Jan 072013

In updating the trade ideas on the site, the following trades will be removed from the Active Short Trades category.  These trades have either hit one or more profit targets, exceeded their suggested (or any reasonable) stop criteria, or based on the technicals, these trades no longer offer a very attractive risk/reward profile.  Also note that there are a few short trades that have exceeded their suggested stop(s) but still look attractive and as such, will remain as active trades for now.  I will update those charts on an individual basis asap.

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Jan 072013

EDIT:  I mistakenly referred to today’s target that was hit as T3 vs. T2 as I should have.  I also mentioned T4 as the final target when I meant to say T3.  The error has been corrected in the revised posted below.  Sorry…guess my body is out of of vacation mode but my head is still there!

The NFLX long hit T2 today for a 57% gain from entry so consider booking partial or full profits and/or raising stops.  One thing that I just noticed when updating the chart was the previous typo of the T2 level.  I usually get e-mails when I make a typo on a target or support/resistance level on a post vs. what’s shown on the chart but didn’t this time around.  Somehow, I mistakenly listed T2 as 86.30 on the previous chart/post but that was incorrect.  In fact it was a completely random number and as you can see from the string of charts on this trade below, T2 was always at the top of that 4/23 gap.  The top of that gap was at 101.79 vs. the high today of 101.75 (I always set my long-side target just below resistance to avoid missing a fill by a few cents).

T3 still remains my final target on this trade although again I would urge even longer-term traders to consider at least raising stops to protect profits as NFLX is getting quite overbought and is very likely to experience a pullback, especially as it has just back-filled that 4/23-4/24  gap.  More aggressive traders could even short the stock here with a stop slightly above that level.  A likely target would be just above the bottom of the gap around the 91 level.

Jan 072013

I have put together an updated video overview of the top 10 components in the Nasdaq 100 Index ($NDX).  Remember, the top 10 components comprise over 50% of the weighting of this key index of 100 stocks.  Therefore, in order to help get a read on where the overall market might be headed, it would behoove us to key an eye on these 10 key stocks.

In this video, I take a look at how the charts have played out since the last $NDX Top 10 Holdings video from Sept 26th in order to determine what has, and more importantly what has not changed from a technical perspective since then.

Click here to view the 1-7-13 $NDX Top 10 Holdings Overview video.

Jan 072013

Although I had planned to get “back into things” over the weekend, I ended up extending my vacation until the last minute of the last day.  As I was pretty much checked out mentally from the markets over the last few weeks, just checking in occasionally, I am now ready to “re-engage” the markets with my full attention and plan to update the trade ideas as well as post some new commentary and charts this week.

It seems that the markets caught the majority of traders and investors, myself included, off-guard over the holidays with the largest two-day point rally ever for the last & first day of the year.  For those who were bullish and positioned as such to take advantage, congratulations.  For those like myself, who were positioned short and still are, I plan to update as many of the active short trades as possible over the next few days as well as communicate my thoughts on where we might go from here.

The bottom line is that the longer-term charts and several other near-term metrics such as sentiment, overbought readings, etc.. continue to remain bearish while the current near-term and intermediate-term price trend clearly remains bullish.  Although I can not give investment advice, I can & will share my general thoughts on positioning here:  For those current long who still believe there is more upside to come, at least consider raising or trailing your stops to protect profits.  For those in cash looking to get long, I can only say that the risk to reward ratio is very poor right now.  Although the near-term trend and price action is bullish, the majority of sectors and broad indices are at or approaching very significant resistance levels on the longer-term charts and overbought to boot.

For those short or looking to get short, the markets are at or very near key resistance levels and shorting resistance with stops above is more often than not a successful strategy (just like buying support with stops below).  I continue to be very liberal with my stops and believe that the R/R of being short here with stops not too far above (roughly 3-5% on the major indexes) is very favorable.  Regardless of the recent plunge in the $VIX during the 12/31 & 1/2 rallies, I still think that the $VIX calls are very attractively valued based for those looking for a hedge against long positions or as a speculative short trade.  Finally, I do plan to add any attractive long trade setups that I come across when looking over the charts this week.  For those of you who have followed this site for most of 2012 know, I have typically kept a nice balance of long and short trade ideas on the site, regardless of my own positioning or market bias.  I hope you enjoyed the holiday season and once again I’d like to wish everyone a happy & prosperous New Year.  More charts & commentary to follow shortly.

Jan 042013

The CS long has hit and exceeded T4 and although I had T5 listed as the final target, I am going to removed the trade early here at 25.57 and move CS to the completed trades category.  Although T5 is possible over time, there are now significant negative divergences in place on the daily time frame and due to the large gains on this trade, I no longer believe the R/R warrants remaining long at this point.  Charts in order as posted:

There are also several short trades that have exceeded their suggest stop parameters recently.  I plan to update the Short Trade Ideas over the weekend and will list all completed trades (stopped out or profit targets hit) as well as add any new trades then.

Jan 042013

the DSX long has hit both T1 & T2 (final target) today for an 18.1% gain.  it took a while as this trade officially triggered a long entry on the breakout back on Sept 19th (at 7.18) and just floundered around since then, above the suggested stop levels, finally moving up sharply with the other shipping stocks recently.  as T2 was the final target, DSX will be moved to the completed trades category.  however, for longer-term traders & investors who are bullish on the stock or shipping sector, the next unofficial target is that horizontal line at the 10.30 area.  consider raising stops to just below the former T1 area if holding out for additional gains. charts in order as posted.