| As you all probably already know, Friday night the government shutdown was avoided. We say big deal who cares, all of you guys in Washington ought to be ashamed of yourselves! Agreed upon was a cut of $38.2 billion? That’s it? Out of a $1.3 TRILLION deficit? That’s like throwing a pebble into the ocean, it means nothing.
Now what does that mean for the market? For a market that uses and spins any little thing it can to a positive so as to gap up the futures? It means that we COULD get a gap up on Monday (it’s what happens after the dust settles assuming it gaps up mind you). After all the market has been consolidating by either pulling back or going sideways — that’s how you correct extendedness and overboughtness — by putting in chart time.
On top of that we have options expiration next week AND then earnings season gets into full swing with everyone "MAGICALLY" beating expectations by a penny. Don’t you all find it odd that over the last 15 years the typical earnings season theme for the most part is "Beats Expectations By A Penny"? A lousy penny? Why does everyone always beat by a penny. Think the CFO has something to do with that? As in move this hear move that there and wa la we beat expectations by a penny.
After 6 days of back and forth in the indexes and most stocks complete with the jury still out as to whether we are done going higher or there’s one more push to retest the highs of Feb. as shown on the 60 minute charts, we happened to notice a lot of structure on both sides of the market (long side and short side). That can be expected when stocks put in chart time by going nowhere.
All of which makes us say a phrase heard around here in the past, that being
"It’s a market of stocks and not just a stock market"
With something for everyone I might add. We have names on the long side, we have names on the short side to work with. And yes we even have names that are in the process of still developing (long side).
So without further ado below are your 60-minute index charts
Notice the long side Pink Line Pullback Off Highs/Bull Channels building themselves out? The S&P 500 looks more sideways and the OTC (Over The Counter) NASDAQ Composite looks more of the pullback variety. This is how markets correct, they either go sideways to relieve the overbought nature (SPX) or they pullback (OTC COMP).
In addition to that we’ve got what looks to be a POTENTIAL ABC up in play with us being in the B wave.
Not only that one could say we’ve even got a head and shoulders bottom being built out with is being in the right shoulder.
Keep in mind in both charts the 50 day averages are mentioned and really not to far away and ought to contain and pullback, but we’ll see.
That all sets up names that are in clearly defined uptrends time to pullback to which many have when you see the longside watch list.
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Game Plan For The Week Of April 11th Thru 15th
If the market gaps up at the open we let the opening dust settle then look to pick off some names on the long side. Not to mention names on our watch list that look decent.
If the market gaps down we’ll use that weakness to also pick off some names on the long side watch list.
Either way Monday we’ll be shopping and doing some trades.
As for the VXX and our short exposure, we’ll monitor them accordingly. All three of them though are still for the most part extended vs. our names on the watch list hence a market of stocks and something for everyone.
VXX and SDS are two names that are more for a hedge purpose and we may have to continue to sweat them out and cycle back around. Of course this assumes the market doesn’t fall on its face from here. If so? We are there and will enjoy the ride.
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Two New Names That Could Be Emerging Leadership?
Below are two names that could over time turn out to be promising new leadership that we’ll want to keep an eye on.
We’ve all see how incredibly powerful BIDU and SINA have been over the last few years well MOBI may over time end up being just one of those type of stocks. We are not saying it is but what we do know is that it has incredible numbers in a great area.
Who knows how it’ll turn out. We’ll let the stock tell us what to do there.
Another name that is also a newer issue which recently has been in a correction and building a whole new big base (bottom of cup?) to launch off of is MOTR. Here too numbers wise these guys rock. But that doesn’t matter, what matters is what is the stock doing. Right now the way we see it it’s doing what all new issues do after the initial 3-6 month burst out of the game as a public company, and that is they all go through an intermediate term correction.
If we were investors and were building a long term virtual portfolio these are two names we’d be keeping our eye upon to take initial positions in and as the stock goes we can always add to those positions along the way. Of course it’s all about the stock though too.
We’re not saying to buy these here we are saying keep them high on the radar.
With MOBI any pullback and we’d be fine picking some off on the long side. With MOTR it’s all about an upside crossover of the pink line.
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LONG SIDE WATCH LIST
If I were to put money to work here. Where do I put it?
ILMN
NEW NAME
It’s all about an upside crossover of the Pink line to the upside to go long.
