The prior two posts show a daily and intraday chart for Tupperware Brands (TUP) which I purchased on March 31st for an average price of $38.68 per share and again on April 1st for and average price of $39.77. I ended up selling it today near the open @ and average price of $40.93. Overall this was a nice, profitable trade, though the length of time I was able to stay with the stock before my trailing stops hit was less than I'd like to see. The markets right now though are anything but a sure bet, so I'm keeping everything on a very tight leash. I started my life in the markets as a daytrader. My first dream was to become a pit trader in Chicago's Ag markets, but as technology progressed it became fairly evident that the days of the pit were numbered. I did come across a site though one evening about some new fangled thing called "Daytrading Stocks" and being a "SOES Bandit". The idea was that you could buy at the bid and sell at the ask. EUREKA!!!! Thats exactly the edge I wanted to have in the pits, so I contributed my money to the market god of tuition over the course of several months. Eventually I learned that short term trading in the volatile markets of the late 90's could indeed be very profitable, but holding onto a stock for more than the simple bid/ask spread was the only way for me to become profitable. At first my approach was 100% technical, and to this day T/A and risk/money managment remain by far my better skills. As time progressed I became more and more involved in managing other peoples money, and less involved in education. My style evolved into one that included both Technical and Fundamental criteria's, and generally a timeframe that is measured in a timeframe of weeks and often months. As I said earlier though the markets right now are not exactly in prime condition, so I'm keeping everything very close to the vest. The setups that I got in TUP is by far, in my opinion, the best way to get into swing/position trades. I love nothing more than to have a daytrade entry that allows me to get in for less risk, but hold on for the potential gains of a swingtrade or position trade. You can see in the case of TUP that several months ago it had a very powerful move to the upside, then as the overall markets collapsed TUP held itself together fairly well. This is the very definition of relative strength, which is in my opinion the only technical tool that provides consistent superior returns. So, we now basically have the daily chart covered. Once I have isolated a daily chart that I like I go to work on the fundamentals, reading the annual reports, looking at the data provided by daily graphs and occassionally having Anthony call investor relations if I plan to hold onto a stock for a long period of time. I was very pleased with the technical condition of TUP, given that it performed so well during the markets snit fit. Aside from a very high debt load, the fundamentals are also pretty appealing. The stock has a relatively low Price to Earnings Ratio, its EPS rating is 87 according to IBD, which means that its done a better job at growing EPS than 87% of all the stocks in the market over the last several quarters. Last quarter the stock saw EPS increase by 26%, just over the 25%+ that I like to ideally see. One thing I also liked is that its Revenue growth is fairly consistent with its EPS growh, so I dont have to worry too much that the growth is manufactured and not organic. Now the intraday charts. As I said, the best situation you can find yourself in is to have a potential swingtrade or position trade that you are able to get a daytrading type entry on. The reason for this is simply that you have to risk much less when placing your stop loss on an intraday setup than you do using the daily. The downside of this is a slight increase in the number of stop outs you will have, but you simply need to be willing to get back in if the stock/market signals to you that this is the thing to do. You can see that the first breakout entry occured late in the day on the 31st, and the second one around mid day on April 1st. Both of these daytrade entries allowed me to enter the stock with very low initial risk, and also to be moving my stops up fairly aggressively as well. On my first entry my risk was about 20 cents, and on the second it was around 35 cents. For this very small risk I was able to close the trade out with an average gain of $1.89 per share, which works out to a very nice risk/reward tradeoff. Not every trade presents the opportunity to get into a longer term idea on a short term setup, but those that do should never be ignored as they can add substantially to your bottom line. If you have any questions please feel free to ask away.
Im not really sure what your getting at? But then again no one ever accused me of being the sharpest knife in the drawer either.
Despite a drubing of bad news the major US market indexes managed to put in relatively good performance. Led off by Alcoa several other stocks reported earnings under pressure currently and for the foreseeable future. Then the International Monetary Fund got in on the game, noting that Global Markets, particular American Financial Markets, remain under considerable strain. They stated that banks are likely sitting on nearly $1TRILLION in credit losses. But wait, wait, there's more fun to come. Later in the day the Fed minutes came out, and in that the wise men at the Fed mused about a severe and protracted downtrend in the US Economy over the coming year. All in all the news was pretty ugly. If I had not seen the markets action myself and some-one had just told me all of these things came out, I'd be expecting to see a several hundred point down move in the market. However, Mr. Market does not agree with my assessment at this time, and its better to be riding his coattails than standing in front of the avalanche. This is a key principle that is responsible for a HUGE portion of the success I have enjoyed over the last 10 years, and its very simple. That which should go up, better go up. That which should go down, had better go down. If everything is terribly bearish but the markets continue to move higher, its not a sign of âidiots who dont understand how bad things areâ, its a sign that the news that's come out has already been baked into the cake and the market does not mind what its seeing. So, our markets. The Nasdaq closed down 16.07 points to 2348.76. This was on light volume, my main worry here is that we saw only 15 new Nasdaq Highs Vs 64 new Nasdaq lows. This goes right along with the theme I've been discussing that its been pretty hard to find quality setups out there. Declining issues lead Advancing issues slightly, 1678 to 1226. The more broadly based S&P500 lost 7 points, closing at 1365.54. Thirty seven new highs were made on the NYSE, while only 19 new lows appeared. Declining issues still lead advancing issues by a ratio of 1816 to 1325, but again we had a pullback on pretty tepid volume, so this is not something I'm going to spend a lot of time worrying about. I generally like to have some trading idea's in here for you all, but as of late they have been few and far between even with a volatile market. Only a few stocks are really standing out to me at this time. In the agriculture arena the DBA looks like its putting in a decent top and could be shorted. I'm considering that along with a buy in the MOO to hedge myself a bit until a clear direction shows itself in the group. The financial group continues to look like the south end of a north bound donkey, and this is of major concern because I have never seen a meaningful rally without this key groups participation. One stock that is making a nice base and looks ready to be coming out of it is MA. We purchased Visa the other day and already have nice gains on that, and MA is looking pretty good at this point. Oil stocks have been fairly strong of late as well, but I think we will want to wait for a pullback in them as they are up in the thin air right now. In Big Cap land IBM has held up nicely and looks ready for a decent run if it can break this base its in right now.
The markets started off with a bit of a double whammy today with higher oil and commodity costs as well as poor news from UPS which carried over to other Transportation names. The Retail tracking indexes hit the top of their most recent ranges and backed off from there, bringing those stocks lower. Likewise Financial groups had a hard day as well. Certainly this is not the type of market action you want to see if you are long. In fact, even though the DOW was only down 50 points for the day, the underlying action was much worse than the numbers on the index would have you think. Up/Down Volume was heavily in favor of the downside. The only area's retaining strength seem to be commodity and commodity related markets. The Dow closed down 49.44 points for the day, settling at 12527, while the S&P500 was off by 11.05, closing at 1354.49. The Nasdaq closed down over 1%, losing 26.64 points, coming to rest at 2322.12. Smallcap stocks though took the worst of it, the S&P600 losing nearly 2% on day, losing 7.03 points and closing at 369.9. Volume was significantly higher on the Nasdaq than the prior day, up nearly 12% for the day. Over on the NYSE volume also rose, but not as much, climbing about 2% above Wednesday's levels. Yesterday marked a distribution day for the Nasdaq, the second such day since the rally was confirmed on March 20th. This is a pretty high number of them for the market to be having so soon after the FTD, not to mention that as stated its hard to find any real leadership outside the commodities and related areas. My own personal opinion would be that at best the market is seriously strained right now, and in a worst case scenario its backed to the chicken coup for chicken little as the bear market resumes. There are a few stocks out there worth having a look at, the majority of them are on the short side. We did very well with the breakout from April 2nd in Apache Corp (NYSE: APA), with my own average entry point being 120.35. I will be watching it closely on any pullback to see if an opportunity presents itself to get bigger in this clear leaders. Lindsay Corp. (NYSE: LNN) has also been a stellar performance generator for me since the April 1st entry of 103.86. I was able to get into this one on a nice daytrading setup which significantly reduced my overall risk, but I slightly mismanaged the trade, getting out with a profit, but before I probably should have done so. Now in the Brandon is a