Hardly Working

Random Comic, courtesy XKCD. Hint: If you go to the website and read the real comics, then mouse-over the image to get an extra punchline.



I hate it when work gets in the way of my trading. We have a big deadline at the end of this month, and it's crunch-time to get everything looking good; I might be looking at some overtime. Meanwhile, the wife is going crazy at home with the kids out on summer vacation, and I need to replace the starter in my car.

Trading update: still holding all positions with a continued positive outlook. I am practically 100% in the market (or 0% cash) with active stops, and I check up on all my trades periodically during the day. All positions are long except TMV, which is a 3x ETF that shorts the 30-yr Treasury Bond.

Portfolio +1.47% today, while the S&P 500 was +0.35%.

If you aren't churning, you aren't learning.

I got nervous this morning as everything stumbled and fell. All my holdings were down about 2% but still "within tolerances." No stops were triggered, and all my holdings seemed to stabilize after the morning session. A few of my holdings even rose back up, and I got confident again, even enough to get back into my 30-year Treasury Bond, triple-short ETF: TMV. I even managed to get it near an intraday low of 90.80, and it closed at 93.76.

I also bought OSCI on pure speculation, and it's making me sweat as it held steady all day. Closed neutral, minus brokerage fees.

With three up and three down, I ended today +1.25%.


These guys are still making me nervous:

ABAT (-1.62% today)
Still painfully drawing out that ascending triangle, which doesn't converge until June 18 or June 23, depending on which resistance you're using.

AGO (-1.23% today)
Ended today on a promising recovery.

ILMN (-2.08% today)
Still looking for direction, but it appears that the bears are in small numbers compared to the bulls. So, I continue to hold on the assumption that this is consolidation, not a turnaround.

Keep rolling the dice

I spent Friday away from the computer, so I was unable to trade all day. I managed to check the pre-market action and adjust my stops, then tried not to worry the rest of the day. When I got back I saw that no stops were triggered, so my 5 holdings still exist. Here's the update:

ABAT
Is still creeping up the triangle support. I have two lines of resistance, the triangle peak at 4.10, and a Fibonacci peak at 3.99. On the other hand, I'm worried that this triangle has gone on too long and will fail. I'll be keeping my stops based on the Fib numbers.

AGO
Is trucking along an upward channel, and just popped through resistance. Fib numbers have a target of 21.14, and the channel says we won't get there before July 7. I'm keeping an eye on volume to see if it keeps up through this rally.

CSE
Tested resistance again today, but failed. Stop is based on Fib numbers, and the Fib target is at 6.12. I'm getting worried about this one.

ILMN
Continues to test my patience, but it's starting to look like a short-term flag for the resistance penetration. That resistance is now support, and being tested repeatedly. I'm starting to relax a little more on this one, and Fib target is at 41.82, but the channel won't let that happen until August. There's always a bump-&-run pattern to boost it quickly.

STKL
Resistance around 2.24, and there's a really strong long-term target of 4.30. Long-term here means no sooner than August.

I'll also be looking into getting into OSCI, among a few others. But OSCI is less than a dollar, and volume is going nuts, so I'm going to see what I can do with it.

(image from thestockmasters.com)

Short-Term Wins

I made 5 buys yesterday, and they made me 5.75% today.

STKL @ 1.84
It paid off nicely today; I see next resistance around 2.08, and later at 2.30. Today's close was up on light volume, and I'm pretty sure that's a good sign of continuation.


ILMN @ 39.54
I had been watching this stock for weeks from a tip by RevShark, when it was nearing 38.50 for the second or third time. After failing to break resistance and drawing out for a bit longer, I was ready to let this one drop. But then it shot through resistance and grabbed my attention. I made the sucker-buy, right at the peak of the day. It's still holding support and looks like a nice pennant, so I'm holding for now.


CSE @ 3.82
Moved up nicely today, as well, following the Ascending Triangle pattern towards resistance at 4.30. It looks good to break through, but if it drops to 4.00 first, I'm afraid it might fail (see the headfake by ILMN above).



AGO @ 14.24
Broke though a recent resistance level of 14.61 and kept on trucking. It finished the day in consolidation, but I don't see any reason for it to turn around in a big way anytime soon.


ABAT @ 3.69
This one is really stretching out it's shape, and I wonder if that is the sign of a breakdown. I see several signs of weakness, but this may still just be a prolonged consolidation period. It's not in this chart, but I also see a flat channel of 3.37-4.00, and today's close tested the midrange of that channel. I've placed my stops based on the channel, not the triangle.


Thanks to WeeklyTA and Trader Stewie for tipping me to a couple of these winners. The others I found using ThinkOrSwim's Pattern finder.

I hate it when work gets in the way of my trading

Been busy with the full-time job, so I've been inactive in the markets this past week. Despite all my pessimism since March, I'm finally starting to accept that this rally could continue. I don't see another pivot point for the S&P 500 until about 1014. Here's what I'm watching:

I expect STKL to hover around the 1.84 level all day Wednesday, where it should hit upward support (not shown). I'm going to watch it today for a long opportunity.


ASCA looks like it's forming an Ascending Triangle, but I'm a buyer in two conditions: if it bounces off support around 19.25, or if it breaks resistance around 23.34. Gotta watch out in case this turns into a Double Top pattern.


ABAT is a similar case, Ascending Triangle near it's tip.


I also like to watch the 30-yr Treasury Bonds, ever since I sold mine a short while back. Now that Direxion has a triple ETF for it, I'll be looking to play the T-Bonds through TMV/TMF. I'm long-term bearish the 30-yr, so TMV is my favorite. I might ride TMF down until $TYX hits 44, and then see if support is broken again.

Tim, Tim, Tim....

This was hard to follow at first, but when it dawned on me I just got pissed. I suppose we can't entirely blame Tax-Cheat Tim, I believe the Bush Admin started this "throw all our money at the banks" plan on their way out the door last year.

Thanks to Bruce Chastain for showing me this.



I think it's only fair to add this little gem on how we got here in the first place:

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Thank you, Veterans, but this post has nothing to do with Memorial Day

I hope every American took a moment to show some kind of appreciation for our Veterans today. I called my dad, who served in Viet Nam, and now lives 3000 miles away.

Back to stocks, I'm starting to feel more comfortable with the ThinkOrSwim platform. I thought I'd post a couple of charts with it while I try to figure out what the Market is going to do tomorrow.

Here's a weekly of the S&P 500:

Even after this seemingly massive rally since March, it looks like we are still in a Bear Market. I like to listen to podcasts of Bloomberg radio and APM Marketplace, but the talk of "The Recovery" must be ignored while price action (charts) is used instead. From reading these charts, I am VERY biased to seeing the Market move down Tuesday, and keep moving down until it hits several support levels. There's a good one at the 20-week EMA here, RSI too.

Daily S&P 500:


Either this is a Double Top that's ready to break, or SPX will bounce up to about 918 and we could see a Descending Triangle. I know the Double Top is bearish, but I've heard mixed opinions on the Descending Triangle. I believe it should be bearish, and I'm going to presume that it is.

Remind me to check the volume levels to confirm price action. I seem to be having trouble figuring out how to get Volume to show up right in my TOS charts.

Maybe I could work on making these a little less busy, too.

Cash is King

This day started with a quick jump overboard from the sinking FAZ ship. After checking out the charts, I rode FAS for a small gain and then got back off (9.04 up to 9.10). The banks (XLF) are really wishy-washy right now. I looked at the charts for C, WFC, BAC, and GE to get a feel for what the banks wanted to do. They all looked like they were breaking down out of patterns, or about to. But XLF held flat until it dumped at the end of the day. That doesn't mean anything, though, it could be anywhere Monday morning.

