Mainely Stocks

[shoichi]

ari

regarding this chart, http://stockcharts.com/h-sc/ui?s=CCME&p=D&yr=1&mn=0&dy=0&id=p43924118080&a=217673688

under this strategy, when is a buy signal triggered?

[ari5000]

big drop premarket:


Market rallied when on was on vacation and I was so surprised... but 3 days later... it's back to where it was before I left...

People are excited about AAPL earnings today but the best thing to do is run for cover.

Dow will be under 10,000.... again today.

Americans need to start learning to be frugal. This recession is going to stick for a long time.

[ari5000]

market drops 260 on Fri...


and weak on Monday -- that's pretty weak. Not even a bounce.

AAPL is notably weak.

Expect more pain.

[TandoorGG]

Welcome back hope you had fun vacation! Should be an interesting week. Let's see.

[ari5000]

been away....


Sorry about that. Was on vacation. Now I'm back.

Got back just in time for the fallout.

[TandoorGG]

Doug Kass thinks we have hit the bottom. He was the BEAR!! and now he is turning bull. Did you see that article on yahoo finance?

Didn't you reference him in one of your earlier posts, few months ago. Time to get in and buy??

[ari5000]

more bounce...

but these rallies in bear markets are often sharp, powerful.. and then prone to epic failure.

[ari5000]

oversold bounce today:

looks like we'll bounce on the short-term oversold conditions. Very expected. Long term downtrend fully intact.

[ari5000]

As I get more experienced...

you realize charts don't help as much as you hope they would.


Today it was obvious we were oversold... but the IBD leader names were all red, all day. Finally near end of day -- a real attempt was made to rally. I saw it... but didn't trust it enough to go long.

The other key that made me think we should rally was the $VIX which was red all day. Red VIX is usually good for the markets.

The fact is -- the economy does not support a rally. Based on everything I know... I would expect lower prices.

AMZN, AAPL, NFLX, SNDK are all still very expensive. So is GOOG and many others. The ride down is extremely powerful.

The entire economy has been propped up on ultra-low rates, debt, stimulus... and hope. In reality, people are going to have to save more and spend less. And so is the government. The world won't keep funding our overspending. It's absurd to think so. Greece and Ireland overspent for years... and they got called on it.

We're no different than Greece. We have a bigger economy that's all. But if you spend more than you produce indefinitely... there comes a time when the market will say: no more. That time is now.

It was an interesting week. Even one of the best traders I follow, Gordon Eckler (geckler) mentioned how he was having a hard time trading. It is tricky in a bear market because moves are sharp and sudden and seem to come out of nowhere... and your regular day indicators rarely work.

I made $13 today trading.

I consider myself lucky.

[TandoorGG]

Interesting chart there. Yes, bounce, when? I cannot believe the levels we have seen so far today SPX, DJI..Low volumes not a surprise. I keep hoping we must be oversold by now, time for buyers to come in. But in the meanwhile CASH is a position, I keep telling myself.

Being a trader is definitely challenging. Any recommendations on good TA sites where I can improve my chart reading skills?

thanks as always.

[ari5000]

still can't bounce...


Don't really blame the markets.

Jobs numbers were terrible. No manufacturing... no Fed trickery...

Market is going to need to drop to much lower levels to get all cash traders to nibble.

Today most IBD names are red.


Well. At least there's 4th of July weekend and good World Cup soccer coming up.



Should be a bounce coming soon... but when ?

[ari5000]

Dow chart: 1999:

http://4.bp.blogspot.com/_nSTO-vZpSgc/TCwmR6rO0dI/AAAAAAAAIwo/bk7dGUKkhtk/s1600/%24indu+Party.png

[ari5000]

Traders win... nobody else.


A guy in the chat room I follow today made $124,000 today.

How's that?

Best part -- he only had $10,000 invested -- he basically went all in long the euro -- through FOREX. He was briefly in control of $10 million euros which had it's biggest one day move in probably a year. I'm not sure what made the euro jump (and gold and the U.S. dollar plummet). Still unclear what prompted it. But it's amazing that these moves are providing opportunities like this.

