Chart: JOYG

JOYG is on my primary watchlist. If you are all willing to take on a bit more risk, the stock can be bought now with a stop under the 50 day moving average. Those who are more patient and willing to miss out on the stock if it makes a move to the upside, a further pullback into the $55-56 range would provide an ideal entry.

I might take a small position now and buy more if it pulls back further. Diminishing volume will be the key for buying a deeper pullback.

Today's Trade: SRDX

I bought 500 shares of SRDX at 45.54 (I noted this in the comments of my last post, but didn't get to post it here).

As I stated last night, SRDX was setup as a short squeeze play:

SRDX, a drug stock, broke out over price and moving average resistance on huge volume today. While that's fine and dandy, what's really interesting is that it has a 30 percent short interest ratio. To put this number in perspective, breakout stocks make my short squeeze setup if the ratio is 10 percent or higher. Of the 125 stocks that were on my 3 percent +20 breakout scan, only two stocks came in above 20 percent short.

Do ya think the shorts that came home from a hard day of work and checked there portfolios this evening are panicking? I wouldn't be surprised to see more upside here. A stock that print a huge gap always worries me (since the gap point is so far way), so if I do enter I will use a tight stop just under today's price action, probably in the $42-43 range.

The stock opened at $44.57 and closed at 49.28. I would have loved to catch the open price, but as a part-time trader I can't always be at the screen, and I didn't want to put a buy stop in without being able to monitor the entry closely.

At the moment, I'm looking at a $2350 gain. I thought about exiting at $50 (the high was $50.98), but I decided against it. These types of short squeeze plays can net some explosive gains over multiple days. I'm going to chance that the shorts will continue to hit the "cover button" tomorrow. I probably will sell into any major spikes above $51.

Short Squeeze Play: SRDX

SRDX, a drug stock, broke out over price and moving average resistance on huge volume today. While that's fine and dandy, what's really interesting is that it has a 30 percent short interest ratio. To put this number in perspective, breakout stocks make my short squeeze setup if the ratio is 10 percent or higher. Of the 125 stocks that were on my 3 percent +20 breakout scan, only two stocks came in above 20 percent short.

Do ya think the shorts that came home from a hard day of work and checked there portfolios this evening are panicking? I wouldn't be surprised to see more upside here. A stock that print a huge gap always worries me (since the gap point is so far way), so if I do enter I will use a tight stop just under today's price action, probably in the $42-43 range.

Today's Trades: OII, HEI and MT

Today I took positions in three of the six stocks that I posted on my primary watchlist last night. All three are pullback plays in trending stocks. Due to the current nature of the market, I cut my normal position size in half for these trades.

I bought 250 shares of OII at $51.14.

I bought 250 shares of HEI at $42.18.

I bought 250 shares of MT at $61.35

Primary Watchlist for Wednesday

Here are six of my favorite long candidates: VRGY, HEI, JCG, CYNO, OII, MT. All are trending stocks with nice pullbacks. While these are short term trade opportunities, MT and OII (two of my favorites in their respective sectors-steel and gas equipment) will be buys for my longer term position trading account if they pullback to the 50 day moving averages (red line).

I define a short term trade as anywhere from a few days to a few weeks, while the time frame for position trades is a few weeks to a few months.

Market Technicals

The S&P 500 is at a critcal juncture, already having broken below the 50 day moving average and now ready to test recent lows. If we see a breakdown below 1487, we officially will be in a short to mid term downtrend. A violation of this level would also signal a double top short setup. Thomas Bulkowski has a good primer on the double top short setup.

It may be time to start beefing up the short watchlist.

Today's Trade: EWZ

I took a small nible in EWZ at the close yesterday, with a 300 share position $60.35. I've placed a mental stop just under $60, with an initial target at the recent all time high, around $63. I'll look to add more if it can break into new high territory.

If you look at the trend on the chart below, you'll see that the "Brazil trade" has been to aggresively buy dips and breakouts. Nothing too complicated here, just buy on any dip and set a low risk stop. While I have no empirical evidence, I have a gut feeling this will continue until we reach $100. As usual, I'll continue with what has worked until it stops working.

at $60.

Video: Sector Review

Video: Sector Analysis




http://one.revver.com/watch/312529/flv/affiliate/93676



Video Summary:

When the market has a bad week, I like to focus on sectors that held up well. This week there were 17 sectors that posted one percent or more gains. Of these sectors, the ones that interest me are: industrial equipment, internet information, ag chemicals, oil and gas drilling and wholesale. All of these sectors have been trending up over the past 6 months, and recently brokeout over resistance levels. I am looking for pullbacks in each of these sectors.

Sector Review

Monday morning I will post a video webcast featuring my analysis of the top performing sectors last week. Here is a quick summary.

