Weekend Thread

Hope everybody has a safe and relaxing weekend!

Friday afternoon

French Army knife

Friday morning

I think that things are about to get "interesting".  This is probably not the right time to swing for the fences.  Just sayin'.

Thursday Evening

St John, Virgin Islands

I Don't C-Care ... not gonna do it.

IDCC Daily Chart (11:10AM)

It's a patent stock and it hurt me bad last year.  I just can't go back there but it does look like it could break higher.  It's already cleared the 200 now and the moving averages will soon be in a bullish configuration.  That's where the 20 is above the 50 which is above the 200.

It's a tight one

Gator's Chart of the Day: GWW



W.W. Grainger Inc has been consolidating for 6 weeks and the Bollinger bands are now only 3.2% of the 20 day simple moving average.  That's tight.  The volume for the last two days has been well above the moving average and increasing.  In addition the 50 day sma is going to intersect the 20 day today (Thursday) and checking the Volume at Price (not easily seen on this chart but trust me) there is no red in the top couple of bars on the daily chart.  Earnings should be around the middle of October.

The stock has 3.2% dividend yield so if you like you could buy and hold and sell upside calls.  You could collect about $300 for each contract (100 shares) you sold with a November 220 strike.  That's not bad.  If the stock hits 220 by then it could be called away from you for 6.3% gain on top of the 1.4% (300/20,700) you collect in premium.  Annualized that's about 45% return. If the dividend is paid in the mean time that's just gravy.  Not too shabby.

SPX Daily

SPX Daily

We are finally seeing a decent pullback in the S&P500 and working off some "overbought-ness". The 50day SMA is currently about 1410ish, and you can see the high volume zone between 1400-1420 on the chart above. I'm expecting the bulls to make a stand in that area the first time down (assuming we get down that far).

Intraday update

S&P futures bears started pressing right at the cash open... and have carved out an 11ish point range so far. Intraday volume is suggesting it could be wider today. Short term indicators look ripe for buying and the bulls stepped up on a 5min setup at 1424 in the futures (SPX 1430). They are attempting to grind it back up here but there appears to be a lot of sellers lined up on the offer.

1432ish (SPX 1438ish) is a level I'm keeping an eye on... it's likely to be where the bears try to keep a lid on things if the bulls keep pushing. Intermediate term indicators still have room for selling, so I'm trying to keep that in mind in case we make another move lower into the afternoon.

Knives everywhere

Plenty of falling knives.  Thanks, I'll pass.



I know we don't have any rookie bloggers here at Algo Fighters but just in case we have some lurkers who are tempted ..... Don't do it.  The worst think that can happen is you successfully catch one with no harm and make a big trade.  Why do I say that?  Because you'll be tempted to do it again and again and again .... Wait for the knife to stick in the hard surface we call support.

Tuesday evening /ES

60min chart of S&P e-mini futures /ES

I thought the market would hold that 1445 support today.  It was a pretty good setup for the bulls, but they apparently ran out of ammo.

Good news:
1)  There will be buyers down at 1430, especially if it opens near there.
2)  It’s end of quarter.  Some markup is likely to be attempted.
3)  Tomorrow is Yom Kippur (sell Rosh Hashanah, buy Yom Kippur)

Bad news:
1430 would be a 100% retrace of the prior rally.  That’s generally not good.  Next support around 1420, then the gap at 1400.

Stay away from falling knives until the market finds its feet.

Tuesday afternoon pork

Might want to get your fill of ham this year, because "a world shortage of pork and bacon next year is now unavoidable," according to an industry trade group.

Blame the drought conditions that blazed through the corn and soybean crop this year. 

Just Pour Me another round of that 3rd red eye, Bucky. (Overheard in the Last Chant Saloon)

Gator's Chart of the Day: JPM

I think the general consensus is that Ben Bernanke has the banks backs.  Money will be entering the economy through them to the tune of $40B every month until he's gone or every able bodied man, woman and child has a W-2 or a darned good excuse for not being at work.