I didn't quite get in on anything today. It looked terrible, then great, then lukewarm end of day. Most of the China names I used to own have been DESTROYED. It's amazing how there is no support in a bear market. Nothing but pain.

One of the best traders I follow on Twitter (johnwelshphd) usually makes around $2,000 a day. He does it so consistently. I still can't figure out how he makes his picks. He usually holds positions an hour or sometimes 10 minutes.

There are several guys I follow that make it look so easy but it obviously isn't. The main thing they do well is take a loss when the position goes anything them quickly. They're not perfect. But they never take huge drawdowns like people who are fully invested in their 401ks have just experienced.

It's kind of ridiculous to think that this where we are - Dow 9700 -- I mean, this is where it was when I first daytraded online over 10 years ago.

Well. I would advise caution still. Many people really expect a bounce here but these bears markets can go on forever.


Also, I found another great blogger. More of a newsy than trading related. Read this guy. You'll like it.

http://market-ticker.org/

[TandoorGG]

I was holding aapl 300calls, my build from last week, tried to do a swing set up for the earnings play. Since, aapl dropped so much Tues, I decided to stop out of my position. Should know better than to do swings in this type of environment. I thought, surely aapl will be fine. Lesson learnt.

I agree, it is hard to determine whether we are done going down and are on the next rally up. 1040 is the no, I kept hearing and we closed at 1041. Lets see what today brings.

[ari5000]

And back to 100% cash.


Took huge beating trying to play around with 'value' names.

No more.

Need to take a break, reset. Rethink.

I'm just not the smartest or quickest player out there to compete with the pros.

The market is a deathtrap.

A steep drop -- even from today's levels... would not be unprecedented. It has happened many times before. Especially in the mid 1930s when it became clear govt. stimulus could not replace an economy based on true supply/demand.

Good luck to all. And hopefully I'm just wrong and this is the real bottom.

[ari5000]

today around 9:00 AM in the markets...

I knew we were going down big time.

How did I know?


I have all those momo names on a watch list: DECK, NFLX, AAPL, AMZN, VECO, SNDK... etc.


well... they were all red. AAPL was green for a bit... but that was it. But they all went red and I knew the market was going to trend down all day cuz the momo funds were not buyers today.

I did buy a few really cheap value names like CCME (again), UTA, BOLT. Nothing is going up. It's dangerous again.

yes... there will probably be a bounce soon. My thinking is: market gaps down tomorrow and really scares everyone -- but that is really a buy signal. But the rally won't go far.

Too many problems. Market needs time to heal and Bernanke ran out of magic bullets.

Market needs GOOD NEWS and there's none to be found.

[TandoorGG]

Would you go in with smaller segments in this market then? Do you think market is oversold now?

[ari5000]

need to be 2 steps ahead:


This morning housing numbers showed a 33% drop in new homes sold. It was the "worst number since 1963".

So you sell right?

Ha ha.

Market does not pay you for being obvious.

And as I write, the home builder ETF, XHB, is .... yep up 15 cents at the moment.

Yes the market is down, but now it's climbing up. And in fact, there appears to be strength building as the day continues... on horrible data.

No doubt this market continues to surprise a lot of people. I was bearish as well but noticed around 11 AM the signs of huge selling just weren't there.

Too many leader stocks are green now. Now if only I knew what happens next.

[ari5000]

holding BRCD:


BRCD is up 3 cents while the markets are down. I see a very constructive chart. Someone likes BRCD at 5.50 --- it is still a buyout target. This is the kind of thing you like to see. On weak days, you can definitely tell which stocks really have support.

Other leader type stocks holding up are: LVS, CF (value name, worth watching), FFIV, NFLX, VECO, NTAP, SNDK



I also like CCME a lot and think it's a great buy down here. For various reasons, it's being taken down but is near major support. And entry at 11.30 may be ideal.

[TandoorGG]

Ari,

I am reading! So, thanks for your posts...Gunjan.

