End of November 2012

I think this sums up all of our sentiments.

Friday Afternoon

They'll be watching you ...

Well the week is winding down and they are throwing cow chips at one another in D.C.  The POTUS has left town for some more campaigning (he's most comfortable in that role) and then he'll be taking the girls to Hawaii for a nice long vacation.  Clearly he knows how to lead and solve a crisis.  NOT!!!

No matter what your political beliefs are our elected leaders should be doing all they can to resolve problems and avoid causing bedlam and economic harm to us little people.  Be careful what you say though.  They'll be watching (and listening) to you.

Friday morning

Thursday evening

Thursday Afternoon - Storage needs still growing

FIO Daily Chart (11:15AM)

The cloud and mobile devices continue to ramp storage needs at unbelievable rates.  The trajectory puts that of our national debt to shame.  FIO is going to be acquired sooner or later but in my opinion it's a great value as a stand alone company.  It looks like the 20 day sma is providing short term support and the stock is making another assault on the 200 day.  This will be the 3rd try and they are frequently successful.  I think it will get through and continue on to test the50 day.  I'm long some calls and looking to add.

Thursday Morning

That's why we're here.  This is a tough gig.  Everybody needs some help from time to time.  If you want a second opinion (yours is the 1st) just ask.  There are some excellent traders here and they may see something you don't.  In the final analysis only you can push the buy or sell button but if it helps to talk about the idea before you do .... we're here.

Wednesday evening

Ms. Market : to traders

Wednesday Afternoon - Annie, get your gun!

RGR Daily Chart (11:00AM)

Ruger hit an all-time high this morning.  I have never owned it and don't currently own a fire arm but I am not a gun control freak.  I enjoy trap shooting and was pretty good at it back in the '70's and used to go hunting when I was 6 years old in Iowa.  With the current regulatory environment and the volume in the stock I think it goes higher.

Wednesday Morning

 

When it gets choppy there is something for everyone but timing is what makes or breaks the trade.  Be careful here ... politicians are posturing and those big players that have profits have good reasons to book them now.

Tuesday evening

Tuesday Afternoon

The market is holding up fairly well as it digests recent gains.  We did have some surprisingly strong numbers this morning on durable goods and Greece got its next stipend to get by into next year.  Don't do anything wild and crazy here.

Tuesday Morning

Gator's Chart of the Day: GNRC

Generac has been in the news even before hurricane Sandy took aim at the northeast coast.  Checking the chart you'll note the gap up on 10/31 as the company reported great earnings before the market opened.  That was followed up with news that demand for home generators is outstripping supply.  Although the stock still trades at a P/E under 11 it dropped like a rock on Monday as the company announced a secondary offering of 11.5 million shares.  (It should be noted that these are existing shares.)  That equals over 17 days trading and the stock price is likely to sag some more.

The Trade
The stock slipped into the gap at the close on Monday.  I think it can be shorted (or take some puts) at this level or even if the stock bounces back to 32.50.  If the stock falls below 31 I would load the boat and look for a meeting with the 50 day sma somewhere around 29.  If the price moves above 32.50 on volume I would close the trade for a small loss.


Edit: The secondary was withdrawn last night.  This trade may not set up.  If it doesn't then don't force it.

Monday Evening

SPY Daily Chart (end of day)

Monday was an inside day.  That suggests the prevailing trend should continue.  IBD declared market is in confirmed uptrend after calling Friday a follow through day.  I'm sure we could argue some of these "facts" since last week had a holiday and a shortened trading day.  More importantly, I want to point out the rectangle on the stochastics chart showing we are still on a buy signal and the SPY closed with tall green bars on the 1,2,3, 5, 10, 15, 30 and hourly charts.

Monday Afternoon

DDD Daily Chart (11:10AM)

There continues to be a lot of buzz about 3D printing (look also at SSYS) and it is my opinion we haven't even reached the 1st inning yet.  The teams are just finishing up batting practice.  If you have room in a loooooong term account I think you will be very pleased in 3 years if you grab some of each of these companies on any kind of a pullback and just forget about them.  The oval on the DDD chart highlights the completed W pattern that I used for starting one of the multiple rides up and down I have traded.

SSYS Daily Chart (11:15AM)

Cyber Monday Morning - Buy something on line.

Notre Dame only has to wait 5 more days ...

What is it that the Irish are waiting for?  Saturday night they learn who's gonna kick their butts for the national championship.  I like Georgia to upset Alabama in the SEC championship game but whoever wins that one will be the national champion. 

Weekend Thread

Colorado Crackers

Friday Morning

Market closes at 1PM EST

Happy Thanksgiving

Thanksgiving at the kid's table

It was a tradition in the mid west where I was born.  The "senior kid" got the big person chair and was considered to be next in line to move up to the big people's table.  It was a right of passage.


