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/
I posted a warning to those in the Agriculture and Nat Gas stocks to be carefull the other day. As the I showed in the post, Jim Cramer was telling the public that “Ag and Nat Gas stocks can be bought up here“. Anybody see the ag and energy stocks yesterday?
The anti-Cramer play is money in the bank.
Here is a bullish chart. We are now in positive territory for the market monitor breadth indicator. We have come close several times before, but this is the first time we have seen green since June 2007. Don’t buy here, but I would buy any dips.
I keep coming across this webpage to read what people have to say about this wacky election. Every time I do, the picture of this kid freaks me out! Here is the link.
I am a big fan of the CANSLIM method. It have studied both it’s fundamental and technical aspects and can safely say that I am an expert. I also study the methods of Tom O’Brien, who I discovered through one of Tom’s interviews with Bill O’Neil. Both of these methods might seem to be fundamentally incompatable with each other since CANSLIM buys breakout while Tom O’Brien’s, “Timing the Trade”, only buys the retracement. Of course this isn’t true, they are just two philosophies about technical analysis. It is our duty to figure out what works for us.
As a scientist, I feel that it is very important to keep an open mind about new ideas. This also applies to my market analysis. While learning O’Brien’s method and looking through thousands of charts I began to see that buying the retracement might be the better strategy. For one, a person is not required to sit in front of a monitor watching for charts that break out of sound bases. Secondly, one isn’t buying at a low-risk entry and has a higher probability of being shaken out of the stock. I have found that it is much easier to just use the breakout as an alert (it is easy to scan for breakouts on high volume). Once you find one, just put it on a watchlist and see how the price pulls back. If it comes into the breakout day on lighter volume, this is a nice low-risk buy. O’Neil often talks about this secondary buy point, but usually makes reference to the 50 day moving average. Patience is the key!!! Check out how I used this method to buy Axsys Technologies (AXYS).
I initially missed the breakout, but noticed a low volume pullback and picked up some shares. The strategy paid off as I sold half of my position yesterday. Today was the earnings announcement and AXYS is trading up after hours. It might be worth letting the stock run up tomorrow and just waiting for the pullback. Looking at the chart, this pattern has been repeated over and over again.
The stop-loss on that SBUX TD Sequential was 16.26. If if closes below that tomorrow, get out. If it fights back, this might be a shakeout move.
SBUX is trading at 16 right now.
The above chart shows the TD Sequential countdown for PGN. As you can see, a buy and quick sell of PGN after it bounced off of its stop-loss point would have given a nice little gain. What I want to emphasize here is that it is perfectly reasonable to buy PGN again as it comes down into a retest of the stop-loss point (blue line). I would recommend call options since the premiums are typically smallest at the lows.
Yes we broke through a very important resistance level yesterday (see post) and I have to be bullish and positioned long (which I am), but a post from Cramer on RealMoney.com has me very concerned. Check this out.
Cramer has a real talent for buying at tops, so if you own the Ag or Nat gas stocks be very, very careful. Also, don’t be surprised to see oil at 70 in the near future.
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