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

Wednesday, February 18, 2009

A New Bottom?

Perhaps. Maybe not. I have to admit, Phil saw this plunge coming in a response to one of my posts, but I actually thought the bottom line of resistance in the DJI30 would hold and it broke down in grand fashion. This downward bias breakout is not sustainable, but whether we will see a sustainable trend upward is the big question. It will happen, but when it will happen is a total guess at this point. There still may be some excellent trading opportunities as the market pauses and corrects in small increments, and I'll be evaluating HOLI, ASGR, and MMM as possible plays for myself should the futures point higher this morning. Just be patient and remain calm in the face of all the panic we are seeing. It's hard to do, but we have no choice.

Have a good one, Roger

Wednesday, February 11, 2009

Back on Track

If you noticed my lines of support/resistance on the DJI30 from a few days ago, we indeed tested the bottom line of support, and the market appears to be bouncing back today as of this writing. The market appears to have recovered from what has been stated as an unclear stimulus layout, but what were people expecting? A step by step plan for recovery, or just a general"throw money at everything" approach? Who knows, but we seem to be correcting from an over-reaction to a not- so- clear event. I was so upset at the market's reaction yesterday that I actually didn't even know if I was going to watch today, but I couldn't resist.

Have a good one, Roger

Tuesday, February 10, 2009

I Was Taken to the Woodshed

I never dreamed there would be such an adverse reaction to a stimulus package being passed, but I was wrong. When I posted to sell LVS before earnings I should have been posting to dump everything you had before the stimulus went through. Then I realized something. The market has remained almost unchanged since the Dow bottomed at 7500 weeks ago, and people have played the impending final stimulus much like impending earnings releases; play the ride up then dump at the event.

Anyway, some of the trades I was in have now become a little bit of a longer investment then what I had originally planned. And there is no way I am going to touch my reserve bottom-buying cash to pick up some bargins at this point. At least not until I see if the Dow is going to ride back down to 7500. Albiet that's a worst case senario, but after the spanking today I'm not eager to play again until I see some recovery, and I am hoping that comes tomorrow. I'll be watching the early morning futures very closely.



Have a Good one, Roger

Monday, February 9, 2009

Playing the Earnings Game

This is one game I never did really like to play; Buying a stock just before
earnings, and then dumping it right before the release. Only one problem; if
earnings are a hit, then I miss a big gain and kick myself in the behind for
selling. But look at the reverse; earnings miss, and it takes a big dive
south. That's what stops are for, however, and I can't blame someone for
taking a chance. It's kind of like watching LVS. Many people had the same
idea as me and the stock gapped up at open from its previous close of 3.80
last Thursday to 4.24. In preparation for a pullback after the morning rush,
I placed a limit order of 4.10 that eventually filled. I was intent on
holding through earnings, but I got spooked over the preferred share thing
and dumped it today at 4.50 for a nice little 9% gain. Should I have held on
for another day in anticipation of another run on Tuesday? Perhaps, but when
I get "spooked" I go into capital preservation mode. I still will probably
establish a long term position after earnings, and these positions take on a
totally different character than a swing trade: you buy it , set a liberal
stop, and forget it. Don't forget it literally, just don't watch it every
tic of the days ahead. All in all, it looks like the DOW is hitting that
first line of resistance in the graph of my earlier post. There is so much
anticipation over the President's stimulus package that the tension is
almost a tangible substance pushing and squeezing my gut. Lovely feeling. I
have confidence that we are going to see a steady rise from here on, and
that trading will be a little more sane, if that is even possible.

Have a good one. Roger

Update on LVS

Some new information has come to light regarding LVS. The 2.50 dividend was
for the type of preferred stock that only the CEO's wife owns. This was very
deceptive, and I should have researched that better. Plus, jc pointed out
some interesting information regarding March calls that leads me to
recommend the following : Sell this stock before the Feb. 11th earnings
announcement. Take a nice gain as a swing trade, and then wait and see the
aftermath before loading up again. There is, generally, a run up in a
stock's price before earnings, so this might turn out to be a nice swing
trade anyway. But if you can turn 2 or 5 percent before tomorrow, I suggest
you sell. Sorry about that, but even the best of us get hoodwinked once in a
while, I just can't believe it happened to me. I guess I am human after all.
Have a good one, Roger

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database 3837 (20090208) __________

The message was checked by ESET NOD32 Antivirus.