  

Wednesday Afternoon

V Daily Chart (10:45AM)

The channel is clear and it has been right to sell at the top and short (or buy puts) with the first red candle.  That looks like it could be today.  As we get near the close you may want to check it out.  I know I will.  (That is if someone will remind me ...)

Wednesday Morning

Gator's Chart of the Day: FSLR

Solar stocks have never been one of my favorite groups but since the green candidate won I'm looking to see if there is a trade I can embrace.  I looked at about 25 solar related companies.  If the screen requires positive earnings and share price above $3 the pickings are very thin.  The best candidate I found is First Solar Inc.

FSLR trades with a forward P/E of 5.8, a PEG of .21 and the short interest was 56% at the end of October.  The short ratio (# of trading days to cover assuming average volume) is 5.8.  (Sources are Finviz and shortinterest.com.)

Looking at the chart, it is in an uptrend and the 50 day simple moving average has been a good entry.  The 200 day sma has quietly slipped beneath the price and in the next few trading days the stock should be in the bullish configuration of 20 day above 50 day above 200 day.  The Bollinger bands are also getting tight so I expect a significant move and the bias is to the upside.

The Trade

I really don't want to get big in a new position this week.  The market is closed 3 of the next 5 days and volume will be pitiful when it's open.  Having said that I may take a 1/4 position if the stock stays above the 50 day and I can get it under 24.35.  I would prefer to begin next week.

Once the initial position is established the stop would be about .25 under the 50 day.  I would look to add on a move above the 20 day and if the stock clears 25.50 I would want to have my full position in place and my stops raised to insure no loss.

Tuesday evening

Tuesday Afternoon ... Fission ... I mean Fishin'

Looks like Paige and company found fish.

I'm jealous.  I grew up on the Gulf coast of Florida where our Paige is visiting.  I've been out there many times and caught my share of grouper, snapper, sea bass, etc. but I don't remember having a crew like this.

Tuesday Morning

Gator's Chart of the Day: FIO

If this looks familiar it should.  I posted this chart last Thursday morning.  I was looking for the stock to hold above support around 21.35 and suggested a quick dump if it fell below 21.30.  Well, it did trade at 21.14 on Thursday so I would have been stopped out if I had not missed trading Thursday due to doctor appointments.  Now I'm getting a second chance.

The Trade
I'll be looking for an entry as close to 22 as I can get and will take a 1/3 position below 23.  the stop will be about 20.85 as I want it below Thursday's 21.14 but I don't want to be stopped out on a bounce from 21.00.  If the stock starts to climb I'm looking for the 200 day moving average as a minimum move.  I would plan to add a little above 23 and move my stop up to insure no loss.  The last 1/3 would be added if the stock continues higher or closes above 23.

Monday Evening

A little something for everyone today.  While it looked very green on the heat maps there were 95 new lows and only 127 new highs.  (Finviz home page)  The market hesitated at 3:30 but when it didn't sell off the traders decided it can go higher for another day and bought heavily into the close.

Monday Afternoon

Between some happy talk between Democrats and Republicans, Israel not yet in full attack mode and the POTUS wandering around Myanmar the market is jerking a knot in the bear's tails.

Be careful as a change in "cliff speak" or Israel's actions in Gaza could reverse everything.  I don't think the POTUS will be an issue as long as he is eating Thai food and enjoying his taxpayer paid tour.

Monday morning

Weekend thread

by Zack Schnepf

Friday afternoon

Friday morning

Thursday evening - T2108

% stocks above 40dma

This is Worden's T2108 indicator.  The good news is that it is getting down into extreme territory.  The bad news is that this is merely a measure of oversoldness ... and things can always get more oversold.

Just so I can appear clairvoyant if it happens .. the Fed likes to pull free money out of its arse on oversold Friday expiration mornings.  I don't think they have any tricks left up there, but they might try something anyway.

Thursday afternoon

Dip Buyer

There is never any reason to buy a stock that's going down.

Thursday Morning

Gator's Chart of the Day: FIO 

I can't say it's pretty but it is testing support.   So far it is holding and as long as it stays above 21.35 it looks like a good place to take a small position.  The overall market looks pretty weak here so if the stock breaks support (say below 21.30) I say dump it and look for it to stabilize closer to 18. 

Long term I think this is a company that will do very well on it's own and will be (already is) a takeover target.

Wednesday evening

by Peter Lik

Another of my favorite landscape photographers.  He prints these really big and they are gorgeous.  This is likely Fuji Velvia slide film, which is also my favorite color film.

Checklist redux

A handy checklist for evaluating a potential trade with links to previous posts.

Trend

On your primary (or higher) timeframe - is the trend up, down, or sideways ?  (the technical term for a sideways trend is “junk”, lol)  It is much easier to trade with the trend than against it.

TREND

Void

Is there a relatively empty area on the chart (i.e. lacking in nearby support or resistance) for price to move into ?  Price moves easier when it has clear areas to travel through.

