Futures levels

We’ve promised our readers to add some future levels to the newsletter as we’ve started trading them more this year.    We had always imagined commodities to be more “difficult” and thought of them as more “risky”.  The truth is that we have found them to be easier to trade than stocks this year.  It’s still early and we don’t want to mush things, but so far so good.   Yes, the leverage can be dangerous but we haven’t been in the business for 14 yrs without learning a few pointers about risk management.  Stops are stops.    We find commodities to be “cleaner” and technically easier to read.    So are we going to give up on stocks?  No.  Of course not.   Our modus operandi this year has been the following: when we have good set-ups in stocks, that’s our priority (for example tomorrow we finally have a few alerts that we really like and stocks will be our focus).   When we have no good alerts (like earlier this week) then our attention wanders off to futures.
Our field of opportunity has now increased, and that’s never a bad thing.   What we have always been very good/disciplined at is not trading unless there is something with an “edge” to trade.   If there’s no edge, we won’t be involved.  If we could ever point to a “secret” of being successful at daytrading,  that would be it.
Here are the futures that we currently have on our radar:

Copper is hanging on to the lows of the trend-line — not what you want to see if you’re a bull.  A break of the trend-line would be a decent opportunity for a short as most likely that area will be filled with stops.



Nothing in corn for us to do until a) gap fill near 693 and then support at 660

Crude too extended from any base for us to be involved long and no interest in shorting.


Gold too extended from base for us to be involved (even though we have been waiting patiently for junior gold miners to set up long for a while — much less extended there $GDXJ) and no interest in shorting.



Silver– as you know we were looking for a short in silver (and mentioned the symbolic 50 last weekend).  Silver retraced 10% from its highs and for us the short trade is over.   We never short the second test of a high so no interest there in shorting 50 either.   We would be interested in silver long if it can consolidate the recent move and set-up long under 50, but a base that would satisfy us would take weeks.  The silver trade is over for us for now.

Soybeans coming into a level of interest — through trend-line down could be a decent short (and then overshoot support long)

Wheat interests us on the trend-line as a long (first test).

$ES_F not extended enough for us to go outright short without a reason but if the dollar can pick up we’d be probably be involved dark.

Trading Hours:   http://www.cmegroup.com/trading_hours/index.html
http://www.cmegroup.com/trading/agricultural/files/AC-268_Grains_FC_FINAL_SR.pdf
http://www.cmegroup.com/trading/Price-Limit-Update.html

Great Read

Thanks to Reformed Broker for his link to this very interesting interview with Peter Brandt
Read the whole interview as it has many interesting insights, but here’s a small excerpt which made us laugh and is uber- relevant to anyone who puts information out there on blogs, twitter, etc.

PETER BRANDT: I knew then that I wanted to start trading for myself. So I started dabbling a little bit, accumulating a little bit of money, starting in ’78, doing some trades… and I didn’t really know what I was doing.

One of the first trades I did came from my friend in Evanston who was the bean trader. I was just learning the business, and he had told me he was really bullish on soybeans: “Peter, I’m REALLY bullish on these beans.”
And so I watched them for a few days – I think they were around $5.50 or so – and I’d saved up a few thousand dollars to speculate. And they crept up like ten cents, and so I bought a contract, and they went up like five more cents – and then they went down twenty cents.
And so I got out with my loss, and eventually saw John again and said: “John, so what about those beans?” And he said “Yeah, was that a magnificent move or what?”

JACK SPARROW (laughing): Oh no…

PETER BRANDT: Yeah, and I said “What are you talking about?” And so it ends up that John is a scalper. He never takes a position home at night. He trades the beans for half a cent to a penny, and he had such a conviction on beans that he had a position he was willing to carry for three or four days. Well I find this out after the fact. He takes ten cents out of the bean market, which for him is a gigantic move, and I wasn’t even thinking that way!
And that was a good lesson. Traders at the Board of Trade would constantly say they were bullish or bearish, and it was a good lesson that the words “bullish” or “bearish” did not mean anything. I would have to ask, “What’s your timeframe? How long do you hold trades? How much money are you looking for in a trade? Where are you wrong – what will tell you that you’re wrong? Why are you bullish or bearish, what do you know?”
And so I learned really early on that bullish or bearish didn’t mean squat.

