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Trading Ideas

Uh oh! I think I see a bear flag…

Take a look at the bear flag based on SPY hourly chart below:


The bull will need to have a good solid rally tomorrow to stop the bear flag from developing into a full-blown continuation bearish chart pattern by taking out the low of the flag.

Let’s see how tomorrow plays out.

Trade well!

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Can someone pump some air into the ball please?

The bounce was quite firm in the morning until the air started to leak.

Good grief.

Take a look at the SPY hourly chart below:


Did you see how the early morning bounce hit the top of the long-term uptrend line and dropped like a bowling ball from there?  Did you notice the steep of the drop?

It is not very inspiring for a bounce even though Dow Jones is still trading a positive 60+ points.

Look at the daily SPY chart below:


Today bar is trading near the bottom of yesterday bar; again, it is not heart-warming at all.   It looks like your significant other is ready to leave you high and dry…

My cash level is now 52%.

Caution is warranted here.

Just my 2 cents.

Trade well!

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Today is what I call a bloody falling knife

Look at that BIG RED BAR slicing thru the low of the last 20 days with high volume to boost.


With a bloody falling off the cliff  kind of momentum, I can only say tomorrow is not a pretty sight if there is not a bounce to be seen.  However, there are supports from the previous three walls SPY has broken through around the $146 – $148 area.

If there is no bounce tomorrow, I’ll continue to cut out swing positions to reduce loss.

There is no reason to have a majority of your money ties up in stock if the market is showing a violent turn.

I’m currently 47% cash and will raise it to 60% if the knife continues to fall.

Remember, the more cash you have, the more stocks you can buy back cheap when market starts to turn.

Just my 2 cents.

Trade well!

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Surprise inside a surprise

What?  $33?

No way!?

Wasn’t it trading at around $50 last week?

Wouldn’t that be a $17 drop instead of $6 drop this morning for missing earning expectation?

I was confused!  I bet you were too!

Yeah, I’m talking about DDD.

3-2 split at the day of earning report?!?


Anyway, as bad as this decision was, I thought I was giving an opportunity to buy back some DDD on the cheap!

After coming to my sense, I bought starter position on DDD under $31 with stop below intra-day low of $30.28.

When an opportunity comes for a chance to catch a falling knife, I’ve got to take it!

Remember, clap your hand together (parallel to the face of the blade) to catch the falling knife; otherwise, you will lose your fingers!

This is a high risk trade so I know I may need a bandage later.

Trade well!


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Pass the GLUU please

GLUU looks like it is setting up for a mighty bounce.

Ok, we may have a catalyst giving this news here- Nevada legalizes first interstate online poker.

Take a look at the hourly GLUU chart below:

GLUU hourly chart

Did you see how the price action break out of the downward trend-line and then consolidated into a ledge?  The way it is looking now, price action wants to go up.  If it takes out the ledge high of $2.38, I will add more.  If it takes out the low of the ledge at $2.27, I will cut my loss and move on.

I particularly like the big ass up bar right before the ledge.  Sometimes, after a spike like this with higher than average volume; it may be a start of a runner if the catalyst is substantial enough; on the other hand, it could be one of those “spike and ledge sell pattern” within a bearish trend.  This is why it is important to see which side of the ledge price action is going to take out next week.

Take a look at the daily GLUU chart below:

GLUU daily chart

Did you see how it was bouncing… bounce once on mid-Nov 2012; bounce again on early Feb 2013;  the 3rd bounce came off from a higher ground and stayed within the “upward” Andrew Fork lower line.  In other words, I see a good risk/reward trade here as long as I use the ledge on the hourly chart as my guidance for protective stop.

Btw, I didn’t get into this trade until the last 15 minutes on Friday when I saw a spike up.  This last minutes spike up reflected the price action upward bias inside the ledge; that was why I bought in my starter position.  If it had spiked downward instead, I would have passed and skipped the trade.

Trade well!

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Is that… a dead cat bounce? (with after-hour update)

I sure hope not!

Take a look at the SPY daily chart below.


