一个笨蛋的股指交易记录-------地狱级炒手

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Bulls go crazy Posted by downtowntrader | 10/12/2006 06:40:00 PM | 1 comments »

The markets had strong moves higher today as Bulls continues to run through the Bears. We have had a nice move prolonged by shorts covering and reshorting. Although I must admit I have been skeptical of this entire move, I was open to the possibility that this move would occur and have been sticking mostly to the long side. Here is a quote from my July 18, 2006 post.

"Here is a chart of the SP500. Nice candle today confirming support. This level was confirmed as support on the last downturn, so it makes the candle more significant. While I'm not crazy enough to call it, it looks like there is a possibility that the SP500 could form a reverse head and shoulders as marked on the chart. This would be an interesting development if the pattern came to fruition as the short covering would be frenzied (maybe fed pause ;). "



I was thinking that if such a move occurred, the majority would be looking to short each rally. If everyone is trying to short, then it may keep chugging along. I figured the end would come as soon as everyone threw in their short towels and started debating whether this time was different. We're not there yet, but I feel people getting bullish, as non trading co-workers are asking me about this rally and if it's too late. I wasn't foolish enough to call a bottom back then, and I'm not foolish enough to do the same with a top. There has been a lot of strength in the markets recently and it seems that every short position I put on is a small win or loss no matter how good the setup. I would imagine that a top would probably drag out a little as there are still plenty of people that think they missed the bus waiting in the shadows.

On another note, I found it a little perplexing that the indices finished with above average volume, but the ETF's volume was very low. Take a look at an $spx chart and compare the volume to the SPY chart. Same with the Q's. I have no idea what this means other then maybe less program trading today? Another thing that has me a little perplexed is that in a normal cycle, stocks peak before commodities. With stocks making a new high and commodities looking like they topped out, I wonder if there is something else at work here or if commodities have another move left in them as well. Maybe there are clues here for a possible major reversal in the US dollar. Just thinking out loud here, but this market has had some strange behavior to say the least. One thing is for sure, if you love this game, there is always something interesting going on.

No charts tonight, but I may post a few intraday tomorrow.

Good Luck,

DT




Markets Seriously Overbought Posted by downtowntrader | 10/11/2006 10:03:00 PM | 1 comments »

The markets are seriously overbought on all timeframes and probably pretty near to a pullback of some sort. I wouldn't get too aggresive shorting, because this some softness late this week with strength into options expiration next week. That pattern appears plausible with the current state of the charts.

Here are a couple long term charts to chew on.

SP500 is near the upper end of this long term channel . It has made a beeline from the lower part of the channel, so there is no way this is shattering the top of this. We can still ride the band for a bit, but we are back to a point where the risk may be greater then the reward.
Here is a chart of the weekly nasdaq composite. A couple of interesting points. RSI readings over 70 and near 30 have been fairly reliable indicators of turning points, other then the high 1/06 reading. RSI still has plenty of room here, but this recent leg up still resembles a bear flag.

There is still some strength in the markets as bad news today couldn't "stick" and the indices closed off their lows, but my guess is that we still have some indesicive trading range days ahead this week. Here are a few links:

• I  a nice post on whether you would hire yourself to manage your money.

Trading plans and money management aren't as sexy as the momentum stock du' jour, but without them, your chances of making it are slim indeed.

Good Luck,

DT




Blog for Sale Posted by downtowntrader | 10/10/2006 07:30:00 PM | 4 comments »

I've decided to put up my blog for sale. If a site full of videos of star wars re-enactments by chubby kids and monkeys sniffing their ass is worth 1.6 billion dollars, then my hard work has to be worth something right. Maybe I should put it up on Ebay? Seriously though, I can see where some of the major players will eventually try and scoop up some bloggers and their loyal readers in an effort to have fresh and exclusive content.

Today was a fairly indecisive day and with the markets in need of a breather, I think the best move will be to take a few days off. I am posting a few charts below in case the markets move more then I expect though.

Sykes Enterprises, Incorporated (Public, NASDAQ:SYKE)

SYKE has been holding under resistance and with the 20sma catching up to price, it should be moving soon. This pattern looks more like a continuation pattern, so the move should be to the upside.


Goldcorp Inc. (USA)(Public, NYSE:GG)

GG continues to look like a near term bottoming process is underway. Today was another rejection of prices in the 20-21 range.

Ceradyne, Inc. (Public, NASDAQ:CRDN)

CRDN is a great example of a stock under distribution. Every rally is sold and it looks like it may be turning back down.


America Movil S.A. de C.V (ADR)(Public, NYSE:AMX)

AMX has taken this wedge to its apex. It will be out of room soon, so a move should be in order. I would be more interested in a breakdown at this point.


SINA Corporation (USA) (Public, NASDAQ:SINA)

SINA was one of the charts I liked most from Sundays post, and it is moving along nicely. Keep an eye on the upper pennant line for a breakout.
Muaad wrote in on how I review sectors and I thought it would be best to post my response.

"I have reviewed the list on StockChart.com's "Market Summary," and I find it a great place to start, but I am aware that there are many Indices and ETFs missing from this list. Can you point me to a definite source that has the most inclusive list of Sector Indices and ETFs? And perhaps the list you track and feel is of importance?"

Before I answer, I will mention that I study the market sectors each weekend to try and determine where to look for a move in the coming week. I also am a proponent of intermarket analysis, so I am keeping a close eye on ratio's and how a specific sector will impact others.

I feel that the
Good Luck,

DT




Semiconductors Rally Posted by downtowntrader | 10/09/2006 09:08:00 PM | 3 comments »

We had a nice move on semiconductors today and it looks like they may follow through over the next few days. This morning, as the indices were weak, the $sox was green giving clues that the indices would turn it around. I didn't like the way the Nasdaq closed, but small caps were looking better today and may be strong tomorrow. Here are a few charts to add to the watchlist.

Illumina, Inc. (Public, NASDAQ:ILMN)
ILMN has been kissing the rising trendline for a few session now. The rule of polarity states that previous support once broken turns to resistance. This is a perfect example of that.



Broadcom Corporation (Public, NASDAQ:BRCM)
BRCM may come back to the bottom of the triangle, but if semiconductors follow through then BRCM should join in the fun. Stochastics is about to crossover.


UTi Worldwide Inc. (Public, NASDAQ:UTIW)
I haven't been too keen on the transports as a whole, but UTIW looks decent after clearing this pennant. It is retesting support and may break the 200sma on the next move.


Thats it for tonight. Go Broncos!!

DT







Advanced Micro Devices, Inc. (Public, NYSE:AMD)
AMD may be close to bouncing here as it pulls backto support. This could be a cup and handle bottom.


SINA Corporation (USA) (Public, NASDAQ:SINA)
Sina is looking bullish and may breakout of this falling wedge / pennant. It should find support here at the lower band and 200 sma.


Baidu.com, Inc. (ADR) (Public, NASDAQ:BIDU)
BIDU may find support at the rising trendline. Stochastic is oversold and looks like it will crossover here.

V.F. Corporation (Public, NYSE:VFC)
VFC is trading a very tight range here and should make a move soon.

Jones Apparel Group, Inc. (Public, NYSE:JNY)
JNY is wedged between a rock and hard place here. It formed a hammer at the rising band and may be ready to break out of this consolidation phase.

Blue Nile, Inc. (Public, NASDAQ:NILE)
Nile is also trading a very tight pattern after making it above resistance. The 20sma caught up to price and it should make a move very soon.

Hittite Microwave Corporation (Public, NASDAQ:HITT)
HITT is trading a nice triangle after getting above a very sloppy base. It may have a very nice move if it can clear this pattern.

EZCORP, Inc. (Public, NASDAQ:EZPW)
EZPW has been consolidating for months now and is trading near support on declining volume. This could be a decent area for early birds who are bullish on EZPW in the intermediate term.

Diodes Incorporated (Public, NASDAQ:DIOD)
I think semiconductors may catch another bid soon and DIOD just came back to fill a gap. It is sitting on a rising trendline and may move from here.

Cascade Bancorp (Public, NASDAQ:CACB)
CACB is a low floater that has been gaining steam. It just broke out of flag type base and has been consolidating the move for a few weeks without giving up too much of the move. Keep an eye on it as it is starting to tick up.

A number of the picks from last week had very good moves, and a few are still looking good for an entry, so make sure to review last weeks posts. I'm a little worried that I see so many bullish charts as this has been a contrarian indicator for me in the past so be careful out there.

Good Luck,

DT

hefeiddd

Internal Strength Posted by downtowntrader | 10/05/2006 07:42:00 PM | 0 comments »

The indices didn't move much today, but there was a lot of strength underneath, particularly on the Nasdaq and smallcaps. Materials and Energy were the leaders as far as sectors are concerned. Here are a few links worth checking out:

Traderfeed had one of the most interesting posts I've seen in a while on Program trading and TIKI. While we're on TIKI, tradethemarkets has a video seminar on market indicators.
Martin Goldberg is seeing the same potential bottom on Gold and Silver miners. Kirk on trading while traveling
• I stumbled on Barry Ritholtz' Apprenticed Investor series the other day and thought it was great. Check it out.

No charts tonight. Lot's of what I've posted this week is moving nicely so be sure to start protecting your profits.

Good Luck,

DT




Commodity Capitulation? Posted by downtowntrader | 10/04/2006 09:08:00 PM | 4 comments »

The Markets had a very strong move higher with volume surging today. We may be seeing a massive short covering move here, as bears may capitulate. One of the more interesting plots today was the reversal of commodity related stocks. This morning I saw oil and gold stocks tanking and my thoughts were that it may get ugly. I had a few short positions on oil stocks and I felt pretty comfortable around lunch time with them. Early in the afternoon I realized that they were at the high of the day and volume was coming in. I covered all of them early. This may of been a capitulation move as the last group threw in the towel. While I'm not calling a bottom, my guess is that we will see higher prices here the next few days and quite possibly much higher prices. If everyone is still bearish and waiting to short the next move up, then these stocks could "climb a wall of worry" much like the indices have the past few weeks.

FTEK is trading a great cup and handle here breaking out of the handle today.

EGY is possibly bottoming here with a little triple bottom at support. It needs to clear this channel to get exciting though.


Here is an updated look at the OIH etf. It clearly has broken down, but may retrace back to the breakdown area or the down trendline.

There couldn't be more bad news coming out on VLO and the stock refused to go down today. Todays move reversed all of yesterdays move and this may be a small reverse head and shoulders here. The blue line is the neckline.

BDCO always seems to catch a bid when Oil rises. If oil the commodity makes a move then I think BDCO may take off. It is very close to support here.

OXPS is trading a flag and formed a hammer on support.

IIIN may be bouncing off the bottom of this huge triangle.
I've noticed an interesting phenomenom with how efficient the markets are at weeding out weak holders. The typical move after a hammer is to buy on the next high. But I've noticed that lately, a few bars later, there is a new lower low under the hammer. Then a few bars later, there is another hammer, but with volume. This is usually the hammer to trade off. Here are a couple of charts with examples.

SLW actually had three hammers on support and may be bottoming here at the lower bollinger band.


Here is GG. Although the first hammer is questionable, the connotations are similar. GG may also be forming a near term bottom here.

All of the commodity plays above are very risky in terms of failure rate, but the risk to reward ratio makes them viable to my tading style. Keep your own trading style and objectives in mind when considering these.

Good Luck,

DT




Dow all time high! Posted by downtowntrader | 10/03/2006 09:37:00 PM | 0 comments »

You would of never known the Dow hit an all time high today by looking at the other indices today. The Russell actually finished red. The strength may spill over into the rest of the indices the next few days, but I am suspect until the Nasdaq resumes a leadership role.

