Trader MD

Here's QQQQ from yesterday. I made this trade using the QLD & SSO, just like the day before. The ETFs definitely have their benefits in that they are a bit safer than a stock, especially when you can't be at a trading desk to watch each trade tick by tick.



Here's ACI just a little bit before I took my trade in it.



As you may recall, I mentioned ACI a few weeks back just as it was about to and in the process of breaking down from the ~67 area. I missed that trade and didn't enter a short in as it ran back up to the ~67/68 area and 50 day moving average on low volume. Anyhow, I had been stalking ACI for sometime and saw it was forming a head and shoulders pattern with increasing volume on the down days, and the 50 day moving average rolling over just above. Today I decided to enter in some puts shortly after it opened. I entered the puts in just above 61.

So why did I enter puts? Well there's a couple reasons.

In a stock as volatile and momentous as ACI, puts can really help define your downside risk. Since I purchased the puts, I can't lose more than what I purchased the puts for. In addition, Coal has been a very powerful momentum sector and the market is still fairly extended to the downside. ACI in theory could experience a sharp reversal or surge higher.

And while of course the initial chart shows my plan to start to close out my puts around the 50 area (near the 200 day moving average), I ended up closing them out about a half hour before the end of the day. ACI had dropped almost 7 points from my initial entry for a nice solid gain.

I used the August 50 puts to enter my trade.



I must say, part of the benefit of having a day job is that you don't watch a stock like this tick by tick and instead check in every 1-2 hrs. I ended up closing it out on my lunch break.

Here's a daily view of ACI at the end of the day.



Speaking of Coal & Material stocks, I think they put in some more downside here. the SMN (ultrashort materials -- basically its the double short ) has been looking pretty bullish lately. Here's the chart:



If that's an inverse H&S SMN is putting in, it definitely has the chance to reach $44. Keep an eye on those material stocks.

Posted by Trader M.D. at 10:03 PM 2 comments

Labels: ACI, HeadNShoulders, Index, qqqq, spy, Tweezer Bottom

My logic?

We're basically putting in a negative divergence. Crude oil has made new highs or essentially stabilized around those highs, yet most energy and alternative energy plays have not.

Take a look at the drubbing solar stocks have been taking over the last few weeks. They are basically energy related plays.

Other alternative energy plays have began to break down as well. Wind stocks come to mind and of course, look at the coal stocks getting killed today.

Speaking of Coal stocks. As far as the daily charts go, these look like the 2 most promising short patterns.

Here's ACI (Box/Rectangle Pattern) & MEE (Double Top).





I have no position on either of these just yet, but will be looking for some type of a low volume kick back.

Posted by Trader M.D. at 8:26 AM 0 comments

Labels: ACI, Coal, Energy, MEE

Here's the LDK daily chart.



Here's the LDK Base & Break trade.



Here's the JASO 15 minute chart from the March lows until today.



Here's JASO's day trade.

JASO was also a HCPG newsletter pick last night through $26.00.



I still have that desire to bail on my late day trades, even if they are solid setups.

I left plenty of $$ on the table on a symmetrical triangle breakdown in ACI at about the same time I bailed on my JASO short.

Oh well. Still managed my longs in JASO & LDK fairly well.

I'll be looking to possibly add LDK on a pull back as a swing trade, depending on how the market and the rest of the solars are acting. FSLR (still the solar leader IMO), started to break down ahead of the other solar stocks today. It was not only a clue that the market may reverse, but that the solar sector may reverse.

HCPG also had quite a few triggers from last nights (DVN, SLB, RGLD, CMP, ACI, CMG) newsletter. I pretty much focused on the solar sector. The only one I really got a piece of is the SLB swing trade I added through 106 (possible cup & handle on the daily chart?). I closed it out as it began to reverse with the market later in the day.

I believe today's late day market reversal on heavy volume, is the 3rd one in recent weeks. I'm definitely getting more and more cautious on the long side with each of these reversals.

Keep an eye on the Tech, Transports, Materials & Energy sectors. They are the sectors that have basically pushed the market higher to the current levels. If they begin to reverse harder, they will drag the market lower. Financials, and other sector haven't really done much recently.

I'll have more on that later. Time to run some errands.

Posted by Trader M.D. at 12:37 PM 2 comments

Labels: ACI, BasenBreak, HCPG, JASO, LDK, Recap, SLB, Triangle