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发表于 2009-3-18 15:56
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Bear Trap in Oil Stocks? Posted by downtowntrader | 12/03/2008 10:34:00 AM | 0 comments »
I wrote an article for Investopedia on a possible bear trap developing in oil stocks. Oil stocks have been weak since I wrote it, but the bear trap isn't failed yet either. It could go either way, so if you trade any of these names, do it carefully.
Joey
Stock Chart DUG Posted by downtowntrader | 11/30/2008 06:46:00 PM | 0 comments »
Stock Chart Analysis DUG
ProShares UltraShort Oil & Gas (ETF)(Public, NYSE:DUG)
It appears to me that a Bear trap is being set in Oil stock. Many stocks recently broke down from valid chart patterns and rebounded back into those patterns. I wrote an article for Investopedia this weekend highlighting a few stocks setting up for a possible short squeeze, so as soon as it's published I will link it up.
However, I did want to post on a pattern I am seeing in the ProShares Ultrashort Oil and Gas ETF (NYSE:DUG). While Oil stocks have been absolutely crushed over the past few months, it appears that they may be ready to bounce soon. While fundamentals don't suggest a true bottom in the oil sector, the charts are at least signaling the potential for a sharp bounce higher.
DUG has traced out a very choppy Head and Shoulders top over the past three months. While it doesn't fit the typical top, DUG did hit all time highs in this pattern. It also has setup so that the neckline coincides almost perfectly with the 200 day sma for the chart. It broke the neckline at $34.50 a few sessions ago, and it looks like it would be pretty stiff resistance on a bounce back higher. Of course, being an inverse ETF, it appears the DUG is portending higher prices for oil stocks in the near term. While DUG has only been around a couple of years, it should be interesting to see what happens if DUG trades to new all time lows.
Good Trading,
Joey
for more analysis, check out downtowntrader.com
Double Bottom in FLR Posted by downtowntrader | 11/27/2008 10:10:00 PM | 4 comments »
I wrote an article for Investopedia regarding a double bottom in some construction / machinery stocks. I mentioned CAT,DE,FLR and CNH. I should be writing a lot more of these in the near future, so if anyone has ideas they would like me to look at, drop me a comment.
Joey
Videos of Trading Robot Posted by downtowntrader | 11/26/2008 09:42:00 AM | 2 comments »
Dave at Stocktickr posted a link to some videos the Trade-Ideas team created showing the trading bot I use in action. I think it does a pretty good job of showing how the bot works and gives you a glimpse into the possibilities one could create with a little work. Also, both Stocktickr and Trade-Ideas are great companies to deal with and they won't leave you out to dry like many of the other companies out there. Great Job on developing this together guys!
Joey
MACD Divergence Article Posted by downtowntrader | 11/25/2008 03:35:00 PM | 0 comments »
For those interested here is an article I wrote over the weekend regarding MACD divergences in some tech stocks for Investopedia.com.
Interesting Week Posted by downtowntrader | 11/23/2008 11:07:00 PM | 0 comments »
This should be an interesting holiday week. Citibank is at the forefront with all weekend meetings going on to decide what to do to protect them. We also have Obama announcing his financial team tomorrow and also announcing some details to a stimulus package geared towards creating jobs. I think this is a good approach by the president elect as it tackles the issue of deteriorating infrastructure and the increasing unemployment rate. I just don't know how any of this is possible without a tax increase, other then cutting back on war spending dramatically.
Another interesting cross current this week will be foot traffic at the retail outlets. Everyone will be analyzing who is shopping where and how much people are spending to attempt and gauge how bad the holiday shopping season will really be.
And don't forget the automakers begging for money.
In short, there is a plethora of market moving news this week, in spite of the shortened week, so tread carefully out there.
Good Trading,
Joey
Nice Reversal today Posted by downtowntrader | 11/13/2008 10:56:00 PM | 2 comments »
The markets had a heck of a reversal today after dipping to new lows. This has the classic signs of a bear trap, as the markets looked like they were breaking down and then reversed to trap anyone shorting into the thrust lower. Some of the most powerful moves come from these failed patterns, so it will be interesting to see what transpires over the next few days.
I'm going to be in New York tomorrow through early next week, so there will be no posts or charts. While all the signals are here for a strong push higher, you never know what the markets have in store. A lot of people think today was the low, and the markets have a funny way of proving the majority wrong. Manage your risk and be ready for anything the markets throw at you.
