Whoo hoo fed day...the day where a private group of old wankers come out to destroy the value of our dollar further!!......
Markets are up big again today...but are we setting ourselves up for a big "sell the news" rally?
I really think so...we'll know in about an hr!
UPDATE 1:
We didn't go cratering. Surprisingly...
Dow hitting 13k, nasdaq at 2400, s&p at 1400. My post from earlier this month came true. If theres anything I can be proud about...I guess it's that!
I am starting a short position on PWRD. It is up another 4%~ today @ $29 off the news that it is collaborating with Intel and Haier to develop games. Nice and all, but it has ran up nearly 25% in the past month. Add it to my theory that the dow has seen a temporary top, I believe this one can correct to $25. Not a bad trade for such a cheap stock. I'll initiate half my position today. And save the other half just in case it peaks at $30. Stop loss at $31.
2 points downside, ~5 points upside. I like the odds
Disclosure
Long AAPL, GOOG, 25% MOS
Short PWRD
UPDATE 2:
We are cratering now!!! Bunch of slick Ricks on Wall street delaying the selloff!!! Hope you guys took profits!
Wednesday, April 30, 2008
Tuesday, April 29, 2008
4/29/2008
Yes I suck I suck!!!
I'm stopped out on my BIDU at $370. That's two bad trades I made in the past month shiet...terrible
I'm going to start drifting away from stocks that are constantly covered by the media. Because these stocks will not always follow technical analysis due to wall street hype.
AAPL is up again, GOOG nominally up, MOS taking another huge dive just like POT. Visa popped, Mastercard WOW talk about mega pop. Glad I covered that one a while back...
I am sitting back right now re-evaluating my game plan. And licking my wounds from the BIDU...
Disclosure
Long AAPL, GOOG, 25% MOS
No Shorts
I'm stopped out on my BIDU at $370. That's two bad trades I made in the past month shiet...terrible
I'm going to start drifting away from stocks that are constantly covered by the media. Because these stocks will not always follow technical analysis due to wall street hype.
AAPL is up again, GOOG nominally up, MOS taking another huge dive just like POT. Visa popped, Mastercard WOW talk about mega pop. Glad I covered that one a while back...
I am sitting back right now re-evaluating my game plan. And licking my wounds from the BIDU...
Disclosure
Long AAPL, GOOG, 25% MOS
No Shorts
Monday, April 28, 2008
Market Update - 4/28
New week, new beginning.
The markets are closing in on the late January highs and now pretty much hovering at that level. This is creating a very interesting setup into fed meeting. My thinking is if the fed does NOT cut rates because of inflation concern, yet the markets expectation is a 25bp cut, this will be enough of a catalyst to cause a "sell the rally" news. And this will once again prove why news feed generated by the media is just a mask that affirms the pattern of technicals...going to have to dig deeper into this.
Apple is going up some more today...same with Google. Even though I own these stocks I feel they may be vulnerable to a huge selloff in the near future.
Mosiac is absolutely getting dumped hand over fist, as the same with the entire ag sector. I'm not going to short it because I recognize the global food demand...not to mention the stock could easily jump 10% as fast as it loses it. No matter what, I'm just glad I sold a significant amount of my MOS position at the 130's.
BIDU caved in a bit this morning which was good. I have been day trading its technicals aggressively today to make up the points I've lost. Gotta work it back.
But for new investors or those really tempted to pour money long... I know I've been wrong on calls and I own it, but don't pour your money in now....you've honestly missed 90% of the ride.
I'm hoping the markets can continue to inch up like this into fed day. I'm more and more convinced the fed may actually not cut at all this time around. And it'll lead the markets to selloff.
In the meantime, I am starting to have a severely heavy bias towards shorting stocks in the near future. Too many people bullish now...too many people ignoring the fact that WE ARE STILL IN A CREDIT CRISIS. There may be a little bit of upside left, but I really feel the majority of the upmove has been seen. Later this afternoon I'll post some charts on the indices. Stay tuned.
-DL
Disclosure:
Long AAPL, GOOG, 25% MOS
Short BIDU
The markets are closing in on the late January highs and now pretty much hovering at that level. This is creating a very interesting setup into fed meeting. My thinking is if the fed does NOT cut rates because of inflation concern, yet the markets expectation is a 25bp cut, this will be enough of a catalyst to cause a "sell the rally" news. And this will once again prove why news feed generated by the media is just a mask that affirms the pattern of technicals...going to have to dig deeper into this.
Apple is going up some more today...same with Google. Even though I own these stocks I feel they may be vulnerable to a huge selloff in the near future.
Mosiac is absolutely getting dumped hand over fist, as the same with the entire ag sector. I'm not going to short it because I recognize the global food demand...not to mention the stock could easily jump 10% as fast as it loses it. No matter what, I'm just glad I sold a significant amount of my MOS position at the 130's.
BIDU caved in a bit this morning which was good. I have been day trading its technicals aggressively today to make up the points I've lost. Gotta work it back.
But for new investors or those really tempted to pour money long... I know I've been wrong on calls and I own it, but don't pour your money in now....you've honestly missed 90% of the ride.
I'm hoping the markets can continue to inch up like this into fed day. I'm more and more convinced the fed may actually not cut at all this time around. And it'll lead the markets to selloff.
In the meantime, I am starting to have a severely heavy bias towards shorting stocks in the near future. Too many people bullish now...too many people ignoring the fact that WE ARE STILL IN A CREDIT CRISIS. There may be a little bit of upside left, but I really feel the majority of the upmove has been seen. Later this afternoon I'll post some charts on the indices. Stay tuned.
-DL
Disclosure:
Long AAPL, GOOG, 25% MOS
Short BIDU
Friday, April 25, 2008
Friday Market Update
Well...today isn't a very pleasant day for me. But I took gains where I could to buffer the BIDU earnings euphoria. Covered my POT for a gain, Covered my X entirely for a gain. Still, The BIDU trade amazes me but have to tip my hats off these guys did report a pretty solid quarter. By no means is this still a justified move in the short term though imo. I actually still have the short position and added to it at the mid 360's. I'm not convinced this move is going to hold.
Other than that, pretty uneventful day for me. And it's Friday, so might as well pack the bags up and head out...I won't be having my steak dinner this weekend, but I will return next week to fight again.
-DL
Disclosure
Long AAPL, GOOG, 25% MOS
Short BIDU
Other than that, pretty uneventful day for me. And it's Friday, so might as well pack the bags up and head out...I won't be having my steak dinner this weekend, but I will return next week to fight again.
-DL
Disclosure
Long AAPL, GOOG, 25% MOS
Short BIDU
Thursday, April 24, 2008
Morning Update - 4/24 - Thoughts on BIDU
Dollar rising = commodities cratering. X is down big!
MOS is taking a huge dump! Glad I sold a lot of shares. POT is being sold on the news of their earnings DOWN HUGE, I am jumping in on the short right now @ 200. 183 cover target (near 20dma).
MY ISRG trade is done stopped out @ $280.
Apple popped, then dropped...I'm not doing anything with it though.
Wow what a crazy first half hour!
Disclosure
Long AAPL, GOOG, 25% MOS
Short X, POT
Update 1 @ 10AM PST: Wow amazing reversal in the market. Apple is now positive. MOS have parred losses and so has POT...I'm pretty much even on that short now.. Damnit should have taken the gains this morning...oh well I think this one still has some ways to go down though price is just way too inflated.
As for BIDU requested by a reader...this one is really tough. You know my rule is to never do anything into earnings. But if I had to choose a side, I would short this stock into earnings:
For the reasons being:
-This one ran way too far. And is now pretty much pricing in a perfecta quarter ($201 to $364 in a month?!?!?)
- Overstretched technicals.
- You can see a gimped version of a "W" pattern but it is undeniably there. And W patterns are bearish if the current price right now is toward the "right top part" of the W
- The market indices right now are up big on positive territory: Implying people are getting way bullish
- 1st level of support is at $300 bucks THATS A LONG WAY DOWN MY FRIEND
- The monster beat Google had last week would mean Bidu is now expected to blowout big. Remember, expectations and market sentiment plays a huge role in stocks. During Google's ER nobody expected ANYTHING and too much pessimism resulted in a mega catapult. BIDU is now different because the stock kept on getting bought throughout the good and bad times... If they disappoint in any way at all, or just barely meets expectation, or barely beats it, imo it is already built into the stock premium for the short term. It really leads me to believe this will selloff AH.
The only catalyst I can think of right now is the fact that the Chinese Government recently revised the Tax laws...but even so...that's not enough of a reason for me personally to put my chips on the long side.
Anything can happen though because Chinese stocks are known for its surprises...But if you're asking my opinion, I think the majority of the upside in the market for the short term has already been seen. Maybe we get little gains here and there until the end of the month. But be very careful.
