Stock Picks Recap for 2/4/11
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.
Off the report, VRSN triggered long (with market support) and worked huge:
In the Messenger, AAPL triggered long (without market support due to the opening five minutes) and worked fine:
AMZN triggered long (with market support) and didn't work on the trigger, although valid again and worked:
AIG triggered short (with market support) and worked:
Rich's CSTR triggered short (with market support) and worked:
In total, that's 4 trades triggering with market support, 3 of them worked, and 1 did not.
Forex Calls Recap for 2/4/11
Another winner to close out a great week. See GBPUSD below.
As usual on the Sunday report, we'll look at the action from Thursday night/Friday, then look at the daily charts heading into the new week (nothing special to note); 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 and then this time, we'll have a more in-depth discussion of the US Dollar Index.
EURUSD:
GBPUSD:
Triggered short at A, hit first target at B, stopped last piece at C:
Rest of report available to subscribers.
US Dollar Update...
Let's discuss the current state of the US Dollar Index daily chart from multiple timeframes, as I think this area is going to be fairly critical in determining whether the US Dollar has formed a multi-year bottom or not.
Bottoms take time, especially when the downtrend on the US Dollar Index lasted from 2001 to 2009. The process of turning that corner doesn't happen overnight. So, let's start by looking at the short term US Dollar Index daily chart:
What we see is that we had a move up in November that gave us a 9-bar Seeker setup count that ended at the point labeled A on the chart. By definition, that gives us the static trendline of that move as the red line at B. That should be significant support if we come back to it. The 9-bar setup later turned into a 13-bar sell at C, which has been the near-term top area. Since then, we've had a 9-bar Seeker count setup that ended at D, but continued lower anyway. Look how close we came to the red static trendline on that move (but didn't break it). This is all very technical action, and that line should be support if we hit it directly after E.
Now, let's back the chart out to show the better part of a year and the intermediate term downtrend line that we broke in November, which was a significant and key break:
The problem is that that line was never retested, as a key trendline should be, and to hit it now and turn back up requires a much lower move first.
If we back the chart out even further and show two years of data, we end up in a scenario of an inverted cup and handle along the RISING trendline, but more importantly, we have a rising trendline:
Keep in mind, holding that line is now a part of the bottoming process, because if we back the chart out even further and show a decade of data on a weekly formation, you can see the 8-year downtrend line that broke, and this uptrend has been in place since:
From a technical perspective, we have a downtrend from 2001 to the end of 2008. We have an uptrend that is very gentle (the first one always is) that has formed since that bottom occurred. We have several intermediate moves, the most recent of which was a downtrend that broke in November. We have Seeker count construction with a solid static trendline that lines up as support around that rising uptrend.
Even though we haven't retested that intermediate downtrend line shown in the second chart, the overall picture still feels more bullish than bearish. A break under that uptrend line would mean that the bottom did not confirm. A turn up that takes out the 81.20 area on the chart would confirm the bottom.
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Tradesight Market Preview for 2/3/11
The SP posted a very narrow range inside day, neither impressed nor disappointed by the ADP Employment Report. The Seeker exhaustion signal is still active.
Naz also posted a very narrow range inside day. Price is still contained below the January highs and the Non-farm Payroll number will likely be the deciding factor. Note how the ranges have expanded (read volatility) which can be a sign that a change in trend may be coming. This is a function of the dominant side, the bulls in this case, losing control and transferring control of the tape to the other camp. The upward advance has been very powerful and should be respected, but recognizing this subtle tell can help traders have more confidence and play the new dominant side sooner when a change in trend is detected. The current increase in range from high to low is only about 3%, however if this persists or the range expands, the bulls will be on notice.
In the chart below is a look at the price action leading up to the top of the NASDAQ tech bubble in 2000/2001. There was a very well organized advance followed by a period wide range trading that covered ~535 points of range in a very sloppy manner. There was a second push higher followed by another range that was even larger than the prior covering ~650 points of range. These disorganized wide ranging moves at the high of an extended impulse are the footprints of the bulls losing control of the tape. Orders of magnitude are always important to monitor. At the end of the great bull market the 535 and 650 point ranges represented moves of about 13%. The current expanded range is only in the order of 3%. Traders who recognize these subtleties will always have the advantage.
Multi sector daily chart:
The computer hardware index was top gun, making a backwards breakout of a rising wedge.
The SOX recorded and closed at a new high on the move.
The OSX is getting closer to the measured move target at 272.50.
The cyclical index, CYC, posed a strange looking candle at range high. If these prices are correct this is a very bearish development.
The BKX remains trapped in the same range.
The higher prices seen yesterday in the XAU were stuffed by sellers. This is typical when trying to pivot higher and isn’t necessarily a bounce killer.
The Dow Transports are dangerously close to a breakdown. Down 2% on the day the TRAN grossly underperformed the broad market.