Here is a 60 minute chart of the Q's . It bounced off the lower bollinger band, but stopped right at the mid band / 20sma. It needs to clear this flag for a shot at the upper band, but it looks like the band is starting to turn lower.

GME is one I've been watching for a couple of weeks now. It bounced off the trendline today near the 20sma and may have a shot at making a run over the handle pivot.
PNRA is trading a flag consolidation here after clearing a down trendline. Keep an eye on that flag.
RWC may be taking off here.
SHLD has been trading a tight flag which may also be classified as a handle for a 4 month cup and handle.
IHS touched the 20sma again and found support.


Good Luck,

DT




Small Caps Breaking down Posted by downtowntrader | 10/02/2006 09:16:00 PM | 0 comments »

Small and Mid caps have continued to underperform even as the market rallies, so the question is, will they lead to the downside. While the recent pullback in the major indices has remained quite tame, the chart of the IWM (tracking ETF for the Russell) is showing a possible breakdown. It looks like a trip to 70 is almost guaranteed before any sort of consolidation happens.

Martin Pring highlighted KKD today on his monthly newsletter and this chart looks pretty bullish to me on an intermediate to long term basis. I would probably wait for a retest of the recent breakout, but it's worth adding to the watchlist already.
It's tough to try and pick tops but AMX looks like it may be topping here for the near and possibly intermediate term. Note the MACD divergence as it tries to make a new high. Also had a bearish engulfing candle today which usually signals a few bars of weakness.
WWY has been under distribution all year and may be on it's way to retesting the 52 week low.

MRVL announced that it would need to "restate" past earnings and guided lower for the 3rd quarter this evening and it was being punished after hours finishing down 18%. Other chip stocks were dropping with them, so tomorrow may see pressure on the semi's as a group. Keep an eye on how they close to see if bargain hunters come in, or if traders rush to lock in recent profits. That will give us a clue to the longevity of this rally.

Good Luck,

DT

hefeiddd

Sunday night watch list Posted by downtowntrader | 10/01/2006 10:13:00 PM | 0 comments »

The end of quarter effect usually lasts 2-3 days into the next month as funds invest monthly contributions, so it will be interesting to see what takes place the next few days. The daily charts are still overbought, but there are some interesting patterns developing on the hourly charts with the SPY looking pretty good to me, but Q's looking a littlw worse. Picking tops is difficult so I am sticking with long charts until we see some further breakdowns.

VIP may be finding support at the 20sma as the bollinger band tries to catch up.

SYKE tried to breakout friday and finished just under the trendline. MACD looks weak but if it can clear resistance on volume, then the indicators will take care of themselves.
OXPS is coiling tightly here as trendline converge.
NEU has been holding the 50sma as support and is testing the downsloping 20sma. Watch to see which way it breaks.
IHS has a nice narrow range candle that may offer a somewhat safe entry.
ICLR is starting to push the upper bollinger band as it breaks resistance.
DK has been trading a pretty volatile range and is up against a descending trendline.
Buying TAM at the 20sma has been working and has printed a nice narrow range candle on declining volume right smack dab on the 20. Keep an eye for the next higher high.
TRID is sitting on major support here with the 200sma meeting the ascending trendline.
BLUD is trading a nice Bull Pennant and may bounce off the 20sma.
CXW may be finding support at the ascending trendline but still has plenty of resistance to work it's way through.

A couple of links worth reading

JC had a great review of the past month Fallond's weekly Stockcharts roundup Jamie thinks we may be in for a pullback
• I uploaded another pic on the other blog

Good Luck,

DT




Just a few links tonight Posted by downtowntrader | 9/28/2006 07:48:00 PM | 0 comments »

There won't be a regular post tonight.
Here are a couple of links.

JC the NYSE Scalper had a nice post tonight comparing traders to Jedi.

Here are a couple funny videos.

Sinking About.
weatherman roach .

Good Luck,

DT




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hefeiddd

CNBC on Sirius Posted by downtowntrader | 9/27/2006 09:30:00 PM | 0 comments »

I rarely tune in to CNBC during trading hours, but I was running some errands today so I had CNBC on in the Car, on Sirius Satellite Radio. I was cracking up at how excited they were about the Dow all time high and how "important this was to investor psyche after the bubble". Last I checked, people lost their asses in Nasdaq stocks, and those are no where near even recent highs. It takes a long time for these wounds to heal, and this is why we probably won't have a runaway bull market for quite some time.

The indices are slowing down and it will be interesting to see what transpires into week end and then in early October. Here are a few charts, both long and short to chew on.

RWC had a huge move today on volume and looks like it is breaking out. The key is if it can decisively take out the 200sma.
LIFC is getting ready to move and it "should" be a continuation move to the upside.
NSM has been looking weak and hasn't really participated in the recent rally.
I hate to throw in a long semi chart after a short one, but MRVL is looking good here. There are some serious MACD divergences and MRVL is close to breaking a downtrendline.
ORB found support on the 20sma and may present a good opportunity in the coming days.
KOMG is another weak looking stock. I've been waiting for it to retrace higher, but it seems to be stalling out already.

On a lighter note, I couldn't believe this when I saw it on TV the other day. When your daughters ask you for the Barbie with the dog that craps for Christmas, this is what they're talking about. I would of loved to have been a fly on the wall for that product development meeting.


Thats it for tonight.

Good Luck,

DT




Keep on Truckin Posted by downtowntrader | 9/26/2006 09:23:00 PM | 0 comments »

Well, we hit a new multi year high on the SP500 and we are close to a new all time high on the Dow. While everyone worries about how long this will last, stocks keep on going higher. There are two things that will be interesting in the coming days. First, everywhere I look it is being reported that this weeks move is attributed to window dressing. If that is the case, I would expect a reversal before Friday to chop out a bunch of people. Second, there are probably too many pessimistic people out there to end this rally, but you can be sure that once market participants start thinking they are out of the woods, then it will be too late.

Commodities started to bounce as I mentioned last night, and there may be some good short covering in these sectors. These moves, especially in the Oil sector, should be reserved for the most nimble traders. I am sticking to metals for now as they have more divergences on the charts.

Here are a couple of charts to watch.

DXPE has given back all of the gains from its recent stellar earnings report, but is at major gap support. It had a very strong move today and may be bottoming out. I imagine that it will pull back in the coming week to retest the breakout, and may give a better entry for those that missed.
ASEI is one of my holdings that may be ready to make another leg up after hugging the 9ema the past few days.

Here are a few links worth checking out.

Highchartpatterns has had two pretty good posts the past couple of days here and here. I like reading about other traders thought processes and how they approach different aspects of trading .

Also, Ugly has another great video out. Just awesome.


Good Luck,


DT




Metal Knives Posted by downtowntrader | 9/25/2006 08:53:00 PM | 0 comments »

The markets bounced back on higher volume today and could follow through tomorrow. When I think of the possible scenarios playing out, I can envision a strong surge that would get to new highs before resuming putting a top in. The way things have been playing out, it looks like the bulls are determined to take the Dow to all time highs. Although the risk is high right now, it might be worth it if we do indeed get a "blow off" top.

Commodities have been getting hammered and may be getting ready to get a technical bounce. I am looking at a few possibilities in the miners as they are oversold and may have very limited downside from here. So, is this a catching a falling knife scenario, or a buy at value scenario? In looking at the different timeframes and the sector charts, I think there is little downside here, however, anything more then a small allocation would be foolish as well.

Here is a weekly chart of GG (Goldcorp). It fell out of the bollinger band which should present good value. It could bounce back to the middle of the bands and still be in a confirmed downtrend. There are still negatives here such as still declining MACD and Stochastics.

Here is the daily chart showing a gap down at eh end of a downtrend that couldn't follow through. This is sometimes the last gasp, especially if tomorrow has a gap up.

Here is a chart of SLW. This is looking more positive then GG as it is not technically in a downtrend and has a MACD divergence.
Here is a large daily chart showing possible support at the 200sma and previous resistance. Also, the MACD divergence is apparent here.
Moving away from the miners, ILMN is in a better performing sector and could find support at the rising trendline.
TRID may try and fill the gap if semiconductors rally this week.
AXE may be ready to clear this resistance after coming back to support at the 20 sma.
Software has been doing great led by ADBE, so don't be surprised if BMC follows suit.

GROW has pulled back into support and may offer some value here.
ICLR has been trading a very tight range and may continue the uptrend if the markets get going again.
LIFC has been getting support at the 9ema and may get a push soon.
OXPS came back to test support at the 200sma and may resume the rally here.

Thats it for tonight.

Good Luck,

DT

hefeiddd

Sunday Night Update Posted by downtowntrader | 9/24/2006 10:39:00 PM | 0 comments »

The indices remained over their 20 and 50 smas after some profit taking last week, and the question is, will they push to new highs or roll over. With quarter end and month end taking place this week, a case could be made for a bull window dressing run. Here is an hourly chart of the Q's.

Possibly a double bottom on the lower Bollinger Band. It might be time to pick up some tech's for a quick trade.

Here is CTXS which broke through string resistance last week. It may need another day or two of consolidation, but it is looking a lot more bullish then last week.
DIOD has had a nice run and may pull back and test the gap for support. If semiconductors show strength, then DIOD may clear the recent high.
I pointed out some strenth in GYMB a couple weeks ago, and they have just flat out taken off. That is a nice gap over resistance, and those usually tend to be breakaway gaps.
HWCC is a recent IPO that may be turning up.
IBCA was on last weeks list and not much happened with it. It still looks bullish to me though.
I'm not sure if I have the guts to trade it, but I will be watching. The volume on the last day may be a hint of an upside breakout.
TAM has been finding support at the 20sma and formed a hammer on it Friday.
The bears are running out of steam on ODFL, so it may make an interesting trade with a relatively painless stop area.
CYMI is one of the better looking short setups I found. Although it cleared the downtrendline, it looks like it is failing to clear the 200sma and may be rolling over.

I didn't find too many charts tonight, so let's see if the coming days give us some clear direction.

I added another post to my photo / art blog for anyone interested.


Good Luck,

DT




Bearish Engulfing Pattern Posted by downtowntrader | 9/21/2006 09:45:00 PM | 1 comments »

Most of the indices had bearish engulfing patterns today which may signal near term weakness. Yesterdays highs will be key resistance moving forward. I imagine that we will know the staying strength of this rally within a few days.

Here are a few charts I'm adding to the watchlist.

Gold is very oversold and may get a short covering move soon. GG has made a lower low with a MACD divergence. There is a chance that a bottom is being put in.

JCOM may be trading in a bear flag here. If the Nasdaq is in for more then a pullback, then JCOM may fall apart.
REDF is coming into support here and may have a large move to either side.
RACK held up on a test of the 50sma and rising trendline. it may try and fill that gap and test the 200sma.
NSM has been moving nicely and may pullback to the recent pivot low soon.

Good Luck tomorrow.

DT




Is no news Good news? Posted by downtowntrader | 9/20/2006 09:48:00 PM | 0 comments »

The Fed didn't throw the markets any curveballs today and the markets really didn't do much after the announcement. Most of the indices ended up pretty much where they were at the time of the announcement. So, where do we go now? Clearly there wasn't a drastic disappointment with anything said, but the markets didn't move up either. The indices are overbought and my guess is that the big elephants are letting retails buy into them. Dr.Brett posted as such earlier today. (by the way, Dr. Brett is doing great work on the Traderfeed blog each morning attempting to gauge the days direction)

"9:15 AM CT - One of the things that got me taking quick long side profits a few min ago was seeing large offers at the highs. It wasn't the kind of fake offers where they flash and pull them. These were large traders willing to have those offers taken. My general experience is that very large traders got to be that way for a reason and, at least for the short run, I won't be the guy who grabs a piece of their 2400 lot. Some slowdown of volume; TICK distribution remains positive, which keeps a bid underneath the market and ER2 particularly."

