Monday, June 28, 2010

BP get out now!

Excerpt from Blog posted on June 23. Now more so than ever. You have already lost/missed $2. My timing was the end of this week but may not make there.

3. Short BP

Don't tune out! I know many are saying this stock is going to zero, but I am about to say it is heading for a break lower imminently. It has bounced off of the 29 area for a week now which is forming the base of a descending triangle, and notice how the same steep downtrend line can be used to trace the volume fall off. It is setting up to break this triangle lower before the end of next week.

Updated chart 6/28/10:

The triangle is broken.

Sunday, June 27, 2010

Top 10 Ideas for the Week of June 28, 2010

After looking at over 500 charts I have found some good setups for the week. For the first time in several weeks both the daily and the weekly charts for the Index ETF's both point lower. This is a big change! Gold is just flying, no questions about it, and the dollar appears as though it may have found a bottom with a morning star doji. Oil seems to be in a range and needs to be watched carefully. With that backdrop here are some ideas for the week, not all of them short surprisingly, in no particular order.

1. Mosaic, Ticker: MOS

Now cracked the 42.50 recent low it is heading to the woodshed (38)

2. Patriot Coal, Ticker: PCX

Trying to hold around 14, failure to hold it, and that looks to be the case to me, leads to support below at 12.

3. iShares Barclays 20+ Treasury Bond Fund, Ticker: TLT

The piercing candle Friday bodes for another run at the magic 100 level and 110 above that. There is support at 94.92.

4. Annaly Capital Management, Ticker: NLY

One of the only REITs I follow that looks good either way. This one is going to new highs, with support at 17.10.

5. Blackstone Group, Ticker: BX

This has found support around the 9.83 Fibonacci level (9.70 - 9.90) several times but is having a hard time getting away now. If it goes below 9.70 it should test 8.25 fairly quickly.

6. Genoptix, Ticker: GXDX

ZERO, ride it there unless it breaks 17. If it does wait for it to stop rising and then ride it to zero.

7. Stericycle, Ticker: SRCL

Perfect pairs trade to GXDX, this stock is ready to take off higher on a break of 66.00

8. Best Buy, Ticker: BBY

Testing 35 support. Has potential for a big move either way. If it holds, it can rise to resistance at 40.30-.70 area. If it fails to hold support is at 30.90.

9. True Religion Apparel, Ticker: TRLG

If it loses the 200 SMA it will see 22 support, then 20.90. Resist above 200SMA at 25.60

10., Ticker: CRM

Hammer, doji Friday bodes for higher prices. 97.5 is the only obstacle. It has support at 89.50, then 87.64 as well.

Bonus: Expedia, Ticker: EXPE

Failure at 19.50 gaps to 18.70 on the way down to 13.80, 21 is resistance above. Looks lower

Double Bonus: Proctor & Gamble, Ticker: PG

As a long term short, I mentioned this last weekend. Looks like it is going to grind a lot lower over the next forever. Use 60 as the beginning of a trailing stop.

Trade'm well this week!

Friday, June 25, 2010

From the Charts:Macro Week in Review 6-25-2010

This week started with the highly anticipated free float of the Chinese Yuan that was supposed to put the US on better footing against our Asian neighbors (At least for you west coasters). My initial thought was why now? What is in it for China, outside of getting Timmy G. off their back at the upcoming G20 meeting? But my views on the economics of the situation are for another space, how did the market respond, in the charts.


Lets take a look:

GOLD Daily

GOLD Weekly

Looking at the daily chart it appears that only 1265 is left before 1300 can be taken. There is support below, at 1241. From the weekly chart we see a hanging man doji though indicating a possible pullback, but with support at 1225.

OIL Daily

OIL Weekly

The daily chart for West Texas Intermediate Crude shows a strong up move today that stalled right above the 100SMA. 82 looks to be the next resistance and 74.50 support below. Moving to the weekly shows that oil could not break the 20wk SMA though, which is resistance. and support below is at 70.50. Put the two together and it appears to be range bound.

