector it's always good to have key stocks on your watch-list to give you an immediate feel for what the market is doing.
All our sectors are in separate portfolios but we have one small leader watch-list which includes the following key stocks:
NOV EOG OXY for energy
MOS AGU POT CF for ag-chem
BTU ANR MEE ACI for coal
GOOG AAPL AMZN VMW CREE for tech
GS JPM for financials
BUCY CAT JOYG for farm/construction machinery
GMCR ISRG for misc leaders
RGLD IAG BVN SSRI PAAS for gold and silver
AKS X MTL for steel
PCU FCX for copper
There are two basic steps that need to be taken before one trades successfully. One is doing your homework the night before and identifying key support and resistance areas. Two is being able to read the price-action (which includes breadth, volume, etc) and especially to be able to note divergences (for example relative weakness in banks).
Oils and Natural Gas, Coal, Precious Metals, Metals, Miners, Ag-Chem, Financials, Chinese momo, and Tech leaders. We also have small watch-lists on home builders, solars, REITS, Trannies, and semis. For charts we have 1 min, 3 min, 5 min, 15 min, 30 min, 60 min, and daily on each stock we highlight. The only indicators we use are 20,50,200 SMA on daily and 20 EMA on intraday along with P, S1 and R1.
For futures we watch the E-minis, crude, natural gas, copper, and gold and of course we always have an eye on the USD.
If you don't want to (or have the option of) watching 300 stocks then you can take a short-cut and watch the following ETFs:
DIA FCG FXI GDX GLD IYR IYT JJC KBE KOL MOO OIH QQQQ SLV SLX SMH SPY UNG USO UUP XHB XLE XLF XME
Even if you don't want to watch multiple stocks from each sector it's always good to have key stocks on your watch-list to give you an immediate feel for what the market is doing.
All our sectors are in separate portfolios but we have one small leader watch-list which includes the following key stocks:
NOV EOG OXY for energy
MOS AGU POT CF for ag-chem
BTU ANR MEE ACI for coal
GOOG AAPL AMZN VMW CREE for tech
GS JPM for financials
BUCY CAT JOYG for farm/construction machinery
GMCR ISRG for misc leaders
RGLD IAG BVN SSRI PAAS for gold and silver
AKS X MTL for steel
PCU FCX for copper
There are two basic steps that need to be taken before one trades successfully. One is doing your homework the night before and identifying key support and resistance areas. Two is being able to read the price-action (which includes breadth, volume, etc) and especially to be able to note divergences (for example relative weakness in banks).
Some key areas
If you want to initiate swing longs with the belief that the bull trend is intact then do yourself a favor and don't do it until these levels are taken out on GS IYR XLE. We had been watching these levels for days (on Twitter and in our newsletter) and all three held where they should meaning that resistance is to be respected:
GS reversed at the 160 level we've been talking about for several days. If you're a bull you want that level and then the 200 SMA taken out with force.
IYR reversed at the 50 SMA and is leading the market down -- be patient and wait for that to be remounted.
Whether one likes it or not oil stocks are a big part of the current market -- wait for XLE to re-gain the 50 SMA.
GS reversed at the 160 level we've been talking about for several days. If you're a bull you want that level and then the 200 SMA taken out with force.
IYR reversed at the 50 SMA and is leading the market down -- be patient and wait for that to be remounted.
Whether one likes it or not oil stocks are a big part of the current market -- wait for XLE to re-gain the 50 SMA.
Monday, February 01, 2010
Today's trading
We've underperformed the market today but have gotten off a few good trades. We'll take it. Our focus is now resistance shorts:
This is the only stock that triggered (that is, hit our alert) from last night's newsletter, a short of MDR at 24.5
It even surprised us how well it worked which of course makes us feel more conviction in the strategy.
This is the only stock that triggered (that is, hit our alert) from last night's newsletter, a short of MDR at 24.5
It even surprised us how well it worked which of course makes us feel more conviction in the strategy.
Sunday, January 31, 2010
Our Four Strategies
We've traded these four strategies for over a decade now and will probably trade them until we retire. At the same time we have adapted with the market but the adaptations have mostly been confined to intraday strategy evolution.