Looking at the chart, the white line intersects the vertex of the "W pattern" that JPM completed in January.  I'm viewing that as long term support and I see a bull flag in the 41 area that would suggest a measured move back to just above 45.  I am already long a starter position that I acquired on 9/19 and I want to add to it.

The Trade
Assuming a flat to up open I'll look to add as much as I bought to establish the position which would make it about half full.  If it clears 42.19 I'll fill out the position.  (42.09 is the top of the flagpole.)  My stop on all but the core will be just under 40.

Monday evening

Relax :)

Tragedy in Atlanta

Before

A sad event today northeast of Atlanta.  An adventurous squirrel grabbed a hot one and was "overcharged" this morning.  His identity has not been released as next of kin have not been notified.  Authorities did reveal that it was a 2-eyed male squirrel.  Readers of the Algo Fighters were relieved. 

A cross of gold ... Fusion

Gator's Chart of the Day: FIO

No I don't own it now and no I didn't have any when it gapped big.  But I am looking at it again as it makes the golden cross.  Are there insiders selling?  Of course, but not a lot and with as much stock as they have I think there will always be selling.

The chart looks extended.  It is.  That's what happens with growth stocks when they are growing.  Short interest is still high with 22% shown as short and 7+ days to cover. 

The Trade
I'm looking at 29 - 29.50 as near term support.  I want to start a position if the stock opens sideways to up or if it opens down and bounces from the 20 day sma (29ish) I will buy the bounce.  The stop goes under the 20 day around 28.65.  I would look to add quickly if the position is profitable.  If it is flat or slightly red then I'll wait.  I'm looking for the stock to keep pushing the upper Bollinger band higher and if that is not happening then I won't be adding to the position and am likely to close it out on a "time stop."  (If it hasn't started to make the move by Thursday I doubt I own it on Saturday.)

Weekend thread

Tunnels Beach, Kauai

That's "Bali Hai" in the background.

Hiking Hawaii ... could it be?

Could be ... looks challenging and refreshing.

Friday morning

ANR - Thursday evening

ANR

Not a horrible buy setup if it holds here above the 50dma.  Would have been better if the volume fell off more during the pullback.  Just a chart look, I don't know nothin' about the fundies.

Lots of hammers on the charts today, courtesy of the dip buyers.

POT, why not?

POT Daily Chart (11:25AM)

That white trend line goes back to the July 2011 high.  Speaking of high, the volume is crazy today.  It has already traded more than the 50 day moving average and it's only 11:30.

Thursday morning

What Beaky is learning this week, or soon.

Not a pirate flag ... it's a bull flag

SPY Daily Chart

At 3:15 the market looked strong but by the close the wind had left the sails and the ship was drifting.  The chart shows a bull flag and while volume was below average it was slightly higher than yesterday and the candle is much closer to the upper Bollinger band than the middle one.

Weakness in crude oil and the still unexplained fast $4 drop coupled with some strange action yesterday in NOV and DO have some traders scratching their heads.  Still Ben has the bulls back and the trend is up (until it's not.)

Vulcan dog says ...

Three things that will be a big help:

 

1. Buy low and sell high.

2. Remember flowers on those special days

3. Put the seat down

For CallaLilly

Gator's Chart of the Day: EL

Several of the traders here remember CallaLilly.  She was on the old Rev blog and at Dan's place way back.  She traded bio tech and beauty and since I don't do bio tech I looked at some beauty stocks and found EL.

The chart shows a reasonably well formed cup with handle (yeah there's a hole under the handle) and it looks ready to move higher.  An IBD sanctioned buy point would be 10 cents above the right side of the cup.  That would make the trigger 62.08.  IBD would tell you to put a stop 8% below there but I think a tighter stop is in order, say just a little under 60.

Analysts have a price target of just over 67.  With 5 up and 2 down the reward to risk ratio just barely passes muster with me.  (I like 3 up 1 down as a minimum.)  The options are a bit thin so I may not get in this trade but for those that like the common this can work.

 

 

 

 

 

$701.95

'nuf said

 

 

 

How to get the cheese ...

 

It's said many ways:

Wait for the bounce.

Don't be the first out of the foxhole.

Let the stock establish support.

