NOTE: Make sure you look at the current holdings section as we have changed stop loss levels on our holdings.
On the surface everything looks all fine and dandy with the Dow up almost 100, the OTC up 11 and the SPX up 8 at their best points today . HOWEVER, back out AAPL and look at what is happening to all the leaders here!
All of them are red and not up contrary to what the market is showing us with its green today.
AMZN, NFLX, CRM, FFIV, OPEN and PCLN — just to name a few — are all getting whacked. Now this is either a pause pullback in order to refresh before continuing onward to a retest of the highs or? It’s a B wave up of an ABC down. We can build a case for either one.
Caution is advised here and that is why we raised our stops on our current holdings.
Does everyone know their ABCs?
Like we said, we either retest the highs in the indexes and the leaders or we fail. If we fail the leaders get it first as they were first out of the gate in this recent 200 MPH bounce. If they fail these names ought to get hit the fastest and hardest as they are the go-go names.
Many times when stocks are in a correction they tend to at least stage an abc down look to them. Should that occur? Well in each of the 3 charts below we’ve laid out a diagram off to the left of what that would look like.
Again we are not saying this is what is going to happen but like we said over the weekend we need to be prepared for potential scenarios. Never take anything for granted folks and never ever get complacent.
Names like:
SINA
Gosh, who’s not to say this isn’t the start of some sort of right shoulder developing here. We’ll want to watch for that too over the coming weeks. If you were one who bought the face of fear here recently? Well you got a good 4-5 point swing trade out of it that’s for sure.
BIDU
CMG
WHAT EXACTLY DO I WANT TO ACCOMPLISH WITH MY OVERALL Virtual PORTFOLIO IN 2011 REGARDLESS OF WHAT THE MARKET DOES OR THROWS AT ME?
SHORT SELL WATCH LIST
See below we’ve got a few names POTENTIALLY setting up
Now if over the coming weeks we sell off to the 50 day or prior supports, (2-25 Been there already did that) bounce (2-28 Now doing so) and then fail? We’ll get short in a major way. Should that occur it will set up a lot of double tops and first thrust down snapback rally chart patterns. Below are a few examples of what Double Tops and First Thrust down patterns look like.
MOTR
BCSI
Classic first thrust down, puts in a bear channel, snapback rally call it what you will in pink, breaks it and it’s bombs away. One catch, the bombs away was earnings related. BUT that’s the pattern we want to see on the short side with names.
SLAB
Well there you have it, first thrust down, snap back rally and bombs away we might add.
All of the below fall into the realm of watching for a Double Top breakdown to occur. A break of the pink lines are what we need to see to make us take some short sells.
ARMH
Watch those pink lines, same goes for ADTN below. Even EBAY has "Got That Look"
ADTN
SWKS
LONG SIDE WATCH LIST
If I were to put money to work here. Where do I put it?
Remember it’s all about Pullbacks Off Highs of issues in clearly defined uptrends above the 50 day that we are most interested in.
AAPL
This issue is definately playing the little train that could song here — "I think I can I think I can"
LLNW
Notice how our watch list got real small all of a sudden? That’s because at 200 MPH it doesn’t leave a lot of names at low risk entry points that we can work with anymore, besides the index action warrants caution AGAIN.
Featured names but not trade triggered by us
Long side featured
SINA, BIDU and CMG are all shown above.
NFLX
OPEN
SOHU
One could say that NFLX, OPEN and SOHU are also staging what COULD be those ABCs mentioned at the beginning of this update. Key word is "could." Market makes the call here not us.
All About Options In The World According To All About Trends
NOTE: The exchanges recently started WEEKLY EXPIRATIONS of options. Going forward, make sure that you check to see which ones you are buying. Let’s stay with traditional options expirations which are the ones that expire the 3rd Saturday of every month.
NONE currently
CURRENT POSITIONS
"Let Your Stocks Tell You What To Do By The Action They Exhibit"
Long Side Positions
Per the trade trigger alerts Friday morning we are now long LULU, RAX, IDCC and CVLT.
So here is the deal with these. One of three things are going to happen here. We’ll either make a gain, wash or stop out at a loss. It can be no other way.
In each of the charts we laid out stop loss levels to be aware of should something go awry, those levels (And Trade Size Per Position Risk Management) define your risk.
Are they going to work out? Nobody knows. We are there and now at the mercy of the market. At this point it’s all about managing that risk as defined because right now we have no gains to be able to manage and quite frankly that IS always the way it is going to be the split second after you take a trade.
2-27 NOTE: Should the markets stage a retest of the highs these ought to go along higher with it. HOWEVER should the markets fail? These will most likely fail too so BE AWARE. What we’ve done is lay out stop loss levels to BE AWARE of should that potential scenario occur.
