I AM BUYING AAPL AND WFT

I know it there has been a hiatus in my blogs, but my trading has continued despite me not blogging. I just haven't had the time to post my trades.

Since time is still and issue, I am going to suggest two stocks to investigate that I am buying tomorrow, Monday.

AAPL and WFT.

Basically, I watched AAPL consolidate for two months and I believe it will head up due to the strong industry it is in. I am putting in a buy price near $198.00. This was bought based upon my "A system" triggered on Dec. 27th, 2007.

I do, however, have more confidence in WFT as it appears to be breaking out of a cup with handle. My buy point is going to be around $70.40. This was bought based upon my "A system" triggered on Dec. 27th, 2007.

Good luck trading.
JD

JUST WANTED TO LOOK AT THIS - USD/JPY Forex Pair Trading Strategy

I got an email and I wanted to see how this works. I am just going to put this picture up for my info and if you can figure it out, go for it. You could also tell me what you think.

My key points are 4 day EMA and 10 day SMA on Fx.

MARKET HAS BOUNCED AND I THINK IT IS A BUYING OPPORTUNITY

I have been waiting for a bounce and I finally think it is here. Bought in on ATW a few days ago based upon my A system. It did retract 5% today. I know that is a lot, but it was in below average trading volume. Still good news and I am holding on.

CRZO just hit a buy signal based upon my A system. Buying as close to $50.66 is the best. Target is $61.20.

LOGI has hit a buy price of $34.84 based upon my MH system. My target price to sell is $36.58 which is only 5% gain, but it still allows a trader to move in and out of stocks and make quick gains.

Good luck trading.
JD

BEGINNING TO THINK MARKET MAY TAKE A BOUNCE (at least for a little while)

I like the looks of ATW. It sat sideways during this whole downturn in the overall market and today it took a large influx of cash and rose tall.

ALDN also strikes a cord for buying. HOLX is bouncing off support. I see buying opportunities coming us so let's see what will happen.

Good luck trading

JD

BUYING THE BRITISH POUND

Since I am waiting for the stock market to find a bottom and begin to turn up, I am going to trade ETFs (exchange traded funds) that correlate to the price of foreign currencies. One that is showing a buy signal is the British Pound and goes by the symbol FXB. My intent is to get in around $207.50. I know that price is high, but it meets my trading rule that I am going to call 3/22 PDI/MDI. Yes, that is in code so when I take my capitalist attitude and create the website I want to create this will be one of my systems that I will trade. So here it how it goes. Once the candlesticks and the trend bars at the bottom of the screen are both green, that is a buy signal. Also, the opposite it true - once the candlesticks are red and the trend bar at the bottom are both red, sell.

So for the model portfolio that I have set up, I am finally going to buy something after being in cash for the past month or so.

Good luck trading only FXB.

JD

ARE WE GOING TO BOUNCE OR FALL?

The markets are beginning to test the lows back in August and I am wondering if this is going to be support or not. The $127 mark on DIA is going to be a major key point for support. This is equal to 12,700 in the DJIA. If that mark is broken to the downside, get ready for a big fall to 11,700. The number of puts continues to rise and this is a signal for a "contrarian" that we are ready for a bounce. I am still going to short stocks or buy puts in this market until it proves to me it is ready to rise.

Stocks that are hitting signals to short:
OYOG
MTL

The GBP/USD is getting close to the target price of 2.032. Hopefully it will hit the target for another profit.

GOOD LUCK SHORTING.
JD

For those who wish to walk on the wild side:
OSIP
TDG

ICAHN BOUGHT INTO GENZ, SHORT GBP/USD AND CLB

GENZ is bouncing off its 50 day moving average after breaking out from a huge consolidation. This is an opportune time to buy. Another reason is that the investor Carl Icahn announced he has bought into GENZ. Follow the leaders.

If you trade forex, my signals just alerted me to sell GBP/USD as near to 2.0517 as possible. Goal is 2.0320 which is only a 197 pip move.

CLB is showing signs of breaking down and creating a diagonal put spread may be feasible based upon the overall negative tone of the market.

GOOD LUCK TRADING.
JD

OPTIONS : Long-term Diagonal Call Spreads or Put Spreads

Options come with risk so this is for those who are willing to accept risk and try to make more money than just buying stocks alone.

