WHERE ARE WE GONNA GO?

The market has decided to pierce previous support and look to move downward over the past couple of days.  Where we go from here, no one knows.  If you look at the DJIA on a weekly chart you will see that we are in a downtrend after hitting the 200 day moving average (it acted as resistance)  and falling to our present position.  It has broken down further past the March lows so it would portend a fall.  Looking at the stochastics on a weekly DJIA chart shows that it is nearing an oversold area so a small bounce may be in order.  Don't you just love all the reasons I can come up with to try and "predict the market."  I still do not believe anyone can, but I am trying to predict near term moves by looking at charts.  

GXDX recently popped up and is retracing again to a buy point and do I ever hate buying when the market is going down.  Based upon on of my screens, however, GXDX has shown a buy signal and I made mention that a good buying point was below $31.  Well, I bought more shares today at $30.38 after the stock bounced of its 20 day EMA and after the ADX showed a buy signal about 2 weeks ago and 6 weeks ago.  

Shorting VIVO was a good thing.  Still waiting for CRZO to drop buy oil prices keep holding steady. 

Let's see where we go from here.

Good luck trading.

JD

NAVG LOOKS GREAT ON P AND F AS WELL AS A DAILY CHART

NAVG looks good on a P and F chart as it has broken a downtrend and is now consolidating. If you look at a daily chart like the one here, you will see there is a strong rise in the ADX after dipping to 10 in mid-June. As the ADX gets to that low, there should be a strong movement one way or the other and it has chosen up. Now, the 200 day MA may pose a threat to this recent rise as it met resistance today. I would love to add shares when it retreated back down to $52.50 to $53.50.

GXDX has done the same thing and right now it may be a little overexteded. So wait for this one to pull back into the $29 to $31 range.

WYE HITS BUY SIGNAL ON WEEKLY CHART

WYE has crossed the ADX system that I like to trade meaning this is a long term trade (1 year) since the cross occurred on a WEEKLY chart and not on a daily chart. I have added a few shares onto my account and will buy on dips (anywhere from $46.25 to $47).

I also bought the puts on VIVO.

LOOKING AT A NEW MONEY MGMT SYSTEM, BUYING PUTS TOO

The overall market continues to decline and I will ride the stocks that continue to make lower highs and sell those rallies (or buy puts).

OXPS - on a weekly chart, the slow stochastics (14,3) are in overbought territory and the ADX is below 25 meaning that the stock is not trending. On a daily chart (seen on this blog), it has had a small uptrend for the past few months, but the stochastics are also heading lower while the ADX is at 15. Note that the ADX did not rise above 25 during this recent uptrend and if a stock trends up strongly, so should the ADX. Since both stochastics on a weekly and on a daily chart coincide, I suspect that the stock is going to head lower for a little while, but this is debatable.

CRZO - Here is one that I see on a daily chart that is probably going to drop a little while. The weekly chart shows a strong uptrend during the past few months, but the ADX is showing negative divergence - i.e. the stock has moved higher, but the ADX is now trending downward. On the daily chart, the ADX is less than 25 denoting a non-trending stock and the slow stochastics have just broken down below the overbought area. Perfect opportunity per stochastic recommendations.

Another one I like on the short side is VIVO. It has had a long uptrend also on a weekly chart but in mid-April, the uptrend was broken with high trading volume. Since that time, the stock has risen, but trading volume never surpassed the high selling volume. Focusing back down onto a daily chart shows the stock hitting the 200 day moving average and it is resistance. I see this as another perfect time to short the stock or buy puts.

Good luck trading.

JD

THANK YOU ESLR!!! WATCH UGI

I am watching UGI since the weekly ADX is getting ready to cross as a buy signal and the daily ADX has just created a buy signal by crossing the 20 line. The stock also broke out of consolidation that has lasted for 2 years. I am putting a buy order in near $27.75.

ESLR - SharpCharts from StockCharts.com

ESLR - SharpCharts from StockCharts.com: "ESLR" Check out this chart in that the Stochastic is turning positive in a non-trending stock. That would make this much more of a buying opportunity.

LONG GSX, FLEX, AMZN, AMD

LONG AMLN, POSSIBLE REBUY ON STAR, SHORT NTAP AND GNK

Long STAR

WATCH VIV, ASF, CCRT

VIV is near its 50 day EMA.  The buying volume has outweighed the selling volume and a stock near its 50 day EMA is a buying opportunity.

The same exact scenario is with ASF and CCRT.

Missed out on BCE's down move, but got in on PENN at $44.61.

Good luck trading.

JD

SHORT BCE; LONG PENN

QID IS LURKING NEAR ITS 200 DAY EMA

QID was helpful to me by helping to keep my portfolio from imploding.  I enjoy reverse ETFs since a trader can trade them in their retirement account and they move in the opposite direction as the major indices such as the QQQQ, DJIA, SPY, etc.  Since QID is near its 200 day EMA, a trader has a very important decision to make.  Do I take the QID side or do I take the QQQQ side?  i.e. do I think the market is going to drop or is it going to rise?  

I have been taking some real short trades and trying to garner only 5% profit moves.  I recently was successful on FSLR.  The reason I bought it was the MACD had crossed the Zero line near $215.  My purchase point was $216.77.  I hit my price target of $227 in three days of trading.  I'll take 5% in 3 days anytime.  

I had also been watching CPST.  On 2/25, CPST broke out of a cup-with-handle and I made an initial buy at $1.88.   I have patiently waited a month and I decided to buy more when the stock retraced back down to $1.82.  I have a nice profit so far and I intend to ride it a little longer and take my first profits at $2.30 then wait for a further exit.

