A Trade A Day

Hola Amigos!

Sorry for the delay in posting. Nothing earth shattering going on. Just so many hours in the day. The summer can be a slow time and I find it helpful to take a break. However, I got dragged back this AM. I wanted to share some interesting charts to impress upon you how becoming an expert in one area is the way to go.

If you’ve read this blog for any amount of time, you know I love to trade traps. A trap, simply defined, is when the stock is trending in one direction, and then the next morning the stock opens in the opposite direction of the trend. Traps can be subtle with an open above the previous day’s close or severe with the stock gapping 5 or more percent. This severe kind of action is called an OOPS. As in “OOPS! There goes my retirement”

Seriously though, imagine yourself shorting a large position, the stock price crumbles over the next couple of days, and then one morning you find the stock has gapped above (or close to) where you initiated your short. The stock typically, begins to trend upward during the session as more and more traders exit.

A picture is worth a thousand words. So let’s take a look:

You can see that the setups aren’t always perfect. Not sure if I can remember if they ever have been. They don’t have to be. I like to take setups on the 15 minute time frame because it’s slower and offers time to do analysis. The 5 minute time frame is my second choice, but can be too quick and I get stopped out alot more. Hope this helps to get your mind thinking about what you can specialize in.

BTW, I had to lock comments because of all the spam. I’m going to be upgrading soon. Hopefully that will slow the spam that gets into my comments and I can reopen them.

Happy trading!

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Just looking at the Dow I saw some potential trades. Let’s look at the index first:

The Dow taking a rest before moving higher? Or at least hope we aren’t range bound.

I like AIG over 47.70. It just needs to get over the 50 sma.

I may buy some C here. It’s over its 50 sma and showing strength.

Bull flag here. It’s gotta break in a day or two because it looks like it almost wants to go sideways.

Ok, it’s not in the DOW, but it should be. GOOG is the internet company. When I think of internet success story, I think GOOG.

VZ also had a nice chart worth a look.

See you tomorrow!

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Day Trading is still my modus operandi, temporarily anyway. Looking at the daily charts I might be seeing some light at the end of the tunnel.

Higher lows are back again. The next step would be to find out what stocks are pushing us higher.

I would be drilling down into the index components to find what specific stocks are forming patterns that will move higher. Like I mentioned in the chart, the slope of that flag is a little steep, but it’s a move over 2346 that interests me.

I’m sure you’ve heard the radio advertisements. “It’s a great time to add gold to your portfolio”. Well, I would put that buy on hold for the time being.

Your typical bull flag for this fast mover.

Another old reliable. Very interesting over 240.

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Here’s a quick look at three shipping stocks that I think are worth your time. If the market continues its advance out of the triangle, these three stocks are poised to move.

The weekly patterns for all three stock are positive. Each has bounced off the 50 SMA and is consolidating. I would like to see each closer to a 52 week high, but alot of damage was done over the past few months.

Good Luck!

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U.S. markets are closed today. For some reason I forgot. I did all my scanning and was all set for today. I checked the news and then it hits me. It’s a good lesson though in that you should be thoroughly prepared for each day. Any market holidays are just extra time for research.

After several weeks of lower prices, I’m finally starting to see the consolidation I’ve wanted. Unfortunately for me, the symmetrical triangle that is forming doesn’t tell me which way the market is going to break. My gut says we’ll see a resumption of the down trend. But in my scanning, I’ve seen several very nice cup and handles, ascending triangles and double bottoms forming in index components. My strategy in all times is to trade what I see. Tuesday will be no different.

Let’s look at the Dow and the Nasdaq.

We’re looking at symmetrical triangles in both markets. I’ll be looking to play either side. Here are two interesting formations for this coming week:

MCHP is one of my top potential longs for this week. This double bottom has been 4 months in the making.

JNPR is also forming an interesting double bottom pattern.

Look, the line of least resistance is down. I don’t like trying to pick bottoms and trading counter trend can be like spitting in the wind. That being said, I see a lot of long candidates right now.

I am enjoying this consolidation and looking forward to putting on more shorts should the market break lower. I also want to stay flexible enough to make money on the long side should the market’s trend reverse.

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