US Dollar Index Daily

US Dollar Index Weekly

The Dollar index on the daily chart shows a range between 86.22 and 85.04 (the 50 SMA) with further upside resistance at 86.22. But the weekly paints another story. The morning star doji suggests a reversal higher is coming with 87 as first resistance and then 88.5.

On to equities.

Volatility Index, VIX, Daily

Volatility Index, VIX, Weekly

The VIX daily was an inside day, consolidating, but tested the 30 level again. It should get a push higher from a rising 50SMA. The weekly confirms a bullish bias with a engulfing candle. resistance above is next at 32.50. Support lower would be 25.37 on a break of 28.

SPY Daily

SPY Weekly

The daily SPY chart is in another down move with support now at eh 104.38 level. If something odd happens there is resistance above at 109.09, the downward trend line. On the weekly, this week was a big bearish engulfing candle which broke through the 50wk SMA. Look for a test of 106 on the way lower.

IWM Daily

IWM Weekly

The daily chart held the 200SMA after testing it so it is now support. On the weekly the bearish engulfing candle seems to point to 62.08as the goal. Both charts show upside resistance at about 66.80

QQQQ Daily

QQQQ Weekly

The Q's also retested the 200SMA at 45.05 and held. If it reacts like the other index ETF's it looks to go through and lower. Support below would be at 43.50, This is confirmed from the weekly chart. A bearish engulfing candle points lower with resistance above at 46.65.

So What Does It All Mean For Next Week?
For the first time in several weeks both the daily and the weekly charts for the Index ETF's both point lower. Also, each of the 3 ETF's outlined here are pointing lower in the future. This is a big change! I am mainly cash and have a handful of short options spreads. It will be hard for me to stalk a long trade for Monday based on what I see now. That is outside of gold and other precious metal related stocks. Perhaps you can pick up something quick in oil but there does not seem to be much upside there if at all. The dollar is still playing a big role as it looks to have found support. G20 will tell.

Good luck next week!

Wednesday, June 23, 2010

Confusion Still Abounds in the Charts What to Do?

I have written about it a few time already so I will be brief tonight. When you look at your charts and see your view shifting from long setup to short setup and back again, it is time to step back to a longer time frame to get a better perspective. Tonight let's use Dr. Pepper Snapple Group, ticker DPS, to illustrate.

DPS Daily Chart

From the daily chart on DPS we see a lot of different things going on. First, it rejected off of a test of the recent highs established in May. This gets you thinking about a double top. and a move lower. The next thing I see is that the SMAs are all upward sloping, a positive for the stock. Third, the relatively larger red candle yesterday followed by a down day today is also a potential negative. The price however is also at support from the recent end of May beginning of June levels near 37. Volume has been elevated since March but basically flat. RSI is slightly above 50 but has been heading down, not much of a clue there. And MACD indicator is near zero with the two lines nearly flat lined on top of each other. So which way is the stock going to move? Now go through this same analysis 3 days ago when there was a series of doji. What would you have thought then? Screaming higher?

DPS Weekly Chart

When you look to the weekly chart a whole new picture emerges with a series of doji or near doji at the all time highs. If you looked at this same chart on a daily basis you would be all in. This baby looks primed to take off. SMAs are all rising, RSI is elevated but not in overbought territory and falling, even the MACD is basically neutral maybe if it continues in current direction will start to show potential weakness but.

So don't forget, take a breath, step back and gain the benefit of a different perspective.

A couple of trade ideas:

1. Short TBT

This stock broke a descending triangle below 37.50 now with support at 35.50 then zero

2. Short DCTH

Despite dropping below 8 today it still has a long way to run to support at the 200SMA at 7.19 and then 6 below that. Volume picked up today as it sold off as well.