Here is the set up for a DIAGONAL CALL SPREAD:
Outlook - Bullish
Options -
1. Long ITM 12 month call (10% ITM)*
2. Short ATM** or OTM*** 3 month call
*ITM = In The Money
**ATM = At The Money
***OTM = Out of The Money
Reasoning - Profit from rally in market when IV is higher than SV. If market rallies strongly, roll the short call out 3 more months at the same strike. If market closes below short call, resell new 3 month at the same strike as the first short call.
Set up - ADX cross MDI. Better if breaking out from a base and market in a rally.
Trade - SPY, DIA, QQQQ, or growth stocks.

Now for the opposite.

Here is the set up for a DIAGONAL PUT SPREAD:
Outlook - Bearish
Options -
1. Long ITM 12 month put (10% ITM)*
2. Short ATM** or OTM*** 3 month put
*ITM = In The Money **ATM = At The Money ***OTM = Out of The Money
Reasoning - Profit from a falling market when IV is lower than SV. If market falls rapidly, roll the short put out 3 more months at the same strike. If market closes above short put, resell new 3 month at the same strike as the first short put.
Set up - ADX cross PDI. Better if breaking out from a base and market in a rally.
Trade - SPY, DIA, QQQQ, or growth stocks.

DESPITE TODAY'S NICE RISE, JUST TAKE AIM AND WAIT TO PULL THE TRIGGER

I know that today was nice, buy just be patient for this may only be a small blip. I am still nearly 90% in cash. Haven't found any real signficant buys.

I am still going to sit on the sidelines.

Good luck trading.
JD

Personal note: 10/20/50 LIFC. SNHY to FSTR (ADX cross) GPOR to SCHW (MACD cross) or FCSX.

COGN IS BUCKING THE DOWNWARD SPIRAL, PCR IS SHOWING A "CANDLESTICK KICKER"

So here is the update on my model account. Yes, it does go down, but in limited amounts.

I dislike buying in a downward market, but I was playing around and watching COGN. Just using this as a study.

Check out this article for candlestick kicker on PCR.

Article from www.workingmoney.com

The Candlestick Kicker
by Stephen W. Bigalow

Do you chase a stock that is already up 12% on the day? What do you do when one of the companies you own stock in announces an earnings warning? What do you do when one of your stocks, previously uptrending, turns around and plummets after announcing an SEC investigation? Or the Federal Reserve Board announces a surprise rate hike, and bond prices gap down from one minute to the next and move in the opposite direction of the previous trend?

Not surprisingly, these situations paralyze most investors. Fortunately, candlestick charting can keep you from falling into traps. When such a price action takes place, you will usually find a kicker signal on a candlestick chart. The kicker signal has powerful implications.

The one basic factor built into candlestick signals is that they are formed by the cumulative knowledge of all the investor input, the buying and selling, of a trading entity or trading entities during a certain time period. The candlestick signals tell you exactly what investor sentiment is doing. The kicker signal illustrates a dramatic change in investor sentiment.

Candlestick analysis allows investors to project trend reversals with a relatively high degree of accuracy. One misconception about candlesticks signals is that there are too many of them to learn. But of the 50 or 60 candlestick signals, there are only about 12 signals that occur most of the time — the doji, the bullish and bearish engulfing signals, the hanging man, shooting star, hammer, the inverted hammer, the bullish and bearish harami, the dark cloud, the piercing pattern, and the kicker signal. Knowing these few signals will sharply improve your analysis of trend reversals and make learning candlestick analysis much easier.

Having this analysis capability in your trading arsenal allows candlestick investors to have their portfolios positioned in the correct direction when a move occurs. Understanding the psychology of how signals are formed provides investors with better foresight in where to have positions placed.

Big dramatic moves! What do you do? Many investors act like deer frozen in headlights, but candlestick analysis tells you instantly what to do. An announcement can completely reverse a trend direction. If a trend has been in progress, whether strong or mild, and a surprise announcement is made, how that formation rolls out will tell the investor what to do. One possibility is observing the previous day's candle formation with the open price, then the closing price continuing in the direction of the existing trend. After the announcement, the price alters its direction, opening at the same level as the previous day, a gap open, and proceeding to close in the direction opposite of the previous day. This is known as the kicker signal, and it is a high-powered candlestick signal. This signal should never be ignored. It can create huge profits. Candlestick signals are fractal. They can occur on a daily, weekly, or monthly chart just as well as on a one-, five-, or 15-minute chart. The Japanese rice traders identified approximately 50 reversal and continuation signals through centuries of developing candlestick signals. Of these, the 12 major signals will provide more trades than most investors will ever need.

