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Monthly Archives: September 2012

5 years Bullish Plan?

Take a look at the monthly SPY chart below.  2 major corrections have occurred after 2 sets of 5 years bullish trend.  From the look of the monthly chart, we are now on the 3rd set  of the 5 years bullish move up.

Is there some sort of “unwritten” rule here for the 5 years bullish plan?  Well, the pattern is there and it is up to you to interpret it anyway you want.  From my perspective, the QE3 serves as the catalyst we are all waiting for to kick this bull market to the next level.  I like to see SPY takes out the high of 2007 before the year is over.

Giving this bullish scenario, I’m now 90% invested.  I’ve finally bought back DDD and SSYS for my portfolio.  I’m now “invested” in the following (sort by descending position size):


Most of these stocks are high beta and the rewards can be very high as well.

GLOG:  we need plenty of LNG (liquified natural gas) tankers and GLOG will have brand new tankers build with optimal design for this purpose.  How can business not take off when we have abundance of natural gas lying under our ground to share with the rest of the world?

AMRN: it is my opinion that this “fish oil” pill will become a popular prescription for people with high cholesterol condition.  And there are plenty of people with this condition giving the diet we are eating now.

LRAD: this has been my long-term equity position for awhile and I believe this technology will eventually become the standard in law enforcement and military use.

SZYM: biotech fuels and foods.  This technology speaks for itself when we are heading toward the issue of “over-population”.

DDD & SSYS: Do I need I to say more?  3D printers are the future of production because it is economical to do so.

ES, DNN, USU, CCJ:  Now that Japan is rethinking nuclear power, demand will slowly climb back up.  There are only so many uranium lying around and they are tough to find and mine.

ATML:  This one is The Fly’s pick; so ask him.  The chart looks good and the potential upside is huge compare to the risk.

Overall, I believe QE3 has created an economic environment for the stocks I mentioned above to climb higher.

Good luck to all and may all of you prosper regardless of what stocks you own.  Like Mr. Partridge said, it is the right side that counts and not the stock.  To me, the right stock will give you more bang for the buck!

Remember to follow the price action.  I may or may not hold the above positions if price action doesn’t support the bull trend.

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Double-Top Turnover

After throwing numerous AAPL put options against the wall over the span of several months with none of them staying put; I believe today is the day that I finally throw a perfect one that will stick like a well-chewed soggy bubblegum coming off from the mouth of Sandy Olsen (from the movie- Grease).

“How can it not stick this time?”

We’ve a BEAUTIFUL double-top day thanks to the courtesy of today’s big red bar day.  Will this be the last bastion of AAPL’s mighty $600,000,000,000+ (count those zeros!) market cap we ever see again?

Will I, the guy you have been snickered at every times I throw the gum and announce my foolhardy play, be finally vindicated?

Honestly, I really don’t care as long as I recover all those tiny losses here and there PLUS a gazillion more so that I can then go out and buy myself an overpriced iPad to hang on my wall to remind me of today.

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Btw, in the event of an unusual “turn around” rally by end of the day which I am definitely NOT expecting to see, you can go back to your snickering and I’ll go back to my corner and wait for the next opportunity to try again.  If not today, there will be another day.  Nothing, and I mean NOTHING, can stay up FOREVER with that many 000,000,000,000!; especially when Steve Jobs is no longer around.

Remember to follow the price action instead of listening to anyone’s rambling that include me!

End-of-day Chart Update Below:

Below is the end-of-day daily AAPL chart:

Below is the end-of-day AAPL 15m chart:

We will see if tomorrow will continue the downtrend.

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Do we have buoyancy?

So what do we have here?

Based on the daily SPY chart below, it does look like current price action wants to go up.  Despite the fact that SPY is trading near the previous high of May 2008, the overall sentiment is surprisingly buoyant.  Take a look at the 2 circles on the chart.  The one on the left shows how price action has corrected to the downside after the consolidation has been complete inside the circle; meanwhile, looking at the 2nd circle on the right, you get the feeling that this consolidation appears to be an upside down version of the 1st circle.  If that is the case, we may see a minor correction before price action screams higher.

Friday’s short-range bar only means that momentum of price action is slowing down a bit to catch its breath. But if you look at the momentum indicator at the bottom of the chart, you will see that the fast line has already taken out the recent steep downtrend trendline (red) and is on the way to take out the long-term downtrend line (purple).  This turnaround on the fast line signifies that the internal momentum indicator has a bullish stance.

While others are saying that September may be a popular down month; just remember that we are all dealing with statistic and probability.  Perhaps, just perhaps, September in 2012 will surprise all of us by being an odd month where price action continues to move up without looking back.

