And here we are, we broke the green uptrend line to the downside and now we have rallied right back up to fill the opening gap. What remains to be seen here is whether or not we stall here OR we are going to test the 1300 level one more time. Odds favor we’ll know into the close. If we bust 1300 to the upside? Then the 61.8% fib level could be in play which would be a gap fill of the orange circle basically. But we don’t know that. We just bring it up because it’s there.
From a daily perspective here is the S&P 500 tagging resistance at the 50-day. Come to think of it, didn’t DECK just do that in the 81 and change range? Now 80.09. In correction phases a lot of times indexes and names will come back up to test the 50-day from underneath it, then turn away. Look at FFIV when it initially got slammed to the 105 range and then bolted to the 50-day at 130. After that? The rest is history.
We took a few positions today on the short side (VXX is a long side trade, but is really a short side trade as for it to go higher, the market has to go lower) and now it’s all about hurry up and wait with those. No big deal to us here as we aren’t hounds for instant gratification. We’re more interested in positioning when it comes to new positions. They’ll either work or they won’t. It’s as simple as that — all per the mechanics of reality with regards to the stock market that we outline at the end of each trade trigger email alert.
Change In Trend Patterns
More and more each day as we go through charts we see just that — more and more issues that are showing "Change In Trend Patterns" in this case up to down. What do you expect after a 2-year run?
Yesterday in this space we highlighted charts of PAY, OPEN, WLL and CXO. Today we have a slew more.
XOM
XEC
RIG
ADTN
These early warning alert patterns that we commonly call change in trend patterns WORK! Make sure you memorize them. Not only can you profit from them on the short side but that also allow you to profit from them by dodging bullets and getting out of the way before they break down.
Intermediate Term Corrections
Above we touched upon ADTN in the sense of it was in a nice uptrend, put in a double top and promptly broke its uptrend to the downside in first thrust down fashion. It’s obvious that this name is in a correction. To what degree we don’t know. But what we do know based upon historical precedence analysis is that typically when issues do what ADTN (and numerous other have) has it could easily be dead money for months while it builds out a whole new basing stucture. Of course this assumes it didn’t top for good mind you. Below is a good example of a name that we have had on our list on and off for months around here that has been in an intermediate term correction for months AFTER it did what ADTN just did.
This issue is still 5-months into the bottom of a cup and ooking better every day we’ll give it that. Still big picture it’s basing and at this point just a good example of what could occur with a lot of names that have recently been smashed.
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SHORT SELL WATCH LIST
For weeks we’ve been highlighting numerous times the First Thrust Down pattern. Below are a few examples.
SHORT SELL WATCH LIST
NOT FOR THE FAINT AT HEART! – CMG This name is prone to big swings in each direction with big average daily ranges. That makes these names extremely volatile, consider yourself warned. In other words if you can’t handle the heat these names generate stay out of the kitchen. We can and are willing to sit with them underwater should they initially go that route after we short them, are you? How can we handle that? Two reasons, one is we are not perfectionists around here and trade size position risk management. Remember what we’ve said repeatedly about it? Never allow yourself to get into a position that can devastate your account should they go awry.
ALLT
NEW NAME
GEOI
NEW NAME
Both ALLT and GEOI tend to be a little on the thin side (average daily volume) so keep that in mind. As you can see though both broke hard and have snapped back up to the 50 day. We’ll see if the 50 day acts as resistance.
BRY
This one is close, a little more backing and filling?
CLF
This one looks the best because it’s tagging the 50-day average. If it stalls here? Then we’ll want to get serious with it. As we post though it’s still intact.
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LONG SIDE WATCH LIST
If I were to put money to work here. Where do I put it?
SDS
BACK ON LIST
As you can see at the open this issue crossed over the pink line. And of course after that dust settled it’s pulled back of those morning highs. Still though, keep an eye on it if you are looking for short exposure without having to short stocks.
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Featured But Not Trade Triggered By Us
This is where names that we have on our watch list that have triggered but for whatever reason we did not take them (can’t do them all) in our trade trigger alerts. This section is because a lot of our subscribers opt to use our information as they see fit from a do-it-yourselfer standpoint.
RAX, KLAC
Get deleted due to a few of you who emailed us saying they are out of it.
CVLT
ALTR
NOG
This issue has broken the major uptrend channel as shown. Those who used the green uptrend channel support as a stop loss level should now be out of this issue. This name gets deleted after today.
SLV
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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.
Options Watch List
ALL PUT OPTIONS All APRIL expiration
CLF
The ones we want to look at are the APRIL 100 puts. With the stock at 93.80 these are priced at 7.70 which means you are paying 1.50 points for time.
BRY
There are two classes one can look at with this issue.
They are the APRIL 50 puts. With the stock at 47.12 these are priced at 4.00 by 4.00 which means you are paying 1.12 points for time.
The other ones are the APRIL 55 puts. with the stock at 47.12 these are priced 8.40 which means you are paying 52 cents for time.
XLE
The ones we want to look at are the APRIL 84 puts. With the stock at 77.50 these are priced at 7.10 which means you are paying 60 cents for time.
Current Holdings
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CURRENT POSITIONS
"Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
AAPL (We are now LONG 50 shares at 341.25)
Yesterday we said:
"We’re thinking of getting rid of our position in hopes that we’ll be able to jump back in at the 325-9 level. Those that are investors and have held for awhile, this doesn’t apply to you. This applies to those who took the most recent trade here in the 340 range."
So much for that. This issue gapped down and pow before you know it it’s down 5 points although it’s recouping a bit here. Still though, that little uptrend line (pink) is intact.
VXX (We are now LONG 300 shares at 32.58 as of 3-23-11)
SHORT SIDE POSITIONS
NFLX (We are now SHORT 75 shares at 220.19 as of 3-22-11)
BIDU (We are now SHORT 100 shares at 127.81 as of 3-23-11)
As far as NFLX and BIDU go as you can see, it’s like we said — not for the faint at heart. For us it’s not a big deal right here. Why? Trade size position risk management.
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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.
