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Friday, February 22, 2008
Preliminary Week-End Equity Market Comment - 2/22/2008
If you will recall a post about 2 weeks ago that discussed a pattern of Investor Sentiment and the results of this pattern occuring.
For those who do not remember, the pattern has been 100% over a 10 year time frame and has returned 24% from the lows to the end of the move.
A move of this size will bring us right back to the highs on the S&P 500 at 1570-1580.
Here is more confirmation of this pattern, as the prediction model is looking for sharply higher prices over the next 2 1/2 months.
The blue bars represent the current market action and the black bars are the benchmark model.
As you can see, the black bars make quite an impressive run over the next 60 days and to top it all off, the model is calling for a 24% return from low to high just like the sentiment pattern did.
For those who do not remember, the pattern has been 100% over a 10 year time frame and has returned 24% from the lows to the end of the move.
A move of this size will bring us right back to the highs on the S&P 500 at 1570-1580.
Here is more confirmation of this pattern, as the prediction model is looking for sharply higher prices over the next 2 1/2 months.
The blue bars represent the current market action and the black bars are the benchmark model.
As you can see, the black bars make quite an impressive run over the next 60 days and to top it all off, the model is calling for a 24% return from low to high just like the sentiment pattern did.
I wanted to post some preliminary comments on the equity action today as this weekend may be a very busy one and I simply may not have the time to publish a full week-end comment.
The market today staged a very impressive late day rally and once again saved itself from breaking the wedge based on closing prices. This continues to be a strong positive, especially with most market pundits expecting this pattern to break to the downside.
I think the main reason you saw such a sharp reversal was their short covering as the market moved a but higher. Many of the shorts put their positions in place early in anticipation of some sharp downside follow through on a break of the wedge and when this did not materialize and the market began to stabilize and push a bit higher there was a mini buying panic as more and more shorts got covered.
The good news about getting today out of the way is that we are now out of the seasonal weakness pattern and breaking into a strong seasonal upside pattern. This pattern officially goes into effect on Tuesday and runs all the way through March 16 or perhaps even stringing out all the way to March 20th. The nature of the potential rally will dictate its life cycle so we will address that once we have enough data under our belts.
For Monday we have a Neutral to Very Slightly Bearish Tendancies for the day.
The Models Outcome is as Follows:
Bullish - 3 components
Bearish - 3 components
Neutral - 2 components
This translates into a coin toss either way, but should not be a big increase or decrease when the close finally occurs. Expect the volatility to continue though as there are simply to many positions out there that need to be squared.
As I said, I am going to try and post more of a week-end comment later in the week-end, but in the event I do not manage to squeeze it in, then this will have to do.
I hope you all had a very profitable week in the markets as there were some great opportunities presented to us and the good news is that looking forward, new opportunities should flourish.
The market today staged a very impressive late day rally and once again saved itself from breaking the wedge based on closing prices. This continues to be a strong positive, especially with most market pundits expecting this pattern to break to the downside.
I think the main reason you saw such a sharp reversal was their short covering as the market moved a but higher. Many of the shorts put their positions in place early in anticipation of some sharp downside follow through on a break of the wedge and when this did not materialize and the market began to stabilize and push a bit higher there was a mini buying panic as more and more shorts got covered.
The good news about getting today out of the way is that we are now out of the seasonal weakness pattern and breaking into a strong seasonal upside pattern. This pattern officially goes into effect on Tuesday and runs all the way through March 16 or perhaps even stringing out all the way to March 20th. The nature of the potential rally will dictate its life cycle so we will address that once we have enough data under our belts.
For Monday we have a Neutral to Very Slightly Bearish Tendancies for the day.
The Models Outcome is as Follows:
Bullish - 3 components
Bearish - 3 components
Neutral - 2 components
This translates into a coin toss either way, but should not be a big increase or decrease when the close finally occurs. Expect the volatility to continue though as there are simply to many positions out there that need to be squared.
As I said, I am going to try and post more of a week-end comment later in the week-end, but in the event I do not manage to squeeze it in, then this will have to do.I hope you all had a very profitable week in the markets as there were some great opportunities presented to us and the good news is that looking forward, new opportunities should flourish.
Thursday, February 21, 2008
Gander Mountain Breaks Out
Gander Mountain broke above heavy resistance today on decent volume.