Financial genius we simply look back to yesterdays newsletter where I noted that I thought the Ag groups might be topping out and advocated a spread, DBA short and MOO long. It's just such a wonderful feeling when your longs go down and your shorts go up. Probably the market teaching me a lesson about trying to be too cute with things. Simplicity almost always works better. As I said at the onset of today's report yesterday's market action was much worse then that of a down 50 point's DOW Day. Plenty of stocks and sectors are looking like the south side of a north bound donkey, while very few outside of the commodities and agriculture have much to write home to mom about. On the short side we have plenty of stocks to look at. Wendy's (NYSE: WEN) has over the course of the last several months been the picture perfect example of both a basing stock and of a stock that has a lot of relative weakness. Why? Well, during the entire time that the market did rally WEN was never even able to attempt to breakout of the channel its in. It has remained a dog for the entire time the market was offering buying opportunity and should the market turn lower I'd expect a name like WEN to be a clear leader. Wendy's is very similar to the setup we have seen in DELL, which I shorted on April 4th. In the troubled financial's sector I think that stocks like BAC, ZION, CORS and LM should certainly be on your radar as names worth following and potentially trading as well. One final stock I will give you to look at is Casey's General Stores (NASDAQ: CASY). The setup in CASY is actually pretty similar to the one in WEN, this simply being a stock that, even when the market did give it an opportunity to get a bid during the rally it could still not get out of its own way and remains trading near the lows. A break lower will trigger a short setup in this stock
Nasdaq Composite: +29.27 to close out at 2351.70 S&P600 (Smallcap Index) +3.53, closing at 373.53 Nasdaq Market Volume of 2.13 Billion shares, an increase of 17% vs. Wednesday NYSE Market Volume of 1.228 Billion shares, up 8%. New Highs on the NYSE came in at 37 vs. 40 new lows, although over in Nasdaq'svill the figure was not so pretty with 12 new highs being made and only 93 new highs being made. Markets opened on Thursday with a good deal of bad news, certainly enough that even just one week ago the indexes would have been sent tumbling. Oil is back over $110 per barrel, and it looks likely to settle in the $80 to $120 range for quit some time to come. UPS came out with bad news, and predictably they placed the blame right at the foot of higher energy costs. This did lead to a good number of Transportation stocks, both Truckers and Rails having a less then stellar day. Novellus (Nasdaq: NVLS) came out and said things are getting worse with new end in sight: What did the broad based semi-conductor do? It rallied, a decent rally even..this coming from one of the markets weakest overall sectors as of late. The Dollar is crashing and CNBC has even started to bring people on the network to remind us all how bad the great depression was ( I remember the great depression too, I once told my mom I didnt have to eat the Sh** she cooked, and so I was grounded to my bedroom for 10 days with nothing in there but a book, a pencil and paper...Now THAT is the depression!) and that the next one is just around the corner. We can of course take relief in the fact that the Great Depression Guru's CNBC keeps bringing out are the same idiots who have stayed bearish since the 1907 Financial meltdown almost destroyed American's young financial system. So, in a nutshell here is what we see: The market is getting hammered, I mean pounded like my older brothers used to pound me, every single day with this company or groups bad news, or this jackass self important idiot in Washington thinking he's gonna fix the system. Overall the market has had very little but bad news through its way, but somehow it has managed to hold together very well: Not that it has gone up much, but most important is that it has not really gone down at all. A weak market, or even an average market, would have been beaten silly buy all this news, yet here we are. Now, I know a lot of people like to argue with the market: âYou idiots, can't you see that all the numbers are coming out bad? Cant you see that the Fed has lost control of their mandate and they are printing dollars like they are Reichmarc's. Can't you see? You people are fools!!!â. Now you may ask how I'm so familiar with that psychosis, and the truthful answer is that I've been afflicted by it myself In the past. Right now though I think that the market is speaking to us, and hat it might be saying is that its stronger than every one things it is. A few stocks you may want to watch on the long side LUV, RIMM, RIO, HAL (only on a pullback), CHK, EWZ, BA, PCU. The next group are all oils and steel stocks which need to pullback first in order to get a decent entry: APA (A note of disclosure I was in Toni Hansen's Free Mainstreet chatroom on April 2nd , gave the idea to the group and took it myself. I'm still long some APA from $120.35, in this case I will be looking to add exposure rather then to take on new exposure with this stock, in any even a pullback will present a nice opportunity IMO). Also on the list of stocks needing pullbacks NBL, MT, X. On the short side of the market there are fewer setups then I had thought we might have, but in particular WM, SIVA, PFE, GM and RF. Also, please note that on the right hand side of my blog near the top I've added several RSS feeds so that you can be alerted as soon as I post something new. As always if you have any comments or questions please let me know.