As for the other person asking me about put/call ratio. I'll dig into it more. Stay tuned
- DL
Update 2: 11AM PST
I'm getting so tempted to pull the trigger on the Bidu short (just a very small position) to see where it goes. I figure even if it goes up 10-20 bucks its not gonna be the end of the world for me. But I'm really liking the odds and the market's bullishness today is not gonna help it at all. One of the readers said a lot of positive catalyst that might be coming BIDU's way and I absolutely respect that. But for the short term, this is just looking way too tempting to not try. From the daily 10 min chart BIDU is now clipped right inbetween a necktie that's why we are probably not going to see much movement going into ER. Before the end of the bell, I'm going to throw on a small position (like 50 shares) to see how it'll end. I just want to be clear though this trade will end tomorrow regardless of what happens. If I get annihilated I will sack my losses. If I make a quick profitable trade, then I'll be treating myself to a nice steak dinner this weekend :)
Disclosure: Short BIDU
After the bell: I've done it...shorted BIDU at 345...holy smokes been a long time since I've done this. It is kind of gut wrenching...
MSFT MISSED EARNINGS FROM JUST THE FIRST LOOKS...STOCK IS SELLING OFF AH. Hmmm.
We also saw the market selloff before the end of the day. Gains were nearly halved from it's intraday high. With MSFT at a first glance missing expectations we could see the sector get dragged down tomorrow. It's too early to say without listening to the conference call, but we're going to find out very soon.
BIDU is not set to report its numbers until 8PM EST. So that means 5PM PST? This means we're probably not going to see the numbers AH reflect until tomorrow morning. Nevertheless, good luck to both longs and shorts (although for my personal stance, it is my belief it's gonna go down, hey after all, I got my money where my mouth is!)
Good day for apple longs...amazing reversal today for the stock.
X = Tankage = goood. I'm expecting more from this
POT went back toward its lows and finished off at about $193. Up $7 today. Not bad
TANK BIDU TANK!!!
I'm out for now. Invest wisely and best of luck!
- DL
Disclosure:
Long AAPL, GOOG, 25% MOS
Short X, POT, BIDU
Final Update: Bidu Earnings are out!
And it looks like at a first glance I'm on the wrong side of the trade...I'm down about $10 bucks AH right now. Stock is at $355. Trying to reflect on what happened...perhaps the selloff at the end of the day is giving this some room to run? But Earnings came up light...60c vs 67c. Nevertheless, shiet...Can't win them all...and this little experiment further reinforces the idea into me to not play earnings...just don't know what is going to happen.
But for all I know, the stock could be sold off on strength tomorrow. It was just like Apple today reversing from losses to gains. BIDU any way that is sliced is still a very overstretched stock in the near term. Guess I'll just have to wait and see what happens during the conference and tomorrow.
And one more idea that has reinforced into my discipline: The easy trade is NEVER the right trade. The hard ones are....
MOS is taking a huge dump! Glad I sold a lot of shares. POT is being sold on the news of their earnings DOWN HUGE, I am jumping in on the short right now @ 200. 183 cover target (near 20dma).
MY ISRG trade is done stopped out @ $280.
Apple popped, then dropped...I'm not doing anything with it though.
Wow what a crazy first half hour!
Disclosure
Long AAPL, GOOG, 25% MOS
Short X, POT
Update 1 @ 10AM PST: Wow amazing reversal in the market. Apple is now positive. MOS have parred losses and so has POT...I'm pretty much even on that short now.. Damnit should have taken the gains this morning...oh well I think this one still has some ways to go down though price is just way too inflated.
As for BIDU requested by a reader...this one is really tough. You know my rule is to never do anything into earnings. But if I had to choose a side, I would short this stock into earnings:
For the reasons being:
-This one ran way too far. And is now pretty much pricing in a perfecta quarter ($201 to $364 in a month?!?!?)
- Overstretched technicals.
- You can see a gimped version of a "W" pattern but it is undeniably there. And W patterns are bearish if the current price right now is toward the "right top part" of the W
- The market indices right now are up big on positive territory: Implying people are getting way bullish
- 1st level of support is at $300 bucks THATS A LONG WAY DOWN MY FRIEND
- The monster beat Google had last week would mean Bidu is now expected to blowout big. Remember, expectations and market sentiment plays a huge role in stocks. During Google's ER nobody expected ANYTHING and too much pessimism resulted in a mega catapult. BIDU is now different because the stock kept on getting bought throughout the good and bad times... If they disappoint in any way at all, or just barely meets expectation, or barely beats it, imo it is already built into the stock premium for the short term. It really leads me to believe this will selloff AH.
The only catalyst I can think of right now is the fact that the Chinese Government recently revised the Tax laws...but even so...that's not enough of a reason for me personally to put my chips on the long side.
Anything can happen though because Chinese stocks are known for its surprises...But if you're asking my opinion, I think the majority of the upside in the market for the short term has already been seen. Maybe we get little gains here and there until the end of the month. But be very careful.
As for the other person asking me about put/call ratio. I'll dig into it more. Stay tuned
- DL
Update 2: 11AM PST
I'm getting so tempted to pull the trigger on the Bidu short (just a very small position) to see where it goes. I figure even if it goes up 10-20 bucks its not gonna be the end of the world for me. But I'm really liking the odds and the market's bullishness today is not gonna help it at all. One of the readers said a lot of positive catalyst that might be coming BIDU's way and I absolutely respect that. But for the short term, this is just looking way too tempting to not try. From the daily 10 min chart BIDU is now clipped right inbetween a necktie that's why we are probably not going to see much movement going into ER. Before the end of the bell, I'm going to throw on a small position (like 50 shares) to see how it'll end. I just want to be clear though this trade will end tomorrow regardless of what happens. If I get annihilated I will sack my losses. If I make a quick profitable trade, then I'll be treating myself to a nice steak dinner this weekend :)
Disclosure: Short BIDU
After the bell: I've done it...shorted BIDU at 345...holy smokes been a long time since I've done this. It is kind of gut wrenching...
MSFT MISSED EARNINGS FROM JUST THE FIRST LOOKS...STOCK IS SELLING OFF AH. Hmmm.
We also saw the market selloff before the end of the day. Gains were nearly halved from it's intraday high. With MSFT at a first glance missing expectations we could see the sector get dragged down tomorrow. It's too early to say without listening to the conference call, but we're going to find out very soon.
BIDU is not set to report its numbers until 8PM EST. So that means 5PM PST? This means we're probably not going to see the numbers AH reflect until tomorrow morning. Nevertheless, good luck to both longs and shorts (although for my personal stance, it is my belief it's gonna go down, hey after all, I got my money where my mouth is!)
Good day for apple longs...amazing reversal today for the stock.
X = Tankage = goood. I'm expecting more from this
POT went back toward its lows and finished off at about $193. Up $7 today. Not bad
TANK BIDU TANK!!!
I'm out for now. Invest wisely and best of luck!
- DL
Disclosure:
Long AAPL, GOOG, 25% MOS
Short X, POT, BIDU
Final Update: Bidu Earnings are out!
And it looks like at a first glance I'm on the wrong side of the trade...I'm down about $10 bucks AH right now. Stock is at $355. Trying to reflect on what happened...perhaps the selloff at the end of the day is giving this some room to run? But Earnings came up light...60c vs 67c. Nevertheless, shiet...Can't win them all...and this little experiment further reinforces the idea into me to not play earnings...just don't know what is going to happen.
But for all I know, the stock could be sold off on strength tomorrow. It was just like Apple today reversing from losses to gains. BIDU any way that is sliced is still a very overstretched stock in the near term. Guess I'll just have to wait and see what happens during the conference and tomorrow.
And one more idea that has reinforced into my discipline: The easy trade is NEVER the right trade. The hard ones are....
Wednesday, April 23, 2008
Market Update - 4/23
Hi,
Haven't updated in a few days. I had some personal matters to take care of and so didn't have a chance to look at the markets too much.
Apple's earnings is finally on deck. What an interesting past couple day it has been. We saw the street wised up and took some profits. It is now hovering near the low 160's. I've made my case on it...good luck to everyone.
Bought ISRG this morning on a fill order @ $272. Remember how I talked about it retracing all the way back towards 200DMA? PERFECT TRADE. Charts don't lie. It is now up to $283. I am hoping apple giving a good quarter and the stock market reacts nicely tomorrow it will go to $290. That is my target to releasing this trade. My stop is @ $280.
I am dumping my Garmin trade. The two week timeframe has come and I have to stay disciplined. I gave this a chance to run but looks like it didn't work out too well. Pretty much even on this trade...oh well. Try something another day :)
MOS taking a dump today bigtime. I'm glad I took a lot of profits. I'll just let that remaining 25% sit tight.
As for the overall market indices, I have to be honest and say my expectations for the market upswing is now very limited. Too many people getting bullish now. Put call ratio is getting skewed. And we have wall street media buffoons barking buy buy buy (Cramer LOL). I swear he is the perfect contrarian indicator. I've done so many trades opposite to his calls in the past and it has paid off handsomely. I think the market has seen the megapops in the near term. If anything we are now ready for retraces and some potential market selloffs. We've already seen one yesterday...could it be a taste of what's to come? We shall see.