Not superb volume, but decent.
There are a couple of options here as to how to play this.
1. Buy half your position in this area and wait to but the second half if and when the stock comes back to the trendline and tests.
2. Conservative investors can wait until it pulls back to the trendline and has a successful test before putting a line together,
Not superb volume, but decent.
There are a couple of options here as to how to play this.
1. Buy half your position in this area and wait to but the second half if and when the stock comes back to the trendline and tests.
2. Conservative investors can wait until it pulls back to the trendline and has a successful test before putting a line together,
Equity Market Comment - 2/21/2008
A down day was what I was looking for today, but not quite as sharp as we were delivered.
The market managed to stay within the wedge on the S&P 500 and the 30 minute Nasdaq as well. The two charts show both of these occurences.
The seasonal model calls for a moderate up day Friday as the model scored
6 Neutral
4 Bullish
0 Bearish
Friday also is the early start to a strong period in the market.
We will know very shortly if equities can stay in their positive rally mode as we should begin to move up starting tomorrow.
The market managed to stay within the wedge on the S&P 500 and the 30 minute Nasdaq as well. The two charts show both of these occurences.
The seasonal model calls for a moderate up day Friday as the model scored
6 Neutral
4 Bullish
0 Bearish
Friday also is the early start to a strong period in the market.
We will know very shortly if equities can stay in their positive rally mode as we should begin to move up starting tomorrow.Wednesday, February 20, 2008
EQUITY MARKET COMMENT FOR 2/20/2008
Today was right along the lines of expectation with the exception of the extreme range we saw.
The market is marching right along with what our work dictates and the next stop on the upside is a break of the upper boundry on the wedge as shown in the chart below.
Tomorrow brings to a close the negative seasonal influence and next week should usher in a very strong upward seasonal draft that could very well carry prices sharply higher. This period of strength also has life until mid March where we should see some weakness for the last half of the month.
The Probibility Model for Thursday shows us 6 Neutral and 4 Bearish, so we anticipate a down day, but only modestly so, with the lows of today remaining untouched.
The market is marching right along with what our work dictates and the next stop on the upside is a break of the upper boundry on the wedge as shown in the chart below.
Tomorrow brings to a close the negative seasonal influence and next week should usher in a very strong upward seasonal draft that could very well carry prices sharply higher. This period of strength also has life until mid March where we should see some weakness for the last half of the month.
The Probibility Model for Thursday shows us 6 Neutral and 4 Bearish, so we anticipate a down day, but only modestly so, with the lows of today remaining untouched.
Things are starting to shape up on the intermediate term picture, however, after we complete this negative seasonality tomorrow, we need to really see the market make a move upward that will take investors my surprise and also begin to bring some of the sidelines money back into the game.
Here is the breakdown of the Seasonal Probability Model.
Day of the Year - UP 47% Neutral
Day of the Month - UP 47% Neutral
Return for Day of the Month - (-0.08)% - Neutral
Day of the Week - UP 55% Neutral
Day of the Week Returns - +0.04% Neutral
Post Option Expiration - UP 42% and worst of the week - Bearish
Post Option Expiration Return - (-0.16)% and 2nd worst of the week - Bearish
Post Presidents Day - UP 42% - Bearish
Post Presidents Day Return - (-0.02)% - Neutral
Inside Pattern - UP 43% - Bearish
Overall - 6 Neutral and 4 Bearish
Comment - Look for a modest pullback Thursday
Tuesday, February 19, 2008
Equity Market Comment - 2/19/08
The negative seasonal pattern played its part to a tee today as a fairly decent rally could not hold with the downward seasonal pressure.
Today was marked as the worst day of the 3 day seasonal weakness pattern and could be the lowest point of the weakness we see.
The market tried to break out of its wedge today, but the pressure lower would not let it hold.
The second day in this weakness pattern calls for a modest increase in prices, so we could see a break on the upside out of the wedge tomorrow. You can plainly see on the chart that we are getting very close to a break one way or the other and Wednesday should rectify prices in either direction, with the probibility leaning towards a break higher.
The Third and last day in the seasonal weakness pattern calls for only modestly lower prices so should we get a break out of the wedge in an upward thrust tomorrow then we will look for a small pullback of that move for Thursday.
