Joined Nov 29, 2008
329 Blog Posts

Longer-term: Gold and Silver

Many folks requested that I post longer-term ideas, or plays that don’t last for only a few minutes heh. Well, first it was the casinos, which still have more room for upside, and now I want to talk about gold and silver.

Prior to 2010, all of us at iBankCoin made predictions for 2010. One of my predictions was that “Gold will continue it’s correction for the first quarter of 2010 and break the 2009 highs after Q1”. Exact words. So far, part one of that prediction is true and part two has yet to be seen. With recent technical developments in both gold and silver, I think we have a play here, finally.

Gold broke out of a symmetrical triangle at the beginning of this month. It is also testing the channel high as shown in the continuous contract chart. We may need to watch some action between the sym tri’s upper resistance and the channel’s high. Also, notice that the price action is fully above all four SMA’s (20, 50, 100, 200). The GLD tells a similar story. I posted some of the best gold charts I could find.

Silver also broke out at the beginning of this month above upper multi-month resistance. I did not find as many silver setups, but precious metals, in general, should be a place to focus on.

I am looking for a test of channel highs and possibly one more pullback before deploying gold and I am looking for some kind of foothold between 18-18.70 in silver before deploying silver positions in my positional account.


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On March 17, I wrote the following: http://ibankcoin.com/chart_addict/2010/03/17/longer-term-casinos/

At the time of posting:

MGM was at $12.30. Today, MGM closed at $14.73.
WYNN was at $73.63. Today, WYNN closed at $86.23.
LVS was at $20.06. Today, LVS closed at $24.23.

This update is for other long-term holders in casino stocks.

I am looking for a test of $16.89 (Jan 2009 highs) in MGM.
It is difficult to tell where WYNN will end up, so I will use targets for LVS and MGM as guides.
Lastly, I see LVS at around $30.


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Write a Review on ME

Right here on Investimonials: http://bit.ly/b2eV7Q

If you enjoy the blog, watch my show, and follow my tweets (and I helped you out…or not), feel free to write up an honest review of ME. It only takes a few minutes to register and I will be eternally grateful and will listen to your opinions.

Thanks a lot!

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SPY Within One Point Range – Imminent Move Expected


Happy Easter folks!

Here are the 2-mon/daily and 1-mon/60-min charts of the SPY. The daily chart shows the ascending triangle with a doji string at it’s apex. The 1-mon chart shows the 60-min intra-day action.Both show that the SPY is now trading within a 1 pt range.

As you may have noticed, I refrained from trading much last week. Why? When any triangle forms an apex, you must expect narrow range days toward the apex. This means that there will be a decrease in volatility and a lack of day trading opportunities.This also means that if you went crazy day trading, then you probably got chopped up.

However, if you watched my show, a cluster of doji or doji string represents the possibility of great swing trading setups. I suggest that you look for both long and short-side swing setups because I do expect a major move in the markets this week.


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Stocktwits TV Show Presentation Slides

I am making my Stocktwits TV show slides available to everyone in PDF format for download.

For my show archives, you can go to this link: http://www.stocktwits.tv/charts-gone-wild-with-john-lee/

Here are the slides:

AIG Trade Review: http://www.scribd.com/doc/29142022/AIG-Trade
Volume Patterns: http://www.scribd.com/doc/29142294/Volume-Patterns
Common Breakouts: http://www.scribd.com/doc/29142224/Common-Breakouts
Doji Strategies: http://www.scribd.com/doc/29142270/Doji-Strategies

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For exact trade entries and exits, you can refer to the blog comments or on my twitter (@WeeklyTA). It’s documented in real-time and I have about 60 traders who saw me trade it in real-time in 2 different live chat rooms.

I had my 2nd best trading day of 2010 thanks to ABIO. At 8:30AM Friday, ABIO announced that “a patent was issued to them for treating heart failure patients with Bucindolol based on genetic testing” (http://bit.ly/c08SLF). Like other plays, I do not care what the news is. I only care about the reaction to the news. This is the principle of momentum short-term traders. That’s lesson #1 – don’t get too absorb into the news, instead, trade the reaction to the news. We see this rule all the time, but do you really put it into practice or do you let your personal biases get in the way?

Lesson #2 is actually watching and “stalking” a stock prior to a breakout. It may take forever, and yes it is many times boring, but you gotta pay attention to the setups during the day. Use a 1-minute time frame for momentum stocks so that you’re able to capture the first breakout out of a base. That’s what I did…I caught ABIO’s first breakout at $4.57/58 (after the opening gap). Do not miss the first breakout, or else it’ll get more difficult to maintain your emotional stability. Don’t let thoughts like “it’s already up too much” get into your head. If the setup is great, then take it.

Immediately after a huge power spike, I immediately look back to the multi-month daily charts to find key support and resistance areas. This helps me identify where I need to buy and sell intra-day.

We can see a high of $4.50 in November 2009. We can see a high of $4.88 back in July 2009. The next level would be the breakaway gap back in June 2008 with a high of $5.29. After that, the gap started to fill and the target was the filling of the gap between $8-9. Technically, ABIO breached every level, every high, on the way up. I keep these levels in mind because when the stock does break..it’s gonna BTFO. I’ve demonstrated this nearly every single week. Lesson #3 is to pay attention to past major price levels. Don’t sit there intra-day wondering where the stock should be because the chart will tell you.

Intra-day, you have to have focus and discipline when executing the trades. Of course, in hindsight someone could say “why didn’t you hold the stock till $9 and just get 100% in one trade?”. Well, problem is that when the first breakout happens, no one knows where it’ll end up by 4PM. Heck, I don’t know, which is why I trade each intra-day 1-minute setup as if it were the last. It’s a way to protect yourself from sudden reversals. Why? Stocks that explode to the moon will fall the hardest and many times, without warning. The important thing is to trade comfortably, take profits at appropriate levels, and play the stock till the wheels fall off. This is lesson #4.

The star that burns the brightest  burns out faster than the star that emits a cooler, darker light. Don’t forget this.

Lesson #5 – pay attention to volume. Volume is absolutely mandatory with momentum stocks. No volume = no trade. Notice how each intra-day breakout displayed some sort of sustained multi-bar volume spike? Combine that with a price spike and you got yourself a trade.

Key characteristics that make this spike “legit” vs. the other spikes in ABIO:

1) The gap was above all 4 MA’s (20,50,100,200) immediately. Not true for the spike in November and July 2009.

2) Volume was exceptionally greater than any other day in the morning. This signified to me that there was going to be a massive move. This alone does not confirm direction however. It just tells me that it’s going to be “one of those days”.

3) The stock was able to breach previous highs with very little problem. Resistance is supposed to knock a stock down, but it didn’t. ABIO would flag at, under, or above resistance (pausing) to launch itself again.

4) Once the gap was filling, the stock could not be stopped. A breakaway gap that fills in only one day is extremely, extremely, extremely RARE. This was an exceptional case.

Let it all sink in. If you have questions, then let me know.

Thanks to the folks who @replied me on ABIO. Hope you folks made some cash.


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