THE KICKER
The kicker signal, which may be the most powerful signal of all, works equally well in both directions. Its relevance is magnified when occurring in the overbought or oversold area but is effective no matter where it appears in a price trend.

Consider the investment sentiment that built this pattern. It is formed by two candles. The first candle opens and moves in the direction of the current trend. Investors are continuing with the established trend, closing the price further in the existing direction. Then something occurs to change the direction of the price; usually, surprise news causes this type of move. The signal illustrates such a dramatic change from the current price direction that the new direction will persist for a good while. (One caveat to this signal — if prices gap back the other way in the next time frame, liquidate the trade immediately. This does not happen often, but when it does, get out.)

The second candle opens at the same open as the previous day, a gap open, and heads in the opposite direction of the previous day's candle. The bodies of the candles are opposite colors. This formation is indicative of a dramatic change in investor sentiment. The candlesticks visually depict the magnitude of the change.

Understanding what forms a kicker signal produces a strong trading discipline for investors. If you own a position that has had a nice steady uptrend and one morning you see an announcement that causes the price to open below the open of the previous day's bullish candle, a trade decision can be made immediately: Get out on the open. Candlestick analysis makes it simple. If an announcement alters the direction of the current price trend with such magnitude that it is gapping the price down below the previous day's open, you can make one assumption. The investor sentiment of the current uptrend has been dramatically altered. A gap down below a previous day's bullish candle now has the strong potential of forming a bearish kicker signal. With the understanding that the kicker signal is one of the strongest reversal signals identified, logic dictates that you do not want to remain in a long position with strong downside indications. This is common sense investment practice depicted by candlestick signals. The probabilities indicate that a negative announcement, causing the price to gap down, would not be opening lower and immediately continuing back up.


Figure 1. Bearish kicker in Amily Pharm.













AMILY PHARMACEUTICALS. A gap below the previous day's open clearly demonstrates a strong change of investor sentiment. If long, it would be in your best interest to close the position.

If an announcement creates a gap up in price above the previous day's open, in a stock downtrend, an investor should take advantage of a large profit potential in the earliest stage. A gap up above the previous day's open signifies that whatever was announced has now dramatically changed the investor perception of that price. If you wake up and see an announcement that is gapping the price up above the previous day's open, you can assume that the strength of the announcement is now going to create a bullish kicker signal. Even though the price has moved a good percentage from the previous day's close, a potential formation of a kicker signal is usually the prelude to a strong uptrend. This allows an investor to act immediately versus worrying about how much the price is already moved from yesterday's close.
FIGURE 2: BULLISH KICKER SIGNAL
As illustrated in the RadioShack chart in Figure 2, whatever announcement created the kicker signal produced new investor sentiment that developed into a strong uptrend. The strength of the uptrend was immediately apparent, with the price gapping up well above the previous day's open.

Announcements can dramatically change the prospects of a company. Do all kicker signals create strong price moves? Not always! However, based upon the circumstances that create the signal, the results expected will occur with such a high percentage of positive results that executing trades upon seeing the formation or the completion of a kicker signal would dramatically improve the returns of a portfolio.

SUGGESTED READING Bigalow, Stephen W.Profitable Candlestick Investing, John Wiley & Sons. [2005]. High Profit Candlestick Patterns, Profit Publishing.

Short SBAC based upon this "kicker."

MORE THAN 65% OF ACCOUNTS NOW IN CASH

Wow!!! The markets are taking a hit and I have been knocked out of positions on the past 3 times that I have bought (BLUD, SNHY,CMED). That puts the majority of my accounts into cash. So the best option for me at this time is to ride out this down turn and wait until the market corrects itself.

GOOD LUCK NOT TRADING.
JD

CHECK OUT CMED, AGAIN

I just wanted to show a chart that I really like, CMED. Granted the overall market is not really in good shape right now, but I like this chart for many reasons and I will explain. If you pan back and look at a 2 year chart you will see that 2 years ago the stock reached a high of $43.51.






