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Analysis of The Fly’s Smart Money Top Picks

I took The Fly’s Smart Money Top Picks and filtered out the stock symbols that was picked by more than one fund.  Below is the list.

By assuming these Smart Money are “smart”, you also have to assume that any stock that is picked by more than one fund has to be a “darling” stock for a bigger percentage of the “smart money” holding, right?  No?  Oh well, let’s play along for the sake of discussion.


Stock # of Fund
 AIG 2
 CVI 2
 FSL 2
 HCA 2
 NSM 2
 S 2
 SIG 2

At first, I was going to post a chart for each of the symbol in the above list but then it would expand this post to be too long; so I would stick to the ones that I saw as good “potential”.  Yes, that’s right, I’m showing the ones where I will put my “smart money” to hitch the ride.

You do realize that the term “smart money’ is always in a state of flux, right?  You can be smart money one moment and then you are not. 

Anyway, below are my favorites:

I like $HCA and $LIFE because we are heading into an explosive aging population.  Our health science has improved longevity among all classes of seniors (70’s to the 90’s) that will require more healthcare services. (Hint: another reason I’m betting big on $AMRN.)

Look at the $HCA weekly chart below, it is making new high here.


Look at the $LIFE weekly chart below, it is going to break out to make new high soon.


I also like $S here. Take a look at the weekly chart below.  Did you see the long long consolidation period going back to  2009?  It looks like it is going to breakout of the current cup & handle pattern.  This chart looks like a long-term breakout is imminent.


My last pick is $YNDX. This is a Russian $BIDU in the making.  I missed the $BIDU runner, maybe this one will make it up?  Does it look like an ascending triangle to you?


My 2 cents.

Oh, I almost forget, a special thanks to The Fly for sharing the Smart Money Top Picks for our perusal.

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The destructive power of Greed

How many of you bought $AAPL at $4xx.00 in Jan 2012, watched it climbed all the way to to $644 in three months. endured the correction to $522 in one month, cheered the resumption of the meteoric rise to $705 in four months, and then suffered the persistent and painful downdraft all the way back to $4xx?

I did not buy $AAPL so I missed the whole meteoric rise but I had witnessed a friend who did all the above.

“It is going to a $1,000!”

“But the market cap is north of half-a-trillion already!”

“Don’t matter, they are not making enough iPhone to supply the demand!”

“But the chart is heading south, why don’t you put a sell stop at $680 to lock in profit?”

“Hmm, I will think about it.  But I will sell some at $800 to lock in some profit.”

But the price never climbed back above $705 since then.  $AAPL began its descent week after week.

“Did you sell at $680?”

“No, I know $AAPL will go back up.  I’m afraid if I sell at $680, I will miss the bounce back to my $800 profit target.”

“But the price has been going down week after week and it doesn’t look like it is stabilizing yet.”

“Do you know that they cannot make enough iPhone to sell?  I hear of iPhone shortage everywhere.  Besides, if they nail the big China phone company, price will go back up to $1,000 in no time.  However, I won’t be greedy, I will sell at $800.”

“You do realize that for each week $AAPL drops in price, it will make it that much harder for you to sell for profit because you’ll be telling yourself you may be selling at the bottom, right?  Basically, you may freeze yourself up from selling if price continues to decline.”

“No worry, $AAPL is not going to go back to $400.  It is an opportunity to BUY!  If you do not have $AAPL share, this is YOUR opportunity to buy some now on the cheap!” He gave me that sly look as if he was letting me in on his special secret.

Needless to say, I’ve to witness my friend gives all his gain back to the market.  Since his average cost is around $4xx; he allows a phenomenal 75% gain evaporates in front of his eyes.

There was another case I witnessed that happened at the time when Linux was the talk of the town.  There was an IPO on a company that sell and support the use of Linux launching in a week.  My friend and I bought some shares of another company that also sell Linux OS in a disc.  I forgot the name of the company.  Anyway, when the IPO was launched, the company we bought did not move much even though the IPO was opened at $100+ on a $28.00 IPO price.  Seeing that there was no following the coattail with our stock, I took my profit and ran.  I also told my friend he should take profit as well.

“Did you take your profit?”

“Well, my hand was on the phone and I was about to dial my broker number; but I could not move.  I was sweating and it was as though another force was preventing me to call.  I could not go through with the phone call.  No, I did not sell yet.”

