May 142012

here’s the updated OSUR chart along with the original from last week.  prices are quickly approaching T1 with a 12.2% gain on the short already and although i think that this trade has a good shot of hitting one or both of the additional lower targets (horizontal lines) that i added to this chart, i plan to cover my shares just above that T1 level (8.70) and move this to a completed trade if/when it gets there.

i’m going to continue to work on streamlining the set-ups and active trades throughout this week in order to keep only those ideas offering the best R/R in those sections but as many of these trades may have additional downside, just use the contact information on this site to send me a message if you plan to continue holding a trade that has been moved to the completed section and i will be glad to email you my thoughts or a chart on the stock.

May 142012

sorry for the lack of updates today.  i had to take one of my kids to a couple of dr’s appts this morning that turned out to be an all-day event and is still going.  as far as updates on the existing trades i’ll try to get caught up to see if there are any highlights but a few shorts that i’m in stand out today.  first off is IMOS, which is up big apparently on a barron’s article that came out over the weekend.  if i was in front of my computer early when the stock was up 17% i would have shorted more.  the chip sector is in heavy distribution & i still feel this trade will hit T1 soon.  regardless of the article related pop which is common for a thin volume stock, this trade is still very profitable from entry.  i will post an updated chart later today.

the OSUR short has broken that support level i had pointed out and then some and is very close to hitting T1 now.  i will also try to update this chart asap as i might add an additional target or two.

the RGR short is now sitting on the bottom of that 4 hour channel so keep an eye on that level as a solid move below would likely open the door to some additional downside.  i may also add targets to that trade as well.

May 132012

one thing that i try to do is to avoid posting much when there’s not a lot to say, at least anything that hasn’t been said here in the last few weeks to months:  i still do not believe that the risk to reward favors being long this market. i am speaking more to the longer-term investors and swing traders although i still believe the near-term bias is bearish as well.

from a longer-term perspective, i have made the case both fundamentally and technically, based largely on the daily and weekly time frames, that quite a few extreme levels such as overbought readings, sentiment surveys, etc… had all reached very rare levels that almost, if not always, preceded significant corrections and/or market tops.  one could argue that the recent correction from the highs, in both time and price, has been sufficient enough to relieve those extreme conditions but a quick glance at the market action following similar junctures in the market suggests that is highly unlikely.  add to that the fact that we are finally seeing the market leading stocks break down one by one and the case for a more lasting downtrend is even stronger now than it was a few weeks ago.

shorter-term, one could argue that since the SPY & QQQ did penetrate below the bottom of that trading range that i highlighted last week and was able to get back above that level without the markets cascading lower was very bullish.  i won’t argue that point very hard although i do have a different take on last week’s market action and the fact that the markets were able to hold up after making a new low.  from my experience, when a well-watched technical support level like that is broken and quickly regained, especially after a period of several weeks of consolidation, that usually proves to be a bear-trap and the launch of a powerful rally which it clearly has not been so far.  zooming out to a slightly longer time-frame, the SPY did not break any support, yet, but on tuesday tagged that key support level shown on my last couple of daily charts and bounced off that level for the rest of the week.

therefore, neither side, bull or bears, have yet to declare victory in the short-term but personally i think it would take one heck of a mega-rally this week to undo all the bearish technicals on the weekly charts that have now firmly set in (trendline breaks, bearish macd cross-overs, oscillators rolling over, etc..).  as such, my bias remains to downside and as i remain aggressively positioned as such, i will continue to look very hard for evidence that might prove me wrong.

May 112012

note how the SPY has long since broken below it’s orange uptrend line shown on this 4 hour period chart while the QQQ still has yet to even test that comparable trendline which, at the least, i still expect it to do at this point.

May 112012

here’s a fairly simplistic take on the market.  these are 120 minute line charts of the SPY & QQQ showing that both of these key index etf’s remain in a bearish technical configuration.  however, if both indexes were able to move back above those lines, that would be an early indication that the downtrend is most likely in jeopardy.  these aren’t hard lines that single-handedly determine the current near-term trend of the markets but they do warrant monitoring IMO.

May 112012

the GLD short continues to play out exactly as forecasted and is now close to hitting the initial target on the weekly chart (bottom of the primary uptrend channel). i will study the charts later today to and post an update scenario and my thoughts as whether to take profits on the GLD swing short and possible play a long-side counter-bounce trade as this target is hit or hold for a possible break-down of the channel, which would likely usher in additional selling.  here’s the updated weekly chart along with the previous weekly from february 7th.

May 102012

Although the vast majority of the trade ideas posted here recently are shorts, I am aware that many traders and investors are not comfortable with shorting stocks.  I do plan to start including more ETF’s/ETN’s in the future, both long and short, as many prefer the relative safety of these vehicles due their diversity of holdings.  With that being said, please take a moment to share your opinion on the poll that I just added to the top of the sidebar on the right side of this page.  Although I do often incorporate ETF’s into my own trades, I’ve always found that the most profitable trades come from identifying high-probability, good risk-to-reward patterns on individual stocks and, as anyone following this site or my trades in the past can tell, I am every bit as comfortable with shorting as I am going long.  However, as my goal is to constantly improve this site, I would welcome feedback as to your own preference of trade ideas posted here.  Would you prefer that I continue to post the most attractive R/R set-ups that I find, even if those are highly skewed to shorts at times?  Or would you prefer that I make an effort to continue posting long trade ideas, regardless of current market conditions or my own personal market bias?  Thank you for taking the time to share your opinion.

-Randy Phinney

May 102012

as i continue to update any outstanding set-ups or active trades that should have already been re-categorized, MDM stands out as a good example of how one can utilize the targets on the trade ideas posted here not only as profit targets but also as an aid to placing stop-loss orders to protect profits on winning trades.

remember that once a resistance level is broken, it become support and vice versa.  in this example (see today’s chart, the last in the string of charts posted on the MDM trade below), a trader preferring tight stops could have set a stop not far below T2 as once that target was hit, prices traded above it for a few days and even printed a close above it. then the stock reversed and that stop would have been hit giving back just a small amount of the 17.8% gain that MDM produced from the breakout to T2.  another option for a less active, longer-term trader or investor shooting for T3 or T4 would have been to set a stop below T1, which would have still assured a profit on the trade yet if prices were to have fallen back below that level it would obviously have signaled something wrong with the stock.  one could have also drawn an uptrend line from the lows within the pattern (see orange line on the chart) that coincided with T1 about that time that level was broken, another sell signal.