Now the stock is sitting near that previous high after breaking abovce it a few days ago. If you click on the second chart and look at the top blue line, you will see that was the previous high 2 years ago and we have zoomed in on the most recent months. The lower blue line is a "trend line" that looks as if the stock is getting "support." I have held this stock waiting for a further breakout so hopefully it will do so in the next week. I am buying shares near $43 to $44.

Good Luck Trading.
JD

PROTECT YOURSELF

Did those California fires have you scared about your assets? I'll bet you think that you are safe telling the insurance company all of the items that you own. Don't fool yourself. Insurers will try to get out of paying for anything.

My solution: http://knowyourstuff.org/

'Nuff said.

OUT OF NBG, BUYING SNHY

So I have to admit I got out of NBG right before the close yesterday because I saw $14 as a point where the stock may take a rest because it was near the top of a trend line. (Click on the chart to the left to see what I am talking about) I was happy with the return that I had so I decided to take profits. I am glad I did. Today it opened down and sometimes it pays to draw these trend lines.

Here are the transactions for NBG in my retirement account.

10/31/2007 NBG SOLD 100 SHARES OF NBG AT $13.81 $1,380.97
10/31/2007 NBG SOLD 1000 SHARES OF NBG AT $13.83 $13,829.78
10/31/2007 NBG SOLD 433 SHARES OF NBG AT $14.00 $6,054.90
10/31/2007 NBG SOLD 292 SHARES OF NBG AT $13.81 $4,032.45
10/31/2007 NBG SOLD 100 SHARES OF NBG AT $13.83 $1,382.97
10/31/2007 NBG SOLD 275 SHARES OF NBG AT $13.83 $3,796.19
10/31/2007 NBG SOLD 100 SHARES OF NBG AT $13.83 $1,382.97
10/31/2007 NBG SOLD 100 SHARES OF NBG AT $13.83 $1,382.97

10/18/2007 NBG BOUGHT 105 SHARES OF NBG AT $12.4499 ($1,314.24)
10/1/2007 NBG BOUGHT 95 SHARES OF NBG AT $12.81 ($1,223.95)
9/27/2007 NBG BOUGHT 1100 SHARES OF NBG AT $12.9199 ($14,211.89)
9/27/2007 NBG BOUGHT 100 SHARES OF NBG AT $12.9199 ($1,298.99)
9/27/2007 NBG BOUGHT 1000 SHARES OF NBG AT $12.93 ($12,937.00)

I did buy more GPOR since I see it sitting at more "support" and added more shares at $21.74. Let's see if this one pans out. I am also interested in this stock since oil prices continue to climb.

I am also buying SNHY since it is near "SUPPORT" after what I believe is to be a "cup with handle." If you click on the chart you will see that a cup with handle is forming and a support trend line drawn on this chart confirms this. Remember, this is MY presumption that it is at support. The market may prove me wrong, but I am a believer.

Good luck trading.
JD

A LOT OF WAITING FOR THE FOMC TO MAKE AN ANNOUNCEMENT

There was a fair amount of selling today ahead of the "Fed's" announcement tomorrow. The FOMC is going to announce whether or not interest rates will stay the same or if they are going to move it up or down. The consensus is that they will cut interest rates again which is what I am hoping for. Sure it will weaken the US dollar, but it will allow stocks to rise in price.

I was scouting stocks again since I am looking for buys after BLUD and AMZN knocked me out of a couple of positions. I got in on GPOR and I am hoping it finds "support" at the current price of $21.00. Currently it is sitting at an 8% loss from where I bought it. So if it drops only 2% more, I am getting knocked out of another stock.

RIG is hitting $120 and is acting as "resistance" currently. I pray that it it going to breakout since oil prices continue to rise. I guess oil & gas drilling is really not a good industry to invest in currently.

I am going to put ABAX on a target to buy. Click on this chart to see where I believe the proper buy point and maximum buy point is. Once could say that the proper buy point is lower than $27.10 since there is a "cup with handle," but the breakout was so big I am willing to move my buy point up a little bit.

Pray that the Fed cuts interest rates.

Good luck trading.

JD

ACTU IS UPGRADED TO MARKET OUTPERFORM

ACTU has broken out this morning and is currently up 13% based upon the fact that is was upgraded to market outperform. When I made the suggestion to buy this stock, I said that it was risky to buy stocks priced under $20. Well this one paid off. It could turn out to be like BOOM three years ago where I garnered 400% within a year. Can I do it again? We will just have to see.

