Trader MD

On Friday I was fairly busy and in the time I spent in front of the screens I didn't see much. I added some RIMM Aug 105 puts.

Had a fairly busy weekend and didn't get enough chart study in on sunday night before crashing. I ended up closing my RIMM Aug 105 puts for a slight profit as I didn't really like the way it was acting. My stop was a move over 120, but I figured it was better to close it.

Today was just as bad if not worse than yesterday in terms of being tired. So I ended up using this morning to catch up on sleep and I think I'm now good to go. Instead of looking for trades this morning and when I had time through out the day, I ended up scanning daily charts and I picked up some USO about midday and RBN at the close.

I think the market is looking good on the near to intermediate term here. The $COMPQ / $RUT look like they are putting in a higher low or cup and handle type bottom. The $NDX is putting in what looks like a rounded bottom, and the $SPX is putting in a higher low / tweezer type formation on that higher low. Of course none of these patterns have been 'validated' yet.

Sectors that appear to be looking good: Steel (aside from MTL), Solars (appear to be setting up to run again), and Rails.

Mixed Sectors: Agriculture (AGU looks to be putting in a bear flag, CF has maintained its symmetrical triangle and is looking like it wants to break out to the upside, TRA has held up fairly well), Chinese Internet Stocks (BIDU looks solid, where as SOHU/SINA look neutral/negative) and Coals (FDG WLT ACI MEE; CNX & FCL don't).

Posted by Trader M.D. at 11:01 PM 1 comments

Labels: Coal, Index, Oil, RBN, RIMM, Sector, Solar, Steel

Here's the Nasdaq 100 after today's market action.

We're still trading in the upper half of the channel dating back to the Bear Stearns Low (March 17th).

Important levels to watch are ~2010, which appears to be near term support. The next level of interest is ~1990 which is support & the median line for the channel. The median line often acts as support/resistance, as you can see from the chart.



This is the Power Shares Agriculture ETF. This basically lets you take advantage of movements in the futures of Agriculture related commodities. Notice how it's been coiling up in a descending triangle type pattern and could break either way soon.



Here's Intrepid Potash (IPI), which also is coiling up to form a symmetrical triangle. I expect it to break one direction or the other during the next week or so.



My current view for tomorrow's market is fairly neutral believe it or not. Yes today's late day action was bearish, and is definitely a reason to become more cautious, but I'll wait to see how the market acts in the first portion of the trading day. With the previous 2 late day sell offs we had recently, the markets began grinding upwards as if nothing happened.

Sure the volume on the upside is light, and sure we're over extended, but you still have to give the benefit of the doubt to the buyers.

For clues to which direction the market may move, keep an eye on the Materials (XLB, SLX, KOL, MOO), Energy (XLE, OIH, TAN), Transports (Rails & Dry Shippers), & Tech (XLK, SMH, & large cap techs).

As I mentioned earlier today, these are the sectors that have led the market higher. In essence, these are the best & strongest stocks in the market.

Alternatively, you could select the strongest few stocks from each sector & watch those.

If the market looks like it wants to bounce, AMZN (continued momentum) could setup as a decent play to the upside.

If the market looks like it wants to continue to sell off I'll be looking through my lists of stocks in the materials & energy sectors. Particularly MON (bearish flag here?) in the Ags, CLF in the Steel sector (post split effect?), ACI in the Coal sector (failed break out today?) and JASO (possible continued downside momentum) in the Solars.

Posted by Trader M.D. at 8:16 PM 0 comments

Labels: Index, Sector, Watch List

With the dollar strengthening ahead of the fed meeting tomorrow and gold showing relative weakness (esp to oil), over the last few weeks, it looks like gold has a bit further to go on the downside.

How can you profit from this? Take a look at going long the DZZ (ultra short gold) or by shorting the miners (ETF: GDX, Miners: AEM, NEM, AUY, HMY, ABX, GOLD, RGLD, GFI, KGC, etc)

Posted by Trader M.D. at 11:40 AM 0 comments

Labels: Gold, Sector

Just a guess, but look for tomorrow to be more of the same as today.

That probably would mean more selling for Ag, and more break downs for Coal, Steel, Energy, Solar names.

They've all had fantastic runs and its still a bit early to tell if people are actually transitioning to what may become new leadership, or if they just have an excuse to sell what has been ridiculously hot and pick up what has been beaten down.

If you want to take a look at what kind of stocks that did poorly today, just take a look at any momentum type name over the last month, esp NEU & PBT. Wow, I'm guessing a few people wish they had sold or tightened their stops.

The steeper a stocks ascent has been, the more likely it is to roll over as profit taking feeds upon itself.

If gold continues its descent (and even otherwise), I particularly like GOLD (the ticker symbol, although its a bit thin, so be careful) as a swing short/short, but I'm probably a bit early as the double top I see hasn't been techincally confirmed yet.

Just to recap, sectors that did well today are:
Financials, Homebuilders, Tech, Semis, Retail and Consumer discretionary

Other names to keep an eye on to the long side:
China related tech stocks (BIDU, SINA, esp SOHU -- its coiling up for its next move), the rails appear to be bouncing here (CSX, NSC, BNI, UNP, etc), AAPL could continue its recent momentum (it had a solid move / reaction today after the earnings were digested), BCSI (appears to have bottomed... it purchased a company a few days ago and traded UP on the news -- usually the purchaser trades down), AKAM (broken down trend line & solid buying interest over the last few days), Semiconductor related names (LRCX, SNDK, QCOM, KLAC, BRCM)

And of course keep an eye out on the following stocks for any short squeeze type action:
BZH, VMW, NILE, NTRI, GRMN & LULU

Finally keep an eye out on education related stocks. They've been beaten up quite a bit recently due to concerns over student loans, but after the bell DV (DeVry) posted better than expected earnings. Other education stocks: STRA, CECO, APOL, EDU

Posted by Trader M.D. at 11:59 PM 0 comments

Labels: Sector, Watch List

Over the weekend I posted some thoughts on the indexes. The Financials & Semis have come the closest to breaking the levels I mentioned.

