reaching a higher ground

Another week, another huge pop early in the week and continuation through the rest of the week makes for another impressive week of gains.  Can anything stop this market?  The VIX sure doesn't think so as it plunges even lower to a solid 14 handle.

In other news, Gold and Silver are down, Oil drifts slightly lower but still remains elevated, even the $USD manages to hang on to its gains over the past few weeks.

The election news continues to occupy mainstream media's attention as the battle of attrition has whittled the list of legit contenders down to essentially two now.

With gas solidly over $4/gallon even at the 'cheap' stations, any economic benefit all this good data presumes has been washed away by the consumer gas "tax" that has been levied on every automobile-driving consumer. 

Let the party roll on!!!

Dow Jones

13,232.62

-20.14

(-0.15%)

S&P 500

1,404.17

+1.57

(0.11%)

Nasdaq

3,055.26

-1.11

(-0.04%)

Up up and away

The SPX is now trading and levels we have not seen since mid-2008 and we all know how well the latter half of 2008 turned out.  Not predicting or forecasting by any means, just know we have had an amazing run since the lows of October and December.

Yet things have not changed, the economic data released is massaged in a way to let us think the economy is recovering yet any real or imagined gain in prosperity due to this economic recovery is quickly swallowed whole by the great gasoline goblin who has come out to play in the $4 a gallon range.  The negative effect of gas prices on gdp is proven, the higher the gas prices, the higher the negative impact on GDP.  If one has to allocate more dollars to the tank, they will have less dollars to devote elsewhere (staples, discretionary, etc).

So the market pushes ever high, the VIX is burgeoning in the high teens which is where it traded during the good old days of 2007 and 2008 when every things was "fine". 

Keep your stops tight and enjoy the run and always have a few shorts in mind for if/when this market ever decides to correct (or at least revert back to the mean).

		Dow Jones 12,977.57 -2.73 (-0.02%)
		S&P 500 1,369.63 -4.46 (-0.32%)
		Nasdaq 2,976.19 -12.78 (-0.43%)

long weekend - EU gets the jitters

A long MLK weekend leads us into a short  trading week.  Over the long US weekend the S&P guys in Euro-land were busy taking a hard look at the state of the sovereign entities and their ability to pay back their debts.  Evidently, the "sure thing" of yesterday ain't such a sure thing anymore as people in the know have essentially come out and said that Greece will default shortly and that France is getting a downgrade for the large amount of toxic garbage on the nation's balance sheet.

Earnings season just got underway last week in the States and the season continues over the next several weeks.  People have noted the de-coupling of the US markets with Europe but we will see if a few bad earnings on this side of the pond or a few downgrades on that side of the pond gets everyone  re-coupled in the near term.

The slow melt-up since the October 2011 lows on extremely light volume is running out of steam and even in the past 5 years there are only a handful of instances that have such over-bought characteristics.

We are looking for a pull-back off the recent highs of this past week, maybe with a head-fake to the upside thrown in for good measure, but will be looking to play the long side of volatility or the short side of many high beta stocks that are levitating high above their 50 and 200 DMAs as of late.

			Dow Jones   12,422.06       -48.96     (-0.39%)  S&P 500        1,289.09         -6.41     (-0.49%) Nasdaq          2,710.67        -14.03     (-0.51%)

happy new year 2012 !!!!!

Another year, and with it comes another opportunity to put up great risk-adjusted returns and preserve capital while making money.

Goals, dreams, opportunities, hard work and just a little bit o' luck (?) - here's to a GREAT year!

With 15 minutes left in today's trading:

Dow	12,422.20	24.87	0.20%
S&P 500	1,276.69	-0.37	-0.03%
Nasdaq	2,649.65	0.93	0.04%

I am going to be looking at a large set of charts later today and will put up a trade idea that looks good with an attractive risk/reward profile.

Market summary for pre-market today

from the kids at bloomberg...here is the data from yesterday's close

	Dow 11,766.30 -100.13 -0.84% S&P 500 1,205.35 -14.31 -1.17% Nasdaq 2,523.14 -32.19 -1.26%

back to 1100?

So the S&P 500 is teetering precariously at 1200.  Trading right below its 20/50/200 day exponential moving averages and just below its 50 simple MA. Could it possibly re-rest the lows of 1100 on the S&P set back in early August and October?  Economic date in the US is mixed and optimism coming from the EU is fading.  The pundits say it will take a catalyst to drive this market up and above the 1265 mark on the SP500. I would think a catalyst of the same magnitude but to the negative would be the catalyst to the drive this market back down.  The what and when are the only questions left.  Just a fact to keep in mind, when the market leaders are all recently beginning to trade under their 200 DMA's, it is never a good sign.

taking advantage of.....