I am starting to look for opportunities to stack short positions.
It's going to be an interesting after hour session today. For all the apple speculators out there, I wish you the best.
-DL
Disclosure:
Long AAPL, GOOG, ISRG, 25% MOS
Short X
Edit 1: Ambac (ABK) and MBIA (MBI) today is exactly the reminder we need that the credit crunch crisis is far from over. Deep condolences to long term holders suckered into investing in the companies from the media.
Edit 2 After the bell
Apple and Amazon both are selling off afterhours. Hold on to your hats people. And like I've constantly been saying throughout my posts. Playing earnings is not a wise thing to do. I hope none of you went "all in" going long on apple because of the euphoria created by the media. I own the stock going long but like how I've said before this is a long term play for me that's why I do nothing to it. But Godspeed to the speculators tomorrow. Watch for the $150 level, that is where the necktie support is. If it goes below $150, for speculators out there, I'd suggest you cut loss for the time being or hedge accordingly.
Haven't updated in a few days. I had some personal matters to take care of and so didn't have a chance to look at the markets too much.
Apple's earnings is finally on deck. What an interesting past couple day it has been. We saw the street wised up and took some profits. It is now hovering near the low 160's. I've made my case on it...good luck to everyone.
Bought ISRG this morning on a fill order @ $272. Remember how I talked about it retracing all the way back towards 200DMA? PERFECT TRADE. Charts don't lie. It is now up to $283. I am hoping apple giving a good quarter and the stock market reacts nicely tomorrow it will go to $290. That is my target to releasing this trade. My stop is @ $280.
I am dumping my Garmin trade. The two week timeframe has come and I have to stay disciplined. I gave this a chance to run but looks like it didn't work out too well. Pretty much even on this trade...oh well. Try something another day :)
MOS taking a dump today bigtime. I'm glad I took a lot of profits. I'll just let that remaining 25% sit tight.
As for the overall market indices, I have to be honest and say my expectations for the market upswing is now very limited. Too many people getting bullish now. Put call ratio is getting skewed. And we have wall street media buffoons barking buy buy buy (Cramer LOL). I swear he is the perfect contrarian indicator. I've done so many trades opposite to his calls in the past and it has paid off handsomely. I think the market has seen the megapops in the near term. If anything we are now ready for retraces and some potential market selloffs. We've already seen one yesterday...could it be a taste of what's to come? We shall see.
I am starting to look for opportunities to stack short positions.
It's going to be an interesting after hour session today. For all the apple speculators out there, I wish you the best.
-DL
Disclosure:
Long AAPL, GOOG, ISRG, 25% MOS
Short X
Edit 1: Ambac (ABK) and MBIA (MBI) today is exactly the reminder we need that the credit crunch crisis is far from over. Deep condolences to long term holders suckered into investing in the companies from the media.
Edit 2 After the bell
Apple and Amazon both are selling off afterhours. Hold on to your hats people. And like I've constantly been saying throughout my posts. Playing earnings is not a wise thing to do. I hope none of you went "all in" going long on apple because of the euphoria created by the media. I own the stock going long but like how I've said before this is a long term play for me that's why I do nothing to it. But Godspeed to the speculators tomorrow. Watch for the $150 level, that is where the necktie support is. If it goes below $150, for speculators out there, I'd suggest you cut loss for the time being or hedge accordingly.
Friday, April 18, 2008
Intuitive Surgical - A Preview of What's Coming for Apple?
You may say these two companies are in two different sectors and are totally unrelated. I agree.
However, their price action is setting up similarly going into earnings even though their technical pattern is different.
Here's ISRG:
Lessons to be learned and a preview of what to expect:
- W pattern formation, which meant a selloff was very likely going into earnings despite massive beat
- "Double top" pattern that formed
- It has now definitively broken its 6 month 50DMA
- This stock will most likely return to the 200DMA support ~$267 before rebounding.
Hang tight ISRG holders. This one could retrace all the way to the low 270's before rebounding and will still maintain in line with its bullish 2 year uptrend. If the stock does get this low, I will most likely jump on for a trade as well. But for now with the intensity of the selloff I feel my money could be put to better use elsewhere for now. My condolences to ISRG long speculators and marginal holders.
Apple - The tech darling of wall street
Let me be first to say I OWN THIS STOCK. And even though it breaks my heart to talk against it I gotta keep it real and follow the charts. Apple is set to report on 4/23. No doubt with the blowout earnings of Google today tech is going to have huge momentum carrying it forward. And no doubt there are going to be tons of euphoric buyers piling into the stock. Even though the stock swooned bigtime during January - March, note:
- Indicators are already near max out
- Just like Intuitive Surgical, it has made a huge move up, retraced to 20DMA, and now is chugging along once again. Now it is WELL ABOVE any support lines. (First line of support rest @ roughly 150
- BUT, notice once again the "necktie" that is forming underneath with the 20DMA and the 200DMA ($150). THIS SHOULD BE VERY VERY STRONG SUPPORT.
I would imagine in the coming days Apple will continue to make its climb up, perhaps even as high as $170 (just my guess). But note that if apple reaches 170 into earnings, it will already be EXPECTED that they blow out estimates BIGTIME. And even then, the upside premium is already factored into the price. If they disappoint. Oh boy hang on to your hats...This leads me to think the stock will swoon to at least its necktie support of $150. That could potentially be a $20 dollar drop if the price reaches $170+ into earnings.
We're going to get some very interesting tells in the coming days. If wall street is pumping this stock like mad, if the psychology of investors goes along the line of "OH YEEE $200+ HERE WE COME!!!", if there's way more calls being bought over puts etc., be prepared for a massive "sell the news" plunge to the necktie level that'll destroy speculators and blind bulls. Remember, whatever the sentiment of a stock is, combined with its price action leading up to earnings, will most likely dictate the OPPOSITE direction the stock will travel afterwards.
We will know more as the day approaches. But just my two cents.
Good luck!
- DL
Disclosure:
Long AAPL, GOOG, GRMN, 25% MOS
Short X
However, their price action is setting up similarly going into earnings even though their technical pattern is different.
Here's ISRG:
Lessons to be learned and a preview of what to expect:
- W pattern formation, which meant a selloff was very likely going into earnings despite massive beat
- "Double top" pattern that formed
- It has now definitively broken its 6 month 50DMA
- This stock will most likely return to the 200DMA support ~$267 before rebounding.
Hang tight ISRG holders. This one could retrace all the way to the low 270's before rebounding and will still maintain in line with its bullish 2 year uptrend. If the stock does get this low, I will most likely jump on for a trade as well. But for now with the intensity of the selloff I feel my money could be put to better use elsewhere for now. My condolences to ISRG long speculators and marginal holders.
Apple - The tech darling of wall street
Let me be first to say I OWN THIS STOCK. And even though it breaks my heart to talk against it I gotta keep it real and follow the charts. Apple is set to report on 4/23. No doubt with the blowout earnings of Google today tech is going to have huge momentum carrying it forward. And no doubt there are going to be tons of euphoric buyers piling into the stock. Even though the stock swooned bigtime during January - March, note:
- Indicators are already near max out
- Just like Intuitive Surgical, it has made a huge move up, retraced to 20DMA, and now is chugging along once again. Now it is WELL ABOVE any support lines. (First line of support rest @ roughly 150
- BUT, notice once again the "necktie" that is forming underneath with the 20DMA and the 200DMA ($150). THIS SHOULD BE VERY VERY STRONG SUPPORT.
I would imagine in the coming days Apple will continue to make its climb up, perhaps even as high as $170 (just my guess). But note that if apple reaches 170 into earnings, it will already be EXPECTED that they blow out estimates BIGTIME. And even then, the upside premium is already factored into the price. If they disappoint. Oh boy hang on to your hats...This leads me to think the stock will swoon to at least its necktie support of $150. That could potentially be a $20 dollar drop if the price reaches $170+ into earnings.
We're going to get some very interesting tells in the coming days. If wall street is pumping this stock like mad, if the psychology of investors goes along the line of "OH YEEE $200+ HERE WE COME!!!", if there's way more calls being bought over puts etc., be prepared for a massive "sell the news" plunge to the necktie level that'll destroy speculators and blind bulls. Remember, whatever the sentiment of a stock is, combined with its price action leading up to earnings, will most likely dictate the OPPOSITE direction the stock will travel afterwards.
We will know more as the day approaches. But just my two cents.
Good luck!
- DL
Disclosure:
Long AAPL, GOOG, GRMN, 25% MOS
Short X
Market Morning Update
BA BA BA BOOYA! Chew on this Cramer GOOG is up $80! Cramer's beloved ISRG? Not so pretty...down $56 right now @ $292 OUCH. It broke its 50DMA but if its any comfort it's most likely a fakeout to shake off weak longs and margin holders. If the company destroyed earnings we could reasonably expect this to have a solid rebound soon enough.
Market indices are UP HUGE 200+ on the Dow as we speak at 12,800, Nasdaq +45, S&P at 1,385
Commodities sector not joining the party. In fact they are selling off as we speak. I am debating really hard right now should I re-initiate my shorts on X for a quick trade...