Remember the mechanics of reality apply with these issues and we , nor you have any control as to whether they are going to work out as the market is the boss not us.
LULU (We are now long 150 shares at 77.26)
We are going to tighten our stops on this one to a 1-point loss which would amount to a $150.00 loss should it occur.
Consider this a trade alert, you will not be recieving a stop loss trade trigger alert on this name as this is it — 76.26
Place your stop loss orders on the books at your broker
IDCC (We are now long 250 shares at 47.34)
We are going to tighten our stops on this one to BREAK EVEN which would amount to a wash on the trade should it occur.
Consider this a trade alert, you will not be recieving a stop loss trade trigger alert on this name as this is it — 47.34
Place your stop loss orders on the books at your broker
RAX (We are now long 300 shares at 36.79)
We are going to tighten our stops on this one to a 1 point loss which would amount to a $300 loss should it occur.
Consider this a trade alert, you will not be receiving a stop loss trade trigger alert on this name as this is it — 35.79
Place your stop loss orders on the books at your broker
CVLT (We are now long 300 shares at 35.40)
We are going to tighten our stops on this one to a 1 point loss which would amount to a $300.00 loss should it occur.
Consider this a trade alert, you will not be recieving a stop loss trade trigger alert on this name as this is it — 34.40
Place your stop loss orders on the books at your broker
SHORT SIDE POSITIONS
CYMI (We are SHORT 200 shares at 47.66)
To our NEW SUBSCRIBERS
What we’ve tried to do is break our watch list down into chart pattern recognition structure from a visual standpoint. Learn the patterns and the components of patterns and you’ll blow those Wall Street MBAs away. You don’t need a $3,000 software program either. All you need is a BURNING DESIRE to be the best that you can be and we’re here to help.
We have a lot of new folks here and we thank you! We want you to take it easy, get to know how the routine works around here for awhile and to feel comfortable.
We hope you all aren’t here because you are chasing performance. For us it’s more about educating and making you the best you that you can be first (that’s what we focus upon!). Like many of our long time subscribers they have all found out that they have no use for traditional Wall Street (and we don’t blame them) and it’s our hope that over time you’ll have acquired enough knowledge from us to say the same with conviction.
One of the most important things we want to stress is that of RISK MANAGEMENT via POSITION SIZING. You don’t need to stack your account with just a few big positions as we’ve seen it time and time again that those who get into trouble are the ones who take large positions and do not employ any risk management system IE shoot for the fences. Those are the people who live on the fringes of extremes and yes ultimately get burned.
As a guideline a good initial system is that of the following example.
Let’s say you have a $100,000 virtual portfolio and let’s say that as a guide you never place more than 10% ($10,000) into any one position. Now let’s say that one day a news driven event hits (over which you have no control over anyway) and one of the positions tanks 20%. On its own that position is sporting a $2,000 loss, while that may seem devastating on its own its really no big deal overall.
Why? Simple its all about risk management being properly employed. What is the impact of a $2,000 loss to the TOTAL VALUE of the virtual portfolio in this example.
Answer: A whopping 2% LOSS. Now you know why we say no big deal.
We can also tell you new people here that you will get stopped out of names and you will take hits. There is nobody on the planet living that has ever hit 18 holes in one and there never will be. We’d rather get you grounded in reality right away vs talking about pie in the sky all the time like a lot of other sites. In so doing your head is screwed on straight from the start and when those days happen (and they will) mentally it won’t mean a thing to you. To us that’s what’s most important is YOUR state of mind as it’s your most important asset. We hope you appreciate our honesty.
We have a very good retention rate here at All About Trends and a lot of great outstanding people here. We like to think that a part of that is being upfront about what can happen (in both directions). Verses those up 500%, I turned $50,000 into $3 million or some other absurd number to get you to bite. That’s not who we are.
WELCOME ABOARD!
Lastly with regards to taking any trade:
Remember the moment you take a trade you are at the mercy of the market and have no control except when to sell. If you are not willing to take the risk and are not willing to pay that price do not take the trade. We are willing to take that risk knowing full well the end result could be a loss. That said make sure that virtual portfolio management trade size is used accordingly. With any position you may take make sure that should something go awry the amount of total impact to your account does not devastate your acct. Try to stick to a 5% position That’s the key to virtual portfolio management, not biting off more than you can chew.
Remember the mechanics of reality with regards to the stock market states a stock can only do one of three things: Up, Down, Nowhere. The moment you hit the enter button you are at the mercy of the market therefore the only control you have is when to sell/cover. You can’t manage your gains as you have none to manage initially. Knowing this in advance it allows you to stay in outcome, that being you will either:
1. Make a gain
2. Wash
3. Get stopped out at a loss
Remember the market IS the boss. IT is going to do what IT wants to do.