[ari5000]

reversal day:

could turn ugly but I am holding BRCD:

http://stockcharts.com/h-sc/ui?s=BRCD&p=D&yr=0&mn=9&dy=0&id=p93425017556

I like this chart and the fact that it stayed green all day.

I ended up selling some CCME at 12.20 -- then buying it back at 11.69 near the end of the day. That stock only goes up for about an hour these days...

[ari5000]

talking to myself about Yen:

http://stockcharts.com/h-sc/ui?s=FXY&p=D&yr=0&mn=9&dy=0&id=p48665212384

Not sure if anyone is reading here anymore but these posts help me as much as anyone else.

First: Read "The Quants" --by Scott Patterson -- It'll explain a lot about why the market moves the way it does.

Basically, you've got a bunch of big hedge funds that buy momo stocks -- and they tend to act like a pack of elephants.

One of the most important elements of a strong risk appetite is the Japanese yen. The bubble and bust was fueled by the 'carry trade' -- hedge funds can juice their profits by borrowing yen due to ultra-low rates, and go buy... whatever and get a better return. Then yen hit bottom during the flash crash but take a look: There's the yen back over the 200 day MA -- not since late March have we seen that.

It was clear to me last week the elephants are back. The market was moving -- lead by ultra-momo names... AAPL to all-time highs, but NFLX, CREE, DECK, SNDK, BIDU, CRM -- super growthy/expensive big cap names were dominating.

Now it appears we have a major gap up in store on Monday fueled by China currency intervention. Yessir, if you wait for the news pundits to say its a bull market, it's probably over. But several technical analysts I follow clearly changed to modestly bullish last week.

I have been dabbling long but have been far too gunshy to take advantage of the recent move. I did buy back a large position in CCME... but it's a small cap China name and it has not gone up. (But at least I'm long.)

I'm also holding some BRCD but that too has not done anything.

What is important to understand is, there are big funds on Wall Street and they are HUNGRY, no, STARVING for alpha, or performance. They need to find some place to put their money to work. If these guys smell momo - the market is going to rip and it's going to be 'unreal'. Most people will not believe it for a second. And they probably shouldn't. But that doesn't mean it's going to stop.

Most indexes are pinned up against their 50 day MAs but these may get broken at the open and that's going to send a big greenlight signals to everyone sitting on cash -- and the shorts are going to be in panic mode at the open. So you've got an extremely bearish sentiment competing with what will be a triple green light open.

I got a feeling tomorrow is going to be a banner day for some... and quite painful for others that were leaning the wrong way.

Thing is, tomorrow's rally may just be the start of a big upmove, not the end as many will still assume.

Good luck and happy father's day to the dad's.

[ari5000]

Dr. Wish goes long:

http://wishingwealthblog.com/

You can read a purely technical trader here has now gone long based on technical signals.

Of course, if this is a whipsaw... it'll end badly. You never know. As a technical trader, you live and die by your signals.

[ari5000]

very interesting day today.


check the 2 month SPY chart:

http://stockcharts.com/h-sc/ui?s=SPY&p=30&yr=0&mn=1&dy=20&id=p68054973659&a=196000731

Pretty much explains everything.

[ari5000]

chessnwine: 20% long

http://ibankcoin.com/chessnwine/2010/06/15/get-your-hated-rally-caps-on/

good to folllow him.

Quite a few people I know are going long selectively now. But prepare for pain at any moment.

I sold some XIDE today in the managed account near 6.00 today.

[ari5000]

my chart: May 25

http://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=0&mn=9&dy=0&id=p51532920683&a=191081970

Sometimes, I'm a genius and don't even know it.

Noticed my post on May 25th. How do you like that for calling the bottom? Now all I need is a time machine.

[ari5000]

needless to say...


that was not a bullish finish.

[ari5000]

chart of the day:


SPY --- 30 day chart (each bar is half-hour period)

http://stockcharts.com/h-sc/ui?s=SPY&p=30&yr=0&mn=0&dy=20&id=p75416166037&a=196000731

Look at where the indexes topped out today. almost too obvious...

