Saturday, October 27, 2007

Trading Calls-- Oct. 29-Nov. 2, 2007

I am still struggling to correct a couple of key issues in my trading, and if anything, it has become crystal clear that if I ever hope for a successful trading career, I must find a way to completely remove those key mistakes from my system.

On the market:

I must admit that overall the major indices in the past week were much stronger than I had expected. The extremely bearish candle formations of the week before were substantially mitigated for DOW and SP500, and in the case of NASDAQ, almost fully invalidated. On the weekly charts, it seems that NASDAQ is ready to challenge its recent high at 2834, and DOW/SP500 in similar albeit a bit weaker positions. On daily charts, it is worth to point out that the major indices found very strong support from their key levels, which is highlighted by the 2 sessions where the bulls staged tremendous comeback from the big sell-offs. The bullishness on the daily charts is very clear.

Besides the continuous earning report flood, next week features two key events: the FOMC decision on Weds and the Oct. employment report on Fri. Right now the market fully expects a .25% rate cut, while I expect they will get it, I am not sure if a less than .5% cut will disappoint bulls.

A couple of observations on the earning season so far: first, most reports from big industrial, financial and other non-tech companies have been overall disappointing; second, many tech sector names (except the semis) have had better-than-expected earnings and outlook, but in many cases, there are signs of distributions in the post-earning rally (just look at the bearish candle of MSFT on the Friday).

I have to say that I am continuously impressed or frankly baffled by the fact that the market has kept rising despite of unfavorable news from all fronts, and I don't really know what's the driving force behind it, liquidity, momo-traders, frustrated shorts?

On next week's trading

I will continue focus on day-trading, and will refrain from shorting especially before the FOMC decision. Due to the bullish bias early next week, I might also consider break-out setups, but will be quick to take profits.

Trading calls:

1. AAPL: weekly chart very bullish, but daily chart show signs of distributions ever since the earning report; 60/30 min charts modestly bearish. I feel that it may fill the gap in the coming days.
** S2-DT: if the opening signal confirms, use open and key resistances around 186 and 189 as stop references. IT=183.
** L2-CTT: if it spikes towards key support levels at 175, 179, or even around 182.8.

2. AMAM: weekly chart just confirmed the turn-around of the down trend; daily chart bullish; 30/60 min in overbought area and suggests some pullback.
** L1-DT or Swing: if it spikes towards 35.5 or 37, IT=41.

3. AMZN: weekly chart mildly bullish, daily chart mildly bearish; 30/60 min charts bullish though in overbought area.
** DT-CTT if it spikes towards key S/R at: around 88, 92, 94 use tight stops.

4. BIDU: both weekly and daily charts are bullish though with some bearish divergence developing.
** DT-L2: if it breaks 360, or spikes towards 300, 323, 330.

5. BRCM: the big post-earning drop turns every chart bearish.
** DT/Swing S1 if it spikes towards EMA50 (currently around 37) with a stop just above 37, IT=32.

6. COH: the post-earning drop signals a new around of down trend. Weekly chart shows increasing downside momentum; daily chart bearish but in extremely oversold conditions; 30/60 min charts point out more rebound.
** Swing S1, entry zone=37-39 and 40-41, IT=30.

7. CTRP: weekly chart bullish, daily mildly bullish. 30/60 min charts show increasing bullish momentum but in overbought region. With its earning date around Nov. 7, looks like the pre-earning run is about to start.
** DT/SWing L1 if it breaks 54, IT=59. DT stop just below 53.5, Swing stop just below 51.

8. DRYS: Weekly chart bullish, daily chart shows the bull run stalled below last week's high around 130 with some bearish divergence.
** DT-L2 if it spikes towards 105, around 117, 120.
** DT-S3 if it spikes towards 129 with a stop just above.

9. ENER: weekly chart is on the verge of confirming the reversal of the down trend; daily chart; 30/60 min charts overall bullish but sellers are still evident.
** SW-L2 if it spikes towards 26.6, CS just below 26.3, IDS just below 26, IT=30.