Newsletter excerpt Silver

Big move in silver today — it threatened to break 44.61 today but reversed sharply just before with the FOMC decision, and then went insane to the upside when Bernanke actually took the stage.  It stopped for the day right at resistance/R2.    Our “edge” here is gone for now, be it shorting against 49-50 or buying over 44.61.   We’ll probably leave this alone for tomorrow.  We won’t short against 50 as now it’s the second test and technically a buy.  However it’s too extended for us to go long through 50.   This means we’ll probably stay to the side-lines until we see a good risk-reward set-up in it form over the next few days.

The reason we’ve been so focused on silver lately is simply because that is where the best action (edge) has been.   Once this shifts back into stocks we’ll happily return our focus to equities.

Support being tested

Copper and Silver are close to testing short-term support levels — if those go it could accelerate selling.    $USDX has some early strength which of course is not helping the commodities.
Copper bounced right on our support line and “short-term bottom” call from last week — the more it tests it now the weaker it becomes.

Silver also threatening to break-down out of the 44.61 support.


Lots of Fed appearances today so as we wrote in our newsletter last night, not a bad time to step off the pedal and take it easy.

Update:  Ben, the dollar killer, out with FOMC decision and commodities catching a bid and USD resuming death spiral.   Next up press conference at 2:30 PM.

Daytrading Silver

We wrote last night ” note how trend-line broke and now has been regained.   For day-traders the low 44.61 now is the first floor.”      Today’s low was….wait for it…..wait for it…..    44.625.     As long as that holds now the bias is day-trade long.    Note how 60 min chart/20 EMA which had been resistance (boxes 1 and 2 which were great spots to short against) has now flattened out (3) and is turning the other way.   This is another argument for day-trade long bias.


Update: Already working, now through the 20EMA on 60 min chart:


Couple of points:
1) we’re only talking day-trades here.   No serious support on daily for a while.    If 44.61 goes then bias goes again short or at least neutral for us until next support areas on daily.
2) FOMC rate decision out at 12:30 PM tomorrow — if that somehow lights a fire under the moribund $USDX then expect pressure on all commodities.

Silver Road Map

We’ve been talking about shorting the silver top (and alluded to wanting 50 reversal on weekend) now in one post after another.   Last night silver traded up 7%, possibly at least partially on rumors that China would start dumping USD for hard assets.    Silver rallied to the very symbolic 50 level and reversed, now down 9% just from last night’s high.

If you want to buy the dip, here’s your road map.   In our experience it’s never a good idea to start picking at bottoms on the first day of a reversal.  The price-action is simply too heavy.
We wrote a few times about the change of angle of ascent — something that often precedes short-term tops.   Note now that silver is testing the steep trend-line.  We believe this will break soon.  The second line of defense is much sturdier, and it currently is around $40 on the $SI_F.    We’d be buyers on this secondary less steep trend-line.


What if you don’t trade futures?  Well, let’s take a look then at $SLV.   Instead of the 50 top we have here the $47 top.  Note how strongly it bounced today on the steep trend-line.  This most likely will break tomorrow.  Again, be careful going long on the steep trend-lines.  Risk/reward is often much better on the longer time-frame, milder ascent trend-line.
Secondary trend-line is currently also at $40.


If you want the silver miners there is a great spot coming up near 26.5 on $SIL


If you like the junior gold miners (plus a few silver) then $GDXJ has a nice support area near 36.

No more silver obsession from us

Silver 8% pull-back from last night’s highs for us constitutes the short-term top we were looking for and enough of a pull-back for us to stop our obsession.  If we can now enter a consolidation phase under 50 and let the SMAs catch up we would walk down to the bull camp.    Big IF of course, especially since USD still has not been able to find a bid in this reversal.
As an aside, it’s somewhat funny that silver would run up last night 7%, possibly at least on rumors that China would start shifting away from USD and into hard assets.  As we wrote last night, if this were true, why would China want to pre-announce this?  So everyone front runs them?  And they already have trillion dollars worth of US debt, not exactly in their best interest to make toilet paper out of the USD.   Could rumors from abroad about dumping USD scare the Fed away from QE3?      Interesting times indeed.
Here are all the relevant charts:

Silver reversed under the big symbolic 50, and now back at very steep trend-line.  We expect this to break and for silver to go into a consolidation phase.  We’re not interested in shorting it anymore.
We pointed out the silver miner/silver commodity divergence a while back — note how miners have not been able to find traction. We’re still interested in buying the trend-line test.