....Europe, earnings season, kick-the-can mentality, well, frankly the list just goes on and on. The financial sector both here and abroad is in tough shape. It is no secret that the banks still hold portfolios of garbage and biz is bleak in many of their profit centers. The on-going crisis in Euro-land involving sovereign debt, the financial sector and governments' inability to face their current problems is combining to create strong headwinds for the sector.

In short, banks stink. That may be an over-simplification but sector rotation does not lie. Money has been and is flowing out of bank stocks and into other more attractive sectors.

One of the most efficient ways to capture the movements in the banking and financial sector stocks and do it with some amplitude is Direxion's FAZ ETF. Known as The Financial Bear, it is a 3x fund that invests in the short side of the financial sector if you will. The moves are dramatic and volatile. The ETF has been trading in a range between $50 and $80 a share for the past 2+ months. Currently it is now back at the lower end of that range, trading in the low-to-mid $50's. We are initiating a position that will either move back to the top end of the range, preferably in the $70's or will stop us out if it moves lower and falls out of its current trading range. Any movement into the high $40's taking out yesterday's low would cause us to be stopped out on the position.

Not for the weak at heart, it is a small position that will either juice the portfolio returns or create a small and negligible loss to the portfolio.

another quarter...another chart. : SOHU

Took a break from the blog for summer and that lasted a few more weeks into fall so here we are back with the weekly and sometimes more frequent than that updates. This time around the post will profile the Chinese Internet stock SOHU....the CN internet stox got hammered a while back and this looks like the possible beginning of Stage 2, the next leg down, as most of them (SINA, SOHU, RENN, YOKU, BIDU) are all coming up and trading near downward sloping moving averages (exponential 20 or 50 DMA).

Playing on the fact that the sector is out of favor and they have recovered quite a bit in percentage terms in the last week to trade at or slightly below some rather significant moving averages, we'll initiate a short position in SOHU. The stock is trading in the $57-$58 range, the stop is today's high of $60.64 and the expected move is down near $50 where it was trading last week.

Look for more consistent updates in the coming weeks along with new charts and current trades/positions.

Q2 update

Wow, tax day? That was the last update? How the months fly. So here we are in late June, coming up on the close of Q2. (and QE2)...the markets have sold off in the last few months, the bears finally got their pay-off in many stocks in many sectors. The global recovery or lack thereof is setting everyone on uneasy street and the volatility although not great has been a bit better as of late.

Gold and Silver have pulled back along with oil and other commodities. Best of luck for the upcoming months of the dog days of summer.

Happy early 4th for those that are making this week and next week short trading weeks.

how about another chart? CTXS

So the markets are showing staying power but no one is going to be a true believer until the S&P can break the highs of a few weeks ago and more importantly the highs of mid-February. Consensus is fairly mixed whether we are in the middle of a double-top or just consolidating before breaking out to new highs above 1344. The 200 day SMA and EMA are both providing nice support and earnings season will probably be the catalyst that moves this market higher (or lower.)

In the meantime, we continue to search for the strongest stocks that are moving higher and the weakest stocks that are moving lower.

Most recently we profiled RIMM and our trade thesis. We continue to maintain that position with belief that it has more room to run to the downside.

Today, the focus is on Citrix Systems, CTXS. The stock is at essentially all-time highs. It is a strong company with a smart management team, best-in-breed products and fundamentally the company has been growing both top-line and bottom-line numbers. Technically, the stock has been forming an ascending triangle since August 2010. The stock has been bid up to the low 70s several times before meeting resistance and selling off first into the mid 50s, then again to the low 60s and most recently into the high 60s. Each time the stock sells off, buyers step in earlier to buy up shares. The psychology of the investor/trader/buyer is that they have a positive outlook for Citrix and are buying the pullbacks with the hopes that it will be moving higher in the near future.

The stock broke-out to all-time highs in early April and has pulled back to the low 70s and is consolidating. What was once resistance has now become support. This is Technical Analysis 101. We are very recently long the stock from the low 70s on the initial move and anticipate a move higher to the low to mid 80s in the near term. Our stop is the low 0f 8 days ago. The stop is best defined as any print with a 71 handle. If this level is reached we will sell out of the position since it will confirm our thesis was wrong since the stock would have broken support, changing the dynamics of the trade set-up.

CTXS reports numbers after the close on Wednesday, April 27th, giving only 7 trading sessions left before the earnings hit.






In other news, oil has been trading on either side of $110/barrel, gold flirts with all-time highs, the Japan Nuclear Meltdown is occupying less of the news and the VIX has drifted back to the recent lows in the 15s. It will be interested if the VIX can solidly move to the 14s or will another Armageddon scenario drive it back up?


DJIA 12,341
SP500 1,319
Nasdaq 2,764