Thursday, July 30, 2009

Thursday Trade Review

Here's a couple of trades that didn't turn on me already, KLIC and ZIXI.

KLIC has just completed a big move up past resistance, and I'm looking to hold it while it shows promise. Fibonacci retracement looks like resistance around 6.13.

ZIXI looks to be completing a wedge, as shown in the graph, and I bought near the support. This wedge still has a few days before it ends, but I'm not confident in any triangle formation with more than five 'points'. That's from Constance Brown, and I haven't found it fail since I read it. Using the five-point rule, I now realize that ZIXI may have already failed. I'm giving it enough benefit of the doubt to make a comeback, but the stops are tight just in case.

I was also in and out of AEA and PVX yesterday, but got out quickly as they moved against me. PVX ended up being a winner today...too bad.

Notes for Friday:
  • Friday feels like it's going to be a down-day for the SPX, but my bias is always accompanied by a healthy dose of Murphy's Law.
  • I'll be watching HCF more closely the next few days, it just tested daily 200MA today for resistance.
  • MGAM has been bull-flagging for days now, and would hit major support tomorrow if it keeps trend. I'll be watch that for a bounce. My target buy-range is between 5.35-5.45.
  • OMX might also be ready for a second bounce at the open, but I'm thinking it will end up as a doji.

Tuesday, July 28, 2009

Playing Ketchup, & Many Mad Ravings.

First I had overtime for a couple of weeks in a row, then I got sick with a fever and a wicked cough. The fever left but the cough wouldn't. The doctor said it was "Walking Pneumonia" and gave me some antibiotics. I still have the cough and have been back at work for a week, but everyone avoids being around me. Heh, don't blame 'em, something's been going around.

All this time, I have been out of the markets and research. I even put down my copy of All About Technical Analysis by Constance Brown and read Harry Potter 6 & 7 instead during my time out. Today I spent some time doing some research, and I see I've missed a few more swings in the Markets. I'm going to try to tune-out the news once again and look purely at the price action.

I tried something I hadn't really done yet; I used ThinkorSwim's platform to do a pattern search using criteria to look for low-price stocks with decent volume, max 30 hits. I went through those 30 stocks to see if I could spot anything worthwhile. Here's my notes for the watch list I came up with, I'm bullish on all, but I expect some consolidation first on some.

AMD: Riding up-channel support (sppt) ~3.56 (buy target if all goes well)
CHDX: Rising wedge to 14.35, sppt ~12.64
AEA: Showing acceleration back to 5.80
ZIXI: Rising wedge to 1.80, buy ~1.63
DYN: .05 below 200MA, watch for crossover/breakout
PVX: Short-term bull flag, watch for bounce around 4.74
MCGC: May be about to enter consolidation around 3.00
CY: Been riding higher, get on it if continuing
KLIC: Just hit resistance (rst) at ~5.00, watch for breakout
MCCC: May retest sppt ~4.48, bullish
MGAM: In bullish flag, sppt ~5.39
AFFX: Just popped up, watch for flag & rebounce
OMX: Just passed daily dbl btm, consolidate then uptrend
CCO: 200MA @4.75, watch for pullbacks to buy
HCF: Strong uptrend, approaching 200MA of 5.25
TER: Due for pullback, sppt ~7.00/7.30
OPWV: Buy dips ~2.65, watch for 2nd breakout
PESI: Rising wedge to 2.72, sppt ~2.42
ARQL: Breaking out NOW, rst ~6.35
HGG: Entering consolidation, spt ~17.00

I'll be referring to these notes while I check on the watchlist to see which ones to follow, and I usually have no more than 5 holding at a time. I'm not going to post 20 charts tonight because I don't really see the need at this time. I might post charts of my trades later.

Also, I see S&P 500 reaching for 1050 right now, possibly 1080. It needs to get past resistance around 983. I am, unfortunately, biased from listening to Bloomberg Surveillance and reading Ritholtz (The Big Picture). I believe that this rally is government funded with money that doesn't exist (yet). China is concerned about our credit rating as we have promised unprecedented sums of cash to float the economy internally. But the Dollar is spiraling, as it looks about to fall through the floor and plummet. I am VERY concerned about the immediate future of this country, and continue to fear that this rally is built on sand, not stone.

A few months back I predicted that we're going to slowly come back to S&P 1600 around late 2013, before we crash even farther for a third and final time of this Secular Bear market. I still hold to that, but I'm not sure how the "recovery" is going to look until then. It looks like the S&P is going to hit major resistance in October, and I'm concerned which way it will go. I've got an itching suspicion that we'll break resistance just enough to turn around and fall through again. The chart tells me that this "rally" is still just a recovery from an oversold condition that went from Sept 2008 to March 2009. And my news-watching bias tells me that we have not corrected enough.

This is because I'm still seeing way too much f*ckery going on in the corner office AND the government from the city to the county, state, and federal levels! When the guys in charge realize that raising prices/taxes isn't working, THEN we'll see the final stages of this big correction.

On a personal note, my neighbor just moved out last weekend. He was complaining of his mortgage and the mortgage on a rental property he's had for several years. The other property has been empty and for sale for 6 months now. He now lives in another rental at a rather nice fly-in community up the road, and I asked him how he'll handle two mortgage payments and a rent payment. I didn't really get an answer, and I'm thinking he's going to walk away from the house next door if he can't pull off even a short sale. That would be too bad, the house right across from him is a foreclosure and has been sitting empty for 2 years now. Lately, people have been coming by weekly to check it out, but no buyers yet.

I also found out that says my house is now a few grand less than what I paid for it back in 2004. As long as I can keep my day-job we'll be alright. Here's hoping Obama doesn't cancel the Constellation Program (wince)!

Don't those people realize that it's us 'citizens' that fund this whole economy??? I think they do, just enough to B.S. us while they help themselves. D@mn, I'm freakin' cynical!

Wednesday, July 15, 2009

Picking off the sick and weak

I've been laid-out with a fever and annoying cough for a week now. It's been nothing but bedrest, fluids, hot flashes, and the kids on summer break all day.

But, I decided to check in on the SPX this morning, and I see we've popped up over the past few days. But we're still within the down-channel that began in mid-June. The index has appeared to enter a narrowing trading range that starts between 900 and 915 as shown in the pic. above.

While typing this, the markets just opened with the SPX above 917. This is within a margin of error of the boundaries, just like when support was broken on July 8 (see blue circle below). I don't believe that channel boundaries and support/resistance are hard, definitive lines that must be absolutely respected. Especially when there's many technicians out there drawing those same lines, and putting their stops a few pips below those lines. There will be some techies who put their stops a few pips below that, and a few lower, until the trend is finally exhausted.

If the SPX keeps above 915 today, then I'll need to look for a new trend.

Monday, July 06, 2009

Head & Shoulders fakeout, and Michael Jackson

Who's Bad?

Man, what a ride these past few weeks have been! And I've been out of all of it the whole time, trying to make deadlines for the day-job. But looking back on what's going on, it's very tempting to see a head & shoulder's pattern forming in the SPX.

However, a wise trader once said (actually, he won't stop saying it) that the 200 day MA is a force demanding respect for that index. And right now, the 200 MA is marking support, which WAS respected today. There are other lines of support that are being toyed with right now, and we've been flat for weeks. A novice such as myself is probably best to stay away, anyway, and practice from the sidelines. It will be interesting to see if the 200 MA gets retested along with other supports around 885, it looks like a nice pivot point for future reference.

As for the bit about Michael Jackson. I was a fan back in the Thriller and Bad days, so I made a little song in tribute. You can find it, and many of my other creations here. Enjoy.