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Friday, February 6, 2009

Good for Swing and Long

Gaming stocks have been absolutely hammered this past year, and for good reason. But at some point you have to call a bottom, and realize that some were just simply overdone. One prime example of this is Las Vegas Sands, LVS. Currently trading at 3.80, this puppy traded at more than 95 dollars less than a year ago. (This is not an official Stock Assault pick, you will not see it in the software.)

With a current book value of over 6 dollars a share, and just issuing a 2.50 a share dividend yesterday, I see this as a bottomed-out gem ripe for the picking. Use it as a swing trade for a good 5 to 10 percent pop, or keep it as a long term investment and watch you money balloon as the economy recovers, and people start playing again. Either way, I believe this stock is a good play.

Have a good one,
Roger

Wednesday, February 4, 2009

DJI Trying to Rise

It looks like the Dow is trying to rise above a well-formed base as shown by the support line of 7887. The first test of resistance will occur at around 8387. If that boundary is broken, we can look for the next level of resistance of 9043 at which point the first level of resistance becomes the next level of support until it can consistently stay above 9000. I am waiting for the day we see a consistence rise in equity price when the level of 9000 becomes a rock-solid base of resistance.

When that happens we will see the strength we have been looking for to signal the end of what many people have referred to as the "absolute" bottom. I've actually seen many bottoms formed during this whole retraction of the market, but I expect we have really seen the worst of it. I still believe this is an excellent time to establish new wealth in what I firmly believe will be the biggest bull market in a decade, provided we can actually clear the bottom far enough to keep its memory from interfering with our judgment. And how does that memory affect us? It instills fear.

That's as plain as I can put it. We need multiple strings of victories on the way up so that the memory of all this stays behind us, but not so far behind us that we ever forget how we got here: greed. That' put plainly also. We need a new order of trader to emerge from all of this; An honest trader that compels the rest of us to excel. Hopefully each of us can be that trader.




Have a good one,
Roger

Tuesday, February 3, 2009

Another Giant at a Bargain

I hope most of you took the little tip on UN. Another tip from today's picks would be MMM. This giant makes the cash and is trading at levels that make it a steal. In fact, at first glance at the charts it is poised very similar to UN in the stochastic distribution recently.

I have too many open positions to take advantage of it, but consider it another one rated "Roger ready". Trading days like today seem to be getting more common. It has a very bland feel to it with no real excitement one way or another.

Have a good one,
Roger

Monday, February 2, 2009

Making Money on the Way Down

Several stocks have a very tradable pattern. This hold true whether in an upward bias or downward bias. For example, look at the attached chart for DO. This was a Stock Assault pick from a few weeks back, the pick that I rode for a 20 percent gain. Notice the price channel is downward, but the price bounces up and down along the way in a very tradable manner.

There are many stocks with the exact same pattern. I prefer the up-channel myself, but I'll trade either way as long as I win. On another note, I was looking at the picks generated today and the one that stood out to me was UN. After a large drop, and trading near its 52-week low, I thought this to be an excellent entry point.

I got it early while it was negative at 21.62, so we'll see how it rides out. People sometimes ask me what a good profit is, and I believe if you can net 2 percent on any trade then you've done well, especially on a swing trade. Let's hope for a good week with no devastating news to de-rail us along the way. Remember to screen your picks, and set your stops. The longer you trade the better you will get, and no matter how long you've been trading you will always learn something new with each trade.




Have a good one,
Roger

Tuesday, January 27, 2009

Choppy Trading

We seem to be headed towards another good day in the market, but we all know how that can change during the course of the day. I feel as though we are in a kind of lateral bias with no strong trend up or down in the overall picture, but there are some really good opportunities out there as evidenced by some of the recent picks generated.

Two of the stronger ones that I would recommend would be CAT and ROH which are trading in pre-market close to two percent higher than yesterday's closing prices. Personally I would favor either, but I would wait until the early morning run up on these to see where it settles. After a large sell-off there is sometimes a continuation that goes into the next trading day, so be patient and enter around the noon time lull if you are so inclined.

Make sure you have a good stop in place. I would recommend a five percent stop, but set it where you feel comfortable. If I see some steady progression after the morning rush, I may enter with a five percent trailing stop to keep profits locked in as the day goes on.

Have a good one,
Roger

Friday, January 23, 2009

I Got Fooled

Looks like the market isn't as whooped as I thought. A good recovery is underway, and most picks are faring well. I think we will swing positive before the day is over. Looks like a good positioning day after all. If you are on the sidelines, you might want to look at an entry at this point. Let's hope this is sustainable throughout the day.

Have a good one,
Roger

Here We Go Again

I'm used to down days after a big run up, but today looks to be a repeat, if not even worse, of yesterday. There is so much uncertainty in the market today one has to wonder when it will ever settle into a stable rise.

