My portfolio has recovered from a significant drawdown the past few days. I’m up about 7% from the start of this week but my high water mark is still in the clouds. I was surprised to see almost all of my positions contributing to this. I sold my UCO position for a 10% gain. It was a nice, clean trade that I outlined on this blog. It will most likely continue higher, but I needed to raise cash. My current cash levels are now 15%. My favorite positions right now are KLIC and RTEC. Meanwhile, my  OCLR position is finally setting up as a technical trade that should pop tomorrow. My positions and charts are here on Finviz.

It feels good to rally back up after a big performance drop, but that’s when traders (myself at least) are most vulnerable. The seasonality should be respected here as the floor can literally drop out from under us. The crystal ball in my last post indicates a head and shoulder top brought to you by the Russell and homebuilders/construction sector. Should we scream higher tomorrow, I think that the crystal ball should be broken into a million pieces.

A few members in The PPT have been focusing on stocks with a low float, and a high short float percentage. I love those plays, and a lot of them are working well right now. One example is MEG, displayed below.

MEG has a 40% short float. The shorts quickly capitalized on the 15% drop yesterday, as seen by the price action in today’s session. Once these get moving, they are literally explosive. The shorts must cover into an illiquid tape, and the buy pressure lifts the stock. Another name I have been talking about on this blog is SAM. The beast continues to squeeze shorts as it hits new highs.

Note: Look at GTAT. The cup and handle looks ready to rip higher. Sapphire is hot, the Fly was all over it.

Technically speaking, the market has corrected very little. The May correction that always falls upon us has yet to sink its teeth into most traders. With that being said, it has managed to do a great deal of damage to my portfolio. I’m down on most positions and the only one really working right now is my oil trade through UCO. I believe lower prices are ahead of us, however, in the near term I think there will be one last push to highs. I may try to take advantage of it to raise cash.

Here’s my UCO chart. I’m in this name purely for the sake of mean reversion, and I will looked to sell above 28 or higher.

Maybe a bounce will occur. I will keep moving my stop up on this, my average price is just below 26 now.

As for the entire market, I am using the Russell as my tell. A break below 900 would signal a true correction may be underway. Here’s my crystal ball reading. In my opinion, and this is entirely speculative, we are going to bounce. People will continue to think new highs will be in reach, but they are wrong. All strength will waver into a sell off down to the neckline of the 900 level. We fall through, and correct in a true head and shoulders fashion. The chart of the Russell is below. 

I think the bounce will lift a lot of my positions, and I will look to get out with breakeven or small profits. I’m not going to get greedy here, I just want my previous gains back.

On a side note, watch KLIC and TER. The action looks very promising today for a trend reversal.

Glancing through my portfolio of 8 stocks, I’m beginning to wonder how I constructed such a composition of holdings. Of the 8 stocks, 3 are centered around the industry of semiconductors. The names are KLIC, RTEC, and OCLR. KLIC and OCLR are classified under Semiconductors and Equipment, whereas RTEC is categorized as a Scientific Instruments company. Between the three names, I have 25% of my portfolio invested in them.

These were never intended to become holdings, as I would have never thought to own them at the beginning of the year (housing is my favorite theme). The industry is rather dry in my opinion. However, their fundamentals dragged me in as they have continued to underperform the indices and other stocks. As a result, I made purchases during the downtrend. Turns in the trend looked promising, but they failed time and time again.

For the sake of the post length and our time, I’m just going to talk about KLIC here. The company is announcing earnings on April 30th. From a fundamental perspective, the company looks awesome because of their balance sheet. They just paid off their notes, and thus have zero debt. Also, the market currently values it at low multiples. Their PEG ratio is low at 0.38, and their PE ratio is low at about 5.

Reading through their SEC filings, I found nothing that looked too worrisome. The only major risk that I see is the limited customer base. If a customer decides to drop them for whatever reason, then they could suffer material drawdowns with respect to earnings. However, I think that this company is capable of retaining customers, and possibly obtaining more. Their innovation with respect to cutting gold loose and bringing in copper has brought them to the forefront of their industry. With a clean balance sheet, they can also invest in research and development for their future. They also have exposure to the LED industry, which I think will continue to grow.

Hopefully I’m not being value trapped here with the technicals looking pretty grim. The fundamentals are my excuse for failing to get out of the name already.