Alright Yes I am. Citigroup just downgraded X to a hold from buy. Citing full valuation to the stock and stating the "easy money has been made." I am usually not the one to agree with analysts. But I think this call holds a lot of merit. Overstretched technicals, euphoric buying, a possible retrace in the works becoming likely. I'm liking the odds. 20DMA is at $138 from a 3 month chart. Not sure if it will get there but from the daily 10min chart, there are now 2 very strong resistance levels on X (20DMA and 50DMA). Profit taking should start kicking in hardcore. ROUND 2 X! I'M COMING BACK FOR MORE!
Remember my post from 4/16? I believe we are now going to test that first resistance point on the S&P at the 1390-1400 level (and I'm going to have to assume we will fail on this first breakout, since the first test usually never succeeds.) After this monster move expect at least a 50% retracement in the indices from recent gains. I actually think by the end of the day the markets are going to sell off somewhat and we will not end at the highs of the day. Just a guess, but we'll see what happens
Take some profits off the table!
Disclosure:
Long AAPL, GOOG, GRMN, 50% MOS
Short X
Update 2: I am selling another 25% of my MOS.
Market indices are UP HUGE 200+ on the Dow as we speak at 12,800, Nasdaq +45, S&P at 1,385
Commodities sector not joining the party. In fact they are selling off as we speak. I am debating really hard right now should I re-initiate my shorts on X for a quick trade...
Alright Yes I am. Citigroup just downgraded X to a hold from buy. Citing full valuation to the stock and stating the "easy money has been made." I am usually not the one to agree with analysts. But I think this call holds a lot of merit. Overstretched technicals, euphoric buying, a possible retrace in the works becoming likely. I'm liking the odds. 20DMA is at $138 from a 3 month chart. Not sure if it will get there but from the daily 10min chart, there are now 2 very strong resistance levels on X (20DMA and 50DMA). Profit taking should start kicking in hardcore. ROUND 2 X! I'M COMING BACK FOR MORE!
Remember my post from 4/16? I believe we are now going to test that first resistance point on the S&P at the 1390-1400 level (and I'm going to have to assume we will fail on this first breakout, since the first test usually never succeeds.) After this monster move expect at least a 50% retracement in the indices from recent gains. I actually think by the end of the day the markets are going to sell off somewhat and we will not end at the highs of the day. Just a guess, but we'll see what happens
Take some profits off the table!
Disclosure:
Long AAPL, GOOG, GRMN, 50% MOS
Short X
Update 2: I am selling another 25% of my MOS.
Thursday, April 17, 2008
Google vs. Intuitive Surgical - After hours Price Reaction
A person I follow very closely in the financial markets pointed out something very interesting regarding Google (GOOG) versus Intuitive Surgical (ISRG) and illustrated some very strong reasons why Google surged and Intuitive Surgical tanked DESPITE both companies completely destroying wall street estimates. I want to post it here because I am just like him - A true believer of technical analysis. Wall street media will CONSTANTLY misguide and disappoint. But charts and your own intuition never will.
In the Google Chart, the stock made a move up from the lows, reached the 50DMA and retraced all the way back to the 20DMA. From the action today, Google DID NOT run up, in fact it traded down $5. PERFECT SETUP for an earnings play. From a psychological point of view, there were simply TOO MUCH pessimism about Google. Too many puts being bought, too many doubters, endless rants about COMSCORE data (boy were they wrong!), and low expectations (whisper number in the street indicated 4 cents BELOW the consensus). The result? Any upside surprise to earnings would send this stock flying - as we see in the afterhours Google is now hovering at ~$529 UP NEARLY $80, or 18%.
Intuitive Surgical on the other hand had a MONSTER move up (from the low of 254 all the way to $357, had a small retrace back to the 50DMA, but then into earnings MADE ANOTHER GIGANTIC MOVE from $315 all the way to $350. Note the "double top" pattern that formed where I circled. Indicators had no room to run either. On the psychological level, there were simply too many bulls buying hand over fist for this stock - pumping it up. And when that happens, THATS THE TELL. EVEN IF ISRG BEATS, THEY WOULD BE VULNERABLE TO A PROFIT TAKING SELLOFF. In order for ISRG to continue its monster move up, they just had to literally beat by a gigantic margin. And even then, the upside would have probably been limited. In this case, beating earnings was already factored into the stock premium. And this is why the stock is now getting annihilated after hours on MASSIVE VOLUME. Last check down $33, or 9% @ $315. OUCH
Lesson to be learned here? Charts tell the truth. As well as the sentiment about companies. When there's too many bulls piled onto a trade and the stock makes a gigantic move up into earnings, that would mean expectations are SKY HIGH, and the slightest earnings miss or disappointment will absolutely destroy it afterhours. Vice Versa, from Google we saw had way too many bears, way too many doubters, way too much pessimism. Presto, the shorts are now going to be carried out on bodybags.
Always remember the timeless wisdom of Warren Buffet: "BUY on FEAR - SELL on GREED".
I still am a firm believer to not invest heavily into earnings. However, I would be lying if I said I'm not happy man right now. Watch for another mega push up in the markets tomorrow off of this momentum. But at the same time, expect the markets to hit resistance when we reach the late January highs (check blog post on 4/16) because remember after every monster move up IT'S ONLY HEALTHY TO HAVE PROFIT TAKING AND RETRACES. If there wasn't, the markets would be very scary.
I believe after a test of that high and a possible retracet menpause, we could very well see that top get broken off. Then, I believe we could ultimately hit the 200DMA on the indices.
Going to be very exciting times in the markets in the near future. Stay sharp and stay alert. This is when money can be made.
Invest wisely, good luck to all of us.
-DL
Disclosure
Long AAPL, GOOG, GRMN, 50% MOS
No Short Positions
In the Google Chart, the stock made a move up from the lows, reached the 50DMA and retraced all the way back to the 20DMA. From the action today, Google DID NOT run up, in fact it traded down $5. PERFECT SETUP for an earnings play. From a psychological point of view, there were simply TOO MUCH pessimism about Google. Too many puts being bought, too many doubters, endless rants about COMSCORE data (boy were they wrong!), and low expectations (whisper number in the street indicated 4 cents BELOW the consensus). The result? Any upside surprise to earnings would send this stock flying - as we see in the afterhours Google is now hovering at ~$529 UP NEARLY $80, or 18%.
Intuitive Surgical on the other hand had a MONSTER move up (from the low of 254 all the way to $357, had a small retrace back to the 50DMA, but then into earnings MADE ANOTHER GIGANTIC MOVE from $315 all the way to $350. Note the "double top" pattern that formed where I circled. Indicators had no room to run either. On the psychological level, there were simply too many bulls buying hand over fist for this stock - pumping it up. And when that happens, THATS THE TELL. EVEN IF ISRG BEATS, THEY WOULD BE VULNERABLE TO A PROFIT TAKING SELLOFF. In order for ISRG to continue its monster move up, they just had to literally beat by a gigantic margin. And even then, the upside would have probably been limited. In this case, beating earnings was already factored into the stock premium. And this is why the stock is now getting annihilated after hours on MASSIVE VOLUME. Last check down $33, or 9% @ $315. OUCH
Lesson to be learned here? Charts tell the truth. As well as the sentiment about companies. When there's too many bulls piled onto a trade and the stock makes a gigantic move up into earnings, that would mean expectations are SKY HIGH, and the slightest earnings miss or disappointment will absolutely destroy it afterhours. Vice Versa, from Google we saw had way too many bears, way too many doubters, way too much pessimism. Presto, the shorts are now going to be carried out on bodybags.
Always remember the timeless wisdom of Warren Buffet: "BUY on FEAR - SELL on GREED".
I still am a firm believer to not invest heavily into earnings. However, I would be lying if I said I'm not happy man right now. Watch for another mega push up in the markets tomorrow off of this momentum. But at the same time, expect the markets to hit resistance when we reach the late January highs (check blog post on 4/16) because remember after every monster move up IT'S ONLY HEALTHY TO HAVE PROFIT TAKING AND RETRACES. If there wasn't, the markets would be very scary.
I believe after a test of that high and a possible retracet menpause, we could very well see that top get broken off. Then, I believe we could ultimately hit the 200DMA on the indices.
Going to be very exciting times in the markets in the near future. Stay sharp and stay alert. This is when money can be made.
Invest wisely, good luck to all of us.
-DL
Disclosure
Long AAPL, GOOG, GRMN, 50% MOS
No Short Positions
Google Earnings!
Google EXPLODING afterhours! Currently UP $80 @ 530!!!
THIS IS WHY YOU DON'T LISTEN TO MEDIA BUFFOONS SUCH AS JIM CRAMER! What was it he said before? "Don't buy Google until it goes below $400?!?!"
I urge you "Cramericans" out there to seriously reconsider your position if you solely take Cramer's advice on your stock picks.
