The Novice Bear

There are a lot of people out there trying to pick the top of oil so I might as well jump into the fray. The two crude oil charts that are shown above are the TD Combo sell signals for the daily and weekly timescales. The daily and weekly have broken the stop loss levels, which shows that crude can still go higher, but I wouldn’t be surprised if this was just a false breakout (nice hedge, eh?).

I tend to prefer TD Sequential for finding buy points, but I think that TD Combo does a better job of picking tops. Go over to MarketTurbulence.com to see some of the recent TD Combo sell signals that nailed the tops of some equities.

The “I” in CANSLIM refers to “Institutional Support”.  The ideas is that a stock that is being accumulated by the big funds will move higher and find support on larger dips.  I find that out of all of the CANSLIM rules, I ignore this one the most.  It is not because I want too, it is mainly because the information is a pain in ass to find.  

Well it looks like I don’t have that excuse anyone as I recently stumbled upon a really cool website.  It is called MMAIS.com and it pulls together all of the buying and selling of large funds.  Go check it out.  It may not be the atheistically pleasing site, but it sure has a ton of good stuff.   

I love the pattern that has developed in Cintas (CTAS).  I see this short setup over and over again and when it looks like the market is going to turn down for a while I just run a scan for it.  What I look for is a stock that has already broken below its TD Sequential stop-loss point and is then climbing back up for a retest.  I enter the short on the retest and use the lowest low between the 1 and 13 count of the TD Sequential countdown as my buy-stop.   

I closed that JAVA trade today.  I didn’t want to deal with Cisco’s earnings tonight.  Overall, not a bad trade.

I received the backscanner for Blocks 3.1 last night.  I’ve been playing with it a little, but haven’t reached any conclusions.  I’ll let you all know what I think. 

Click for latest update pdf.

I don’t often promote picking up stocks that have been killed, but this one might be worth the risk (very low-risk). Notice how the TD Sequential stop-loss point is only 1.3% below the current price. Talk about making a trade with your back up against the wall. If JAVA closes below the stop, then sell. If it holds, look for a quick 10% on the upside. The likelihood of falling another 10% after such a long downtrend is very low.

UPDATE: I put my money where my mouth was. I picked up some JAVA just above the stop loss point.

For inspiration I sometimes head over to the Jan Arps webpage and look what he has to offer. One of his tools really caught my eye becaused it seemed to be so obvious. I show what I came up with in the chart below. What makes this worth something is that the swing levels do not have to be adjusted for each equity, it is calculated automatically based upon its volatility. Just for fun I added automatic Fibonacci retracement and expansion line using the last swing high and swing low.

For those of you who would like this kind of indicator, I’ll be showing you how when my website opens for business. Jan Arps charges $50. I won’t.

There was a discouraging late-day selloff today but I did manage to find a couple very interesting breakouts.  Check out the charts of ITU and OTEX.  I’m a buyer tomorrow.

I’m taking the plunge.  I’m probably early but I’ve signed a contract for a house in Chicago.  The market is not in total freefall like many other parts of the country, but it is still nerve wracking!  I’ll be living in the Lincoln Square neighborhood, which is awesome little community on the north side.  Here are some charts from Trulia.com.  Check out the collapse in sales! 

I have been slacking on posts lately because I’ve been hard at work at putting together a new website.  It is not ready yet but when it it, I’ll be providing detailed help with creating all kinds of complicated indicators in Blocks 3.0.  I will also be providing help with methods for systems trading and general CANSLIM methods.  

The ultimate goal is to help the little guy (like myself) to turn Blocks 3.0 into just as powerful a tool as any of the most expensive technical analysis packages.

Here is a sneak peak at the frontpage.  http://www.marketturbulence.com/