10. FFIV: the post-earning drop turns every chart bearish.
** SW-S1 if it spikes towards 36/38 with closing stop just above, IT=32.
** DT-S1 if it spikes towards 38/39.5 use tight stops, IT=36.5

11. ILMN: ongoing pullback due to patent lawsuit and slightly less bullish outlook. The weekly chart is still bullish, the daily chart suggests more pullback likely; 30/60 min charts suggest rebound on the way.
** SW-L1 if it spikes towards 51 or 48/49 with CS just below 51 or 48, IT=54. However, it may stop here with low around 52.8, in which case, wait for bullish candle and diminishing selling pressure before making entry.

12. JCG: another broken down retailer. Weekly chart bearish, daily too but some rebound on the way.
** SW/DT S1 if it spikes towards 42, use EMA50 as stop references.

13. NUE: Weekly chart shows increasing bullish momentum; daily chart bullish; 30/60 min charts show overbought conditions with diminishing momentum.
** SW/DT L1 if it spikes towards 59 or 61 use a tight stop just below, IT=65.

14. TBSI: weekly chart bullish with increasing momentum; but daily chart shows diminishing momentum with possibility of more pullback.
** DT-L2 if it breaks 68, IT=70
** SW-L2 if it spikes towards 57 with CS just below it.

15. VRTX: Weekly chart confirmed trend-reversal with increasing bearish momentum; daily chart also bearish but more rebound possible; 30/60 min bearish.
** DT/SW S1 if it spikes towards 35 with stop just above EMA50=35.4
** DT/SW S2 whenever it breaks the previous day low, IT=29.

16. X: Weekly chart just confirmed trend-reversal; daily chart also bullish; 30/60 min charts show overbought conditions but momentum still strong
** DT L1 if if breaks 111.5, IT=114, stop just below 111.
** Swing L1 if it spikes towards 107 with CS just below it, IT=114.

Earning Watch:

1. CROX: Q3 report oct31-nov2?. weekly bullish but daily has bearish signs. KEY S/R: around 57, 60, around 63, 69, 72.4.

2. GRMN: Q3 Oct. 31 BMO, weekly bullish with diminishing momentum, daily bullish but stalled under recent high. KEY S/R: 95, 105, 109, around 116, 125.68

3. UA: Oct. 30 BMO. weekly show confirmed reversal of uptrend, daily chart shows quite strong rebound with more likely. Key S/R: 53, around 58, around 60, around 62, around 66.

4. LDK: Oct. 29? bearish all around. Key S/R: 22, around 28, around 35.6, around 41.5, around 46, 52.

Saturday, October 20, 2007

Trading Calls-- Oct. 22-26, 2007

On last week's trading:

My winning streak ended at 13 sessions on Friday when I was controlled by intense emotions and committed despicable mental mistakes one after another. That was on top of the numerous terrible trades earlier in the week, mostly the same old same stories in which I failed to capture majority of profitable movement. I am really sicked of all those mistakes and I am disgusted that I keep repeating them. I must do something here! Starting next week, I will purposely reduce my trading size to see if that would help me to combat those psychological issues. I also need to remind myself to be realistic, not greedy, and most of all, to stay cool-minded and disciplined.

On the market:

The volatile week ended with a big sell-off on the Friday. The developing weakness in the market probably can be attributed to the not-so-bright Q3 reports from key industrial and financial companies, which explains why both DOW and SP500 are notably weaker than NASDAQ. Tech sector overall remains relatively strong, but the Q3 reports are not nearly one-sided bullish like they had been in previous quarters.

On the weekly charts, both SP500 and DOW turn slightly bearish while NASDAQ remains slightly bullish. It is worth to point out that a weekly bearish-engulfing Marubozu candle has formed for all three indices, the size of which is pretty close to that of the July 27 one. The overwhelming bearish candle formation will prevent any sustainable rebound in early part of the next week if not outright leads to more losses.

