Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
S2:One more Q about "TRMB", The May $20 calls are from .35 to .50 now...but the bid price is around .40...do you want me to sell the calls on tomorrow or hold/wait to the end of May? Thanks!
This chart is showing the market is about to turn:
When it does and the MACD turns neg, then it's time to start buying out of the money puts.
Anyone trading my ES trading 'system'? What a champ it is!
It's an ATM machine.
Remember, plot a 10 period EMA AND SMA. Make one a different color than the other. Then, when the ES trades north or south of them forcing the EMA to cross above or below the SMA, buy/sell on a retrace to the SMA. If it's a cross below (EMA crosses under the SMA), then SHORT the ES when it pulls back to the SMA (or within a 1/2 point or so - just use your judgement)
The reverse is true.
You get at least 3 a day. That's 3 full points a day. You don't take the the trade if the price jams way below both and then pulls back. Use your judgement on that situation.
it wouldn't be out of the question to see it go straight up to that 940 to 950 level to the 'neckline'. But it's totally obvious that the market is losing steam. Right now because the chart is so clear as to the setup here and the cycles coming, everyone (in the biz) knows that most likely this will turn out to be a large inverse head and shoulders. So, because just now that's becoming the most likely outcome, large short positions are being cleared out which gets you that final spike higher when it appears there's no reason for it.
So, pay attention to how we trade right around here. It could be the end of the week or next before it starts moving up again. Op-ex this week could skew some of that. INTC reports tonight and that I think will have a neg effect on the market because it's been the semis that have led this entire thing. INTC I think pours cold water in the face of the hypesters and brings everyone back to reality of what's really going on.
If you look at the chart above, you'll see that there also exists the possibility that we fall now in what would be a declining inverse head and shoulders. That's a very real setup, too. If that were to happen, then for sure we're making new lows.
syn you think a pullback is in order here to complete the right shoulder?
then a move to 950 ish before a major fall?
Tommorrow after the close, INTC reports earnings and the stock looks like it could really go either way. $16 looks like a major breakout point that's held the last 3 days. However, it looks like a possible rising wedge, too. With the indicators a bit overbought, could fall. But with the way the market has been, it could break that $16.20 level.
S2: Got it, Thanks! Placed the order already, let's see what happend tomorrow, may have to change the price... thank you again!
MRVLREADER -- DON'T DO THAT SHORT BRCM TRADE. I think it's going lower, but don't go in that big.
Instead, look at PDC. I was reading a seasonality thing tonight and PDC came up as a stock that moves up 9 out of 10 times in April through early May going back years. You can only buy the $5 calls. I'm looking at the May $5 for $.20 or less. Might try a bid in at $.10 tomorrow for a couple hundred. Maybe risk $3k. If it goes to $6 ($4.50 now), then that's a $15k profit.
All of these oil and gas stocks have the same chart. All of them from APA to HAL to APC to BHP, to PDC. They are all the same. They are all looking like they've been basing and ready to explode higher. I'm thinking of buying 1 year LEAPS 5 strikes out on each of them. Could be multiple lotto tickets.
Oh, also TRMB has a big seasonal thing going this month through May. It also looks like it wants to move up. At just under $17 now, it looks like it could fill the gap to $20 and then run to $23? Possibly by the end of May. The May $20 calls are .35. If the market does a spike here to the end of May, then TRMB could easily run to the $23 area or Dec swing high. Those would jam to 3 or turn a say, $2500 investment into $37000.
Will it? In this market, anything could happen.
At the time it looked like it was a bad move. But as the market works, you have to change with it. But I still think this is a 4th wave that will/could end violently to a retest of those March lows.
Remember my post the other day about how the MMs now are going to get even or even profitable on all that stock they had to buy on the downside.
too bad you told everybody not to touch apple at $80....:)
too bad you didn't get them when the thing was at $250 last month!