After this pattern works its way through, the market should enter a period of unusual strength all the way until March 19th. Of course we need one thing to happen at a time and the first is an upside breakout of the wedge.
Today was marked as the worst day of the 3 day seasonal weakness pattern and could be the lowest point of the weakness we see.
The market tried to break out of its wedge today, but the pressure lower would not let it hold.
The second day in this weakness pattern calls for a modest increase in prices, so we could see a break on the upside out of the wedge tomorrow. You can plainly see on the chart that we are getting very close to a break one way or the other and Wednesday should rectify prices in either direction, with the probibility leaning towards a break higher.
The Third and last day in the seasonal weakness pattern calls for only modestly lower prices so should we get a break out of the wedge in an upward thrust tomorrow then we will look for a small pullback of that move for Thursday.
After this pattern works its way through, the market should enter a period of unusual strength all the way until March 19th. Of course we need one thing to happen at a time and the first is an upside breakout of the wedge.
For those of you keeping score, here is how the seasonal patterns work out for tomorrow.
DAY OF THE MONTH - 52% CHANCE OF AN UP DAY (INSIGNIFICANT) - NEUTRAL
DAY OF THE MONTH RETURN - NEUTRAL
DAY OF THE WEEK - 59% CHANCE OF AN UP DAY - BULLISH
DAY OF THE WEEK RETURN - BEST OF ALL DAYS - BULLISH
POST OPTIONS EXPIRATION - 54% UP DAY AND BEST OF ALL DAYS - BULLISH
POST OPTION EXPIRATION RETURN - HIGHEST OF ALL DAYS - BULLISH
POST PRESIDENTS DAY - 40% CHANCE OF AN UP DAY - BEARISH
POST PRESIDENTS DAY RETURN - INSIGNIFICANT - NEUTRAL
TOTALS
4 BULLISH
3 NEUTRAL
1 BEARISH
OUTPUT - MILDLY POSITIVE DAY EXPECTED
Monday, February 18, 2008
Can They Ever Make Up Their Minds!
Yesterday we talked about the negative side of the current market and why 1320 on the S&P 500 is so important to the intermediate and long term viability of equities.
This still remains the case mind you and that level on the S&P 500 continues to remain an area of concern and bears a keen eye in order to keep all avenues open.
However, as you know, I remain one of the few that continue to believe we are NOT in a bear market and this decline we have seen in equity prices, while painful, is nothing more than a normal correction in an ongoing bull market.
Remember, all of these market pundits that are crying wolf now are the same ones who have been echoing caution over the last 2 years. These are the same market analysts that talked about how long it had been since the market saw a meaningful correction of 10% or more and how just this type of correction would be healthy for the long term viability of equity prices.
Well now they have gotten their 10% plus market correction that they had been looking for and all of a sudden it no longer is healthy for the market, but quite the contrary. Now it has become the starting of a bear market instead of a normal correction in a bull market.
Seriously, I don't know how they can do it. They look for something to happen for two years and remain in a limited equity position during the entire time and then the market finally does what they have been saying it would do and all of a sudden they change their minds on what it means.
You can see now why I do all of this analysis myself and I only use the mass of analysis from others as a contrarian indicator at best.
Anyway, I have attached a chart of the NASDAQ that shows quite a large wedge forming on the 30 minute chart. This wedge has some fairly major implications for prices if it breaks out to the upside. The minimum target is for a better than 12% rally to be ripped off and probably in fairly short order.
So while we continue to monitor that S&P level 1320 we also remain in a buy weakness mode and until anything tells us differently then this is the strategy we continue to use.
Sunday, February 17, 2008
Why 1320 on the S&P 500 is a Critical Level for the Stock Markets Health
We are coming into next week with the potential for lower prices into the close Thursday, there is a critical area on the S&P 500 that needs to be monitored.
While we believe the ultra short term low was put into place on Friday, it never hurts to be prepared for the unexpected, especially with the current market behavior.
The chart below shows exactly what I am talking about and should be printed out for reference.
That is how important it is.
While we believe the ultra short term low was put into place on Friday, it never hurts to be prepared for the unexpected, especially with the current market behavior.
The chart below shows exactly what I am talking about and should be printed out for reference.
That is how important it is.