Sector Spotlight: Business Software and Services

As we were doing scans last night one sector kept popping up, showing strong trends and very good price-action.   Business Software and Services. Go figure.

Here are the best of the bunch for some possible swing ideas.   $BCSI $ADP $CTSH $CTXS  $INFA $JKHY $SFSF $TIBX

The elusive silver top

 
We stated our intention of trying to game the silver top this week in our It’s never different post.   We waited for the right opportunity and finally got involved in two short selling daytrades, on Wednesday and Thursday.   It’s safe to say that right now, it’s our obsession (even though we’ve tried to keep it out of the newsletter, which is more stock oriented and has had usual number of alerts).  We had two very good days yesterday and today by waiting for excellent set-ups and being extremely patient in our entries.   A couple of points:

1.  While we had good solid profits on these two days we would have had 10x more profits had we simply just bought the stupid metal and rode the trend.  But we simply cannot go long a chart as extended as this one, that’s not how we trade.

2. We can’t help it.   We are 97% trend-traders but once in a while we have to go for that ultimate game of trying to find the top when it’s as juicy as this one.

3.  As long as silver keeps going up WITHOUT basing we’ll be looking for short opportunities.  If it can actually base/pull-back then we’d be happy to go long.

4. It’s like picking up dimes in front of a bulldozer.  Really.     But it is a lot of fun.  And for the most part our job and the way we trade is pretty conservative.   Once in a while we need to let loose.  This is the time for us.   It’s also a very good exercise for keeping our skills sharp.  Kind of like extreme sport.  Timing has been everything, and there’s not much room for error if you want to get the trade right.   It’s not forgiving the way a break-out on a trend-day is…

5. Many traders we know are doing the exact same thing which is kind of funny. And scary.

6. On both days we didn’t cover that last contract just in case this was the one.   Our style is to move stop down aggressively and finally leave a partial position on at higher stop to give the trade some room.  On both days we were stopped out the last contract. No regrets.  Key was locking in majority of trade so that even if you’re stopped out last partial, you had a solid profit for overall trade.

7. If silver goes up on Monday, we’ll be looking for a short set-up again.  And we’ll do this every single day it goes up, covering 3/4 profits but keeping that last 1/4 just in case we hit the real “top”.  We will not swing short silver, we are only engaging in day-trades.   We’re 100% cash right now.

8.  This definitely is not for the inexperienced or faint of heart.   And it’s not even smart way to trade.    But we all have to do what we have to do.  And it’s been quite profitable the last two days and we believe will become even more profitable next week.

9.  We have a defined stop on this casino play — we’ll lose x amount and stop the game.  And it really is a game.   If you’re doing the same please treat it as such.   This is not bread and butter trading, this is not a way to last in this business and if you don’t understand good risk management it’s probably one of the fastest ways to blow up your account.  However, if you do know what you’re doing and have experience/good skill set then there are excellent opportunities.   In the other 97% of the year you’ll find HCPG to be engaging in boring and conservative trend-trading.

10.  Can’t wait for Monday. Go silver.   It’s the perfect storm as USD is in complete death spiral and silver is going for that symbolic 50 mark.   The higher it goes the more we like the trade.  A scum of 50 and reversal would be oh-so-perfect.  But then again,  many traders are looking at the  same trade which is never a good thing.

And here is the hilarious chart to look at one more time before you go for the long weekend:



Note change of angle of ascent –we’re now going vertical.   Fun times around the corner.

Daytrader Strategy: Failed Indy

Over the years we’ve contributed a few daytrader strategies to the community, the base and break, overshoot support, and one of our favorites, the Indy.    We wanted to review a variation of the Indy today: short on failed Indy.


The name comes from a description of the strategy in which the stock is basing under  R1 /2 or daily resistance and is slowly getting squeezed from below by the ascending EMA.  Indiana Jones would often find himself in similar situations and would always find a way to break out of the impending squeeze, thus the name “Indy”.   It’s a great inflection point — it’s basically do or die and you can often get off great risk-reward trades around the pattern.   We mostly trade Indy long, that is we look for Indy set-ups on existing alerts from alerts we’ve added on previous nights.