The airline index, XAL, is at the last level of support before a breakdown. The static trend line is the last area of support before a trip to the 200dma and August highs. Note that the bar count is only 4 days down and price is already interacting with the static trend line. This is generally bearish.
Oil:
Gold:
Stock Picks Recap for 2/2/11
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, ISIL triggered long (with market support) and didn't work:
ADSK triggered long (with market support) and worked great:
PCAR triggered short (with market support) and worked some:
In the Messenger, Rich's APKT triggered long (without market support due to the opening five minutes) and worked great:
His JOYG triggered long (with market support) and didn't work:
His NVDA triggerd long (with market support) and worked great:
His BRCM triggered short (with market support) and didn't work:
In total, that's 6 trades triggering with market support, 4 of them worked, 2 did not.
Forex Calls Recap for 2/2/11
Winner to start the month in the GBPUSD. See below. New calls tonight and Chat as we head toward NFP on Friday.
EURUSD:
GBPUSD:
Triggered long early at A but gave you until B to enter. Hit first target at C, stopped last piece at D:
Tradesight January 2011 Forex Results
Before we get to January’s numbers, here is a short reminder of the results from December. The full report can be found here.
Number of trades: 34
Number of losers: 18
Winning percentage: 47.0%
Worst losing streak: 4 in a row (Dec 26-28)
Net pips: +315
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 January 2011
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
2011 starts off with our first negative month in almost three years. On the surface, the first part of the month should have been better than the second part, but that's not how it worked. We had a couple of unlucky stop outs that barely happened early that would have improved the month, and we managed to catch three nice moves in the last eight days to bring things back a bit (including 50-, 20-, and 70-pip winners to close out the month in the last three days). We also had a near record 8 losers in a row, which is really where the problem area was. Ranges didn't move much, although a couple of days late in the month brought the averages back up. GBPUSD was 151 pips per day heading into January on average over the last six months and 150 after January. EURUSD was about the same.
Still, from time to time, you have to expect a series like this. What's clear is that the month ended up being barely negative in the end despite a 2-to-1 losers-to-winners ratio. That's critical. You system, as we teach, always needs to focus on keep losses small even when you go through a string of them so that a few winners can bring you back quickly. It's a disappointing start to the year, and the activity in general did surprise me given that there should be a lot going on in the world, but after making 512, 218, and 308 pips respectively each of the last three months, things are still working fine. It's important to focus on what we teach, which is that a system isn't based on trying something for a couple of weeks. We're trading to put together a year of results. Sometimes, that gets a little tough for newer trades to focus on, but think about the risk management numbers that we cover in the course and I think that will make more sense now.
On to February...
Tradesight Market Preview for 2/2/11
The SP settled at a new high on the move, adding 21 handles. The futures left a gap open from Monday’s close and terminated the advance at the Seeker exhaustion risk level. The Sell signals is still active until a close is recorded above the aggressive risk level and then follows through on a subsequent candle and produces a higher high.
Naz was higher by 42 but did not produce a new high on the move. Like the SP, price left a gap.
On the daily comparison chart, the NDX100 is slightly lagging the broad market SP500. This is OK on a temporary basis but can be a trend changer if the NDX continues to lag and does not confirm the new high by the SP500.
The OSX continues to lead the underlying crude futures which is bullish for the futures.
The NDX100 and SOX semiconductor index are trading in lockstep so there is no divergence at this time.
The XAU gold miners index continues to underperform gold futures. If this condition persists, any bounce that does not produce a new high in the gold futures is shortable.
The XAU was top gun, +3%. Price settled above the 10ema for the first time this year. The short term trend is now up, look to the 50sma for an initial bounce target.
The BKX was stronger than the broad market, +2.5%. The Seeker exhaustion signal is still active.
SOX settled right at the prior high:
The OSX posted a small range day compared to the rest of the leading indexes. The chart produced a new high.
Oil was lower on the day and note that the Seeker exhaustion signal is still active.
Gold was higher but grossly underperformed the gold mining shares. Again, this is likely only a bounce in the miners unless gold futures start to perform.
Stock Picks Recap for 2/1/11
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, SOHU triggered long (without market support due to the opening 5 minutes) and worked huge all day:
EXXI triggered long (with market support) and didn't work:
Rich's DANG triggered long (with market support) and worked great:
AMZN triggered long (with market support) and worked:
Rich's MCP triggered long (with market support) and worked:
In total, that's 4 trades triggering with market support, 3 of them worked, 1 did not.
Forex Calls Recap for 2/1/11
Another nice winner on the last day of the month as we now move to February. See the GBPUSD below. The trade from the prior day carried to a nice winner as well.
New calls tonight and chat.
EURUSD:
GBPUSD:
The final piece of the trade from the prior session ended up being a 160 pip winner when we exited everything at D. Meanwhile, the new call triggered early at A but gave you hours until B to enter, then hit the first target at C, and final exit after some adjusted stops in the morning was D also for about 95 pips:
