Friday, April 3, 2009

A More Normal Market

I think we are seeing more normal market action even in the face of some bad unemployment numbers. Even though the market is hitting strong resistance, it is wanting desperately to break through and run. Those of you that took my little "elbow in the side" and took some CENX have most likely seen returns in excess of 50 percent. With a book value close to 20 dollars a share and rumors floating everywhere, we will see a large run up to earnings, unless the rumors pops open to truth before then, in which case we will see 6 dollars out of this pretty fast.
That's the life of speculation ; you win big some of the time, and loose your donkey other times. This time, however, I believe my donkey is coming home to stay. Next time I'll keep him chained right on to me.

Have a good one,
Roger

Sunday, March 29, 2009

Anatomy of a Stock Pick


I decided after the recent pullback to look at the last couple of day's SA picks to look for a good Monday winner should the bull run resume. I analyzed AFK, CELG, STZ, DF, GILD, MKC, SMTC, and SRCL. I quickly applied the oversold rule, looking for stock whose %K was less than 30. This left me with Dean Foods, and McCormick. I looked at their yahoo finance pages to see if their was any recent news that might help or hurt. I saw a downgrade on DF and several new ratings on MKC, all good. I the broke out my Amibroker with the pattern explorer plug in to look at the Schaff Trend Cycle, ADX, Patterns,Taio, and volume vs. 50 day MA. I saw a wealth of information, but the clearest for me was the expanding triangle on MKC showing progressively higher swings in highs and lows, thus the expanding triangle adage. MKC was bottoming at the far bottom of the pattern, and had a large upside to the upper side open. That sold me. I closed all my micro holdings in the anticipation of a sell-off except for CENX , with its impending and much talked about buy out or tender. We'll see on that one. But I expect to take a good position with MKC on Monday if the futures look promising, and maybe a smaller position with DF. I have attached the expanding triangle pattern that caught my eye.


Have a good one,

Roger

Thursday, March 26, 2009

The Market is Holding Up




I dug up my old DJ30 chart from a while back showing a support line at 7887 that was ultimately blown away to the downside. What used to be support will now be resistance as the market attempts to extend a rally that has now become a full blown break-out. With everything as overbought as it is this break cannot last forever, but it has lasted longer than I thought it would. After liquidating all that I had and sitting on the side for a while, I entered the market again this morning with microcap plays( except for one gold pick) . I have posted my actual account, and you can see that things have gone nicely . I seem to have a nack for micro's so I am going to see how that pans out for a while. I'll let you know how it goes. In the meantime, be sure to watch for a pullback. It is certain to happen sooner or later, but I believe the market has bottomed and will do nothing but advance from here.




Have a good one,


Roger

Tuesday, March 17, 2009

Bottom Break-Out or Fake-Out ?


I think it is safe to say the former. This little run has actually held up, and I say it has another good 700 or so DJ30 points to go. The attached chart shows resistance around 7850, and we may see some retraction as far down as where we started, but I don't think that will happen. We will see some pull back, but only one normally expected during overbought conditions.

So, is this the end of our huge downturn? Not likely. We may see a good couple of months out of this, but I still think the worst has yet to come in my humble opinion. That, in itself, is quite a change from my usually upbeat tone, but let's face it: the market is damaged and it will take most of the year to recover if even then. But we can still profit by riding the waves and not getting greedy. Pick your spots and set your stops. There are many excellent trades available. In fact, its hard to avoid one when the market is rolling, so roll with it.


Have a good one,

Roger

Monday, March 2, 2009

Has Anyone Seen My Donkey?

I think I lost it, if you know what I mean. Wow, is this market ever going to settle, or are we just beginning a ride to 5000 ? If you've lost your donkey too then you know how frustrating it is to watch the market crumble away with the economy. Everybody selling at the same time just increases the bias to the downside, and we are seeing short selling running rampant. Even the retail investor is beginning to smell blood, and when they panic they make bad decisions. Many are either short or are simply sitting on the sidelines waiting ( and some are looking for their lost donkey also ).
In reality the market has reached an oversold status that it simply cannot maintain, and we may see a short swing up very soon. But that may be short-lived. If we are ever to see a recovery in this market it simply has to bottom. And how will we know when that is? Well, it is always found well after the fact and by then you will know it as people rush back in to devour the bargains being generated during this major sell-off. I'm trying to analyze the picks being generated to prepare for the spike up. Take advantage of the spike when it comes because it will probably be a whopper. Excuse me while I look for my lost donkey.

Have a good one,
Roger

Wednesday, February 25, 2009

Don't Get Your Hopes Up

One positive day in the market doesn't mark a turn, just like one bad day in a bull stretch doesn't mark a decline. A little breath of life was interjected on Tuesday but we are in a flat-out recession and have been for months, but it has been a very tradable one. All declining markets present excellent trading opportunities, and we need every tool at our disposal to find them. Personally , I use several tools to sift through the changing landscape of equities to produce mostly swing trades and the occasional long hold for prosperity's sake. Of course, SA is my top pick for pointing me to some excellent swing opportunities, but I also depend on allot of charting tools and technical analysis.
Reading is a pleasure to some and a chore to others, but I whole-heartily recommend that you spend as much time as you can exploring the world of equities by reading as many articles as you can. Look at technical analysis, Dow theory, or anything that can expand your understanding of what comprises a successful trader. I'm still trying to figure that one out for myself, and I am going to try to give you some more insight into some aspects of technical analysis. In other words, I will make more of an effort to supply more meat in addition to the milk, lol . Have a good one .

Roger

Saturday, February 21, 2009

Quicksand

That's exactly what this market feels like to me: bottomless, engulfing, and a host of other words. It's getting very hard to find long action, and the trip down through all lines of support in an apparent leisurely, steadfast fashion by the market does indeed flash visions of myself trapped in quicksand, kicking and thrashing all the way. If I could find some branch to cling to, some bit of news to pull me out of this mess, I would be very hesitant to jump back in again.
I'm sure many of us are caught in positions right now that we'd rather not be in, but I am an optimist. I firmly believe that if were are invested in sound equities we can survive this and build some wealth. This may take longer than we initially wanted, but it will come to pass like all other things do in life. If you are not in right now it is best to stay on the sidelines until the bulls are running again. Have a good one,

Roger