When the market has a bad week, I like to focus on sectors that held up well. This week there were 17 sectors that posted one percent or more gains. Of these sectors, the ones that interest me are: industrial equipment, internet information, ag chemicals, oil and gas drilling and wholesale. All of these sectors have been trending up over the past 6 months, and recently brokeout over resistance levels. I am looking for pullbacks in each of these sectors.

Trade: RIO and Entry Point Precision

I bought 500 shares of RIO at $44.65. This is a simple "trend pullback" trade. The stock has been on a steady trend that has bounced off of every pullback to the 50 day moving average. I am a bit concerned about the heavy volume on this pullback, so I will use a tight stop at $43.50, which is just under the 50 day moving average. My target is $47, the old highs, which gives me a better than 3:1 reward to risk.

Lately I have been receiving e-mails and comments about precise entry points. While I try to be a bit more precise on breakouts, when it comes to pullbacks I don't worry so much. As long as I've got a good risk reward, I'll enter. For example, yesterday I decided I would enter RIO if it was within a point from the 50 day moving average. This morning when I checked the quote, it was at $44.60, so I decided to enter. Nothing too complicated. No 30 minute charts, candle patterns or fibs.

Sometimes I think we tend to over complicate things. I do have some day trading strategies that are much more precise. However, when swing trading with a goal of 2-10 points, waiting for a few nickels and dimes doesn't amount to much, and can keep you out of good trades.

Trade: NILE

I sold 200 shares of NILE at $60.50 for a $410 gain (+3.5%). I am still holding the remaining 200 shares from yesterday's trade, and have moved my stop to the entry point ($58.45). This locks in my current $410 gain, while "letting the rest ride".

Today's Trade: NILE

I bought 400 shares of NILE at $58.45. The stock made it to my "low float high short interest breakout" watchlist yesterday (also discussed in the video webcast). My stop will be in the around $56 range.

Short Float Breakout Watchlist w/ Video Webcast

In today's video, I go over the Short Float Breakout Watchlist. Elements that make up the setup include:

A. Short Interest High
B. Float Low
C. Breakout
D. Over Resistance

On the Watchlist for Monday: CHFC, NILE, BAMM, ULTI, ZOLT and LIFC



http://one.revver.com/watch/304473/flv/affiliate/93676

Watchlist Additions

The following stocks were added to my watchlist:

FLIR, ICE, SYNL, USNA, RATE, CLRK, ZOLT, PEC, SPWR, CYH, FTO, JEC, ISIL, CIB, SBS, CBD, MTL

Plans for the weekend:
1. Revise top 100 watchlist
2. Add more to short watchlist
3. Detail trades over the past two weeks
4. Produce "low float short squeeze breakout" video

Video: Watchlist for Thursday

In today's video webcast I analyze charts of selected stocks from my primary watchlist:

NFX, VRGY, JCG, SII, RIO, CYTC, MT, COG and OII



http://one.revver.com/watch/301152/flv/affiliate/93676

Watchlist

I like COG on a pullback to $40. I am already in with a 500 share position, as I had a buy stop that triggered at $40.05 (I mentioned this stock on the video webcast this morning).


Other stocks on my radar: NFX, HEI, IOC, CYNO, VRGY, JCG, BKE, SII, BYD, BEAV, RIO, NBL, CYTC, AKS, TOPP, TMX, MT, MTOX, OII, SSYS, FTK

Video: Breakout-Pullback Watchlist For Wednesday

In today's video, I go over how I scan for breakout-pullback candidates.

Video Summary:
Only 16 stocks made it on the scan, which looks for 3 percent breakouts that are over $20. This is a very low number and makes me cautious about the market in general. Stocks that made the watchlist:

COG, NMX, ITG, MGLN, MFRI, IOC, CMED



http://one.revver.com/watch/299923/flv/affiliate/93676

Weakening Market?

Only 6 out of 239 sector groups posted positive gains today. While the market did okay today, this breadth reading is not a postive for the market. To make matters worse, I only had 16 candidates to choose from on my breakout scan, which is the lowest I can remember in quite some time.

CTRP and Oil Stocks

There is a good chance I will take a position in CTRP tomorrow:


In yesterday's video webcast, I mentioned that I liked independent oil and gas, along with oil refiners. These five stocks made my "oil" watchlist: WNR, NFX, KWK, DNR and IOC.

Video: Sector Review

In today's video webcast, I review the top 10 performing sectors over the past month and show how I decide which sectors to further investigate. Sectors that interest me include: independent oil and gas, oil and gas refining, nonmetallic mining and gaming activities.



http://one.revver.com/watch/297440/flv/affiliate/93676

I would appreciate any feedback you may have, as this is my first attempt at producing a webcast. Please leave a comment or e-mail at SinghJD1@aol.com if you have any tips, suggestions, or just want to stoke my ego ;)

Breakout-pullback Stocks

The following stocks are new additions to the breakout-pullback watchlist for this week.