“Why don’t you try again tomorrow?  Watch the market open and sell if price begins to fall off.”

The next day came and I asked my friend if he had gotten out.

“I couldn’t get up in the morning to watch the market open.  Obviously, I missed the gap-up but the prices fell off afterward and is now down 7% for the day, so I don’t see the point of getting out now.  I think I will wait for it to go back up.  After all, Linux is the new wave.”

Price did not climb back up and eventually my friend had to give back 50% of the gain before he finally sold.

There was another case which I mentioned before in one of my Biotech posts.  After I sold my lot and locked in my 360% gain, I told my friend of the possible unreliable data being promoted on the web, he brushed me off and thought I was being too “weak”.  And to prove his point, he later told me he bought more at the high of the day (which happened to be the historical high of the stock).

Now, this friend was quite intelligent in his own right but he was ignoring all the red flags because he was too consumed by his greed on this particular biotech stock. He was like a different person when I talked to him.  He defended his stock like a star-crossed lover defending his/her loved one when others were trying to warn him/her of the “integrity” of the person he/she was loving.

Needless to day, he lost money on the stock instead of multiple gain he should be taking home with. He later confessed to me that he was already dreaming of an early retirement, planning for his world traveling, etc at the time I was alerting him of my sold-out position.

Such is the destructive power of Greed.

I was not immune to this emotional force as well.  I had my share of being possessed by greed and lost money as a result instead of a gain.  However, I also believe that if we don’t learn from our past mistakes, we are doomed to repeat them again and again.  Hence, instead of putting my past “possession by greed” experience in a far-away corner in the remote part of my brain, I put it on a pedestal in front of me to “remind” myself of the debilitating effect of greed.

This, from my experience, is the only way to control this monster.  As long as we are human, we are always one-step away from falling into the abyss of Greed and be possessed by it.  And once you have fallen, there is no exorcist around to help you escape.  And the only cure available is that the stock you are possessed by get bought out by another company and thus force the gigantic gain on you or that the stock actually reaches your lofty price target and you come to your sense to take it.   Sure, it can happen to you but you need to look at all the corpses around you who have tried the same thing but are not as lucky as you are.

Here is a litmus test to see if you are possessed by Greed:

Stock shoots up and begins to climb

“Ha! Ha! Ha!  It is going to the moon!” (you may be possessed)

“Wow! Go! Go!  Let me move my trailing stop just in case.”  (it’s ok to be excited since you are not a robot; however, you have a plan so you are not possessed)

Stock retraces by 50%

“I’m buying more!  What’s an opportunity! It is gong back up higher!” (you may be possessed)

“Sh*t! I’m going to watch the support, if it get taken out, I will sell some to lock in profit.” (you certainly have a right to be pissed off to see your gain drops by half; but you are not possessed since you have a plan to lock in some profit )

In summary, we have all been possessed by Greed at least once; therefore don’t put that experience away since we have paid dearly for it.  Instead, put it in front of you to remind you of this lesson.  Tell yourself you won’t repeat it again.

It is working for me and I believe it may work for you too if you can acknowledge the destructive power of Greed.

My 2 cents.

ps. Here is a classic example of controlling greed by The Fly himself:

The Fly loaded up on VHC because he had reason to believe it would go much higher; however, after seeing price action languished for too long when it should be going up, he decided to sell his positions in pieces until he sold his whole lot to lock in his gain.  Enough said.


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Today Portfolio Adjustment (03-28-2013)

Today was actually a slow day for me since I was tied up with non-trading activities all day.

Anyhow, market opened neutral which was nice since it was printing negative 5.x when I went to sleep.  Unfortunately, $FB was under attack from the get go and I did not like this kind of action after a big rally the day before; thus, I started to unload my position on $FB in stair-step fashion.  For each price decline of taking intra-day low, I unloaded some more.  $FB continued to trek down to mid-$25.xx and I was left with 10% of my original position.  I will add again if price action starts to climb back up next week.  And yes, I took some loss alone the way but it was part of trading expenses.  So, no big deal.

Next, $AAPL looked like it might have bottom in the morning time when $SPY began to trek up.  I bought some for day-trading and was stopped out by the trailing stop to lock in profit.  I didn’t trade $AAPL on the short-side so I missed the downtrend.  I was pretty busy today so I didn’t really have much time to pay attention to the market.