Okay, here's the 'way things should go' over the next year ---
This comes from both Moe Ansari and Tom McClellen (i heard him today on a radio interview):
Moe stands firm we see a May top and then a slow drift into summer (sell in May and go away) with a final last bigtime selloff in Fall. That ends the bear market to give us a final low which will either be a lower low or a higher one than the 666 SPX low. In either case, this current rally is about to end.
McClellen says almost the same thing. I found that interesting. He says his occillator has never had a higher reading than it did on Thursday. That doesn't neccessarily mean it's a top, but it does suggest there's more room to run in this leg up. However, the upside he thinks is limited because although the 1500 point move in the DOW has been impressive by itself, he thinks based on the internals, the market should be well over 9000 on the DOW and especially 900 on the SPX now. The fact that it isn't tells him there's actually distribution going on. (selling high volume into the buying). But the overall volume is not only weak, it's been drying up on this continuation.
He's also telling of a major ugly selloff in Nov/Oct.
Now, I was doing some research last night on these solar stocks. I showed you guys the charts the other day and how they are all clearly appearing to be breaking out of the long term downtrends. They appear like they are on the verge of a big breakout. LDK and SOLF especially. When you look at their charts, they look like lotto tickets down here. LDK in particular was a $40+ stock just last year and now breaking out at $8. The problem? They have been selling shares bigtime via secondary conversions and preferred sells. They did a secondary with preferred stock that converts each of the shares to 25.4 common. That added up to over 40 mill shares. I assume that has a lot to do with the selling.
So, stay away from those. They might actually run on these apparent breakouts, but I don't like the fundamentals to risk it.
So, what to do? I think BRCM is a monster short here. It's weekly chart is above the upper bollinger band, 2 period RSI at 99! and on almost every time period chart, hitting the upper regression channel line. I am going to buy straight out May $30 puts on Monday for as close to $7 as I can get allowing for a great short entry with no time value. Goal will be a buck or better profit.
I'm also looking at SYNA. That's a rolling collar setup. Why? Well, you can't short it because 50% of the float is already shorted. Can you beleive that! 50% of the 40 mill shares is shorted. Talk about a setup. They make the touchscreen stuff in AAPl's toys.
I'm trying to figure out the best way to play that.
The trade here will be to watch the $NYSI and $NASI daily charts (i'll post) for a reversal with the MACD turning south. That will be the confirmation of the next leg down. Right now those summation charts are bigtime overbought. (well, you don't really call them overbought, they are simply measures of the breadth)
But they are in very high levels setting up for big reversals.
If played correctly, there could be some big money made these next few months.
i am short skf with puts to $36
S2 Sometimes hard to follow all these wave counts and abc's.So that i am clear if we break 1200 on S&P in May the 5TH wave will not be drop back to 750 or lower.I'm hoping we do get sell off since i never took any long positions for long term as expecting the pullback as you suggested we would have.Just building account on daytrades to take advantage of future lower prices.Or did i miss the boat.Hard to tell with all the noise we get from all the "experts"on CNBC.I value your opinion.THANKS.
Okay, notice the SPX broke out today (chart above). What does that mean? Well, technically money should start flowing into it for pure technical reasons and I have no doubt that the index runs into the 900s. However, it needs to break 1200 in order to break the current weekly wave count which is predicting a 5th wave move beginning in May.
Now, I have found three stocks that I am going to focus on.
LDK
SOLF
and the big one I think has huge potential is ILMN. Both LDK and SOLF are under $10 with ILMN at $35. Why ILMN? I ran into it today by accident and was reading all their past 10qs and WOW what a potential. What's even more interesting is it's bouncing right now at the 50 day and someone today bought 1200 May $45 calls at .20. Open interest is only 1000. So, I'm wondering with a $20k investment in an option that is $10 out of the money, what do they know? Well, the chart kind of predicts that price range in the current trend if it only runs to the top of the range. Earnings are April 21st. So, it could be interesting. Low float of 100 mill with 16 mill short. Company makes DNA sequencing machines that are all but putting AFFX out of biz. Very interesting.
