Short Squeeze

I don't post about the indexes to often. I did mention in a past post that I felt the NDX was in a broadening Top pattern and that it was going to break out to the upside. It has and looks very strong. The overall market is holding a higher volatility, measured by the VIX and just felt by everybody in it. The swings are just huge as of late.
Panic Buying is what might have happened in a lot of cases, causing a short squeeze. there could have been a lot of perceived breakouts that will turn into fake outs after some short covering ends. I look forward to seeing some failed patterns this week that could turn into panic selling.



Well to follow up on a few stocks form last post. I mentioned this was against resistance and I am mad that I was too chicken to take a position. 20 point drop in 2 days.

CTSH was stronger than I guessed as I had sold my call a little early. It really has taken no breather and I could not be more disappointed in myself for selling out of my position so fast. I guess 90 looks good for a target and any price in the low 84's looks good for an entry.
POT - another favorite of mine. I bought some contracts 2 days ago when it was just below support. Earnings are around the corner.
I took a big speculative stake in NBR on Friday. I think the stock has great fundamentals. There was a nice surge in volume and I am banking on my entry and earnings next week. Depending on your time frame, you could make an argument that this stock is going down, up, or sideways. This is purely and earnings play for me.

CROX - I have only played this twice, once for a loss and once for a profit. Both were bullish plays. If I remember right, the loss was bigger than the profit :-( On a personal note, I hate the shoes. I think they are just plain ugly, coyote ugly. It did break out last week and seem to come back for a re test. I took a bullish position and we will see if it bounces, I am looking for at least $3 to 50.

PCAR -Another stock that has been kind to me. I played it last earnings and was obviously rewarded very nicely. Since then, the stock has been very range bound trading sideways. I have sold some options and taken advantage of the higher theta and IV, but it clearly broke out, re tested 91 ( my entry ) and has bounced. Earnings are Monday and this is how I am going to start the week. I am not going to be shy about saying I am looking for 98 to 100.

CAH is still forming what looks like a nice H&S pattern. I think the break of support is coming and I loaded up on some PUTs, maybe a little over all profit taking in the market will send this down.

Still not a lot of bearish plays that I am looking at, stopped out of ASFI, I played CAL for a quick gain last week. My BNI is do or die this coming week. I will try to get a better list later this week of some stocks that might produce failed patterns.

MIA but I am back

Yes, I have not been posting, but I don't think anybody missed me. My computer has been in the shop and that has been a real downer. I have an HP laptop and I am in love with this thing but an undisclosed member of my family had an accident.... and anyway, we had to send it back to HP for some warranty work. I might add that I was most impressed with the warranty department at HP.

So the market has been in the same unpredictable stage as when I last posted. The NASDAQ has however broke out to the upside, keeping a trend of higher highs in tact. The DOW has started a sideways move. Everybody wants to know what the market is going do. It's probably going to go up until it goes down! That was a safe statement.

Having a background in the Mortgage industry, I find the mortgage and real estate stocks interesting. Home builder stocks are making a move lower and there could be a lot of good bear call spreads and shorts in that sector.

One stock that I like long is Fannie Mae. FNM is the largest "A" paper investor, their loans require mortgage insurance and you can see by this chart, they have broken out of a gigantic wedge. Price Target? 90 to 100. No, not next month, buy the stock and hold it or look at some Jan 08 options. There is a reason the stock price is going up while other mortgage lenders are shutting their doors.


FUL - They broke out of this channel on earnings and I entered into a long position on Friday. Low risk as support is right there. I have a short term target of 32-33, it is just a couple of dollars but that would be 10% move. Not too bad.

BG - You have what looks like a "W" pattern followed by a few months of a descending channel. It broke out of that downtrend with some nice volume and I am looking for higher highs going into earnings. If it does pull back, I would gobble up a boat load at the 82.50 mark.

ADSK - I would like to think of an inverted Head & Shoulders pattern as being at the bottom of a down trend and signalling a reversal so... maybe this not one. It has been trading in more of a sideways range for the last two years giving swing traders lots of opportunity and most likely disappointing investors. Looked like a great entry on Friday and I am in!

LLL - looks like a nice up trend and the industry has had some momentum. 5 more points seems easy enough.

LPNT - Another big wedge. I got in last month right at the re test and was stopped out when it broke beneath 39 for a losing trade. I am back in and like the potential run into earnings.
GROW - you could view this as bearish or bullish. I like the volume spikes on the up days and have a long position with a tight stop. I see this just bouncing off support AND I see this right at resistance.

CTSH - this has been in trading range for the last two months after a nice sell off. I took a long position Thursday at the close and was rewarded very nicely on Friday. I can not say that I stuck with the whole move as I exited a little too early, but I will be watching this closely.
ASFI - My only notable bearish play is shorting this stock at $40. There is a little room for it to move up but looks like a loser to me.
CLF is still moving up not really showing any weakness. I like the volume.
SHLD - always a favorite chart of mine. I just love this stock and it has treated me well. My most recent trade was a loser as I did not expect it to break 175. It had a big day on average volume and you can see it is right at Resistance. Have to watch and see.

I am about 5 to 1 bullish trades over bearish and looking for things to keep climbing. Earnings are here and that should give some idea of direction as always.