However, when we’re looking short, then we also look for failed Indy patterns.   Today there was a nice one in $SLV which we thought would be interesting to the day-traders out there:
We were looking for a short trade in silver today (again) but the $SI_F chart was a mess and we couldn’t find any edge.  So we decided to trade the SI_F  off the $SLV which in contrast was printing a nice orderly chart.
There was no daily spot on SLV to short against but there was R2 which interested us –note nice ascending 9EMA.   This is a bullish Indy pattern in that stock is basing under resistance (R2) but is being squeezed from below by the 9EMA.   SLV poked above R2, and came back to test the EMA.    A true Indy would have pushed the stock away from R2 above for continued rally but SLV started to weaken as it re-tested the EMA.  The longer it sat on EMA the flatter the EMA became — the flatter the EMA the less strength it has.    What we had here was a possible failed Indy formation — exactly what you want to see if you’re short.


Now look at the chart below:  SLV went to re-test R2, now very much sitting on the EMA.   This is the do or die moment — at this time stock has to lift up and away or it will likely fail offering good short trade.     If you see the EMA weakening (flattening) as it was here, go short, with stop on top of the high.   Trade here was short around 44.99-45.02 with stop just above high 45.07.  This is the “do or die” moment in an Indy.


And Indy fail worked well here for a short — stop was not hit and you would have had a nice risk/reward trade short as stock quickly went to 44.66,  original stop was around 7 cents so as you can see very good R trade. On the SI_F entry was around 46.13 with a dime stop,  and the low on the failure was 45.75.

At this point a trader covers majority and can sit back, relax (write blog posts) and  leave on last partial (last 1/4 in this trade) at updated stop of break-even (which now is above the EMA) in case the short has more juice.   When we have last partial at break-even stop then we try not to micro-manage the trade and try to focus elsewhere.



Note the pattern can also be applied to the daily char.  For example, stock is basing and finally ascending 20SMA catches up, stock oftten then either rips up (usually the case, following trend) or fails.  Again, good risk-reward entry.

The silver trade, newsletter excerpt SI_F

All our focus was on silver today. As we wrote yesterday we were expecting opportunity in silver today due to yesterday being a trend day. It is rare to get two trend days in a row (in overbought daily) without some type of pull-back short opportunity. A few of you asked us to review our trade, here it is: First trade was on extension from EMA with sells from 44.98 to 45.13 averaging 45.08. Took majority on the on re-test of EMA for profit while stopped on last on new high for a loss. At this time we had fully realized how sticky the day was going to be and decided to be a bit more careful. Even though we got out with profits, we had rushed the entry (we should have started at 45.13 instead of adding there) and we were not going to make same mistake again.



Second entry was again on extension from EMA at 45.37 plus a separate position short SLV (don’t ask why, no rational reason, just wanted another vehicle) stopped on SI_F on new high which was very close by. This time it was much less painless as the trade worked without too much chop.



Covered positions throughout the fall while moving stop down aggressively. Also booked another quick trade short on the first test of the EMA. We wanted 44 for the last cover but didn’t get it and booked the last on the move over EMA 44.87. We gave up a lot of profit by waiting for that EMA to go (instead of covering all into the spike down) but we thought we had a chance for a kill and went for it — no regrets. Also was a good place to go flat as silver rallied for rest of afternoon.


Key was being very very patient in entry — there is no trend right now “stickier” than silver. Shorting it is probably not the smartest thing to do — but it’s what we wanted to do and we had a plan, and it worked well for a decent day of profits. If you short extended from EMA on an overbought chart then usually you can get away with not much damage or profits if you’re wrong (like our first trade) or good profits if you’re right (our second trade). Also note that if you want to short against a trend, wait for the day after a trend-day as it will increase odds of success. The day after a trend day in an overbought stock almost always offers some short opportunity (unless news). As our readers know these type of trades are rare for us (we’re trend-followers) but once in a while we like to get involved in order to keep things “fresh” and our skill levels in ready state.

