Oct 102014

The following short trades will be moved to the Completed Trades (Short) category as they have either exceed the previous suggested stop (or any reasonable stop, if none suggested) or the technicals no longer warrant remaining short at this time. Several of the Active Short trades still look to offer objective entries or add-ons at this time with others trading right at or just above key support level, which may offer another objective entry or add-0n once those levels are taken out. I plan to highlight some of the more promising short trades soon in addition to adding some new trade setups over the weekend & into next week.

BWS- Stopped out as per the previously suggested stop criteria (SOAPSC)

COST- Exceeded the suggest stop of 127 if targeting T1. No stop listed for T2 but COST will be removed as the charts just don’t clearly warrant being short at this time.

GS- Exceeded the original stop of 170 a while ago as well as the 181.13 level which was most recently mentioned as a level that GS needed to remain below to keep the bearish case intact. GS will most likely fall inline with the financial sector but GS will be removed to make room for more attractive short candidates.

HAIN- The previous breakdown proved to be a false sell signal as the stock quickly reversed & move higher to exceed any reasonable stop. HAIN does still look ripe for a major correction from on the weekly time frame and may be added back as a new short setup soon.

HSNI- The HSNI setup never triggered the conventional entry of a break below the neckline (support). However, the alternative, aggressive partial position entry was triggered but the charts no longer support a compelling bearish case and HSNI will be moved to the Completed Trades category as an un-triggered conventional trade setup and a stopped-out, partial (1/2 or less position) aggressive trade.

LNKD- Hit the 3rd target for a 26.5% gain & continued to fall about 2/3rd of the way to the 4th & final target before reversing & exceeding any reasonable stop.

TASR- Hit the 2nd target for a 30.5% gain & continued lower to reverse just shy of the 3rd & final target before exceeding any reasonable stop.

TJX- Hit the 2nd target for an 11.4% gain & then reversed to exceed any reasonable stop. As the charts no longer support a compelling case to be short, TJX will be removed from the Active Trades category as a Completed Trade.

Oct 102014

Today I plan to update all of the trade ideas on the site in order to remove any stopped out trades or those trade that no longer offer look compelling to make room for some new trade setups which I plan to add over the weekend & into next week. As I still remain longer-term bullish on precious metals & the mining sector, GLD/$GOLD, SLV/$SILVER and all of the individual mining stock trade ideas will remain as Active Long-Term Trade ideas for now but we be remove from the Active Longs category (Active Long Trades are typical swing trade idea) in order to streamline the Long Trade Ideas category, which will likely focus on quick counter-trend trades (other than select commodities).

The following Long Trade ideas will be moved to the Completed Trades category:

ACI- Stopped out as per the suggested criteria (SOAPSC) shortly after the breakout (Failed to reach any price targets).

BTU- Hit the first profit target for a quick 3% gain before reversing & exceeding the suggested 3:1 R/R stop.

NSL- SOAPSC before reaching the first price target. However, this one may still have been profitable as NSL when factoring in the dividends paid as this was a high-yielding Growth & Income Trade idea.

ANR- Hit T1 for a 13.3% gain on Aug 19th & then reversed to be SOAPSC.

NLY- Technically, NLY should have been considered stopped out when it failed to close above the most recently highlight uptrend line last Friday (see previous notes). The stock is now trading back above that level and still looks ok from a long-term perspective for those who prefer to continue to hold this high-yielding mREIT. With that being said, this Growth & Income, Long-term Trade idea will be moved to the Completed Trades category at this time. NLY hit the first profit target back in February, so far falling just shy of T2 (the final target) and the total gains on this trade, if factoring in the 11-15% dividend yield over the last year, has more than exceeded 20% even to this point. Again, NLY will be considered completed at this time although any growth & income investors wanted to hold might consider a stop just below the recent (Oct) lows.

PWE- SOAPSC (close below 7.40) before reaching any profit target.

VHI- Hit T2 for a 40% gain on Aug 22nd & moved slightly higher before reversing an exceeded any reasonable stop.

WLT- Hit T1 for a quick 14.3% gain before reversing & exceeding the suggested stop of a 3:1 R/R.



