Stock Picks Recap for 3/7/11
With each stock's recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
From the report, SSRI gapped over, no play.
CSIQ triggered short (with market support) and worked:
From the Messenger, Rich's JDSU triggered short (with market support) and worked great:
AAPL triggered short (WITHOUT market support); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES but this was my big winner of the day anyway:
Rich's LVS triggered short (with market support) and worked:
AMGN triggered long (by a penny, without market support) and didn't work:
ERTS triggered short (with market support) and didn't work:
In total, that's 4 trades triggering with market support, 3 of them worked, 1 did not, but AAPL, JDSU, LVS, and CSIQ made for a fairly straight-forward profitable session.
Forex Calls Recap for 3/7/11
Here's the US Dollar Index intraday...despite all of the movement, the net result was barely ending up above where it started:
Having said that, we ended up with two winners, with both trades on the GBPUSD triggering and hitting first target cleanly. One trade (the short) is still active. Also, note the AUDUSD Value Area below on the North American session.
New calls tonight and Chat.
GBPUSD:
Triggered long cleanly at A, hit first target at B, stopped at C (if you were awake overnight, stop should have been moved right under entry instead when it hit first target). Triggered short at D, hit first target at E, carrying second half with a stop over 1.6220:
AUDUSD:
Note the clean Value Area move from A to B on the North American session:
COT: 3-4-11
Hi Traders,
A good Saturday morning to you. It's a little overcast here in the Tampa Bay area, but yesterday was FANTASTIC, so I'll put up with some cloud cover. At least it's warm enough to wear shorts and flip flops!
On to the COT but first, get this weeks charts HERE.
The small traders and specs have been buying the aussie and looney; as commodity currencies, it's no wonder, especially with oil going through the roof this week... and the best survival knife commercials were sellers (hey, the specs and smaller traders have to buy from someone). That said, the looney (i.e., CAD) is at extremes and the aussie is real close. Look for a 180-degree differential, which usually presages a turnaround. The kiwi, however, didn't benefit, and small traders kept on selling.
Other pairs at extremes are the swissy and euro, and the pound has turned the corner. This is a good time to start looking for a longer-term move setting-up in the opposite direction. Depending on one's risk tolerance and whether they're an active, swing or position trader, entries might already be in place. But, especially for active traders, Friday was Non-Farm Payrolls, which creates some chop and, if stops are too tight, you run the risk of getting a whipped around. This next week may offer some good entry opportunities in the shorter timeframes. Keep your eyes open.
Note the US Dollar Index. Specs (green line) and commercials (orange line) are at extremes. AND, finding a dollar bull right now is about as easy as trying to find a politician you'd want take home to meet your mother. But I digress.... The point is, right now the consensus is 99% dollar bears. O' to be contrarian ;- ) If you're not sure what this means, please see my post this week covering the topic--or just post a message and ask. Anyway, take a look at the COT chart.
What can I say about the shiny metals? The specs and short term traders are buying, which means the commercials are selling. While I don't know where the top is (especially with silver--though it did hit my target near $34.80); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES I have to ask: "If it's the end of the world and, the commercials being the "smart money", why would ANYONE be selling? I mean, if you knew there weren't anymore macadamia nut white chocolate chip cookies, and you LOVED, LOVED, LOVED macadamia nut white chocolate chop cookies... I mean you just couldn't live without 'em... would YOU sell any of your stash?
Okay, maybe "insulin" is a better metaphor. Bygones. Still, you get my point.
That's it for this week.
Be well and keep living large!
Clay
Identifying New Ideas in a Weak Tape
The rally off the September 1st follow through day in the market has been nothing short of relentless , and in recent weeks, the market has come under significant distribution (Institutional Selling) exacerbated by headlines of Middle East unrest. While the short and long term fate of the rally may still be unknown, when the market comes under pressure, it can be a great opportunity to search for stable fund flows and individual investment and trading ideas in the areas of the market that are holding up.