Did you see that wall around $151.50?

Some will say this wall is nothing.  A line drawn from a single pivot high with only one down bar from each side, what kind of wall is that?

Exactly my point!

If $SPY cannot overcome this so-called dime store wall by end-of-day, we have got a serious problem.  This rally may be a dead cat bounce after all.

Well, the day is not over yet.  Let’s wait and see…

Despite a 100 points rally, I feel price action is meandering around all day…

Currently long LRAD, AMRN, USU, CCJ SZYM, URA, DCTH, DNN, and 36% cash.

Trade well!

EDIT: After hour update

Well, I’m glad to see SPY has closed strong today.  It is way above the dime-store wall! 🙂  Nah, today is not a dead cat bounce.  We may see higher price action next week.


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The revival of SKF- the reluctant runner

SKF has not been getting any respect for quite awhile now; but the situation may have changed.

Take a look at the hourly SKF chart below:SKF_HourlyDid you see the potential breakout happening here?  It has already taken out last Friday high and is working on taking out last Thursday high.

Take a look at the daily SKF chart below:SKF_DailyDid you see how today green bar pierce the downward trendline?  Did you also see the price/momentum divergence below the chart?

I think it is high time we pay some respect to SKF.

You see, SKF doesn’t have to be your enemy, you can be a friend with it.  All you need to do is to go along with the flow of SKF and it will be your best friend ever!

Without a doubt, I’m long on SKF since today.

Oh yeah, SKF is buying drink today. (grin)

Trade well!

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The market has a surprise for you

If you look at the daily SPY chart below, the sky is the limit.  Price action has all that empty space above to float around.  Where is the resistance?  One may ask.

What resistance?


Notice that price action has fallen below the middle line of the Andrew Fork uptrend; this may just be price action way of saying momentum is slowing down a bit.  Yet the overall trend is still UP.

Now look at the monthly chart below:


Whoa!  Where do those giant walls come from?  Surprise! Surprise!

Well, they are the giant walls of 2000 and 2007.  My money says these walls are very tall and resistance could be formidable.

From a short-term perspective, we still have room for the uptrend to continue before these walls come into sight.  For 2013 to be a significant bullish year, these two walls have to be taken out the sooner the better; otherwise, a major correction may be on the horizon since March 2014 will be clocked at the 5th year of the bullish cycle.  Please see my post here regarding this long-term cycle.

I’m currently semi-bullish with 37% cash.

Oh yeah!  I’m still smarting from that %*%$! ETRM bet that has set me back one step.  Holy Smoke!  Did I just cuss? Pardon my manner!

Don’t worry, I still have eleven months to this year to bank coins.

Trade well!

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The price/momentum divergence in the daily $SPY chart

The picture below tells it all:


Notice that while price continues to trend up, the momentum indicator below is trending downward.  Will price be correcting soon?

I’m getting cold feet.  I’m now 50% cash; however, don’t mind me because I can be overly cautious from time to time.

I will watch the resistance line @ $151.42 which is the high established in Feb 1st.

Trade well!

Edit: I’m currently holding LRAD, AMRN, USU, ETRM, & EMAN & 50% cash

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Going Biotech!

After $SSYS stuck its leg out for me to trip all over the muddy pile, I saw the grime on my face thru the reflection from the pocket of sewage water.


“No! Biotech!”

Without much fanfare, I dumped SSYS yesterday for causing me bruises and picked up more Biotech stocks today- mainly CLDX, ETRM, SZYM, and CRIS.

“Everything happens for a reason.”

“Indeud it is!”

My current portfolio mix is as follows:

Biotech (AMRN, SZYM, CLDX, ETRM, CRIS) 39%

Uranium (USU, CCJ, URA, DNN) 30%

Tech (LRAD, EMAN) 21%

Nat. Gas (GLOG) 10%

Today, the rising tide of my Biotech’s picks is soothing my bruises caused by the SSYS fall.

Trade well!

Ps. My MJNA position is in another account that is not part of this main portfolio.


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