So the question is, what catalyst will propel the markets higher. I don't have any answers, but with this rally long in the tooth, and the bull cycle long in the tooth, I am being extra cautious. This is one of those times where I am comfortable to stand aside and just babysit my holdings. Maybe I should take a queue from X and drink some margarita's.

Here are a couple of charts I will be watching over the next couple of days.

IBCA is consolidating under the 50sma. If it can move above it on volume, then the chance for a test of the 52 week high are good.

GME has formed a deep cup and handle base and recently cleared the handle pivot point.It might need to consolidate before attempting to breakout.

In a non market related topic, I created another blog where I will post some of my photography and artwork. I eventually will put everything together on one site, but this will have to do for now. If anyone is interested, you can check it out at http://downtownart.blogspot.com .

Good Luck,

DT

hefeiddd

Volatile Session Posted by downtowntrader | 9/19/2006 09:24:00 PM | 1 comments »

Today was a pretty volatile session with most of the indices pulling back pretty hard and then reversing pretty strongly off their 20 day sma's. There were plenty of wild moves on stocks as well, leaving doji's and spinning tops all over the daily charts. I can only imagine that tomorrow may get wild, although if i remember correctly, the last two fed release days have been positive in the morning leading up to the announcement. The bulls showed some resolve today and although everything is overbought, the bulls could make an assault tomorrow on alltime high territory on the Dow and May highs on the SP500. I still believe that buying here is pretty risky but I am giving my long positions a little more room to run.

Here is a weekly chart of the Nasdaq Composite. It is up to what could amount to formidable resistance and may be forming a bear flag.
CTXS was highlighted on Sundays update and is starting to drift down a little. If it loses the 200sma tomorrow, then it should drop fairly quickly to the 20sma.
NSM fell out of the wedge today but closed well. The indicators are softening from an overbought level, so this may drop more.
UTSI was highlighted on Pristine's chart of the week column this week. Usually, these bomb out as a lot of rookies play these stocks, and I notice that the pop gets faded. However, after triggering on their system, and pulling back as expected, it held up without making the lower low. If it can clear the resistance above, it should make for a nice move.
ODFL has been getting strong support and may get a "whipsaw" rally here. In a whipsaw, a stock breaks support and aggresive shorts pile in. The stock then rallies back over broken support drawing in new buyers and forcing shorts to cover. Keep an eye on it to see if it follows through.
UARM was one of those volatile stocks today, and I'm glad I missed it. I highlighted it this Sunday as a potential short and it looked like it gave a good signal today. However, it rallied very strongly at the end of the day to close in a doji. It still looks mighty toppy to me.

Careful tomorrow as it could get pretty wild after the Fed announcement.

Good Luck,

DT




Anniversary Posted by downtowntrader | 9/18/2006 04:39:00 PM | 7 comments »

Today is my Anniversary so I will be not be posting an update. The markets ended up forming spinning tops / dojis which signal indecision. This is expected as traders may be waiting for the fed meeting before putting on any meaningful positions. Here are a few links to check out:

Nice post by TraderX on one of the most common mistakes amateur traders make. Kirk had almost exactly the same thoughts too. Along those lines, here is a good articleby Barry Ritholtz on how Money Management is more important then stockpicking.
I love reading Fallonds public stockchart.com roundup. If you are learning how to chart, you really owe it to yourself to spend some time on the public area of stockcharts.com and try to really analyze how others chart and compare what your charts look like compared to others.
• And finally, my link of the day. I saw this a while ago and a friend of mine was checking it out today and I still found it funny.

Have a nice evening and good luck tomorrow,


DT




Sunday Night Roundup Posted by downtowntrader | 9/17/2006 11:22:00 PM | 1 comments »

Last weeks gains were quite impressive for bulls, but with overbought conditions, and the Fed meeting coming up, I would be very careful about what positions I initiate in the next couple of days. The Dow is just a few points from an all time high, so it will be interesting to see if there is a squeeze that takes it there or if the rally is too tired. The Nasdaq has been leading this move up which is bullish, but in looking at some sector charts tonight, I noticed the hardware index and Sox coming up to 200sma resistance. I would think that a pullback, at a minimum, is in order here. As usual for Sunday's, lot's of charts.

BBBY has been strong but may run into trouble at resistance here. The key here is what the Fed says about the consumer and / or housing this week.

Re-Posting XING for those that didn't trade Friday. MACD is turning up nicely.

While the hardware index is looking like it is near some resistance, RACK looks like it will touch 29's at least.
IBCA found support at it's rising trendline and looks good if it can clear the 50sma.
TIE is back at major support and with Basic Materials oversold, it could be due a nice bounce. Of course, if it breaks under 24, it could get ugly real fast. Either way works, as long as it moves ;)
CTXS has managed to work it's way up to trendline resistance. If the Nasdaq runs in to trouble this week, then CTXS should give back a decent chunk of this last leg up.
NSM may be running out of steam, and is in danger of breaking down from this bearish wedge.

BNI didn't quite make it to the descending trendline, but did stall at a previous piot area.
UARM looks like it got a nice short squueze but formed a doji near resistance. This could turn into an evening star pattern if tomorrow is ugly.
I was looking at the Biotech indices and thinking they were looking bullish, and Trader Jamie also mentioned a possible rotation into Biotechs on his blog. Here are two that I think looks bullish.

First up is LIFC. It is finding support at the 20sma right under trendline resistance. Slow Stochastics is turning back up as well.
Second is ILMN which I mentioned last week. This looks like it is starting the next leg up.
LVS looks like it is done here. It tried to rally and gave back all the gains the next day. It is leaning out of a rising wedge in what could be the right shoulder of a Head and Shoulders top.
SIRF is another short chart that may be failing at a declining trendline. MACD is about to cross as well.
At this point I think it's best to either start nibbling on the short side or stay on the sidelines. The markets could get a push as the media frenzy on a new Dow high may get some people to chase, but the markets rarely break major resistance successfully if they are overbought before getting there. Shorting heavily could be quite dangerous as well, as bulls have been strong. As always, adhere to your plan and wait for the markets to confirm the move.

Good Luck,

DT

hefeiddd

Volatile Session Posted by downtowntrader | 9/19/2006 09:24:00 PM | 1 comments »

Today was a pretty volatile session with most of the indices pulling back pretty hard and then reversing pretty strongly off their 20 day sma's. There were plenty of wild moves on stocks as well, leaving doji's and spinning tops all over the daily charts. I can only imagine that tomorrow may get wild, although if i remember correctly, the last two fed release days have been positive in the morning leading up to the announcement. The bulls showed some resolve today and although everything is overbought, the bulls could make an assault tomorrow on alltime high territory on the Dow and May highs on the SP500. I still believe that buying here is pretty risky but I am giving my long positions a little more room to run.

Here is a weekly chart of the Nasdaq Composite. It is up to what could amount to formidable resistance and may be forming a bear flag.
CTXS was highlighted on Sundays update and is starting to drift down a little. If it loses the 200sma tomorrow, then it should drop fairly quickly to the 20sma.
NSM fell out of the wedge today but closed well. The indicators are softening from an overbought level, so this may drop more.
UTSI was highlighted on Pristine's chart of the week column this week. Usually, these bomb out as a lot of rookies play these stocks, and I notice that the pop gets faded. However, after triggering on their system, and pulling back as expected, it held up without making the lower low. If it can clear the resistance above, it should make for a nice move.
ODFL has been getting strong support and may get a "whipsaw" rally here. In a whipsaw, a stock breaks support and aggresive shorts pile in. The stock then rallies back over broken support drawing in new buyers and forcing shorts to cover. Keep an eye on it to see if it follows through.
UARM was one of those volatile stocks today, and I'm glad I missed it. I highlighted it this Sunday as a potential short and it looked like it gave a good signal today. However, it rallied very strongly at the end of the day to close in a doji. It still looks mighty toppy to me.

Careful tomorrow as it could get pretty wild after the Fed announcement.

Good Luck,

DT




Anniversary Posted by downtowntrader | 9/18/2006 04:39:00 PM | 7 comments »

Today is my Anniversary so I will be not be posting an update. The markets ended up forming spinning tops / dojis which signal indecision. This is expected as traders may be waiting for the fed meeting before putting on any meaningful positions. Here are a few links to check out:




DT




Sunday Night Roundup Posted by downtowntrader | 9/17/2006 11:22:00 PM | 1 comments »

Last weeks gains were quite impressive for bulls, but with overbought conditions, and the Fed meeting coming up, I would be very careful about what positions I initiate in the next couple of days. The Dow is just a few points from an all time high, so it will be interesting to see if there is a squeeze that takes it there or if the rally is too tired. The Nasdaq has been leading this move up which is bullish, but in looking at some sector charts tonight, I noticed the hardware index and Sox coming up to 200sma resistance. I would think that a pullback, at a minimum, is in order here. As usual for Sunday's, lot's of charts.

BBBY has been strong but may run into trouble at resistance here. The key here is what the Fed says about the consumer and / or housing this week.

Re-Posting XING for those that didn't trade Friday. MACD is turning up nicely.

While the hardware index is looking like it is near some resistance, RACK looks like it will touch 29's at least.
IBCA found support at it's rising trendline and looks good if it can clear the 50sma.
TIE is back at major support and with Basic Materials oversold, it could be due a nice bounce. Of course, if it breaks under 24, it could get ugly real fast. Either way works, as long as it moves ;)
CTXS has managed to work it's way up to trendline resistance. If the Nasdaq runs in to trouble this week, then CTXS should give back a decent chunk of this last leg up.
NSM may be running out of steam, and is in danger of breaking down from this bearish wedge.

BNI didn't quite make it to the descending trendline, but did stall at a previous piot area.
UARM looks like it got a nice short squueze but formed a doji near resistance. This could turn into an evening star pattern if tomorrow is ugly.
I was looking at the Biotech indices and thinking they were looking bullish, and Trader Jamie also mentioned on his blog. Here are two that I think looks bullish.

First up is LIFC. It is finding support at the 20sma right under trendline resistance. Slow Stochastics is turning back up as well.
Second is ILMN which I mentioned last week. This looks like it is starting the next leg up.
LVS looks like it is done here. It tried to rally and gave back all the gains the next day. It is leaning out of a rising wedge in what could be the right shoulder of a Head and Shoulders top.
SIRF is another short chart that may be failing at a declining trendline. MACD is about to cross as well.
At this point I think it's best to either start nibbling on the short side or stay on the sidelines. The markets could get a push as the media frenzy on a new Dow high may get some people to chase, but the markets rarely break major resistance successfully if they are overbought before getting there. Shorting heavily could be quite dangerous as well, as bulls have been strong. As always, adhere to your plan and wait for the markets to confirm the move.

Good Luck,

DT

hefeiddd

OPEX Tomorrow Posted by downtowntrader | 9/14/2006 11:04:00 PM | 0 comments »

Tomorrow is options expiration and as usual, I will be taking the day off. Here are a couple charts that I am adding to the watchlist.

ILMN looks like it has hammered out a support area and is ready to move higher.
XING cleared this ascending triangle and may test it's 52 week high soon.

The Dow is mighty close to an all time high and you have to wonder how much strength bulls have left in them once they reach that mark. Be careful out there.