It reminds me of when I first got into MRVL. It's the kind of stock you can buy, sell calls and buy puts and ride the thing into a huge profit over time by 'rolling' it. The key to doing that is to use a stock that can move in large ranges but is profitable.
Thank you S2 - I did not realized that it has changed.
Look at this chart of the Nasdaq summation index --
Notice the higher high (way higher high) BUT with a lower high on the MACD. NEGATIVE DIVERGANCE with the summation in near record high territory. Screams for a larger pullback anytime.
Now, listening to Moe's show tonight, he's putting out this point --
If you look back at 2002 to 2003, you'll notice what happened was we got a low in Oct, then a retest (higher low) in March, then blast off.
Many are predicting the same here. However, as Moe pointed out, the wave counts are completely different this time as is the fundamental backdrop now compared to then. That bull market going into 2000 was led by a rush into tech for no reason other than to be in it. That was the selloff backdrop. Now, it's completely different. Now, it's led by a complete lack of capital/credit which as we know is the foundation of this economy. Face it, very few can afford to go out and buy a car or home or other large purchases like appliances/furniture for cash. They finance it. That is hard to get these days. Even in 2002 and 2003 credit was never a problem.
So, here we are in April after having a lower low made in March off the Nov lows. The problem? The wave count says (weekly) we're simply in a wave 4 now. (correction off the wave 3 decline into March 9th).
The next major cycle date high is in May. That implies we bounce around here right under resistance for the SPX (look at the chart above and that downtrend line we have yet to break (a break over 845 would confirm a new leg up)) and then sometime in the next 2 to 3 weeks break it for a final push higher to complete this wave 4.
Then what? Moe thinks that in May, many large investors will stop and take a look around and judge how the economy is recovering - if at all. Is the stimulus working? So far it doesn't seem like it is because most of the money that congress spent or is spending is on pet projects/paybacks/payoffs to donors of their party, not stimulus.
If it appears nothing is working, then watch out below. He seems to be convinced we're headed for a final wave 5 down into Oct/Nov taking out the lows taking the DOW into the 5000s. But that's all predicated on the stimulus not having any effect as companies report nothing to back up that things are getting better.
Many are pointing to the fact that stocks have been going up on bad news. Stocks like BBBY, RIMM, and others that obviously are just too shorted.
So, most likely we bounce around here for awhile and then push higher into SPX 900s. Then it gets dicy.
Remember, 'sell in MAY and go away'. It most of the time works and considering we just ran 1500 points in the DOW and probably have a little more to go, that will be more true this year than any other.
Level 2 is pretty useless now because of ECNs that allow you to hide your orders. Back in the old days (before 2003) if you had a large order and you put it up for sale for example, it would show on L2. That would allow daytraders to see that and basically infer that with such a large order for sale, the price most likely would go lower. That set up a scenario where daytraders/hedge funds could step in front of that and lower offers in front of that order.
That's basically the idea.
Now, if you have say, 500k of BRCM to sell, you place it with an ECN (electronic communication network) like the Island book or ARCAnet or the other big one I can't think of the name right now, your order is 'hidden' in that it will only show 100 shares at the current inside price. That means that it's nearly impossible now to determine much from the level 2 quotation system without really paying close attention to how the orders hitting via time and sales are affecting the current offer. So, if you see 1000 little 100 share blocks hitting the current inside bid which only shows 100 shares, but that MM at that price doesn't budge, you know something is up.
So, you're stuck with price charts.
S2 - wonder if you can help
Level II - Learning to read the tape
I have tried to find good sources to learn how to read the level II or the time and sales screens. Some people I have talk to mentioned that there is no documents out there to explain this - but that there are more "internal" documents with brokers or highly experience traders.
Does anyone have any good source available that would like to share?
Thank you
SHORT DLTR AND AEM.
Or, buy the May $42.50 DLTR put at $1.80
S2: Please take a look the SIGM chart below. Is it much better than before to get in? Thanks!
http://investorshub.advfn.com/boards/board.aspx?board_id=11430
Regarding SOLF, wait for about 3.50 or so.