Oct 092014

In that past I’ve discussed using the 20/50 ema pair as a tool for helping to define intermediate-term trends in the stock market. On Tuesday of this week, that moving average pair triggered a death-cross (20-day ema crossing below the 50-day ema) on the S&P 500 Index, providing a relatively infrequent sell signal. As with any indicator, this moving average pair is not perfect but as this 7+ year chart of the $SPX illustrates, you’d be hard pressed to find a more simple, yet effective way of defining intermediate-term trends (i.e- trends typically lasting weeks or months).

Once again, this indicator, like all, is subject to occasional whipsaws (brief false buy & sell signals). In fact, the last time I pointed out a death-cross on the 20/50 ema pair was back in early February. That signal proved to be a false signal as it came just on the heels of the January correction with the 20-day ema only trading below the 50-day ema for 5 days before crossing back above. The only other whipsaw signal in the pair over the last several years occurred back in early Sept 2013 with the 20-day trading below the 50-day for just 4 days. Neither of those two previous whipsaw signal would have inflicted much damage to those who positioned short on the bearish cross, had they covered that short position on the bullish cross just a few days later. The 20/50 ema pair also works very well on other US stock indices such as the Nasdaq Composite & Nasdaq 100, both of which have yet to signal a bearish crossover but are poised to do so such the markets move much lower, as expected.

$SPX 50-20 ema trend Oct 9th

$SPX 50-20 ema trend Oct 9th

Oct 082014

The SPY found support on at the Oct 2nd reaction low with relatively minor bullish divergences in place on this 60 minute chart. As of now, the bearish case & near-term downtrend in the US equity markets remains solidly intact despite this post-FOMC minutes driven rally. The release of FOMC minutes often causes sharp market reactions which are more often than not reversed shortly thereafter. As has been widely expected, the Fed has begun to “jawbone” down the $USD in today’s release of the FOMC minutes and the impact on commodities & the mining stocks has been very direct & impulsive so far with GDX blasting above this 60 minute downtrend line in addition to the late Dec 2013 previous lows. While it is probably best to let the dust settle before making any major changes to positioning today, everything I see still points to the dual-theme that I’m positioning for into year-end & likely well into 2015: Equities down, commodities up.

Quite a corner the Fed has boxed themselves into here: Let the dollar keep soaring and the economy will eventually start to suffer from the effects of a strong dollar -or-  Put the brakes on the dollar & commodities will start to rise, thereby rearing the ugly head of inflation, which of course, will force their hand in raising rates… (which will also stifle economic growth).

Oct 082014
MCP 60 min Oct 8th

MCP 60 min Oct 8th

The MCP (Molycorp Inc) trade has now hit the 2nd target for a quick 16% gain. Consider booking partial or full profits and/or raising your stops if holding out for any of the additional targets. Although the price action on MCP has been very bullish since the breakout, I have yet to see the other rare earth stocks that I follow acting bullish. In fact, MCP is the only stock in my rare earths watchlist even trading positive today and therefore, I am more concerned with protecting gains by tightening up stops and may change the final target to this trade to T3 (1.70) & might possibly close the trade before then unless the other rare earths start to catch a bid very soon.

Oct 082014

A quick look a some of my favorite agricultural commodities, along with updated price targets. The scope and duration of any rally in the commodity sector will likely be commensurate (and dependent) on a reversal in the US dollar index.

Oct 062014
MCP 60 min Oct 6th

MCP 60 min Oct 6th

MCP (Molycorp Inc) has hit the first target for a quick 7% gain. MCP was posted as a Long Trade Setup on Thursday afternoon & went on to trigger an entry on a break above 1.37 later that afternoon. At this time I’m only viewing MCP as a quick oversold, counter-trend trade based off the intraday chart although the stock is starting to exhibit some early signs of a possible near-term 0r better bottom in this low-priced, rare earth stock. If I continue to see bullish developments in both MCP as well as the rare earth sector, MCP has the potential to morph into a longer-term trade with a target of at least 2.40.

Once again, unlike most of the trade ideas posted on RSOTC, I have only listed the actual resistance levels on this 60 minute chart vs. the suggested sell limit level, which are typically set slightly below the actual resistance level in order to minimize missing a fill, should the stock reverse just shy of resistance. As of now, this chart still looks constructive & a move up to any of the next three targets (1.60, 1.70 & 1.81) seems likely at this time. With that being said, consider booking partial or full profits and/or raising your stops, depending on your trading plan.