Anticipation

The Power of Price Patterns. Sometimes things just happen the way they should and other times you wonder if it will ever work out. I mentioned JEF before and this is a classic example of how great the Bull Flag can be.

IIG - also mentioned before as an inverted H&S is giving yet a third entry signal right now. One could have gotten in on the break of the neckline, the retest a week later, or this flag is looking good right now.

TTI - also mentioned before is moving in the right direction but buyers have not stepped in yet. Maybe earnings will speed things up

XAU - still falling as it should. My Puts just keep increasing in value.

BVN - My number one pick for next week is setting up real nice. The Power of the Flag, will it show its strength again? Getting ready to bounce off old resistance and the 20 dma.

CAL - My PUTs were stopped out for a gain as the stock bounced back up to re test that 40 mark, but I got back on that dog and shorted at 39.90. I closed the position for a fat two day gain as the airline industry got hammered.

My HERO, is shaping up to look like a nice pattern. I can not wait for earnings this next week. Hopefully it does not give back the anticipated gains. The stock is still not inside the bollinger bands and had no respect for the 200 dma, blew right threw it.

ICE - this will be a test. I have never had any luck with straddles/strangles. The stock seems very constricted via the Bollinger bands. It has a history of being volatile all the time and earnings are around the corner. I strangled it at 135/125 two days ago. I need a 10 point move one way or the other to make me happy.

Finally, HP is an earnings play from a great fundamental trader, Tom Malone, who has helped me understand so much when it comes to earnings. Becoming a member of his team will give you a whole different perspective of the market.

I continue to let the Bear in me reek havoc on my mind as I bought PUTs on OEX and DIA and the Q's. I will mention again, trying to pick the top is the most humbling experience and patience is so rewarding for a new trader.

Bull flag set ups are MER, NBR, BVN

Seattle

Trading has many perks and I have found that one of them is traveling. Traveling to different cities for different conferences can be rewarding. Of course I tell my wife that it is a lot of work and the food isn't like her home cooking, and not to mention the crummy hotel accommodations.
Trading has taken me to Michigan, St. Louis, San Diego, Salt Lake City, Las Vegas, Sacramento(home) and I am hoping Chicago in August.

PCAR - must I say any more?

I bought PUTs on RYL last Friday as it was looking juicy.


HERO - have been watching this since Easter. Tom Malone turned me on to this one as a possible buy out candidate. I have been intrigued by the huge pick up in volume and the lack of price movement. Look at how constricted the bollinger bands have been for an extended length of time. The Volume picked up and the stock started to move on Monday, so I did a "mixed bag" thing again. Just a hunch at the time as no break out occurred but feeling good (lucky) now.

CG - mentioned the other day gave three more fine entry points before doing its thing. I got in on the highlighted day.

ACI - bought this morning when it was down .20 cents. Got lucky has it took off.

AMR - a classical example why stop losses have to be used. I set mine at yesterdays open price and was triggered for a profit! I still think that this presents a nice shorting opportunity.

I felt blesseed today to have a surprise guest speaker and someone who I admire speak in my class, Tim Knight. He is the chartist of all times. Everybody should get his book.

Who's In Charge?

Da Bulls!

I had to close my IWM and DIA puts for a medium size loss that was just irritating. The irritating part was that I was trying to call a top or anticipate a much needed pull back. Sometimes that makes you look smart, predicting the future accurately based on your analysis of the market, BUT most of the time it reminds you that you are an idiot and you know better than to try and predict market direction.

CG- I entered into a bullish position on this Bull Flag pattern. Some like to wait for the breakout and others( me ) like to anticipate the breakout with a tighter stop. I like to go in small and add to the position as it develops.

IIG - I had bought some stock a couple days ago on the re test of support looking like it was going to hold, looks like it did today.

AMR - Well if CAL is just the best looking thing ( my PUTs are up 30% ) then look at its partner, AMR. The stock also sold off on earnings news and headed straight for the FIB retracement line and diagonal support. Is there more selling to come? Keep an eye on this one, A very good short candidate.