And I know I've said before I don't bet into earnings. And that still holds true. The reason I am long Google into earnings though is because this is part of my IRA account holdings. And I do absolutely nothing to that portfolio regardless through thick and thin.
Booyah!!! I believe with IBM's strong earnings and now Google's earnings, this is going to set us up for another potential HUGE push tomorrow. Especially in tech.
I am on the run today sorry for short post. Good luck to us all.
- DL
Disclosure
Long AAPL, GRMN, GOOG, 50% MOS
No Short Positions
THIS IS WHY YOU DON'T LISTEN TO MEDIA BUFFOONS SUCH AS JIM CRAMER! What was it he said before? "Don't buy Google until it goes below $400?!?!"
I urge you "Cramericans" out there to seriously reconsider your position if you solely take Cramer's advice on your stock picks.
And I know I've said before I don't bet into earnings. And that still holds true. The reason I am long Google into earnings though is because this is part of my IRA account holdings. And I do absolutely nothing to that portfolio regardless through thick and thin.
Booyah!!! I believe with IBM's strong earnings and now Google's earnings, this is going to set us up for another potential HUGE push tomorrow. Especially in tech.
I am on the run today sorry for short post. Good luck to us all.
- DL
Disclosure
Long AAPL, GRMN, GOOG, 50% MOS
No Short Positions
Wednesday, April 16, 2008
Perfect World - A Swing Trader's Wet Dream
I have traded this stock a few times in the past but now I want to focus on it again. Let me be the first to say THIS STOCK HAS VERY VIOLENT MOVES AND NOT FOR THE FEINT OF HEART. If you are a solid long term, long haul investor , extremely risk averse, I STRONGLY ADVISE YOU TO STAY AWAY.
With that said, check out this Chinese video game developer Perfect World (PWRD). They are makers of popular RPG's (Role playing games) exclusively in the Asian markets. They have no subprime exposure, not levered to the U.S. economy, does not lend money, has a very solid subscriber base, and have blockbuster games that are MEGAHITS in Asia. Being Asian myself I can say definitively for Asian people outside the U.S., video games are just not just "games", it is a culture. This mentality allows companies such as PWRD to have consistent revenue flows. They also file regular quarter earnings report. Check out their website here @ http://www.wanmei.com/index.htm Very impressive work they do. The company also have partnerships with Intel and Nvidia who helps them develop their 3D modeling technology.
Notice these monster weekly moves. I mean you're talking from the high teens / low 20's all the way up to the HIGH 20's to even possibly 30 before pulling back. All this happens within DAYS or in this case, my ideal time frame in 1-2 weeks.
This stock defies all chart patterns. Price action can violate moving average support just as easily as they breakout. But from my observation in this stock from the past 6 months, it has always presented great opportunities to load up in the low 20's (anywhere below 23) and great sell or short opportunity near 30. You need some serious balls of steel to sack the volatility. But it can pay off very handsomely. I've traded this before at 20 dollars on 3,000 shares and booked profits at 30 in 2 weeks. You do the math.
It made a gigantic move up again today (up nearly 6% intraday at 10:35AM PST) so I'M NOT telling you to go all in today and buy. But just wanted to post this up. If you got a serious tolerance for volatility and risk, STUDY THIS CHART AND THE COMPANY NOW so you can be ready to pull the trigger when the opportunity presents itself. And you can be damn sure I will be watching very closely to pull the trigger on this baby again - Short or Long. And when I do, you will know about it.
-DL
With that said, check out this Chinese video game developer Perfect World (PWRD). They are makers of popular RPG's (Role playing games) exclusively in the Asian markets. They have no subprime exposure, not levered to the U.S. economy, does not lend money, has a very solid subscriber base, and have blockbuster games that are MEGAHITS in Asia. Being Asian myself I can say definitively for Asian people outside the U.S., video games are just not just "games", it is a culture. This mentality allows companies such as PWRD to have consistent revenue flows. They also file regular quarter earnings report. Check out their website here @ http://www.wanmei.com/index.htm Very impressive work they do. The company also have partnerships with Intel and Nvidia who helps them develop their 3D modeling technology.
Notice these monster weekly moves. I mean you're talking from the high teens / low 20's all the way up to the HIGH 20's to even possibly 30 before pulling back. All this happens within DAYS or in this case, my ideal time frame in 1-2 weeks.
This stock defies all chart patterns. Price action can violate moving average support just as easily as they breakout. But from my observation in this stock from the past 6 months, it has always presented great opportunities to load up in the low 20's (anywhere below 23) and great sell or short opportunity near 30. You need some serious balls of steel to sack the volatility. But it can pay off very handsomely. I've traded this before at 20 dollars on 3,000 shares and booked profits at 30 in 2 weeks. You do the math.
It made a gigantic move up again today (up nearly 6% intraday at 10:35AM PST) so I'M NOT telling you to go all in today and buy. But just wanted to post this up. If you got a serious tolerance for volatility and risk, STUDY THIS CHART AND THE COMPANY NOW so you can be ready to pull the trigger when the opportunity presents itself. And you can be damn sure I will be watching very closely to pull the trigger on this baby again - Short or Long. And when I do, you will know about it.
-DL
Market Update - 4/16
I called it...
The necktie theory worked. The charts don't lie.
I think I'm going to buy myself a cookie with my profit :)
Selling another 25% of my MOS position right now @ 133 to lock profits.
Covered my last 25% on X for a loss. There's a time and place for everything. X hit the 150 mark. Can't win them all...I was wrong about X and I own it. I paid the consequences with my own money. But have to stick with discipline and keep losses under control.
Plan the trade, trade the plan.
Stupid GRMN, piece of crap stock...maybe I was a little bit overoptimistic about this one...Going to have to re-evaluate.
Enjoy today folks. I'll be back later when the markets close
Disclosure:
Long AAPL, GOOG, GRMN, 50% MOS
No Shorts
After the Bell Update:
What a monster move up in the indices today. If you have been following my blog from the past week or so you know I've been anticipating this move. And sure enough, the Dow went up 256 points to 12,619. Nasdaq up 64 points to 2,350. S&P up 30 points to 1,364. Just a phenomenal push up. Intel basically set things in motion with their up upbeat earnings. And after the bell today IBM has reported and they too have blown right past estimates. Nasdaq afterhours is up once again on the back of that. Just looking to be a phenomenal next few days in the greens.
But, no matter where the markets take us, always stay discipline. Observe the following S&P chart. Keep in mind the dow and nasdaq are pretty much looking the same. But here's my observation and game plan for the remaining trading week.
Notice now the indices is DEFINITIVELY above the necktie support. This necktie now should become solid support should we have any retrace. But with IBM and ebay setting us up with solid earnings, we could see another solid push up.
- RSI shows theres now a lot of room to run
- Stochastics showing this could be a beginning of a big move up.
Usually though, my experience tells me after a monster move up, we would want to see some pause days. The first pause could very well come when the indices hit the line I drew in the chart, or around the 1390-1400 level. This is the high from back in late Jan/early Feb. From a technical perspective, we have to reasonably expect once the markets hit that level we are going to see a pullback or some sort of profit taking kick in. This is normal, and has to occur in order for the markets to garner strength to push higher. If the markets kept on shooting up without pauses I'd be more worried committing capital.
But, I'm going to go out on a limb and say we are not done yet rallying. The chart pattern has been very bullish. My opinion is once the indices reach the late January high's we will probably see some sort of a retracement and consolidation (very much like what we've been seeing the past week or roughly 7-10 sessions). But once that occurs and if there's a continual flow of good news (be it that banks are not doing as bad as everyone believes, strong earnings, or a combination of both, or perhaps more governmental support), I think this market could very well be off to the races all the way to the 200DMA line. (This will effectively put the S&P @ 1,441, the Nasdaq @ 2,538, Dow @ 13,100
Everyday we're going to be seeing a new piece of the puzzle. So time will tell, and I will adjust my game plan accordingly. Ultimately, keep in mind this market is still fragile. It still has its problems. And chances are after some euphoric periods we will get bad news once again that will crater this market. But this is what doing swing trades is all about. We can profit from both directional moves - just as long as we're on the right side of it.
Tomorrow the tell will probably be Merrill Lynch reporting, and that would probably set the tone to the trading day. Google comes out after the bell so most definitely the markets will be watching that one. But for now, things seem to be setting up toward the bulls favor. It's not up to us to question of how the markets can still continue to rally. But let's just play by the rules and follow the charts. It is MUCH BETTER than following that wall street media jibberish.
I welcome all of your comments. Please feel free to tell me something I'm not aware of. And let's make some money.
PS - Jesus MOS and POT and the AG sector have just been on a tear. I wish I got in on POT during its March retracement...literally ran from 135 to almost $200 in a matter of 3 weeks!! Absolutely phenomenal. But you know what, if it can go up that fast, it can come down just as fast as well. The only reason I'm not betting against those companies right now yet is because of the way the indices are setting up. But I honestly believe those are going to be some tasty shorts in the coming weeks. Keep an eye out for those. And if you're thinking about going long now....better keep those tight stops handy.
