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Monthly Archives: May 2012

More gas for my car please! Ooop! I meant compressed natural gas…

Yes, that would be our future car filling up with compressed natural gas which is available in abundance right here in the US.

I bought a starter position in WPRT with stop at yesterday low.  If it proves to find bottom here and take off to the upside, I’ll buy more.

Today news may be the catalyst needed to halt the slide.

Good Hunting!


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I need Silver bullet! (will it cure current werewolfish environment?)

In lieu of silver bullet, I settled for SLV and GLD.  I’m building a small position with a tight stop.  If these metals find bottom, I’ll continue to add if price action support the uptrend momentum.  In other words, I’m pulling my “catch the falling knife” tactic with close stop from my playbook for a spin.

Below is the weekly chart- notice the support from way back in late Dec.

Below is the daily chart- notice the stochastic is now turning up from the bottom.

Good Hunting!

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RIMM is getting reamed!

Short RIMM with June 2012 $11 put.

Chart shows a breakout to the downside.  Looking for sub $10 price soon.

Good Hunting!

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SKF- a reluctant runner?

Please make your own conclusion from the excerpt below.  JPM is “selling protection”… Isn’t that what AIG did with mortgage- selling protection???

If the market tanked due to European nightmare, what do you think will happen to the corporate credit?

I added more SKF today.  It “may” just be a runner if our economy doesn’t show any improvement going forward.   Of course, stops are in place for my own protection.

Good Hunting!

Below is an excerpt from the article: Understanding J.P. Morgan’s Loss, And Why More Might Be Coming

“The passage below comes from the WSJ article:

In recent weeks, hedge funds and other investors have been puzzled by unusual movements in some credit markets, and have been buzzing about the identity of a deep-pocketed trader dubbed “the London whale.” That trader, according to people familiar with the matter, is a low-profile, French-born J.P. Morgan Chase & Co. employee named Bruno Michel Iksil.  Mr. Iksil has taken large positions for the bank in insurance-like products called credit-default swaps. Lately, partly in reaction to market movements possibly resulting from Mr. Iksil’s trades, some hedge funds and others have made heavy opposing bets, according to people close to the matter… However, Mr. Iksil has turned more upbeat recently. He has been selling protection on an index of 125 companies in the form of credit-default swaps. That essentially means he is betting on the improving credit of those companies, which he does through the index—CDX IG 9—tracking these companies.

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What is YOUR real PURPOSE in trading?

I can start by telling you mine.  I am always looking for RUNNER!  Yes!  A stock that can run.

‘Yeah, yeah, so do we all” you said.

“Well, how do YOU look for the runner?”  I counter.

Alright, I’m not going to get into a small argument that may lead to a physical fight and then have my ball squeezes till I turned blue on my face and bid this life farewell in the most unpleasant way…  Instead, I’m just going to tell you how I do it.  If you don’t agree; it’s a free country and you are ALWAYS right!  Yes, I’ve given up the sacredness of being right.  When you think about it, what is the whole point of “being right” anyway?  What do you get out of being right?  A feeling of superiority?  A feeling that you are in control of your destiny ’cause you are right about a thought that appeared in your mind.  If you say yes to these questions, then you are also subscribing to the belief that when you are wrong, you are no longer in control of your life and you must appear foolish… Wow, that must be a LOAD for your EGO.  “No F__King WAY!” the ego will scream.

Guess what, we are NEVER really in control of our life; we are merely an insignificant part in the whole scheme of thing that is significant.  Yes, a double-sided irony!  Of course, what I just said is all baloney ’cause you are right in your judgement!  I don’t know what is the hell I’m talking about…  Ok, enough of my being wrong, let’s get back to the purpose of my post…

What I look for is a stock with a great story!  If it has a fantastic story, the stock will have the propensity to RUN.  Forget high P/E; forget the poor balance sheet; just focus on the validity of the story.  If it has enough substance, it will RUN.

“So, how do you find the runners?” You inquired with a readily hammer to pound.

These days, they are ALL over the place!  Seem like the most recent trend is Social Media…  and you can always find them in technology.  Names like AOL, Netscape, Microsoft, the dot.com of the hey day were great runners.  Oh wait, there is always a story stock in BIOTECH!  And that is why Biotech is always a part of my trading arena.