This is at a perfect point where risk to reward is at its lowest point TTI. A stop is clear.

I had an order in and did not get filled, I should have chased it a little. This is a great pattern and a take over candidate. Nice volume.



p>

SWEET!!

Ah, this looks like victory...sort of.
Yesterday I said that I got stopped out and that is true on my in the money contracts. I would kill for my in the money puts right now, rules suck sometimes.
If only the stock would not have run yesterday, if only.....

JEF - I entered into a long position on this one and hopefully it does well. I bought some July OTM Calls and some stock, sort of a mixed bag!


This is a beauty from Mr. Knight and I only wish I had entered the trade yesterday.

My account is still headed south and I am trying hard to fill it with things that might keep me at a break even for the week.

Went long on:

CME

BJS

ACH

JOYG- Added to position

SOLF- Added more stock to the position

Went short;

DIA

IWM

If you wake up at 4:30 am PST and think about checking on the futures, you might have a problem or be over positioned!

Stopped Out!

For the most part I watched the DOW make a life time high and my account get drained. Stopped out of CAL and FFIV. I really can not believe that the market is this strong, everywhere you look, you see 14 of the last 15 days up or something like that. It is unheard of! So I should have loaded my account with PUTs at the close, but instead, I cried in my bear soup. It is not that I do not think it should not be a strong market, more of, we need a pullback, like 15o points at least.

I was getting all happy as you can see the long tail on FFIV, looking very nice.

I left the puter for a few minutes and the stock was up $2 plus on out of this world volume. Party OVER!

I can not even believe those two charts are from the same day.

So far every chart I have posted has turned out to be a disaster. I would cry some more and say I just can't catch a break, but the truth is, this is the first down day in two weeks and I am still positive for the week. I fully expect tomorrow to be a different story and I will have to be on my toes to keep the account in the black.

I re-entered a trade on JSDA, long. By far my biggest money maker in the last three weeks.

Also bought some calls on JOYG. Hoping that the stock can continue what it started before Feb. 27th came and rained on its bull parade. Short term target of 55. Hopefully volume will follow shortly.

Be back another day and don't spend it until you take it!

Charts to go...

I wanted to back my positions up with some charts. I will post the rest as time allows.

I love this pattern. This is a BIG pattern and time and patience will pay off. Buy to the end of the year and give your options some room to fluctuate. Click on any chart for a larger version.

This stock has been channeling real nice and if earnings are good, a 10 point move could happen in a few days. My entry price is on the chart.

Health Care should get lots of love going into elections. Long term options will pay off huge are you can trade this off the Bull Flag bounces.

Super Bullish

Well the market has been on fire. I wanted to clarify that although I am a Bear and love to see the market go down, I would rather just trade with the trend. For me, trading with the trend means if the market is Bullish, have more bullish plays than bearish. And visa versa. Right now I have about 80% bullish plays and 20 % bearish. This helps you in both directions as the market fluctuates.
No, I am not bailing on being a BEAR, as the market is about to make all time highs. I really feel that being bearish is the hardest thing for people to do. I love it and the higher the market goes up, the more room there will be for it to fall and I know I will profit greatly from that in the future. Mean time, trade with the trend and be ready to go bearish when the time comes. It happens fast and hard, so watch out.

Right now I am long/calls;
WCG
SMSI
SOLF
NDAQ
BTU
PCAR
GLW
CAH
AH
ASTI

SHORT/puts;
RATE
CAL
FFIV
DIA- Hedging

I could not be any more miffed about Rate. Stopped out for a loss. As with all stocks, there are many levels of resistance and support. This one apparently was in the 37.50 range that was used many many times in the past. I let my in the puts go and kept my out of the money. They do not lose as much value because of the poor delta.

The good thing is that my account keeps going up and ultimately, it is okay to be wrong if you can keep moving in the right direction.
I look forward to earnings on CAL and NDAQ this week.
Short on time, no charts.

Big Moves Coming

The week ahead has lots of earnings reports that should give more overall guidance as to how earnings will play out this season.