[ari5000]

rally time but:


Greece downgraded to 'junk' status

As a technical trader, you must ignore all news and trade what the charts say... but my heart isn't into going long. I just can't do it.

I bought some ERY and got stopped out (bearish oil ETF), I bought some DJSP and it was up 11%. I sold both and made a little money. But I just can't commit long here.

It's a bullish day though. NFLX to new highs at 127. Talk about a ride to the heavens.

[ari5000]

what I'm seeing:


Quite a few small cap China names look like they might run.. Stuff like YONG, RINO, GFRE.

The thing is -- the actual ticker is not going to matter much. If we have a little throw back rally here, they're all going to move up. That's why I'm a little interested - because the markets pretty much work like a mob. If we're in rally mode then they all run.

My feeling is that there's a chance for a very sharp rally here, just enough to get people's hopes revving, and then it dies just as 'we've turned the corner' stories hit maximum on CNBC.

The low volume makes it easy to push stocks but eventually, when everyone tries to sell at the top... well, they can't cuz there's no volume to absorb the sellers.

A few notable stocks that have already hit new highs are names you know. Netflix! and the best of retail - DECK (think Ugg boots. Or is it Uggs? They're uggly is all I know.)

I'm not sure how a sustained rally occurs here with no jobs, no consumer spending, huge foreclosures on the horizon and sovereign debt issues weighing down for years. But the markets can easily do a little flurry for a few days and the technical picture is suggesting we get a little hope and awe campaign.

Otherwise, Monday is going to just gap down and forget everything I just said.

[ari5000]

constructive day:


markets rally on no volume since everyone is watching World Cup. SPY closes above 20 day MA. It almost looks like this is day 1 of a new uptrend. But perhaps I'm jumping the gun.

People are going to grumble about low volume but the last time I remember a rally emerging from the dust... it always runs on low volume at first. It's not a big sign of weakness.

Leadership was everywhere: RIG, CMG, AAPL, SNDK, even BP is going up. Small caps were great.

2 stocks were up for every 1 down.

Crossing above the 20 day MA for SPY and QQQQ and finishing at the highs changes the technical charts quite a bit.

I was talking with a trader who was short from two days ago -- he watched the markets melt up and finally closed at the highs -- taking a big loss. Many people are now thinking the markets can only go down. People are anchored in the short term past. But a rally can emerge at anytime. The past is irrelevant.

coal and steel sectors also regained 20 day Moving Averages. Bearish sentiment is at extreme highs (which is bullish... )

I think next week is really going to set the stage. Follow through next week is going to be met with huge buyers as they realize things are moving up. Otherwise, it'll be a spectacular failure and selloff. So it's a bit scary to just go all in.

I'll see what all the bloggers are saying this weekend. I imagine some people will be cautiously bullish now. We shall see.

Nice to see XIDE really push higher. That's one I do hold for managed account.

[ari5000]

today: Retail Sales # Ugly:


And the 2nd best day of 2010 is met with a massive wave of selling as reality trumps hope.


Best charts are still FXI (China) and EWZ (Brazil) -- they both climbed out of the basement and regained the 20 day MA. But they're not going to simply rally on their own.

Still, I think this is a sign that when a rally one day does materialize... the big winners may be in some foreign names rather than familiar ones.

[ari5000]

current thinking: no confidence


I bought some CCME and CNAM yesterday... during today's rally they didn't do much. I sold both for a total loss of four bucks. Both are now trading even lower.

Really is silly to hope people will regain confidence too early. Confidence is gone.

Although there are constructive signs. We need more.


What is working recently (like the past 5 days) is oil -- but you had to have gotten in just when it bottomed to profit from it. If you bought it anytime in April or beginning of May you still have a big loss.

Every afternoon seems to bring in heavy sellers... It's a market bound to disappoint you right now. So don't get involved, at least not with size.

That said, today is a very good day for the markets. Best in weeks. I just don't know if tomorrow we end up giving it all away again.

[ari5000]

May 25 lows still the bottom:


Just a quick thought -- the market bottomed on May 25 and it still has not moved below that level. Today we are gapping on everywhere. Led by BP (!!) up 10%

Once again -- another constructive sign down here in the pits.