DT




Trade Ideas and Oddsmaker Posted by downtowntrader | 9/13/2006 09:48:00 PM | 7 comments »

I've been experimenting with a new daytrading style recently that is somewhere along the lines of the Maoxian dummy setups and Trader-X methodology. There are several bloggers trading these types of setups and this has proven to be a successful style, however, I've incorporated some of my own concepts and exit strategies to this style. The basic premise is to find stocks that are having a continuation of momentum after either gapping or opening strongly in either direction.

I've found Trade Ideas realtime scanner indispensable to my daytrading so that is where I started. I created a custom scan that basically looks for stocks breaking out of their opening range on volume. I added a few criteria such as a minimum gap, volume ratio, volatility, etc. I've been using the new Oddsmaker function to ensure that my strategy is profitable before spending energy trying to test it. Here is a screenshot of the Oddsmaker settings I am using to backtest. I ran this scan for the last 14 days and it returned 60.65% winners with the average winner larger then loser as well. While this is not true strategy testing, it at least gives you an idea if the alerts you are watching are working in your favor. I've seen Fallond and Dr.Brett experimenting with Oddsmaker as well, and I imagine that the tool will improve as it gains a larger following.

Here is an example of a trade I took today off an alert. I entered GROW on a break of the 4th bar and closed it out after the evening star pattern in the afternoon.
Here is the missed trade of the day. I've been experimenting with stop strategies and one of them is based on setting stops under the low of a 15 minute bar that makes a new closing high. I entered NTGR on the 3rd bar and was stopped out for a whopping 10 cent gain. With the futures dipping (shown by arrow on chart) I decided to hold off on re-entries and then lost track of NTGR. DOH!! Bad decision as this would of been a great and easy to manage trade. Still, this is just one example of several alerts that would of been nice trades, so I'm happy with the scan results.
Here are a few charts for tomorrow. With Options expiration on Friday, I will be cautious of entering any trade longer then a day or two.

Here is IIIN right up against resistance. It looks like commodities may get a technical bounce, and IIIN has already started to move. However, it is best to wait at least till mid-morning on this to see which way it breaks.
ASEI gapped over some resistance today and has a lot of shorts in pain right now. It fell short of taking out it's 50sma, but could follow through tomorrow.
BTJ got a nice bounce today with the rest of the Oil and Gas sector. It held on previous resistance which did in fact hold as support, so there is a chance that it holds this area as a bottom.

Thats all for tonight. If you're interested in trying Trade-Ideas, please sign up for a free demo here . If you want to know a little more about the software I also reviewed it here.

Good Luck,

DT




Bulls take over Posted by downtowntrader | 9/12/2006 09:20:00 PM | 0 comments »

I'm still in vacation mode and trying to get back in synch with the markets. Congrats to those who have taken recent picks such as HAL, NTRI, CXW, INFA, etc. I am taking it light this week until I can get some time over the upcoming weekend to pore over my usual number of charts. Still I feel good that I was able to take some good trades today, especially on the daytrade side in tech stocks such as MRVL, RMBS, and RACK.

The bulls took over and squeezed the shorts today and had a strong day. All the indices closed near the highs of the days and were led by the Nasdaq and semiconductors. All of this bodes well for near term action, however, there are warning signs all over the place of an impending downturn in the intermediate timeframe.

I'm having problems with annotating my charts tonight so I will just post what is already saved.


Here is a chart of the Dow which looks like it will test it's 52 week highs in the coming days. There are a couple of clues to underlying weakness such as the still negative MACD histogram.
Same story for the SP500.
I posted this chart a few times warning of a possible top in commodities and it looks like a good time to revisit the chart. The CRB has fallen out of the bollinger bands after the clues of weakness given earlier. With the dollar possibly strengthening, it looks like commodities could be in for a cyclical bear market. The ratio charts under the chart have all broken support.
ORB looks like it is ready to move higher.
RACK was a nice daytrade today but it also looks like it can make a nice quick swing trade. This is still a stock in a downtrend with downsloping MA's, but we have some positive items as well such as a MACD and RSI divergence, and a nice candle pattern today. I held a few shares over from my daytrade and may add on weakness.
REDF is in a similar situation to RACK but may have a nice short term move.
BMC is trading tightly as it tries to break resistance. Keep an eye on it if the markets follow through tomorrow.

CTSH has been getting sold at this level, however, maybe the third breakout attempt is a charm.


Good Luck tomorrow,

DT

hefeiddd

Pullback or failure? Posted by downtowntrader | 9/06/2006 10:06:00 PM | 0 comments »

This is the difficult part of being a trader. Trying to determine if a drop like today's is signaling that a top has been reached or if this is all part of working off some overbought readings. Today's selling was definitely distribution, but then, that is also a part of normal behavior for markets. The key will be how the indices handle upcoming support levels and whether they will be breached without a fight. It is important to adhere to your stops and wait patiently for things to sort themselves out. I am posting updated charts of the four major indices tonight with certain trendlines drawn in.

First is the SP500. It should find support in the 1290-1295 area and if it doesn't, then that is a clear signal that all is not right with it.

Next is the Russell. Today came close to invalidating the recent breakout and in fact, it may have. Keep an eye on whether it can reclaim the 200sma. My guess is that the best shorts for the next leg down will be small caps as they have been getting hit the hardest on down days.
Here is the Nasdaq composite. Todays drop took it right to expected support. What you don't want to see is a few days consolidating near the bottom or under todays range. Notice Volatility getting close to a breakout. That would be bearish.
Here is the DJIA. This could be a bearish wedge breakdown and should probably be shorted if it breaks the trendline.
The thing that has been tripping me up lately, is while seasonal influences point down, and while the market internals are pointing down, and economic indicators are pointing down, the markets clearly formed some chart patterns that have yet to reach their targets. The key is what happens with volume and certainly that has been down lately.

Good Luck,

DT




Bulls win today Posted by downtowntrader | 9/05/2006 09:26:00 PM | 0 comments »

Bulls took over today and closed the markets strongly. The indices are getting quite overbought and may be in need of a breather. That doesn't mean they will take that breather though, so the best course of action is to adhere to your trading plan and be cautious about any new entries at this point. We had some decent moves in some of the charts I highlighted last night led by a strong move in BTJ. I am adding a few charts tonight, but keep an eye on the ones mentioned last night as well.

OIH is either ready to break this trendline or ready to offer another short entry. It's best to wait for confirmation at this point.
INFA has been getting support in the mid to low 14's as shown by the tails on the last three candles. There is still plenty of room left to the upside here as well.
ODFL looks like it may resume the downtrend here.
BWNG may offer a scalp play tomorrow if it follows through on todays move.
NTRI had a strong day and is still possibly forming a reverse head and shoulders here.
My buddy Dave called TIE a couple days ago and unfortunately I let it go. It looks like a bottom may be in here.
IIIN is in a similar sector and may be close to breaking out as well.

Good Luck,

DT




Sunday Night Update Posted by downtowntrader | 9/04/2006 10:17:00 PM | 0 comments »

As usual, I am posting a ton of charts for the weekly watchlist. This week will definitely be interesting as people are expecting all sorts of things now that the summer trading season is over and the bearish fall season is upon us. With the indices overbought, I'm not sure it's a good idea to start initiating a bunch of intermediate swing trades. Of course, the indices can continue to remain overbought longer and the best plays will probably be quick hits with tight stops. It is probably a good idea to not be fully invested as it is quickly becoming a dangerous environment. Funny enough, I found mostly bullish looking charts but I've found this to be a contrary indicator in the past, so I am definitely on alert for a reversal.

Oil is oversold and may get a technical bounce pushing the Oil stocks back up. Here is a chart of ALJ showing a hammer on support.

CXW has been trading a very tight range and looks like the move will be up.
GYMB recieved strong support at the rising trendline and may be headed back to the top of the trading range.
ETP has been consolidating at the upper range of the breakout candle and may be ready to move higher.
LVS may be ready to form the right shoulder of a head and shoulders top by falling out of this rising wedge.
I'm keeping an eye on SLW to see if takes out it's all time high or bounces back and consolidates.
CCJ may continue to follow through here after breaking out of a triangle.

NTAP may breakout to the upside if it can clear this tight consolidation.
ARD is wedged between support and resistance and is worth watching to see which way it breaks.
BTJ is starting to coil up for a big move. It looks like it will be higher especially after moving higher up on the IBD 100 this weekend.
EZPW looks like it will end up at least testing the upper resistance trendline.
MWIV found support and looks like it will attempt another assault on the upper trendline resistance.
OFLX is consolidating in a bull flag pattern but the very low float makes this very difficult to trade.
OKE looks like it is ready to resume the breakout after clearing this pennant pullback.
PVA continues to try and clear formidable resistance. If it can clear Fridays high, it may accomplish the breakout.
TWGP is high on my list this week as they cleared the triangle but haven't followed through yet.
TXU opened weak on Friday and finished strong right up to resistance. I will be watching this one as well for a follow through move to the upside.
AKAM is close to breaking out as well. This was one of the better looking tech stocks I looked at.
STLD may be forming a large double bottom base as it cleared the downtrend channel for the most recent leg down.

Here are some interesting links I read this weekend.

Fallond's roundup of stockcharts.com public charts again. Great job of him sifting through the charts and highlighting some interesting ones. Maoxian is feeling bullish after checking out the put/call ratio. Great article by Tim Wood on how he combines cycles with Dow theory.
• The Stock Bandit's three signs you have a pet stock.

Good Luck,

DT




Musical Chairs

hefeiddd

Pullback or failure? Posted by downtowntrader | 9/06/2006 10:06:00 PM | 0 comments »

This is the difficult part of being a trader. Trying to determine if a drop like today's is signaling that a top has been reached or if this is all part of working off some overbought readings. Today's selling was definitely distribution, but then, that is also a part of normal behavior for markets. The key will be how the indices handle upcoming support levels and whether they will be breached without a fight. It is important to adhere to your stops and wait patiently for things to sort themselves out. I am posting updated charts of the four major indices tonight with certain trendlines drawn in.

First is the SP500. It should find support in the 1290-1295 area and if it doesn't, then that is a clear signal that all is not right with it.

Next is the Russell. Today came close to invalidating the recent breakout and in fact, it may have. Keep an eye on whether it can reclaim the 200sma. My guess is that the best shorts for the next leg down will be small caps as they have been getting hit the hardest on down days.
Here is the Nasdaq composite. Todays drop took it right to expected support. What you don't want to see is a few days consolidating near the bottom or under todays range. Notice Volatility getting close to a breakout. That would be bearish.
Here is the DJIA. This could be a bearish wedge breakdown and should probably be shorted if it breaks the trendline.
The thing that has been tripping me up lately, is while seasonal influences point down, and while the market internals are pointing down, and economic indicators are pointing down, the markets clearly formed some chart patterns that have yet to reach their targets. The key is what happens with volume and certainly that has been down lately.

Good Luck,

DT




Bulls win today Posted by downtowntrader | 9/05/2006 09:26:00 PM | 0 comments »

Bulls took over today and closed the markets strongly. The indices are getting quite overbought and may be in need of a breather. That doesn't mean they will take that breather though, so the best course of action is to adhere to your trading plan and be cautious about any new entries at this point. We had some decent moves in some of the charts I highlighted last night led by a strong move in BTJ. I am adding a few charts tonight, but keep an eye on the ones mentioned last night as well.

