Wednesday, February 27, 2008

A MOVE TO THE UPSIDE

After moving sideways for days, the S&P 500 is finally out of its symmetrical triangle.

I've been bullish since Monday and will continue to be for the rest of this week. With Google and Apple being hit earlier this week, I'm surprised the markets have been doing so well. Due to their price and volume, a lot of strength is needed to propel the NASDAQ up from a negative Google or Apple (bullish indicator). However, we did not hang on to our gains today so this worries me a little. Nevertheless, I think there's still room for some upside before we head lower. I expect the S&P to test the 1400 mark again...remember, there's a lot of resistance at this point, so unless there's fantastic news I wouldn't bet on a further breakout. Inflation is exceptionally high right now, so if Bernanke does continue to cut rates that's not exactly good news for the economy.

Note: I am still holding NYX, I did not sell my shares before Tuesday like I said I would.

Friday, February 22, 2008

DRAMATIC TURNAROUND

Tack så mycket! That's Swedish for thank you very much, or at least that's what Google tells me, haha. I'd like to thank all of you for visiting my blog. In the past month, this blog has had over 1000 clicks with a returning visitor rate of 40.21%. I've seen visitors come from all parts of the world with 67% of them coming from Canada, 26% from the US, 3% from the Bahamas, 2% from the UK, 1% from Sweden, and 1% from India. Further, my analytic software tells me that the average time spent on my site is 4 minutes and 3 seconds.

Anyways, let's take a look at the DOW now.

If you were trading at around 3:30pm today you were probably thinking the same thing I was..."what just happened?!?" In less than 2 minutes we recovered from a full day of selling. The markets were down nearly 2 days in a row, it looked like we were finally getting a sure direction in the markets but that all changed after word that a bailout plan for troubled bond insurer Ambac Financial could be announced next week. So what's the word on the street, should we be going long or short? I wish I could tell you but this rumor in the last half hour of trading put the indices right back inside the symmetrical triangle. For this reason, I would not go long nor short at this time, wait for a sure signal before picking a side.

Note: I am still in my NYX trade, there's a good chance the markets will rally on Monday (DOW had lots of volume near the end of the day). Nevertheless, I don't see myself holding NYX past Tuesday.

Tuesday, February 19, 2008

IT'S A WAITING GAME NOW

It's a waiting game now. Technically the indices are still in a symmetrical triangle. I was thinking that we might get a break to the upside this morning, instead we continued to move sideways. I'm guessing that tomorrow's CPI numbers may determine whether this trinagle breaks to the upside or the downside.

The sell-off near the end of the day indicates that investors aren't expecting good numbers. I didn't anticipate a sell-off so I ended up buying NYSE EURONEXT (NYX) at $67.09...I'm at a 36 cents loss right now. The chart below pretty much sums up why I bought NYX.

With the markets being so uncertain right now, this position I have in NYX isn't sitting pretty. If it breaks below $65 I'm going to have to take a loss.

Oh by the way, I just wanted to share this site: www.HitTheBid.net with you guys. I find Jefferson's videos quite entertaining...like these ones for example:
Sony Tech Call Part 1
Sony Tech Call Part 2

Thursday, February 14, 2008

TOO MUCH RESISTANCE

What a turn in events. The market as a whole looked bullish yesterday, we ended the day right at resistance. There appears to be a higher low, another sign that things are looking good. However, we were unable to break 1370 in the S&P today; therefore, it's unlikely that we will get a higher high. News this morning didn't look promising so I decided to go against the market and pick up some QID. Since we didn't break the 1370 resistance today, we are still stuck inside the symmetrical triangle. I suspect that we will end the week in the negatives but keep in mind that a symmetrical triangle means that this market could easily swing to the upside or downside, so keep stop losses in place.

The chart I detailed below has more on why I think we are still in a bear market.

Sunday, February 10, 2008

FALLING WEDGE

A falling wedge on Apple (AAPL) was brought to my attention last Thursday. As I have been busy all week I was unable to follow nor post this bullish formation. After dropping 40% in price you may have noticed that Apple just recently broke out late Friday. This may be the cause of shorts covering and if this is the case, a huge rally could advance.

Setting stop losses under $119 and buying it near its low of $121 either in the morning or after the bull pull-back would've been perfect. Unfortunately, I missed both opportunities. Nevertheless I will be watching AAPL play out over the next few days, I may enter after another bull pull-back (hard to say that will happen though with NASDAQ up 9.50 in the aferhours) or wait for AAPL to break its resistance of 125.50 (Friday`s close).

Seeing as the financials have been down the entire week, it may be possible that people have been taking profits from the financials and entering high beta tech stocks like AAPL and RIMM. Both have some room to the upside before hitting the near-term resistance. I see institutions driving up tech prices next week and then knocking them back down shortly after.

Tuesday, February 5, 2008

REVERSAL AT 1400


Things look to be going my way. Speculating that the peak of the suckers rally was near, I bought SDS in the middle of a heavy rally on Friday. Assuming that the rally is a suckers rally, a reversal at 1400 is certain. Turns out that my prediction was indeed correct, the index reversed at 1396. On Monday we got a strong sign that the uptrend was ending, we got a Bearish Harami. Further, as of today, we dropped below the 20 day moving average. This week continues to look bearish, but I plan to put some stop losses in place to secure my profits. The only thing that can revive this market now is good insurers news.

Friday, February 1, 2008

SUCKERS RALLY

Want a thorough look at what's happening in the markets? Well this video from Free Trading Videos.com does just that. As you may have read, I am still bearish so I strongly agree with everything this video has to say. Just to sum it up, we're currently experiencing a 'suckers rally'. With the market closing up, there are more and more bulls everyday. Fears and concerns are starting to fade away and this is when the amateur starts buying back the stock market. This is exactly what institutions want, they want you to buy into this mess...this 'suckers rally' gives institutions a perfect opportunity to sell into this bounce. At this time we are still in a downward trend, instead of looking for opportunities to go long, start looking for opportunities to short.

Give this some thought: With today's poor job statement the market should be experiencing a negative vibe, instead there is a positive outlook. Mergers and acquisitions (M&A) are giving people hope. Refer back to the video...what's happening to the big four? If institutions were buying right now, shouldn't prices be rising significantly in these four stocks? Institutions do have investments in these stocks, but are now finding opportunities to sell as amateurs buy. M&A is just an excuse for the market to stay afloat, without this M&A news, institutions would not be able to gradually get out of their long positions. An aggressive .5 cut shortly after a .75 cut should spark a massive rally, instead we got a small rally followed by heavy selling led by the institutions.

Disclosure: I bought SDS today to hedge my long position in APP. May have bought it too early, we'll just have to wait and see. Also, my recommendations of BHP (1 day ago), HOLX (2 days ago), WYNN (5 days ago) and YUM (2 days ago) would've made you around $7, $6, $15 and $3 respectively. As you can see I am an active trader, I would've sold all these stocks by now. This is why I don't pitch any of my stocks here, instead I post them on forums and only post my longer-term recommendations on my blog. If you want specific stock picks, leave me a comment.

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Edmonton, Alberta, Canada
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