Looking at ALGN and VAL
I've stated that both of these are high potential Bullish stocks. But lets look at how to work a short trade.
ALGN
This has the most bearish look. It has a Nice dome top look to it, But again, if you imagine relative performance to the spx, it's very strong. It does have a nice red candle, on Friday there is a daily macd divergence to the bearish side. It follows the pattern of a nice Momentum high, followed by a secondary high. It also does not look like a very good "Basing" move, There is a case that it's in Aversion stage. before a push higher. The safe short is to short it when it "Crosses" not plays with the blue line, that should lead to a very aggressive correction. The red trend line is based on nothing but a 45 Degree angle, or a 50% retracement of the impulse move. Aggressively a short could be, placed on a 50% retracement of this move.
Still I don't like the look of the chart, and this is the third time it has teased with this resistance level.... Remember my rule of threes.... The third time resistance is tested, the more likely to go through it is.
This has the most bearish look. It has a Nice dome top look to it, But again, if you imagine relative performance to the spx, it's very strong. It does have a nice red candle, on Friday there is a daily macd divergence to the bearish side. It follows the pattern of a nice Momentum high, followed by a secondary high. It also does not look like a very good "Basing" move, There is a case that it's in Aversion stage. before a push higher. The safe short is to short it when it "Crosses" not plays with the blue line, that should lead to a very aggressive correction. The red trend line is based on nothing but a 45 Degree angle, or a 50% retracement of the impulse move. Aggressively a short could be, placed on a 50% retracement of this move.Still I don't like the look of the chart, and this is the third time it has teased with this resistance level.... Remember my rule of threes.... The third time resistance is tested, the more likely to go through it is.
VAL
This is a decent looking basing move, which could still have some sideways action in it. The recent high is a momentum high, and one would suggest that a secondary high is still in order. Firday has a nice green candle. the Blue line is the "Safe short". Again The red line is based on nothing but a 50% retracement of the last move, or a 45 Degree angle, an aggressive short initiated when it crosses ... Not Toys with this line. The yellow line is... well Thursdays and Fridays low tied together, That is an aggressive trade, and probably more a "Scalp" trade than anything. in this chart you actually have a nice bullish MACD
22 comments:
Hi Eric,
thanks for the charts.
I guess what's left to do is watch and see what happens.
I worked out the pivot points for both, maybe they'll help to make a decision.
Whether you want it or not, I think the markets *will* be psycho. Take a look at hong kong, was up nearly 3% now down almost 2%. wow wow
Sweety, I always want "reality".
History suggests more probable than not that we will find buyers in the morning. (but I cleared most my plate on friday)
I think we will either "build a Strong base from now till next options. or make a Slightly lower low.
Or Fucking Crash..
But the Volitility suggests "The Turn"... maybe short term.
I expect some puking.
I want to chart a "Standard correction" for you.
Sweety?? LOL Why? Do I come across as a naive teenager?
I'm going into tomorrow with no expectations whatsoever.
Thanks for the charts!
Interesting you took it that way,
After 3 weeks of hell, I'm just trying to get some "Positive Mojo" going. Everybody has been Pardner, Buddy, Tough guy, Darln', dear, pal.
this has happened All weekend, some of it just leaked your way.
When we think Positively, and retroactively, Become engaged, and spread the kind of positive energy we want to see. It helps to create it.
not that I am/ or want to be Nieve. But... I don't have to live in a suffering purgatory of negativity.
Things are ok!
Things Will Be OK!.
As long as I keep my whits about me and don't surrender to anger and fear.
I must face fear, allow it to flow over me and through me, and when the fear has past I will turn the inner-Eye, and there will be nothing, only 'I' will remain.
I don't mind, but it's the first time you addressed me at all, in *any* way. So it's a bit of a jolt :))
Lightened up my mood for sure, anyway, I feel bimbo-esque this weekend so it fits.
Kat,
I'm sorry, My real problem was you introducing yourself as 'Tradewell' I find it awkward with "Alternate names".
and I have addressed you, both as kat, and tradewell, I swear. Though I'm never surprised by cognitive dissonance.
I use my real name and try and use the whole thing without reservation. Since if I say something I want to be "Accountable".
I'm not casting dispersions, since anonymity is one of the pleasures of the Internet....
I'm just saying it was awkward, and with my lack of social graces, That doesn't help.
sorry.
eric
You didn't allow anonymous or "name/URL" posting when I started commenting here, so I used my Google ID.
Now I keep using Google ID because it emails me responses, if I just enter name/URL I won't get a notification if you posted a reply.
Nothing to be sorry about, really.
I remember you mentioning 'kat/tradewell' recently in a post on your blog, to be fair.
I don't use my real name because if the clients search for me, I don't want them to see me commenting on blogs, they don't need to know that much.
What else? Well, you can call me "phanta".
And I'm abolishing "Kat" starting now.
So much bottom calling....
I have creepy mojo going on.
Everyone is calling for the V reversal.
Can I make a request?, I'd prefer to refer to you with a given name.
Helen.
Right now my eyes are on the BRIC, because of EEV. Wondering if I should buy EEM in the morning to hedge.
Wow, Helen.
Maybe if I know your secret identity "Batman"...
Maybe I can call you Phanta..
but you sound like a soda.
The trade nagging on me like a puppy is RIO... another option would be pbr
RIO down, PBR up.
Both of these are top-10 EEV components, so we're on the opposite sides of this trade, he.
you were talking about a hedge, the Commodities trade is all the rage today. I'll chase it some other day It Gaped up 20% needs to come back before I want to play..
and I'm cranky today...
I covered ALGN and sold all AUY. Think gold needs to correct just a tiny bit.
Assuming gold has become as irrational as oil. I'd say more than 'a bit', they roll into a new oil contract tomorrow, so it could just be a "blip" in the data.
Good to see things get compleatly irrational, Which means that everyone is on one side of the boat.
I think commodities will be strong for awhile, maybe a couple of months. There's no other place to put the money, plus inflation, plus they over-corrected on the way down.
You mentioned medical, but I don't think it's very popular with the exception of a few names.
Can you remind me, when dollar is weak, techs go up, right?
I'd be cautious, I dig the commodities game, But oil has become irrational, which draws me to the possibility that they are all irrational.
this could just be near term.
But it's not like you trade anything long term.
Like this Oil will be at 200 by the end of the week and gold will be at 1200. and the dow will be at 9000.
But then where is it going next week?
Big cap, and big cap tech are weak dollar plays.
>But it's not like you trade anything long term.
That's not true :) I have a lot of long-term investments. I have about twice as much money invested as I trade, so I'd like everything to be nice and peachy really. I want the economy to boom and commodities to be up (ideally).
Weak dollar plays - as in, it doesn't affect them much?
"weak dollar plays" Plays that work if the dollar sucks.
Tech: works because Microsoft sells in Europe in Euro Dollars, then turns the Euro's into Dollars, and the exchange works in "Big Tech" favor.
Same goes for Cisco, Orical etc
Gotcha, thanks
I'm trying to figure out what is going on with sector rotation.
I'd suggest that you keep an eye on retail... We may have seen a "Blow off top" and may need some correction.
Something you don't see, is that besides the Financials, after catching a day and a half double, are the most bearish today, But SECOND are the SMH semiconductors, those Lead Tech.
Yeah I was looking at retail, surprised it was so weak this morning. SHLD, KSS...
You know how I love to short JCP but it was too weak.
LVS is finally getting what it deserves.
This shit is just too crazy to trade.
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