OIH is either ready to break this trendline or ready to offer another short entry. It's best to wait for confirmation at this point.
INFA has been getting support in the mid to low 14's as shown by the tails on the last three candles. There is still plenty of room left to the upside here as well.
ODFL looks like it may resume the downtrend here.
BWNG may offer a scalp play tomorrow if it follows through on todays move.
NTRI had a strong day and is still possibly forming a reverse head and shoulders here.
My buddy Dave called TIE a couple days ago and unfortunately I let it go. It looks like a bottom may be in here.
IIIN is in a similar sector and may be close to breaking out as well.

Good Luck,

DT




Sunday Night Update Posted by downtowntrader | 9/04/2006 10:17:00 PM | 0 comments »

As usual, I am posting a ton of charts for the weekly watchlist. This week will definitely be interesting as people are expecting all sorts of things now that the summer trading season is over and the bearish fall season is upon us. With the indices overbought, I'm not sure it's a good idea to start initiating a bunch of intermediate swing trades. Of course, the indices can continue to remain overbought longer and the best plays will probably be quick hits with tight stops. It is probably a good idea to not be fully invested as it is quickly becoming a dangerous environment. Funny enough, I found mostly bullish looking charts but I've found this to be a contrary indicator in the past, so I am definitely on alert for a reversal.

Oil is oversold and may get a technical bounce pushing the Oil stocks back up. Here is a chart of ALJ showing a hammer on support.

CXW has been trading a very tight range and looks like the move will be up.
GYMB recieved strong support at the rising trendline and may be headed back to the top of the trading range.
ETP has been consolidating at the upper range of the breakout candle and may be ready to move higher.
LVS may be ready to form the right shoulder of a head and shoulders top by falling out of this rising wedge.
I'm keeping an eye on SLW to see if takes out it's all time high or bounces back and consolidates.
CCJ may continue to follow through here after breaking out of a triangle.

NTAP may breakout to the upside if it can clear this tight consolidation.
ARD is wedged between support and resistance and is worth watching to see which way it breaks.
BTJ is starting to coil up for a big move. It looks like it will be higher especially after moving higher up on the IBD 100 this weekend.
EZPW looks like it will end up at least testing the upper resistance trendline.
MWIV found support and looks like it will attempt another assault on the upper trendline resistance.
OFLX is consolidating in a bull flag pattern but the very low float makes this very difficult to trade.
OKE looks like it is ready to resume the breakout after clearing this pennant pullback.
PVA continues to try and clear formidable resistance. If it can clear Fridays high, it may accomplish the breakout.
TWGP is high on my list this week as they cleared the triangle but haven't followed through yet.
TXU opened weak on Friday and finished strong right up to resistance. I will be watching this one as well for a follow through move to the upside.
AKAM is close to breaking out as well. This was one of the better looking tech stocks I looked at.
STLD may be forming a large double bottom base as it cleared the downtrend channel for the most recent leg down.

Here are some interesting links I read this weekend.

Good Luck,

DT




Musical Chairs

hefeiddd

Musical Chairs Posted by downtowntrader | 8/31/2006 10:19:00 PM | 0 comments »

The markets have been rising and you have to wonder if there is a big game of musical chairs going on. The big question is when will the music stop and who will have chairs to sit on. The markets didn't do much today but they closed weakly. With tomorrow being a shortened day and before the Labor Day weekend, expect volume to be extremely low. There is a chance that the downtrend will resume next week when volume returns, so I am starting to look at possibilities for shorts while maintaining a near term bullish bias.

TXU looks ready to break out here so keep an eye on it tomorrow.

TWGP cleared resistance but had a weak day today. Volume did tick up on the breakout day though.
CCJ came back to clear the triangle. It may follow through tomorrow.
It looks like HAL will begin to accelerate to the downside here.

HLX looks like it may fall out of this little wedge and the bigger triangle like pattern as well. There is still a small chance it breaks higher so be careful with it.
LVS may be having a hard time with resistance here and may be forming a larger head and shoulders top.
AL is another basic materials stock that may be forming a large topping pattern. It still has some room before completing the head and shoulders top.
UARM may be resuming the downtrend here.
ANDE may get a nice bounce after clearing the downtrendline. This can be classified as either a descending triangle breakout or reverse head and shoulders. Both yield a nice target.
ODFL had a nice bounce to resistance and may break down here.
TS is testing a long term trendline here.
Not sure what got into ORB today but they had a strong rush in volume mid day. Keep an eye on resistance above.

The environment is getting more dangerous and while things are still looking bullish, it makes sense to protect any profits made from recent trades. Be careful out there and adhere to your exit strategies.

Good Luck,

DT




No Update tonight Posted by downtowntrader | 8/31/2006 12:31:00 AM | 0 comments »

Being that I just got home there won't be an update tonight. Good Luck tomorrow,

DT




Strong Day Posted by downtowntrader | 8/29/2006 09:19:00 PM | 0 comments »

The markets closed very strongly today as Bulls bought the dip. I've been waiting for confirmation from the Russell and it looks like it is close to giving it. Technically, it is still at resistance but RSI is confirming the move. It looks like small caps may be back in the near term.
Here is a zoomed in version of my nasdaq composite chart showing a bull flag breakout. The target for this move takes it up for a retest of the broken trendline.

As I suspected yesterday there were some strong moves in tech stocks especially late in the day. Keep an eye on the charts I mentioned last night as well as NVDA, FFIV, DRIV, VRSN, MRVL, AMD, etc. One thing I will add tonight, if I was holding a lame stock right now, I would take advantage of whatever move we get here to unload it. I still feel that the markets are headed much lower at some point in the near future and that we are going to be given some great entries for shorts when this rally is over.
Good Luck,

DT




Bullish Move Posted by downtowntrader | 8/28/2006 10:13:00 PM | 1 comments »

The markets had a bullish move today although on typical light summer volume. I am seeing some bullish tech charts tonight which may give a clue that the Nasdaq is ready to lead the next few days. Oil and Commodities pulled back which may of helped.

Here is a chart of Oil. I highlighted an evening star on my candle chart a while back as a warning of a trend reversal and it has held up so far. Here is an OHLC bar chart showing a possible test with a long term trendline.

AKAM continues to look bullish and had a decent day today.

BWNG may be ready to break out of this flag consolidation.

RACK had a nice move today and stopped at the 38.2% retrace. It looks like it will head further up into the gap.

QCOM resembles the BWNG chart above and it looks like there is plenty of room left to the upside without damaging the overall bearish outlook.

BEAS is a little overbought, but looks like it will make a push to the red trendline.

BRCM also resembles QCOM and BWNG. It looks like it will breakout of a bull pennant and make a push to the 200sma.

CXW is holding above the flag breakout but indicators are starting to get negative.

I had ORB on my watchlist and just flat out missed the bounce today. This is a strong candle and looks like it is the beginning of a breakout.

MYOG is yet another Flag after downtrend breakout chart. Most of these look like they will make one more push up.

GOL held up after almost reversing the downtrend breakout. At this point it looks like they will travel up the channel which may turn out to be a large bear flag.
A couple of links worth checking out tonight follow:

PS. Transports got a reprieve as Oil pulled back when Hurricane Ernesto turned away from the Gulf and towards me ;) . Thankfully it looks like I will have to weather a Tropical Storm and not a hurricane tomorrow night. If you don't see a post, it is because of a power or DSL loss.


Good Luck tomorrow,

DT

hefeiddd

Fantasy Football Posted by downtowntrader | 8/27/2006 10:37:00 AM | 0 comments »

I have two fantasy football drafts / auctions today so I am posting my update early. I won't go into too much details as I am short of time. While the past weeks consolidation can be viewed as bullish the hourly charts on the indices are showing the possibility that we pull back a little more before anything else happens.

The transports have been weakening and if this hurricane is gonna push oil higher over the next week, then transports may weaken further.

Here is ODFL possibly breaking the neckline of a head and shoulders top.
XPRSA is also showing a possible break of a trendline.
CCJ failed to break the line and may be headed to the 200sma.
ALJ is looking like it will breakout.
INFA came back to test the break out area and may be ready to follow through.
I've been looking for NTRI to breakdown and instead it is forming a potentially bullish reverse head and shoulders. If it completes the pattern it may only mean a test of the earnings gap down.
TXU looks ready to move as it is being squeezed by two trendlines.
TWGP looks ready to explode to either side. Volume has been contracting and if I showed the bollinger bands I'm sure they would be really tight.
NITE may bounce here off the 20 sma or travel down to the rising trendline.
PVA has held near the neckline of the reverse head and shoulders base. It tried to rally Friday and may of failed. Watch to see which way it follows through.
LMS may of broken down here.
ICLR may get a fast move higher as it extends the bull flag breakout.
CTSH is giving a lot of warnings that a reversal may be imminent. Two really bearish candles followed by a shooting star on the last three breakout attempts should put bulls on edge. If it can clear this mess then a really nice move might be in store.
Keep an eye on ALY over the next week to see if it attempts to breakout over resistance.
BOOM's action has been healthy the past three days and it may be headed back to the top of the rising channel.

Good Luck,


DT




Decent Close Posted by downtowntrader | 8/24/2006 09:47:00 PM | 0 comments »

The markets had a decent close after showing some weakness during the morning. If the markets can follow through then it would pave the way for the next leg up of this rally. It looks like tech is the place to be if the markets will rally as Basic Materials and Energy have been looking weak.

Here is a chart of copper. It has retraced up after breaking out of a triangle and it looks like Slow Stochastics will cross back over to the negative.
Here is an updated chart of gold. Everyone is bearish on the dollar so it would only make sense if it went higher ;) . Notice the gold/dollar ratio indicator towards the bottom of the chart. It is close to breaking a trendline. As always, you can click on the chart to make it larger.
AKAM has been consolidating the recent breakout and may be ready to start moving back up.
FLSH was strong today reversing yesterdays losses with an outside day. This stock just hit a 52 week high and may follow through tomorrow.

SVNT is a smaller stock that looks like it has broken an ascending triangle. Volume is increasing which is bullish.
QCOM had an inside day which partly negates yesterdays reversal. This stock has been beaten down and may incite a short squeeze if it can clear this little flag consolidation.


Good Luck,


DT




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hefeiddd

Reversal Pattern Posted by downtowntrader | 8/23/2006 10:00:00 PM | 0 comments »

I will keep it short today since I have a splitting headache. While todays declines were on lower volume, most indices and plenty of stocks are showing bearish engulfing patterns. This may be a hint of lower prices to come in the near term.
With that in mind, here are a few short charts.

JCOM may be failing after filling the gap and wrestling with the 200 sma.
KOMG may be slipping into the accelerated downtrend channel shown in red.
HAL has been putting up a pretty good fight refusing to go down, but it also has failed to move up much higher and has stalled at the 61.8% retrace of the last leg down. The target for the head and shoulders top is still pretty far below.

Good Luck tomorrow,

DT




Welcome Posted by downtowntrader | 8/22/2006 09:21:00 PM | 0 comments »

Looks like I have a bunch of new visitors today, so I would like to offer my welcome. Thanks to Dr. Brett for the mention on his blog today. Also, thanks to Trader Jaime of Wall St. Warrior for the mention on his stocktickr interview. Check it out here, it is an interesting read, as are the other interviews.

For those visiting for the first time, this blog is mainly about sharing what is on my watchlist with the public. I started the blog as a way to share my charts with some trading buddies and groups I was a member in. I think it fills a niche in the blog community as most blogs are dedicated to reviewing daily trades or general trading advice. My main objective is simply to provide a watchlist of stocks likely to move BUT that also offer a decent short term entry for swing traders. If anyone likes what they see or has any suggestions / ideas please feel free to leave comments.