3. Short BP

Don't tune out! I know many are saying this stock is going to zero, but I am about to say it is heading for a break lower imminently. It has bounced off of the 29 area for a week now which is forming the base of a descending triangle, and notice how the same steep downtrend line can be used to trace the volume fall off. It is setting up to break this triangle lower before the end of next week.

Good luck to all and hope you trade'm well!

Sunday, June 20, 2010

Top 10 Ideas For the Week of June 21, 2010

Reviewed over 500 charts and posted over 150 this weekend. It was an interesting quadruple witching week. Gold is just flying, no questions about it, and the dollar appears to need some more time to consolidate. Oil and the equity indices all seem to be in ranges and need to be watched carefully. When they break the range they will move and you need to be ready. With that backdrop here are some ideas for the week in no particular order.

1. Apple, ticker AAPL

Broke out of a symmetrical triangle and made a new high. Price target is now 300.

2. Rambus Inc, ticker RMBS

Bear flag after a big drop, bodes for another drop. Target is 15.

3. ProShares Ultra Short 20+ Treasury, ticker TBT

Descending triangle completing, watching 37.50 for a break out. A break lower would have a target of 30ish.

4. American International Group, ticker AIG

This stock has historically traded off of Resistance/Support. If it breaks 38 expect a run to 43.82 - 44.82 and beyond that then 54.20/55.90. Above 55.90 there is clear air. Support is at the 200/100SMA.

5. Intercontinental Exchange, ticker ICE

Trying to break out of ascending triangle formed by SMAs and 122.50, target on break out and hold of 130 is 160.

6. Mastercard, ticker MA

215 is a crucial level to watch and can play either way. A break and hold higher sees 227 - 230. Failure sees support at 195 below.

7. Delcath Systems, ticker DCTH

A break below 8.75, leads to 6.93 next and further support then at 6. Make sure it sticks below 8.75 to play.

8. Cliffs Natural Resources, ticker CLF

Rejected at the 100SMA with the 50SMA driving down. Looks to test 200SMA again.

9. Lululemon Athletica, ticker LULU

Strong move higher. 50 is the next resistance and through there can try 60. Support at 44 below and then 39.81.

10. Shanda Interactive Entertainment, ticker SNDA

Descending triangle with support at 38.20. Volume declining, doesn't look good. Support below is at 33.70 - 34.00 area the 30.83. Resistance at the 50/100 SMA convergence at the downtrend line near 43.15 and 200SMA above that.

Bonus Idea: Sears Holding Corporation, ticker SHLD
Daily Chart

Under 76.80 now will see resistance at 70 below.

Trade'm well this week.

Saturday, June 19, 2010

Quantifying the Uncertainty

I have posted several times in the past 10 days about the uncertainty in the market lately. What the F$@K is Going On on 6/10
Crossroads Uncertainty Indecision...Not the QQQQ's (dead wrong on this so far) on 6/13 and
Why is Sentiment Seemingly so Mixed? on 6/16. Let me illustrate this from another perspective using the relationship between the 20, 50, 100 and 200wk SMA using the weekly chart of the Financials Select Sector SPDR, ticker: XLF

Notice that the 20wk and 50wk SMA's create a range that has been open for quite some time and the 200wk and 100wk SMA's also create a range. This in itself is not all that unusual. Also the 20/50 range is tighter than the 200/100 range. Also not unusual. You would expect that the 20/50 range would be narrower than the 200/100 range. The shorter SMA's react to price changes quicker. Now notice that the 20/50 range is now within the 200/100 range. Also not that interesting as the shorter SMA's range is narrower than that of the longer SMA range it easily fits inside.