Best commodities last month were Natural gas followed by sugar which is gapping up again as well. SGG is going to pay out.

[ari5000]

Keep reading chessnwine:

http://ibankcoin.com/chessnwine/2010/06/09/two-headless-horsemen/


This guy continues to offer great blogs each day and really helps you develop your understanding of charts and how to use them to get an overall feel for market conditions.

[ari5000]

FXI China chart:

http://stockcharts.com/h-sc/ui?s=FXI&p=D&yr=0&mn=9&dy=0&id=p02123850879


Today's another lesson in why being early is the same as being wrong. What's the rush in getting long in a bear market? All rallies end in failure and pain.

That said -- FXI did a fantastic job of not fading to red like the U.S. markets. FXI looks like it wants to start a new uptrend but I doubt it'll do it all by itself. China said exports are up 50% -- China does not have the same kind of debt issues as most countries in the news... But China is not about to be an oasis in a global storm. Still... it was nice to see perhaps half the small cap China names I follow finish green today.

The NYSE and AMEX had more advancers than decliners today. (Nasdaq didn't) - So a bit more interest in small cap names today.

BP is heading to zero. The smartest people I know are short BP to zero. What a laughable company. Tragic.

If you're holding 50 - 100% cash in your account (and I hope you are), keep holding. These rallies will occur frequently because markets don't go straight down. But they don't last long either.

[ari5000]

OIH chart:

http://stockcharts.com/h-sc/ui?s=OIH&p=D&yr=0&mn=10&dy=0&id=p14609128410&a=196157122

Bullish candlestick way down here. Watch to see if base forms.

[ari5000]

Where will strength emerge first?


http://stockcharts.com/h-sc/ui?s=FXI&p=D&yr=0&mn=9&dy=0&id=p56767758354

I'm definitely watching China a little more closely. Yesterday FXI closed above its 20 day MA -- that is quite an accomplishment considering the rest of the markets.

One 'tell' a few gurus are using is FCX -- a copper company. If copper is in demand -- then the global economy should be doing well. Yesterday FCX started the day strong even when the indexes went red. Eventually, the sellers ran out of strength and a rally took over. FCX is a leading indicator these days.

This morning, FCX is strong again. And the Shanghai index had a great session. So it may be early... and I don't plan to jump in there right away... but always be on the look out for strength or at the very least, stability.

The unusual thing about yesterday was that tech was really weak but the industrials were strong. So the next emerging leaders may be a completely new set of names.

With offshore drilling in the pits... I have to think at some point oil prices are going to rise much faster than anticipated... and anyone controlling energy assets is going to see a sharp rise in value...


And I especially love the fact that the commodity rally yesterday was lead by my new friend... sugar

http://stockcharts.com/h-sc/ui?s=SGG&p=D&yr=0&mn=9&dy=0&id=p82180939089

This is a beautiful chart. With the 20 day MA now starting to curve up... this is exactly the kind of multi-month holding that could make you 20 - 30% if you buy in today. I would recommend a small buy of SGG right now based on this chart. I own a little. I may buy more soon.

[TandoorGG]

Love that idea of holding cash as position..I agree with you in bear market, you cannot win even with value stocks..

[ari5000]

Recap: Best ideas --


again, looking through all the experts I follow: Holding 90 - 100% cash right now has been, and remains the best strategy. You cannot beat a bear market with value names. You cannot beat it period.

A few experts like gold, and own GLD for the time being.


I continue to try to trade short term moves and it is mostly frustrating and unrewarding. Save your money. There will be a time to invest again. Just not now.

[ari5000]

How much is the casino being gamed?


http://valuehuntr.com/2010/06/03/exploring-latency-arbitrage/


Read this. You'll realize the things that go on on Wall Street are just.... a little hard to comprehend... and see just how outclassed the retail investor is.

[ari5000]

needless to say:


massive problems still being priced in, 'V' shaped recovery being priced out.