Don't catch a falling knife.

Wait 'til it sticks in the butcher block.

Tuesday Morning DK

Gator's Chart of the Day: DK

Delek US Holdings Inc. is a domestic oil and gas refiner/marketer with operations in Texas and Arkansas and some pipeline interests to the gulf coast.  The company reported on August 7th and they had solid numbers.  The forward P/E is under 9 and there is a 5% short interest.  With a market cap of $1.54B it's not a big player but it is profitable and looks ready to make another move higher.  Analysts have a price target of 32.51.

Looking at the chart the earnings pop is obvious and the stock has been consolidating since then.  The Bollinger bands are snugging up but not tight enough yet to qualify as a Fitz squeeze (6% of the 20 day sma) so we may have a few days before the next move but I don't think it's too early to take a bite.

The Trade
I like a 1/4 position right here with a stop just below Thursday's low (25.00).  That's about a 5% risk.  A move to the analyst's target would be a 22% return so the reward is 4x the risk.  That's worth taking.

The all-time high is 27.51 and I would triple the position size when it clears that level by a dime and put the stop around 26.40.  The last quarter of the position would be added when the second chunk is about a dollar to the good.

Monday Evening

Monday Afternoon ... Beaky's iPad

We may not hear from beaky.

Could have been an accident or perhaps Galas decided he needed to be more locally focused.

Monday morning

It's Monday, again

Weekend thread

This is where Ski is going to be next week.  Kalalau Lookout on the northwest shore of Kauai.  Elevation 4000 ft.   Those are big cliffs, lol.

Everybody have a great weekend and best wishes to the newlyweds !

Friday afternoon

Close inspection will reveal a chain around his neck.

Some things are universal ;-)

Nuptials

Congratulations to Beaky and Nurse Galas !

Thursday Evening

S&P futures traders started rolling into the December contract today, but I don't make the shift until the Monday of expiration week (next week). The bulls made a strong push up today to print another new high for the year (1464.25).

I stepped in front of it today and put on a swing short in S&P futures (Sep) with an average entry price of 1456.25. My stop is above 1470ish. I'm thinking we put in the highs of the year today... yup, don't laugh, I just said that....lol.

Stops part 2

Ok, so I’ve got a trade on and it’s working.  Man, I really want to move my stop to either reduce the potential loss or lock in some profit.  My finger is itching on the mouse button.  So I tighten the stop and $#@*(@#&, stopped out.  Cannot even count how many times I’ve done that.

Borrowing from Einstein again :  stops should be tightened as soon as possible, but no sooner.

My current plan is to (try to) resist moving a stop until a new area of support or resistance has been established.  This generally works out to be a price pivot point or long tail or sideways consolidation.  In other words, if long, I want to wait until price tries to go down and fails.  Then the stop can be moved under the new support, but not “too” close.

Here’s an idealized trade example.  I just picked FSLR because it had a relatively clean uptrend on the 5min.

A) Excellent entry over 5min high !  ( I am a great trader from the left side of the chart, lol ) Initial stop under the low of that bar. Under low of day would be good too.

B, C, D)  Stock tries to go down and then breaks back up.

E) Breakout from a little consolidation.  It shouldn’t come back into there.

F) Another attempt to go down which goes back up.

(between F and G, one might consider a tighten after that green bottoming tail.  It should have gone up after that.)

G) Stopped out for about 0.50 gain

Thursday Morning

Can you guess what it is?

Wednesday Evening

I want to say a special thank you to Gator for all of his hard work authoring on the blog. We all know how much effort he puts into creating blog posts and coming up with new ideas on a regular basis. I think I speak for everyone when I say how much we appreciate your efforts Gator... Thank You!

Gator isn't being fired....lol, I just thought it was a good time to let him know that his work is greatly appreciated. To the existing authors already on the payroll :).... I'm hoping that we can give Gator a much deserved break and fill in the gaps a bit. He's expressed an interest in taking some time off, so I thought the rest of us could fill in the blanks and spread it out a little.

