NOTE: We are now SHORT CY- Cypress Semi Conductor at 20.89 per this morning’s trade trigger alert. See the current holdings section for more on this.
For some reason the template we normally use has SHORT SELL in the header and apparently this did not come through.
Yesterday we said:
"So the question remains as to whether we are still going to retest the highs in the indexes? Or that was it and it’s stair step down time."
"Given how close we are to a retest of the highs the last thing we want to do is get cute on the long side here because this is resistance and if resistance sticks and then the market fails at it? We’re going to want to get short."
That all said let’s take a look at some index action:.
As you can see we are still within the potential bear channel lines on each index. This means that a retest of the highs still could occur. However as shown there is a lot more bearish technical underpinnings showing currently chart pattern-wise. A break of the bear channels pretty much co-insides with a break of the 50 day average for the most part. Watch for it but for right now we are still in that channel and could still chew around here for a bit.
It’s the weekend and of course we still have the final hour of trading yet to show up so we will find out how it all pans out from here. We’ve added a bunch of POTENTIAL short sell names to the watch list, should the channels break to the downside we’ll want to hone in on the names on that list for deploying new money on the short side of the market, make sure you check them out.
See you this weekend.
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WHAT EXACTLY DO I WANT TO ACCOMPLISH WITH MY OVERALL Virtual PORTFOLIO IN 2011 REGARDLESS OF WHAT THE MARKET DOES OR THROWS AT ME?
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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.
ARMH
Actually , the names below all look better chart patternwise than this one so you may want to hne in on those names instead with regards to deploying money on the short side.
ADTN
One could say this issue and ARMH are there. The face of fear trade on the short side is any strength as long as it doesn’t breakout. That’s what we’ll be watching for to consider taking a short sell position on strength. Or for those of you who are more "In The Zone" traders it can be taken right here but you’ll need to allow for intra day gyrations in here in the event it doesn’t break down. In that case give yourself a wide stop loss to allow for volatility.
SWKS
We are going to delete this name from the watch list in favor of other higher chart pattern potential names. This issue looks as though it’s starting to get that base building consolidation look to it here, albeit wide and loose. Better fish to fry elsewhere.
CAT
NEW NAME
DE
NEW NAME
WCC
NEW NAME
RJF
NEW NAME
AXE
NEW NAME
As you can see with all the names on this list that yes they are still above the 50 day average HOWEVER they are all starting to show classic All About Trends "Change In Trends" patterns from up to down.
This makes us stand up and take notice. This is also how the market talks to us- in chart pattern recognition form.
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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
Here we are retesting the highs, thanks anyway with buying this issue here.
VMW
The blue line and 200 day average get us interested on the long side for a trade.
As for Energy?
Until we see a Pullback to the 50 day average there is nothing to talk about with regards to putting new money to work. It’s all about a grand slam to the 50-day in all of them to get us interested in the long side.
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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
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CURRENT POSITIONS
"Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
NONE
SHORT SIDE POSITIONS
CY (We are now SHORT 350 shares at 20.89)
CYMI (We are SHORT 200 shares at 47.66)
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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!
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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.
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SUBSCRIBER ONLY WEB SITE
Don’t forget you can view updates in the middle and the end of each trading day complete with current charts, along with our current performance at our subscriber only web site.