Saturday, February 16, 2008
Ford Makes The All Star Watch List Again
With all of the troubles the domestic automakers have had over the last 3 years, Ford has had the roughest go.
Currently in their 7th year of a turn around plan that was supposed to take 3 years. Of course to their defense, their plans have been changed about 50 times so how could we even expect anything to take hold.
However, given the number of problems they have had in that time, it seems as though they may just be turning the corner.
They should begin to feel the benefits of the hourly buy-outs this year and they have also managed to ween themselves off most of the incentive packages for new car buyers. Although this process of moving away from large cash back offers has eaten into sales volumes, it has more than made up for that with the help to the bottom line which is what they sorely need.
Providing we do not see any sabotage moves on managements end, then this trend should continue and this is exactly what wall street has been looking for.
The chart below has a very strong pattern being traced out and although we have yet to get a trigger to enter the stock, it still remains a very strong watch list stock.
Currently in their 7th year of a turn around plan that was supposed to take 3 years. Of course to their defense, their plans have been changed about 50 times so how could we even expect anything to take hold.
However, given the number of problems they have had in that time, it seems as though they may just be turning the corner.
They should begin to feel the benefits of the hourly buy-outs this year and they have also managed to ween themselves off most of the incentive packages for new car buyers. Although this process of moving away from large cash back offers has eaten into sales volumes, it has more than made up for that with the help to the bottom line which is what they sorely need.
Providing we do not see any sabotage moves on managements end, then this trend should continue and this is exactly what wall street has been looking for.
The chart below has a very strong pattern being traced out and although we have yet to get a trigger to enter the stock, it still remains a very strong watch list stock.
Friday, February 15, 2008
Weekend Market Comment For W/E 2/15/08
A fairly mellow option expiration Friday as it seemed most of the position squaring took place on Wednesday and Thursday.
It was a great day for trading however as we had about as textbook symmetrical day as you can get, lower early followed by higher later in the day.
The chart below makes some very interesting points about the intermediate term health of this market, so please take a look.
The Nasdaq remains the primary focus of the big boys and should prove to outpace most of the other broadly based indexes.
It also remains in an intermediate term position for higher prices, but probabilities tell us it might have to wait a couple of days before we continue higher.
Friday saw the market work lower to the lower corrective target and then begin moving higher.
It was a great day for trading however as we had about as textbook symmetrical day as you can get, lower early followed by higher later in the day.
The chart below makes some very interesting points about the intermediate term health of this market, so please take a look.
The Nasdaq remains the primary focus of the big boys and should prove to outpace most of the other broadly based indexes.It also remains in an intermediate term position for higher prices, but probabilities tell us it might have to wait a couple of days before we continue higher.
Friday saw the market work lower to the lower corrective target and then begin moving higher.This is a bullish development and also solidifies the low on Friday as a pivot point for either higher prices or lower prices. This level needs to hold fast if we are going to continue to work our way higher.
The next couple of days show a tendancy of being negative so we may simply flop around in here until we find our way out of the pattern induced negative slope. This should end on Thursday and from there we should see a sizeable rally begin.
Thursday, February 14, 2008
Current Stock Coverage - 2/15/2008
MRK has done very well this week handily out pacing the market.
The stock remains in the buy zone and should prove to be one of the leaders on the
next leg higher in the general market.
AMD had a very average pull back today and on declining volume which is a bullish development. I expect the stock to get back on track with higher prices as early as Friday.
I talked yesterday about the Airline Index either proving or disproving a continuation of its intermediate term rally and today was a failure and caused us to exit the last half of our position.
The stock remains in the buy zone and should prove to be one of the leaders on the
next leg higher in the general market.
Gander Mountain has reached a critical point that should determine the short term
course of its stock price. A solid break of this downward trend line on expanding volume
will be a huge positive. A failure and turn away may very well bring about one more test of the stocks lows.
AMD had a very average pull back today and on declining volume which is a bullish development. I expect the stock to get back on track with higher prices as early as Friday.
I talked yesterday about the Airline Index either proving or disproving a continuation of its intermediate term rally and today was a failure and caused us to exit the last half of our position.No complaints however as it managed a very nice return for us and in a very short time frame.
We will see what this potential decline in XAL is made of as Long Term the index still has a good amount of pent up demand and much higher prices. We may very well re-visit again.