I reviewed the charts of others within the industry with the same fundamentals, and found that the S&P 5oo stock TER trades with a very tight correlation to KLIC. Thus, I have provided the TER chart below. It’s at a critical point in terms of price. 

The two year trendline  of TER is being tested, and the hammer action we have been seeing in the name during the last two sessions makes the case for a possible reversal.

Now, for KLIC, the trendline isn’t as pristine, but it’s there. But I would like to point out the divergence occuring near it.

I have also included a rate of change oscillator at the bottom. It has a good recent history of calling local tops and bottoms. There is a clear divergence currently occurring as it comes to terms with the trendline.

While I’m posting charts about 2 year trendlines, I might as well include RTEC. It’s currently hitting the trendline with a divergence as well. The chart is below.

These charts give me some hope to holding my positions. Even if they break technicals, I still might end up not being able to hit the sell button.

I’m getting lit up right now, as my YTD gains are evaporating before my eyes. I have to keep telling myself to have a different outlook. For instance, I own USG and IMUC based upon fundamental theses that extend past 2013. I don’t see why I should sell, only to try to get back in at a lower price, with the risk of selling at a bottom. With that being said, I’m still frustrated with my other plays, which were supposed to be technical and fundamental driven. My postions and charts are here on Finviz. Look at those charts. I’m walking on thin ice, speaking on technicals. It looks like everything is about to meltdown. I need to make a decision, but I think I will attempt to stomach this correction. I can try to fight it with some intraday hedges.

Enough of my problems. I have two things popping up on the radar right now: TASR and UCO. I posted about TASR last night, so this is just a reminder to take a look at it. It can run here. Oil is having a hell of a day, and thus my UCO position is back to break-even. It has the potential to put in a short term bottom here, and maybe revert to the mean since the intense selloff.

I will be back with some more insight into Apple tonight, as it depends on how it closes.

Lately, it seems to be the norm for my portfolio to whip around as it ultimately heads lower. The last time I felt this way was during the broad market correction that began in September 2012. I managed to come out on top due to a turkey day recovery. I played the small caps through December, and then went into some bigger names headlined by the Fly. I have yet to scale out of this market, and I’m paying a high price for it. But I think I will let it ride out while raising cash when bounces arrive. Click here for my current positions and charts on Finviz.

The most talked about piece of news from today is the plunge of Apple to the all-important $400.00 mark.  I highlighted the potential for it to reach this level in my post a couple of days ago. I’m not considering buying any of it until after earnings. The risk of being apple sauced is too damn high. The chart is below. 

Multiple scenarios could play out, but given the current volume levels, I suspect there might not be too much time for consolidation. It’s going to do one of two things. Bounce off that trendline, or breakdown beneath it. For the Apple bulls, I believe the biggest milestone to break is the 50 day moving average.

I have one more chart I would like to mention. The markets could tank or rip tomorrow, but I think this is trading in its own world. Check out TASR. The PPT has registered it as oversold, and a bounce is very probable. Given the technical setup, the potential is even higher.

It’s worth a look for a day or even swing trade. If you want to hold it longer, a key level is that rising support line. It dipped earlier today and was bought up into the close.

I just bought the crude oil ETF UCO for a 10% position. The reason for my position is to potentially capitalize from the commodity sell off that has plagued the markets recently. I fear buying precious metals, and I have always had a liking to oil. The stats are near oversold in The PPT. I’m willing to hold this for awhile to yield a profit. However, should a bounce come, I will look to sell.

I haven’t sold any of my other positions, and this brings me to cash levels of a little more than 5%. Quite dangerous isn’t it? I could sell and take the hit now, but I’m so far down this road that I might as well wait for a bounce. Some positions may be sold for break even or a slight loss.

Another ETF to note, with great stats in The PPT, is ITB. It’s oversold and a bounce is due, if the market doesn’t roll over. I’m hoping for a bounce, as this will lift my USG shares.

The charts for both of the discussed ETFs are above. Keep in mind these are frozen intraday prices. For updated charts click here.

With breadth being so low, I assume most of you are in the same boat as myself. I don’t even own any silver, and I was still down over 4% on the day. My portfolio and charts can be found here. I didn’t sell anything into the madness, as I was caught up in different business. The Fly predicted this day was to come, and here I sat 85% invested into the market, all on the long side. I felt pretty burned by the close of the market with the relentless selling. I couldn’t manage to employ any of my cash here.