CAE: low float
BCSI: low float, smokin' uptrend
RRGB: low float, risky-still in breakdown gap
TNC: pb 35
SYNA: pb 32
EFD
VRGY
CMC
ISIL
FDO
NSM
BTM
GGB
BRP
CIG

I recorded my first webcast tonight and hope to have it posted Monday morning.

Webcast Test 2

I plan to incorporate streaming webcasts into the blog. Please bear with me as learn how to best use it. This is a test post. Any suggestions would be appreciated.

View Webcast

test

WebCast Test

I plan to incorporate streaming webcasts into the blog. Please bear with me as learn how to best use it. This is a test post.

View My Webcast

ILMN Revisited and a Video Question

Two nights ago, I mentioned ILMN as a "short float" breakout candidate. The stock had broke out over resistance and had a low float coupled with high short interest. These conditions lead me to believe we could be setting up for a parabolic move higher. Take a look at how it's stock has performed over the past two days.

The stock is consolidating it's breakout, but has not fallen with the market. Considering the carnage over the past two days, that's quite admirably. I wouldn't be surprised if it makes a big move in the coming week.

I have a "mental buy stop" placed just above the 200 day moving average.

Video Question:
I would like to start posting video of my daily chart and watchlist reviews, but I don't know where to begin. Is it as simple as pointing a webcam towards the computer screen, or is there some type of software I should use? Any help would be appreciated. Please leave a comment or email me at SinghJD1@aol.com with any suggestions. Thanks.

Short Watchlist: CAL

While I'm still not in full bear mode (I won't be until the S&P breaks below 1450), I am starting to formulate a short watchlist. CAL looks like a good short on a break below $35.

Today's Trade: STLD, and SPX

I went short 500 shares of STLD at $45.70. I had a short set just under the 50 day MA, which of course triggered today.

I was also stopped out of my 300 share long position in STLD at $45.90 (entry at $47.70) for a 540 loss (-3.7 %).

Note that the 50 day MA on the S&P 500 is 1487. This level is crucial for the market, and could lead to a correction down to the 1450-60 level, where there is tons of support. If we do get a drop down to this level, I will load up on SSO (long 2 x SPX) since I expect a bounce at this level.

Top 100 Watch List

Here are all 100 stocks on my watchlist, including today's performance. Note that only 17 of the 100 stocks made positive gains today.

Even with the two day market pullback, many stocks on the list are still overbought and have yet to pullback to support. That's why this correction has yet to concern me.

"Short Float" Breakout Setup: ILMN

ILMN made a 4 % gain today over established resistance. However, that's not what put it on my watchlist. Stocks in a downtrend do not usually make the cut. What makes this stock special is that it is a low float stock with a high short interest ratio.

The stock's float is a little over 5 million. To put this in perspective, AMZN and HTZ both have over 30 million floats. What this tells you is, if there is strong buying interest, it will be easy for ILMN to make a parabolic move.

The short interest ratio is 12.6 percent. That puts it's short interest in top 10 percent of today's top 40 breakout stocks. Not bad. If there is buying interest and price starts to move up, there is a good probability that we will see some short covering. This could make what would have been a small gain after the breakout into a parabolic move.

Ideally, I like to use this setup for stocks that are not in a downtrend. For example, take a look at IOC. This one was a perfect setup, but now is a little too far from it's breakout point. However, it works for stocks that are reversing from downtrends as well, you just must play it more cautiously.

To sum it up, here is what I like about ILMN:

A. Short Interest High
B. Float Low
C. Breakout
D. Over Resistance

Note that their are a few resistance points to cross, with the 200 day moving average at $35.81 and the gap down at 38-40. I will not enter unless the 200 day moving average is crossed, or we get a low volume pullback to the breakout point. In either case, I will use a tight stop upon entry. I tend to play it "tighter" when a stock is trying to break a downtrend.

Blogger Quotes: Tim Knight is Numb

There was a time, not long ago (like, ummm, early last week) that I would have felt cheated and flustered by the Chinese market's tumble not having a bearish effect in the U.S. But at this point, I am so utterly distrustful (and numbed) by this market that I'm not at all surprised.

The Shanghai index fell the equivalent of over 1,100 Dow points last night, and our market - of course - went up. I truly believe - and I am seriously not exaggerating - that a nuclear bomb on a major city would not cause a major disruption in this bull market. I swear to God, this market is insane, and even the death of a million people would not stop it. It has lost its mind.

