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Yesterday we said:
"With the indexes sitting at retest of highs levels for us to catch our breath here would not be out of line. That would be exactly what we want to see, in so doing it allows stocks who have just made runs (AAPL and DANG) to consolidate before trying to make another push. Of course this all assumes we are going higher here over the next few weeks. Think thrust and pause as in the Pause That Refreshes as Coca Cola would say.
On April 17th we touched upon us being in the start of the final 5th wave as talked about in the Comp chart below. IF this is still the case? Then we still have some work to do to the upside and this is just a consolidation. Keep in mind the chart shows the D wave as a pullback, this doesn’t have to be the case as consolidations take place two ways, a pullback as shown or sideways. "
Yesterday we said:
"It’s earnings season and tonight a slew of companies report after the close. One such name that we ought to see some fireworks with is IRBT. As you can see this issue too has been ran up into earnings. It’s going to be interesting to see if they have built earnings in to this name or not."
From the looks of today’s action, it sure has the look of "buy the rumor and sell the news"
Game Plan
Right now we are pulling back in the markets after a few big days and this is normal here, that’s the way we have to treat it. Markets digest gains by either pulling back or going sideways, this is all normal.
The thing that makes it difficult is earnings season. What if we were not in earnings season? Then this is just normal market climate — two steps forward one step back.
Now we can make a decision with BIDU, SWKS, CAT and DE all in the face of an unknown fear — fear of earnings surprises in a negative light with our longs and vice versa with our remaining short or we can let our stocks tell us what to do by the chart action they are exhibiting.
Where have we made all our money? Where do we practice what we preach? By that of letting our stocks tell us what to do. We hammer on that all the time and we need to stay true to our discipline. Scary because of a news driven events pending with a lot of names we are in but?
We have to stay true to our discipline, of course in doing so it also means that we will end up living and dying by the sword mind you BUT BUT BUT we have no control over that unless we want to walk away from everything here. So do we want to make an emotional decision here based upon an unknown fear? Do we want to jump to a conclusion because a lot of leading stocks are down today and a fair amount yesterday as well? OR?
Nano term case in point? See CAT today? Had we jumped to a conclusion early morning market action we would have been filled in the 109.75 level (lows of day) now? 111.15.
Make no mistake the last 4-5 days were huge! So this is normal action here, besides all of our holdings are still intact.
Given what we are seeing in the daily and 60 minute charts we are following a script and based upon that action we’ll stay the course, but that’s us.
Remember the market IS the boss NOT US. We are just along for the ride. IT is going to do what IT wants to do and IT does not care what you want. THAT is the truth, period end of story.
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LONG SIDE WATCH LIST
If I were to put money to work here. Where do I put it?
4-27 NOTE: It’s earnings season, make sure you know when that is to occur with whatever issue you are stalking.
AAPL
DANG
BACK ON LIST
Keep in mind that this is 1st thrust up, poh chart pattern is probably going to be the pattern from here to be on the lookout for if we are going higher, assuming this is a "Pause That Refreshes" mind you. For a better look at what it looks like chack out the blue box 1st thrust up in ILMN in the featured list.
CVLT
NEW NAME
SGI
NEW NAME
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SHORT SELL WATCH LIST
NONE
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.
Long side
ILMN
Talk about a wild ride this morning huh? Well we talked about a theme this year being fast and blink your eye – that’s still in play.
PPO
Backtesting
PANL
Backtesting. One could say this name and most others are all doing the same thing here, all in line with our index action comments at the beginning of this newsletter. This goes for a lot of our current holdings too.
SLV
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
ALL MAY Expiration Folks Current Holdings
MOTR (We are now long 3 MAY 10 Call Options to open at 3.50)
As we post they are currently at 3.40
DE (We are now long 1 MAY 85 Call Option to open at 9.40)
As we post they are currently at 10.65
PAY (We are now long 2 MAY 46 Call Options to open at 7.40)
(We are now long 1 MAY 46 Call Options to open at 8.10 from 4-19-11)
As we post they are currently at 7.00
CAT (We are now long 1 MAY 95 Call Options to open at 12.80)
As we post they are currently trading at 16.50
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"Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
BSFT (We are LONG 300 shares at 42.89 as of 4-18-11)
SPRD (We are LONG 300 shares at 21.17 as of 4-18-11)
4-27 right back to support
SWKS (We are LONG 200 shares at 25.59 as of 4-18-11)
Earnings due tomorrow, this name either retests the 200 day ave, in which case we are right back to break even, or takes off to upside. Market makes the call and it’s all about the green line.
DE (We are LONG 150 shares at 93.54 as of 4-15-11)
CAT (We are LONG 150 shares at 107.35 as of 4-13-11)
PAY (We are LONG 200 shares at 52.00 as of 4-12-11)
MOBI (We are LONG 250 shares at 12.39 as of 4-11-11)
MOTR (We are LONG 300 shares at 13.15 as of 4-13-11)
BIDU (We are now SHORT 100 shares at 127.81 as of 3-23-11)
Earnings are due tomorrow. It’s sink or swim time. At the money calls and puts have 13-14 points of time in them, that tells us to expect a move of that potential size. What we don’t know is what direction. What we do know is that like SINA it’s big time extended away from support as shown in the chart. Market makes that call not us.
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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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