On the daily charts, all indicies are clearly bearish, highlighted by the extremely bearish Marubozu candles on the Friday, with both SP500 and DOW slice through the EMA50. While the near-term bearishness is evident and short-the-rebound seems a sound strategy for the next week, it should be noted that all indices are approaching to some very strong support levels: NASDAQ-2690-2725, SP500-1480-1500, DOW-13200-13520, and it is conceivable that some rebound from these levels will happen.

Another bearish note: both SP-mid cap and Russell2000 seem to have formed solid triple/double tops.

One other noticeable sign that the market is turning bearish is the red-hot Chinese ADRs have started a serious retreat. It is too bad that Ameritrade does not have any shares for short for almost every one of them.

For next week's trading:

Once again, I will focus on Q3 earning plays. I will also pay attention to any shortable rebounds using key resistance levels as stop references. Due to the increasing volatility, I will be cautious about swing trades, long or short.

Trading Calls

1. ANF: clearly range-bound and weekly chart favors long if it approaches the lower boundary of the trading range.
** Swing-L2 if it spikes towards 71-72, with a stop just below 71, IT=79.

2. COST: weekly chart bullish, daily chart neutral.
** Swing/DT L1 if it spikes towards 62, stop just below 62, IT=65.

3. CRM: weekly bullish, daily bearish.
** Swing L2 if it spikes towards 49/46, stop when closes below those levels. IT=53.5.

4. CTRP: both weekly and daily charts bullish.
** Keep close eyes on the 54 resistance and 54.71 all time high, L1 if it breaks such levels with a closing stop just below 54.
** DT L1 if it spikes down towards 48/46 using tight stops.

5. DRYS (focus stock): both weekly and daily charts bullish, but more pullbacks are possible due to the huge gains in recent days.
** DT S1 if it spikes towards 123, stop just above, IT=120
** DT S2 if it spikes towards 117/118, stop just above 120, IT=111
** DT Swing L2 if it spikes towards 110/111, stop just below 110, IT=117
** DT Swing L1 if it spikes towards 99/100, stop just below 99, IT=110.

6. ISRG: bullish all around, blow-off Q3.
** DT Swing L1, key support around 263 and 266, IT=280.

7. RIMM: bullish all around.
** DT/swing L1 if it spikes towards 100/105.

8. SHLD: both weekly/daily charts bearish, but the strong buys occured a couple of weeks ago may have some implications here.
** Speculative L3 if it spikes to 128/123 with tight stops, IT=136.

9. SNDK: both weekly/daily charts very bearish. lower Q4 outlook will depress bulls for a while.
** DT/Swing S1 on rebound if it spikes towards 45.5/47, IT=41.5.

10. SONS: weekly chart turning bullish, daily chart more bullish
** DT/Swing L2 if it spikes towards EMA50=6.3, with a tight stop just below, IT=6.5/7.

11. TBSI: weekly very bullish, daily bullish but may be more pullbacks.
** Swing/DT L1 if it spikes towards 61 or MA10, use tight stops if DT, IT=67/70

12. UA: both weekly/daily very bearish,
** Swing/DT S1 if it spikes toward 57-58, stop just above 58. IT=49/50.

13. WFMI: weekly remains bullish, pullbacks entering oversold region.
** Swing/DT L1 if it spikes towards 46-46.5, stop just below 46, IT=48.

Earning Plays:


AAPL: both weekly/daily charts quite bullish, market is obviously expecting a very positive report, a negative surprise will send it down to 153/155 region for sure.
Key to look from the report: rev 6.05B, earning 85cent, Mac 2.2 M.

TXN: both weekly/daily charts turning bearish.
Key S/R: around 33, around 31.8, 34.8-35.5, 37.37.2.


AMZN: both weekly/daily charts bullish but bearish divergence developing.
Key S/R: around 70, 74, 88, 94, 96.73.

COH: both weekly/daily clearly bearish and on the edge of breaking down. My gut feeling is the Q3 report will be strong as usual, but considering market reactions to its Q2 report and the macro consumer discretionary spending conditions, it seems a good play to short any QUICK rebound.
Key S/R: near 40, around 43, at 46!