New investors are getting frustrated by the seemingly unsettled vacillation, and seasoned investors are plain-out fed up by the inability of the market to "make up its mind". It should be no big shock that 4th quarter earnings are off for many companies, but the market reacts as though it's been blind-sided by the news.

Even though the market is unsure, we must be sure of what we are doing or we will get hammered. Even in a big down day some stocks perform really well which is always the case, but they are hard to find.

Sometimes you just have to stand back and wait for the dust to settle, and this may be one of those days. Even though the market may start by falling flat on its face, it could easily turn positive at the drop of a hat as the day wears on, but that's the nature of the beast, so to say.

Try and have a good one,
Roger

Wednesday, January 21, 2009

Bottom Resistance Met

Remember how I said we will bounce around between 8000 and 9000 on the DJI before we make a break? Well, the bottom is in which means we can look forward for a few days of recovery, starting with today. At least I sincerely hope so.

The futures are pointing towards a good day today. A break through the bottom resistance would mean a major leg down, but I don't see it happening. If you have taken my advice and waited to pull the trigger on some trades until we have an up day, I think today is the day to bang away.

If we ever break the 9000 barrier we will have a very nice bull run, but the weakness of the financial sector will be dragging everything behind it. When that sector breaks loose, look out!

Have a good one,
Roger

Monday, January 19, 2009

Quick Way to Sort Picks

I'm often asked about days when several picks are fired-off. For instance, last Friday there were 23 picks delivered to my PC, and I was quickly able to narrow that down to a possible 5 by simply looking at the %K(15,3) of slow stochastics.

I hope that most of you use some kind of charting software, even something as simple as Yahoo Finance. There are some free ones out there, but I like my Amibroker and StockShare v2 charts. I'm kinda partial to the 15, 3 settings for %K, but I have also received messages about other settings that work well. It's really what you feel comfortable with that matters.

Anyway, I was able to quickly filter the picks by choosing the ones with a %K value of less than 20. This generally yields extremely oversold stocks that are most likely to bounce up. The results from that left me with DLX, DOW, ADSK, LAMR, and NWL. I sifted through news to get the dirt on each, and I was left with two with impending earnings announcements, one with a failed joint venture, one with a bunch of downgrades, and one hitting a 52 week low, but decent earnings.

Remember, any stock, good or bad, goes through the same up-down cycles. Its just that the good equities have larger up cycles than down. We can make money either way, and even stocks high in %K can still bolt upward. This was just a helpful pointer on a way that I use to sift picks.

Have a good one,
Rog

Sunday, January 18, 2009

Looking at Some Picks

I thought I would share some more on how I look at picks. Three potentials fired off for Monday include BGG, CAI, and MCO. I started by looking at Yahoo Finance for something on each one. BGG showed some new star ratings of 4 and 5. This stock also recently topped wall street forecasts on earnings. That's always a good thing. Looking at CAI, I saw some new contracts it had recieved, and some good looking financials. It's a money-maker. MCO showed a history of EPS surprises. Very good. I then opened each one in Amibroker to look at some charts.

BGG shows a dive towards resistance of around $14 which is where I placed the red dotted box as a possible Buy Zone. The %K shows that it is oversold and due to bounce. The dotted red box shows the area where we would expect to see a bottom and a turn. Notice the volume bars outlined showing heavy selling far above the 50 day moving avg. for volume. The price movement and vol. in the short term is bearish,but technically it is due for a bounce.The weekly Bongo shows good momentum. I also threw in the pattern explorer recognition showing a bullish expanding triangle patter

CAI shows a pullback towards the 100 day moving average of $44.50 which is the buy zone indicated by the red dotted box. The %K is above 70, indicating that it is oversold and may retract some more, but if you notice its history, it never seems to make a full retracement before rising again. The Bongo weekly also shows good momentum. Pattern Explorer also shows a bullish rising wedge.

MCO shows a lateral move across a very predictable price channel indicated by the black dotted lines with a buy zone indicated by the red dotted box. %K has a dotted red line showing possible retracement, and the volume bars have shown heavy selling well above the 50 day moving avg. for volume. I would not expect it to fully retract due to the previously mention price channel action. Bongo again shows a good weekly momentum,and the patterns show both a rising wedge and an expanding triangle.