TRADE ALERT!!!!!!!!
LOOK AT THIS CHART!!!! BUY IT NOW!
S2 - any good source that you recommend to understand how the MM affects the market. Thanks
All those stocks I said to short did very well today. That aside, here's the way to play the market --
Options expiration is 2 weeks away. Here's the problem right now going long into it -- TONS of calls have been bought by people trying to get even using this rally. Of course it could keep going up. But the most likely result will be that ellusive pullback in a wave 2 to wipe out many of those long calls.
You see, the market has a mechanical thing to it that many don't understand. The biggest one is how market makers and specialists play. If you want to be a market maker, you are required to be a 'buyer of last resort'. Well, this last decline was the mother of tests for these firms. They had to be buying all this stock that was sold to them in the freefall. Well, now it's time to get even. They know based on their trading books what the real short interests are. They now are going to jam those short positions forcing them to be forced buyers which means buying their stock they bought all the way down now all the way up.
So, there's a little game that's going on right now where the MMs get to make money. So, don't be suprised to see the market go higher than you think.
The same holds true for those who sold calls. Many of those are now in the money. Well, MMs don't like that. They are short those positions. So, it's time to kill 'em. Today was a distribution day in the market. With 2 weeks to go, expect more of them to kill the time value with the big selloff days to be next week.
But use that as your long entry into the market. I'll have speciifc stocks to use.
Hey, thanks for that. I didn't know his shows were saved. I only could listen to him when I had my computer on at 3 each day. I'm normally done with the day by 12 or 1.
It's not an issue of whether or not it works - it's a fact. Like I said, you get an average price by using the difference between a high and low. That means you need a 'low' price to get that average. Thus, EVERYTHING reverts to the mean.
S2: Please find Gary's website below which I told you this afternoon:
http://www.businesstalkradio.net/weekday_host/Archives/gk.shtml
Nice charts S2. I've heard the same thing about reverting to the mean when it comes to commodities. I see no reason why it wouldn't be true for stocks also. JMHO
It works, doesn't it? Just watch. That is a monster warning sign. When the EMA is moving down below the SMA - undertanding what the EMA is screams out at you that something is up. The beauty of that as an indicator is that it's nearly impossible to see in the charts unless you really look closely at each candle and how they each close compared to the previous ones. The EMA/SMA crossover does it for you automatically.
Personally, I think the reason for the gaps is obvious. Too many short with obvious double risk of both losing your short profits and seeing each resistance level break forcing all the quant funds which trade technically to come in.
But don't be fooled!
I know it's 1999 all over again with Cramer (who at SPX under 700 re-affirmed his 'get all your money out of the market if you need it in the next 5 years' call). This rally is indeed different in breadth than the previous ones. The last one was from Dec to early Jan which took the SPX up 200 points in 4 weeks or so. We're now up 170ish in the same time with absolutley every indicator overbought.
Like I said, I don't really put too much into most indicators because they are mostly lagging and stay overbought. The key to timing larger reversals is mean reversion and looking at these charts using both the 20 day SMA as one indicator to give you a '20 day mean average over the last 3 months' as a guide to overbought/sold and specifically the linear regression channel which not only gives you a more scientific mean average (center) but also the 1 full standard deviations from that based on my 3 month chart, you can clearly see how overbought or extended the Russell 2000 is and the specific stocks like PPG, BRCM, etc....
(remember, you get an 'average' price via a moving average or regression by trading around an up AND down price - that's why these things will pullback)
Those regression levels (the actual numbers, not the upper and lower lines) are you reversal targets.
Yea they count,but yet to see one job created yet.More people in trouble today than six months ago.
tons of gaps to be filled the other way too....
or don't those count when everyone is wishcasting the market lower?
S2 Their are a ton of gaps to be filled.Interesting how many stocks are rising and 10 sma above 10 ema,tells me caution ahead.