PDE still is sitting just below a buy point so I will keep my eye on this one.

As far as the negative trades, GPOR turned the opposite direction yesterday after buying it and is currently down 6% from where I bought it. If it breaks down and I lose 10%, I'm out. See, I don't win on every trade.

If you are following forex, both the GBP/USD and the NZD/USD are both doing well and have continued their positive upward movement.

Here is a picture of the model portfolio that I am using as my performance standard. In June, 2007 it had $20,000 in it and currently sits at $46,383.

Good luck trading.
JD

TWO STRIKES WITHIN A WEEK

BLUD took a digger on the news that their acquisitions in the late 90's are going to be investigated. So I took my 10% loss and walked away.

So I am on the prowl for new buys. Hunted down HURN and GPOR. HURN is sitting at support and by clicking on the chart you can see the proper buy point and maximum price that I would be willing to pay.

GPOR is sitting at support. Click on the chart to look for the $23.48 buy point.

Good luck trading.

JD

GIVE CMED A LOOK

CMED is looking even better. Right now it is sitting near a 1 1/2 year high and appears to be ready to break out. I am setting my sights on $43.23 which is today's closing price for my buy point.


If PDE breaks above $37.31 on higher than average trading volume, consider this one to buy during a base-building episode. This is only for those who are willing to risk it a little more than those who wish to play it conservatively.

As for Forex traders, click on this chart to see my recent buy/sell signals for NZD/USD and notice that today there is a buy signal. Don't look at the chart and expect it to show you UP versus DOWN days as I have changed the candlestick colors to suit my buy and sell signals with a confirmation signal at the bottom. I am not going to give away my secret as to what my indicators are so this is how to read this chart.

1. If either the candle or the trend bar at the bottom of the chart turn green, wait for the trend bar or the candle to turn green respectively to confirm a BUY signal.

2. If either the candle or the trend bar at the bottom of the chart turn red, wait for the trend bar or the candle to turn red respectively to confirm a SELL signal.

GOOD LUCK TRADING.

JD

I need this as a personal note. Watch GSF. Group #73 same as RIG

DAMN AMZN!!! THIS JUST SHOWS THAT EPS REPORTS CAN HURT A STOCK

I was basking in the glow on Tuesday when AMZN broke out and gained 10%. I was then burned by the fire when I checked on the market to see that it was down 15% due to warnings on future earnings. In light of that, I sold out for a loss of 5% since I originally bought at $90.

See, I don't win on every trade, but I do cut my losses quickly.

I do get to brag about my warning about the Dow Jones Industrials, DIA, turning down in the October 16th blog. I mentioned that one of the indicators called the MACD was turning down and I didn't like the feel of the market. In my personal account, I placed a trade in options called a bear call spread. The "bear" means that is I expect the market to be "bearish" or to move downward. The "call" means that is the type of stock option I bought and sold. (I know it may be confusing but this is for those who have learned how to trade stocks first. Be confident with stocks first, then you can investigate how to trade options) The spread means that I bought on "call" and sold another "call." My spread was a December 142 call that I sold, and I bought the Dec 145 call for $1.27. As of today, the spread is worth $0.90 which is a 30% gain in one week. My target is a 50% gain so I am waiting for this move.

Good luck trading.
JD

MONEY MANAGEMENT - FOREX AND STOCKS

This segment is more applicable to forex trading due to the high amount of risk versus trading stocks. The same can be applied to stocks, but I am willing to risk a lot more in stocks so I don't use this 2% rule in stocks.

The most common formula that investors use is risking no more than 2 percent of the total portfolio value in any given trade. If you have an account with $100,000 in it and by applying the 2 percent formula, you would be willing to risk up to $2,000 in a single trade. Then you must determine the number of forex contracts you can buy without risking more than $2,000.

If you set a stop loss of 100 pips on a trade, you are willing to risking is $1,000 per contract since each pip is worth $10. (100 pip loss x $10 = $1,000). Knowing this, you can now calculate how many contracts you can purchase by dividing $2,000 by $1,000 per contract. Meaning you can trade 2 contracts. This formula determines how much you are willing to invest from your total portfolio in any single trade.

In light of this, I am going to go long GBP/USD due to one of my trading signals being triggered. Let's see how this trade transpires. Remember, if you can't trade forex you can trade FXB which is the stock version so you will want to BUY the stock symbol FXB.

Good luck trading.
JD