Newsletter Excerpt

As we wrote in our post this weekend silver is very extended but finding a good short spot likely will take some patience.  Right now any quick extension and move up will make things easier, starting with a significant gap-up on Sunday evening and a quick run into this week.   This really isn’t our meat and potato type of trade but we’ll probably be involved at some point trying to find a short in a short-term blow-off top.   It’s extended on longer time-frames but not yet extended on intraday and that’s what we’ll be looking for before we enter.   It could come at 45, 47, or 50, we don’t know, but hopefully when it comes it’ll be a straight panic move up followed by stalling and reversal.  We’d short the reversal and be stopped on top (or give it a set room, for example, 50 cents, etc).   Of course this is easier said than done — what can happen is stock runs, extended from base, and then goes horizontal and digests the move before legging higher.   If you’re short and you see that happen you need to just accept it and take the loss.

We’re in a good position in that we  don’t “need” to do this trade and we can afford to be very patient.   This is not some breakout point that we’ve watched for weeks and which we feel psychologically we “need” to be involved in — this is very much an entertaining tangent of a trade.  We’ll wait until it’s screaming at us to get in; and if the trade doesn’t talk to us and we can’t find that “no-brainer” entry, then we’ll just sit back and watch.

Starting to leave channel and go parabolic — very important not to be early on these type of shorts as stocks can stay parabolic for much longer than one can rationally imagine.   If you don’t know what you’re doing (start early, keep adding) you can easily blow up your account.  If you’re going to get involved have a set number you can lose without doing any real damage to your account.  For example  say to yourself   “Ok, this is a bit of a crazy trade but I’m willing to give it $1500″.    You watch silver go up another $5, start stalling and reversing. You adjust your position size so that if the high is taken out you only lose $1500.   That’s the only way to go against the trend and not kill your account.

For most traders, including ourselves, it is much easier to follow the trend.  Even our support longs (which are short-term reversion to mean) are usually within longer term bullish trends (so essentially they’re also following the trend).  This is a very different type of trade.   Experienced traders only.   If you can’t trust yourself to take your pre-defined stop loss (especially if it happens quickly, the hardest stops to swallow are the ones that happen immediately) then don’t even think about taking this trade.   Basically, if in the last 2 years you’ve broken your rule/plan of adding to a losing position instead of taking a loss/ obeying a  stop then DO NOT get close to this trade.

Check Earnings

Don’t only check earnings on your holdings, but remember to know the earning dates on your stock’s competitors.
Here are the most important stocks with earnings that we follow:

Monday:   ALXN BA BIIB BUCY C FCX GILD HAL MEE NFLX NTGR NVLS PCX STLD VRTX (note biotech theme)
Tuesday:  BTU CREE CSX GS INTC ISRG JNPR IBM VMW YHOO
Wednesday: AXP CMG DECK EMC FFIV SOHU SWKS UNP WFC
Thursday: AMD CY CYMI DHR DO GE HON NFX NEM NUE SLB

It's never different

We have quite a bit of conviction that there will be a very juicy day-trade/short-term short trade coming up in silver $SI_F.  But to be perfectly honest,  we’re not sure we’ll be able to get off a good risk/reward trade.    There were many smart traders who were completely right in their thinking that the Nasdsaq was in a bubble back in 2000 but lost it all anyway as the top kept getting toppier. Knowing it and Trading it profitably are two different things.  What will help the trade is further extension, the faster we go up, the better.  A gap up on Sunday night and into Monday would certainly be good.   For us to get short (we’d do it via SI_F) we’d need an extension away from the 5 min/ 9 and 20 EMA (daily/weekly are already extended and since we are daytraders we’ll be focusing on the intraday time-frame).
To make a point clear right away — we’re not calling an absolute top in silver.  We have no interest going in that direction.  We’re all about the short-term.  If we short 45 and it goes to 43 and we cover we call that a victory.  If it goes to 47 the next day that’s fine, we got our two points.
We look at the divergence between silver miners (stalling, under highs) and silver commodity (screaming higher, completely parabolic) and we can’t help to think reversion to mean on the commodity.    Take a look at the following charts:
This is an overlay of silver miners via $SIL and the commodity via $SI_F.  We love these type of divergences because they usually foreshadow good trading opportunities.

Here is a silver weekly– textbook parabolic as buyers are hysterical.  Got to get me some silver!   The divergence to us demonstrates speculative fever versus supply and demand.
Unbelievably extended from the base, and outside its Bollinger Bands on every major time-frame.     Not exactly a good risk-reward entry long, even if you are a bull.

We posted this chart a while back — we’d be buyers of SIL on a pull-back to the trendline, currently at 26.