Blog posts can be whatever you want them to be... pictures of beaky's upcoming wedding (don't think we forgot about it beaky lol)... or stock/commodity charts, pet pictures, car pictures, comics, pure written commentary... whatever you want. Anything but politics...lol... I think we've established that's a touchy subject lol. If you put up images of something, just check to make sure there isn't a potential copyright issue. Other than those minor restrictions, the blog is your canvas. Refreshing seems to slow down a bit when we get over 120-150 comments, so that's usually a good time to put up a new thread.

I would also like to throw out an open invitation to anyone who would like to be added as a blog author: Let me know and I will take the steps in order to add you to the author list.

Oh... one last note to the authors..... I've noticed that Blogger doesn't seem to function very well when a lot of people are in there creating/editing posts at the same time. It's probably a good idea to throw out a comment on the thread that you are going to do a post so other authors know to stay out of the "New Post" area.

Mid - afternoon thread

It's all about the AAPL

 

and later about Ben

Roll out the barrel ....

Gator's Chart of the Day: CBRL

Cracker Barrel was the Chart of the Day on May 9th (vertical white line.)  A buy and hold from that day would have gained 14% (~42% annualized) and collected a couple of 40 cent dividends.  I don't know anybody who did that.  I know I didn't.  Grrrrrrrrrrrrr!!!

Is CBRL a buy right here right now?  If you have the can't help its a small bite would be OK but a tag of the 50 day simple moving average would be better.  Perhaps just a close approach would be good since it really hasn't touched that moving average since July.

Be aware that the stock only trades 114k/day so it's a little thin.  The short interest is over 4% and it takes over 6 days average trading to cover.  Earnings are scheduled for Sept. 19th so you may want to put this on a watch list and make a decision then.

Rydex Data

Sentimentrader Rydex Bull Flow

Sentimentrader Rydex Bear Flow

The Rydex Bear Flow indicator gives me the impression the bears have been getting steadily squeezed out.... and the latest push up in stocks finally moved it into the red zone. There is room for it to go higher, but you can see that previous corrections have come when we see this indicator in the red zone area. Rydex Bull Flow is not in the red zone, but it is in the upper half suggesting a lot of folks are positioned on the long side. I hate to keep sounding like a broken record, but please be careful on the long side here... especially now that it appears bears are throwing in the towel.

(The Rydex indicators are updated daily; these charts are including Sep 10 data)

Afternoon thread

DJ-20 Daily Chart (11:45)

Sorry there is no chart ... something is goofy in the author's section and I see no way to import a picture/chart.

I was looking at the DJ-20 and it is quite strong today but still 5% below the high made on 3/19.  Transports are a good measure of business activity for anything that is dependent on physically moving things across town or across county or around the world.

Would you like a piece of PI(I)?

Gator's Chart of the Day: PII

Polaris Industries, Inc. reported earnings on July 24th before the market opened.  You can see the tall red volume bar that was indicative of the gap up and trade down for the remainder of the session.  Including the shadows at the top and bottom that candle nearly touches the upper and lower Bollinger bands.  They got tighter as the stock consolidated for the month of August and now we see the good ol' breakout from a volatility squeeze pattern.

A quick check of the fundamentals shows a strong balance sheet with little debt and a dividend yielding just under 2%.  Analysts have a target price of 91.60.  The short interest is 6.4% and it takes just over 5 days average trading to cover.

The Trade
Phase 1 of the pattern is the breakout and move higher.  This is in progress.  Phase 2 is the pullback to test the breakout and Phase 3 is the move higher following the successful test.  That's the playbook.

With the market fading into the close on Monday I would look to take a small bite on a positive open or if the stock opens down I would look for a bounce.  It could be we see Phase 2 complete before we see the bounce so patience may be required.  Once the initial position is established the stop would be back in congestion.  Pay attention to where the 20 and 50 day simple moving averages are when selecting the precise level for that stop.  My target price agrees with the analysts; 91.60.  That means it will be in new all-time high territory so I would expect to exit the trade with tight trailing stops and let the stock tell me when it's time to leave.