Invest wisely and good luck to all of us.
-DL
Disclosure:
Long AAPL, GOOG, GRMN, 50% MOS
No Short Positions
The necktie theory worked. The charts don't lie.
I think I'm going to buy myself a cookie with my profit :)
Selling another 25% of my MOS position right now @ 133 to lock profits.
Covered my last 25% on X for a loss. There's a time and place for everything. X hit the 150 mark. Can't win them all...I was wrong about X and I own it. I paid the consequences with my own money. But have to stick with discipline and keep losses under control.
Plan the trade, trade the plan.
Stupid GRMN, piece of crap stock...maybe I was a little bit overoptimistic about this one...Going to have to re-evaluate.
Enjoy today folks. I'll be back later when the markets close
Disclosure:
Long AAPL, GOOG, GRMN, 50% MOS
No Shorts
After the Bell Update:
What a monster move up in the indices today. If you have been following my blog from the past week or so you know I've been anticipating this move. And sure enough, the Dow went up 256 points to 12,619. Nasdaq up 64 points to 2,350. S&P up 30 points to 1,364. Just a phenomenal push up. Intel basically set things in motion with their up upbeat earnings. And after the bell today IBM has reported and they too have blown right past estimates. Nasdaq afterhours is up once again on the back of that. Just looking to be a phenomenal next few days in the greens.
But, no matter where the markets take us, always stay discipline. Observe the following S&P chart. Keep in mind the dow and nasdaq are pretty much looking the same. But here's my observation and game plan for the remaining trading week.
Notice now the indices is DEFINITIVELY above the necktie support. This necktie now should become solid support should we have any retrace. But with IBM and ebay setting us up with solid earnings, we could see another solid push up.
- RSI shows theres now a lot of room to run
- Stochastics showing this could be a beginning of a big move up.
Usually though, my experience tells me after a monster move up, we would want to see some pause days. The first pause could very well come when the indices hit the line I drew in the chart, or around the 1390-1400 level. This is the high from back in late Jan/early Feb. From a technical perspective, we have to reasonably expect once the markets hit that level we are going to see a pullback or some sort of profit taking kick in. This is normal, and has to occur in order for the markets to garner strength to push higher. If the markets kept on shooting up without pauses I'd be more worried committing capital.
But, I'm going to go out on a limb and say we are not done yet rallying. The chart pattern has been very bullish. My opinion is once the indices reach the late January high's we will probably see some sort of a retracement and consolidation (very much like what we've been seeing the past week or roughly 7-10 sessions). But once that occurs and if there's a continual flow of good news (be it that banks are not doing as bad as everyone believes, strong earnings, or a combination of both, or perhaps more governmental support), I think this market could very well be off to the races all the way to the 200DMA line. (This will effectively put the S&P @ 1,441, the Nasdaq @ 2,538, Dow @ 13,100
Everyday we're going to be seeing a new piece of the puzzle. So time will tell, and I will adjust my game plan accordingly. Ultimately, keep in mind this market is still fragile. It still has its problems. And chances are after some euphoric periods we will get bad news once again that will crater this market. But this is what doing swing trades is all about. We can profit from both directional moves - just as long as we're on the right side of it.
Tomorrow the tell will probably be Merrill Lynch reporting, and that would probably set the tone to the trading day. Google comes out after the bell so most definitely the markets will be watching that one. But for now, things seem to be setting up toward the bulls favor. It's not up to us to question of how the markets can still continue to rally. But let's just play by the rules and follow the charts. It is MUCH BETTER than following that wall street media jibberish.
I welcome all of your comments. Please feel free to tell me something I'm not aware of. And let's make some money.
PS - Jesus MOS and POT and the AG sector have just been on a tear. I wish I got in on POT during its March retracement...literally ran from 135 to almost $200 in a matter of 3 weeks!! Absolutely phenomenal. But you know what, if it can go up that fast, it can come down just as fast as well. The only reason I'm not betting against those companies right now yet is because of the way the indices are setting up. But I honestly believe those are going to be some tasty shorts in the coming weeks. Keep an eye out for those. And if you're thinking about going long now....better keep those tight stops handy.
Invest wisely and good luck to all of us.
-DL
Disclosure:
Long AAPL, GOOG, GRMN, 50% MOS
No Short Positions
Tuesday, April 15, 2008
Market Update - 4/15
It is tax day...pfft
But with that said, market once again is hovering near flatline. There was a huge pop this morning but it slowly went down the drain and as of 10AM Pst dow up 2, nasdaq down .80, s&p down .26
I am going to utilize the market weakness right now to unload the rest of my short position on RIMM, which is now down 1.24 @ $114.23 as of 10:09AM
Unloading the rest of my Mastercard shorts right now too. It is down $5 @ 222.09. I'll take what I can for now
Garmin taking another beating today down 1 @ $43.16. I'm going to stick with my plan and triple my position if this hits $41. I think it may have a little bit to do with the CROX killing...but they are in completely different sector so hard to say. But the way I see it, I liked it at 45, I'll definitely like it more at 41. But I'll hate it altogether when it goes below $40. lol
I have sold 25% of my MOS position this morning @ $129. Doesn't pay to be greedy in this market. Not especially with the amazing run it has had. Buy price was at $105 = $24 profit. I'm content
Let's see how the rest of the day play out.
Disclosure:
Long AAPL, MOS, GOOG, GRMN
25% Short position on X
But with that said, market once again is hovering near flatline. There was a huge pop this morning but it slowly went down the drain and as of 10AM Pst dow up 2, nasdaq down .80, s&p down .26
I am going to utilize the market weakness right now to unload the rest of my short position on RIMM, which is now down 1.24 @ $114.23 as of 10:09AM
Unloading the rest of my Mastercard shorts right now too. It is down $5 @ 222.09. I'll take what I can for now
Garmin taking another beating today down 1 @ $43.16. I'm going to stick with my plan and triple my position if this hits $41. I think it may have a little bit to do with the CROX killing...but they are in completely different sector so hard to say. But the way I see it, I liked it at 45, I'll definitely like it more at 41. But I'll hate it altogether when it goes below $40. lol
I have sold 25% of my MOS position this morning @ $129. Doesn't pay to be greedy in this market. Not especially with the amazing run it has had. Buy price was at $105 = $24 profit. I'm content
Let's see how the rest of the day play out.
Disclosure:
Long AAPL, MOS, GOOG, GRMN
25% Short position on X
Monday, April 14, 2008
Midday Update
I have covered a significant amount of my short positions this morning on X, RIMM, and MA for a decent profit. I don't know how this week is going to play out but I am going to stick with my necktie theory that we will bounce hard.
Long AAPL, GRMN, GOOG, MOS
After the bell update
So once again, the indices were virtually flat. It is true we are still currently below the necktie level but at the same time, we didn't crater either. Sometimes we have to give these movements a little bit of time to work out. Which is why I've decided to cover today. For all I know tomorrow could be another consolidating day. But the longer we consolidate, the more bullish I am feeling.
As for my positions: For MA I covered 75% of my position near the lows at $223 with my initial shorts at $232. I wanted it to go lower but for now, the way the indices are acting I just prefer not to take the chance. $9 isn't too bad.
For RIMM my short started @ $123. Covered 75% today at the open at $115. Again, isn't what my ideal target. But I still have a small position left. I will probably cover that tomorrow regardless. $8 dollar profit
X I covered 75% at $141.50. Boy I tell ya this one has been on a tear. The charts still show this as a severely overbought stock and I am still absolutely blown away after near 2 weeks of trading this stock still have a 4 handle. I didn't really make money off this trade...just broke even. But sometimes that's the way it is.
My plan going into the next few days: Given the amount of economic data we're going to get I imagine we gonna have some volatile movements in stock prices. But I still have a long side bias.
But all in all, my current trades are not too bad. Mosiac (MOS) have been on a tear. I am getting a little concerned now because it has gone up a lot...but hey, I'm not going to complain.
Garmin came down a little today. Not much action yet...I will stick with it for now.
Google earnings this Thursday is going to set the tone for tech; same with IBM.
As for the anonymous poster who asked about STLD: My opinion on the stock is STLD looks to be consolidating after a nice pullback. Observe:
- Stock has a nice upward channel and have not violated its trend (maintaining above the 20DMA consistently)
- Pulled back and is now consolidating on nice volume (there's also a decrease in sell volume)
- MACD is still a concern though, it is sky high
- But, commodity prices should continue to benefit if the dollar continues to tank. Along with global demand of steel.
- Sitting right on that 20DMA now
I have to admit the strength of the steel sector has just been absolutely amazing (just look at my X trade, I had to sack through a lot of pain with the shorts on that one...If I just went long instead would have made a very nice trade). I have to study the price action a little bit in order for me to justify doing anything with this company. But just from a glance, I think you might have a winner here that could be on its way up. Just always keep in mind though the steel sector has already made a monster move up...so make sure if you're trading it keep that nice tight stop to protect profits. If you're trying to get in it for the long haul, this stock could reward handsomely...