If you are interested in silver, you follow $SLW.   Here’s a recent quote that caught our eye:  ” Smallwood (CEO) pointed out the only drawback right now is that with silver prices rising so fast, miners are reluctant to do deals with Silver Wheaton. They know that if prices run up to $50 US in the near future, they can get a much higher upfront payment for their silver. He is convinced those deals will come once prices stabilize”
Miners holding back and not signing deals?  Again, this type of information often comes near a blow off short term top.   ZeroHedge this weekend posted this article about University of Texas taking physical delivery of  1 BB in gold.   They see it as a “tipping point” in which U of T is the first of what eventually will be many to leave the “fiat” system.   They see the current gold rise as a “dress rehearsal” of what really will come once other funds join in the fun.   Again, this type of fear-mongering for us is closer to a time when you want to be short, than long.
Precious metal bulls have very good arguments on why silver/gold will go higher.  And who knows, maybe it will go up much higher.  But it’s never different.  And new paradigms are much more rare than people think.     Historically speaking it’s rarely a good idea to initiate a position in a trading vehicle that has gone up vertically out of base as much as silver has and is outside of its Bollinger Bands.   We’ll see if this time indeed is any different.

Market Thoughts

We had 11 support alerts hit today — many in the same sector.  When this happens, (simultaneous support alerts going off) it often results in a strong bounce.  This was not the case today.   Even though most closed at least near or higher than the original alert, quite a few first went below before finding intraday bottom, and then bounced higher.     It wasn’t ideal but there still were opportunities long ( in fact $CSX $HOC $FLR $JDSU $X  alerts from last night’s newsletter worked at/near the alert for decent daytrade  bounces).    Basically, what didn’t work at support was the oil and gas sector.

We ended the day green, not by much, and we churned a lot (thanks mostly to $OXY) but still green enough to still feel rewarded for buying the dip.   We won’t stop looking for support alerts until this reward feedback stops, i.e. we get punched in the face by mother market.    And then we’ll start thinking about replacing support long strategy (which we use for bull markets) with breakdown short (which we use in bear markets).   But we’re not there yet.   Not even close.

Incredible run on the $XLE — give and take and basing all part of normal cycle.  Next big support not until 72.

Steel Ideas

Three support areas coming up in the steels that we like for a trade  (a trade for us means daytrade or if we’re lucky and get enough safety cushion into the close a possible 1-2 day hold).
ATI 60.6 zone add alert

NUE 44.8 add alert


X 50 add alert.



This market has come a long way in a short period of time — these pull-back moves are all part of a healthy cycle.  As we’ve written many times in the past we will not be worried until support buyers cease to show up.  When that happens we’ll definitely step-back and re-assess.   Until then though, business as usual.

How to run a straight-up business: newsletter case study

We have been running the HCPG newsletter now since 2006.   We are very happy with what we have created over the years and believe that many of the lessons we have learned in running HCPG also can apply to other businesses.   So here’s our case study.

1. Don’t claim anything.    The quality of your product is the only thing that matters.     We could be three punks trading from a double wide in some trailer park,  or we could be three very well-off successful traders.  We’ve never claimed one or the other.  Does it matter?   No, not at all.   All that matters is whether the information we provide can make you more profit than you would have without the newsletter.  Stay with what is relevant.   We stay under the HCPG moniker without providing personal information because frankly, our personal life is no one’s business.   All we do is provide potential set-ups for any one who pays $44.76/month.   You’ll find out very soon (including a 10 day free trial) whether it’s all nonsense or whether it can add to your bottom line.

2. Unless you intend to provide an audited PnL record that you will provide to your subscribers every week never talk about dollars or brag about how much money you’re minting.   You will never hear us talk about money, be it on stocktwits, twitter, or in the newsletter.   You will never hear us say Big Kaching!!   If we’re happy with a trade we’ll say it was a good trade; whether we had 100 shares or 100,000 shares should have no effect on your trading.  Keep your ego out of your business.

3. Be nice and always look at the big picture.  If you’re in it for the long-term as we are (HCPG 5 year anniversary in a few months) then try to build solid relationships with your readers.  Don’t nickel and dime people.  If a subscriber forgets to cancel a trial and gets billed on the 10th day  and emails us that they don’t want to stay on, we refund the money.    We believe that readers should consider us a lucky find — rather than trying to trap people for an extra month because they forgot to cancel in time.   We want readers to stay with us because they want to stay with us.   This is also the reason we do monthly payments.  No contracts, no specials.

