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We’ve all heard the famous Superman line of "Up Up And Away" right? Well how about we change that to "Gap Gap And Away." After all that’s been a trend, and along with those gaps so is basically 80% of the day’s move taking place in that gap or how about the gap and trail off trend.
So you see the last 4 or 5 days that’s what the market’s been doing. We wonder how strong it would be if it wasn’t for the pre-market gaps higher. We wonder what would happen if the market had to trade on its own free will vs. the pre-market gaps.
Yesterday we said:
"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 the61.8% 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."
And sure enough, here we are into that orange circle gap by a smidge. Never thought we’d make it.
To see our indexes stall here would not be out of line. We have RS and Full Stoh’s tagging high end overbought status. We also have some wave structure and we have Leonardo De Pisa of Fibonacci fame making an appearance today. All of these advanced Technical Analysis components are not flashing on the buy side here. So what are we going to do about it?
We have some short sell exposure and are fine with what we have currently. Sure we’re feeling a little in-flight turbulence but that’s always par for the course.
No need to get fullblown short here. We just keep picking them off one at a time, one step at a time.
As we start to see more of the names on our short sell list trigger we’ll add accordingly.
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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
CMG
Given how sloppy the overall pattern is with all its back and forth gyrations we’ll delete it in favor of other tighter patterns.
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.
With both of them, it’s all about a downside break fo the Pink lines for shorting.
BRY
This one is close, a little more backing and filling?
XLE
CLF
It’s all about a downside break of the Bearish rising wedge. Watch for it.
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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
So if you buy right here what is your risk? The blue support line which is basically a little over a 1-point pop from here. Keep in mind in order for this to break support the SPX has to break into a new high. But even if the SPX were to break into a new high it doesnt mean its going to stick. See all the gaps up the SPX is creating off the recent lows? Odds favor they get filled.
3-23 As you can see at the open this issue crossed over the pink line. And of course after that dust settled its 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.
CVLT
3-23 For those interested, this issue finally cleared the little red line. Resistance is a retest of the highs.
3-24 And here it is.
ALTR
SLV
3-23 New highs, and a new short term support level to watch and that is now the 33 level from a few days ago.
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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 95.45 these are priced at 6.50 which means you are paying 2.00 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 47.50 these are priced at 3.60 by 4.00 which means you are paying 1.50 points for time.
The other ones are the APRIL 55 puts. with the stock at 47.50 these are priced 7.70 by 8.00 which means you are paying 50 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 7.00 which means you are paying 50 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)
3-21 As usual, market up AAPL up, market down AAPL down. See that 50 day? Its resistance. So what happens if this issue goes up to that level and the market is starting to roll over about the same time? You got it, AAPL rolls with the market. What it also means is that at that level we’ll have like a 4 point lousy nothing to speak of gain. BUT if the market rolls over? guess what happens to that gain? You got it- Poof and we’d be right back under water vs being in cash and be able to look at it in the 329 level again.
Yesterday we said and still true today:
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. After all it is below the 50 day average and has recently came back from the 326 level to this 343 level in like a few days soooo for us (and this is us, not you long term holders with massive cap gains)
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)
3-24 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.
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