Equity Market Comment - 2/14/2008
Just about right on schedule was the ultra short term correction we had anticipated.
It is also possible although not likely that we took care of the entire corrective process in one day.
If this is to be the case then we should begin to see some higher prices tomorrow in order to complete the first leg up of a more complex structure.
The target for the final high of this complex leg is 1375 to 1379. From there I anticipate a larger correction than the one we just had or are finishing now.
Here are some of the seasonal tendancies for Friday, which is option expiration by the way.
February Seasonal for the 15th - Only a 50/50 proposition for an up day, so pretty much a non statistical event. However, tomorrow does hold the third best average returns for the month so if Friday is going to be a rally day it has some strong odds of being up strongly.
Still, this only ranks Neutral.
The Day Of The Week numbers are pretty bullish with Friday being the highest of all the days of rallying. 60% chance of a rally and also the highest average return of all other days.
These two combined rank Bullish
Pre-Expiration Statistics show Friday having the second lowest odds of a rally day, but still ranks 53% so this is rated Neutral. The Average Returns for Fridays in the week before expiration are the worst of the week with a negative 0.20%. This is rated Bearish.
The Holiday seasonality is the worst of the bunch, with Friday carrying the lowest chance of a rally day, only 31% and the worst average return of the entire pre and post holiday period with a negative 0.18%
This Is A Double Bear.
So, while I mentioned that the correction may have been taken care of in one day, the seasonality of the markets has other ideas and I always listen to the market.
The 30 min chart shows the S&P 500 making its way down to one of the retrace points, thus one reason I thought the short term selling pressure might be over.
Either way the element of risk is really only about 10 S&P 500 points from here.
Be leary of the market making an early strong rally back up to the 1361 area. If the market conforms to this set-up I would be an aggressive ultra short term short seller for a final leg down to 1339 +/- 3 points. This may be a bit short term focused, but it will be paramount to the condition of the market on the intermediate term front should this play out.
As it stands now, we view this as nothing more than a normal corrective process in an otherwise complex rally structure with the ultimate lows having already occured in the 1270 level of the S&P500.
One more note is the PUT/CALL ratio during trading today.
It showed some serious bearishness right out of the gate before the market even began to deteriorate. As I stated before, we need this to remain in the bearish sentiment levels as long as possible in order to keep the intermediate term rally in progress.
It is also possible although not likely that we took care of the entire corrective process in one day.
If this is to be the case then we should begin to see some higher prices tomorrow in order to complete the first leg up of a more complex structure.
The target for the final high of this complex leg is 1375 to 1379. From there I anticipate a larger correction than the one we just had or are finishing now.
Here are some of the seasonal tendancies for Friday, which is option expiration by the way.
February Seasonal for the 15th - Only a 50/50 proposition for an up day, so pretty much a non statistical event. However, tomorrow does hold the third best average returns for the month so if Friday is going to be a rally day it has some strong odds of being up strongly.
Still, this only ranks Neutral.
The Day Of The Week numbers are pretty bullish with Friday being the highest of all the days of rallying. 60% chance of a rally and also the highest average return of all other days.
These two combined rank Bullish
Pre-Expiration Statistics show Friday having the second lowest odds of a rally day, but still ranks 53% so this is rated Neutral. The Average Returns for Fridays in the week before expiration are the worst of the week with a negative 0.20%. This is rated Bearish.
The Holiday seasonality is the worst of the bunch, with Friday carrying the lowest chance of a rally day, only 31% and the worst average return of the entire pre and post holiday period with a negative 0.18%
This Is A Double Bear.
So, while I mentioned that the correction may have been taken care of in one day, the seasonality of the markets has other ideas and I always listen to the market.
The 30 min chart shows the S&P 500 making its way down to one of the retrace points, thus one reason I thought the short term selling pressure might be over.Either way the element of risk is really only about 10 S&P 500 points from here.
Be leary of the market making an early strong rally back up to the 1361 area. If the market conforms to this set-up I would be an aggressive ultra short term short seller for a final leg down to 1339 +/- 3 points. This may be a bit short term focused, but it will be paramount to the condition of the market on the intermediate term front should this play out.
As it stands now, we view this as nothing more than a normal corrective process in an otherwise complex rally structure with the ultimate lows having already occured in the 1270 level of the S&P500.