Consumer credit numbers were a huge beat today -- and the market still got killed. When the market hears great news and sells anyway -- it's a bear market. It's why the news NEVER matters, only the market's reaction tells you what you should be doing.


That said: Market is very over sold and the market has rallied twice before from these levels. So there may be a rally from here. But I wouldn't hold for long.

[ari5000]

short term support lines still work:

Futures were down big last night but now are back up -- people are confused how this market dives and rallies lately.

http://stockcharts.com/h-sc/ui?s=SPY&p=30&yr=0&mn=1&dy=0&id=p67421399321&a=196000731

But check the last 30 days of the SPY. Friday's big plummet was 3 cents away from the lows on May 27. The market remembers. And notice where the recent tops are -- 3 times in the same general area.

In general -- most indicators I see are still negative.

Here's one more guru I follow -- who I mentioned before -- he maintains a simple market monitoring system to keep him in or out of the market: http://wishingwealthblog.com/

[ari5000]

gurus:


Again: check the links in the I-box above. Click 'show I-box' if you can't see it.


People I really respect at the moment:

http://markminerviniblog.blogspot.com/

http://ibankcoin.com/chessnwine/

[TandoorGG]

Do you mind sharing which gurus you are following?

thanks,

[ari5000]

cash wins again!


I had tried shorting several times yesterday to no avail.

Left a short in my managed account (ERY -- 3x inverse oil).

Believe it or not, my mom actually made over 2 thousand dollars today with the markets down over 300 points... a good sign following the gurus that I do can at the very least, minimize the pain of bear markets.

She also had a boost from SGG -- sugar prices are rising. Why? I really don't know. Just like the chart.

[ari5000]

value player update:

http://www.oldschoolvalue.com/portfolio/portfolio-update-2010/?source=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+OldSchoolValue+%28Old+School+Value%29&utm_content=Twitter


OSV is a true value investor -- but a little technical trading would have helped. What excellent picks to be up 12% just a few months ago... but now it's all gone and he's down 3.3% for the year.

You can't fight a bear market, not in value names, not in anything.

[ari5000]

total confusion:


Most of the people I follow are very confused right now. Some see signs of a bottom. Others are not so sure. Most are still mostly in cash. The thing is -- if an uptrend emerges, it's not necessary to get in on the ground floor. You can start from the 2nd floor, ride it till the 8th floor, watch it go to the 10th floor without you, and back down to the basement (also without you).

I see some encouraging signs but this chop is not providing much direction. I notice FXI is the first major index I see to get above its 20 day MA but I'm not sure it'll hold since that moving average line is still sloping down.

I think the market needs more time to base. Too much indecision. Many traders aren't willing to put money in the markets and keep it there.

There are leadership names though now -- AAPL and a few that are not so familar -- BIDU, VMW and CMG.

Two very positive reports came out from JOYG and XIDE (I own this one). So if you're a bull, there is at least enough to generate some level of confidence.

[ari5000]

article on sugar:

http://seekingalpha.com/article/207165-sugar-the-uncrowded-commodity-trade?source=hp_wc


In general, this website does not have the most in-depth analysis.

Strong hurricane season = lots of rain = good crop. So sugar may not rise any time soon. But long term, interesting story.

[ari5000]

I'll check my experts but...

I have a feeling a few of them are going to see bullish signs after today. I have a memory of when I first started trading -- back in 2006 -- the market was sunk into the pits. It was around July. Everyone knew the market was going lower. Then there was a big dip and the next day, the market rocketed 250 points or so -- just like today and nobody saw it coming. After a bit of chop, the market rallied for several months and everyone was dubious and skeptical... the whole way up.

Today felt just like that. Everyone will be skeptical at first. But today was an enormous blast of bullish firepower. We shall see what happens next.

The fact is though, being in cash was definitely the right decision. Stocks like CSIQ and XIDE which I bought today are much lower than I would have ever imagined. XIDE was up 9.5% today alone -- and it's still way under 5/share -- and I think it's fair value is around $7.50.

It's very easy for small caps to rally from these depressed levels if today's move holds.


Today may mark a very big shift in sentiment. We shall see.