Can you believe Cramer is trashing his critics as having been wrong about him. Is he crazy? He's been DEAD wrong MOST of the time as proven by numerous sites that follow him and especially as shown by Stewart on Comedy Central and he's using this rally as a way to prove them wrong now? Huh? What's he smoking?
So, when the market falls again later, what will be his excuse? Why does he have a show anymore? He's made such a fool out of CNBC other than his call to get out at 10k. Stewart proved you probably wouldn't have much money left if you followed his advice over the last few years.
What a dumbass.
TNA has a gap to fill with a break below $19.75. If it starts to trade below that level, then it surely will fill the gap back to the $18s. That's when the summation line above in the SPX chart should turn south. That's the signal for the pullback. But that should be used to set up buys.
You make money on them? If so, be glad.
Another move is coming. Just not now. Look at what happened today -- the market up supposedly on the mark to mark thing? The banks didn't even really go up % wise that much. Also, what about the VIX? Still held 40. On a day like today, that SHOULD have fallen over 5 points. Didn't budge. Why? Because the big boys are buying puts hand over fist to protect these gains. That means they don't believe.
The SPX's combined earnings will still be under $70 this year. Let's say $60 the most likely number. At $60 and a PE of 12, that puts the SPX fair value at 720. At $70 and a PE of 12, that's 840. But I think everyone will think that $70 is wishfull thinking. So, either the market is currently fair valued or way overvalued. And, those EPS numbers could be as low as $50 or worse. Geez, at $50, the SPX is worth 600 or less. A PE of 12 is a gift in a monster bear market. It should be 10 or lower.
So, before everyone pulls out the party hats, keep it in perspective. The idea is that the future is brighter next year. Well, not so fast. A big problem coming down the road is the inflation genie. If we get oil over $70 or $80 next year (which is almost a sure thing) and inflation climbing over 6% with all this money they are pissing away, exactly what do you think is going to happen to the market when they try to pull it back? It's like giving a drug addict drugs to relieve their pain and then taking it away just when they get used to it. Huh? You think that's going to go over well????
BTW - Kevin Haggarty says there's a small cycle low coming in next week.
833 was the 1st swing high from the March rally point. That taken out means this isn't a new leg up but rather a continuation of the 1st wave. However, I'm with someone else that says, 'wait a minute, everyone is counting this wrong'.
This is a B wave rally off the larger first decline being an A wave down. B waves are corrections made up themselves of an ABC. So, that makes this a A of a B. Make sense? That's why we didn't get a fibo pullback.
But that's all speculation. Personally, I don't really trade that way anymore. I read Larry Connor's book 'Short Term Trading Strategies That Work' from Tradingmarkets.com in which they backtested all kinds of strategies to 1997 and basically came up with one that does work -- mean reversion.
Simply put, it's trading against the trend. The key to making it work is timing the entries. They came up with an RSI of 2 on daily charts and 5 for indexes for bottoms and 98 on tops.
But I use that only as one. The other is linear regression. The idea is the same as using extreme RSI readings being that prices can only go so far on each leg up or down before they need to pull back.
The trade is to trade for small gains the other way. Using options, you magnify that.
Here's 5 PUTs I'm going to buy tomorrow. Maybe even put spreads.
CHG
BBOX
JNPR
RVBD
ELON
Go here --- http://www.prophet.net/analyze/sc.jsp?size=468,400&pricedisplay=3&duration=3m&frequency=0&log=1&redbars=0&showSpreads=&hidevolume=1&hideevents=1&ustudy=&lstudy1=&lstudy2=&lstudy3&MA=&MAPars=&studies=CCI=14,,;LRC=100,,&scheme=blugray ----
Enter those stock symbols and you'll see how each have their prices at the upper end of that channel on the 3 month charts. The key to timing these types of trades is to wait for those extensions to get reached before even considering trading against the trend. That way you know you're not early.
Let's go with $1000 into each of those trades:
SHORT:
23 shares CHG
38 BBOX
59 JNPR
65 RVBD
118 ELON
Let's see what happens!
