Damaged Goods

Home later than I wanted to be. Had to pick up car from the service station. 30k mile service for the car, costs a few bucks!

Damaged Goods
In almost a drive by shooting, the markets have gone from flying higher all of October to suffering bad damage over the past two weeks. The easiest way to see this is to go to the charts.

Daily for SPY:

It's clear the SPY has fallen out of the green ascending channel.

You may recall back at the start of October I traded in and out of both CVLT and NI. I cloned those positions in my long term account and here is how they are looking now (both closed out).

NI:

CVLT:

I don't mention longer term trades usually because I like to keep that close to the vest as not to have my thinking be affected by outside discussion. I am showing these two stocks because they were two of my strongest ideas for the October run that I was thinking would happen. You can see where the stocks violated the uptrend lines and they were dropped then. NI was dropped on 10/31 and CVLT, one of the better performers I have seen, was closed out on 11/18.

Things are very oversold now and a bounce higher is probably going to happen. I look over the big picture and I don't like what I am seeing.

Between the MF Global fraud, accounting issues at GMCR, and today's Chinese burrito news on FMCN there seems to be too much bullshit out there to be comfortable. I have been a proponent of the idea for run higher to year's end. I am backing off on that now. If the Euro weenies get their act together and Bernanke unveils some kind of new pony, maybe I would change my mind. At this point after the damage lately I think performance chasers may just start licking wounds and manage funds, not run blindly after a rally that has fizzled out.

The big problem is that charts are so damaged it will take time for them to set up. It's November 21st now which does not leave a ton of time. Any fast improvement will be suspect I believe. The way well supported moves up are being abandoned feels more dangerous to me than a vanilla correction. Just my 2 cents. Things probably go vertical from here on out the way this autumn has been.

Have a good night.

Swinging Thursday

I was having a pretty good day until one of my dental crowns pulled off, now I am a bit annoyed. No matter, it's Thursday night. Have a mini vacation coming up starting Sunday in NYC. If you ever wanted to meet me, and you a fellow blogger/writer in NYC, well here's your chance.

Get your requests in for Friday night. Make it count!

Swinging Thursday
Markets are rolling this week and at this point meeting strong resistance overhead. We could discuss chart levels, sentiment, and other stuff but you have probably seen that all day. What I like about this week, and this is news, some stocks started to act somewhat normal, making trading them something I could do without being in fear a 20% drop in 1 minute was going to happen any second.

When swing trading (2 days to a week or two) I use Japanese candles coupled with the awesome iBankCoin tool, The PPT. This allows me to screen for the kinds of looks I want, and quickly. My way of picking stocks can work in almost any market, as long as there is some kind of trend. Up, down, or sideways is ok. Where candles become just things to try and set a room mood to get lucky in is heavy wash out down markets, rip roaring up markets, or 100 point S&P 500 range-bound sideways markets. They just don't work well and I know that. They have not been working for a while. I stopped trading while the drama happened.

They worked well this week.

Now you might think that of course in a melt up market they all worked but it has not been that way for all the rallies so far. This week was different.

I bought the stock NI on Tuesday and the stock CVLT on Wednesday. I sold NI for a +3.5% gain and CVLT for a +5.5% gain today. Here are charts for them with crappy arrows for entry and exit. I am short on time so it's the best I can do:
NI

CVLT

What was good about these two stocks is that they were the only two positions I had and I knew solid exit points, even if the market tanked, would hold. This allowed me to put more money into both than I would normally. They were large positions. NYC here I come with a bit of cash for the trip!

Right now I am thinking that it's best I am going on a mini vacation. Earnings get going next week and I cannot shake the feeling like things are still not fully priced in to the downside. That said, when my charts start working and news flow is neutral one can see how this market wants to run. It's just a tough show.

"Discretion is the better part of valor."

I don't need to catch THE bottom or even be close. When markets get settled I know I can work them, it's just still not time. Soon I hope, and I have a whole room of Pelicans to work with.

Have a good night.

Quick Notes

Raining here again and of course that means the drive home was extra long. Always fun. Just a few quick notes.

Market Operations
I did some work last night and found a few trading ideas I figured were worth a look. If the market is setting up for a run higher, then I wanted to get some experience trading it. It's no secret trading has been very hard for the past couple of months and I have been on the sidelines for a long time.

Using some screens I built inside the iBankCoin PPT, I came up with a complete list of ideas. I trimmed it down to three names to try here VHC, VGR, and my top pick CVLT. My plan was to buy today and hold until tomorrow and sell if I could get a bump up in price. VHC and VGR did ok today but CVLT was a great runner moving up 6% today and I got most of that move. Here is a fast chart showing some notes on it from last night:

The plan is too see if stocks run again tomorrow ahead of the President's night speech and sell before the close. We shall see if I can make a few bucks.

Reading Now
What am I going to read tonight? This of course:

Check out Daniel Wilson's Robopocalypse at Amazon. So my kind of book.

Have a good night.