VOID

Entry

What is the entry signal ?  For instance, trading outside of the previous bar, or perhaps hitting an obvious support or resistance level.

ENTRY

Stop

Where is the natural stop-loss point ?  For instance, the prior pivot low or high.  If the stop is too wide, the trade should be avoided.

STOPS 1

STOPS 2

STOPS 3

Target

How far is the stock likely to go if it moves in the trade direction ?  This would generally be the next support or resistance level.  If the ratio of target size to stop size is too small, the trade might not be worth taking.

TARGET

Market internals

Things like A/D ratio, $TICK, up/down volume, $VIX.  In a very strong market, shorts have lower odds of paying off.  In a very weak market, longs have low odds.

INTERNALS

Wednesday Morning

Gator's Chart of the Day: FXI

China is finishing up the transfer of power they do every 10 years.  It's not the public spectacle with mud slinging, name calling, truth abuse and character assassination we are treated to every 4 years.  Despite the alleged copper bubble it appears China's economy is cooking at a slow boil with GDP growth well over 7% in the 3rd quarter and inflation reported at 1.7% in October.  The US of A should be so healthy ...

Tuesday I was watching for a bounce from the horizontal support line and it appeared a little bit after 10AM and it held for the next half hour and then started climbing.  That's when I took a bite on some Dec36 calls.  Now what?

The Trade
Now that I've taken the initial position I'm watching for the stock to make a move.  If it's up I'll add but if it falls below the rising 50 day sma I'll be kickin' those calls to the curb.  My high level plan is to hold the calls (adding twice) for about a week and if the etf moves up near its October high I will have more than a triple and the delta will have moved high enough I'll want to roll out and up.  (Maybe just up.)

Tuesday evening

Rainbow Over the Potala Palace, Lhasa, Tibet (1981)

Galen Rowell

That's not Photoshop .. it's Kodachrome.

Tuesday Afternoon - Pairs trade in China

QIHU Daily Chart (11:45AM)

BIDU Daily Chart (11:45AM)

I've been watching these two for a couple of weeks and I think they make a good pairs trade.  That would be long QIHU and short BIDU.  If you don't like to short (or have an account that does not permit it) you could buy puts instead.  I have no position but I might try this one.

Tuesday morning

SPX Daily/Weekly

SPX Daily

SPX Weekly

Monday Afternoon "Hey Cisco ..."

CSCO Daily Chart (11:30 AM)

John speaks tomorrow after market.  CSCO has gapped on the last two earnings reports; down once and up once.  Do you feel lucky, punk?

Monday Morning

Gator's Chart of the Day: CAB

Since the election last week (you may have heard about it ... it was in the papers for a couple of days) sales of firearms have been hot.  The stocks of Sturm Ruger (RGR) and Smith & Wesson (SWHC) were very active and finished the week with impressive gains.  Many of those weapons were sold at Cabela's (CAB) and it looks like it could make a move higher from here.

CAB reported earnings Oct. 25th and the market was not impressed.  The stock dropped nearly 20% and has been basing for the last 9 sessions.  That's not a lot of trading but last week we saw more green candles than red and with a P/E under 15 the stock is not expensive.  Analysts have the price target set at 56.

The Trade
I'm not real excited about this one so I would not recommend a big position.  Assuming the stock is somewhere in the 45 - 45.50 range I would take a 1/3 bite and put the stop just below recent support and 43.25 looks about right.  That would be about 5% below the entry and the first target price is the bottom of the Oct. gap which is 50.95.  That's about 12% above the entry.  If the stock makes it into the gap it could add another 3 points which would be about 19% above the entry.

Assuming the stock moves higher it looks like the first add would be about 46.20 and the position should be full if it clears 47.  Unless you intend to hold a core position for the long term (6 months or more) I would move stops up to insure no loss on this trade and I would let tight trailing stops take me out of the trade as it reaches 56.

Weekend Thread

I hope everybody has a safe and relaxing weekend.

Friday Afternoon

The suit comes in five colors.

Europe started things out on a grim note but U.S. markets appear to have had enough downside this week.  That is unless the POTUS says or does something tank worthy.

Friday morning

The markets could do almost anything today.  There's no clear pattern, no clear support, no clear resistance.

Some possible scenarios include :

Dip-and-rip

Gap-and-go

Gap-and-crap

Flop-and-chop

Puke-and-puke-some-more

Give things time to settle down.  Be very selective.  Use smaller size and bigger stops.  Or just sit back and watch the purty colors.

Above all, protect your capital.  That is job number 1.

SPX Daily/Weekly

SPX Daily

SPX Weekly

Thursday Afternoon - Perimeg, this is for you.

If you want a bigger pic click on it.  If you want a bigger finger ...

The market is flopping around and now looks like 1400 is in the rear view mirror.  My cat is also comfy with his DJIA 12000 hat.  Don't force trades here.  Sometimes it's best to stand aside.