ILMN: bullish all around. This is a true growth story. My gut feeling is that if there is any weakness in its Q3 report, it should be treaded as a buying opp for swing trades.
Key S/R: around 49.6, around 51, 54, 63.38.


AKAM: both weekly/daily charts show signs of turn around of the down trend.
Key S/R: 27.75, around 30, around 33, 35, 38-39.5, around 43.

AFFX: both weekly/daily bullish, but overall range-bound. The key question about its business is if ILMN is chipping away its business.
Key S/R: 23.85-25, around 27, around 28.7, around 31, 32.


BIDU: bullish all around. A stellar Q3 report is expected and probably baked in the the price.
Key S/R: around 270, around 294, around 300, around 225, around 330, 359.45.

FFIV: weekly just turned bullish, daily more bullish.
Key S/R: around 36.5, around 40,around 43, 47.

Saturday, October 13, 2007

Trading Calls-- Oct. 13, 2007

On recent trading:

Even though I am in one of the longest winning streak right now, 9 days and counting, and made some trades that I am proud of, my woeful incapability of letting the winners run continues. The problem has cost me over $25k of uncaptured profits in the past 2 weeks along, and it becomes routine that everyday I would have at least 1-2 trades which had a run for at least $1500 with me only pocketing 10% or less of the move. I must focus on solving this problem or at least making some improvement. I realize that the main reason for this problem is psychological, namely, the fear of losing profit when above water. One thing I will stick to next week is using smaller trading size which hopefully will allow me to let the winners run a bit longer.

On the market:

As expect, the bulls continues their parade, and fever and a sense of invincibility are growing, just look at the parabolic movement of many Chinese ADRs. Technically, charts in almost every time frame continue to be very bullish. However, aside from the fact that the market have been really stretched, there are some bearish divergences. The most notable are the OBV on daily charts and MACD on 60 min charts from all three major indices. I also find the dramatic top-reversal sell off occurred this Thursday PM very intriguing: the extreme volumes on the downside suggest that big boys start to get nervous about their paper-profits. As the market continues to push higher next week, I suspect that such dramatic sell-off may well happen again if any big names release disappointing Q3 reports. At this stage, all big sell-offs are buying opportunities, just like what happened last Friday. However, if this high-volume drops become frequent, it may help the topping process.

On next week's trading

I will focus primarily on day-trading even though the setups are mostly based on the swing strategy. I will also focus on the post-earning reports plays on the big tech companies.

Trading Calls

1. AAPL: overall quite bullish, but I sense a sense of caution/nervous here.
*** DT only using the following key S/R: 153, 159.5, 163.5, 166.6, 167.5; 170.5, 171.88.

2. ADBE: Swing only, entry zone=43-45.1, CS just below 44, IDS below 43, IT=46.

3. AKAM: both daily and weekly charts offer signs of turnaround of recent down-trend, but not all confirmation is in, expect more volatile moves in the coming days.
*** DT or overnight play, CTT between 33/34 and 39.5/42

3. AKS: last week's labor settlement news propelled it to new high, and charts are mostly bullish, there are some bearish divergence here and there. Considering that the steel sector has been performing far worse, I suspect it will pullback some bit.
** speculative swing S3: entry zone=50-51, stop just above 51, IT=45

4. AMZN: weekly chart bullish with some divergence, daily chart turn bearish, 30/60 min charts suggest more rebound.
** speculative S3 on top if it spikes towards 94 with stop just above, IT=89.

5. BIDU: weekly/daily charts overall bullish, but sells become visible near highs, I doubt it will make new high before Q3 report on Oct. 25.
** DT-CTT when it approaches the following key S/R: 294, 300, 330, 334, 345/346.

6. COH: weekly/daily bearish, 30/60 min charts bearish but oversold
** Swing S1, entry zone=45-46, stop just above 46; IT=42
** Speculative DT-L2 if it spikes towards 40/41, stop just below 40.

7. DRYS: bullish all around, but sellers in close-watch here
** DT-L1 if it breaks 123, stop just below 121, IT=130?
** DT or Swing L2 if it spikes down todays 114/112 use tight stops, IT=120.

