Wednesday, June 04, 2008

Tech bulls keeps running, but for how much longer?

You got to be impressed by the tech bulls' tenacity as of late, without which the market would have rolled over by now. With financial sector breaking down, recent leaders from the energy and solar reversing, and both DOW and SP500 are completing the 1-2-3 reversal, I wonder how much longer the tech bulls can march on alone.

Stalking list:

Below are the names I am monitoring for next two days, especially after the Friday's May employment report. Most long side plays are for technical rebound, which means you should not be greedy when it comes to taking profits.

1. CME: getting oversold on all time frames, L2, EZ=340-361, IDS just below 340, CS just below 350 on bearish candle, IT=395.

2. DRYS: L1 if it spikes towards 80/82, IDS just below 80, CS just below the MA50/MA200 area on bearish candle.

3. EWZ: L2, ez=86-90.3, IDS just below 86, CS below MA50 on bearish candle, IT=95

4. FCX: L2, ez=100-106, IDS <100, CS < MA200, IT=115

5. FSLR: L2, ez=220-231, IDS <220, CS <225, IT=248.

6. GS: S2 if it spikes towards 180, IDS >182, CS > 180, IT=172.

7. RIG: L2, ez=130-138, IDS <130, CS
8. WLT: L2, ez=80-85.2, IDS <80, IT=92

9. X: S1, ez=176-180, IDS >180, IT=170/166.

10. MON: unlike PCAGUY's decisive action, I pondered over 1 freaking hour yesterday when it was around 136, and chicken out in the end. I am now looking for re-entry.

Open Position

I took an initial put position in SOHU today when it was near 91, the decision was based on bearish momentum divergence, overbought condition, and recent parabolic bull run, I will add to the position if it gaps/spikes up, with stops just above 100. IT around MA10.

14 comments:

RazoR said...

Happy day yall! Well compared to PCA I'm embarrased to report my 8 points on a fslr240c today, but I'll take it. Still holding the common which is up 14 and will dump at 268.
Up 5 on V, 4 on drys and 7 on aapl common. If I read the charts correctly I see drys going to 120 and aapl 230+. Of course they could go down, it would suprise me to see a run this time of year, plus the volume is just gone...

flyingwabbit said...

Razor:
You know what I admire/envy the most about your trading? holding power! you always make many points per trade, unlike me who just cannot seem to grow out of the scalping mode, I start to think maybe the problem has a deep root in my genetic makeup, just woeful... say, do you have such staying power from the beginning or it is something you evolved into? if the latter is the case, what caused that kind of change?

fortune8 said...

wabbit,

Frequent reader of your blog. Do you have the same position size for all your trades? I find that I tend to be more conservative in a larger $$$$ trade then a smaller $$ trade. That is all wrong. I should actually trade the same $$$ for every trades, but I don't.

Anonymous said...

What was the option position you open for SOHU? Just curious about the expiration date and strike price.

flyingwabbit said...

Fortune8:
thanks for reading my blog. No, I don't use same position size for all trades, I often decide based on my conviction (1-3 scale). Just like you, when I tend to be more jittery when trading large positions, and in the end, I find that I would've made more had I use smaller positions, but it is sad that I just don't learn my lessons well....

flyingwabbit said...

Anon:
My initial position on SOHU is July 85 put, 5 contract at 4.8. I might add another 5 put, possibly July 90 put, if it gaps/spikes tomorrow in the early going, we will see...

pcaguy said...

I have the confidence problem, also. When I hold a large position (frequently OIH) I bail out way too early. I seem to have conviction when I am buying into my position but lose faith frequently if the trade goes against me. I often bail out of a future winning position as I get back to break even. Most of the time the stock continues to run up and I miss the big gains. Cramer has stressed this point but I have trouble executing.
I hope to build confidence like RAZOR.
DRYS: Sold my DRYS when it was $95.2 today and my OIH wen it was $210.20. Of course OIH closed at $214.80 today and I would have more than doubled my profit.
GES:
I am hung out to dry on GES puts currently. However, what I have discovered in 90% of the cases the puts trades I put on always come back to me and can make a profit.
Holding July 50 GES Puts -GESSJ at a cost of $6.26.
I have bailed out of some puts trades and they always become profitable within a week.
I don't have enough patience.
POT:
Bought 5 contracts July 220 PUTS at the close, $218.88. 52 week high, big gain on the S&P today, so it should be good.
PCA GUY

flyingwabbit said...

pcaguy:
funny and sad that I thought you were describing MY confidence problem as it was so vividly true!
some point we need to get razor drunk so he will spilled out the secret on how he became so sharp:)
At this stage, I feel that CF and MOS are better shorts than POT relatively speaking as both of them still yet to make new highs, IMHO.

RazoR said...

well it seem we all get mad at ourselves...believe me I've gotten my ass kicked, and we don't always publish our loses. Wabbit, you're an excellent DT, if you doubled your option account your doing something right no? PCA you are just a heavyweight I bow down.
Here's a story, I call it the "doublescrew"...over the last 5 days fslr has been swinging wildly leaving gaps, yesterday it was down 10 gap with an upper gap of 20 points, i bought it, i was up 6 points and the damn mm pulled a V and went down 10...i broke even but was so pissed i would have killed anybody in the office had they said the wrong thing...today up 6 premarket, pulls the same thing and goes slightly negative, ala the doublescrew, can't fool me twice you evil mm, bought the call and common and got rewarded. Anyway Wabbit if i dt i will eventually bust, i'm not real lucky, so if i hold common i can always wait or find an exit plan, plus i really hate how options get blown out on a daily basis(wish i was pca)...here comes fri...

flyingwabbit said...

razor:
I do appreciate that you share the anatomy of a trade, and I see something here: you see, you were able to still sit tight and stick to your style when you missed 6 points just like that, but in the end, it paid off and you got more than that. For me, I somehow had those experiences burned into my mind, and I guess I could even say that I got paranoid when I am in green. It is a terrible mentality that I cannot seem to shake it off.
Aside of long-plaguing risk manage problem, I do consider myself pretty good in DT, but I am tired of it, I need to switch the style, at least to a 2-5 day swing. I think my technical analysis has already tuned towards such short-time frame trading, but my execution has so far woefully behind.
Oh well, I might just need to buy you a few beers and ask you to kick my ass as hard as you can afterwards....
good luck tomorrow!
oh, one more thing, I do post my losing trades :P

sean said...

let me just take a second and thank you for this trade, I shorted at the open.

flyingwabbit said...

sean:
glad that you got a good trade going, may I ask if it's sohu put?

sean said...

Yes I opened 20 June and 10 July $85 puts at the open, covered in the money, didn't think I'd see that today so I had to take profits. Your assessment of SOHU was spot on thanks again for you analysis.

flyingwabbit said...

sean:
that was a very decisive move, and I am glad that you made money. there might be a rebound of some sort, and I will keep eye on re-entry.