--Tim Knight

This market is inanely bullish, ain't it. There is not reason for it, but yet it keeps going up. This is precisely why I will continue to play the long side . . .until being long no longer works. In this market, a dip like today will likely be snapped up tomorrow.

Today's Trades: BEAV and ZEUS

I sold 500 shares of ZEUS at $34.25 (entry at $32.90) for a $675 gain (+4.1%).

I sold 500 shares of BEAV at $38.55 (entry at $37.25) for a $650 gain (+3.5%).

I am still holding TMX, BBD, SYNL, STLD and IBN.

Quote of the Day - Fly on Wall Street

Aside from my holdings, the natural gas sector intrigues "The Fly."

Look you, according to "stately experts," half the country will be destroyed, during this year's Hurricane bonanza, barring disruption from Sahara dust or El Nino. So, it probably makes sense to position in some risky dice rolls, ahead of the mayhem and calamity. After all, I invest to bank coin, not to fuck around and watch other people make Ferrari money.

With that being said, the following stocks are worth looking over, providing Mother Nature decides to go postal on our natural gas/oil pipelines-- located in the Gulf of Mexico.NGAS, NGS, ARD, GMXR, GMRK, ECA, TXCO, BEXP, FUEL, GSX, OMNI, NOV, HP, MIND, BMD, DK, RES, RRC, SWN, LUFK and EQT.

Fly on Wall Street

--------------------------------
Fly at his best. I agree with his analysis, and am looking to add one or two natural gas/oil pipeline stocks in my longer term position trading account, where I can hold a stock anwhere from a few weeks to a few months.

Today's Trade: TMX

I bought 400 shares of TMX at $40.88. It has been on my watchlist since May 20th. Mexican stocks have been on a tear, and I'm using the consolidation after the latest breakout as a jumping point. Any thoughts on this trade? Was the last breakout a continuation or exhaustion breakout? Only time will tell. I will likely place my stop at $39.50, which is just below the breakout point.

Watchlist and Lebron James

Here is a list of stocks added to my watchlist. All of these stocks are 3 percent breakouts from Thursday or Friday. I am looking for pullbacks to support.

MW: pb 48
GGL: pb 21
SNCR: pb 24
AMTD: pb 19
CIEN: pb 32.50
JCG: pb 42-43
BIDU: pb 130
TS: pb
CEN: pb 34.50-35
VT: pb 39-40
FTK: pb 47.50
NTGR: pb 36
YZC: pb 60
DXPE: pb 45-46
GES: pb 43
TNL: pb 27.50
BYD: pb 50-51
EWZ: pb 58
NFX: pb 50
KSU: pb 40
CASY: pb 2
ESL: pb 46
IPAR: 26-27
KR: pb 30
MT: pb 60
HDNG: pb 30-31
ITU: pb 44
CYNO: pb 30-32
MTOX: pb 25
GGB: pb 22
BBD: pb 24-25
CBD: pb 34
CIG: pb 38.50

Off Topic:
If you are a basketball fan and are kicking yourself for not watchlist Game 5 of the Eastern Conference finals, give thanks to youtube. Lebron's performance, at only 22 years old, placed him in the Jordan, Magic, Bird category of greatness.

The Right Side of the Market

"There is only one side to the stock market;....not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock market speculation."

--Jesse Livermore

I pulled out this out in response to the e-mails I've received over the past month asking why I don't have any shorts in my watchlist and have been trading almost exclusively from the long side. Some have gone on to detail why the market "should not" be hitting highs, pointing to all sorts of economic stats and principles.

Guess what fellas . . . I agree that the economy stinks right now. I do believe that Mr. Bush and his cronies have caused irreparable damage to democracy, the constitution, the economy, individual rights, the poor, the middle class and foreign relations that will have long lasting consequences. I do think the market is overextended and due for a future correction, or even something more menacing. To put it mildly, I think the U.S. is a mess.

However, I am not going to let any of that stop me from participating in this bull run. I am going to ignore all of the economics stats and follow the trend, adhere to my setups and support and resistance levels, and place prudent stops. Short term traders don't make money by making macro-economic predictions. We make it by adhering to what the charts tell us.

At some point, the run will end and I will take some losses when it does. However, those losses should be small, as long as I adhere to my stops, and will be more than offset gains I am making now.

I don't care to be a bull or a bear. I just wanna be right.

Trades: BEAV and BBD

I made two trades yesterday from Tuesday's watchlist:

I bought 500 shares of BEAV at $37.25. I had been watching this stock ever since the late April breakout, and liked the way it acted on pullback to the 50 day moving average, which also happened to "fill the gap".

I bought 500 shares of BBD at $25.05. I liked the increased volume while the stock has consolidated at the recent highs, which leads me to believe that the stock is under accumulation (as is just about all of Brazil). This leads me to believe we'll see a breaiout over $26.