Category Archives: Markets

Pre-Market 3/14/08

The futures were below fair value earlier this morning on worries about the economy and inflation on the day of the release of the new CPI number. The CPI remained to previous levels which eased concerns and the futures spiked up, putting us in good position for a positive open.
As of 08:30 am : S&P futures vs fair value: +5.0. Nasdaq futures vs fair value: +10.5. Have a good day!

Post-market 3/13/08

I am again still not going to post everyday but when I post, I will now split my homework in two: pre and post-market. Pre-market is the morning prior to trading with overnight news and futures. Post-market is after the trading day, mainly charts and reviews. Again, I fully understand this may not be useful to anybody else. This is basically my notebook first and foremost.

Roller coaster session today will a lot of activity and a lot of different opinions on the current situation. Everyone is trying to speculate on the markets mood: bearish or bullish. The fact that everyone opinions differ demonstrates are unclear signals are at this point. So be cautious out there.

Even short term trading gets tricky in these choppy markets. Market opens up down you end-up with a few good shorts and get squeezed out at lunch time. The reverse also applies.

Here is the trend table for today:

Intermediate Short-term
Dow Sideways Sideways
NASDAQ Sideways Sideways
S&P Sideways Sideways

Only DOW charts today:

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CMO Dip Trip (+0.47)

Traded my first Dip Trip and I am happy with the result. I read “The Master Swing Trader” by Alan Farley several times and still refer to it once in a while. I just never really used his pattern knowingly until now. I started visiting his site recently and he has interesting content. So a couple of days ago, he had listed CMO has a dip trip candidate so I started watching it. Here is the daily chart:


I placed a fib grid on the top of the late November to late January trend. Right after that top, we see the dip starting and it hits bottom around 38.2% as predicted. I started watching the rebound but I was careful. On the hourly chart, I traced a trendline tacking the dip. The line was traced between the top on 1/24 and the congestion levels mid-day on 1/28. Following the action, I saw the price rebound back to that line on 1/30 so I entered. Unfortunately, I miscalculated the impact of the FOMC 3/4 pt rate cut announcement on that Wednesday. At first, the markets rallied so I entered my position after the announcement around 2:45pm, not a time I enter a lot of positions. The rally was short lived and after reading more into Bernanke’s words, the market turned red across the board, taking CMO with it. All through Thursday, the markets were in the red and CMO was falling. I got very close to my stop level but I hung in there and right on the bell Friday morning, the uptrend from Wednesday resumed. Later that afternoon, I had .50pt gains on the trade, it was Friday, and not knowing what the weekend had in store and the market being as volatile as it is now, I cashed out when the price showed signs of congestion later in the day Friday. Looking at the chart now, it’s clear I may have gotten out too early but I sleep better with my money in the bank and Monday I can start looking at other charts.


Hope everyone is having a good Super Bowl weekend. Enjoy the game tomorrow and GO G-MEN!!!

Tim Sykes’ An American Hedge Fund

I had pre-ordered Tim Sykes‘ An American Hedge Fund a while back, I received it late September and finally got around to reading it all this weekend.

Tim is the trader who started Cilantro Fund Partners LP from capital he made on the market. He started trading the $12,415 from his Bar Mitzvah and turned it into $1.65 million between 1999 and 2002, managed his short bias hedge fund from 2003 to 2006 and starred in the TV documentary Wall Street Warriors on MOJO.

Tim’s book was very entertaining. It is loaded with anecdotes about his life, his trading and his decisions. With the trades and the decisions, he took pride in highlighting the good but took no shame is also highlighting the bad. It make the book a great insight into his life and his passion, the stock market.

I did not always agree with Tim’s underlying message on how SEC regulation on hedge fund publicity and advertising can prevent small guys from succeeding. Although it is nice to help smaller players, I think the SEC does have a key role in protecting the general public and the field of investors. But it took nothing away from the book. The last chapter alone, “Lessons Learned”, is a goldmine of facts Tim learned the hard way and is now sharing with the readers.

I would recommend the book to anyone interested in the market. Do not look for precise recipes for success shorting Pink Sheets and Bulletin Board stocks but keep an open mind and you will learn plenty from a fellow trader.

RSH in The Onion

Sometimes, The Onion is so close to reality it’s scary. Like in this nice piece about RadioShack (NYSE:RSH). Yet, as counter intuitive as it may sound, the stock appear to be holding up. I do see signs of the trend weakening and when it reverses, we may see RSH featured on Wallstrap, or Wallstrip‘s sister show for not so hot trends and all time lows…
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Keeping an eye on Polyone Corp (POL)

Not at entry level yet but I am adding POL (Polyone Corp) to my long watch list.

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Take a look at BGO

I have been keeping an eye on BGO recently. BGO is Bema Gold Corp, a Gold mining company. A quick look at the weekly chart reveals BGO had a nice uptrend for a good part of 2005 and half of 2006. Mid-2006, the price started consolidating and bounced between a support at 4.25 and resistance around 6. The price currently sits near the resistance and the weekly impulse signal has been green for several bars.

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ROIAK

ROIAK or Radio One Inc., the radio station owner and operator, just made it on my watch list. As usual, I am sticking to fairly cheap instruments. The weekly charts tells me ROIAK may have formed a bottom last August, making it an attractive long. The current weekly trend is up and the impulse signal is green meaning the MACD histogram slope is up and the EMA is also trending up. So we have both momentum and inertia favoring the bulls. The weekly chart also formed a small bullish divergence between the May 06 bottom and August 06 bottom where the MACD traced a higher bottom.

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NGAS

I will be watching the progress of NGAS in the coming week. The weekly chart gives a blue impulse signal which is not ideal but permits me to trade long if I so desire. The MACD histogram is up but the EMA still shows a down trend. I think the weekly primary trend is down but chart shows regular upswing so I could trade this between the channel lines.

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FAF long above 42.10

Reading charts tonight I fell on FAF which attracted my attention and would consider getting in around 42.10 with a stop around 40.39. The weekly chart shows a potential uptrend with the EMA trending up and the MACD histogram slope is also up (Elder‘s Impulse System). On the daily chart I see the same pattern: EMA trending up and MACD histogram sloping up also. The TSV recently crossed under which could indicate a good entry point.

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