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On the surface it sure looks like a lot of damage is being done however we talked about this in advance and here it is. A big part of our success is to let our stocks tell us what to do based upon the action they exhibit so let’s do that first with the indexes. As you scroll through the newsletter make sure you read the notes as they are what is going to tell you whether or not an issue has concerns and is still intact or not.
Notice where this index stopped for the time being? Right back to a new support level and the neckline of the head and shoulders bottom. Will It stick? Gosh that’s a market question nobody can answer. All we do know is that this is a support level and that is why it stopped at this moment in time.
When one looks at the Full Stoh’s (indicator at bottom of each chart) you can see in both indexes we are deeply oversold in the short term.
Overall? The uptrends for both indexes are still intact and still in the uptrend channel but pulling back just like we talked about over the weekend.
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INDEX ACTION AND GAME PLAN FOR THE WEEK Of 5-2 through 5-6
Over the weekend we said and still the order of the week:
"As you can see in both index charts we have a lot of structure. First off we have the current wave count of 3 waves up (abc). If we are going to complete 5 waves up (abc DE) then we still have work to do with a pullback to boot coming (a buy the dips set up?). What’s interesting is that any pullback ought to be contained to the green trend channel support and the neck line support of the head and shoulders bottom. So you see we have a floor baring any unforeseen events.
Remember this potential pullback is healthy and allows stocks to digest the recent thrust up. If we are going to continue to follow the 5 waves up script then we have one more swing higher after a buy the dips pullback. We want to be prepared for that as it’s going to set up a lot of names all in the realm of Pullbacks Off Highs (POH) with a lot of names already doing so that could go at any time.
This doesn’t mean that everything is going to pullback as it’s a market of stocks and stocks are trading to the beat of their own drum as the overall trend is up. We still have a lot of names reporting next week so that too is going to cause a lot of hoopla that we can use to our advantage.
So pace yourself and it’s all about selectively buying the dips and selling the rips as they say with POH’s being the name of the game! Well use pullbacks to start to take on positions all in the realm of 90% of this is getting in the zone and 10% is sweating it out while in the zone."
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LONG SIDE WATCH LIST 5-2 AND WE STRESS WATCH
If I were to put money to work here. Where do I put it?
NOTE: It’s earnings season, make sure you know when that is to occur with whatever issue you are stalking.
ALTR
5-3 Still needs more of a pullback.
5-2 Talk to us at the blue support zone
IRBT
5-3 GETTING REALLY CLOSE! Uptrend still intact, let’s see what tomorrow brings. Watch INFA and YOKU too by the way.
5-2 Talk to us near the trend channel support in the face of fear.
AAPL
5-2 Still Pulling back Off Highs (POH) and locked in a channel
In speaking with one of our subscribers we got to talking about the cloud stocks, specifically CRM, VMW and one could even say FFIV, NTAP and RVBD (AAPL’s pattern falls into this theme too). You’ll see the same thing we’ve been touching upon, that being a digestion of recent gains in the form of POH’s building.
CRM
5-2 Still Pulling back Off Highs (POH)and locked in a channel
VMW
5-3 Wonder if this issue is going to fill the gap here? 88 is a level we’d consider in the face of fear.
Right now? nothing to do.
5-2 Still Pulling back Off Highs (POH) and locked in a channel
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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
ALLT
5-2 The blue line is definate resistance, its going to take this issue to catch its breath and give it another attempt if its going to go.
5-3 Another good example of why we try to stay away from breakout and especially why we don’t chase buses, but you all already knew that right?
PANL
5-3 Watch that 50 day!
SLV
5-3 so the big question is will the 20 day average stick? Or will it pull a MOBI? and head to the 50 day average zone.
5-2 Getting wide range sloppy here which should come as no surprise.
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
ISRG
5-3 Non committal today.
Current Holdings
MOBI (We are now long 3 May 12.50 call options to open at 4.60)
Make sure you read the notes in the current stock holdings on this one.