Oh, of course short BRCM.
ahh...mann..you got me...
scared me out of my JAN 2010 $20 calls at $6.70....
you bastid..
what happens if we take out 833 spx?
SHORT BRCM -- look at that weekly chart above!
Outside the upper Bollinger Band. WEEKLY RSI over 98!
Yeah, I agree. Picking tops is a dangerous thing to do. But one thing that stands out is this -- isn't the reason the banks all got into trouble in the first place was because of them making all their values up? IE - mark to model? When forced to accurately price everything, then all of a sudden they were worth nothing.
Now, Obama and the Dems in congress are faced with a huge problem -- if they didn't relax the mark to market thing, then the market keeps going down not allowing them to pass anything. Now, the market can go up on this fantasy again like the old days and they can cram their agenda through.
The problem? It just sets up another monster bank 'issue' down the road. This time though the market will smell it out.
This is one of the most irresponsible things I have ever seen. The Dems and Obama are acting out of pure fear. This is why you have split government.
Food for Thought
I agree that this wave could be over but I hesitate to say that it's definitely over. I actually think that the technical picture is fairly ambiguous right now. While some oscillators are bearish other technical signals are bullish. The strongest bull case is the stubborn support of the 50DMA. The last few days are the first instance in a year that the 50 day has held multiple and consecutive tests on the daily chart. There's also a catalyst for a bull move in FASB announcement on mark-to-market accounting rules tomorrow. It's dicey to take on a whole lot of weight on the bearish side until 780 is breeched. SPX can hit 870 from here pretty easily.
They will. By the way, look at this chart of the NASI (summation) Clearly hitting extended highs
That said, right now the futures are up 10 points to 819 which translates to the SPX around 823. I think it's running because of the mark to market decision tomorrow. However, I think it sets up a sell the news event for this pullback that will eventually come.
Tomorrow could be that big reversal. So, look for shorts tomorrow in the ES on extended moves.
In quote tracker, open 3 charts - 30, 10, and a 5 min chart. Open all with only 1 indicator -- regression channel. When ALL confirm together an extension move to either the highs or lows of the channels, go the other way and play it for at least 1 point. It's so safe, you can go into an all in trade. I use 10 contracts on each trade and capture at least 2 a day gaining between 1 and 1.5 points.
The symbol in Quotetracker for the ES is GLOBEX:@ESM9
Also, look for shorts on BRCM around $21.70
S2: Please check TNA Option Price in Yahoo, could not find the May $10.00 call.. only $6.00 or $12.50 on the list... Do you know why? Thanks!
BTW - I shorted 2 May $30 TNA puts this morning for $12.50. The idea is to average into them with a goal of 30 to 40 with a basis over $15.
Well, I'm not recommending the calls because of the inherent risk. I'm doing the short put way. But don't fall for this rally. today's SPX high could be the Gann angle that sets up the continued drift lower (lower highs/lows).
If we're in a 2nd wave pullback, it needs to go lower than this. Not until you get above SPX 833 will it confirm a bigger move - in which case if that happens without a pullback here, then we're still in a wave 1.
Remember, 'sell in May and go away'.
The Jan effect should set up a MONSTER selloff later this year.
S2: If we want to buy the TNA May calls, should we buy $15.00 call or $20.00 call? Thanks!
I think the SPX chart is screaming a bear flag. 740 to 760 being the target. Around that level, I'd start buying (or shorting the puts) the TNA. I'm going to short the May TNA $30 puts. The next leg up should be a 3rd wave which could take the TNA to the high $20s
Followers
|
8
|
Posters
|
|
Posts (Today)
|
0
|
Posts (Total)
|
541
|
Created
|
08/18/08
|
Type
|
Free
|
Moderator SyndicateTwo | |||
Assistants |
CLOSING THIS BOARD. NEW BOARD HERE--->>>
http://investorshub.advfn.com/boards/board.aspx?board_id=15543
S
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |