Trade alert

AAPL: just went long at 176.02, stop just below yesterday's low, IT=179.8.

Market is down big, but volumes are very light across the board, I doubt bears are seriously pushing at this level, it is probably all scared retailer bulls.

Watch QQQQ support at 47.4 and SPY at 140, if they were breached convincing, I will pick up some short positions.

Position update

CME: just exited the remaining long position at 604.8 for a gain of over 28 points. May consider re-enter around 575 or 560 with a $5 stop.

Not much of follow-through for the bulls today, Big Ben's pledge of all-out support only had a positive reaction for about 30 min, if the market closes poorly today, yesterday's lows may not the real short-term technical bottoms.

Position update

FSLR: just sold the rest of the position at 228.8 for a gain of over 17 points, may consider re-enter the position if it spikes towards 200 or 210 with a $2 stop.

CME: raised the stop to just below today's low at 588.

Bulls got no follow-through from yesterday's late surge, which makes me feel that we may need a capitulation here to hit a short term bottom.

Position Update

FSLR: closed half position at $229.8 for a gain of over 18 points; raised the stop to just below 220 for the remaining half position.
CME: closed half at 598.8 for a gain of over 22 points, raised the stop to just below $582 for the remaining position.

Do I feel lucky? Actually, NO, the capitulation never really came so I held back on several buys (AAPL, BIDU, STP, JCG, as planned in my last weekend's trading calls). The market turned around just at the nick of time, and the way it closes, we should see some follow-through tomorrow and even Friday. If you did get in today, great but don't get cute on that or you won't smile for long (see my earlier post on how to catch falling knives).

Trading alert

Second knife caught: long CME at 576.11, stop just below 570, intra day IT around 584.

The market is doing slow crashing, need a capitulation here to catch more knives.

Trading alert

Just caught the first knife: FSLR, long at 211.21, IT=219, stop just below 208.

The market gapped up in the open again, still not enough panic to be aggressive on the long side.

Patience!

Mid-week note on the market

The market has been noticeably weaker than I expected in my weekend note. After several attempts of early morning or intra-day rallies failed, the market rolled over into the close today. The sharp drop today has every major indices made a lower low, which completes the first concrete signal of the primary trend reversal (after made a lower high in last Dec.). Such major trend reversal signal could be further confirmed in the coming days if the major indices break and close below their Aug'07 lows, which are really just a stone throw away (Russell 2000 has already done so).

As the NASDAQ leads the market breaking down with 8 consecutive losing days and counting, fears are tuning into panics as the volumes rose rapidly in the past two days with many sectors breaking down previously held bottoms. Buying the drop here is really becoming the catch-the-falling-knives act, but my gut feeling is that with the current deep oversold conditions, a panic-driven capitulation is what it takes to trigger a sharp technical rebound, and the panic may reach the extreme when the market tests its Aug'07 low.

The keys to catch the anticipated rebound are:

1. Pick the knives with the dullest edges, such as those solar names, agricultures/fertilizers, and even BIDU, AAPL, ICE.
2. Be patient with the attitude that you rather miss it than risk it. For example, given what's happening in the past two days, I will not catch AAPL unless it gets close to 162 with stop just below 160.
3. The entry point must be very close to a well-defined strong support, which will be used as the stop-loss should the knife falls through.
4. Must place the stop-loss or the falling knife will hurt you!
5. Don't be greedy when the rebound occurs because the rebound is against the overall trend, lock in profits by raising stops or scale-out the position.
6. Finally, consider reverse the position when the rebound runs out of steam.

OK, I think I am ready for a gap down and a test of the Aug'07 lows now. You?

Trading Calls for the next week or two -- Jan. 5, 2008

Please refer to the previous post for the overall strategy consideration for the coming weeks.

A. Buy-at-bottom or CTT setup

1. AAPL
Weekly: clear uptrend, some mild bearish divergences, huge bearish engulfing candle could spell more loss before rebounding.
Daily: Friday's action validated some bearish divergences and then some more, more downside is likely, but the expectations of next weeks MacWorld event may stir bullish sentiment.
60 min: extreme bearishness and weakness and oversold point to an imminent technical rebound.
** L2, entry zone=170-175.22, CS just below 170, IDS just below 169, IT=189
** L1: entry zone=158-162.22, CS just below 160, IDS just below 158, IT=180

2. BIDU
Weekly: still in uptrend but upside momentum dissipating
Daily: more downside before any technical rebound
60 min: in oversold
** L2 if it spikes towards 320, stop just below 320. IT=380
** L1 if it spikes towards 300, CS just below 300, IDS below 298, IT=340.

3. CF
Bullish all around.
** L1, entry zone 100-105.5, IDS just below 100, CS below EMA10, IT=119.

4. CME
Weekly: still clear uptrend, but more decline is ahead before rebounding
Daily: 2 consecutive big down days put bulls in defensive standing with key support zone 600-610, oversold but very bearish candles point to further downside
60 min: oversold,
** L1 if it spikes towards 585, CS just below MA200, IDS just below 580, IT=640.

5. CMG
Weekly: big loss with a huge bearish engulfing candle, but uptrend still intact
Daily: Friday's big drop did a lot of technical damage to the bullish case, more downside likely before rebounding
60 min: in oversold for a while now
**L3 if it spikes towards 115 with a tight stop, IT=135
**L2 if it spikes towards 102, IDS just below 100, CS below MA200, IT=130.

6. CRM
Weekly: strong up trend
Daily: in pullback mode, more down side likely
** L1 if it spikes towards 56 or 50 use tight stops, IT=60

7. CTRP:
one of the most consistent base for buy-on-dip-then-hold play
** L1 if it spikes towards 48 or 50 use tight stops, IT=60.

8. DHI:
Weekly: still a clear down trend, but signs of bottoming out
Daily: testing the previous bottom, in oversold
** speculative L2 if it spikes towards 10, stop just below 10, IT=13.

9. FSLR
Weekly: still a clear case of strong up trender, but last 3 weeks' candles formed the evening star, indicators point to more pullback.
Daily: overall still bullish, but negative momentum is on the rise.
60 min: in oversold.
** L1 if it spikes towards 220, IDS just below 215, CS just below MA50, IT=250

10. GRMN
Weekly: trend-reversal process developing, more downside.
Daily: short and intermediate trends all down, watch its testing MA200 around 85.6 in oversold conditions.
** L2 if it spikes towards MA200, CS just below MA200, IDS just below 85, IT=92.
** L1 if it spikes towards 80, stop just below 80, IT=89.

11. ICE
Weekly: still a clear up trender, but big bearish engulfing candle suggests more decline in the near future.
Daily: the Three Black Crow candle formation strongly signals near-term trend reversal, this coupled with increasing negative momentum does not bode well for bulls.
** L2 if it spikes toward 160/155 zone, CS just below MA200, IDS just below 150, IT=179.

12. ISRG:
Weekly: still a clear strong up trender, up volumes dwarf down volumes, but up momentum has dissipated.
Daily: looks like a head-and-shoulders formation near completion, more short-term downside likely
** CTT between 264 and 330 use tight stops, don't trade the mid range.

13. JCG
Weekly: big down week came in on light volumes, indicators point to more pullback
Daily: 6 straight down sessions on increasing negative momentum, the post-earning gap is in the test, in oversold
** L1 if it spikes towards 38 with CS just below 38, IDS just below 36, IT=MA50.

14. RIMM
Weekly: up trend flattening, more downside in the cards
Daily: gapped down and closed below MA50, candle formations suggest persistent distribution following the earning report fueled gap up. Even if it breaks 96, the downside may not be much given the latest Q report.
** L1 if it spikes towards 85 use MA200 as stop references. IT=100.

15. STP
Weekly: clear and strong uptrend despite of the abundance of sellers whenever it hits new highs.
Daily: clear up trend but some bearish divergences, momentum on the downside
** L1 if it spikes towards key support zone of 74/76, or MA50 use tight stops, IT=88.

16. WLT
** L1 if it spikes key support zone of 30/32, use MA200 as CS, IDS just below 29., IT=37

17. YGE
Weekly: still a clear up trender, but the Evening star candle formation may spell more near term decline
Daily: downside momentum on the rise, the volatility continues
** L2 if it spikes towards 30 with a stop just below, IT=38
** L1, entry zone 24-28, stop just below 24, IT=MA50


B. Short setups

1. DRYS
Weekly: looks like a boom turn bust play, in oversold but negative momentum on the rise.
Daily: short and intermediate trend down,
** S1 if it breaks 69.5 or closes below 70, IT=MA200=64, stop just above 71

2. EXM
another crashing shipper like DRYS, similar technical picture but even weaker as it closed below MA200 for the first time in over 15 months!
** S1 if it breaks/closes below 37, IT=30, CS just above MA200, IDS just above 40.
** S1 on top if it spikes towards 40, IDS just above 41.5, CS just above 40, IT=32.

3. GOOG
Weekly: while the uptrend still appears intact, MACD histrogram offers the first sign of the possible reversal of the inter-mediate trend, other indicators point to the downside.
Daily: sliced through MA50 with negative momentum on the rise
** S2 if it spikes towards 680, CS/IDS just above MA50, IT=620.
** S1, entry zone 699-715, stop just above 720, IT=640.

4. SU
along with other energy sector names such as XOM, SLB and DVN, last Friday's action could well be the start of an inter-mediate double top formation. Short setups on these names have a very attractive risk/reward ratio!
** speculative S1 either when it breaks 109 or spikes towards 113, stop just above 113.5, IT around 97.

Weekend notes on the market -- Jan 5 ,2008

Bears are finally arriving!

There is no doubt that bears are more thrilled than bulls that 2007 is over and 2008 has started. Friday's job report caught bulls off guard and the precipitous drop ended the first trading week as one of the worst on record. I am not going into chart analysis for the major indices since they are bearish all around regardless what time frame or angle you look at, just some thoughts:

1. The housing mess is definitely spreading, just look that the retailer index or almost every consumer-driven companies' latest earning reports (pharmacy, retailer,restaurant).

2. FED will further cut rates, even aggressively, but the impact will be short-lived at this stage.

3. Institutions finally decided to take down their bull costume. For that, you may check out an excellent analysis on COT by the Smart Money Tracker (posted on Dec. 31, 2007).

4. Except Russell 2000, all major indices still have one more key support: NASDAQ around 2400, DOW around 12500, SP500 around 1370. But the chance that bulls final standing at these levels will be firmly breached in coming weeks has dramatically increased.

5. NASDAQ is leading the downside move, and yesterday, the big caps on the NASDAQ were sold off aggressively. Such fact suggests that if anything, the down trend is in its early stage.


On the overall trading strategy for the coming weeks:

This week's huge drop came in on relatively light volumes overall, this plus the fact that many stocks are in oversold conditions, I expect the market to rebound in coming days, therefore I may still play the long-at-bottom setup for those that are still in clear uptrend and have a very defined support nearby as stop-loss references (best example: AAPL, entry zone=170-175, stop just below 179, IT=190), but I will use smaller size and shorter holding time. However, the best strategy is using any rebounds to build up short positions. Bottom line, the psyche of the market has clearly changed, and while the time may be yet to come for easy money to be made on the short side, sticking on the long side is getting more and more dangerous.

Will post my trading calls soon.

Short note -- Monday, Dec. 17, 2007

About the weekly trading calls

Sorry that I did not get time to do it this past weekend, and I probably won't be able to until after the holiday season -- will spend time with several friends who will be visiting during the holidays.

On the market

In short, the market has been acting pretty much like what I predicted in the Dec. 8 weekly calls. As the major indices and many stocks approach oversold on both daily and 60 min charts, I expect their initial tests of the previous lows likely to be successful, even triggering some Ho-Ho-Ho rebounds:P But in my view, last week's Fed action and maybe more importantly, the inflation signs, are fundamentally changing the psyche of this lasting bull market. Even though it might still be a bit too early to build up short positions, it is high time to reduce long positions on every rebound from here on.

On Ameritrade's StrategyDesk

I have been back-testing some trading strategies, and when I get chance I will post some of the main findings here.

Link for RSS subscription
I figure some readers might like a RSS subscription link here, so I decide not to wait for the Blogger.com to formally roll out this feature -- I just add it using a free service from Addthis.com. Let me know if you have any problems/coments.

Until I resume the regular weekly trading calls, I will try my best to at least post some short notes like this a couple of times per week if not more.

Happy holiday and best wishes!

fw

Weekly Swing Trading Calls--Dec. 10-14, 2007

On the market – Searching for the golden compass

With now the US government joining the subprime mess rescue forces, bulls continued their march and closed week with all major indices gaining 1.6% or more and reclaimed some key technical levels along the way.

Weekly charts for all 3 indices are mildly bullish with indicators point out to further up side move; daily charts are even more bullish as they charged into overbought region on increasing positive momentum. The only thing that bears may take into comfort is that the rally came in on significantly reduced volumes, signaling that many major players are not ready to put on their bull costume and join the parade, which makes perfect sense as the market prepares for next Tues FOMC rate decision.

The market has now priced in all the good news: US Government is on their side, the job growth is not too bad which may help to avoid recession, and FED will cut 25 bp for sure. So what else is left in bulls' tank? A 50 bp cut? possible but less likely with the Nov. employment report we had. Santa? As reliable as the Santa rally has been, without a 50 bp cut, will the mighty Santa be able to help bulls to challenge the double-top formations of almost all 3 indices? And in case the market does get the 50 bp cut, how long the fuel will last?

I think market's reaction to FOMC decision next week will be a telltale sign of the market direction for the coming months. In my view, if the market sell-off hard and falls once again below the key technical levels (SP500 around 1490 and NASDAQ around 2630), a retest of the recent lows will be sure on the way. If the market rallies on light volumes, I myself will start to build up short positions, with some patience and all the respect to the Santa, and get ready for a brand new year!

The bottom line: generally speaking, at this stage of bull cycle, easy money on the long side has been made, but bears are still looking for the gold compass to find out if their time is finally coming.


Weekly Trading Calls

I am going to be brief as I try to spend some time to back-testing some trading strategies using the latest of version of the StrategyDesk.
Many trading calls (notice the word spikes) only apply when the market moves violently following FOMC decision.


1.AAPL – the forbidden fruit, for bears!
Weekly chart: bullish all around, now looking at it, in the past 3 months, it only had 2 losing week!
Daily: solidly broke into new high on increasing momentum; entering overbought region.
60 min: staying in overbought and bulls not worried about..
** SW L1 if it spikes towards key support at 180, 175, and 170, IT=200.


2.COH – current shorted at 37.38
Weekly: the 3 week rebound came to the end, stochastic no long oversold, negative momentum continue to diminish, still solid down trend
Daily: mildly bearish, both volume and momentum are contracting, sellers evident just below MA50.
** for current position, IDS around 38.5, CS just above 38 with a bullish candle, IT=32
** SW S2 if it spikes up on FOMC decision, entry zone 40.8-44, stop just above 44, IT=38.


3.DHI: bottomed out, for now
Weekly: solid up week with solid bullish candle, MACD histogram confirming trend reversal, stochastic points further oversold rebound
Daily: closed above MA50 for the first time since June, bullish bow-tie formation developing
** SW L1, entry zone 12-12.52, IT=15, stop just below 11.7.

4.DVN:
Weekly: the bullish engulfing candle formation signals a typical new highpullbackresuming primary up trend setup
Daily: bull rip through key 84 resistance and closed week above MA50.
** SW L1 if it spikes towards key support near 80 and 84 use tight stops, IT=91

5.DRYS:
** CTT between 81 and 100 using tight stops, bearish bias, keep an eye on MA50, don’t trade the middle range.

6.EXM:
** SW S2 if it spikes towards 59, IDS just above 50, CS=MA50.
** SW L3 if it spikes towards key support near 40 and 44, using tight stops, IT=50

7.FSLR:
There are some bearish divergences, but it is still a solid bullish case no matter how do you look at it.
** SW L2 if it spikes towards key support at 200 and 210 use tight stops, IT=235.
** speculative S3 if it spikes towards 280 with a tight stop, IT=230,

8.JCG:
Bullish all around after a much-better-than-expected earning report, but as a part of the retailer sector, there is a ceiling under current macro-eco conditions.
** SW S3, entry zone=53.8-56.5, stop just above 57, IT=48.
** SW L3 if it spikes towards 47, stop just below 46, IT=52

9.LDK: bulls finally came through!
Weekly: super bullish engulfing candle, stochastic ready to rebound out of the deeply-oversold area.
Daily: EMA10/10/30 bow tie formation developing, closed above MA50
** DT L1 if it spikes towards 40, stop just below, IT=45
** SW L1 if it spikes towards 37, stop just below 36, IT=50.

10.NVDA:
** Currently shorted at 34.38, IDS just above 35, CS above MA50=34.7, IT=31.


11.PFCB: can you say bottom?
Weekly: still a clear-cut bearish case, stochastic suggests further rebound out of the deeply oversold territory.
Daily: 6 consecutive up days and closed just above MA50
** with a down trend like this one, I just don’t trust the true bottom can be formed without re-testing. SW S2 if it spikes towards 30, stop just above 30, IT=26.

12.RIMM: trend reversal developing?
Weekly: MACD histogram crossed below zero line for the first time since late May, signaling the momentum switch which often is followed by trend reversal. Most indicators point to further downside movement. Notice that unlike other big tech stocks such as AAPL, its only had one up week since late Oct, and all down weeks came on good volumes.
Daily: bearish bow-tie formation developing, support near 100 very strong.
** SW S1 if it spikes towards 118, stop just above 120, IT=100.
** DT/SW S1 if it breaks 98, CS just above 100, IDS just above previous day high, consider adding more position if it breaks 96, IT=86,

13.SLB:
Weekly: it looks like a resuming primary trend setup, but other indicators may yet to run the bearish course
Daily: 7 straight up days stalled last Friday and closed the week just below MA50 near 99, momentum still on the rise but stochastic is in the overbought area.
** DT S2 with a stop just above 99.11, IT=95
** SW L2 if it spikes towards 91, stop just below 90, IT=100
** SW L2 if it breaks 99, CS near 97, IT=110.

14.STP: refer to FSLR
** SW L1 if it spikes towards 72, stop just below 69, IT=98.

15. FNM:
** SW S1, entry zone=42-48, IDS just above 50, CS above 48, IT=33.

16. FRE:
** SW S1, entry zone=41.8-46, stop just above 47, IT=30

Weekly Swing Trading Calls--Dec. 3-7,

On the market--Deja Vu all over again?

For a while, it appeared that bears were in firm control as bulls failed to mount any kind of sustainable rebounds despite of the deeply-oversold conditions and the favorable seasonality. Then came the FEDs, who had a change of heart, not only signaled the rate cuts but even went on to say that the irresponsible risk-taking behaviors should not be punished if such punishment will cause recession. Emboldened bulls promptly went on all-out assault, leaving bears dazed and confused.

All major indices scored 2.5% or more gains this week. On weekly charts, all major indicies posted a bullish engulfing candle formation with indicators showing diminishing downside momentum. On the daily charts, all major indices reclaimed MA200 but failed the test of MA50; with indicators show increasing positive momentum.

With market now fully expecting a 25 bp rate cut or even 50 bp if next Friday's Nov. employment report comes in weaker than expected, is this going to be a carbon copy of last Aug's rally? My view? possible but unlikely. Why? First, unlike last Aug, the economy is in worse shape and may well get even worse before getting better; second, unlike last Aug, the room for further rate cuts is simply smaller. Furthermore, the unintended negative impact of rate cuts will not only increase but also show up faster in a material way.

With the above considerations, I view the ongoing rebound as a good opportunity for setting up swing short-on-top trades. The key, however, is patience. Aside from watching key resistance levels of major indices (DOW 13750, NASDAQ 2700-2720, SPY 1490-1500), it is crucial to wait for the rebound to run its course and use previous highs as stop references.

My feeling for the next week is that it is going to be a range-bound market until the Friday's employment report. With the rate cut expectation already baked in, bulls will be hard-pressed for more sizable gain, in fact, presence of sellers were evident this past Friday. Bears, on the other hand, will find it extremely difficult to regain the control as long as the possibility of 50 bp rate cute remaining in the card, let along the bullish seasonality. In a bigger picture, bears are probably holding on to the belief that FED is forced to cut rate because macro-economy outlook is much worse than most expected, and the market just cannot make new highs with such outlook hanging over head, let alone the unpredictable and potentially catastrophe negative impact of further rate cuts.

Count me in that camp, for now.


Weekly Trading Calls:

1. AAPL: Re-loading for the new highs?
Weekly: bullish but weaker momentum
Daily: bullish with increasing momentum, but sells start to come out as it approaches recent high.
60 min: declining out of overbought conditions is running its course.
** SW L2 if it spikes down towards 175/176, stop just below 175, IT=188
** SW L1 if it spikes towards 170, stop just below 169, IT=180

2. ARO: the end of rebound?
Weekly: bearish candle formation along stochastic poised for retreating from the over-bought conditions, but momentum is still positive and strong
Daily: top-looking candle formation, momentum shifting to the down side, indicators point to more slide.
** SW S2, entry zone=26.4-28, stop just above 28.5, IT=23

3. BIDU: onto new highs?
Weekly: evening star candle formation? indicators mostly bullish
Daily:increasing upside momentum, but sells came out after 6-straight up days;
60 min: mildly bearish as over-bought condition works it out.
** SW L2 if it spikes down towards 340/350, stop just below 340, IT=390.
** Speculative SW S3, entry zone=410-420, stop just above 430, IT=330

4. C: Dead cat bouncing?
Weekly: bullish engulfing candle, oversold and diminishing down side momentum
Daily: oversold rebound running the course on increasing positive momentum, but up volumes notably lighter.
** SW S1, entry zone=35.8-37.5, stop just above 38, IT=31

5. COF: what's in your wallet?
Weekly: in oversold region, spinning top candle formation, clear and confirmed down trend
Daily: versold rebound running the course on increasing positive momentum, but sellers are lining up.
60 min: neutral
** SW S2, entry zone=56-59, stop just above 60 or MA50(currently 61.7), IT=50

6. COH: luxury on the run?
Weekly: 3 straight up week on significantly lighter volumes, oversold rebound running the course, negative momentum continues to diminish, clear and confirmed downtrend.
Daily: un-abating positive momentum, approaching overbought, heavy resistance zone ahead.
60 min: mildly bullish.
** SW S1, entry zone=39-40.5, IDS just above 40.5, CS above MA50 with a bullish candle, IT=34.

7. DHI: is the bottom finally in?
Weekly: continuous bullish divergence, heading out of oversold region, again!
Daily: another oversold rebound on the way, but is this finally for real?
60 min: retreating from over-bought
** SW L1=2, entry zone 11-11.5, stop around 10.7, IT=13.5.
** SW DT L1 if it closes above MA50 with bullish candle, IT=15

8. DRYS: smooth sailing again?
Weekly: bullish-engulfing candle with volume following 4 straight down week, indicators still show negative momentum and implications from the precipitous decline.
Daily: powerful oversold rebound, while some indicators suggest more gains, candle formations point out increasing seller activities.
60 min: poised for further retreat from short term overbought conditions.
** SW DT S2, entry zone=98-105, IDS just above 105, CS just above MA50 with bullish candle formation, IT=85.
** SW S1, entry zone 110-120, stop just above 120, IT=95.

9. EDU: learn to profit from volatility!
Weekly: bullish engulfing candle and clear up trend
Daily: oversold rebound seems to more room to go,
** SW L2, entry zone=74-76, stop just below 73.5, IT=84
** Speculative S3, entry zone=87-91, stop just above 92, IT=74

10. EXM - refer to DRYS
** SW S1, entry zone 57-60, stop just above 60, IT=44

11. FMCN: bulls die hard!
Weekly: momentum is on the verge of shifting to the down side, alternate loss/gain week for the past month, the down volumes and candles outsized the up ones.
Daily: oversold rebound may have more room to run
60 min: overbought and staying overbought.
** SW S3, entry zone=58.8-60, stop just above 60.5, IT=52.

12. GRMN: navigating out of woods?
Weekly: bullish rebound, but negative momentum may slow its upside move
Daily: increasing positive momentum, approaching overbought, able to stay above MA50, but failing to clear resistance just below 109.
60 min: mildly bearish.
** SW S2, entry zone=115-117, stop just above 117, IT=100.

13. NVDA: turn of the tide?
Weekly: long shadow highlighted selling pressures near key resistance, increasing down side momentum, still ways to go before being oversold
Daily: Oversold rebound may have ended with Friday's big black bearish candle.
60 min: very bearish but in deep oversold region
** SW S1, entry zone1 32.8-34, stop just above 34.2, IT=29.

14. RIMM: up trend ending?
Weekly: momentum is poised to shift to the downside, downside volumes outpaced up volumes in recent weeks, stochastic points to further slide,
Daily: the overbought rebound came to an abrupt end with Friday's big black bearish candle
60 min: bearish but in oversold region
** SW S2, entry zone=116-120, stop just above 120, IT=100

15. TBSI: Refer to DRYS
** SW S2, entry zone 45-50, IDS just above 50, CS above MA50 with a bullish candle, IT=36.

16. VMW: on the second wind?
Weekly: bullish-engulfing candle but diminishing momentum, will it be able to test the classical evening-star top formation?
Daily: oversold rebound well on the way, but candles on both Thurs/Fri show increasing selling pressures.
60 min: mildly bearish, overbought decline is emerging
** SW S1, entry zone=99-104, stop just above 105.5, IT=80.

17. X: when steel meets stiff resistance!
Weekly: indicators mostly point to more slide, bow-tie formation developing
Daily: oversold rebound running its course, increasing up momentum, but sellers step in around MA50 MA200 convergences (around 101.4) on the Friday.
60 min: poised for overbought decline.
** SW DT S2, entry zone=99-101.5, stop just above 102, IT for DT=93, IT for SW=87.

Weekly Swing Trading Calls -- Nov. 19-23, 2007

On the market -- stalemate, for now!

Bulls were able to significantly slow down the tremendous bears attack and ended week with a slight gain, while bears managed to thwart any serious rebounds.

On the weekly charts, all major indices posted more or less of a spinning top candle formation, indicative of indecision on both parties. Most indicators still favor more down side movement.

On the daily charts, both DOW/SP500 closed below EMA200, while NASDAQ successfully tested and closed above EMA200. The lows on Nov. 12 seem to firming up for all major indices, while downside momentum is diminishing.

On the 30/60 min charts, DIA/SPY/QQQQ all show signs of oversold rebound.

Overall, the bears and bulls are in a temporary stalemate right now. For bears to break through the impasse, relying on the carry-over negative momentum is no longer enough, instead, it will need more significant bad news on the macro-economy level, especially the solid evidences of consumers' faltering spending. For bulls, however, things are a bit easier: as long as there are no significant negative headlines, the favorable seasonability (Turkey rally and Santa Rally) may help them to steadily recover some of the lost ground.

My feeling for the next week is that while it will be a overall range-bound market between the Nov. 12 low and Nov. 14 high, the bias is mildly bullish. Therefore, I will continue the intra-day or very short swing trades from both sides using those key S/R as stop/entry references. Since it will be a non-trending market with high volatility in coming days, taking quick profits is very important.


Weekly Trading Calls:

1. AAPL: short-term rebound on the way!
Weekly: doji candle, still a clear up trend, indicators mostly bullish.
Daily: signs of temporary floor around 160, indicators slightly bearish
30/60 min: solid signs of more over-sold rebound.
** DT/SW L2, entry zone=159-165, IT=175
** DT S3 if it spikes towards 175/180 use tight stops.

2. AKAM: more pullback before rebounding?
Weekly: second losing week on light and diminishing volumes, indicators mildly bullish.
Daily: several successful tests of EMA50, but indicators point to possibly more pullback before rebounding
30/60 min: reluctant oversold rebound, slightly bearish
** DT/SW L2, entry zone=33-34.5, IT=38.

3. BIDU: A falling leader?
Weekly: neutral, second losing week on high volume, noticeably weaker than QQQQ/NASDAQ, repeated bullish calls from analysts could not stop the slide,
Daily: bearish, un-abating negative momentum as every rebound was sold down,
30/60 min: struggling to mount any over-sold rebound, test of Nov. 12 low around 298 is still in the card.
** SW CTT if it spikes towards key S/R levels: 298, 333, 360 use tight stops, don't trade the middle ranges.
** Consider DT/SW S2 if it breaks and closes below 294, IT=270?

4. CRM: Stellar Q report emboldens bull rampage!
Weekly: very bullish all around
Daily: every bullish with extreme bullish candle, there is no way that bulls will be satisfied with anything less than new highs.
30/60 min: bullish and in overbought regions, but if it is indeed trending to new highs, expect overbought to become even more overbought.
** SW L1, entry zone=55-57.1, stop just below 55, IT=65
** DT L1, entry zone=56-57.1, stop just below 56, or when it breaks 57.6, IT=62.

5. DRYS: running into a dry ground?
Weekly: 3rd straight down week on diminishing but still relatively high volumes, indicators favor further down side movement, MACD histogram is poised to become negative for the first time in months.
Daily: persistently high negative momentum kept it near over-sold region,
30/60 min: signs of oversold rebound but lacking strength.
** DT/SW S2 if it spikes toward key resistances around 95, 100, and 105 with tight stops.
** DT/SW L3, entry zone=82-85.11, stop just below 81, IT=92.

6. EXM: trouble water ahead?
Weekly: like DRYS but even weaker as it is on the verge of trend-reversal confirmation, very bearish
Daily: descending candles on persistent negative momentum, is another leg down in a short order?
30/60 min: stuck in oversold with all bearish indicators favor more oversold time.
** DT S1 break-down play if it breaks 43.5, stop just above 44, IT=40.
** SW S2, entry zone=48-52, stop just above 53, IT=44.

7. FSLR: indeed the first of solar!
Weekly: increasing bullish momentum, uptrend to continue
Daily: Friday's action conclude the pullback.
30/60 min: rebound in full swing, overbought conditions does not mean imminent pullback if it is trending up.
** DT L2, entry zone 200-205, IT=230, stop just below 200,
** SW L1, entry zone 185-201, IT=250, stop just below 185.

8. GRMN: have the fundamentals changed for better now?
Weekly: overall still mildly bearish, but will the bullish engulfing candle embolden the bulls?
Daily: diminishing negative momentum, sellers still abundant near key resistances.
30/60 min: poised for overbought pullback.
** CTT at key S/R: around 93.5, 102 and 109, don't trade the mid-region.

9. RIMM: from studs to suds?
Weekly: second weekly loss on increasing volume, indicators favor more down side move, but long shadows on the candle may define the short-term trading range.
Daily: Friday's high volume reversal may have lay down a short-term bottom, but un-abating negative momentum may cap any significant rebound.
30/60 min: over-sold rebound is running its course
** SW/DT S2 if it spikes towards 118, stop just above 120, IT=105

10. TBSI: the reverse of a fortune?
Weekly: 4th straight weekly loss with acceleration to the down side, extreme Marubozu candle along with other indicators point to further loss.
Daily: oversold becomes more oversold as it clearly trends down
30/60 min: clearly down-trend suppressed any over-sold rebound.
** DT/SW S1 if it spikes towards key resistance around 47, 52 and 58.
** DT/SW speculative L3 if it spikes down towards 35, with stop just below 34.5, IT=45.

Weekly Trading Calls -- Nov. 12-16, 2007

On the Market:

For the first time in nearly three months, bears took solid control and pounded bulls to the submission. Another round of confession by financial heavyweights pushed the major indices through the key support levels early in the week which emboldened the bears to launch an all-out attack on the tech bulls who quickly entered a panic retreat mode. For the week, all major indices suffered huge loss with NASDAQ led way for a 6.5% drop.

On the weekly charts, the bearish-engulfing Marubozu candle of Oct. 14 week finally got a big follow-through, especially in NASDAQ which posted an ominous evening star formation. The momentum is now solidly on the negative side and on the rise for both SP500 and DOW. The bearish candle formations and many other indicators clearly point out the likely further downside movement in the coming days.

On the daily charts, things are even more bearish as both SP500/DOW closed below MA200 while NASDAQ firmly below EMA50. Even though the 3-day sell-off pushed all indicies near oversold region, the high volumes and increasing negative momentum suggest more losses on the way. As the major indices seem to on its way to test their early Aug. lows, there are some key support levels that are critical to bulls: NASDAQ-2490 to 2520, around 2580; SP500-around 1450 and 1430; DOW-around 13000 and 12850.

The big question right now is if the current huge decline is a repeat of the late July/early Aug epic. and thus represents a perfect buy-on-dip opportunity for the ever so trustful Santa rally OR this is the beginning of the end of the multi-year up trend? The problem for the bearish case is that as long as the major indices succeed the test of previous low, bulls are far from done. The problem for the bullish case is that it was Fed's rate cuts stop carnage and drove market higher in Aug. now with the Fed already cut twice without a lot of room to go further, what factors are going to halt and reverse the powerful free-fall? Right now, I am leaning to the bearish case but I will keep an open mind. I don't expect a lot of subprime headlines next week as the financial stocks show signs of stabilization, and I will pay close attention to retail sale data and find out if retail sector can rebound a bit here.

On the Trading:

After several key mental mistakes that burnt big holes in my account, I finally came to face the reality and did something I should've done several years ago by implementing an external supervision mechanism that is aimed to stop any train-wreck acts in track. Things are working fine so far as I posted a 20% again for the week. However, I still need to be more realistic about the profit expectation and more awareness and control in risks. For the next few weeks, I will set a daily target of 1% gain, and weekly at 6%.

Given the current market conditions, I will try to avoid swing long trades while actively look for swing short setups. I will continue to focus on day-trading from both side and take advantage of the volatility.


Weekly Trading Calls:

1. AAPL: bears took out their multi-month frustration on bulls the big way. Weekly has a evening star candle formation with other indicators turning bearish, but it is still a clear uptrend stock. Daily seems to form a towering-top formation, closed weekly right at the EMA50, but with all the things running for bears, further slide is likely; 30/60 min charts bearish but in oversold area.
** DT-S1 if it approaches key resistances at 168, 174/175 or 179/180 with a stop just above those levels.
** DT-L2 if it spikes towards 153 with a stop just below.
** SW-L1, entry zone=145-149, stop just below 145, IT=153.

2. AKAM: Low volume and mild retreat in the midst of tech melt-down. Weekly: trend-reversal still intact; Daily: first test of EMA50 was successful but it may drop more if NASDAQ accelerates to the downside.
** SW-L1, entry zone=32-33.11, IDS just below 31.7, CS just below 33, IT=40.

3. AMZN: Weekly: the risking negative momentum is on the verge of confirming a trend reversal; Daily: Friday's broke-down spells more losses for bulls; 30/60 min chart: bearish but in oversold area.
** DT/SW S1 on top if it spikes towards 83/84 with a stop just above 84;
** DT L2 if it spikes towards 70/71 with a stop just below 70,

4. BIDU (focus stock): the unrelenting bulls along with momo traders got crushed. Weekly: still a clear up trend but the bearish engulfing candle is ominous for bulls; Daily: more bearish with negative momentum on the rise; 30/60 min: bearish with signs of stabilization.
** DT-S2 if it spikes towards 360 with a stop just above, IT=330.
** SW-S1 if it spikes towards 400 with a stop just above 410, IT=360
** DT-L2 if it spikes towards 300, 315, 324 use tight stops.

5. CROX: Weekly: bearish with negative momentum on the rise; Daily: bearish, oversold and Friday's action show signs of temporary bottom; 30/60 min: mildly bullish
** DT-L2 if it spikes towards 35 with a stop just below 34.8, IT=40
** DT-S1 if it spikes towards 44 with a stop just above, IT=40,
** SW-S1 if it spikes towards 46/47 with a stop just above 48, IT=40.

6. CTRP: earning report drove it to new high. Weekly: bullish all around; Daily: bullish.
** DT L1 if it spikes towards 55.55 with a tight stop, IT=59
** DT L1 if it spikes towards 54 with a stop just below, IT=56
** SW L1 if it spikes towards 51, stop just below 50, IT=54.

7. DHI: bearish all around, BUT bullish divergences developing on both daily/weekly charts; 30/60 min in overbought region. Is it time to buy the bottom here?
** SW speculative L3, entry zone=11.41-11.81, IDS just below 11, IT=13.4

8. DRYS (focus stock, currently long near 98 during the closing moment on Friday):
Stellar earning report failed to buoyant the stock in a sea of red. Weekly: diminishing up momentum with indicators favor more down side move; Daily: closed below MA50 for the first time since Aug, negative momentum on the rise, but candle formations and volumes in the last two sessions show signs of stabilization; 30/60 min: in oversold region with signs of rebounding and temporary bottom at 95. I closely watched level II and tape last Friday, and there were signs of big boys buying at the current level; it would have closed above 99 had market not sold off that hard in the last 30 min, and bulls should take into comfort that even with such sell-off it closed above its open. I suspect that it will rebound as long as the BDI indice continues to hold/rise from the current level. I shorted it on the closing moments on the Friday before, resulting in a 7+ points gain, and now looking for a sizable gain from the long side.
** For the holding position: stop if breaks 95, if it fails to break 100 on Monday, consider exit at least half of the position, if it breaks 100, it will be almost certain to test 105 if not 108.
** DT S2 if it spikes towards 105, 108, 112, and 120 with tight stops.
** DT S3 if it breaks 95, but must take quick profit, IT=92, stop just above 96.
** DT L3 if it spikes towards 90, with a stop just below, IT=95.

9. GOOG: even strongest bulls cannot withstand the furor of the long frustrated bears. Weekly: clearly up trend but a bearish-engulfing candle on all-time high volume could spell more pullback; Daily: bearish with increasing negative momentum;
** DT L2 if it spikes towards 640, stop just below 636, IT=660
** SW L2,entry zone=600-611, stop just below 600, IT=660.