“You are not telling me thing I don’t already know!”  Your hammer is probably inched closer to my head…

Wait!  What most people forget is that despite the story stock having the propensity to run, it can also simply be a story stock with a propensity to FAIL.  Yes, remember Netscape? How ’bout Commerce One?  Commerce One went from IPO price of $30 to $900 without making a single dime in their business model.  I felt bad for those who kept on shorting the stock while it ran all the way up to the stratosphere; imagined their faces turned blue… and for those who were holding the bag when it went to zero.

Do you see the allure and the danger here?

That is why you MUST master the art of chart-reading!  To me, chart-reading trumped fundamental hand-down.  I ALWAYS listen to the chart ’cause it is a DIRECT message from the market.  The chart give you clue on demand and supply of the stock you are looking at.  If demand is high ’cause the story reaped of validity, it will RUN.

But there is a CATCH!  All runner will also crash and burn before it will run again (if ever).  That is why you MUST learn to take profit with profit target.  Yes, you can miss out the rest of the run; but at the same time, you are also spared from the crash that literally eliminated all the paper gain you used to hold dear to your chest.

REMEMBER, PAPER GAIN is just that- paper.  A worthless number in your broker account until it becomes a part of CASH balance.

Bottom line, when you find your runner, don’t just buy and fall in love with it.  You must trade it according to the chart.  Average up with the trend (not the other way as in averaging down).  If you go with the flow and direction of the price movement, runner can be extremely profitable.  And you need these profitable moments to offset all losses (keep them small!) from those fake runners that pooped out.

In other words, in the world of trading, you must acknowledge that you can be WRONG again and again.  Playing runner is high risk; so go ahead, hit me with the hammer.  I’m already wrong by suggesting that it is a profitable way to trade.

Good Hunting!


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Dead cat bounce, anyone?

What do you see in the chart below?

Since it is “May”, I like to call it a dead cat bounce for today price action; but I’m sure other will see it as an imminent reversal to the upside.  It is all depended on whether the 136 support will hold or not.

Truly, at this point, I rather play safe and sit on the sideline.  If I short, the imminent reversal will spank me silly; and if I long, the conclusion of the dead cat bounce will also spank me silly.  What to do? What to do?  Oh yes! Do nothing.  I prefer to sit on the sideline and let the market tell me what it wants to do next by either crossing the 136 line to the downside or upside.

Just for fun, I dabbled in SKF since JPM is such a bad bad boy!

Good Hunting!

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GMCR- a gift in disguise?

Today morning action is a pleasantly nice surprise.  Instead of an expected avalanche, we have a nice “screw you bear we’re going up!” reaction.

My top pick: GMCR


It has a close pivot low from Friday for a stop that commensurate with the risk I’m willing to take.  In other words, the risk/reward is FANTASTIC!

Good Hunting!

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Month of May – a historical chart review (or how valid is “Sell in May and go away”?)

From the weekly Dow Jones chart; since 2005, there were 4 downtrends and only 3 uptrends for the month of May.  If you looked back at the 4 downtrends, you could see the down weekly bar starting in either the 1st week or 2nd week of May.  Notice that last Friday close actually started off with a down weekly bar.  On top of that, you can see current price action is hovering around the high of May 2nd, 2008 which I see is  a major resistance.

In summary, statistically speaking, the odd is in favor of a bearish stance; therefore, be mindful if you are long.

Note: click on the weekly or monthly chart and then click on 1870 x 973 number right above the chart, the chart will expand to a more comfortable viewing size.

Below is the Dow Jones weekly Chart:

Below is the Dow Jones monthly chart:

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Time of Day- 2:30pm EST (inflection point)

Statistically speaking, 02:30pm is a pivotal point (in time) for either the trend to “continue” or “reverse”.

If the trend continued- possible avalanche.

If reversed, a hammer candlestick bar will look really nice for next week!

Please be mindful…

Good Hunting!

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Best Buy ~ Best Sell?

If the weekly support failed (around 21.79), watch out…

Needless to say, I short BBY.

Good Hunting!


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