PNRA
NEW NAME
Any weakness as long as it stays above the 50 day and blue line is fine by us. The 50 day defines your risk.
PPO
NEW NAME
ADTN
NEW NAME
CPX
NEW NAME
CVLT
Back On List
PAY
NEW NAME
Locked in a channel pulling back off highs (POH) to the 50 day and trend channel support. Its as simple as that. Any weakness as long as it stays above the 50 day is fine by us to consider going long on.
BSFT
Back On List
AAPL
BACK ON LIST
Any opening weakness and we might just take a little to be there. Should this issue break support and head to the blue line in the 300 level after we buy it? Who cares, it basically amounts to about a 10% loss. BUT this is the kingpin of all stocks in the market, think that 300 supprt level wont stick? Odds favor in that event it gets defended. Of course this assumes it were to fall out of bed the next few months anyway.
Last week we said:
This issue ought to be interesting the next 2 weeks. Know why? Well if it sells off its selling off into earnings which is just what we would want to see. A move down to support would be nice HOWEVER we are not the boss, the market is. This issue is going to do what its going to do and we have no control over it. Thats a key to success in the market by the way- Knowing what you have control over and what you dont.
All we are saying is what we’d like to see/need to see to get us interested in this issue on the longside again. If it happens? Great we can work with that. If it doesnt? it on to the next stock.
SDS
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SHORT SELL WATCH LIST
Consider this section of the newsletter the "Get The Gun Loaded" and be prepared area for you forward thinkers.
VMW
Gets deleted as earnings are upon us and with the indexes consolidating their gains here? We’ll look to fish in another pond as we have a lot of nice set ups brewing on the long side, this is what a market going nowhere for a week does — it sets up opportunities on the long side.
ARMH
It’s all about a downside break of the pink line.
GEOI
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.
Short side
BRY
XLE
4-8 Popped at the open, now at the lows of the day. So from yesterday’s close ?Sure its up. But from the open? its down, just like CLF
Long side
SLV
4-8 Bottom line? EXTENDED
And by popular demand below is GLD
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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
4-7 NOTE: being this close to April expiration we will now be looking into MAY expiration from this point forward.
Current Holdings
CLF (We are now long 1 APRIL 110 Put Option at 12.25)
As we post they are priced at 10.70
We need to be out of these by Friday, use any weakness to your advantage.
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CURRENT POSITIONS
"Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
APKT
(We are LONG 150 shares at 70.67 as of 3-28-11)
4-7 We see any retest of the highs and we’ll lock our gains as fast as possible. For those who dont want to babysit or stay glued to a screen alday you can always place an order to sell at 76.97 ish. I think its called a LIMIT order. You want the one that is only at the price you state or the one where it becomes a market oder to sell when it hits a certain level. In this example 76.97. With us?
From here what we will want to do is set a stop at breakeven on the issue SET YOUR STOPS ACCORDINGLY for those who werent fast enough to walk away at this mornings highs. For us? Any strength and we’ll want to consider walking away and calling it another day.
VXX
(We are now LONG 300 shares at 32.58 as of 3-23-11)
4-6 With the indexes spitting distance away from a full blown retest of the highs it stands toreason that this issue is near retesting the lows. This is a support level much like the indexes are sitting at a resistance level. This issue typically trades inverse the indexes. It’s also a play on Nervous Nellies fear.
Exactly the kind of action we want to see at a major support level. One day at a time folks one day at a time.
SHORT SIDE POSITIONS
CLF (We are now SHORT 125 shares at 98.16 as of 3-31-11)
4-6 AWESOME, doing exactly what it should be doing when it hit resistance, like we’ve said "90% of this is getting in the zone and 105 is emotionally sweating it out while in the zone"
4-5 Well here we are sitting at resistance , if the issue and the market break? We are there.
NFLX (We are now SHORT 75 shares at 220.19 as of 3-22-11)
4-10 So what happens if this issue continues to sell off into earnings and down to the 50 day. We’d fold on out position at that time. What happens if the market takes off like a banshee on earnings season? Well we may have to make a decision as to hold or fold and stop out. Same goes for BIDU below.
4-6 AWESOME, here too exactly the action one wants to see at resistance and a potential double top.
3-30 Resistance and MAY be forming a double top.
BIDU (We are now SHORT 100 shares at 127.81 as of 3-23-11)
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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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