While many of the stocks in the tech sector have been under distribution and trading down toward their respective support levels, one of the exceptions in the tech sector has been Omnivision Technologies which is traded on the NASDAQ under the symbol (OVTI). They design digital image sensors for compact cameras used in Mobile phones, Notebook computers, Automotive, and Medical Markets. The company released quarterly EPS last week on 2/24 that beat expectations with a +320% surge is fiscal Q3 earnings vs. year ago numbers and topping analysts’ estimates by 44.8%. The stock produced a gap within its base the next morning which fulfilled the right side of a choppy Double Bottom like pattern with a Long Trigger of $31.37. A few sessions later it tested that area in a period of general market weakness before advancing to a new price high of $33.49 just 4 trading days after its breakout. It’s important to keep in mind that with any position you should always adhere to a strict maximum 7% stop loss from your purchase price.
Despite a current market environment where the uptrend is suffering from so much short term distribution, this is an example of one type of idea we look for at Tradesight.com. Sometimes it is better to wait out the cross currents that frequently tend to occur around potential trend changes. However, you should always have a watch list of potential buy candidates that is constantly being maintained like a well-kept garden because when opportunity knocks you must have a plan and you must trade your plan.
This is only a brief summary of some of the things we look at in our stocks and general market selection process. If you would like more information about our process and to learn how we may be able to enhance your investment results, visit us today and use the offer code below.
David Nesson
Analyst
Tradesight.com
This newsletter is a publication dedicated to the education of online stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell stocks of any kind. We are not licensed or registered in the securities or futures industries. The information presented herein and on the related web sites is presented "as is" without warranty of any kind either express or implied. The newsletter selections are not to be considered a recommendation to buy any stock but to aid the investor in making an informed decision based on technical analysis. It is possible at this or some subsequent date, the editors and staff of Tradesight.com, may own, buy or sell stocks presented. All investors should consult a qualified professional before trading any stock. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. Tradesight.com staff makes every effort to provide timely information to subscribers but cannot guarantee specific delivery times due to factors beyond our control.
GBPUSD Target Update and US Dollar Index Analysis...
Time to analyze the US Dollar Index, as we are getting to a "make or break" point here conceptually. While the chart certainly looks weak overall, it is important to recognize that from an energy perspective, it is sitting right on a static trendline (red line) of the last 9-bar move up, which could be support as these often serve as trade targets:
If that breaks, it isn't far to the lows of the year, and if that breaks, look out. Meanwhile, let's review what this means to our GBPUSD wave analysis conversation from last week, which you can read here. Here's the updated daily chart:
The comment we made was that even though a breakout looked like it could be pending, the MoB line (blue and pink) target represents the likely goal of the move, and typically, you would expect to get it between the black lines at A and B.
Notice that because it took its time, the GBPUSD is now on a path to hit the MoB between the black lines, right on target. This suggests that, at least in the short term, the US Dollar Index will break lower.
Tradesight February Forex Results...
Before we get to February’s numbers, here is a short reminder of the results from January. The full report can be found here.
Number of trades: 35
Number of losers: 23
Winning percentage: 34.3%
Worst losing streak: 8 in a row (January 6-14)
Net pips: -40
January was our first losing month in years. February rebounded nicely even though the ranges died down. More on that below.
Reminder: Here are the rules.
1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.
2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.
3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).
4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.
5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6. Triggers that occur right on the Big Three news announcements each month don’t count as you shouldn’t have orders in that close at that time.
You can go through the reports and compare the breakdown that I give as each trade is reviewed.
Tradesight Pip Results for February 2011
Number of trades: 30
Number of losers: 12
Winning percentage: 60%
Worst losing streak: 4 in a row (February 16-18)
Net pips: +235
Considering the biggest trade of the month was only a 65-pip net winner and only two trades total carried over into a second day, we're pretty pleased with the results of the calls. It's a nice rebound from the January loss and it wasn't particularly difficult even though it wasn't particularly exciting either.
I think the real concern here, though (and the thing to focus on) is the drop in ranges. Have a look at the various pairs. The first number is where their 6-month average daily range stood February 1 and the second number is where it ended the month. Remember that with six months of data, a shift of even 5 points in either direction is pretty meaningful because you have to bring the AVERAGE down.