One more note is the PUT/CALL ratio during trading today.
It showed some serious bearishness right out of the gate before the market even began to deteriorate. As I stated before, we need this to remain in the bearish sentiment levels as long as possible in order to keep the intermediate term rally in progress.
Wednesday, February 13, 2008
TRADE ALERT - LIVE CATTLE TRADE
WE WERE STOPPED OUT OF OUR LONG APRIL CATTLE TRADE TODAY AT BREAK EVEN.
CATTLE BROKE BACK INSIDE THE CONSOLIDATION ZONE AND CLOSED THERE.
CURRENTLY WE REMAIN
SHORT COTTON
SHORT SUGAR
LONG MAY LUMBER - CONSERVATIVE EXECUTION AT THE CLOSE TODAY
AMD - Looking Very Constructive
AMD confirmed its bottom today with the higher high and higher low. (Aggressive Confirmation)
Aggressive traders can purchase half their intended line right in here with a protective sell stop just below the most recent lows.
Conservative traders can wait for a pullback of sorts before entering on the long side.
You have the option of purchasing the stock outright, or purchasing call options.
If you choose the call option play, I would purchase the April $7 Calls, which currently are .75 by .77
Aggressive traders can purchase half their intended line right in here with a protective sell stop just below the most recent lows.
Conservative traders can wait for a pullback of sorts before entering on the long side.
You have the option of purchasing the stock outright, or purchasing call options.
If you choose the call option play, I would purchase the April $7 Calls, which currently are .75 by .77
XAL Update - Remaining Position
The Airline Index is offering up some clarification as to its near term direction.
We are sitting with only half our position as we took a very nice profit on the first half already.
We will know shortly what to do with the remaing position as the index will clue us in upon a break on either side of the triangle.
A break to the downside and we exit our remaining position.
A break to the upside and we continue to hold long.
We are sitting with only half our position as we took a very nice profit on the first half already.
We will know shortly what to do with the remaing position as the index will clue us in upon a break on either side of the triangle.
A break to the downside and we exit our remaining position.
A break to the upside and we continue to hold long.
Equity Market Comment - 2/13/2008
Three days in a row of higher highs, higher lows and higher closes.
With the way equities have behaved this year, this type of market action seems almost magical.
So far things have gone pretty much the way we had anticipated and the Nasdaq is living up to its potential also.
Things seem to come in threes with the markets, so it would not be unexpected to see some type of breather tomorrow before we continue to move higher.
The probability/seasonality model for tomorrow pans out like this:
1. Monthly seasonality shows a 65% chance of decline with the 2nd largest average decline for the month. This is a Negative.
2. Options Expiration Week brings tomorrow in at a 58% chance of closing higher and the second largest average gain for the week. This is Bullish.
3. Pre-Presidents Day shows a 54% chance of decline tomorrow.
Which is a Neutral Reading.
4. Day of the Week seasonality brings in a 55% chance of the market moving higher. Another Non Event which is Neutral.
5. Lastly the day of the year statistics show tomorrow being an up day 53% of the time.
A non event and a Neutral Reading.
Not much to hang your hat on there, with 3 neutral readings and 1 bullish 1 bearish.
However, the bearish side takes this contest simply because it has a 65% chance and the bullish has only a 58% chance.
The short term charts are showing some exhaustion here, but the capability to move 10-15 points higher before taking a rest.
With the way equities have behaved this year, this type of market action seems almost magical.
So far things have gone pretty much the way we had anticipated and the Nasdaq is living up to its potential also.
Things seem to come in threes with the markets, so it would not be unexpected to see some type of breather tomorrow before we continue to move higher.
The probability/seasonality model for tomorrow pans out like this:1. Monthly seasonality shows a 65% chance of decline with the 2nd largest average decline for the month. This is a Negative.
2. Options Expiration Week brings tomorrow in at a 58% chance of closing higher and the second largest average gain for the week. This is Bullish.
3. Pre-Presidents Day shows a 54% chance of decline tomorrow.
Which is a Neutral Reading.
4. Day of the Week seasonality brings in a 55% chance of the market moving higher. Another Non Event which is Neutral.
5. Lastly the day of the year statistics show tomorrow being an up day 53% of the time.
A non event and a Neutral Reading.
