weekend watchlist

SPY - descending triangle


ICE - lower highs / lower lows


SRS - bounce?


OIH - channel


XLE - watch these support levels

Running Out of Room

IWM, as well as SPY and QQQQ continue to remain perfectly inside of its descending triangle...but not for long. It's running out of room and will resolve itself next week (expiration week). I've been looking at some reasonably prices debit/butterfly spreads and will post, if any present an attractive risk/reward ratio.

Some I'm looking at involve ICE, AAPL, GS, OIH, PFE, BMY, AKS, the list goes on and on and all candidates have a common characteristic: overhead resistance is substantial. Bounces and oversold rallies aside, I will continue to favor the downside until given a reason not to.

IWM

Stops too tight?

Between the last post (11/26) and this one, note the dangers of placing stops that are too tight. As tempting as this can be to limit risk with tight stops, below are several examples (CVX, PPG, GS) of how this can be a costly mistake, despite trying to be conservative. Of course loose stops can be costly as well. Find balance.

CVX




XLU




PPG




ICE




GS

Super Wednesday

Here's a few for the watchlist... for the remainder of this short, delicious week.

A lot of sentiment in the news and blogosphere has turned bullish recently (as does it every time we capitulate). It is true that a lot of stocks have some room to run but invariably once previous levels of support morph into resistance like a wet gremlin, it will be time for you to get short.

CVX




XLU




PPG




ICE




GS

Boobies

A couple of my booby traps were triggered today. This however sucks since both triggers are to the downside which I don't like after so much weakness in the market. For consideration:

ICE




















FSLR




coming up AAPL

Weekend Watchlist

Click on symbol to view chart.

X - broke long-term support; short entry would be on a retracement back to the underside of old support

POT - same as above.

OIH - same as above.

GNK - same as above.

BIDU - downtrend

XLY - downtrend; reaching resistance

CME - short if closes below horizontal support line

ICE - short if closes below horizontal support line


MA - establishing a downtrend

SHLD - Sep 85 Puts

Most of the following charts are shaping up bearish - just keep in mind that there haven't been a lot of follow-through days lately, so getting wildly short after a 2% down day probably isn't a good idea. Most of these have a time frame of at least 1 to 5 weeks.

SHLD

QQQQ

ICE

AAPL

FSLR

Out of these, I like SHLD the best - resistance at 93 held up nicely and it continues to channel downward. There's a bit of activity in the SEP 85 Puts that I can't disagree with...of course volatility could always be a little lower.

OptionSpot

FSLR

I like FSLR on the long side here. Short-term. Use stops.

Shorts: FXP, ICE, NMX, MA, CSCO, PCX
Longs: GLD, FSLR, DBA, OXY, BP

Recap

Review of recent recommendations/predictions: (click on symbol for chart)
Green = profitable
Red = lost a small pittance thanks to using my trendline as your tight stop.

FLS - 07/10 - today set up a perfect entry - touched underside of trendline - still too early
USO - 07/08 - recommended calls at 110; currently at 117.
BIDU - 07/08 - recommended puts at 334; currently at 305.
GS - 06/26 - recommended puts 179-183; currently at 162.
CME - 06/26 - recommended puts at 406; currently 306. Probably the best call ever made by anyone at anytime....ever.
ICE - 06/26 - recommended puts at 122; currently at 88.
GLD - 06/26 - recommended calls at 91; currently 95.
MA - 06/26 - recommended puts at 275; currently at 257.
POT - 06/27 - recommended calls at 219; stopped out at 215.
AAPL - 06/26 - called for AAPL to go to 160; reversed at 164; currently 173. Still might be in a downward channel but either way my timing was stupid to make the call.
GOOG - 06/26 - recommended puts at 529; stopped out at 554. Still like puts. Still like 5hundo.
GNK - 06/26 - recommended puts at 64; stopped out at 65. Still like puts. Still like 50.

Not a bad couple of weeks - especially when you consider the magnitude of some of these winners.