I'll start tonight by showing my CRB / US Dollar ratio chart. It is interesting to note that Gold and Oil seem to be bouncing short term, however, it appears that a top may be in place. Look closely at the chart below and notice that the CRB index failed to reach the upper band after a normal correction and looks like it may of formed a double top. Also, the major Ratio trendlines are close to breaking. At this stage in the economic cycle, it seems like the time is right for a peak.

Funny that I will follow that up with a bullish oil and gas refiner, but the charts are what they are short term. There are several refiners in tonights watchlist and we'll start with ALJ. It hasn't triggered yet and may drift to the ascending trendline, but I will be watching for a break of this little pennant type consolidation.
WNR is another refiner that looks like it has already started to bounce.
NITE is looking like it has cleared resistance and may get a nice move if it can clear the wick left yesterday.
MYOG has been consolidating the breakout move for three days and may be ready to follow through.
DBRN is looking pretty bearish after the head and shoulders top and then a failed consolidation. There is a sliver of support on the lower trendline, but the major trendlines are broken.
CTCM is for aggresive traders not shy about IPO's. Has a little pennant going and a morning star type reversal pattern.
CTSH is a very nice looking chart with a little whipsaw after the failed breakout. If it can clear this little consolidation, it would validate the breakout and offer a very nice target.
HOC is another refiner that looks bullish. Although these trendlines are a little unorthodox, it is clear that these are lines of importance and candles are confirming support right here.
Here is a possible head and shoulders top in the making. ODFL is in the transports sector which has been showing weakness with signs pointing to a weakening economy.

We've had some decent moves on stocks mentioned on this weeks watchlist such as ORB, NEU, ETP, ARD, EZPW, TXU, so make sure to keep an eye for follow through moves.
Good Luck,

DT




Narrow Range consolidation Posted by downtowntrader | 8/21/2006 09:29:00 PM | 2 comments »

Not much to add tonight so I will just post a few quick charts.

ORB looks like it wants to breakout here. MACD is about to crossover and Slow Stoch and CCI are moving higher.

TIE is back to the descending trendline and showing a little weakness. Keep an eye on it at the least.
ETP was mentioned last week as it looked like it might try and clear the triangle. It looks like it did and may follow through tomorrow.

Thats it for tonight.

Good Luck,


DT




Sunday Night Update Posted by downtowntrader | 8/20/2006 07:41:00 PM | 0 comments »

It was tough to prepare tonight as the markets look like they could easily do anything at this point. The indices are overbought and could easily consolidate sideways. They could continue to push higher as excitement builds, or they could fall apart abruptly due to various pressures not limited to seasonal weakness, inflation concerns, etc. In looking at the indices the charts are certainly looking bullish and although there are several signs pointing to a weakening market we can't fight the tape. If the market is going up in the near term, then we go long.

Here is a chart of the Nasdaq composite. The most interesting thing to point out is near the bottom. If you look at the Nasdaq / SP500 ratio you will notice a trendline break. This is bullish as it shows market participants taking bigger risks.

Here is the Dow Industrials clearing a double bottom with a target that takes it to new high territory.

Here is a monthly chart of the DJIA showing a cup and handle type base. It will be interesting to see if it attempts to clear the pivot point.

ADM is looking interesting as this base matures. It failed to reach the lower area twice now and looks like it is headed to the upper trendline.

ARD has been holding up well with weakness in it's sector. It may get a bounce on this ascending trendline.
EZPW looks like it is finding support and may be headed higher.


Lots of gold charts look oversold and may get a bounce this week. Here is GG near the bottom of a triangle.

The GLG chart looks very similar to the GG chart showing a hammer at a support line.

ICE looks like it will follow through on the triangle breakout.

NEU cleared the downtrend and now is consolidating in a bull flag. If it clears the flag it should head to a new high.

TXU came back to test the breakout area and had a nice bullish morning star candle pattern on support.

WCC looks to be breaking down here as it was rejected on the descending trendline.

ANDE looks like it may hold up at the bottom of the ascending triangle. I would be careful if I was short as it could break the downtrendline on this attempt.

FILE is looking quite bullish with this bull pennant forming.

As pointed out last week VIVO indeed touched the downtrendline. At this point, we wait for a reversal pattern for confirmation.

TIE is headed back up to the descending trendline and may be a short again.

NTRI is quickly running out of room and should make a move anyday now.
WNR looks like it is trying to find support here at the ascending trendline.


CKFR fell out of this little triangle on Friday and may be headed for a retest of 34.
Keep in mind that sometimes on the monday following options expiration there is a counter move to the preceding action which would mean lower prices the next few days. Also, Traderfeed had some interesting data on the days following 5 day highs on the SP500.
Good Luck,


DT

hefeiddd

Pre Options Expiration Posted by downtowntrader | 8/17/2006 08:52:00 PM | 0 comments »

It was a lackluster day after the fireworks of the past two days, but it is to be expected after all the magnitude of the past few days worth of gains. As Mike points out, most of the indices are already overbought or near overbought which points to consolidation at a minimum. Aggresive traders can short into a pullback with the realization that a rally can resume at any point. It really is a tricky time to trade with counter rallies spurring short covering in a bearish environment. You can add the elections as a possible reason for a rally at this point according to both this article and this one. That being said, I am posting a few shorts below in the case that this rally is over.

CYMI has worked it's way up to the descending trendline as has some indecisive action there. For those of you that suscribe to the "max pain" theory, max pain for CYMI is 40, so it will be interesting to see if it gets taken down tomorrow.

Much of the same here with ATHR, except we have a nice shooting star. Max pain is 17.50 for ATHR.

NTRI is working it's way sideways under resistance. It could fall apart when it runs into the descending trendline in the next couple of days.

Good Luck to those trading tomorrow and have a nice weekend.

DT




The beauty of being a short term trader Posted by downtowntrader | 8/16/2006 08:21:00 PM | 0 comments »

One of the biggest advantages of being a short term trader is the ability to switch sides quickly. While I've been expecting the markets to continue the downtrend, it doesn't make a whole lot of sense to fight the tape. I had been expecting a summer rally and maybe it is just a little late. Whether this is a real move, options games, oversold bounce, manipulation, it doesn't really matter, because lots of money can be made to the long side on days like this. The other nice thing is that there will be some great short entries when this is all over.

Here is a chart of the SP500 showing the breakout that I thought failed. Interestingly, the target for the reverse head and shoulders takes it to new high territory.


Here is a chart of VIVO which was a great short for me. I am keeping an eye on it as it may set up for a nice short entry in a day or two.

Same deal with KOMG. Another two or three days of rallying would be ideal.
Natural Gas stocks have fallen a little off the radar but the sector still looks good. Here is CHK's weekly chart. It is wedged between two previous trendlines.
TRMB had a nice reverse head and shoulders breakout and may now be ready to clear the entire base.
TNL looks like it is clearing this small consolidation.
ICE appears to be breaking out of a triangle reversal pattern.

Keep in mind that options expire on Friday and may bring a counter move. Also, I would be a little wary of trying to chase tech stocks after 2-3 days of rallying.

Good Luck,

DT




Perplexing Action Posted by downtowntrader | 8/15/2006 08:35:00 PM | 0 comments »

It was a very perplexing day as the markets gapped above the highs of yesterdays long wicks and maintained above yesterdays highs as they consolidated and then closed at the highs. It will be interesting to see how they react to tomorrows inflation and housing numbers. Keep in mind that this is options expiration week and I wouldn't dismiss program trading trying to jockey for position kicking in already. With that in mind, todays action was decisively bullish and there is a chance for a follow through tomorrow. Tomorrow could be tricky so it's best to wait till after 10 before initiating any new positions.

Here is an updated chart of CXW which I think gave a buy signal yesterday.
INFA continues to look bullish here. You could classify the chart pattern as a cup and handle or reverse head and shoulders with a close above 14.
HANS tagged the 200 yesterday and reversed, followed by a bearish engulfing pattern today (on a strong day no less). Looks pretty weak to me.
BWNG successfully cleared the downtrend and looks to have cleared a bull falg consolidation.

This is a similar chart for MYOG, except it hasn't cleared the Flag yet.


Good Luck tomorrow,
DT




Shooting Stars Posted by downtowntrader | 8/14/2006 09:13:00 PM | 0 comments »

Lot's of shooting stars after the indices reversed today. Things are looking bleak for the bulls as the good news of a cease fire failed to hold stocks higher. Gold, Oil, and Materials were weak again as the dollar rose. The dollar is up against resistance so it remains to be seen if there is more behind this move.

Here is a chart of Copper showing a failed breakout. Usually when a breakout fails the move down is swift as trapped bulls and shorts sell aggresively.

Here is a chart of the DJIA showing the shooting star. Slow Stochastics has plenty of room to the downside. It looks like the relative strength for the industrials vs the $crb index is about to break a trendline. This is a negative as it shows a slowing worldwide economy.
I've highlighted ATI a few times and it is moving nicely. It is nearing support with both a horizontal and the 200sma nearby so it would be prudent to tighten up on a stop and get ready to watch for a consolidation.
NTRI looks like it failed to get over trendline resistance and had a negative candle. With MED getting hammered to the tune of -26% after earnings it could be a rough day for diet stocks.
With materials stocks weakening keep an eye on NUE. It looks like NUE is breaking out of a triangle here.
TS looks similar to NUE and which makes sense being in the same sector.
It looks like there will be some weakness the next couple days with a possible reprieve for options expiration. Good Luck,


DT

hefeiddd

Pre Options Expiration Posted by downtowntrader | 8/17/2006 08:52:00 PM | 0 comments »

It was a lackluster day after the fireworks of the past two days, but it is to be expected after all the magnitude of the past few days worth of gains. As  out, most of the indices are already overbought or near overbought which points to consolidation at a minimum. Aggresive traders can short into a pullback with the realization that a rally can resume at any point. It really is a tricky time to trade with counter rallies spurring short covering in a bearish environment. You can add the elections as a possible reason for a rally at this point according to both , max pain for CYMI is 40, so it will be interesting to see if it gets taken down tomorrow.

Much of the same here with ATHR, except we have a nice shooting star. Max pain is 17.50 for ATHR.

NTRI is working it's way sideways under resistance. It could fall apart when it runs into the descending trendline in the next couple of days.

Good Luck to those trading tomorrow and have a nice weekend.

DT




The beauty of being a short term trader Posted by downtowntrader | 8/16/2006 08:21:00 PM | 0 comments »

One of the biggest advantages of being a short term trader is the ability to switch sides quickly. While I've been expecting the markets to continue the downtrend, it doesn't make a whole lot of sense to fight the tape. I had been expecting a summer rally and maybe it is just a little late. Whether this is a real move, options games, oversold bounce, manipulation, it doesn't really matter, because lots of money can be made to the long side on days like this. The other nice thing is that there will be some great short entries when this is all over.

Here is a chart of the SP500 showing the breakout that I thought failed. Interestingly, the target for the reverse head and shoulders takes it to new high territory.


Here is a chart of VIVO which was a great short for me. I am keeping an eye on it as it may set up for a nice short entry in a day or two.

Same deal with KOMG. Another two or three days of rallying would be ideal.
Natural Gas stocks have fallen a little off the radar but the sector still looks good. Here is CHK's weekly chart. It is wedged between two previous trendlines.
TRMB had a nice reverse head and shoulders breakout and may now be ready to clear the entire base.
TNL looks like it is clearing this small consolidation.
ICE appears to be breaking out of a triangle reversal pattern.

Keep in mind that options expire on Friday and may bring a counter move. Also, I would be a little wary of trying to chase tech stocks after 2-3 days of rallying.