Back inside the bands .... SP-500

SP-500 Daily Chart

It probably felt worse than it really was as some of the popular high beta stocks were red today.  The SP-500 just barely pulled back inside the upper Bollinger band.  There is a lot of news yet to come out this week.  The German Constitutional Court rules on Wednesday and Apple will show the iPhone5 later in the same day.

Tomorrow is 9/11.  Do you remember?

Foot Loose ... put on your Sunday shoes.



FL Daily Chart (11:30)

It's a shoe stock and it continues to run on a breakout from a volatility squeeze.  Volume continues to be good and last week it was well above average.  There are other shoe companies doing well too.  Check out BWS or DSW or NKE.

In the military UA is a very bad thing.

Gator's Chart of the Day: UA

I have not owned this stock since '07 when Rev and I were on opposite sides of a trade on this one.  If you check that section of the chart (not shown) you'll see who did better with that one.  I was long and he was short.  We both made money but my profit was puny and more luck than anything else.

Under Armour consolidated long enough in August that the Bollinger bands got tight enough (4.4%) to qualify as a volatility squeeze.  It didn't last long so the breakout may not have the strength we often see with this pattern but it looks like a profitable trade can be crafted.

The forward P/E is lofty (38) but so is the short interest (19% and 7+ days to cover) and this is the time of year the company's products get a lot of TV exposure. If you don't have a retail stock then maybe this one will fill that void.

The Trade
Thursday the stock made the move out of the squeeze and Friday it continued.  A small commitment could be made right here around 59.60-59.75 and then add if the stock moves through the round number (60) level with no trouble.  A stop lower than 55 may be too tight so be aware your risk is likely to be more than 8%.  Size your position appropriately so the dollars at risk are acceptable.

Weekend Thread

Your island awaits :)

I hope everyone has a safe and relaxing weekend!

She's smart, graceful and a great trader

Our panther

Glad to see you posting.  I always gain insight from them whether I follow or not.

THANKS!!!!

Is it time for Basic Materials?- HUN

Huntsman

Huntsman is a chemical company that has one of the lowest PE's in the industry.  It bounced off support and yesterday HUN made a nice move. One could also say it is a cup and handle.  Many of the basic material charts are starting to look a lot better.  I am long a little HUN and FCX.  Lots of stocks popping today but many are quite extended.  You could enter now with a stop around 13.65 or wait for a pullback closer to support.

Many stocks took out their 52 week highs and closed above it.  How much farther can we run and are you comfortable buying on a Friday a bunch of stocks that have made decent moves?

No politics

Just going back to the point of the blog and it is about stocks.  Many people like this blog because mentions of politics are either muted or absent.  Let's keep it this way to keep our community intact.

S&P futures update

S&P Futures Daily

I sure got this one wrong. The bulls went to work right at the cash open and have tacked on about 18points so far to 1429. A 20 point range would be 1431 on futures... and intraday volume is suggesting that as the high target area.

I don't have any trade setups right here. With most of the days move probably in the bag, and also the fact that I'm out of sync today.... I think the safest thing for me to do is nothing at all. Sometimes it's frustrating to "miss the move", but I'm getting better at shrugging it off.

PAWN SHOPPE?

Gator's Chart of the Day: PANW

Palo Alto Networks has finally been trading long enough that it has a 20 day average.  It looks healthy enough that it should make it to a 50 day average later this month.

This one qualifies for the Fitz IPO trade.  That's the technique he uses that trades blue sky.  The only losers in the stock so far are those who bought Wednesday.  So here's how I would look to trade it.

The Trade
If you want to be aggressive then take some right here at 70.  The stop should go under the 20 day sma and that's 64.25 so that implies more than 8% downside so you may want to start small.  The safer trade would be to wait for the stock to clear 72.61 and then everyone is a winner. A stop just below 68.50 would be a little over 5% risk and the sky is the limit to the upside.

S&P futures target

S&P Futures Daily

Today was the 4th day in a row (if you ignore the holiday close) that S&P futures closed below its 20day WMA. I'm expecting a drop to the red box area (1375-1387) tomorrow and Friday. I think Gold futures are ripe to pull back too.... with the first level of potential support at 1670-1675.