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

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

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.