I just wanted to put up this chart example of DELL for you guys to look at and get something of an idea of what I'm doing and looking for. All of my scanning starts out with technical analysis, and from that I build further lists based upon additional fundamental and technical criteria. For whatever reason though I do find that I'm not as profitable on the short side, especially when its with individual stocks, so the majority of my shorts these days (68% to be exact) are in ETF's not a single stock. The shorts are almost always at least 90% technically based, which is a bias I would never give towards T/A on the buy side. In any even, attatched is a daily chart of Dell Computer (NasdaqELL) showing the daily chart for the past several months. The thing that to me stood out immediatly on DELL is that long period of sideways movement, a base for lack of a better word. It continued to make this base, trading sideways, even when the overal market would rally. We'd get a market rally and good ole DELL just sat on its butt and did nothing. This is a strong cue to a trader that he/she should put a stock on their christmas list and be looking for opportunity. I finally took my on April 4th @ $19.76 per share. Obviously this hasnt turned into a huge winner yet, but for a stock that I was able to get into risking about 30 cents, I'll take that every day and sunday. Any questions feel free to ask.
You'd think that when the CEO of a major corporation, especially one as importance as GE comes out and says "We are going to have great earnings, its going to be a blow" he wouldn't have worded it incorrectly and instead said "Our earnings are going to blow", but that's just what he did. Jack Welsh, Immulet is not. S&P500 was down 27.72 points (2.04%) and closed at 1332.83 The NASAQ triggered a trap, closing down 61.46 points (2.61%) and closed at 2290.24 S&P600 Small Cap Index also had a difficult day losing 9.44 points (2.53%) closing at 363.99 NASDAQ Volume was around 1.8billion shares, a decent dip from yesterday We saw 10 New Highs and 122 New Lows on the NASDQ NYSE Volume also dropped slightly to 1.17 Billion Shares The Big Board saw 24 New Highs and 50 new lows. As I stated at the start of today's commentary General Electric's terrible earnings surprise yesterday thew the market into fits. The CEO of a major corporation does not just come out and promise blowout numbers then screw the pooch when the actual numbers come out. This caused a lot of worry, especially when that particular company is seen as being a barometer to the overall economy. Rising oil prices. I'm going to give today a pass because of volume, but also due to the fact that leading stocks held up pretty well overall, and we had a situation where they could have very easily fallen apart, but we I'd. My involved in the market has remained very tepid. I just read the other day that the average mutual fund is down around 14% for the year and the average hedge fund over 10%. All year I have really been fretting the fact that maybe my clients would be unhappy with me for having such a large cash position (we've averaged about 80% thus far for 2008) and not producing huge gains, but all have expressed great pleasure with what I'm doing. One of the key things to trading, which I learned long ago, is simply not to go broke, nor allow yourself the opportunity to suffer a drawdown you can not recover from. This is the most important thing, everything else really is secondary. There will come times ago where you can grab 20% + quarterly returns, but for me right now is one of them, so I'm taking very few but carefully selected trades, most of which I have explained here on my blog.