Archive | February, 2009

Wk8: Stocks to Watch

17 Feb

To recap last week’s watch list we had 8 winners, 0 losers, and 4 remain open (1 of which depends on where you placed your stop). View the detailed analysis below…

MYGN – Continues to break to new highs
CECO & COCO – Positions remains open. The gap down on Thursday did not trigger our stop since we do not trade the first 15-min bar. After the first 15-min bar closed, we placed a stop under the low of the day.
POT, MOS, BBG – After strong rallies on increasing volume, small pullbacks are making for more potential entry points. If you took profits on a position here don’t be afraid to jump back in once the stocks signals an entry.
MMC – Broke down to a new low the day before earnings, great point to take profits. It is wise to never hold a full position size over earnings.
KBW & FLIR – Both stocks were crushed, and continued lower after earnings hitting our profit targets.
ROG – Moving sideways.
SJT – Beautiful example of a bear flag, once again hitting our profit target.
COST – Made its move lower and it 10 cents away from our profit target, while it may continue lower through our target, if you are holding Feb options keep in mind they will begin deflating extremely fast this week.

For the following week keep these stocks on your radar.
Long (Enter over the high of the low day, stop under the low):

ABT, ATHN, FNF, MS

Short (Enter below the low of the high day, stop over the high):

NATI, VARI, ERTS, KSS

Trader Interview

13 Feb

Back in October of 2008 I was interviewed by Tim Bourquin of TraderInterviews.com and The Money Show. I delve into my trading strategy, tactics, and market psychology, click below to watch.

VIX Triangle

12 Feb

Taking a look at the Volatility Index (VIX) daily chart, Justin noticed we are forming a symmetrical triangle as well as coming into the 200-MA. Watch for a contraction of the VIX into the 30’s to signal a move higher, but if the VIX breaks to the upside, we should see stocks go lower.

Wk6: Market Recap

9 Feb

Week 6 was quite bullish. We put in a higher low on the major indices and the NASDAQ broke to a higher high. The S/P, Dow and Russell are close behind sitting right at the previous swing high. We saw a divergence on the NASDAQ internals on Wednesday, again not something you see too often. This is a sign that a tug of war still remains between the bulls and bears, even as we move higher.

The Basic Material sector performance has been strong lately. Good old Potash (POT) and Mosaic (MOS) broke out on strong volume with Intrepid Potash (IPI) close behind. The VIX has held in the mid 40s and Gold and Oil remained flat on the week.

Wk7: Market Forecast

9 Feb

We are at a pivotal point here in week 7. While the last two trading sessions have been quite bullish, we are not rushing to go all out long. Watch for the S/P, Dow, and Russell to break their previous swing highs. Sideways action would be a sign of upside to come because it means the bulls are holding prices at these levels, however we remain cautious for short sellers will want to try and push prices lower at this resistance level.
· Weds: International Trade 8:30 ET
· Thurs: Retail Sales 8:30 ET

Thursday we have Jobless Claims and Friday Consumer Sentiment. The S/P $877.86 level is the previous high so watch this AREA for market direction.

Wk7: Stocks to Watch

9 Feb

If you’re still looking to catch a move in the Basic Materials Sector look to stocks like IPI and BBG as they are the lagers of the group. ALWAYS make sure to manage your risk. PNRA is forming a nice triangle, watch for a move higher or a continued breakdown on stronger volume.

MMC, KBW and ROG are candidates for bounces of resistance here and we are keeping our eye on FLIR as it has had a nice move down with earnings continuing the trend. Here are a few more stocks to watch…

CECO (long)
Ascending Tri
Entry: $22.52
Stop: $21.12
Target: $24
Option Play: Feb 22.5 Calls
Comments: We are making our way closer to options expiry so make sure to watch out for theta and consider March options for stocks with longer time horizons for their price targets.
MYGN (long)
Bull Flag
Entry: $84-85
Stop: $80 area
Target: $86-87, $90
Option Play: Feb or Mar 85 Calls (not much vol. on Mar)
Comments: We are keeping a loose stop on MYGN because the pole of the flag is so long. Many times after a few days sideways the stick will put in a hammer with a long shadow so we want to make sure not to be stopped out on a day such as this.
COCO (long)
Bull Flag
Entry: $21.39
Stop: $20.14 or under breakout bar
Target: $86-87, $90
Option Play: Feb or Mar 20 Calls
SJT (short)
Bear Flag (and other patterns)
Entry: $18.45
Stop: $19.69
Target: $17.50
Option Play: None, short the stock
COST (short)
Descending Triangle
Entry: $43.90
Stop: $45.68
Target: $42.50
Option Play: Feb or Mar 45 Puts

How to get the most from TJMacTrading

7 Feb

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Diverging Indices = Higher?

5 Feb

As we take a look at the top line figures (S/P, DOW, NASDAQ) we see an interesting divergence. Let’s examine the price action and the Stochastic Indicator. All charts are daily candlesticks.

The S/P is forming symmetrical triangle with a Stochastic turning higher. Volume has decreased over the past week and the apex of the triangle is tightening.
The Dow is creating a descending triangle, in the context of a sideways market, and its Stochastic is forming a triangle with a lower high which is turning higher, forming a higher low.
The NASDAQ on the other hand has put in a higher low on the dailies and is about to break out to make a new high, forming a small up channel. The NASDAQ has been the strongest index over the past few weeks and we see a small increase in volume these past few days as it makes its way higher.
For the rest of the week and week to come, look to the NASDAQ to lead the market higher with confirming triangle breaks on the S/P and Dow. However, If we break lower, expect a quick, violent, and emotional move back to last November’s S/P 750 level.