Not much to hang your hat on there, with 3 neutral readings and 1 bullish 1 bearish.
However, the bearish side takes this contest simply because it has a 65% chance and the bullish has only a 58% chance.
The short term charts are showing some exhaustion here, but the capability to move 10-15 points higher before taking a rest.Short term traders can look to take profits on strength tomorrow as a pull-back of sorts seems to be in the cards. It should be a very brief pull-back, perhaps only 1 day and then we should continue higher.
Keep an eye on this wedge off the lows on the 15 minute chart as it should give a strong indication of short term direction for those traders in this time frame.
Keep an eye on this wedge off the lows on the 15 minute chart as it should give a strong indication of short term direction for those traders in this time frame.****************************************************************************
IN A NUT SHELL, WE REMAIN IN A BULLISH MODE OF BUYING WEAKNESS, BUT WE EXPECT SOME TYPE OF MINOR RETREAT ON THE WAY. NOTHING TO WORRY ABOUT, BUT SHORT TERM TRADERS SHOULD TAKE SOME PRETTY NICE PROFITS.
Tuesday, February 12, 2008
Gander Mountain - A Possible Trend Shift
Gander mountain seems to be trying to come back to life, as its bear market took it from $16 to $4 or a decline of 75%.
There are multiple signals that are calling for the stock to break from its major downtrend and make a run towards $10 at a minimum.
The stock has a very large test ahead of it breaking the downtrend line off the $16 high.
Also, it has formed a "W" bottom with volume confirmation and a close above 5 3/4 should break the stock out. Of course we will need the stock to have an expansion in volume when it breaks above 5 3/4.
But, I get ahead of myself.
First thing first, as the stock needs to close above the intermediate term trendline from the last long term high at $16.
Keep in mind that this is a high risk venture, but it also may deliver a very impressive double!
Don't forget to use your stop loss orders to limit your losses should the trade get triggered.
Place your stop wherever you feel at ease. Personally I try and risk no more than 18% on a high risk equity trade such as this.
There are multiple signals that are calling for the stock to break from its major downtrend and make a run towards $10 at a minimum.
The stock has a very large test ahead of it breaking the downtrend line off the $16 high.
Also, it has formed a "W" bottom with volume confirmation and a close above 5 3/4 should break the stock out. Of course we will need the stock to have an expansion in volume when it breaks above 5 3/4.
But, I get ahead of myself.
First thing first, as the stock needs to close above the intermediate term trendline from the last long term high at $16.
Keep in mind that this is a high risk venture, but it also may deliver a very impressive double!
Don't forget to use your stop loss orders to limit your losses should the trade get triggered.
Place your stop wherever you feel at ease. Personally I try and risk no more than 18% on a high risk equity trade such as this.
AMD - Has It Reached Its Point of Rally
AMD is starting to exibit the signs of a stock that wants to make another move up.
The hourly has a rolling bottom forming with confirming volume with an accumulation pattern on the daily charts.
The key to the puzzle now is two fold.
Number 1. No violation of the lows at 6.22 on an intra-day basis
Number 2. A Higher High and Higher Low with a higher close a bonus, but not a must.
The hourly has a rolling bottom forming with confirming volume with an accumulation pattern on the daily charts.
The key to the puzzle now is two fold.
Number 1. No violation of the lows at 6.22 on an intra-day basis
Number 2. A Higher High and Higher Low with a higher close a bonus, but not a must.
XAL - Sold Half of the Position
The airline index broke to the bearish side of the wedge on the half hour chart and triggered our sell on 1/2 of the position.
The downside target for the wedge is 35.25 which is about 6% lower from current prices.
We are holding the other half of our position and may even add to it once we achieve the downside target. This will have to be determined upon reaching those levels.
The remaining position has a stop loss at 34.25 which will still lock in 12% should the stop get triggered.
The model continues to call for higher prices and based upon the models abilities to predict price so far, we would be foolish to doubt this forecast.
The downside target for the wedge is 35.25 which is about 6% lower from current prices.
We are holding the other half of our position and may even add to it once we achieve the downside target. This will have to be determined upon reaching those levels.
The remaining position has a stop loss at 34.25 which will still lock in 12% should the stop get triggered.
The model continues to call for higher prices and based upon the models abilities to predict price so far, we would be foolish to doubt this forecast.
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