Let's go over, in simple terms, examples of support and resistance strategies.
The first, and our favorite, is the simple break-out of resistance. Here is an old WYNN alert from 70 that worked very well for a day-trade (we're primarily day-traders but sometimes do hold for a day or two). At the time WYNN broke-out the market was very bullish and we anticipated the break-out by entering a day before (posted in our account real-time on that day)
Not all break-outs have to be near new highs -- here is a simple trend-line break of GS which we also entered the day before (again, posted in our account). Trend-line breaks still fit under the resistance break-out strategy.
The inverse of the break-out of resistance long is the break-down of support short. Here is a bear-flag short of QQQQ at 44.
The second type of long strategy is to buy support, be it on a major moving average, or on a previous break-out zone. HMIN 38 had been a break-out alert on our newsletter. Days later the stock offered another opportunity long, this time on a re-test of previous resistance which now was support. Again, great for a day-trade.
The inverse of support long strategy is the resistance short. RS action on Friday is a good example of this as the stock got smacked down by the 50 SMA.
It looks easy doesn't it? It's not. In order to be constantly successful you have to combine that kind of information with some decent tape reading skills and have a few intraday strategies up your sleeve. Nevertheless, studying the basics of support and resistance is an absolute must for new traders and the first step of becoming a technical trader.
Let's go over, in simple terms, examples of support and resistance strategies.
The first, and our favorite, is the simple break-out of resistance. Here is an old WYNN alert from 70 that worked very well for a day-trade (we're primarily day-traders but sometimes do hold for a day or two). At the time WYNN broke-out the market was very bullish and we anticipated the break-out by entering a day before (posted in our account real-time on that day)
Not all break-outs have to be near new highs -- here is a simple trend-line break of GS which we also entered the day before (again, posted in our account). Trend-line breaks still fit under the resistance break-out strategy.
The inverse of the break-out of resistance long is the break-down of support short. Here is a bear-flag short of QQQQ at 44.
The second type of long strategy is to buy support, be it on a major moving average, or on a previous break-out zone. HMIN 38 had been a break-out alert on our newsletter. Days later the stock offered another opportunity long, this time on a re-test of previous resistance which now was support. Again, great for a day-trade.
The inverse of support long strategy is the resistance short. RS action on Friday is a good example of this as the stock got smacked down by the 50 SMA.
It looks easy doesn't it? It's not. In order to be constantly successful you have to combine that kind of information with some decent tape reading skills and have a few intraday strategies up your sleeve. Nevertheless, studying the basics of support and resistance is an absolute must for new traders and the first step of becoming a technical trader.
Commodity talk
We went through a lot of charts this weekend and saw a nice pattern in the commodity charts. We're not quite there yet but we have very nice support coming up in all the following charts:
Note how the 200 SMA/ base are coming together. All it would take is 1-2 days more sell-off and we'll hit these spots. Until then it's a bit of no-man's land and we're staying away. Horizontal line represents buy spot.
Gold started this -- watch for them to be the first to bottom.
Drillers, Ag-Chems, Steel, Coal, and Natural Gas producers
Note how the 200 SMA/ base are coming together. All it would take is 1-2 days more sell-off and we'll hit these spots. Until then it's a bit of no-man's land and we're staying away. Horizontal line represents buy spot.
Gold started this -- watch for them to be the first to bottom.
Drillers, Ag-Chems, Steel, Coal, and Natural Gas producers
Friday, January 29, 2010
Position Update
As we posted in our Twitter acct/Blog this morning we sold all our commodity positions into the gap-up (didn't like GS AAPL action) and now have come back into the market and bought one position into the close -- a swing of QQQQ at 42.93.
As we mentioned yesterday we like this SPY gap fill area near 107.4 for a short-term bottom and are following our plan. We might go beyond it but we think market will dance around the area.
We expect some choppiness but it's not a large position and we'll withstand at least some pain before crying uncle. It's also quite possible that we're wrong and we get some type of wash-out come Monday -- we would add into that panic.
Most likely it's not the bottom, but we believe it's a good initial entry and this area will be in play next week.