Sold out of GM at 1.75 while watching it fall. That chart today had a nice slope: x=-y (get Excel to plot it if you don't get it). It was just begging to get dumped.

I am 100% cash for the weekend and I fee just fine with it. I've been scanning some charts and see a lot of triangles at their points. Since I don't claim the skills to predict which way they will go, I'm going to wait for the patterns to break and look for confirmation next week. I think we're still going sideways, meaning a bounce off support & resistance instead of penetration (huh huh, I said 'penetration'). We'll see.

As for predictions, I did happen to call today's close of 887 on the S&P 500 over at JL's blog (read the comments). Maybe I can read these charts after all.

I know, no charts/pics are boring. Maybe when it's not 12:30AM I'll add some chart-porn.

And you can take that to the bank.

Looks like the GM bet is holding out well so far. It closed at 1.92 today up 32.41%, and up to 2.14 in aftermarket trading. That would be a 100% gain so far.

Sooo..... since I was feeling a bit Extra Edgy today, I took a look at FAZ around lunch and bought some more at 5.38. I had a little time to watch it today, and thought about selling around 5.68 (the top!). But I took a look at C, WFC, and BAC as underlying indicators for XLF, as an underlying indicator for FAZ.

All three of those big banks are coming to the end of flags/pennants/wedges that they've been forming for the third time since the rally. They're either about to shoot way up again or collapse for a short time. Volume Flow and Advance/Decline on a daily chart do not look promising, so I'm holding out.



FAZ closed up at the end, and aftermarket had moved it up to 11.85. This happens to be a penny short of my resistance line created in my ThinkOrSwim chart. Again, I don't have much time to post charts right now, I'm sure the one above says too much already.

I'll be watching premarket action and then opening prices of XLF and FAZ to see if this wedge pattern is broken. We are at the tip of the pattern, so today should be do or die. I wonder if this is coincidence that it's happening on a Friday? I don't think I care to hold FAZ over the weekend... I'm already nervous about holding it overnight tonight.

TOS?

I'm looking into switching my broker. I've heard several referrals to ThinkOrSwim, so I've been checking them out. This platform allows access to Stocks, Options, Futures, Forex, and has a built-in pattern scanner. It's quite a bit to take in at first, like drinking from a firehose. But, they have online tutorials, demos, webinars, and a paper trading account to help get warmed up.

I don't consider myself too sophisticated to be looking for a bunch of particular features just yet. I have some charting techniques that I'd like access to, which I usually use through Prophet.net. TOS has prophet charts built in, so I'm liking it so far. As for the other features, I'll have to check them out to see if it's worthwhile for me. StockCharts.com is a great site, too. But I'm not paying for their premium services yet, so I'm still missing out.

The main reasons I'm looking for switching is access to FOREX, and more versatile charting tools. I'm actually hesitant to check out the other retail brokers that advertise on TV...simply because they advertise on TV. It goes against my philosophy of avoiding herds. You know what I mean.

All About Technical Analysis

Book of the week:


This is the book I am currently reading. I've picked up some new ideas that I haven't heard of before, which I find interesting since the version I'm reading was published in 2002. I've read a few TA books since I got serious in 2004, but I'm getting some great ideas from this one so far.

I've spent a few hours tonight doing some research on her methods, particularly the art of adding horizontal support and resistance levels to the RSI indicator. I've heard of adding trendlines and channels to RSI or other indicators, but never horizontal S/R. I tried it out with the S&P 500 as shown below to get an idea of what it might look like.

I know, these charts are busy. I won't have all the vertical red lines all the time, I just wanted to get some references for analysis. It appears that RSI support and resistance are pretty accurate, I picked the horizontal lines visually before looking at the price section of the charts.

Weekly:


Daily:



And XLF, since I'm holding some FAZ:


I'm not sure what to make of these charts, just yet. I don't see any familiar patterns setting up, but I do see some support and resistance lines getting tested. We just finished Options Expiration Week, so the past few days have been crazy. Things should start to settle on Monday and reveal which way it wants to go. There's a few conflicting signals, or I just don't understand them too well yet.