Tomorrow I think is going to be a pretty big action day. Don't know how the intraday is going to play out but I am going to stick with the discipline and maintain a short term upward bias. Hopefully it'll pay off.
Be careful out there and invest wisely. Good luck to us.
Damn that was a long post...
- DL
Disclosure:
Long AAPL, GRMN, MOS, GOOG
25% Short Positions on X, RIMM, MA
Long AAPL, GRMN, GOOG, MOS
After the bell update
So once again, the indices were virtually flat. It is true we are still currently below the necktie level but at the same time, we didn't crater either. Sometimes we have to give these movements a little bit of time to work out. Which is why I've decided to cover today. For all I know tomorrow could be another consolidating day. But the longer we consolidate, the more bullish I am feeling.
As for my positions: For MA I covered 75% of my position near the lows at $223 with my initial shorts at $232. I wanted it to go lower but for now, the way the indices are acting I just prefer not to take the chance. $9 isn't too bad.
For RIMM my short started @ $123. Covered 75% today at the open at $115. Again, isn't what my ideal target. But I still have a small position left. I will probably cover that tomorrow regardless. $8 dollar profit
X I covered 75% at $141.50. Boy I tell ya this one has been on a tear. The charts still show this as a severely overbought stock and I am still absolutely blown away after near 2 weeks of trading this stock still have a 4 handle. I didn't really make money off this trade...just broke even. But sometimes that's the way it is.
My plan going into the next few days: Given the amount of economic data we're going to get I imagine we gonna have some volatile movements in stock prices. But I still have a long side bias.
But all in all, my current trades are not too bad. Mosiac (MOS) have been on a tear. I am getting a little concerned now because it has gone up a lot...but hey, I'm not going to complain.
Garmin came down a little today. Not much action yet...I will stick with it for now.
Google earnings this Thursday is going to set the tone for tech; same with IBM.
As for the anonymous poster who asked about STLD: My opinion on the stock is STLD looks to be consolidating after a nice pullback. Observe:
- Stock has a nice upward channel and have not violated its trend (maintaining above the 20DMA consistently)
- Pulled back and is now consolidating on nice volume (there's also a decrease in sell volume)
- MACD is still a concern though, it is sky high
- But, commodity prices should continue to benefit if the dollar continues to tank. Along with global demand of steel.
- Sitting right on that 20DMA now
I have to admit the strength of the steel sector has just been absolutely amazing (just look at my X trade, I had to sack through a lot of pain with the shorts on that one...If I just went long instead would have made a very nice trade). I have to study the price action a little bit in order for me to justify doing anything with this company. But just from a glance, I think you might have a winner here that could be on its way up. Just always keep in mind though the steel sector has already made a monster move up...so make sure if you're trading it keep that nice tight stop to protect profits. If you're trying to get in it for the long haul, this stock could reward handsomely...
Tomorrow I think is going to be a pretty big action day. Don't know how the intraday is going to play out but I am going to stick with the discipline and maintain a short term upward bias. Hopefully it'll pay off.
Be careful out there and invest wisely. Good luck to us.
Damn that was a long post...
- DL
Disclosure:
Long AAPL, GRMN, MOS, GOOG
25% Short Positions on X, RIMM, MA
Friday, April 11, 2008
Observations About the Current Market Trend - Part 2
On Friday 4/11 the dow tanked 256 points, nasdaq by 61, S&P 27. No doubt a very ugly picture. But I want to go back to something I mentioned from this past Wednesday's post. That is, the potential downside we may see but the potential bounce that may ensue from the strong "necktie" support that the indices are now right on top of. Observe the 3 indices chart once again:
DOW
Nasdaq
S&P
As the charts show, we are now right on the double necktie support - historically known for its resilience. We also have not had confirmation yet to the downside. Notice also despite the ugly move we had today, the volume was actually rather light. In the dow, nearly 1/3 of the volume came from the amazing selloff of GE. But the nasdaq and S&P were just collateral damage and felt more like profit taking rather than panic selling (as indicated by the VIX meter).
So Monday's indices close will be crucial. Even if the morning the markets gap down, if by the closing bell the indices retraces back to the necktie and closes above, it leads me to believe we will have a very strong rally coming.
However, if after Monday there is confirmation to the downside, then the markets may have a significant downside risk.
Time will tell. Good luck to all of us next week.
-DL
Disclosure:
I hold short positions on X, MA, RIMM
Long positions on AAPL, MOS, GRMN, GOOG
DOW
Nasdaq
S&P
As the charts show, we are now right on the double necktie support - historically known for its resilience. We also have not had confirmation yet to the downside. Notice also despite the ugly move we had today, the volume was actually rather light. In the dow, nearly 1/3 of the volume came from the amazing selloff of GE. But the nasdaq and S&P were just collateral damage and felt more like profit taking rather than panic selling (as indicated by the VIX meter).
So Monday's indices close will be crucial. Even if the morning the markets gap down, if by the closing bell the indices retraces back to the necktie and closes above, it leads me to believe we will have a very strong rally coming.
However, if after Monday there is confirmation to the downside, then the markets may have a significant downside risk.
Time will tell. Good luck to all of us next week.
-DL
Disclosure:
I hold short positions on X, MA, RIMM
Long positions on AAPL, MOS, GRMN, GOOG
Wednesday, April 9, 2008
Garmin - Possible Bounce Setting Up?
Garmin (GRMN) is one of those stocks that have simply been annihilated since Christmas. Lower sales forecast, profit margin miss, lackluster forward guidance, have all contributed to this stock's mind blowing 52% freefall year to date and 63% from its all time high. But is now the time to jump in for those of us that have been observing on the sideline?
- Stock is at 52 week low
- Extreme pessimism (very high short interest) could spark short covering on any uptick.
- Options indicates a bet that the stock will reach 60 before options Ex (April 60 calls has 13,392 open contracts)
- Stock is now at the 3 year 200DMA level (as shown on the technical chart)
- All indicators showing a severe oversold status
- Many analyst have downgraded this stock already
- Bad news could already be factored into the stock price
- Panic selling has occurred (notice the huge red volume bars in the past month)
- If the markets bounce hard in the near future (as indicated by previous post by the "necktie" theory, this stock could spurt some buying interest.
- Possible takeover/merger target?
Opinion and plan: Let me be the first to say that my plan is to TRADE this stock, not to invest in it. I believe this is now at a level so oversold where the downside is very limited, but a rally due to short covering could potentially give it a quick 20-30% boost. Unless this stock tanks to 0 and goes bankrupt, this seems to be a golden opportunity to make some fast money.
Buy @ $45. Stop loss at $40. Target price $55-$60. 2 week target.
If the indices continue to consolidate and selloff tomorrow (taking this stock with it), I will most likely initiate my position.
Good luck to us. As Warren Buffet once said: "Buy on FEAR, Sell on Greed" Everyone is jumping ship on Garmin. All the ingrediants seem to be setting up for a nice bounce.
- DL
- Stock is at 52 week low
- Extreme pessimism (very high short interest) could spark short covering on any uptick.
- Options indicates a bet that the stock will reach 60 before options Ex (April 60 calls has 13,392 open contracts)
- Stock is now at the 3 year 200DMA level (as shown on the technical chart)
- All indicators showing a severe oversold status
- Many analyst have downgraded this stock already
- Bad news could already be factored into the stock price
- Panic selling has occurred (notice the huge red volume bars in the past month)
- If the markets bounce hard in the near future (as indicated by previous post by the "necktie" theory, this stock could spurt some buying interest.
- Possible takeover/merger target?
Opinion and plan: Let me be the first to say that my plan is to TRADE this stock, not to invest in it. I believe this is now at a level so oversold where the downside is very limited, but a rally due to short covering could potentially give it a quick 20-30% boost. Unless this stock tanks to 0 and goes bankrupt, this seems to be a golden opportunity to make some fast money.
Buy @ $45. Stop loss at $40. Target price $55-$60. 2 week target.
If the indices continue to consolidate and selloff tomorrow (taking this stock with it), I will most likely initiate my position.
Good luck to us. As Warren Buffet once said: "Buy on FEAR, Sell on Greed" Everyone is jumping ship on Garmin. All the ingrediants seem to be setting up for a nice bounce.
- DL
Observations About the Current Market Trend
Today's post I'm going to discuss about the overall market indices rather than specific stocks. Because I have noticed something in the charts that may drastically go against my short positions - even though I still believe the market, and some of my particular stock positions, are still overbought.
As a disclosure
I own short positions on X @ $140, $146. RIMM @ $123. MA @ $232.
I am long AAPL @ $120. MOS @ $105.
Being a swing trader one must recognize and acknowledge both sides of the trade. And recently there have been an overwhelming bullish sentiment on stocks. Unemployment @ 5.2%? Shake it off. WAMU requiring $7 billion infusion? Not a problem. Fed acknowledging recession? Not even a dent in the market.