Good Luck,

DT




Perplexing Action Posted by downtowntrader | 8/15/2006 08:35:00 PM | 0 comments »

It was a very perplexing day as the markets gapped above the highs of yesterdays long wicks and maintained above yesterdays highs as they consolidated and then closed at the highs. It will be interesting to see how they react to tomorrows inflation and housing numbers. Keep in mind that this is options expiration week and I wouldn't dismiss program trading trying to jockey for position kicking in already. With that in mind, todays action was decisively bullish and there is a chance for a follow through tomorrow. Tomorrow could be tricky so it's best to wait till after 10 before initiating any new positions.

Here is an updated chart of CXW which I think gave a buy signal yesterday.
INFA continues to look bullish here. You could classify the chart pattern as a cup and handle or reverse head and shoulders with a close above 14.
HANS tagged the 200 yesterday and reversed, followed by a bearish engulfing pattern today (on a strong day no less). Looks pretty weak to me.
BWNG successfully cleared the downtrend and looks to have cleared a bull falg consolidation.

This is a similar chart for MYOG, except it hasn't cleared the Flag yet.


Good Luck tomorrow,
DT




Shooting Stars Posted by downtowntrader | 8/14/2006 09:13:00 PM | 0 comments »

Lot's of shooting stars after the indices reversed today. Things are looking bleak for the bulls as the good news of a cease fire failed to hold stocks higher. Gold, Oil, and Materials were weak again as the dollar rose. The dollar is up against resistance so it remains to be seen if there is more behind this move.

Here is a chart of Copper showing a failed breakout. Usually when a breakout fails the move down is swift as trapped bulls and shorts sell aggresively.

Here is a chart of the DJIA showing the shooting star. Slow Stochastics has plenty of room to the downside. It looks like the relative strength for the industrials vs the $crb index is about to break a trendline. This is a negative as it shows a slowing worldwide economy.
I've highlighted ATI a few times and it is moving nicely. It is nearing support with both a horizontal and the 200sma nearby so it would be prudent to tighten up on a stop and get ready to watch for a consolidation.
NTRI looks like it failed to get over trendline resistance and had a negative candle. With MED getting hammered to the tune of -26% after earnings it could be a rough day for diet stocks.
With materials stocks weakening keep an eye on NUE. It looks like NUE is breaking out of a triangle here.
TS looks similar to NUE and which makes sense being in the same sector.
It looks like there will be some weakness the next couple days with a possible reprieve for options expiration. Good Luck,


DT

hefeiddd

Sunday Night Update Posted by downtowntrader | 8/13/2006 10:05:00 PM | 0 comments »

The indices are in a precarious situation right now with most looking like they are stalling on the weekly charts. I have lots of charts tonight so I will get right to it.

Gold continues to drop and it will be interesting to see how the cease fire in Lebanon will impact Gold and Oil.

Here is a weekly chart of the Russell showing a doji followed by a reversal candle. Keep an eye on the trendline.
Here is the OIH etf. The head and shoulder top remains a threat and if oil pulls back on the Middle East news then OIH may complete the pattern.
KOMG may resume the downtrend after two inside days.
ARD may get a pop on moving higher in IBD 100 rankings.
ETP printed a bullish candle pattern on support so watch to see if it can clear resistance.
ISYS is above resisitance and has been holding up on weak days.
PVA is close to completing a reverse head and shoulders pattern. Keep an eye on the neckline.
Here is another reverse head and shoulders pattern that was completed in SU. It could be a whipsaw though as a shooting star at 86.78 is giving a warning.
SYKE may be in the process of forming a bull flag.
EOG looks to have failed a breakout. It still has room to the downside after completing a head and shoulders top.
OIS is up against longtime support. If it breaks down it should fall a long way.
CXW has been holding up well and could move higher if the markets get a bounce.
HAL has been holding up in this area, but momentum is slowing and the trend is still down.
HLX is another energy stock that looks weak.

I highlighted BBBY last week and it continues to stay under the trendline. It looks like it will head much lower.

Thats it for tonight. Good Luck,

DT




Bullish Charts Posted by downtowntrader | 8/10/2006 08:33:00 PM | 0 comments »

The indices mostly just drifted up to resistance today. There are a couple of things that may offer some hope to the bulls. First, I've noticed more strength in the Nasdaq the past two days, and the Russell may of bounced off support today. With the Dollar rallying today oil and gold also pulled back which may calm inflation fears a little. While the overall picture remains bearish, I think I've posted enough bearish charts for the watchlist. I am adding a few more bullish charts tonight in case there are still legs here.

Big Pharma and Medical stocks look like they may be the favored "bear stocks" this time and AMGN has come back to retest a major breakout point. The first retest offers one of the safest entries into a stock breaking a downtrend.
MYOG also recently cleared a downtrend and is trading a flag type base. Watch for a move out of the flag.
NGPS has been solid this year and is forming a pennant into support.
ENS may be forming a continuation triangle here.
CXW has been narrowing it's trading range and may be ready for move.
I've had my eye on INFA looking for an entry and it looks like it may clear a cup and handle soon.
UACL is a member of the transports which have been one of the weakest groups overall. They had a bounce today and UACL didn't participate. That is bearish. Others in this sector worth watching are UTIW,CHRW,CLDN,and XPRSA.
ATI continues to look bearish.

This is once again a dangerous spot for the markets. Adhere to your stops and be patient.

Good Luck,

DT

hefeiddd

SP500 failed breakout Posted by downtowntrader | 8/09/2006 09:32:00 PM | 0 comments »

The SP500 fell back below the neckline of a reverse head and shoulder failng the breakout. If it can't reclaim the neckline tomorrow it might be all over for the bulls in the near term.

Here is an updated chart on FMD. I still think this thing is headed much lower.
LVS had a nice drop from the trendline break and is now up against major support. Watch to see if it breaks down.
EZPW is one that could go either way. The chart looks bearish but it is sitting on the 50sma and is very oversold.

Thats it for tonight. Good Luck,

DT




Fed Pauses Posted by downtowntrader | 8/08/2006 11:35:00 PM | 0 comments »

The Fed paused today and Bulls could not capitalize on the news. However, bears didn't exactly take over either as the decline was not drastic. It will be interesting to see if the markets follow through tomorrow or if we get a reversal. All of the indices are under resistance and would need a sharp move to reclaim support. There were a couple clues given to us today though. First, smallcaps easily declined more then the other indices by a wide margin. Second, Materials, Industrials, and Consumer Discretionary were the days worst performers. These may be the hardest hit sectors once the downtrend resumes in earnest. Interestingly, Information Technology was up with Consumer Staples as the best performers.

Here is chart of the Russell Index. It is under all the moving averages and looks to have broken a little triangle continuation pattern which is part of a bigger pattern. You can use IWM as a proxy for the Russell for those interested.
Here is the weekly chart of the Russell. It would probably get ugly really fast if the lower trendline was violated. The ratio charts near the bottom continue to show underperformance by smallcaps vs other markets.
Here is an updated chart on the gold contract. Notice it is walking down the trendline I highlighted last week. It was interesting that the Dollar actually was up today and Gold down with what should of been dollar bearish news. If the dollar tanks tomorrow then gold may get the push it needs.
Since the bears didn't take control today, there is a chance that there is a snapback rally tomorrow. It would probably be sharp as shorts rush to cover. Although I doubt any rally would last too long, I would be looking to get some momentum trades in. With that in mind, I am highlighting a few flag patterns. These could offer a quick gain if the markets rally.

First up is Flag's Flag :D.
Next is ICLR.
And then IMKTA.
And if the markets decide to follow through with the next wave down, then I am looking for stocks in sectors such as the ones mentioned above that would suffer in a slowing economy.

BBBY seems to fit the bill perfectly. They are in a downtrend and are being hurt by several factors such as the ailing housing market and now the weakening economy. They broke a huge descending triangle and it looks like they retraced back up to it and failed.
ATI tried to break out of the triangle but it may of been a whipsaw. I would wait for confirmation on this one.
ODFL is in the transports group and that group has been getting hammered. If they break below the previous pivot low, then I see a trip to the 200sma.
TS looks like a failed breakout and may pick up steam to the downside.

Other shorts highlighted here recently such as TIE, CRDN, and HAL continue to look good to me. Also, TraderJamie has highlighted CYMI and LRCX recently and those look good as well.

Good Luck,

DT




Low Volume Posted by downtowntrader | 8/07/2006 08:42:00 PM | 1 comments »

The indices ended down today but volume was low and the action fairly indecisive. All this was expected with the widely anticipated fed decision tomorrow. Although most likely the markets won't make a move until after the minutes are released, there is a chance they start moving right away. If you recall the last meeting, the markets were moving higher and kept moving higher after the meeting. It wasn't till the next day that the move was faded. With that in mind, here are a handful of charts worth watching.

GOL is up against a descending trendline and will probably test the 200 sma if it fails here.
TIE has been one of the great movers this year, but has been stuck in this descending channel. It is up against the upper trendline and showing some weakness. Slow Stochastics has crossed over under 80 possibly showing a failure to gain momentum.
KOMG has been trying to hold the lower trendline but is up against some pretty stiff resistance here. It will probably fail without the help of a rally in the Nasdaq.
ALJ is one of the better looking bullish charts I am seeing. They reported earnings after the bell and there were no trades, so not sure how it will go tomorrow.

Good Luck,

DT

hefeiddd

Weakening Commodities offer clues to Market direction Posted by downtowntrader | 8/06/2006 09:24:00 PM | 0 comments »

Tonights update is a little different then the usual Sunday night watchlist. I don't think it makes much sense to enter any swing trades until after the fed announces their decision in a couple days. A lot of people are looking for the much anticipated pause and hoping a rally will occur. I am a little suspect of any substantial rally at this point, although I would be more then happy to participate if thats what occurs. I think the next substantial move will be down although I am open to the possibility of some more life in the summer rally. What I decided to post tonight was some of my sector charts, some of which are still under development. There is a good chance that commodities are topping and there may be some good money to be had on the short side.

Here is a chart that shows three of the four markets. Bonds, Stocks, and Commodities (Currencies are ommitted). The normal market cycle is for Bonds to rise first, then stocks, then commodities. Bonds are then the first to peak, followed by stocks, and then commodities. The purpose of this chart is to show the three markets together to see which is outperforming and to identify the rotation. I highlighted with arrows the previous market tops and then the current possible tops. I think it's clear that bonds peaked already. The question is whether stocks peaked already and if commodities are then following.

Here is a chart of the $crb and the dollar index. While the $crb is still comfortably in an uptrend, notice it failed to reach the upper Bollinger band after bouncing off the mid point and 39 week ema.
The following are some etf charts.

Here is the $osx which is looking pretty similar to the OIH. Oils stocks are still looking weak to me and are ripe for a correction after this last bounce higher.
Retailers may have a "whipsaw" rally after breaking support and then bouncing back. I think ultimately this rally will fail.
Natural Gas is one the only energy related areas that looks bullish to me. Here is the $XNG coming back to test support. While there is always the chance this is a failed breakout, the path of least resistance is still up.
Here is OIH. The last leg up failed to make a higher high and the possible head and shoulders top is still in place. With the mess in the Middle East and hurricane season upon us, you would think the Oils stocks would be going crazy. Since they are not, you have to wonder if the big boys are selling into every rally?
Here is the Brokers which are also looking good. They may pull back here if the market downtrend resumes, but they should hold up better then other sectors.

As I mentioned before, the Fed meeting should be a market moving event, therefore I am not entering any new trades, and as a matter of fact, I only have one trade open right now (Short HAL). The Fed pausing acknowledges that the economy is weakening and can't weather more rate increases. Eventually this will show up in corporate earnings and in turn impact the markets.