Have a good weekend. HCPG
As we mentioned yesterday we like this SPY gap fill area near 107.4 for a short-term bottom and are following our plan. We might go beyond it but we think market will dance around the area.
We expect some choppiness but it's not a large position and we'll withstand at least some pain before crying uncle. It's also quite possible that we're wrong and we get some type of wash-out come Monday -- we would add into that panic.
Most likely it's not the bottom, but we believe it's a good initial entry and this area will be in play next week.
Have a good weekend. HCPG
Guest Post by a Frenemy
Our first guest post on the blog by none either than the infamous Dinosaur Trader
Great example of a disciplined day-trade lay-up using intraday set-ups and daily charts. In our opinion -- the absolute best way to trade. Well done amigo.
Written by Dinosaur Trader
Illustrated by HCPG
---------------------------------------------------------
It was one of those days over here where there would be more distractions than setups. I had a dude tiling my kitchen, and a shaky internet connection that the cable company wanted to fix at 9:30am.
Another hurdle was a phone call from my company, harassing me about day trading my swing account. I tried to explain to them that fault lies with this damned HCPG newsletter I’ve been following. Guys buy “swing” positions, sell them the next morning, pat themselves on the back and then hurl shitbombs at day traders. Thing is, I can hardly blame them. This market has been damned shaky and every time it seems there’s real support, its violated faster than a meth addicted teenager at a dance club. I can’t blame HCPG for that, although there are unsubstantiated rumors about them turning their newsletter profits into hordes of meth which they are selling in rural america.. But I digress…
With the recent weakness in mind, I decided this morning not to chase price. Instead, I’d try and hang onto my swings and shift my day trades into shorting resistance. I was looking for “rhorts,” resistance shorts.
The OIH was outperforming. A few weeks ago, there’s no way I’d look to short the top sector on the day, but given the recent weakness, and the way rallies have been faded with consistency, I scanned the sector and found OXY approaching double daily trendline resistance.
The 20sma was first, up at 79.80 and on top of that, if things got dicey, I figured the 50dma should provide some resistance at 80.20. Instead of assuming I’d pick the absolute top, I set a few sell limit orders, laddered up starting from 79.60. Actually, that’s a lie. My first order was up at R1 at 79.42. However, OXY started to base just below R1 at 10:15 and I decided that it would probably shoot through there when the base broke and move to the 20sma. So I cancelled the R1 sell limit.
As it turns out, the 20sma was basically the top and I got off 3 limits for an average price of 79.75. The market was still strong at this point, and I exited half as OXY dropped back to R1 and decided to leave the other half stopped high of the day. Worst case scenario, I’d make a little money on the trade, no blood. Not bad considering the cable dude just showed.
The guy, an obese man wearing baggy pants, explained that he’d have to shut my connection down. So, I used the 15 ema as my target, set my buy limit, and let him grunt under the desk. His ass-crack was exposed in an inglorious manner, and I thought that MCD and NTRI might not be a bad long term stocks to tuck away in my daughter’s college savings account afterall.
The tile guy was in the kitchen talking angrily to himself. Normally, I would avoid such a situation, but having no control over my trading account with my internet disabled and not wanting to spend any more time with “Tony Asscrack” upstairs, I head towards the kitchen. The man had a small tile in his hand and he was staring at it and mumbling something obscene about the Chinese. I tried to slither by him and nearly made it out the door when he complained that the installation manual was written in Chinese. Apparently, the tiles were manufactured there. I considered adding some of that DYP back into my long term account.
I stepped out into the frigid winter air and started to pick up sticks. Yesterday, I had negotiated a deal with my neighbor’s gardener to remove my piles of leaves and take them to the dump. I found him outside smoking a cigarette in my driveway and gesturing towards the cable van which was parked, basically, on a pile of leaves. Tony Asscrack would have to come down and move it.
Back in my office, Tony Asscrack was staring with wonder at my monitors, which were flashing red more violently than a menopausal woman in a sauna. The internet was back up, the rally was failing, OXY had dropped right to the 15 ema, and I had just made enough cake to pay for my Chinese tiles. Exit $78.57.
I decided that, meth suppliers to rural america or not, maybe these HCPG guys were onto something.