4.  Be the best in what you do.    Easier said than done but what will propel you on this path is to specialize.   Find your niche and then be the best.     We only trade high-beta very liquid US equities, mostly in the commodity and tech space.  We’re not interested in trading small-caps, Chinese time-bombs, biotech-time bombs, and while we like to watch currencies and hear about options, they’re not our specialization and you won’t find them in our newsletter.  We want to only talk about things we know very well and frankly, options and forex do not fit into that category.

5.  Teach people.   Subscribers who have been with us  for a good chunk of time  know our strategies as well as we do.   Create a community and  build bonds and you will see the benefits of organic growth.

6.  Keep your cool.   When you are writing the newsletter or posting on twitter/stocktwits you are representing your company.  Don’t get emotional, or get into cat fights with other traders.    If you are dying to rant then open up a personal twitter account and go nuts.   But everything that comes under your company name should reflect professionalism and integrity.   Don’t get us wrong, we love to joke around, and believe that’s an important part of relieving stress in a very stressful job.   But you won’t find HCPG losing it in a temper tantrum.

7.  Don’t fret about the competition.     We often retweet posts from our competitors, and consider many of them as online friends.   Don’t be afraid.   There’s always room for a quality product in the market.

Market Notes and Week Review

Everyday in our newsletter we review all the triggered trades from the previous night’s alert list.   We’re going to do a modified version for this blog, reviewing all swing trade ideas shared in the blog that trigger during the week.   Last weekend we gave you $GDXJ $GS trend-line long ideas, and both worked well.   GDXJ was straight-forward, broke trend-line and never looked back.  We swung it into today but closed the last partial of the position today.    GS was more tricky as it didn’t trigger for a few days and thus trend-line moved from 162 to 160 (as we told our subscribers in our newsletter) with targets of 162 and 164.  GS hit our two targets and then reversed back into congestion zone (and hit our raised stop).  Mission accomplished.

We have a feeling that next week we’ll be looking more at support trades than break-out trades.  We like the refiners and are half-regretting not putting on an overnight position near the close as they are all finished right at daily support.   However,  since our brains seem to be constituted of 80% daytrader/20% swing genes we wanted to be flat and re-assess on Monday.   We’re all cash going into the weekend.
On a final note:  $USDX death and crude oil $CL_F rip  are reaching “too much/too fast” regions and we think there should be some reversion to mean soon in the names.   As we tweeted today the market is starting to be more “reactive” to crude movements.  We believe we’re at the point now where this relationship will increase at a much greater speed than in previous weeks.   The weight of the price of oil is finally showing up in the market price-action.  Crude rallied almost 4% in the last 2 days — market dipped on both days but was able to regain its composure by the close.  Another move up like that in crude and we don’t think late buyers will show up with the same enthusiasm.

Do or Die Time: Refiners

The four refiners we like to follow,  VLO HOC TSO WNR all re-tested support today on very heavy action even though crack spreads were up 5%.  The bounced off their lows and all of them closed near support.   Bounce or die time coming up on Monday.   We tried our hand in VLO TSO but were early and weren't able to find any traction in either (sold both for small gains/losses).   It's often a good time to buy support when the whole sector hits it at the same time -- however, it also often needs to be held overnight, something we didn't feel like doing today.  Let's go through them all.

HOC through 60 support and overshoot into 20SMA.   It held and stock closed right at support.  Stop here would be the loss of the 20SMA. 

 TSO through 26 support and bounced off the lows but couldn't regain support.   Next support not until 24.5

VLO went through the 50SMA, overshot, and then bounced back to the 50SMA.   Again, if you're long you want Friday's overshoot low to hold. 

WNR had support at 17.5, again overshoot, and bounce off bottom back to support.  

The most common move from overshoot is a bounce back to initial support.  The perfect example here is HOC as first support was 60 which didn't hold, and stock overshoot move to 20SMA which held, and then stock bounces back to initial support.  As our readers know, when you get in an overshoot the first target is a move back to initial support.  This means if you got in HOC on the reversal at the 20SMA near 59.1, then your target is 60 which was primary support.

For more overshoot examples please see these links:

Overshoot definition and examples: 1, 2, 3, 4, 5, 6, 7