Sunday, December 18, 2011

Read for the week of Dec 19-23

Last week the 200d MA proved to be too much resistance and we fell back into a melee of moving averages. The daily chart of the SPY is forming a triangle consolidation, which is very positive in my opinion. Price is consolidating, the daily ATR is decreasing, and volatility has also been decreasing. It seems to me that a breakout or breakdown of this triangle consolidation could lead to a possible trending environment! I don't want to get excited too early, so just watch that triangle! A great r/r trade can be taken at either of those trendlines. I'm looking ~120 this week to possibly get long for a test of the upper trendline.

On the 15 min chart, wait for a break of this descending channel or wedge for a move to the upside. Alternatively, one can play the trendline bounces. Notice that we're forming a mini-bear flag, so a breakdown of this (level ~121.40) would signal more downside for now.

Also, check out the sentiment chart on Laser Trader's blog; the similarity with the SPY chart is uncanny!

cI found a lot of pretty good setups, which has been a warning sign for me lately, so just be careful out there. A lot of breakouts are failing, so I have been trying to buy in anticipation of a b/o, and if the b/o fails, then I get out around breakeven... Here's a few stocks I'm watching this week:



Bounce: I'll be watching gold and gold miners for a possible relief bounce this week... check out NUGT a 3x ETF for Gold miners. Also watching these for potential bounces: MELA, ITMN, LRN, SGI, LPS.

Sunday, December 11, 2011

Read for the week of Dec 12-16

It's pretty simple this week: we're still stuck in the same box that I had drawn last week... That is, we're stuck there until we breakout of it, one way or another! I'm thinking we're likely to breakout to the upside, because it seems like all the moving averages are lining up underneath price and starting to turn up. The only thing stopping us it the 200d, so we really have to get above the 200d and hold it.

There is a move coming in GLD and SLV, so keep an eye on those two this week. I feel like it will be a significant move, and it will pay to be on the right side of the break for a swing... I'll be watching those closely: my intuition is telling me there will be a break down. The only thing not supporting this hypothesis, is that the indices look poised to break out, and recently the correlation of the market vs gold has been positive. This is the opposite of what happened in Aug, where the correlation was negative (ie when the market went lower, gold went up). So if the correlation stays positive, then gold and the market should breakout in the same direction... We'll have to see what happens.

Other than that, I'm seeing a lot of great setups, and I went long a bunch of stuff on friday, in small sizes... I'm long some ZINC, GTIV, COOL, TQNT, GMXR, SANM, I think, and still short INHX, MBI, NLST.  Here's a few charts that look good on the long side: AKS, GTIV, STP, TQNT, MERC, BZH, BZ, OCZ, CTCT, HPQ, UCTT, HCBK, CVGI, NTSP

And here's a few that look good on the short side: CF, TIF, WYNN, ZAGG

Sunday, December 4, 2011

Read for the week of Dec 5-9

We had quite a nice bounce last week after being oversold and finding support near 116 on the SPY. The 200d MA provided resistance on firday, and I'm expecting some consolidation after this big move. We have several moving averages underneath which are likely to provide support for now. The unfortunate thing about the move this week was that most of it happened overnight and it was not easy to get long after big >1% gaps up! I think a lot of traders are in this situation, and because of this, not many people have been involved in this bounce and people might end up chasing the idea of a santa claus rally...  which means that we might have a nice end of year, but it's still no reason to go all in! Overall, the econimic picture remains bleak in my opinion, especially in Europ, and despite the central intervention this week, my longer term outlook is pretty negative.

So, all this to say that I'm going to try to position myself long~ish for the rest of december, but it will be in small size and short time frame! I'm also looking to take advantage of the some of the parabolic runs that are happening in some of the junk small cap stocks... I remember this happened last december as well, and you can make decent gains if you can find shares to short! I sold out of the few longs that I had this week, and right now, I'm short: MBI, NLST, INHX.

Here's a few stocks I'm watching this week:


short: MAKO (on a break of 28), QCOR (if it breaks below the 20d MA), ZAGG (on a break of ~10.6), OSG (on a break of 9.79), ARNA (possible parabolic play)