Of course, the above is just my weekly rambling market opinion.  Regardless of my inability to see the future, I must always be prepared to have some conviction to wager in the market place.  On the other hands, deep conviction in the marketplace can either be very profitable or very dangerous.  I opt to stay in the middle if I can; if not, my trigger-happy finger will move me back to large cash position in a NY minute.

In short, don’t believe what I said; just follow the price action.

I’m currently 72% invested with 28% cash.

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After the dust settles…

After a strong rally of 200+ points on the DJIA, I find myself 75% invested with 25% cash.

Well, duh!  The good news is that today high took out the high of $143.55 in the week of 5/28/2008.

Take a look at the weekly SPY chart below:  The next few trading days will decide if this May 2008 high will be a resistance to this rally or a support for further end-of-year rally.

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Currently, my biggest position is in AMRN (18% of portfolio).

To iterate, I like AMRN because of their recent FDA approval of their drug Vascepa for the treatment of very high trigylcerides (technical term for cholesterol).   AMRN also has been receiving “allowance” for several patents out of the 25 they submitted.  The speculation here is the potential take over by a major pharmaceutical company for a projected price of $20+ per share.  Because any potential take-over news can be unexpected and sudden, I’m more inclined to give AMRN more room for the price action to jump around.  I’ve been buying and selling AMRN since $12ish so I’m sitting in plenty of profit to cushion the volatility.  But that doesn’t mean I want to give the profit back; nevertheless the reward for a takeover announcement  is more than justifying the risk I’m taking.

Below is the daily chart of AMRN.  Notice the inside green candlestick bar.  I see this has a bullish stance even though it is not a full Harami candlestick formation which required  the previous red bar to be at the bottom of a downtrend.

My 2nd large position is in GLOG (14% of portfolio)

LNG (liquefied natural gas) is here to stay and it is not going away.  Foreign countries will want a lot of cheap LNG from the US and GLOG has the ships (and more new ones to come next year) to handle the extra volume.  I’m also inclined to give this one more room to gyrate around since I’m betting the price to increase gradually as we come close to the launching of the new ships in early 2013.

Below is the daily GLOG chart.  Notice today formed a doji candlestick bar after 4 down days.  A doji after some correction may be a signal for a bottom and a possible reversal.

The rest of my portfolio, in order of size, are the following:


I bought The Fly’s pick on NFLX because the daily chart of NFLX today has a very nice bullish reversal setup and also a double bottom b/w early August and this week.  Besides my risk is low since my stop will be below the low of Sep 4th.

Remember to follow the price action!

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AAPL cider anyone?

Here we go again!  Actually, it is more like “Here I go again!”

I like to pick on AAPL ’cause it tastes the sweetest when it is the most crunchier.

We have a dark cloud hovering over the AAPL candlestick chart right now.  This is a potential bearish signal (and how many times have I said that?) which I am willing to bet that this is the last time you are going to see AAPL trading at $67X level.  Again I initiated a small starter position to short AAPL using the Sept 21st  $675 strike price put option to test my luck.

What you see in the chart below is the making of a dark cloud cover candlestick pattern which has the “potential” to signal a bearish reversal.   Tomorrow will be the confirmation day if price open below today close and continue to head lower.

“What about iPhone 5 debut on the coming Sept 12 announcement?”

Good question!  I see two ways price action will take on that day.  A very BIG UP day or a very BIG DOWN day.  For now, I’m letting the chart tells me what to do.  There are still 7 days to judgement day so I am not going to worry about it right now.

Potentially, today high may becomes the next lower pivot high next to the highest high formed on August 27th.  Thus, for the up trend to continue, today high must be taken out in the near future.  It will also be used as a basis for my stop to cut my losses in case I’m wrong, yes, again!

Click here to to see the larger font version of this post: following price action.

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The BULL-Sh*t Maneuver

I’ve to give it to the Bull; today price action is quite a ride from a bear attack to a bear heart-attack!

Below is the SPY daily chart, take a look at the beautiful green bar in today price action.  It took out the lows of the last 2 trading days and then turned around for the greener pasture.  One thing to be aware of is the divergence in the momentum indicator below.

Although I sold a chunk of my AMRN and all of my GLOG this morning; I bought them all back when I saw the intra-day trend change.  I paid only a bit more for GLOG but paid quite a premium to buy back the AMRN shares I sold this morning.  In the scheme of the bigger picture, it is my opinion that the premium I paid to get back on AMRN will be insignificant IF (a big IF) there is a takeover or merger coming in the near term.   The way the price action behaved today, it seems like everyone is gambling that something will happen soon.

Below is the 15m AMRN chart.  I ended up buying back AMRN in the mid-$14 after I sold a bit below $14 in the morning.  Well, that’s the way I have to roll when I’m following price action.

Below is the daily chart of AMRN.  Now, did someone know something?  The way I see it, the chart always give you a head-up.

Currently, I’m 38% invested with 16.7% in AMRN.

Remember, follow the price action!

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