Most people (well, the bears at least), is probably wondering the same thing I have been for the past couple weeks. How is the market holding up like this? It is the current consensus that if the markets are able to acknowledge the problems it faces, then the worst may have already passed.
The current indices have been on a very bullish consolidating pattern. What do I mean by this? Observe the following three charts that maps out the Dow Jones, Nasdaq, and the S&P from a 3 month perspective. Even though the analysis is simple, the point is very straight forward:
Here's the Dow Jones
Nasdaq
S&P
So what's the relevance in these charts? "Neckties" is a term that describes the convergence of 2 moving averages coming together. In this case, it is the 20DMA and 50DMA. If the current indices were below the necktie, then it would be considered a strong resistance (which could be used as opportunities to short). However, if the indices are ABOVE the necktie, it becomes strong support. All 3 indices are closing in on neckties from ABOVE. Which makes me believe there could be a very strong possibility for another big push up; DESPITE the negative economic news we have been seeing everyday. In my opinion, the newsfeed thats generated by the media everyday is just a cover that exacerbates and confirms the movement of stocks indicated by TA. This is one reason why despite the negative news we've had recently we're not seeing severe selloffs. Because the charts are showing a consolidation pattern forming...and in my opinion, charts tell the truth.
My game plan going into the remaining week: I will continue to hold my short positions and monitor these 3 indices very carefully. If all 3 indices hit the neckties and BOUNCES, I will go on record right now and say I will cover all my short positions and reverse my stance for the time being even if the stocks I'm shorting have not reached my optimal price target. Because there's no saying how high the market can bounce back up and it is a sin to not lock in profits when it's there.
However, if the indices reaches this necktie point and PIERCES it with confirmation (so meaning a definitive pierce and not a fakeout), then I will be confident in adding to my short positions. And riding the wave down.
So how much more room to go down before the possible bounce? As of Wednesday 4/9/2008:
Dow Jones closed @ 12,527. Necktie support is at 12,368. That gives the market potentially another 159 points of downside.
Nasdaq closed @ 2322. Necktie support at 2300. That's 22 points of downside.
S&P closed @ 1354. Support at 1339. 15 points downside.
I will be watching the next few days very carefully. Hopefully you will too. I acknowledge the problems the current economy is facing. But as the saying goes, "Wall Street can stay insane longer than us solvent". Just follow the rules, and don't listen to the wall street hype.
Invest wisely, and be careful out there. Good luck to us
- DL
As a disclosure
I own short positions on X @ $140, $146. RIMM @ $123. MA @ $232.
I am long AAPL @ $120. MOS @ $105.
Being a swing trader one must recognize and acknowledge both sides of the trade. And recently there have been an overwhelming bullish sentiment on stocks. Unemployment @ 5.2%? Shake it off. WAMU requiring $7 billion infusion? Not a problem. Fed acknowledging recession? Not even a dent in the market.
Most people (well, the bears at least), is probably wondering the same thing I have been for the past couple weeks. How is the market holding up like this? It is the current consensus that if the markets are able to acknowledge the problems it faces, then the worst may have already passed.
The current indices have been on a very bullish consolidating pattern. What do I mean by this? Observe the following three charts that maps out the Dow Jones, Nasdaq, and the S&P from a 3 month perspective. Even though the analysis is simple, the point is very straight forward:
Here's the Dow Jones
Nasdaq
S&P
So what's the relevance in these charts? "Neckties" is a term that describes the convergence of 2 moving averages coming together. In this case, it is the 20DMA and 50DMA. If the current indices were below the necktie, then it would be considered a strong resistance (which could be used as opportunities to short). However, if the indices are ABOVE the necktie, it becomes strong support. All 3 indices are closing in on neckties from ABOVE. Which makes me believe there could be a very strong possibility for another big push up; DESPITE the negative economic news we have been seeing everyday. In my opinion, the newsfeed thats generated by the media everyday is just a cover that exacerbates and confirms the movement of stocks indicated by TA. This is one reason why despite the negative news we've had recently we're not seeing severe selloffs. Because the charts are showing a consolidation pattern forming...and in my opinion, charts tell the truth.
My game plan going into the remaining week: I will continue to hold my short positions and monitor these 3 indices very carefully. If all 3 indices hit the neckties and BOUNCES, I will go on record right now and say I will cover all my short positions and reverse my stance for the time being even if the stocks I'm shorting have not reached my optimal price target. Because there's no saying how high the market can bounce back up and it is a sin to not lock in profits when it's there.
However, if the indices reaches this necktie point and PIERCES it with confirmation (so meaning a definitive pierce and not a fakeout), then I will be confident in adding to my short positions. And riding the wave down.
So how much more room to go down before the possible bounce? As of Wednesday 4/9/2008:
Dow Jones closed @ 12,527. Necktie support is at 12,368. That gives the market potentially another 159 points of downside.
Nasdaq closed @ 2322. Necktie support at 2300. That's 22 points of downside.
S&P closed @ 1354. Support at 1339. 15 points downside.
I will be watching the next few days very carefully. Hopefully you will too. I acknowledge the problems the current economy is facing. But as the saying goes, "Wall Street can stay insane longer than us solvent". Just follow the rules, and don't listen to the wall street hype.
Invest wisely, and be careful out there. Good luck to us
- DL
Monday, April 7, 2008
U.S. Steel Revisited
Just revisiting my U.S. steel trade again. Yes, I have been wrong. Yes, I started my shorts at 140 and I'm absolutely amazed on Monday 4/7 it managed to pull way out of my expectation to 148. I jumped in early. X has gone up 11 of the past 12 sessions. Amazing bullrun no doubt
But notice the tail that is developing at the top. That is a bearish top.
I know I said I would stop myself out at 142. Thinking about it now. I'm raising my stop level to 150. If it does get there, then I'll happily let X rape me. Because I truly believe this is not going to hold. We shall see soon enough. Keep in mind, I try to have at least 2 week target on swing trades. About 4 trading sessions have gone by, and I'm sticking with my conviction.
Good luck to us
- DL
Disclosure: I hold Short positions on X @ $140, $146
Thursday, April 3, 2008
U.S. Steel - X Marks the Spot.
Time to short US Steel (X)?
-Dow Jones, Nasdaq, and S&P 500 indices have all made gigantic run from low.
- Dollar already at all time lows, possibility of strengthening. Strong dollar = sharp correction in commodity and raw material prices.
- Much better Steel values in the market (PKX, MT, ATI, RS etc) All which seem to still have room to run.
- All indicators are maxed out and beyond.
-Commodities bubble?
- Euphoric buying for the past week with no meaningful pullback.
- Long way down from support lines
- Decreasing bid volume
- Jim Cramer have been raving about this stock. As unbelievable as it may sound, when Cramer calls a stock to go one direction, it usually travels the opposite way.
- Already $10 above its 52-week high
US steel has been a stock that has underperformed the market for quite some time before this past couple months where it rose from a pullback level of 107 to 135. It has gone up 30 straight points with only one small pullback (indicated by the last 9 candles, where 8 were white and only one red). Although X has now gone to territories never before seen, parties like this usually come with painful and sharp corrections (just look at SWC).
Opinion: Just like the other stocks I've covered, this one is no different. Stocks do not go up in a straight line no matter how great the underlying company is. This is now a great opportunity to short anywhere above $135. Stop loss at $142 (I say 142 because I believe X could top at 140 I would not want to get shaken out of my hand if it does get there). Target for cover inbetween the middle bollinger band and the 50DMA. Notice everytime when X sold off it always retraced back to at least its 50DMA. That puts the cover target at $110-115
= $7 dollar downside, $25 per share upside potential profit sold short. 2 week target. I will most likely initiate a short position on any strength it exhibits tomorrow (4/3/2008) if the Research in Motion earnings give the markets an early boost.
-DL
Tuesday, April 1, 2008
Mosiac Revisited
- Lower high's from rebound
- New lows from selloff
- Downtrend forming in RSI
- Selling off on big volume, but rebounds on low volume
- I am getting seasick off this stock
Mastercard - Priced to Perfection For Profit Taking Selloff?
Shorting opportunity for Mastercard (MA)?
-Near 52 week high
- Economy in recession
- HUGE run from the low of $183 to now ($222+) in two weeks time = $40!
- All indicators near max out in the short term
- bid volume is clearly deteriorating
- End of quarter window dressing (3/31). April 1st being the new quarter mean winners could be susceptible to heavy profit taking.
- Money inflow is topping out.
- High volatility stock, could easily give back gains just as fast as it gets them.
Opinion:
Mastercard since its IPO debut has grown a whopping 400% in a little over two years. Absolutely stunning performance without a doubt (Which also leads me to believe why Visa would at least double since it is 2x the size of MA). But like all stocks it is not immune to profit taking.
With it reaching near its 52 week high on low bid volume, this could be setting up for a big move down due to profit taking.
Plan: Initiate short position at $230+. Stop loss at $240-$245. Cover near its middle bollinger band or 50DMA. That puts it at ~$200
=$10 dollar downside risk, $30 dollar upside possibility per share sold short. 2 week target.
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