Trader MD

I finally had the chance to put together a decent chart review last night. One thing that really stuck out to me (aside from the $VIX being far from elevated as everyone has mentioned), is the relative strength of the energy sector.

IMO, we're going to need a flush out of the weak holders in the XLE / energy sector related stocks in order to setup any type of real tradeable move higher.

Until then any bounce will be nothing more than a kick back rally.



Of course it'd also be nice if the $VIX and put/call ratio surged higher as well.

On an unrelated note: Thank God. I finally have a legitimate internet connection up and running. That took way too long.

Posted by Trader M.D. at 7:13 PM 1 comments

Labels: Energy, Index

Now that there's 1 trading day left in June, and the fact that I really haven't been able to trade all week, I'm looking forward to the 2nd half of the year.

I've been compiling goals and altering my trading strategy to incorporate the fact that I will now be away from my trading desk more often than I will be at it.

I figure I will have the first hour to hour and a half of each trading day to make trades and observe the market in real time. The rest of my market observations and trade planning will take place in the evenings when the market is closed.

The one thing I'm currently contemplating is what to do with day trades that still look good when I have to step out each morning.

Right now I figured that the bread and butter of my day trading strategy going forward will depend on the gap base & break setup I've been using more frequently over the last few months. The reason I say that, is because these trades can setup as early as a few minutes into the trading day and often have quick exits.

Getting back to managing trades away from the desk. My only real consistent way of following the market when I'm working, will be off of my Palm Treo (soon to be replaced with the new iPhone). The huge drawback of this is that I still don't know of a way to chart in real time off of it, and pages can load very slowly.

Another option is to get some type of wireless internet connection for the laptop and have that on me at all times. That's still up for debate and has to be looked into.

Finally the last option is to remain in the trade with a trailing stop.

For now I think my best option is to close out any day trades that I may be in before I leave my desk each morning. If I do attempt any remote management of day trades, it will be thoroughly tested via paper trading first.

In general though, the majority of my trades and trading profits will now come from swing trades. Just based on current market conditions alone, I'm guessing this will be harder than day trading has been the last few months.

As far as blog postings of my trades goes: Postings will now generally be in the evenings. I will still try to post every daytrade and swing trade I make. Posts definitely will not be as prompt as they were before (I used to try and post as soon as the market closed), as I will be away from my trading desk at the market close.

Wish me luck, I'm gonna need it :)

Posted by Trader M.D. at 12:22 PM 6 comments

Labels: General

Didn't get a chance to put together a post yesterday.

It's been fairly frustrating around here over the last few days and will be for the rest of the week.

Although I moved up my furniture into my apartment a week and a half ago, I didn't actually move in until this last weekend.

During that week in between, I requested that the A/C be fixed and well... it still hasn't. Its about 85-86 deg F inside at any given time. Even leaving the windows open at night only drops the temp by a few degrees. So it hasn't really been easy to sleep.

Cable/Satellite, which was supposed to be installed on Monday, will now be installed Saturday. They didn't have the reciever in stock, wth? Overall, not a big deal, but it would have been nice to have.

And most importantly, my internet, which should have been installed weeks ago, won't be installed until Friday. I swear AT&T is filled with some of the most incompetent people ever. I called up originally about a month ago, trying to setup dry-loop DSL (no phone line). They said DSL wasn't available at the address, as the address didn't exist. wth?!

Then I was told by the apartment manager, and others that DSL was indeed available, so I put in an order through a secondary company. The secondary company tells me the order goes through and that it will be setup very soon.

I give it a few days and call up AT&T again to find out that they have received no such order, and that I have to put in the order all over again.

Blah....

I have to say I have a ton more respect for those that are able to trade on their laptops and laptops alone, or just off of 1 screen. It's not easy.

I most likely won't be trading much for the rest of the week due to work obligations and lack of an internet connection.

I'll try to put together some setups or other useful information during that time if I'm able to.

As far as AMSC goes, I probably should have known better.

I took it it long as it based around 46.00 and broke through that level at ~11:45. My initial target was the recent morning highs of ~47.40. My stop was just below the base at ~45.50

Initially it broke out and looked promising but it began to gradually reverse and I was stopped out.

Here's AMSC:

Posted by Trader M.D. at 5:42 AM 3 comments

Labels: AMSC, BasenBreak, Failed, General

Sorry about the smaller, more crowded images. I'm on the laptop today, and until my internet connection is setup later this week. Thank God for WiFi, eh?

Here's the daily chart of CLF. Looks like a beauty if you ask me. CLF has had this well formed rising channel for the last few months from which it has gotten support from over the past 2-3 days.

In addition, it's been forming a symmetrical triangle with in that channel.

I think it can hit $120-123 over the near term with cooperation from the market & steel stocks.


Before the market opened, US Steel (X) was added to Goldman Sach's conviction buy list. With that news the steel sector gapped up.

Here's the CLF daily chart. It's a bit messy, but I tried to point out as much as I could and I removed any indicators that weren't useful in the trade decision process.



One of the reasons this trade worked out so well was the confluence of supporting factors: support on the daily chart, momentum in the sector, strong volume and a solid opening range bar. It also based below the down trendline of the symmetrical triangle, opening range high, and the R1 pivot point.

That all made for a very low risk trade.

The only other trade of the day was in X, which based under 190. I bought the break and was stopped out below 191.

Posted by Trader M.D. at 12:21 PM 0 comments

Labels: BasenBreak, CLF, Fibonacci, Pivots, Triangle

First a look @ the 3 minute chart (I managed the trade off this chart). I have to say I managed this trade nearly perfectly.



Now a look at the 15 minute chart, from which I entered off of.

Posted by Trader M.D. at 1:11 PM 0 comments

Labels: CupnHandle, FCL, InsideBar

The Nat Gas swings I had gapped up and attempted to push higher before selling off.

I sold 1/3 of my XTO @ 73.61 (38% fib extension of the double bottom/cup & handle pattern) and was stopped out of the rest just below 72.00.

I was stopped out of the entire DVN position just below 121.00.

I tried putting a swing position of EAC on just above 75 yet that reversed with the rest of the nat gas sector once the EIA data came out. I stopped out just below 74.

As far as the day trades go, most everything I was watching looked pretty choppy.

I was debating taking a long position on ENER, but it seemed pretty erratic for the first part of the day.

One trade I did put on was a short on PXP as it posted an inverse cup and handle that based @ ~77.75. I wish I could say I held it the entire way down but I began partialling out at the pivot points shortly after. My initial stop was just above 78.25. Bleh.

I most likely will be taking tomorrow off as it's likely to be as choppy as things were today.

Posted by Trader M.D. at 4:35 PM 0 comments

Labels: CupnHandle, DVN, EAC, PXP, Swing, XTO

Here's DVN, which I also have a swing on.



Didn't see much else today.

Posted by Trader M.D. at 1:19 PM 3 comments

Labels: CupnHandle, DVN

Keep NFLX on your radar. It's basing here and has a very high short interest.




In addition, this is my 100th post! The blog has now been around for about 2 1/2 months.

Posted by Trader M.D. at 3:08 PM 1 comments

Labels: NFLX, Short Squeeze

Here's MON & TRA.





I still have to work on letting my gap up base & break trades run a bit more. As you can see they both ran much higher even after I exited.

That's the one real downside to the setup. You're basically trading off of 1&3 minute charts with out any defined targets. Sometime in the near future I plan on going back over my previous base & break trades and seeing how the use of Fibonacci levels work as targets. I'm also going to try to focus on incorporating larger time frames (5, 10, & 15 minute charts) in order to stay in and let the trades run a bit longer.

Here's DVN, which I added shortly after my XTO post earlier.

Posted by Trader M.D. at 2:36 PM 0 comments

Labels: BasenBreak, DVN, MON, Swing, TRA

Chart's looking good. Looks like a cup & handle type pattern (you could argue it has formed a double bottom type pattern on the daily... either way the target and the trade management is the same). Sector (nat gas) is acting well too, especially with CHK's leadership. Needs volume to pick up and follow through. A reasonable target would be ~79-80.

Picked up MON earlier as well as it broke out and closed TRA for a nice gain in a week.

Speaking of MON & TRA, I had some solid gap up base & break trades in them today, which I'll post later.

Posted by Trader M.D. at 11:24 AM 0 comments

Labels: MON, Swing, TRA, XTO

I got a late start today, but it was still great to be able to trade again.

Here's Mastercard which put in a tweezer top formation on the 15 minute chart (first chart). Interestingly enough, the tweezer top was right around a 50% retracement from the recent move down (~320 to last weeks low of ~276).



Here's the 3 minute chart from which I managed the trade.




My high volume failure theory continues to impress me. This is yet another example of where a stock has ran up and ran out of gas where the sellers gradually take control. For the rest of the day MA couldn't gain the strength and test the 299 area again.

Hopefully I can be more active tomorrow as I've been able to test the waters today. I had no real hiccups with the DSL connection.

Posted by Trader M.D. at 1:04 PM 3 comments

Labels: MA, Tweezer Top

AT&T's DSL connections are still very slow. Quotes and charts on my screen feel like they are crawling, as a result I made no trades.

I'm moving on Saturday and my brother's graduation ceremony is on Friday morning. So unless my internet connection has improved dramatically by tomorrow morning, I will be taking the rest of the week off.

Take care & be careful out there. We have retail sales tomorrow & the CPI on Friday. In addition, if you are trading, be sure to keep quotes of LEH, MER, the XLF & the USO on your screens.

Speaking of LEH, it appears the real panic is starting to settle in. I noticed it had dropped almost ~2 points in the last 30 minutes of trading.

Will the Fed have to step in yet again? Will someone else?

I'm sure thats what a lot of people are hoping. Judging by the volume over the last few days, the offering LEH made @ $28 / share, and all the talking heads on CNBC trying to pump LEH up as a value below $30. Ok, how much below $30?

Posted by Trader M.D. at 1:16 PM 2 comments

Labels: Recap

Bunge was on the HCPG newsletter from last night.

The Ag sector gapped down with the market, found support and started to work its way higher.

BG formed a base at the ~122.40 area and the Ag sector was working its way higher / showing relative strength to the rest of the market. Volume wasn't great but BG did have considerable buying interest yesterday.

BG was trading above the daily VWAP (Volume Weighted Average Price), which means that buyers were in control.

I took a chance on a break above the 122.40 area. My goal was to partial out 1/2 of my position at yesterday's high (also the location of the daily R1 pivot point).



BG began to push higher until it started to reverse. When it did, it was on higher volume, so I tightened my stop.



At the same time, you can notice that selling pressure began to pick up in other stocks in the Ag Sector. Notice the highlighted gray areas on POT & AGU.



As you can see it was a good decision to tighten my stop on BG. I would have been stopped out at my original stop position.



I was looking for an entry to go short somewhere in the Ag sector, but my internet connection to my brokerage was particularly slow. Hopefully it improves sometime soon :)

I also had a base & break short on WFR early, which also was a HCPG newsletter mention. It initially looked good, but ended up stalling.

Posted by Trader M.D. at 9:16 AM 0 comments

Labels: Ag, BG, Failed

I'll post the chart up a bit later, as I wanted to highlight it from a few different angles.

I missed a great setup in C as I lost track of it and forgot to put in my order.

I also passed on a short on JASO.

Today was a good reminder of how much of a difference nightly preparation can make. I was pretty busy this weekend and didn't get to weeding the watch lists, or looking at a single chart. I plan on taking care of that tonight.

**Update**

Here's the chart of Potash. I didn't have the time to include multiple views like I wanted, but the 15 minute chart covers most of it. If you pull up a 5 minute chart, that would better illustrate the entry point and how volume drops off on the upside.

POT did continue to fall, shortly after I covered, but it was still a nice quick gain. It was hard to have a substantial downside target on Potash, as there was no real technical pattern. It was just a trendline break + negative divergence.

(Most technical patterns have you add the height of the formation to the breakdown or break out point. If you took the greatest height of this 'pattern', it would be about ~3.5 points and subtracting that from the breakdown point of 225.50, you'd get a target of ~222, yet the POT ran all the way down to ~218.50.)

If anyone has any suggestions on how to come up with a more accurate downside target, please let me know.

Here's the chart:

Posted by Trader M.D. at 1:20 PM 0 comments

Labels: Negative Divergence, POT, Trendline Break

Posted by Trader M.D. at 11:18 AM 0 comments

Labels: Index

I started off the day reading through the morning headlines as usual and saw that Monsanto was upgraded with a higher target. Then the employment data came out and the futures dropped.

The Ag names gapped lower, pushed higher to make new near term or all time highs (depending on the name), and gyrated back lower. I saw similar action in almost all of the momentum related names.

After things settled down for a bit, I saw a decent entry in ANR (or at least I thought it was at the time). It looked like it was forming a Head & Shoulders pattern, so I took a stab at it and got stopped out almost immediately.

Here's the chart below. I forgot to mark my entry and exit points. I went short below 85.81. My stop was above the recent high of 86.53. Talk about getting chopped up.



After that failed trade, I basically sat on my hands and called it a day.

Did I mention coal stocks can be choppy?

If you had a tough day or a tough week, don't stress yourself out over it. I'm sure quite a few people did as the market looked like it was going to break down, then break out and then break down again. Just try and go back through & review your trades (good & bad).

Also be sure and get some rest as it looks like things are likely to be interesting next week.

Take care and have a good weekend.

Posted by Trader M.D. at 1:05 PM 3 comments

Labels: ANR, HeadNShoulders

Ended up with singles in each of the above names, before I was shaken out as the MBI/ABK downgrade news was released. In some cases it was good, in other cases they stabilized to run higher. Kind of hard to work on letting profits run when the market feels like it can reverse @ any minute... But maybe thats just my feelings about it right now?

I'll post the charts later tonight.

I may and take tomorrow off as I've had a very solid week. It depends on what the market looks like tomorrow morning.


*** Sorry no charts tonight. I spent the majority of the afternoon and evening taking care of errands as I'm preparing to move later this month. A lot of my free time this week has been spent towards prepping for the move.

I'll try and post the charts tomorrow or sometime this weekend.


** Updated***

Here are the charts (4 decently managed trades and 1 bad one in CLF):











Again nothing special, just hitting a few singles.

Posted by Trader M.D. at 1:52 PM 4 comments

Labels: AKS, CLF, MTL, SOLF, STP

Nothing too special. By the time the market settled down after the early gyrations and EIA/oil data, I found a setup I liked in ENER, but then the MBIA headlines came out shortly afterwards and it was only a matter of time before the market wanted to sell off a bit.

Here's the chart of ENER:



I also had a few late day trades/scalps in MON / AGU as they broke down with the market.

Overall, a decent but quiet day here. It felt like a lot of the move higher was a short squeeze type action. To me it seemed like it was on lower volume, and basically went straight up (i.e. no bases formed along the way) on anything I looked for an entry on.

Posted by Trader M.D. at 3:06 PM 0 comments

Labels: Coil, ENER, Triangle

POT & AGU were on the HCPG newsletter last night and Jamie highlighted GRMN.

I didn't end up doing much during the market gyrations today as I was distracted. I finally picked out a TV last week and it was delivered today.

Wow, sorry about taking so long to post the charts. I ended up having to take care of more than I planned.

Here are the trades, hopefully the annotations & explanations make up for the delays.

Pay special attention to the GRMN chart as I've highlighted my adaptation of HCPGs Base & Break setup. You can read more about their system (with out having to subscribe) by checking out their "Best of Blog feature." I highly recommend it. It's has more useful information than a lot of books out there.

Anyways, the charts.

GRMN:


POT:


AGU:


Feel free to leave any feedback / questions for the setup I've highlighted.

Posted by Trader M.D. at 1:01 PM 2 comments

Labels: AGU, BasenBreak, GRMN, HCPG, POT

Only had 2 trades today. I'm a bit distracted, taking care of errands and won't be able to devote my full attention to the screens today, so I'm calling it a day early.

Here are the 2 trades.

LDK:



AGU was mentioned in the HCPG Newsletter last night.

Posted by Trader M.D. at 10:19 AM 0 comments

Labels: AGU, BasenBreak, HCPG, LDK, Triangle