Good Trading,
Joey
Stock Chart ALXN Posted by downtowntrader | 11/09/2008 11:03:00 PM | 2 comments »
Stock Chart Analysis ALXN
Alexion Pharmaceuticals, Inc. (Public, NASDAQ:ALXN)
Drug stocks have been outperforming recently, and many look like they may be ready to surge higher. ALXN is one that has held up very well throughout the recent turmoil in the markets. It is very close to confirming a double bottom off it's 200 day sma which would yield a target of $50 on a breakout. It would need to get over $43 in order to confirm the double bottom, but it could also in theory be bought here as it is bouncing off the 20 day sma. There are actually a few different ways to play this chart, but the bottom line is that it is bullish looking on all timeframes in my opinion.
Good Trading,
Joey
for more analysis, check out downtowntrader.com
Obama Wins? Posted by downtowntrader | 11/04/2008 10:32:00 PM | 0 comments »
It sure looks like Obama will win tonight, but of course that shouldn't really surprise anyone. The bookies had it heavily in his favor, which makes it damn near a lock. The markets are getting a little ahead of themselves and are close to if not already tagging their upper bollinger bands. I am expecting a pullback in the next day or two and thus took a lot off the table today. Maybe the markets gap up tomorrow (futures are modestly higher) and run higher, but the risks are starting to outweigh the rewards in the short term. On the other hand, it looks like the dollar is finally ready to take a breather and this should really give a boost to commodities. Miners have been bouncing for a few days in anticipation of this and I think we will probably see gold and silver get a bounce. Oil has started to look interesting too, but some of the service stocks may not follow suit with an Obama victory.
Good Trading,
Joey
Stock Chart GXDX Posted by downtowntrader | 11/02/2008 09:04:00 PM | 0 comments »
Stock Chart Analysis GXDX
Genoptix, Inc. (Public, NASDAQ:GXDX)
Regular readers of my blog know that I love stocks trading close to all time highs. While GXDX is a fairly recent IPO, it has found solid buying recently, despite the turmoil in the markets. It has found solid support at the 200 sma over the past month and appears to be headed towards a test of the high 30's. However, this doesn't mean I will rush out and buy it tomorrow morning. Often, when I find a chart like this one that looks like it is headed for a retest and possible breakout, I try and buy closer to it's 20sma, in hopes that it will use that average as support moving forward. This allows for a tighter stop loss, and improves the odds of a winning trade. There is always the chance of missing out on the trade, but chance are that it will retrace at least a portion of the 15-20% + move from the past few sessions. The ideal scenario would be a pull back to the 20sma and a solid reversal on intraday charts, or even the daily charts. Let's see if that opportunity presents itself over the next day or two. As a warning for readers, GXDX reports earnings on 11/6, or Thursday. This may make this a tricky trade, as it may not move till after the release.
Good Trading,
Joey
for more analysis, check out downtowntrader.com
Stock Chart DLTR Posted by downtowntrader | 10/28/2008 10:16:00 PM | 0 comments »
Stock Chart Analysis DLTR
Dollar Tree, Inc. (Public, NASDAQ:DLTR)
Wow, I actually found a chart that looks decent. DLTR, and the other dollar stores like NDN and FDO for that matter have held up fairly well throughout the recent crash. They all look like they want to challenge their recent highs and if the markets rally like I suspect they will, then they should accomplish the feat. DLTR looks like it has very good support at 31 and it appears that it cleared the channel it has been using to pullback. It looks like this is an obvious play in a recessionary environment as consumers look to save money, and maybe this is the gameplan for institutional money flowing into this group. While it is extended from the lows, I'm not sure how deep a pullback it will give, so I will probably look to intraday charts for a possible entry. I typically use 60 minute charts for possible entries on swing plays, so a pullback into the 20ma is a possible area for an entry.
Good Trading,
Joey
for more analysis, check out downtowntrader.com
Busy Busy Busy Posted by downtowntrader | 10/22/2008 08:43:00 PM | 0 comments »
I've been swamped with some new responsibilities at work recently, which in combination with the recent market conditions has left little for me to blog about. While the intraday action has been quite good, swing trading is still quite dangerous. I've been basically picking my spots and daytrading QLD, while letting my trading robot take some trades. The markets are trading in triangles on the 60 minute charts and while it's not a forgone conclusion, they are looking like they will have downside breakouts. The markets are pretty oversold, and while they may plunge lower, I still think we are closer to making a low then beginning a new trend lower. However, now is not the time to be making silly bets or gambling, the best thing to do is wait for the intraday charts to line up with a bounce on the daily charts. We'll see how it plays out over the next few days.