Again, I hope I have given some insight into how you can technically break these picks down. There are actually several more charting tools that I use, but it would take several pages of blog and illustrations to show them all. The one thing that I love about Stock Assault is that it spots stocks BEFRORE they make a move up. Too many other software systems have gotten me in during the middle or at the top. In summary, the stocks I have reviewed are more of a lesson in how I look at stocks, and when I would enter, and are not reflective of how you or someone else would do it. I am most likely wrong on BGG moving that much lower, but I play it safe a little too much. While good charting software is a plus, it is not required to use SA; it just like a security blanket for me.

Have a good one,
Roger
























Friday, January 16, 2009

Timid Market

I threw out some stocks today just by looking at the volume of pre-market trading. They were all up in pre-market, so I tossed them up for grabs. Don't panic if they take a few days to crank up. I went this afternoon and checked the technicals on them, and they are solid picks.

AXP will rise and fall with financials. The recent influx of more bailout money will shore that sector up after the sheep have scattered and the hedge funds are through naked shorting. DOW is solid, and at an all time low. It is set for a bounce. LLY is technically ready. PFE is super strong and technically a go also.

I don't want any of you to think I have abandoned the blog, I have just been really busy on an exciting project. I advise, however, that you continue to sort your picks and be in constant review of market conditions.

Stops are a must for capital preservation, and I am going to be going over some tips and tricks for stop settings as well as limit orders for buying.

Have a good one,
Roger

Looks to be a Good Day

The market seems poised for a good run today. Hopefully this will carry over through next week. A slew of recent picks shows four good runners today for you to look at: AXP, DOW, LLY, and PFE judging from the pre-market action.

I'll try to give more insight as the day goes on, but I have been really swamped lately which I guess is a good thing. Don't forget to set stops!

Have a good one,
Roger

Tuesday, January 6, 2009

Time to Solo

My friend "Pete" is comfortable enough with the SA software now, and He wants to go it alone. I'll still be checking in on him from time to time, but I have personally taught him enough to get started.

Heck, the software is practically fool-proof, even for "Pete" (just kidding buddy). He is still amazed at what his 25,000 has turned into. I was actually thrilled, and at the same time terrified, to play with someone else's money, but all worked out fine. I will still miss the fun of it.

However, I need to get back to basics anyway and write some more tips and give more insight into my take on trading. As always, I just want all of you to make the most out of Stock Assault 2.0 and everything it has to offer. I enjoy the feedback I get, and I learn a lot from all of you as well.

I believe the market is trying to return to some sense of normalcy with the expected bumps along the way. I still think any oil-related signals you get should be pounced on, as the black gold makes a comeback. We'll see what each day brings and makes the most of what we get.

Have a good one,
Roger

Monday, January 5, 2009

Closing Two Runs

Well, I hope some of you were able to make some money by following my money management trek. I closed MO today, 4670 shares at $15.35, and DO 1212 shares at $67.73 . That's a profit of 5.14% and 20.41% respectively. I believe that both are good a little longer term, but I want to do 20 percent or better on some other equities, and these two are due a pullback.

The $25,000 I started December with has now turned into $85,600. That's a 242% return in about a month, annualized out to about 2,900%. I really hope that I have helped in some small way to highlight the more important aspects of finding winners and their entry points and exits.

Remember, don't ever get greedy. I am now going to start scouting my next money management picks for a very happy friend. I'll keep you informed, and maybe some time in the future I can set up a real time venture where we can partner and make some money.

Have a good one!
- Roger

Sunday, January 4, 2009

Looking for Exits

I began looking for exit strategies on my two holdings in my money management portfolio this weekend. I've included charts on the stochastics, price resistance, and another on Bongo which is a somewhat obscure indicator that I use. The Bongo signal is used for signaling an upward or downward bias for stocks. The signal is determined by the value relationships of 3 different Wilder RSI's and a moving average.

For my DO holding I see resistance at about 70 dollars. The dashed red line above %K on the stochastics shows my projected rise, and the Bongo is green on the daily. I will sell when I see a move down in %K or when Bongo goes red or when resistance is met. I still plan on holding out for a little more, but I must not get greedy as there are so many stocks that I need to analyze that show the start of a ride that I don't want to miss out on.

I think I will dump MO on Monday during the first 30 minutes of market open if I can get a slight rise in price. I believe it is about done as indicated by resistance and an impending downturn in %K. DO still has room to run, and if it breaks through the first level of resistance at 70, the next level of resistance is about 76, but like I said I don't want to get greedy.

Greed can blind you and cause heartache in the trading process. Just wanted to keep you up to date on what is going on inside my head, as promised, in my money management attempt. Once I get clear of MO, I let you know what I am eyeing next and the reasoning.













Have a good one,
Roger