8. JCG: still in confirmed down trend, but shows signs of bottom around 43.
** DT or swing L2 if it spikes down towards 42/43, IT=46
** DT S2 if it spikes towards 50/52 use tight stops.

9. LDK: bearishness persists due to distrust of the management, but the raise of its earning guidance will bring bargain-hunting buyers. Be quick to take profits.
** DT-S2 if it spikes toward 49 or 52 use tight stops
** DT-L2 if it spikes toward key support at 33.5, 37, 40.

10. MRVL: weekly turning bullish, daily more bullish, looks like it is ready to challenge EMA200=17.6 and key resistances at 18/18.25.
** Swing L1, entry zone=16.8-17.02, stop just below 16.7, IT=18.

11. RIMM: bullish but stalled.
** DT-CTT when it approaches key S/R: 105, 107.5, 114, 118.8, tight stops.

12. SHLD: neutral at both weekly/daily charts, mildly bearish on 30/60 charts
** DT-L2 if it spikes towards 136 or 139 use tight stops
** DT or Swing S2 if it spikes towards 149 or 153 use tight stops, IT=145.

13. TIF: weekly mildly bullish, daily turns bearish and a hint of top, 30/60 min charts bearish but points to a oversold rebound.
** SW-S1, entry zone=55-56.7, stop just above 57.4, IT=52.

14. UA: weekly chart is about the confirm the reversal of uptrend, but daily and 30/60 min charts point out further rebound.
** DT-S2 if it spikes towards key resistances around 62, 63, 65.6

15. BA: the delay of new jets delivery probably will only get worse. weekly/daily bearish with signs of double top formation; 30/60 min also bearish
** DT or Swing S2, entry zone=97.5-99, stop just above 100. IT=95/94,

Earning play focus list:

1. SNDK: increasing bearish on both weekly/daily charts, 30/60 min also very bearish, but oversold. Looks like it will have a bad Q report.
** Q3 report: Oct. 18 AH
** KEY S/R: 36, around 40, around 42, around 45, 50, 55, 58.5

2. GOOG:very bullish all around, but will it miss earning for the second time in a roll?
** Q3 report: OCT 18 AH
** Key S/R: around 520, around 560, around 585,around 610.

3. EBAY: bullish all around,
** Q3 report: Oct 17 AH
** Key S/R: around 33.75, around 35; around 36.5, around 38.5,

4. YHOO: weekly bullish, daily stalled
** Q3 report: Oct. 16 AH
** Key S/R: around 23, 24.5, 27, 27.37, around 28.5, 31, 32, 33.61.

5. INTC: weekly diminishing bullishness, daily slightly bearish
** Q3 report: Oct 16 AH
** Key S/R: around 22, around 23.5, around 24.5, around 24,around 26.5,27.71

I will also keep an eye on the following Q3 report:

Mon: EDU (BMO)
Tues: IBM,

Note on the China ADRs

Many of these Chinese ADRS have doubled/quadrupled their prices in the past 2-6 weeks featuring parabolic movement, high volumes and extreme volatilities. In my view, this is one of the sign the the current bull market has entered the last innings as speculative and momentum traders become reckless. I don't think those gains can be sustained both on technical and fundamental basis. I would love to start building some initial small short positions in those names, unfortunately, Ameritrade does not have shares for short for almost all those stocks, another sign?

Saturday, October 06, 2007

Swing Trade Calls -- Oct. 6, 2007

On the market

Wow! Friday's big rally has all major indices breaking out solidly. The market has taken any news as good news, and with the low rates and suddenly not bad job market, Can you get any more bullish than this? Bears really don't have much going for them, maybe except that the market has been extended without pullback and that the volumes have been relatively light in the past few weeks. Judging from the weekly charts, it seems that the bullish momentum has just started for the major indices, which can easily translate into at least 4-6 bull run. Given all what's going on right now, I doubt that Q3 report season will rain on bulls parade, unless the Q4 outlook makes a sharp down turn, we shall see.