Good Trading,
Joey
Stock Chart AFAM Posted by downtowntrader | 10/16/2008 08:50:00 PM | 3 comments »
Stock Chart Analysis AFAM
Almost Family, Inc. (Public, NASDAQ:AFAM)
I wrote a post on AFAM a few weeks ago as a stock that has held up well through the recent carnage. Although I didn't buy it last time, I have kept it on my watchlist. While I have altered my lines a bit, I am still thinking of the price action as a consolidation rather than a top. While AFAM did move lower from my last post, it has still held up fairly well considering the market conditions, and could of cemented support in the low 30's today. While it may not be ready to assault it's all time highs in a few days, the price action remains constructive, and I would think that it will ultimately resume the uptrend. My preference would be for a couple of days of tight trading in order to build some fuel for a push above resistance. But, who knows, this is one of the very few stocks I have on a buy watch.
Good Trading,
Joey
for more analysis, check out downtowntrader.com
Environmental Issues Posted by downtowntrader | 10/14/2008 08:56:00 PM | 0 comments »
The current trading environment is still not very friendly for swing trading, which is the major reason why you are not seeing as many charts as usual on my blog. There are tons of intraday opportunities, but there is still a lot of risk holding overnight or longer. While Friday / Monday held plenty of oversold snapback plays, we are back in a no man's land of sorts here, caught between the low as support, and all sorts of resistance above. Today's gap fade was about as easy a call as there is. After the strong move on Monday, it was very unlikely that the markets would continue rallying after the gap. If I was a betting man, I would guess that the markets begin trading in more of a range here, as volatility finally dies down a bit. Buyers will more then likely step in on any probe of the recent lows, and sellers will step in at about Dow 10,500+/-500. I am still in daytrading mode, and playing the ETF's for 2-3 day scalps, and probably won't stray from that until things improve on the daily charts. As soon as I see some low risk charts, I will resume posting them. Until then you are saddled with my boring commentary ;-)
Good Trading,
Joey
Mystery Chart Posted by downtowntrader | 10/09/2008 08:49:00 PM | 0 comments »
Let me go over some numbers before I reveal the two mystery charts below.
- The first chart has a two bar drop of 26%.
- The second chart has a two bar drop of 33%.
- The two bars in the first chart occurred under the 20 and 200SMA (red and pink).
- The two bars in the second chart began above the 20 and 200SMA (red and pink).
- The first chart shows panic selling well after a top (over 20% from the last high).
- The second chart shows panic selling just after making a new high.
The reason I highlight where these drops occurred is to show that panic selling can appear in both bull and bear markets. Usually, panic selling results in a major low once the selling subsides. The first chart is of a current issue after todays selling. The second chart is a historical one that went on to drop marginally lower before bouncing sharply. It did however, revisit the lows very soon thereafter before successfully marking a major bottom. What am I charting here? (see below)
The first chart is a weekly chart showing the SP-500 over the past few months. The second chart is also a weekly view of the SP-500 showing the crash in October 1987. While most of the damage to the second chart happened on "Black Monday", the end results of both are very similar. In fact, tomorrow may push the first chart even lower. I hate to speculate on how this will look a week from now, but I would think that there will be a much stronger capitulation since this powerful push lower is occurring after months of selling, rather then catching people off guard.
Let's see how the week ends tomorrow, but it looks like we will be off to a negative start in the morning (Down 2% in overnight futures).
Joey
Free Falling Posted by downtowntrader | 10/08/2008 09:10:00 PM | 0 comments »
The markets continue to drop, and the more they drop, the more bullish I am feeling. Worden's T2108 indicator which tracks stocks trading above their 40 day sma is currently at 1.97. This means that only 1.97% of stocks are trading above their 40 day sma's. That is absurdly low, and we have to go back to the 1987 crash to find levels this low. Notice that this indicator making lows that weren't seen during the nasty bear market that followed the Internet Bubble. I don't want to make too much of one indicator, but this has been a reliable indicator for me in terms of warning me that the markets are oversold on an intermediate level. Under 20 is the level I look for and it has been under 20 for the better part of the last month. Under 10% is pretty rare, and it has only been under 5% in 1987 and now. Again, we are at historic lows for this indicator and while it doesn't signal an all clear for buying, I think shorting here is suicidal.
Below is a weekly chart for the T2108 indicator going back to 1986 when it started being tracked. I overlayed a line chart of the SP-500 as well. Notice how rare moves under 10 are and the moves in the SP-500 that generally follow.
It's too early to call a bottom here, but I'm fairly confident we are close to one.
Good Trading,
Joey
Stock Chart KRE Posted by downtowntrader | 10/06/2008 09:41:00 PM | 0 comments »
Stock Chart Analysis KRE
SPDR KBW Regional Banking (ETF) (Public, AMEX:KRE)
Wow, I finally have a chart to post. I've been looking for capitulation in the markets before putting some money to work on some swing trades, and today may of marked the low for the current leg down. Most charts are complete disasters right now, so there isn't much to get too enthusiastic about. Also, in the current environment, any negative news is absolutely crushing individual stocks. For both of these reasons, I feel more comfortable sticking with ETF's.