Great example of a disciplined day-trade lay-up using intraday set-ups and daily charts. In our opinion -- the absolute best way to trade. Well done amigo.
Written by Dinosaur Trader
Illustrated by HCPG
---------------------------------------------------------
It was one of those days over here where there would be more distractions than setups. I had a dude tiling my kitchen, and a shaky internet connection that the cable company wanted to fix at 9:30am.
Another hurdle was a phone call from my company, harassing me about day trading my swing account. I tried to explain to them that fault lies with this damned HCPG newsletter I’ve been following. Guys buy “swing” positions, sell them the next morning, pat themselves on the back and then hurl shitbombs at day traders. Thing is, I can hardly blame them. This market has been damned shaky and every time it seems there’s real support, its violated faster than a meth addicted teenager at a dance club. I can’t blame HCPG for that, although there are unsubstantiated rumors about them turning their newsletter profits into hordes of meth which they are selling in rural america.. But I digress…
With the recent weakness in mind, I decided this morning not to chase price. Instead, I’d try and hang onto my swings and shift my day trades into shorting resistance. I was looking for “rhorts,” resistance shorts.
The OIH was outperforming. A few weeks ago, there’s no way I’d look to short the top sector on the day, but given the recent weakness, and the way rallies have been faded with consistency, I scanned the sector and found OXY approaching double daily trendline resistance.
The 20sma was first, up at 79.80 and on top of that, if things got dicey, I figured the 50dma should provide some resistance at 80.20. Instead of assuming I’d pick the absolute top, I set a few sell limit orders, laddered up starting from 79.60. Actually, that’s a lie. My first order was up at R1 at 79.42. However, OXY started to base just below R1 at 10:15 and I decided that it would probably shoot through there when the base broke and move to the 20sma. So I cancelled the R1 sell limit.
As it turns out, the 20sma was basically the top and I got off 3 limits for an average price of 79.75. The market was still strong at this point, and I exited half as OXY dropped back to R1 and decided to leave the other half stopped high of the day. Worst case scenario, I’d make a little money on the trade, no blood. Not bad considering the cable dude just showed.
The guy, an obese man wearing baggy pants, explained that he’d have to shut my connection down. So, I used the 15 ema as my target, set my buy limit, and let him grunt under the desk. His ass-crack was exposed in an inglorious manner, and I thought that MCD and NTRI might not be a bad long term stocks to tuck away in my daughter’s college savings account afterall.
The tile guy was in the kitchen talking angrily to himself. Normally, I would avoid such a situation, but having no control over my trading account with my internet disabled and not wanting to spend any more time with “Tony Asscrack” upstairs, I head towards the kitchen. The man had a small tile in his hand and he was staring at it and mumbling something obscene about the Chinese. I tried to slither by him and nearly made it out the door when he complained that the installation manual was written in Chinese. Apparently, the tiles were manufactured there. I considered adding some of that DYP back into my long term account.
I stepped out into the frigid winter air and started to pick up sticks. Yesterday, I had negotiated a deal with my neighbor’s gardener to remove my piles of leaves and take them to the dump. I found him outside smoking a cigarette in my driveway and gesturing towards the cable van which was parked, basically, on a pile of leaves. Tony Asscrack would have to come down and move it.
Back in my office, Tony Asscrack was staring with wonder at my monitors, which were flashing red more violently than a menopausal woman in a sauna. The internet was back up, the rally was failing, OXY had dropped right to the 15 ema, and I had just made enough cake to pay for my Chinese tiles. Exit $78.57.
I decided that, meth suppliers to rural america or not, maybe these HCPG guys were onto something.
Some Perspective
It feels like the market is in a blackhole but we feel more calm looking at daily. Short-term bottom at 107.4-108 and then after a little rally maybe further pull-back to 102. Nothing too surprising here looking at daily time-frame.
Update
We sold out 50% of yesterday afternoon's purchases:
CENX ATPG TC CRK PCU NUE SU DO JRCC RGLD IAG PAAS. Looking for more upside with commodities leading for the first time in a while.
It looks like SPY 108 will be a short-term bottom.
Update: Taking profits and closing positions that are rallying into resistance. Sold TC in front of the 50 SMA, sold SU in front of the 200 SMA.
Update II: Can't feel warm and fuzzy with AAPL GS acting this badly. We sold the rest of all positions, flat in all accounts. The bulls should have taken the GDP numbers and ran with it -- if this is the best they can do we'll stand aside.
CENX ATPG TC CRK PCU NUE SU DO JRCC RGLD IAG PAAS. Looking for more upside with commodities leading for the first time in a while.
It looks like SPY 108 will be a short-term bottom.
Update: Taking profits and closing positions that are rallying into resistance. Sold TC in front of the 50 SMA, sold SU in front of the 200 SMA.
Update II: Can't feel warm and fuzzy with AAPL GS acting this badly. We sold the rest of all positions, flat in all accounts. The bulls should have taken the GDP numbers and ran with it -- if this is the best they can do we'll stand aside.
Thursday, January 28, 2010
New Partnership
HCPG is pleased to announce a partnership with T3 Live.
T3Live is an online trading education platform that provides traders of all experience levels with market analysis, real-time access to strategies, and extensive training from top trading professionals with solid track records.
This is the first partnership deal we have accepted in the four years of running our business. Why? Because we've been in the business long enough to know good traders when we see them and T3 is the real deal. We are excited about this partnership as T3/HCPG trading styles are similar and complement each other very well. Sign up here for a FREE two week trial at T3 Live.
T3Live is an online trading education platform that provides traders of all experience levels with market analysis, real-time access to strategies, and extensive training from top trading professionals with solid track records.
This is the first partnership deal we have accepted in the four years of running our business. Why? Because we've been in the business long enough to know good traders when we see them and T3 is the real deal. We are excited about this partnership as T3/HCPG trading styles are similar and complement each other very well. Sign up here for a FREE two week trial at T3 Live.
Position Talk
As you know we put on some of our positions back on this afternoon (from the opening sale) and are now long CRK RGLD SU PAAS DO IAG TC NUE JRCC ATPG PCU CENX.
Being long commodities we're happy to see Dr. Copper (HG_F) strong tonight.
Our stop was going to be 108 but we're going to give it a bit more room due to earnings volatility and if market sells off we want to see how it reacts around SPY gap fill near 107.4.
We're hoping this 108-107.4 area is a short-term bottom. If not, we'll exit our longs.
As we looked through the charts of our positions tonight we liked what we saw in terms of entry on major support on all the stocks. What we'll be watching for is
positive divergence with commodities stronger than rest of market. If commodities go into the tank with the general market we'll cut today's longs loose and wait for the next set-up.
Being long commodities we're happy to see Dr. Copper (HG_F) strong tonight.
Our stop was going to be 108 but we're going to give it a bit more room due to earnings volatility and if market sells off we want to see how it reacts around SPY gap fill near 107.4.
We're hoping this 108-107.4 area is a short-term bottom. If not, we'll exit our longs.
As we looked through the charts of our positions tonight we liked what we saw in terms of entry on major support on all the stocks. What we'll be watching for is
positive divergence with commodities stronger than rest of market. If commodities go into the tank with the general market we'll cut today's longs loose and wait for the next set-up.
Positions
We think that SPY 108 has a chance of being a short-term bottom and with that we've bought some of the positions we sold this morning:
ATPG CENX CRK DO IAG JRCC NUE PAAS PCU RGLD SU TC
However, this time stops are simply today's low. Before we would have added into weakness, now if that occurs we want to go flat and re-assess.
ATPG CENX CRK DO IAG JRCC NUE PAAS PCU RGLD SU TC
However, this time stops are simply today's low. Before we would have added into weakness, now if that occurs we want to go flat and re-assess.
Update
As we posted in our account at 9:37 AM this morning we went flat and sold all our positions from yesterday into the gap. Why? Ag-Chem sector was weak due to POT earnings but more importantly there just didn't feel like there was any excitement --the sound of the panting breath of bulls wanting to get in so as not to miss the bottom was missing. It was quiet. And the opening print was the high of the day. It was time to get out and re-assess.
What now? We're sitting on our hands. If we had gapped down then the fear trend would have not been broken but the gap-up reset it -- meaning we have to wait again for an extended more down. As we've written in our newsletter and in this blog many times over the last 4 years -- when buying support, the bounce is your exit. If the bounce fails, you have to sit patient and wait for the selling pressure to mount again.
We were anxious not to miss the "bottom" just a few days ago -- now we're happy to just sit and wait for more clear signs. We're technical traders, sure, but if you've watched us trade live on Twitter by now you also know that there's a lot of "gut and instinct" involved too -- and right now we see no edge. So we wait.
What now? We're sitting on our hands. If we had gapped down then the fear trend would have not been broken but the gap-up reset it -- meaning we have to wait again for an extended more down. As we've written in our newsletter and in this blog many times over the last 4 years -- when buying support, the bounce is your exit. If the bounce fails, you have to sit patient and wait for the selling pressure to mount again.
We were anxious not to miss the "bottom" just a few days ago -- now we're happy to just sit and wait for more clear signs. We're technical traders, sure, but if you've watched us trade live on Twitter by now you also know that there's a lot of "gut and instinct" involved too -- and right now we see no edge. So we wait.
Wednesday, January 27, 2010
These are our positions
The arrows are where we entered these positions today, the lines are the bases against which we bought. Futures gapping up -- looks good for tomorrow with the exception of QCOM which is going to hurt (down AH due to earnings). Thankfully it's 1 out of 18 positions we have on: if we get some real strength on good breadth we'll be adding, not selling, to all the commodity positions.
In extremely oversold conditions grow a pair and put your hands into the fire:
Note the time-stamp of 2:19 PM:
Update next day: we sold everything into the gap-up this morning. We didn't like the Ag action (POT warned)/ lack of overwhelming strong breadth and wanted to flatten out and re-assess.
In extremely oversold conditions grow a pair and put your hands into the fire:
Note the time-stamp of 2:19 PM:
Update next day: we sold everything into the gap-up this morning. We didn't like the Ag action (POT warned)/ lack of overwhelming strong breadth and wanted to flatten out and re-assess.
New positions
We nibbled on some positions today with expectation of coming pain. Absolute key for us right now is to stay small and add slowly while keeping a lot of buying power dry for tomorrow.
We inititated positions today in ATPG AU AUY CMI CRK DO GDX IAG JRCC NUE PAAS PCU QCOM RGLD SQM SSRI SU TC and will add not into support (most of these already broken) but into panic.
Update:
As we wrote real-time in our Twitter acct, we added into the FOMC sell-off and took off the adds into this little rally. Keeping all cores for now.
Sold partials of everything (but still have small size on all positions), limiting risk due to tonight's State of Union unknown.
We inititated positions today in ATPG AU AUY CMI CRK DO GDX IAG JRCC NUE PAAS PCU QCOM RGLD SQM SSRI SU TC and will add not into support (most of these already broken) but into panic.
Update:
As we wrote real-time in our Twitter acct, we added into the FOMC sell-off and took off the adds into this little rally. Keeping all cores for now.
Sold partials of everything (but still have small size on all positions), limiting risk due to tonight's State of Union unknown.
Tuesday, January 26, 2010
All you need to watch
We wrote about this range this afternoon -- look at the very nice defined range in the SPY under the 60 min/20 EMA:
Any basing near the top of the range 110.5 and then break-out would increase the chance of success -- the same holds for basing over 109 support and then a hard break. Watch for possible head-fakes if range is broken on extended intraday move.
Any basing near the top of the range 110.5 and then break-out would increase the chance of success -- the same holds for basing over 109 support and then a hard break. Watch for possible head-fakes if range is broken on extended intraday move.
What we'll be watching
This is the kind of stuff we'll be using as tells going into any type of rally:
Note how these three reversed at resistance -- we'll keep them on our screens as "tells" to see how they react next time at these levels. One thing that's for certain -- break-out trading will be on the back-burner for a while and shorting at resistance will be at the forefront.
Note how these three reversed at resistance -- we'll keep them on our screens as "tells" to see how they react next time at these levels. One thing that's for certain -- break-out trading will be on the back-burner for a while and shorting at resistance will be at the forefront.
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