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

I AM EXPECTING A SMALL BOUNCE

I see the market using $125 on the DIA as support.  How long it will last is still questionable, but the $125 mark has been support twice in the past year.  Here is an option play that I am doing.  Buying the March 125 calls and setting a price target of $134.  If you look at the delta of the option, it is $0.61.  This means for every dollar rise in the stock, the option  rises 61 cents.  

Despite all that, some "defensive" stocks are peaking their heads out.  The pharmaceutical ETF has shown signs of life as well as AGN.  You will see that this one is in the banner to the right as a buy.  

CG has also made a nice bounce and I am putting in a buy for that one.  

I have shorted quite a few stocks and HB is one of them.  

GOOD LUCK TRADING.  (I still think this is a bear market so trade carefully)

JD

MARKET BACK INTO CORRECTION

I have to admit, I have not been doing too hot lately on hitting the stocks. Oh, Yeah. It's the market. Despite my best attempts, I still cannot predict the market 100%.

In light of that, AAPL, AMZN, LIFC, ININ have all hit the crapper. There are those that are still hanging on, but I don't know for how long so I am protecting my portfolio by getting 60% into cash. Yes, I am still hanging on to a few stocks, but I am going to protect them with covered calls. I am slapping covered calls on HITT, AMZN, WFT,

In some accounts, a trader has the capability of selling a covered call (click on this link to learn more about covered calls). I use them when a stock has made a nice run and I expect the stock to stay neutral meaning I don't see much upside or downside movement. I will gain a lot of money if the stock trades in this neutral fashion. WHY? Well, a covered call loses value over time. WAIT, if a covered call loses value over time, how does that make me money? Simple math, two negatives make a positive right? I SOLD a covered call and the covered call will LOSE VALUE over time. Those two negatives make me positive money. It takes a little getting used to to realize that you can make money if a stock stays neutral so click on this link for covered call strategies.

So needless to say, I am mostly in cash and covering my butt with covered calls.

GOOD LUCK NOT TRADING.
JD

LOGI gives me 5% in 25 days

LOGI triggered my MH system on Dec. 4th with a buy price of $34.84 and my target was $36.58. It took a while to gain that 5%, but I did it in less than a month.

CRZO has slid sideways during the downturn in late December. Now that the price of oil per barrel is back on the rise, so is CRZO. Remember, the target is just over $61.00.

ATW is still too pretty to let go. Still have not found a resistance point yet.

Today, I added a couple of stocks that hit my "A system." Those are HITT and AMZN. The trigger for HITT was actually triggered on Dec. 26th and I see the stock creating a bull flag and potentially creating a handle in a cup-with-handle formation.

AMZN to passed a resistance point near $95 in strong volume yesterday (Jan. 2, 2008) and bucked the downtrend in the general market. Got in today at$94.82. This one triggered my MH system and so I am setting a 5% profit target.

GOOD LUCK TRADING.
JD