EURUSD 153/152
USDJPY 77/73
GBPUSD 150/149
USDCAD 97/91
AUDUSD 118/114
NZDUSD 95/92
GBPJPY 143/137
EURJPY 132/125
Ranges matter. The US Dollar Index was fairly flat for the month as well. The EURUSD and GBPUSD held up, but everything else lost considerable range in the month. Higher ranges usually leads to better results. The USDJPY in particular is seeing too many days that are virtually untradeable due to their lack of range. We will continue to monitor.
On to March…
Forex Calls Recap for 3/3/11
Pretty flat and contained night until the rate announcement out of Europe. Here's a look at the US Dollar Index with market directional:
Small winner going in GBPUSD, see below. Several Value Area plays worked too, as discussed below.
EURUSD:
Stopped out of second half of prior day's carryover trade under LBreak for a gain:
GBPUSD:
Triggered short at A. Stop was 20 pips plus spreads, which didn't quite hit at B. Covered half at C even though it didn't quite get to first target because the day was ending. Carrying second half with stop over Pivot (entry):
USDCAD:
Note the Value Area entry in the US session (has to be during that timeframe for this pair) that was heading down to VAL cleanly):
AUDUSD:
Value Area here was suggested under the Pivot, which was a short at A and was working:
NZDUSD:
Clean Value Area play from A to B:
Stock Picks Recap for 3/2/11
With each stock's recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
From the report, PBCT triggered short (without market support) and worked enough for a partial:
From the Messenger, Rich's ISRG triggered right out of the gate (no market support due to opening five minutes):
Rich's AAPL long triggered (without market support due to opening five minutes) and didn't work:
NFLX triggered long (with market support) and did not work:
Rich's XLNX triggered long (with market support) and worked great:
GS triggered long (with market support) and didn't really work:
GOOG triggered long (with market support) and didn't work:
FSLR triggered short (without market support) and didn't work:
BIDU triggered long (with market support) and didn't work:
In total, that's 5 trades triggering with market support, only 1 of them worked, the worst overall performance day of the year. Never seen so many sweeps on different big names.
Forex Calls Recap for 3/2/11
Here's a look at the USD with market directional, including the only switch to negative at A:
Winner in the EURUSD that is carried over, smaller loser in the GBPUSD.
New calls and Chat tonight.
EURUSD:
Triggered long at A, hit first target at B, note how specifically it hit R2, and we have a stop on the remaining piece at R1:
GBPUSD:
Triggered short at A and stopped at B:
Tradesight Market Preview for 3/3/11
The SP posted a classic measuring day. These are often seen following a hard move where the bulls and bears “measure” or test each other. By the settlement, price was little changed from the opening and was higher by 4 handles. A break under Tuesday’s low will put the static trend line in play. Note that price never penetrated the upper half of yesterday’s candle which is a sign of weakness.
The Naz mirrored the trade in the SP. Keep a close eye on the lower regression channel (red). A loss of this area would be very bearish and imply further downside is in the cards.
Below is an analysis of the important intermarket pairs:
The NDX might be subtly underperforming the broader SPX which is always negative. The divergence is very small but should be monitored closely to see if the divergence widens out.
The SOX and the NDX are trading lockstep so there are no technical features at this moment.
Gold mining stocks represented by the XAU continue to underperform gold futures. This is typically bearish for the gold futures. Almost all climatic runs in commodities end with this condition.
The huge spread between the OSX and oil futures has finally reconciled. As discussed in previous reports, when the underlying commodity is lagging the producing stocks (OSX in this case) expect a move in the futures to square the divergence. This was a tremendous opportunity for players who were ready to act. ETF subscribers are long the oil surrogate USO and profiting from the move.
The OSX was the top sector on the day. Note that the pattern is stretched and 9 days up in the Seeker setup phase.
The SOX was stronger than the broad market and also Naz. Price is trading out a triangle.
The BTK remains range bound:
The XAU is having trouble with the 62% fib. A close over this level puts the old high in play. Set an alarm for a break under 215 to imitate shorts which is very possible.
The BKX was weaker than the broad market and in so doing lost key support at the static trend line. Price is now below the 10ema and 50sma. To further burden the bulls, the MACD has crossed the zero line. The next downside target is the prior breakout at 51.
Oil made a new closing high for the move but is now 9 days up.
Gold tested the risk level (magenta) of the Seeker exhaustion and closed modestly higher on the day.