If you are following RATE, you know I am about 20 cents from getting stopped out. I still believe that any day bad news will propel the stock straight down but it is running up a lot further than I expected. I really want to hold it for earnings which are May 1st. The stock filled the gap from back in November and has retraced through the 38% mark and the 50% retracement is 38.50. This is a lot higher than I want to hold on for. I might just have to get stopped out to limit those losses and short the stock before earnings or when it gets to 38.50. Options could be too expensive at that point.



CAL- everybody was short this one or had PUTs, but then it found a temporary bottom and the overall market broke through resistance and took this one with it. The trend most people are focused on is very very short term and think higher highs are in place. Not me, I think most have missed this much longer trend line that that the stock is not going to break through ( I hope ). It is one last stitch effort by BULLS and I look for earnings this week to have the same forecast as three months ago. Click on any picture to make it bigger.

For some long idea's over earnings;

NDAQ- I bought calls two days ago when the stock broke above 30 after an extended consolidation period. It had HIGH volume but then the whole market sold off and took it with it. That was when I placed my order, yes prior to the technical break out! It was a gut feeling that it was going to happen. This is great earnings play.

BTU-- Coal is one fire. After a year long down trend, the stock broke out of a nice symmetrical triangle on HIGH volume. Options are cheap and the target on this in the high 60's. Give yourself plenty of time, look at late fall or winter options.

For some more long ideas;
CAH
CVH
ACH
WYNN - last week I was looking at it for a short but it broke out. Watch and see.

Not Satisfied

It is not easy being a Bear. I have learned that it is not an overly profitable point of view. It's just the way I am wired. I have learned that to survive, bullish trades have to be placed, sometimes lots of them. Like I said in my First entry, it is all about account balance.



RATE is not cooperating and I am not satisfied, but it is still obeying the descending trend line. My Favorite Bear, Tim Knight always says " let your stops do the work " so that is what we are doing here. A tight stop would be at 36.29, a loss stop could go slightly above 36.80. I am giving it just a little wiggle room outside of the trend line but not enough to incur a large loss. I use ThinkorSwim which has more features than one can possible use. They have a "trades twice" rule that I use most of the time. The stock MUST have two trades at that price or higher before the stop is triggered. This will prevent your stop from being triggered on a typo and ensures that you are not being whipsawed out on one trade.

Well there are lots of things on the radar, but PSA is setting up. The current support level is acting very strong but be prepared for a break, like tomorrow. The June 90's might offer the ability to double your money and have a tight bid/ask.

I had mentioned that we were do for a down day and the PUTs I bought were quickly doing there job. By days end I had sold them and replaced them with calls which did even better today. I put in an order to sell those and pick up some PUTs on IWM and now I have both. I guess I am ready for what ever tomorrow brings.

Time for a Pullback

We have had more than a week of "up" days with no real pullback to give traders a good feeling about moving higher. RATE has had nine up days in its Bear Flag. I am banking that as it gets overbought and closer to the descending trend line, a nice down day is around the corner. So, I loaded up on more PUTs.

The Market has a much more bullish basis to it right now but earnings season starts tomorrow and that could all change.

First Post

Hi,
I thought for my first chart, it should be meaningful. For starters, I am a bear at heart. That being said, I have learned to set what I want to happen aside from the charts. I am more concerned with account balance than my overall view.

I also have spent the last 14 years writing loans as a mortgage banker. So watching the mortgage industry crumble is most interesting to me. The housing and mortgage industry will be an area of in depth knowledge that I will have stronger opinions on than... semiconductors?

So lets look at a nice Head & Shoulders pattern on RATE (click on any chart to see a bigger version). A trade should have been entered at the close of the market today as a re test of the broken confirmation line is tested with a nice divergence in volume. It traded 1 million plus shares on the way down and just 245,000 on its 1% rise today. That is pathetic!

Risk is low as your "stop" is obvious. I do not see this trade taking longer than 6 weeks so I personally choose the May 30 PUTs for less than a dollar fifty. I am sure Return On Investment will be 100%. If you have trouble with numbers, that's doubling your money.