Use caution ahead of earnings.
Bearish: VIX has not yet spiked and no capitulation low
Bullish: oversold going into earnings - if worst case scenario (should already be cooked in to share price given the recent decline) isn't realized, might see a rally.

OptionSpot

USO | BIDU | X

Once again, USO has retreated back to its trendline. If you're bullish on oil use this trendline as your tight stop, perhaps on a close, and if you're bearish on oil wait for a possible breach of the same trendline. Bottom line: USO is giving you a low-risk setup.

BIDU continues to make lower lows.



US Steel (X) - long-term chart worth noting.



Others: MA, ICE, GS

OptionSpot

Taking it

A lot of stocks rolled over and broke support today...and from sectors you might not expect (ag, steel, coal, energy, etc). Hopefully none of these moves ruined your weekend plans and you'll be able to find a way to profit from them. I will likely sit tomorrow out in protest of this obnoxiously choppy market but I am seeing a lot of nice setups for next week.


Steel and Coal stocks all took in on the chin while breaking through significant levels of support
--> X, AKS, ACI, BTU


Possible longs (as always use tight stops)
--> RIG (yes, this is the whole list)


Possible shorts (same)
--> ICE, GNK, AA, POT, MON, MOS, UNP (...finally UNP)


Watchlist (these may yet require a bounce or a pullback before taking action)
--> MA, VIX, CME, NMX


Have a great July 4th weekend! With this year's undisclosed destination, I will see if I can snap another award winning photograph - just like the one I took last year: Click HERE to see it.

If I ever get tired of raping and pillaging the options market maybe I can just fall back on my photography skillz.

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OptionSpot

POT | CELG | ICE

CELG made a Super Breakout this week - it would be nice if all breakouts worked as well.

POT treated me like a common street whore today by hitting an intraday low of 212. I'm on the fence as to whether it is giving signs of breaking down or if it made a 'hammer'.
Hammer - a bullish reversal candle pattern with a long lower shadow and a close near its open - signifying a rejection of lower prices.

When I look at the weekly chart, it looks like a break-down that has a chance of retreating to its major trendline (blue).

But when I look at the daily chart, all I see is an unconfirmed breakout below support with a close above support.

____________________________________________________________________

Most things recovered today but should this 'bounce' run out of steam here's a suggestion:
ICE 113

Bearish On Goldman

GS. 170 seems like the next obvious target but I like it all the way down to 160. I don't like entering any trade that isn't elbows-to-assholes against its trendline, as tempting as it is, so I will try to show some patience here. Hopefully we see some sort of one day bounce or short-covering rally back to GS 180. This is just one example of a good looking chart but a lot of things broke down or continued to break down today. Ideally, many of these will come back up to the underside of their pre-existing support (now resistance) line, to provide a lot of low-risk setups.
Here are a few facts (in progress):
AAPL 160
GOOG 500
MA 260
GNK 50
CME 385
ICE 115
GLD brokeout
FLR brokedown
SOHU brokedown
POT pulled back to support

Trading for a Living
When the slope of MACD-Histogram moves in the same direction as prices, the trend is safe. When the slope of MACD-Histogram moves in a direction opposite to that of prices, the health of the trend is questioned. It is best to trade in the direction of the slope of MACD-Histogram because it shows whether bulls or bears dominate the market.

The slope of MACD-Histogram is more important than its position above or below the centerline. The best sell signals are given when MACD-Histogram is above its centerline but its slope turns down, showing that bulls have become exhausted. The best buy signals occur when MACD-Histogram is below its centerline but its slope turns up, showing that bears have become exhausted.

late afternoon sell-off

With the way the markets sold off this afternoon and with some less than impressive earnings after the bell, I would certainly expect tomorrow to be a down day. This 'oversold bounce' for that matter, may be shorter than expected. If not, I still don't expect it to last too long. All of the major indices continue to point downward.



























ACI















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RIMM














SOHU















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UNG














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