All of which makes for sloppy choppy trade.
Alright already! Let’s just get it over with! Today’s drop and pop puts us right back into the bear channel snap back rally and right back to the game plan from the weekend which is:
"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? Can we retest the highs? Sure, if so? Then we are at resistance.
On the OTC Comp one could say that today’s strength is just a back test of the broken Pink channel line but we’ll see. We still won’t rule out a retest of the highs nor more 2-3% gyrations up and down every other day.
===========================================================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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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
ADTN
Classic double top with a shake out high. This is why we don’t buy breakouts AFTER A TWO YEAR RUN in a mature market with numerous names showing developing change in trend patterns. But you all already knew that right?
RJF
Head faked and now back in the channel.
AXE
As you can see with all of the above, they are getting sloppy in here without any clear look to them at this moment in time. We’ll keep them on the list for now but will be also on the lookout for higher quality patterns as these are getting iffy here. Its all about chart pattern recognition.
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LONG SIDE WATCH LIST
If I were to put money to work here. Where do I put it?
SDS- INVERSE ETF at 2 times market risk. Remember that works for you and against you.
Going long this issue is the equivalent of being short the S&P 500 Times 2. What this means is that if one were to take 10% of they’re virtual portfolio as an example and put it into this name you are effectively short to the tune of 20% of your virtual portfolio due to the leverage of this issue.
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.
CAT — We are now long 1 April 110 put to open at 9.00 as we post they are currently trading at 7.50 for a loss of only $150. Nothing to panic over.
DE — We are now long 1 April 100 put to open at 10.60, as we post they are currently trading at 9.60 for a loss of $100. Again, nothing to panic over.
From this morning’s trade trigger:
Keep in mind that resistance is still 7.50 points higher just in case, that resistance defines your risk.
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CURRENT POSITIONS
"Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
SDS — INVERSE ETF at 2 times market risk. Remember that works for you and against you. (We are now LONG 400 shares at 21.67)
As we post this issue is at 21.14 for a small 53 cent loss per share or $212. Per our position sizing this issue’s impact to our overall virtual portfolio is less than 1/10th of one stinking percent. That’s the beauty of trade size risk management and not biting off more than you can chew.
Going long this issue is the equivalent of being short the S&P 500 Times 2. What this means is that if one were to take 10% of their virtual portfolio as an example and put it into this name you are effectively short to the tune of 20% of your virtual portfolio due to the leverage of this issue.
As for initial stop loss purposes that can be adjusted along the way? Any break into a new low on a closing basis ( little blue double bottom lines) can be used to define your risk.
SHORT SIDE POSITIONS
CY (We are now SHORT 350 shares at 20.89)
CYMI (We are SHORT 200 shares at 47.66)
Just more of the same old same old back and forth net nowhere for 2 months now.
CAT (We are SHORT 125 shares at 102.12)
As we post this issue is at 103.99 for a 1.87 point loss or $233. Per our position sizing this issue’s impact to our overall virtual portfolio is less than 1/10th of one stinking percent. That’s the beauty of trade size risk management and not biting off more than you can chew.
From the trade trigger alert this morning:
Keep in mind this stock is prone to 1-3 point swings on a daily basis quite regularly
DE (We are SHORT 150 shares at 90.30)
As we post this issue is at 91.46 for a 1.16 point loss or $174.00. Per our position sizing this issue’s impact to our overall virtual portfolio is less than 1/10th of one stinking percent. That’s the beauty of trade size risk management and not biting off more than you can chew.
Broke and head faked just like the market. Still sloppy now though.
From the short sell trade trigger: Keep in mind that resistance is still 7.50 points higher just in case, that resistance defines your risk and its less than 10% given where the stock is.
WCC (We are SHORT 200 shares at 58.14)
As we post this issue is at 59.58 for a 1.14 point loss or $288. Per our position sizing this issue’s impact to our overall virtual portfolio is less than 1/10th of one stinking percent. That’s the beauty of trade size risk management and not biting off more than you can chew.
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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.