I'll have to build a watchlist next.

Sucker!

Sucker's rally for the Bears? After three days of falling, many of the major stocks/indices bounced off support and confirmed a slim trading range. I've got lines all over my charts from all kinds of time frames: 20 day, 6 month, 2 year, etc... This is getting messy.

I think it's going to be a Trader's Market for the time being, something I won't have much time for. I dropped all my stocks except GM (from 1.13), and I'm giving FAZ the benefit of the doubt one more time. Again, TIGHT STOPS on FAZ, because that freakshow can turn on you at any time.

Here's XLF, my basis for FAZ. It spent the past two days bouncing around a narrow channel established back in December. I'm betting that it could be a bearish flag, consolidating a few days before going back down. It's not looking too good, though. As I said, a LOT of stock/indices are riding some pretty good support lines now, and even Ritholtz is feeling a little [cyclically] bullish.




And I would like to take this moment to point out that I had mentioned this time period on Ritholtz's blog months ago. Referring to the S&P's price movement from 1966-1976 and comparing to today.

The current rally in 2009 reminds me a bit of the rally in 1970. From 1965-1980, the S&P 500 had a mean price from 90 to 95...15 years of a secular bear market (SBM). Good for traders, I suppose, bad for retirees cashing in their 401k's. The current SBM started in 2000, and has a mean price around 1170. But what I'm really wondering is if we'll see a third phase of this SBM over the next 3 years as we race back to 1600 S&P. And then see another crash down to...say, 650 in 2015 before the real recovery? Maybe I should dedicate a post to this. I keep bringing it up to the real traders out there, but I've got nothing to show them.

The S&P bounced off support and kept nicely within its tight little channel. This is still anybody's game so it's probably better to just wait and see.


Besides, it's Options Expiration Week, so expect chop and turbulence until Monday. I'm about 83% in cash, and don't see any real reason to get long or short yet.

Man, that was fast

If today's the end of the rally, it sure didn't mess around. The past few days was "sideways action", while today was when prices crossed support left and right. I saw pattern breakdowns across the board on Wednesday. All four of my stocks fell out of their ascending triangles and I got out. Only my casino stock, GM, went up (+5% I might add).

FAZ had also gapped-up and held. I bought in, late in the day, near an XLF support line betting on another breakdown. I also gave it a tight stop in case it's a head-fake. Looks like FAZ is up another 3% so far in the pre-market.

I think it is time for the rally to be corrected, now. I was starting to detect a sense of euphoria in the news, and could hear reporters talking of "The Recovery" in the present tense. Meanwhile, stocks were trading sideways and drawing out those ascending triangles. I'm glad to see this remark from the Big Picture, too.

However, this could also be a short bearish correction, turning failed ascending triangles into flags or channels (more sideways or slightly down action).

Tweet Tweet

Had to add this for the NASA reference.



From Barack Obama's Teleprompter's Blog:

Twitter Updates

Twitter Updates

• Big Guy says stars aligned for healthcare reform, but NASA says those stars are actually meteors headed for Earth. #BOTeleprompter 2 minutes ago

Ok, so it's actually from Twitter, see BOTeleprompter.

************************************************************************************
In other news, the Markets are dropping across the board. All of my positions have stopped-out except GM and GMO. Patterns are breaking apart left and right, and I'm starting to see downward channels. Only GM and XLF look like they're trying to recover, but at midday GM punched through resistance while XLF is struggling. Even bonds rates are down!

In my part-time research, I don't see anything worth jumping on at this point. I'm about 90% cash.

@#$% Sideways Stocks!