As we post they are currently trading at 1.75
DANG (We are now long 3 May 21 call options to open at 3.10)
As we post they are currently at 1.75
MOTR (We are now long 3 MAY 10 Call Options to open at 3.50)
As we post they are currently at 3.00
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)
5-3 See chart in current holdings section along with the notes.
As we post they are currently at 4.80
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"Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
DANG (We are LONG 300 shares at 23.51 as of 4-28-11)
5-3 Flirting with the 50 day average zone. As we post we are down 1.30 points. This issue too is caught in the china syndrome today.
BSFT (We are LONG 300 shares at 42.89 as of 4-18-11)
5-3 Still INTACT going sideways and still base building. We are down a lousy 1.20 points on this issue.
SPRD (We are LONG 300 shares at 21.17 as of 4-18-11)
5-3 Flirting with the 50 day average zone. We are down a lousy 93 cents on this issue. In fact with most of the issues we are in we are only down a tad from our entries, that’s what happens when you get bad day and use proper entries vs. chasing em while they are going up.
PAY (We are LONG 200 shares at 52.00 as of 4-12-11)
5-3 We talked about the blue line being a support level and sure enough today it broke to the downside. One can also see that the lows were in the 48.80 range and now as we post this issue is making a beeline higher and is currently at 51 and back at the blue line. We own it at 52 so for us to as we post be down 1 stinking lousy point? Isn’t really anything to bother us. What bothers us is the break of the blue support. We are probably going to walk away from this issue today.
5-2 This issue is having trouble in the 55+ range. Not a big deal as of yet but its not going to retest its highs or have a shot at it until it can crossover that level. Support is the blue line.
MOBI (We are Now LONG 150 shares at 12.39 as of 4-11-11)
We added to our position this morning in the face of fear to the tune of 300 shares at 16.30
The 20 day moving average is sitting at 15.95 so that too could act as a support level, if that breaks then the 50 day is pushing near the 14 level, which also happens to be near the blue prior resistance line which now acts as a mini support — actually a pretty strong support due to the 50 day average being there with some trend channel support action too.
Keep in mind that if that level doesn’t stick and we buy stock and call options then we’d be underwater really fast. Consider yourself made aware of that. Will it happen? Who knows. We just point this out because when dealing with options the percent moves are amplified. Let’s say we buy a call 5 points in the money and the stock drops 2 points right after we buy it, know what is going to happen to the value of that call? It’s value will have dropped 40%. That’s options for you. That all works for you and against you.
For us, we are going to use this weakness to step in right here and pick some more of this issue off. Keep in mind this issue has not been for the faint at heart recently with its wild swings. If you can handle that then fine, we can and one of the reasons we can is because of trade size risk management of never biting off more than we can chew.
Earnings are due MAY 11 at 8 AM eastern time here in the states which means after the close May 10th. This gives us some time on the issue.
5-3 Besides it’s a china sort of day with most of the china leaders taking it on the chin today. Names like BIDU, SINA, SOHU and YOKU- all the screamers. For us we’ll let the stock tell us what to do. Like we said in advance, this issue is NOT for the faint at heart and is prone to wild swings.
5-3 Grand slam right down to the 50 day average. INTACT. Arent you all glad you sold a bunch at trend channel resistance?
MOTR (We are LONG 300 shares at 13.15 as of 4-13-11)
5-3 Just there still doing nothing.
SHORT SIDE POSITIONS
BIDU (We are now SHORT 100 shares at 127.81 as of 3-23-11)
5-3 See today’s lows? They were there all of about 1 minute, an excellent example of how support can act and should act. Don’t tell us that there were not buy orders sitting at support. It’s also a good example of a trap door open. That is where they at the open clean your clock, stop everyone out and bounce the stock hard. We’ll use any weakness intra-day from here to walk away in the face of greed on the short side. Watch for a trade trigger after this update.
5-2 Given what we talked about in the beginning index action of the newsletter that all bodes well for this issue to pullback next week. That said IF this issue pulls back to the 50 day/blue line we will cover our short and consider going long.
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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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