Trader MD

First here's DUG as promised from last night.

I was comfortable closing out my position yesterday below the $30 level as I saw the 30.40-30.60 area being pretty decent resistance, along with the outer limit of the ~5 month long channel being in that area, and seeing how much of a move DUG has made in the last few days already.

Sure the volume has been great, maybe even fantastic, but I'd still love to see it put in a pause at this area before attempting to work its way higher. Since this was a swing trade, my entries and exits were based on the daily chart for the most part.



I also think that the market has put in at least what appears to be a short term bottom here as crude has started to crack (down >$10 in 2 days). While the $VIX is no where near the mid 30s like we'd all love to see, the fact that the safe haven known as crude is breaking down is a very positive sign for the markets and it goes beyond the price of gas at the pump.

I'll try and briefly explain. It goes along the logic of me looking for energy stocks to break down last week. The energy sector stocks were basically the next domino to fall. The materials stocks (XLB) had been breaking down and the other recent hot sectors had been falling as well (solars, then Ag, then coal). The next biggest safe haven / momentum play / sector with relative strength, after those names was the oil and natural gas energy plays.

Now taking that a step further, the only investment over the last several months that has been even stronger than the oil and natural gas names themselves is crude oil. Now that crude is no longer a "when in doubt buy crude oil" play and money is finally flowing out of crude, it can now be put to work in actual stocks.

Think about it another way: if you can simply just throw your money in crude oil and be relatively comfortable that you will make $$, then why would you bother trying to invest anywhere else?

Here's AAPL & BRCM, which I added as swings today. You'll notice that they have fairly similar charts. Both have held up relatively well with the recent downturn in the markets and both of them have potential cup and handle patterns.

If AAPL can validate the C&H, and the market / earnings / etc cooperate, AAPL has a chance of hitting its cup and handle target of $265. The same goes for BRCM and $43.

Even if that doesn't pan out I think AAPL can hit / retest resistance at $200 for a nice short trade and BRCM can reach the low to mid 30s.

Posted by Trader M.D. at 11:23 PM 0 comments

Labels: AAPL, BRCM, CupnHandle, DUG, Trendline Break, Triangle

Will post a chart tomorrow. Ended up closing out 1/2 of the remaining 1/4 at 29.20 and the other just below 30.00.

I think it can go higher over a longer time frame, but it's had quite a move over the last 3 days (~18% from trough to peak), and any stop loss at this point would be risking too much, considering how large the intra day swings can get.

I will be keeping an eye on it for the potential to re-establish a position on a low volume pullback, or some type of technical formation and break out.

I'll post some updated charts tomorrow.

Good luck out there.

Posted by Trader M.D. at 12:44 AM 0 comments

Labels: DUG, Swing

Sigh looks like the building I'm living in wasn't really wired all that well.

When my internet was fixed in the first place, someone else's service got disconnected. I'm sure while I was out of town over the weekend, or sometime last week that person put in a call to get their service fixed... and now mine is all screwed up again.

Sigh. Hopefully this won't be a back and forth ordeal.

As far as DUG goes, I started partialling out at ~28.65 early Thursday morning. There was no real logic other than the fact that the trade was up >10% in less than 24 hours. At that point you have to start taking part of your position off, espescially in this market. I still have a small position (1/4 of what I had put on in the first place) left that I'm going to try and let it run higher.

Posted by Trader M.D. at 8:15 PM 1 comments

Labels: DUG, General, Swing

Here's DUG, which I had been looking to get into for the last few days.

I entered right after this mornings post on energy breaking down soon. Here's a screen shot from when I entered.

Take a few moments and look at it upon the time of entry.



Here's the annotated version after the close.



I think DUG can easily hit 29 or 30. The XLE still hasn't closed below the 50 day moving average and the DIG (the inverse of dug), has a bit more downside. Also, just as important, the $VIX hasn't really hit capitulation levels.

As I mentioned the other day, energy will be the last sector to really capitulate since its the strongest, and it's only began to break down.

All that being said, I'll be prepared to re-evaluate that line of thought on a daily basis and let the charts tell me what to do.

(I still have my entire position of DUG.)

I'll be happy to answer any questions, as this isn't exactly the most straight forward setup. Hopefully that wasn't too confusing.

Posted by Trader M.D. at 6:05 PM 0 comments

Labels: Channel, Divergence, DUG

Started the day with a base & break short on BUCY through 130, from which it spiked up immediately to eventually stop out.... only to break down later in the day. Nice -1R!

Went on to short STP (one of the few solars where shares were available @ ThinkOrSwim) out of a bear flag and covered a little early, +2R.

Thought POT was forming an ascending triangle, yet it lacked follow through and I closed it for +1/3R. That Ascending triangle became a rising bearish wedge so I went short, yet I covered way too early. My last 2 short trades in that stock have both been covered too soon.

I missed CRM's bull flag early in the day but saw it setup an inverse C&H type pattern @ the ORH late in the day. I was up a little more than 1R, when it reversed quickly and stopped me out for B/E.

Bleh!

If that wasn't enough, I forgot to buy small put position on BIDU @ the open. It looks like its put in a short term double top & is a stock that's too volatile to swing trade. Who knows maybe it'll bounce here, but I think it can come close to retesting that 300 level.

I may or may not post the charts later. I'm debating just taking tomorrow off and enjoying the long weekend.

I have a feeling tomorrow maybe a low volume chop fest. If I do trade tomorrow, I'll only deal with securities posting significantly higher than average volume.

Swing position updates: Sold 1/2 of DUG @ ~27.25 & I still have my DBA, which did come close to stopping out.

Posted by Trader M.D. at 12:45 PM 0 comments

Labels: BUCY, CRM, DBA, DUG, POT, STP, Swing

Here's LDK. I think I may need to buy some Solar panels from them. If you look closely thats basically a symmetrical triangle inside another symmetrical triangle.

Looking back, one of the reasons why I took the first partial on LDK, was because the other solars weren't acting nearly as well. The markets weren't acting all that well at the moment either.



Here's DUG, which I added as a swing, just after the FOMC minutes. My entry was at 25.88. It bounced off the median line of the pink channel, which happens to be the channel boundary of the purple channel. You'll also notice how a hammer was formed at that very point.

My primary target is ~28.



Here is DBA, which I highlighted on Monday night's watchlist.



I also tried to enter MDR as a swing, which was highlighted in last night's watchlist. It got above that 61.59 level early in the day, sold off and recaptured it later in the day. I entered there as it appeared to be stabilizing. After the FOMC minutes came out it was clear that the market was selling off and it was only a matter of time before MDR would sink with the market. I closed MDR for a tiny loss.

The market sold off pretty hard after the FOMC minutes, but I was flat going into it. It was hard to find an entry I liked afterwards, as everything that had sold off basically went vertical. I don't really like to enter after vertical moves, especially after emotionally driven events.

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

Labels: Channel, DBA, DUG, LDK, Swing, Triangle