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It’s been a busy day here at All About Trends as you can see by checking your email. We’ve had multiple trade triggers, covering some short sells and even going long a name.
We walked away from CYMI and DE on the short side and went long on WLL in the oil patch arena. Other names in that arena are big time catching bids and looking decent here. But due to how fast the markets have been lately they basically all staged blink your eyes you missed the most opportune time to pick them off which was at the open in the face of fear at the 50 day average. BUT the day isn’t over and we have the famous "Into The Close" into the weekend due yet so you never know. For weeks we’ve been saying: "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." Yesterday we said: "One more day like today and we’ll be tagging the 50 day and considering on the long side for a quick trade. The same goes for the others above." Check out these energy names that have been on the long side watch list. WLL COP
CVX CXO
Look at all those energy names! Everyone of these were shown to you before they blasted and with everyone of them we pointed out what the trade set up was in advance. If those aren’t classic grand slams with blink your eye and buys at the 50-day we don’t know what is. Kudos to those who have already emailed us with their entries thus far! Let’s get through the day though first right? But you have to admit they really powered up off the grand slam to the 50-days. For investors, all of these can be had right here with the 50-day being used as a guide for stop loss purposes. Traders alike. But again true to the nature of screamers, you had to buy in the face of intra-day fear this morning and the blink your eye you missed the most opportune time to do so. Still though overall they look decent here and on any intra-day weakness we don’t have a problem with doing some nibbling. That said don’t be surprised to see some trade triggers to go long on these coming soon. If not today, then Monday or any weakness from here on. That is assuming they don’t break the trend. We locked in gains on DE this morning as it was in the blue box or shall we say tagged the blue box and pow off she goes. When all is said and done we made As we post we are still in CAT. When the market gets going, it gets going fast. At 99.00 per share it’s another $500.00 plus between the options and the common. So today, if we see CAT at 99? We’ll want to walk away. It all depends upon what the magic last half hour has to say. Heck if we can see that 99 or sub 99 level? It’ll be 1300 worth of quick gains between the CAT and DE trades for a weeks worth of work. THAT’S a great week and goal to focus upon week in week out. Add to that our short position in CY for which we are currently sitting on a gain of 9% or 660 (at 19 per share) and you’ve made a great week even better. On to the indexes: In the short-term SPX chart below one could say we are trying to stabilize here with an ABC down being present.
Moving on to the 60 minute charts:
Yesterday we mentioned an alternative bull count per Elliott Wave so let’s talk about that with regards to the S&P 500. All you can see in the 60-minute charts above with regards to a 4th wave is that of the ABC down (3 corrective waves labeled abc). In order to see the alt count, which is that this whole pullback is just an abc wave 4 corrective pullback, we have to look at the bigger picture charts.
Now we aren’t saying this is exactly what the deal is but it sure is starting to look that way. Many names on the long side don’t look all that bad here, sure damaged goods out there in semi land and mobile land but there are still a fair amount of names that can keep us busy on the long side here. We’ll have a lot more to say this weekend about it. What this basically says is that the whole move off the Sept. lows through the February highs is that of the 5 waves up of Wave 3. If that’s the case then this pullback off the Feb highs is just a corrective (albeit wicked) wave 4 with wave 5 higher yet to show up. Would it surprise you here in QE2 pomo land? If that’s the case? Know what they are going to do to those who are firmly convinced we are going to heck in a hand basket? Can you say Short Squeeze? See you this weekend. We’ll have more names to show you — all on the long side then. In the meantime the cream of the crop is oil and related here so let’s key in on the best and forget the rest. =========================================================== =========================================================== 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
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.
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. ============================================================ 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.
Make sure you read the notes on this issue in the current holding portion of our virtual portfolio below before you consider going into this one from here. If you’re not already there you are a tad late to the party, however if this is the start of something bigger? Well we are there and will sit back with our position. Again 90% is getting in the zone and 10% is sweating it out while in the zone. 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. For weeks we’ve been saying: 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. One more day like today and we’ll be tagging the 50 day and considering on the long side for a quick trade. The same goes for the others above." All are featured at the beginning of this newsletter 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. Watch list CALL OPTIONS Folks keep an eye on all the energy names featured at the beginning of the update. Right now most of these names are anywhere from a point to three points off of the trap door open lows and could easily retrace some of that. If you are buying a call option that is 10 points in price and these energy retest the lows? thats a 30% swing against you vs a not worth talking about swing in the common. Just be aware of that volitility and percentage swings when looking at the options side, in fact expect it. WLL The ones to look at are the APRIL 57.50 calls as they are 6 points in the money and are priced at 6.80- 7.20 Keep in mind the deeper you go in the money the more they cost but the close you get to a point for point move in tandem with the stock. COP — April 70 calls are priced at 6.95 and are 6 points in the money as we post. CVX — April 90 calls are priced at 10.75 and are 9.70 in the money as we post. Current Holdings CAT — We are now long 1 April 110 put to open at 9.00 as we post they are currently trading at 11.50 Read the notes at the beginning of this newsletter for our view of this issue here. CURRENT POSITIONS "Let Your Stocks Tell You What To Do By The Action They Exhibit" LONG SIDE POSITIONS WLL (We are now LONG 200 shares at 62.57) Shown above Much like the indexes hanging on the lows of February this issue is pushing the highs of February and the 50 day average. If the index is sitting on a short term support level then this issue is sitting on a short term resistance level. Today’s action MAY be just what we’ve all been waiting for, that being over time the start of something larger than what we’ve seen. We’ll just stand pat with our position on this one. If the SPX tags the 38 or even 50% Fibonacci levels as shown in the daily index chart at the top? There’s some room to the upside here BUT it won’t happen overnight. 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. 3-11 OR Break even (21.67) in the event that this pullback we’ve seen over the last week or two is that of a wave 4. Which we don’t nor anyone else does either know if that is the case. If If If this was/is a wave 4 and we are going to retest the highs? Then this issue will retest its lows and you’ll be under water. Its your choice. For us we will place our stop loss at the price paid (21.67) consider this your stop loss trade trigger alert as we will not be issuing one now that we’ve talked about it here.
SHORT SIDE POSITIONS This issue came down, looked at the blue box and it too took off from it. We’ll be walking away with money in the bank here probably today so watch for a trade trigger. Hey a $600 gain for a few days? Once a week? We’ll take that anyday. Especially in a market that is a "Just when you think they are going to run them they kill em and just when you think they are going to kill them they run them"?
CAT (We are SHORT 125 shares at 102.12)
============================================================= 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. 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 Remember the market IS the boss. IT is going to do what IT wants to do. 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. |