So what am I doing now? Everything is pointing to a mean reversion opportunity, for both precious metals and their miners, and some equities as well. I am waiting for the bounce that The PPT is saying is imminent in most of my positions. My main position USG is touching oversold territory with great bounce statistics. The same goes for KLIC and RTEC. That is comforting considering the critical technical points price is currently trading at (see resistance and support lines on Finviz).

I keep wondering what charts I should post for you guys to take a look at, but I honestly don’t know whether I should give long technical setups or short technical setups. A bounce tomorrow or the next day could change a lot of things. Instead, lets talk about one of the most beaten down stocks right now. Apple. It’s at a critical price point in my opinion.

The level I’m watching is 419.00. If it breaks that, we could head to 400 pretty quickly. If we bounce tomorrow, we could head back to 440.00 this week. Should it break support and hit 400, there is the possible development of a falling wedge. We’ll cross that road when we get there.

Before the market closes, I would take a look at these hundred dollar players. The stocks are SAM and CHTR. The charts are below. I mentioned SAM in my post last night, it is behaving well off of the 50 period moving average, and I like the look of it here for a bounce.

CHTR has shown institutional inflow into the stock.As it approaches the 20MA, some more buyers may step in to send it over this bull flag.

Unfortunately, one of iBankCoin’s tabbed bloggers, Rhino, decided to resign from his post today. I really cherished his work and used his ideas in analyzing trades. The screens he created in The PPT made me some cash, and I thank him for that. His reasons for going are clear and understandable, and I wish him the best of luck with his new website that is being launched soon (tonight?). I would check his twitter stream for updates!

The market treated my portfolio fairly well today, as there was an unexpected pop in IMUC with a slight rise in USG. My other positions were down or near flat. However, I am not worried with the charts in those names. My current portfolio position charts are here. I sold my gambling stock IBIO and swapped it with OCLR. The position size is extremely small, so I wouldn’t make any big bets. 

Now to the core of the post and some charts of interest. Without running any technical analysis screens, I have three setups that I am finding appealing right now. I like SAM, TASR, and GTAT. The Fly currently has a position in GTAT. I  will show the charts of SAM and TASR. Beware of GTAT at these levels, it might be a little extended.

If you have been following my blog, my first real post talks about the fundamental aspect of SAM. The company is poised for growth in the craft beer market, and it continues to surprise those who bet against it. The short float is very high, and that can further push any drives upward. I have gone on and on about a place to add, and I think that this may be it.

TASR was one of the charts listed from my technical analysis screen last night. The break of the resistance is clear here, and with the gun debates sparking up it could run.

Lastly, I would like to leave you with a list of technical pattern setups that appeared in today’s market session. Feel free to sift through them and mention the ones you like in the comments section! The charts are here for you to browse. My favorite is ZQK.

About the New Highs

The market managed to rip to new highs today, sending almost all of my positions skyward and back to my high water mark of the year. Almost. My biggest position, USG, managed to trade lower. How sad is that? Anyways, my portfolio was pushed higher by my favorites added two weeks ago, KLIC and RTEC. My paper losses in the names are essentially erased and maybe I can be fortunate enough to start turning a profit on them. Other notable gains were in CALL and VHC. Here are the charts to my portfolio.

Since I was fully invested, I took the opportunity to sell into some strength. I am completely out of CALL from a cost basis in the 14’s. It was a great trade, and I think the stock will go higher due to the insane amount of shorts in the name (over 40%). However, I would like to finance some other opportunities.

So what am I looking at now? I think we just need to continue following the bullish setups, and take advantage of the trend. The market could be overheated here, but that has not stopped us from going higher. I am being cautious, however, I will not be calling tops. Just keep taking the bullish setups and being smart with your trades, and you will manage to be okay.

My Favorite Setups

Here are the best technical setups with TODAY’S SIGNALS. Watch for resistance breaks. The list has 34 names in it. The charts are all here in finviz. From my own positions, I like the growth name RTEC here. I am looking to start a position in DSS soon. The chart is below.

Other Things

I told you to watch MNST in my previous post. It popped almost 5% today. If some of you took the trade, then good for you. I managed to sit idly by and pass up the opportunity. My position in IBIO dropped today, but I didn’t mention it above due to the extremely small position size. I am still holding.