$DDD looked strong with a gap-up and prices bounced around the opening range for awhile; but once it made up its mind to go higher, I added to $DDD for taking out the intra-day high.

$BBRY opened higher as well so I took an opportunity to buy a retracement with a stop below the intra-day low.  When I came back later an hour before the close, I found I was stopped out for small loss.

$DCTH finally spiked up today which I had been waiting for everyday for the last two weeks.  You could see me buying and selling for small losses and gains just to make sure I didn’t get mugged while waiting for the spike to happen.  Well, I’m glad to tell you that I’ve caught it this morning and is happy to be in the position for the spike-up today.  Price, at first, went down at the open so I left it alone; however, later on prices ran back up and created a long-tail daily candlestick pattern called the dragonfly.  Since this kind of candlestick can only happen when the bull side pushes the price back up after beating down by the bear, I immediately bought back my position and wait.  When I came back to find out $DCTH was much higher than the morning price action, I added some more expecting the price action to continue higher next week.  Let’s wait and see.

I also nibbled some more on $SZYM to buy back some of what I sold two days ago.  $SZYM continued to trek lower so I still could buy back another batch for cheaper price.  I haven’t bought back all the shares I sold two days ago yet; therefore I still have room to buy some more.

Seeing $PACB also bounced much higher, this time without me because I wasn’t watching the screens at my desk, I decided to buy a small portion so I will not completely miss out if price decides to rally from here.

$POT and $GLOG were pretty much neutral all day so I left them alone.

That was pretty much a slow day simply because I wasn’t at my desk all day.

Current holdings:


My 2 cents.


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Spike up on $DCTH. Is this for REAL this time?

I certainly hope so!  Did I just use the word “hope”?  Strike that out!  I should say, “Look like it!”

I’m talking about $DCTH.  I bought in this morning because I’m “sure” price has to go back up in light of coming FDA decision in May-June.  So, I’ve been stalking this one everyday and looking to buy back in when I see some movement.  This morning, I saw movement so I bought back in.  Good thing I did.

The question is, “will this spike up hold and continue?”  I’m betting it will by adding more at this level.

Take a look at the daily chart below:



I was out all morning so I missed the $PACB run-up as well.  You can’t win them all…

My 2 cents.

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Today Portfolio Adjustment (03-27-2013)

Today was actually a quiet day except for the morning frenzy in which I, again, dumped all my swing trades with no remorse.  I summoned them all up in my office and said, “You are all fired!”.  Only this time, all the stocks just rolled their eyes and gave each other a knowingly smile  ’cause they knew I would hire them back in no time.

I went away and came back to my desk to find $FB roaring back to life!

“Holy Smoke!  What did I miss?”

I tried to buy some $FB back at some retracement point but price never even gave it a glance.  So I bought a starter position and leave my original limit order in place hoping that it would go back down later to hit my buy order.

Nope.  No such luck for me today.  So, I bite the bullet and bought some more above $26.00.

Since $FB was an alert from a good fellow (Sooz) from here, I naturally looked at his other alert which was $POT.  Lo and behold, the chart looked fantastic for a bottom-fishing exercise.  With a support nearby, it looked like a good bet with a fantastic risk/reward ratio to go with.  So, without further ado, I bought some $POT immediately.

I’m quite impressed with the tenacity of the bull for the last two weeks.  It just kept going and going and going despite the bear ferocious attempt to scare the weak hands.  Yeah, I’m one of the weak hands when it comes to swing trade.  But I’m also one of the quick one to jump right back in.  Come to think of it, there are A LOT of people like me jumping back in when they sense the bear is taking a night cap.  Hence, the bull just kept on coming back.

Giving the market was working its way back up, I bought back $GLOG as well as buying back some $SZYM I sold this morning with the intent to buy some back cheaper.

$DDD also looked healthy again so I bought back what I sold this morning.

I watched $WPRT closely but price action was acting a bit defensive in the last hour; nevertheless, near the close, price spiked up a bit so I decided to jump back in.

That was pretty much for the day.  I didn’t even try to buy $AAPL for a day-trade since it had been behaving poorly all day.  What’s up with $AAPL anyway?  Did Snow White took a bite out of it?

Well, I’m feeling bullish giving today price action and I can’t wait till Friday to see if the bull can crack open the GW2.