What is interesting is how this happened and where these SMA's and ranges are going from here. First, the 20/50 range crossed up into the 200/100 range. This means the 20/50 range has been rising and you can see this from the chart. Second, the 200/100 range has been falling. This can also be seen as both SMA's drop from the top of the chart. The important point to take away from this is that in the short term prices have been rising while they have been falling in the long term. think about what that means. Shorter horizon investors are feeling happy as their positions have been increasing in value, but many longer term holders are not feeling the same way yet and some are underwater. How would you look at your investment/position if you were in each of these groups? Final point to note is that the 20/50 range has been narrowing, showing that the price action is leveling at least and maybe falling.

This all equals uncertainty, indecision, a range bound market, whatever you want to call it. But that was just the XLF, right? Actually of the 9 sector SPDRs I had 5 to choose from for the chart where the SMAs stacked up 100/50/20/200 and an overlapping 5 (but not identical) where the price was within the 20/50 range and 1 more where the range was to tight for that to happen.

Sorry only 1 picture on this post and lots of words. If you want more pictures check out the charts for the other sector ETF's on my twitter @harmongreg or on on stocktwits.

Friday, June 18, 2010

Macro Week in Review 6-18-2010

Quadruple witching Friday ended with a Doji day (open and close nearly identical) on the equity indices. There was a great rally in gold, as I have been calling for some time, to new highs, the dollar continued its pullback and oil ended in limbo. Let's go to the charts for more details:

Gold Daily

Gold Weekly

Gold broke through the recent highs today. Now on its way to 1300 from reviewing the daily chart. The weekly shows a continued up trend as well.

US Dollar Index Daily

US Dollar Index Weekly

The other currency. Broke down through the trendline on the daily chart and now sees support at the 50SMA at 84.52. The weekly chart looks worse with support at the 20Wk SMA at 82.71 then the 82.34 trendline.

Oil Daily

Oil Weekly

The daily chart for crude oil shows a lot going on. The 50/100/200 SMA's are all within a $1.63 range with the 50SMA crossing the 100SMA and heading to cross the 200 SMA. It is going to move somewhere, up sees resistance at 80 and down sees support at 74.50. The weekly chart would lead you to believe that down is more likely. It is tapping the 20wk SMA and and retesting the trendline.

Volatility Index Daily

Volatility Index Weekly

The daily VIX touched its support at the 100/200 SMA near 23.30. A break through sees next support at about 18.50. The weekly is also on support at the 20/50 wk SMA. Break down on the weekly sees support at the trendline at 19.67.

Now moving to the Indices.

SPY Hourly

SPY Daily

SPY Weekly

Three charts for the SPY. The hourly chart clearly shows the reduced volatility the last few days and a series of near doji to end the day Friday. This says a move is coming, but which way? Moving to the daily chart there is consolidation after a recent rise above the 200SMA. You might expect continuation with resistance at the 100SMA above. But also note the 50 SMA coming down from above and the hanging man candle from Thursday, both bearish signs. The weekly chart shows a break of the down trendline and a coming test of the 20wk SMA 113.21 (near the daily resistance of 113.41). Seems still in a tight range and need to watch carefully.

IWM Daily

IWM Weekly

The IWM daily chart has cracked the 100SMA and is finding support there. It is now solidly within the range from 2008. The 50SMA coming down bodes slightly bearish near term and acts as resistance. On the weekly chart IWM has tapped the 20 wk SMA and is sitting on the positive side of ST up trendline and 200wk SMA. The weekly looks positive with resistance at the pink trendline. So again conflicting views and one must watch carefully.

QQQQ Daily

QQQQ Weekly

QQQQ's broke a descending triangle this week and rose to the 50SMA today, being resistance. The 100SMA below is support. The doji today signifies indecision. Looking at the weekly chart there is a flagging after a break down below the up trendline with resistance near the year end highs. Pushing higher sees resistance at the trendline and there is support at the 20wk SMA below. Another tight range and conflicting information between the daily and weekly.

How do you sum it all up? Gold is just flying, no questions about it, and the dollar appears to need some more time to consolidate. Oil and the equity indices all seem to be in ranges and need to be watched carefully. When the break the range they will move and you need to be ready.