Tonight's chart is KRE, which is an ETF covering Regional Banks. Many regional banks such as BB&T have been doing quite well, and have kept the most of the financial indexes from making new lows in spite of the disasters in LEH, WM, and WCB.
KRE has been making higher highs and lows over the past few months, and just recently challenged it's 200 day sma. I highlighted the interaction with the 200 sma on the chart below. Notice how the 200 day sma repealed it a couple times, before KRE was able to clear it. Once it cleared the average, it came back and confirmed it as support. The breakout stalled and it's now back for another retest of support. It has found buying in this area over the past week, and could be ready for a move to the upside. I much prefer to take a shot on something like this that has shown strength, then trying to cherry pick a bottom in a crashing individual stock.
Good Trading,
Joey
for more analysis, check out downtowntrader.com
Bear Trap being set? Posted by downtowntrader | 10/02/2008 08:58:00 PM | 0 comments »
The Nasdaq and Russell 2000 made new lows today, breaking under the lows set Monday. Todays volume was much lower then Mondays and we are setting up for a possible bear trap. It seems that most of the ingredients are here for an important bottom. Fear is through the roof. The fear based indicators such as VIX are spiking higher. The impending doom of our financial markets is being broadcast on every channel, and every Joe Schmoe on the street is debating how we got here and who is responsible. We've also had other clues as to where we are from a cycle standpoint as well. If you pay attention to how sectors are rotating you will notice that late cycle sectors like Agriculture stocks have been getting creamed. And has anyone noticed that the financials as a whole are not making lower lows inspite of the fact that the news couldn't be any worse.
Ideally, we would have another plunge followed by a snap reversal to trap the bears, but there are no guarantees that the market doesn't crash either. Maybe we are on the brink of financial armageddon. The truth is we won't know until it's in the rear view mirror, so the best we can do is wait patiently to pounce on the rebound. I am getting excited because I think we are gonna have a heck of a rally coming soon. We only get a few scenarios like this where everyone is caught leaning heavily to one side of the market, and when it reverses it catches most people off guard. The key as I've mentioned before is to not get too cute and try to get in early. And once we bounce, we can't assume we have the bottom either. Thats why we set our stops accordingly.
Good Trading,
Joey
Tough time to swing trade Posted by downtowntrader | 9/30/2008 09:15:00 PM | 0 comments »
The past week and a half has been a tricky time to swing trade (at least for my style) as we are getting huge reversal moves every other day. I place a lot of emphasis on average true range for my stops and targets and it seems like the increased volatility is whipping stuff around. This is an easy problem to solve as a trader, as I just take less trades, tighten my targets, and wait for the odds to stack up in my favor. However, as a blogger who likes to post charts of potential trades I may take, it has been really tough get behind any charts lately. While this may make for slow blogging, I don't want to mislead any readers into over trading right now. As a trader it's very important to be cognizant of what market conditions make it difficult to execute your edge and then have the discipline to not trade during these conditions. The current environment is actually pretty good for scalpers and certain types of daytrading, so those types of traders should be doing the opposite and trading as often as there edge allows. There are really only a few lessons traders need to learn to be successful at trading, and learning when to sit on your hands is one of them. Cash is a viable position and you don't have to be in every move. It took me a while to learn that lesson, but it has paid off during the recent whipsaws, both in my bottom line and my sanity.
Good Trading,
Joey
Holy Smokes Posted by downtowntrader | 9/29/2008 09:51:00 PM | 0 comments »
I've mentioned before how I like to prepare for a few different scenarios and today is a perfect example of why I do. I've been fully prepared for a rally, but I've kept the thought in the back of my mind that things could unravel quickly. Once I saw things were getting ugly, I quickly exited most of my long positions. Luckily, I was hedged enough that I didn't lose any money today despite being net long. However, looking back, I was upset at missing some fairly obvious trades in the afternoon while watching the unfolding events and debating what was happening with co-workers.
One of the key points I've tried to drive home throughout the life of my blog is that traders should always have a plan and honor their stops. Today is a perfect example of why you should have a stop in place on ALL trades. Hopefully most of you weren't hurt in todays nasty tape, as we will be presented with an incredible buying opportunity soon, and it would do no good if you have no capital. There is a chance we have another nasty day tomorrow as well, but as hard as it is to believe, we are probably very close to a bottom. My favorite indicator T2108 is well under 20% down to 8.84%. VIX was through the roof today as well, and there is a real sense of fear in the markets. The hard part of course is being patient enough to sit on your hands until things begin to turn.
Here are a few links I feel are worth reading tonight.
Good Trading,
Joey |
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