Current holdings:


My 2 cents.

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Where’s the bear?

Wait a minute, wasn’t there supposed to be bear around here?  Where did it go?

If the Bull can continue to piss on the bear then the bear may finally get the message- the BULL will take the GW2 by end of this week!

Take a look at the $SPY daily chart below:


Does it look like the bear is in control?  No?  I see more green bars than red.  Not only that, I see the uptrend is still inside the uptrend line.  On closer look, we are ALMOST there at GW2!

Get ready to celebrate an historical event of our mankind driving the stock market into an historical high again.

Yipee YapaDoo!

Oh, don’t mind me, I’ve been smoking too much $POT…

My 2 cents.

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Anyone wants some pot?

No, not the smoking kind; the stock $POT I’m talking about.  This is another Sooz’s alert that I’m now convinced the bottom may be found.

Today nice green candlestick bar with a tail is a nice touch.  It’s not exactly a hammer candlestick pattern since there is a hair sticking out of its head but because it is near a support area; who care?

I’m buying anyway.

Take a look at the daily chart below:


Did you see the momentum indicators (two of them, Wow!) turning up?  This is good enough for me.  You see, I’m an easy fellow to please when it comes to bottom fishing…

I’ll put my stop below the support line.

My 2 cents.

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$FB is screaming at my face- BUY!

I tried to buy back $FB after I dumped it this morning because of the gap-down open; but the retracement never came.  So, I did what anyone who wanted in do; buy at the market just to get in for the starter position.

Take a look at the 15m $FB chart below:


I had a buy order at $25.50 and it was completely ignored ’cause price just kept going up.   The rally is very strong and this could be a catalyst for the bounce back up to the $30.xx range.

Take a look at the massive bullish engulfment bar in the daily chart right now:


It cut through the 5 moving average and broke thru the high of the last four days.  I just added more $FB because price kept going up.

A special thanks to Sooz who alerted me of $FB last week which I added to my “to watch” list.

My 2 cents.


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When does seesaw becomes a whipsaw?

It is when you are whipped for putting chewing gum under a public park seesaw in Singapore.

Today is a day to be cautious.  I sold all my swing trades pronto at open without thinking much.  All for small losses. I even reduced position size on $SZYM with the intent to buy them back cheaper.

So far, all mini-rallies are being countered with a bear attack; therefore if you are thinking about bargain hunting, you may want to put a tight stop “just in case”.

Below is the 1m $SPY chart:


Be safe!

My 2 cents.


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Today Portfolio Adjustment (03-26-2013)

Market opened up today and it slowly climbed its way higher till closing time.

Meanwhile, my “current” favorite trading vehicle $AAPL was not participating in the bull trend but instead played defensive all day.  I bought $AAPL twice and twice I stopped out for breakeven.

$DDD was tracking lower all day until a late stage rally brought the candlestick to look a bit better; thus, I jumped back in with a starter position.  I’m preferring to play $DDD over $XONE because with $DDD there are more cluster of bids in the vicinity while with $XONE I had to look further down to see the bids which often times give me vertigo just to look for bids to get out.  You may see a nice paper profit on unrealized gain on $XONE but the moment you try to get out, you can forget that nice paper gain you see if you just want to get out at market.

$FB was trading around the support area so I bought a starter position with a GTC stop below the low of the day.  My stop did not hit so I’m still in.

$PACB was exhibiting some stability so I decided to buy back some position.

Upon browsing through my favorite stocks to trade, I came upon $CHK which looked like it was bouncing off the previous minor correction; so I bought a starter position and later added some more by end-of-day because I felt the price action was strong.

Take a look at $CHK daily chart below and you know what I mean.


Once I was in $CHK, I naturally checked in $WPRT since it was all related to natural gas.  $WPRT also exhibited a possible bottom so I bought a small starter position to test the water.  See below $WPRT daily chart:


I was tempted to dump $DCTH today but since it was still sitting on the support line, I would give it a bit more time.  See where the closing price just sat on the support created back on early Feb?


This was pretty much a slow day actually even though DOW screamed 110 points higher.  The elephant in the room was that $AMRN continued to trek lower.  Since I already covered this subject on my previous post, I’ll just chalk up today as an uneventual day for me.

Current holdings:


My 2 cents.

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