These levels are important because they signal that the recent trend of 'higher highs and higher lows' is broken. Now that doesn't mean the trend is bearish all of a sudden. When those levels are broken, there is definitely a much greater likely hood of the short to intermediate term being bearish.

Take the semis for example (see below), I'd say they are neutral at best and bearish at the worst.

Posted by Trader M.D. at 12:37 PM 0 comments

Labels: Sector

Companies reporting earnings the week of April 14th-18th include (list courtesy of Briefing.com; key reports underlined):

• Monday: ETN, GWW, ELS, INFY, and STLY
• Tuesday: ADTN, FRX, GMTN, IIIN, JNJ, MTB, MI, NTRS, PII, RF, STT, USB, CHB, CSX, INTC, RLRN, STX, and SORC
• Wednesday: ABT, AMB, BMI, KO, ITW, JCI, JPM, NITE, LUFK, MTOX, EDU, PJC, STJ, WFC, WWW, ATLR, ATR, AVCT, CAVM, CNW, CCK, DTLK, EBAY, GILD, GKK, IBM, ISIL, KNL, LEG, PLCM, SPSN, and UFPI
• Thursday: AMFI, BK, BAX, BBT, CHKP, CIT, CMA, CY, DHR, FCS, HOG, HNI, RX, IGT, MAR, LSTR, KEY, MER, NYT, NOK, NUE, PFE, RS, SLM, LUV, SPWR, SVU, AMTD, UTX, AMD, COF, CBST, ETFC, ESLR, GOOG, ISRG, SNDK, SYK, TPX, ZION and WSO
• Friday: CAT, C, HON, MAN, PRSP, SLB, WB, WL, and XRX

In addition, we have the following key economic reports (all times EST, courtesy of Barron's Econoday):

• Monday: Retail Sales (8:30 AM), Business Inventories (10:00 AM)
• Tuesday: Produce Price Index (8:30 AM), Empire State Manufacturing Survey (8:30 AM), NAHB Housing Market Index (1:00 PM)
• Wednesday: Consumer Price Index (8:30 AM), Housing Starts (8:30 AM), Industrial Production (9:15 AM), The Beige Book (2:00 PM)
• Thursday: Jobless Claims (8:30 AM), Leading Indicators (10:00 AM), Philly Fed Survey (10:00 AM)
• Friday: None

If that wasn't enough, we have Fed speak on Monday, Wednesday & Thursday, from a total of 5 different Fed members (4 of which have voting rights). Also, don't forget that Friday is Options Expiration.

Now, on to the indexes (key supports are in green and key resistances in red; We need to clear the levels in red for the short term uptrend/rally to continue and breaking through & below the green levels would signal an end to that short term uptrend/rally.):

As you can see, we have a ton of information and market moving events on our hands for next week. If you are swing trading stocks for the near term be aware of not only when that company reports earnings, but any related companies. We're in a highly selective environment for stocks. Any earnings failures on the top or bottom line, future guidance, or commentary will not be treated kindly.

Take care and enjoy the weekend. We'll definitely need our rest heading into next week. It almost feels like its going to be one of those weeks where it maybe better to stay on the sidelines or keep trades small & extremely short duration.

Posted by Trader M.D. at 12:24 PM 0 comments

Labels: Index, Sector

Since most of last night's watch list still looks pretty good, I thought I'd focus on copper and the 2 stocks you can trade it with. While they are not nearly as efficient as the GLD ETF is to the gold futures, or the USO ETF is to the Oil futures, FCX & PCU offer a viable alternative.

Posted by Trader M.D. at 12:18 PM 0 comments

Labels: Copper, Sector

Keep an eye on oil related (positive: drillers, the USO etf, coal, railroads, solar & negative: airlines, refiners) names as a result.

I'm beat from my trip, but I had a blast. Too bad UCLA lost :(

There may or may not be a posted watch list later tonight, and if I have time it will most likely be short. Good luck trading tomorrow.

Posted by Trader M.D. at 11:53 AM 0 comments

Labels: Commodity, Oil, Sector

Coal itself is starting to turn up. The ETF is a bit thin for my tastes (less than 300k avg daily volume), but there are a lot of coal stocks acting well.

• JRCC broke out of a bull flag today
• WLT is on fire, like usual
• FDG closed at an all time high
• BTU, CNX, and MEE have started to work their way higher
• ACI is gearing up to move higher

Do be careful with coal stocks & possibly even trade smaller share size, as they can be somewhat erratic/choppy.

Posted by Trader M.D. at 11:49 AM 0 comments

Labels: Coal, Sector

Posted by Trader M.D. at 11:48 AM 0 comments

Labels: Ag, Dry Shippers, Sector, Watch List

Steel stocks are looking strong.

Posted by Trader M.D. at 11:41 AM 0 comments

Labels: Sector, Watch List

Could the $SOX be forming a descending triangle? That wouldn't bode well for the Nasdaq. Sure the Nasdaq could break out of the current trading range, while the $SOX stays flat, barely participates, or breaks down -- but from what I know, the Nasdaq tends to do a lot better when the $SOX is one of the leading sectors.

Posted by Trader M.D. at 11:34 AM 0 comments

Labels: Sector, Triangle