Watch FXC very closely as it is sitting on its 200 day EMA for the past 4 days.  I believe it will be a buying opportunity, but there is currently a fight between the falling USD and falling commodity prices.  Commodity prices and the CAD are best followed by comparing them to the $CRX (type that into the symbol section at www.stockcharts.com to see the chart.)  So if you look at both the FXC and the $CRX, you will see that both have bounced off the 200 day EMA recently.  Let's see if it holds.

Good luck trading.

JD

QID IS HELPING ME OUT.

Thank heaven for reverse ETFs. If it weren't for QID, my account would be suckin'.

I do have to mention something, though. I have been keeping my eye on ENDP and I am going to buy in near $27. Call me crazy about buying something in a downtrending market. In my rules I have written to not do what I am doing, but my emotions may be clouding my better judgment.

THIS SMALL RALLY MAY BE TAKING A DIGGER

I am watching this whole market probably taking a digger after trying to rally. That being said, I have been wrong. This rally has tried to pick up some steam, but I am just not as confident as before.

I am going to short the market by buying the QID. What? How can you short the market by buying stock? Well, in all actuality, QID is the reverse of the market. Since I believe the market is going to go down, this exchange traded fund (QID) will go up. The QQQQ is below its 50 day moving average and trading volume is not as strong as selling volume. My personal belief is that the market is creating a Bear Flag. Google that and you will find out what that is.

So I am going to protect my portfolio by selling some stocks during this rally and buying QID.

Good luck trading.

JD

BUYERS CONTINUE TO SHOW THEMSELVES. PATIENCE IS A VIRTUE

So I am looking at buying in on STJ due to a bullish MACD crossover.  

I am going to be watching WM to add more shares in the drawback in low trading volume after a breakout.  Targeting the $15 range which is near the 50 day moving average.

CG is gone.

GOOD LUCK TRADING.

JD

NEW BUYS POPPING UP AFTER THIS BOUNCE UP

Buys today include AMAT, SYMC and XLNX. If you didn't get in on BOBE, it is sitting around another buying opportunity.

Waiting for CF to take a digger as it is a stock to "short."

Good luck trading.
JD

YUP! LOOKS LIKE ITS GONNA HOLD

APOL and BOBE are buys.

CF looks like a sell/short opportunity.

Good luck trading.
JD

NICE BOUNCE TODAY AND I THINK THIS ONE WILL HOLD

Look at ADLR. It has bucked the downtrend of the overall market at the MACD has just crossed the zero line.

What about CCC, too. It has just bounced off its 50 day moving average, still above its 200 day moving average and didn't sell off. What more could you want?

Large fund companies are also snapping up financial shares. Check out WM, FBP, FIF, JPM, MER. Home builders are also being bought. Check out PHM, RYL, HOV.

GOOD LUCK BUYING.
JD

For those who day trade: GAP OPEN STRATEGY

The Gap-Open Stock Trading Strategy

What is a Gap Open?
A gap open is when the opening price of a stock is above (gap up) or below (gap down) the previous evening's closing price.

Gap Up at the Open Trading Strategy

Like any system, method, tactic or strategy, its not 100% reliable, but applying the following criteria significantly reduces the risk of playing gap opens.

Ideally, the stock should gap above the previous day's high. It is better if it has gapped 5% one direction or the other. The stock should be a relatively strong stock that is in an up trend and/or rebounding off significant price support or a major moving average (like the 50-DMA or the 200-DMA).

Once the stock has gapped open to the upside in the morning, short the stock down to the previous days' close. You can then set your stop loss above the opening price. If the stock tumbles, the ideal situation occurs when the break above the 1st half-hour's high happens several hours after the 1st half-hour of trading (mid to latter day). The opposite is true when the stock gaps down. You would BUY the stock and close out the position when it reaches the previous days' closing price and set the stop loss below the low of the gap-down price.

Even better, should the "gap open" take the stock from below to above a significant moving average like the 50-DMA or 200-DMA, consider it a very bullish sign and therefore an extremely compelling play.


Here's another link: http://www.tradingday.com/c/tatuto/morninggapstrategies.html

GOOD LUCK TRADING.
JD

STILL HOLDING NEAR SUPPORT, BUT IT MAY BE WEAKENING

The market is most likely in a bear phase and there is going to be nothing but downward movement.  Even though the $125 mark on the DIA has held, there is more selling than buying.  So the little bounce I expected may not materialize.  

I have taken a bearish stance on some stocks.  ARO is one that I am taking a bearish tone.  In my personal account, I have created a calendar put spread.  What I am expecting is that the stock will drop over the next year since it is a retail stock.  I bought a Jan 2009 $25 put and sold a Feb 2008 $25 put.  The total cost to me was $3.00 per contract since I put in a limit order.  My intent is to recoup the $3 within the next 4 months and begin making a profit for the next 8 months.  I can best achieve this by buying back the Feb 2008 $25 put when the MACDH nears 0.25.  I would then wait a while and then move to the next month expiration and sell the March 2008 $25 when the MACDH nears -0.25.  It is even better to look for swing signals when the MACDH nears these values.  

That last paragraph may be totally confusing to someone who is not into technical analysis, but hopefully someone can figure it out.

So as for now, I am very bearish on the market and for the year, I am expecting it to be in the crapper.  That said, I hate trying to predict the market.

GOOD LUCK NOT TRADING.

JD