On the trading strategy:

There is no doubt that the best overall trading strategy right now is swing longs, but patience should be exercised and use daily stochastic and key support level to setup the positions. Swing short might be considered for some retailers as their weekly charts are still bearish and that I suspect that the upcoming holiday shopping season will not be a good one. Day-trading, especially on the long side, is also a sound one, but strict stop-loss and opening signals must be honored. In addition, as the Q3 report season kicks in next week, I am looking forward to trade the post-Q-report based on a special set of set-ups.

Trading Calls:

1. ANF: it is one of the strongest retailer here, and the weekly chart favors long side. However, it made new intra-day highs in the past two sessions, only to fail quite dramatically each time.
** Speculative swing short with small initial size, entry zone=84.88-85.77, stop just above 86; IT=79.
** DT-S2 can be considered, but must have close to key resistance around 85 with very tight stop, IT=82.

2. ANN: rebounded strongly in the past few weeks and now at a critical point as it is approaching EMA200=35.05. Bullish on both daily and weekly charts, but bearish on both 30/60 min charts.
** DT-S1 if it spikes towards 34.7 with a stop just above 35, IT=33.5
** Swing-S2, entry zone=35.8-36.5, stop just above 37, IT=33.

3. ARO: Swing-S2 if it spikes towards 24, stop just above 24.5, IT=21.

4. AKS: bullish on weekly chart, but daily, 30/60 min charts show short-term bearishness.
** DT-S2 with possible holding up to 3 days: entry zone=43-44, stop just above 44.5, IT=40.

5. EBAY: still bullish on weekly chart, but daily/30/60 min charts show short-term weakness.
** DT-S2 with possible holding up to 3 days: entry zone 38.9-39.3, stop just above 39.4, IT=37.

6. GRMN: conflicting signals at different time frames, day-trading only using key S/R: 95.25, 97, 100, 102.6, 109 as stop references; take quick profits as it will remain very volatile until the prevailing signal established.

7. ILMN: heart-breaking as I finally entered at 54 on Oct. 4, only to wuss out for a tiny profit moments later. L1, entry zone=54-55.5, stop just below 53.

8. JCG: CTT between 41 and 46.4 using very tight stops, don't trade the mid-range. Still a clear-cut down trend play, but be patient.

9. LDK: the fear is still there, with Barron's negative article coming out this weekend, it might spike down further, I am looking for a speculative L3 between 33-37, stop just below 30, IT=58; be patient and conservative, and no day-trading!

10. NUE: weekly just turning bullish, but daily/30/60 min charts show short term weakness.
** DT-S2 when it spikes towards key R at 59 and 61, use very tight stops, IT=56.

11. SHLD: weekly chart offers the first sign of reversal of a long-hard down trend, and more bullishness on daily chart.
** DT-Long when it approaches key S at 140 and 146 with tight stops.
** DT-short if it spikes towards key S around 155, 167, 170, 174
** Swing short zone 169-174, with a stop just above 175, IT=150.

12. SNDK: it has been inexplicably weak lately. Weekly chart just showed a trend-reversal signal.
** DT S1 with it spikes towards key R around 53.1-53.5, 54.5, and 56,
** Swing S1, entry zone 53-56, stop just above 56, IT=50

13. STP: conflicting signals at different time frames with mild bullish on weekly chart, and mild bearish on daily or shorter time frame charts. pay more attention to key S/R , and be quick to take profits. Barron's article this weekend may setup Monday's wild swing.
** DT-L2 if it spikes towards 37 use a tight stop, IT=EMA50=38.5.
** DT-S2 if it breaks 39.5, stop just above 40, IT=38.5, quick with profit.

14. TIF: it is on the verge of testing high around 56.8, weekly chart very bullish, daily chart also bullish, but it rose nearly 40% in 5 weeks, and with volume and momentum show slight bearish divergence, and the fact that it is in retail sector, it might be poised to pullback even if it sets new high.
** DT to overnight only, S3 if intra-day show clear bearish signal.

15. UA: both weekly/daily chart bearish, but 30/60 min charts suggest some rebound.
DT/Swing S1 if it spikes to key R at 60, 60.6/61, stop just above 61.5., IT=57