My GNK position was stopped-out at 18.20 today. The stock dwindled down to 18.14 and then shot right back up, closing at 19.00, and is now up to 19.48 in aftermarket hours. %@#$ stop sweep! On the other hand, the stock has been channeling down for the past 3 days, so I fought the urge to jump back in as the price recovered. I'll check it out tomorrow to see if this stock was jerking me around or if it's ready to give me what I want.

Instead, I bought a small amount of GM at 1.13 to satisfy my self-destructive tendencies. I heard a rumor that the options action seems to suggest that traders are expecting Washington to finally step in. That was good enough for me!

Still holding FEED, ILMN, and GMO. Only GMO was up today, but it seems to be stuck between 1.80 and 1.85. FEED is nearing the end of it's Ascending Triangle for the Moment of Truth. And ILMN has decided to scrape along it's upward support as it drags to the end of its own Ascending Triangle.

I'm aggrevated, so these guys need to sh!t or get off the pot. STOP MOVING SIDEWAYS! I'll have to check my favorite blogs to see what all this sideways action means.

Speaking of which, POT looks like it's in a nice up-channel and rising wedge that's pointing to 117 in early June.

Tim Geithner presents Stress Test results

"If Citigroup wasn't too big to fail, I would have failed them."
Tim Geithner

Today I didn't have to use my AK... I gotta say it was a good day.

Apologies to Ice Cube.

The Shuttle launch was definitely the highlight of the day. I forgot my camera, but there will be enough professional-quality photos circulating around that I won't miss much. I got to watch from the parking lot of the Vehicle Assembly Building (VAB), exact location below:



Anyone can access the NASA website to view any shuttle related info, including photos and video of the most recent launch that will include footage from the Solid Rocket Boosters (SRB's). Those are the little guys that detach from the Shuttle after 2 minutes, and then parachute back into the Atlantic Ocean for retrieval. The thundering roar was pretty cool, but the brightness of the flame up close was what amazed me. I had to squint or look away.

Meanwhile, I was away from the Markets but my positions held. Notice how all four of my holdings are showing various stages of an Ascending Triangle pattern (bullish), and I ended up for the day.






I'm still about 50% cash, but not for any particular reason, except that I haven't chosen to commit to any more trades at this time. After I almost gave it all away to FAZ in March, I've sub-consciously been committing no more than 12%-15% total equity to any, one trade.

Before leaving work, I had updated all my TPS reports that the boss had been asking for; even remembered to use the cover sheets! After that, I went home and cooked up some homemade fried chicken tenders, steak, and corn on the cob for dinner. Then, we all spent a relatively relaxing evening at home while a thunderstorm rolled in to water our parched Plumeria and Pineapples. Yep, it was a pretty good day...now to just convince the missus to make it a 'perfect' day with a grande finale...

Shuttle Launch Today, 2:01 PM EST

Click for live coverage on NASA TV at NASA.com.
STS-125, Atlantis to service Hubble Space Telescope.

Got Gas?

I've noticed the price of gas has been going up in leaps and bounds again. So, I thought I'd check on the June contracts for Light, Sweet Crude. Here's the chart:



Looks like we're hitting a line of resistance. We might see a correction..most likely forming into a wedge or flag for a few weeks. What it means is that the price of gas might stay the same for the next month. Guess I won't try to wait before filling up.

TMV update

While researching my last post, I came across this article quoting Bill Gross of PIMCO. He predicts that the FED will step up Treasury buying in an attempt to keep agency mortgage rates at 4%. What the #$%@ is an "agency mortgage rate?" Beats me, I'm guessing it's a 30-yr mortgage on a house.

"...the Fed will likely have to step up its daily purchases of Treasuries and focus more on the longer end of the curve..."

And by "the curve", I assume he means the Yield Curve, where the longer end is probably the right side, the 30-yr Bonds. But the part I DO understand is that Treasury buyback by the Fed might pickup, which means a stabilizing of the 30-yr Bond interest rates, and my precious TMV might see some white water ahead. Should've known it wasn't going to be that easy to just buy and hold.