Good Luck and Good Trading,

DT




Bulls take over Posted by downtowntrader | 8/03/2006 08:03:00 PM | 0 comments »

The bulls took over today after a sharp drop at the open. At this point it looks like the bulls will remain in charge until the fed meeting, unless tomorrows jobs report is a doosie. I am trimming back on positions and starting to daytrade more until after the meeting. Here are a few charts that may see some follow through tomorrow.

CTSH had a strong move today following through after yesterdays gap up.
CRY looks like it finally cleared this little consolidation area.
SII was able to clear resistance after bouncing off the 20sma.
I was emailed by the folks at InstantBull.com about their new service letting me know that I was on their blogs link. I checked out the site, and it looks very promising. For those of you that like to cruise the message boards, there is a cool feature that lets you browse multiple message boards for a particular stock. You can also check out all the news for a stock available on the major sites such as Yahoo and Google without having to browse to multiple sites. Very cool indeed. Check it out when you get a chance. I think many of you will find this site very useful.



I'm taking off for a long weekend, so I won't be trading tomorrow. BOOM reported after hours and may move nicely tomorrow for those interested in a gap play. My buddy BTUFF, who is the man with Boom's fundamentals, says it was a blowout report. Let's see if the stock price correlates.

Good Luck,

DT




Spinning our wheels Posted by downtowntrader | 8/02/2006 10:11:00 PM | 0 comments »

The indices are back where they were on Monday after a reverse image of Tuesdays action. With the Fed on everyones mind and the big bad jobs report on Friday, it looks to me like tomorrow would be a nice day for golf or to hit the beach.

An interesting development has been the weakening of the dollar leading up the fed meeting which has been giving strength to Gold. Here is a chart of the gold index. It is right up at resistance and the 61.8% fibonacci retrace level which could cause a reversal. A lot of mining stocks are looking bullish so it may just barrel through.



Oil stocks closed a little weak and if they are pulling back here then HAL is my number 1 short. I would prefer to see an inside day that would give a tighter stop loss before breaking down.



Also, I just finished reading Intermarket Analysis by John Murphy. I will be posting a review in the next few days, but the short review is "awesome".

And in the funny lame section, I heard this song the other day on my satellite radio and was cracking up. Not sure why Joey Ramone wrote this song, unless it's as transparent as the lyrics. I found it amusing and I'm sure the CNBC viewers out there will too.


Maria Bartiromo lyrics

What´s happening on Wall St.
What´s happening at the Stock Exchange
I want to know
What´s happening on Squawk Box
What´s happening with my stocks
I want to know
I watch you on the TV every single day
Those eyes make everything okay
I watch her every day
I watch her every night
She´s really outta sight

Maria Bartiromo
Maria Bartiromo
Maria Bartiromo

What´s happening with Yahoo!
What´s happening with AOL
I want to know
What´s happening with Intel
What´s happening with Amazon
I want to know
I watch you on TV every single day
Those eyes make eveything OK
I watch her every day
I watch her every night
She´s really outta sight

Maria Bartiromo (5x)

What´s happening on Wall St.
What´s happening at the Stock Exchange
I want to know
What´s happening on Squawk Box
What´s happening with my stocks
I want to know

I watch her at the big board every single day
While she´s reporting you best stay out of her way
I watch her every day
I watch her every night
She´s really outta sight

Maria Bartiromo (3x)


Good Night and good trading,

DT




Energy and Gold show strength Posted by downtowntrader | 8/01/2006 09:45:00 PM | 1 comments »

Markets had a fairly negative day that had me thinking the downtrend would accelerate, however, a strong close ate up a decent amount of the losses for the day. The Nasdaq was once again the weaker of the indices, and I wonder how many people are worried about the last bear market with techs and have been unloading ahead of time. Either way, things are still looking pretty bearish in the intermediate to long term with Oil and Gold resuming their uptrends which would force the Fed to keep raising rates at some point.

There are a lot of charts looking good for shorts.

But we'll start with a long ;). WNR held above the breakout area and had a decent day.
BTU is up against resistance and may be stalling here.
NTRI retraced a little of the recent losses but has barely made it to the earnings low. They may fail here.
GYMB is sitting on a major trendline support. Watch to see what it does here .
UARM may of broken a major trendline here and if it loses the 50sma it could get ugly.
BWNG looks like it is ready to resume the downtrend.

One of the clues to a stock being distributed is when good news fails to move it higher. CRDN released news of a contract a couple days ago and the stock popped and gave all the gains back fairly quickly. Now it moved further under the 200sma and may be breaking down.
KOMG retraced a bit higher and failed to reclaim previous support. If it
ATI ran into resistance at the descending trendline and sma's. Looks like it will head to previous pivot low.
I would look to the energy and metals sectors for short term strength. Oil stocks rallied into the close today and may be hot tomorrow with a possible hurricane on the way.

VLO is trading between support and resistance levels here. It looks like it wants to move higher.
TSO is trading a huge triangle. If it clears it, it could be a nice move.
OMNI has been a great performer, and looks like it is gaining steam agin.
AUY is an interesting gold play as it completed a reverse heaad and shoulders today. The target puts it at the 52 week high.

Good Luck,

hefeiddd

Natural Gas breakout Posted by downtowntrader | 7/31/2006 09:36:00 PM | 0 comments »

Natural Gas was up 14% today and is up about 50% in the last two weeks. While it is extended right now, it looks like Natural Gas will be the commodity du jour for this hurricane season.

Here is a chart of the Natural Gas index. This looks like a bullish breakout with two resistance levels recently cleared.

CMED may finally have bottomed. They cleared downtrend resistance early in the day, but pulled back to the resistance zone. What is encouraging however, are all the positive divergences in the indicators.
HANS formally announced their earnings date today after the bell, and are an earnings run candidate. They may clear the little pennant / channel and make a run for the previous 52 week high.
I've been trying to locate shares of FMD to short for a few days now, but can't find any. This however, may be a good play for the options crowd. It looks like it is headed much lower to me.

Good Luck,

DT




Sunday Night Update Posted by downtowntrader | 7/30/2006 11:43:00 PM | 0 comments »

It's getting late so I will be brief. The SP500 broke it's neckline and is in short term rally mode. The Nasdaq is in terrible shape overall, but semiconductors were strong Friday. Small Caps are still lagging which is a clue as to the overall sentiment. All the indices are going up on lighter volume, so this rally should be suspect until volume confirms it. Here are some charts worth watching.

Oil continues to drift down but is holding the declining trendline as support.Watch for a move to either direction.


Natural Gas has been touted as an alternative to Oil plays and CHK just broke a trendline on the weekly chart. Also notice the Parabolic Sars buy signal.

HAL is trying to retrace some of the recent declines but may have some trouble here at the gap and 38.2% Fibonacci Retrace.




BOT looks like it cleared a cup and handle here.

WNR had a strong move friday clearing resistance. I would wait for an entry near the trendline.
NEU looks like it is clearing a descending trendline here.
MWIC had a huge move Friday and may of cleared this sloppy base.
CTSH has been trading these nice little channels and may be headed up to the upper resistance trendline.
ALJ may be ready to clear resistance. Notice the uptick in volume.

Thats it for tonight.




Almost, but not quite Posted by downtowntrader | 7/28/2006 07:03:00 PM | 2 comments »

Trader Mike hit over 1,000,000 page views today, and I had the honor of being number 999,999. Join me in congratulating Mike on this accomplishment.






No Phone or DSL Service Posted by downtowntrader | 7/28/2006 09:32:00 AM | 0 comments »

Sorry I couldn't post an update last night. I have no Phone or DSL service at home. Looks like some construction workers cut something yesterday. I may not have a post this weekend if the problem isn't resolved.


DT




Markets at resistance Posted by downtowntrader | 7/26/2006 09:44:00 PM | 0 comments »

The SP500 and Dow both stalled at the resistance I mentioned last night.

Here is a chart showing the SP500 at neckline resistance. I wouldn't be surprised to see the indices stall here.
Here is the Dow showing a similar situation.
Here is the Nasdaq which is struggling with resistance of it's own. Notice How the previous June support is now resistance.
Metals were up today as the dollar was stalling out. If the dollar falls here Gold and Silver could get a nice little bump.

No individual charts tonight. I would look to the consumer discretionary sector for possible shorts and staples for longs.

Good night,

DT




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hefeiddd

Natural Gas breakout Posted by downtowntrader | 7/31/2006 09:36:00 PM | 0 comments »

Natural Gas was up 14% today and is up about 50% in the last two weeks. While it is extended right now, it looks like Natural Gas will be the commodity du jour for this hurricane season.

Here is a chart of the Natural Gas index. This looks like a bullish breakout with two resistance levels recently cleared.

CMED may finally have bottomed. They cleared downtrend resistance early in the day, but pulled back to the resistance zone. What is encouraging however, are all the positive divergences in the indicators.
HANS formally announced their earnings date today after the bell, and are an earnings run candidate. They may clear the little pennant / channel and make a run for the previous 52 week high.
I've been trying to FMD to short for a few days now, but can't find any. This however, may be a good play for the options crowd. It looks like it is headed much lower to me.

Good Luck,

DT




Sunday Night Update Posted by downtowntrader | 7/30/2006 11:43:00 PM | 0 comments »

It's getting late so I will be brief. The SP500 broke it's neckline and is in short term rally mode. The Nasdaq is in terrible shape overall, but semiconductors were strong Friday. Small Caps are still lagging which is a clue as to the overall sentiment. All the indices are going up on lighter volume, so this rally should be suspect until volume confirms it. Here are some charts worth watching.

Oil continues to drift down but is holding the declining trendline as support.Watch for a move to either direction.


Natural Gas has been touted as an alternative to Oil plays and CHK just broke a trendline on the weekly chart. Also notice the Parabolic Sars buy signal.

HAL is trying to retrace some of the recent declines but may have some trouble here at the gap and 38.2% Fibonacci Retrace.




BOT looks like it cleared a cup and handle here.

WNR had a strong move friday clearing resistance. I would wait for an entry near the trendline.
NEU looks like it is clearing a descending trendline here.
MWIC had a huge move Friday and may of cleared this sloppy base.
CTSH has been trading these nice little channels and may be headed up to the upper resistance trendline.
ALJ may be ready to clear resistance. Notice the uptick in volume.

Thats it for tonight.




Almost, but not quite Posted by downtowntrader | 7/28/2006 07:03:00 PM | 2 comments »

over 1,000,000 page views today, and I had the honor of being number 999,999. Join me in congratulating Mike on this accomplishment.






No Phone or DSL Service Posted by downtowntrader | 7/28/2006 09:32:00 AM | 0 comments »

Sorry I couldn't post an update last night. I have no Phone or DSL service at home. Looks like some construction workers cut something yesterday. I may not have a post this weekend if the problem isn't resolved.


DT




Markets at resistance Posted by downtowntrader | 7/26/2006 09:44:00 PM | 0 comments »

The SP500 and Dow both stalled at the resistance I mentioned last night.

Here is a chart showing the SP500 at neckline resistance. I wouldn't be surprised to see the indices stall here.
Here is the Dow showing a similar situation.
Here is the Nasdaq which is struggling with resistance of it's own. Notice How the previous June support is now resistance.
Metals were up today as the dollar was stalling out. If the dollar falls here Gold and Silver could get a nice little bump.

No individual charts tonight. I would look to the consumer discretionary sector for possible shorts and  staples for longs.

Good night,

DT




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