10. GRMN: even the best GPS failed to navigate it out of a sea of trouble. Weekly: just confirmed the trend reversal, increasing negative momentum points to more loss; Daily: bearish and oversold, stabilized at EMA200,
** DT SW S1 if it spikes towards 95 with a tight stop, IT=83 for SW, 93 for DT.

11. ILMN: Weekly: diminishing up momentum but still clear up trend; Daily: neutral is bullish considering the market conditions.
** DT L1 if it spikes towards 51, stop just below, IT=55
** SW L1, entry zone=46-49.1, IT=55, CS just below 46.

12. ISRG: No bulls can escape bears wrath! Weekly: 2nd down week in a roll, still a very clear bullish case; Daily: increasing negative momentum spells more decline if the major indices fall further.
** SW L1, entry zone 265-271, stop just below 265, IT=300.

13. PFCB: bullish divergence on daily chart plus the modest inside buys stopped bleeding for now, is it time to load it up?
** SW speculative L3, entry zone 27-28, stop just below 27, IT=30.

14. RIMM: see comments on GOOG and AAPL.
** DT L1 if it spikes towards 100 or 106 with tight stops., IT=115.
** SW L1, entry zone 93-95, IT=118

15. SOHU: the post-earning euphoria drown in the red sea. Weekly: bearish-engulfing candle but everything else still bullish; Daily: parabolic bull run squashed by bears but on lighter volumes.
** DT L1 if it spikes towards 50, stop just below, IT=57.
** SW-L1, entry zone=45-46.11, IT=57,

16. SONS: the better than expected earning report powered it up in a falling world. Weekly: trend-reversal confirmed with increasing bullish momentum; mildly bullish but diminishing up momentum; 30/60 min: in overbought region and signs of pullback.
** DT SW L1, entry zone=7-7.21, stop just below 7 for DT, IT=8

17. VMW: the momo traders are no match for pissed-off bears. and I am still pissed off that Ameritrade did not have any shares for short when I was frantically trying it as it was breaking 105, and they still don't have any now. Anyone who has better experiences with different brokerage? Weekly: you cannot get a better morning star formation than this one; Daily: a free-fall with increasing negative momentum.
** DT-S1 if it spikes towards 103, stop just above 105, IT=96,
** SW-S1, entry zone=104-109,stop just above 110, IT=96

18. WFMI: Weekly: momentum turning bearish, huge bearish candle; Daily: broken down below both EMA50/200, negative momentum on the rise.
** DT SW S1 if it spikes towards 46, stop just above, IT=44.5
** SW S1, entry zone 45.8-47, stop just above 47, IT=42
** DT L1 if it spikes towards 40, stop just below, IT=42.

19. WLT: that good earning report sure has a staying power. Weekly: bullish on increasing momentum; Daily: bullish, a bit overbought, but bulls not backing down.
** SW L1, entry zone=32.5-33.11, stop just below 32, IT=40
** DT L1 if it spikes towards 35, stop just below 34.6, IT=36.

Earning Watch:

1. SINA: report 11/14 AH, will it enjoy a post-earning run like SOHU? overall bullish trend, looking for small entry near 47 before earning. Key level: 42, around 46-47,around 50.2, 55-56, 59.

2. STP: report 11/15 BMO, will it have a report like FSLR? Key levels: around 44,48, 54.8, 62, 75.64.

Trading Calls-- Nov. 5-9, 2007

On the market:

The market got its rate cut wish and promptly rallied on Weds, but a steep and high volume sell-off pained a less bullish picture for the coming days. Significant divergences among major indices emerged last week as both DOW and SP500 losing over 1.5% while NASDAQ made slight gain. The divergence can be attributed by new concerns in financial sector and continuous strength in tech sector.

On the weekly charts, both DOW and SP500 show the bearish impact of the bearish-engulfing Marubozu candle of Oct. 14 week with signs of more follow-through; the NASDAQ is still very bullish with increasing momentum.

On the daily charts, the bearish-engulfing Marubozu candle resulting from the post rate-cut sell-off significantly dampened the hope that both DOW and SP500 would join NASDAQ in making new highs, furthermore, as DOW/SP500 closed below their EMA50, it seems that they are poised to make a lower low there after making the lower high this week. The rebound on the Friday clearly shows that key support is very much there for both DOW (around 13400) and SP500 (around 1490), and until these supports are broken through, with NASDAQ's strength, the major indices may attempt another rally for new highs.

With rate-cut done and earning reports slowing down, the market is probably going to focus on the financial sector and the health conditions of consumer spending in the coming weeks. Unless the NASDAQ start to come down and DOW/SP500 break the key support levels, the battle between bulls and bears will intensify in the coming days. With that in mind, the best trading strategy right now is probably to open to both long and short trades using key S/R as entry/stop references, and be nimble to take profits, and try to shorten the holding time.


Trading calls

1. AKAM: weekly and daily bullish, 30/60 min neutrual
** DT/SW L1, entry zone=34.5-35.5, CS just below 35, IDS just below 34, IT=40.

2. AKS: weekly posted first real bearish engulfing candle in over a year period, with many indicators point to further downside; daily all bearish; 30/60 min all bearish but with signs of stablization.
** DT/SW S2 on rebound, entry zone=49.9-51.9, stop just above 52, IT=42

3. AMZN: weekly on the verge of confirming the reversal of the long up trend; also bearish in all other time frames.
** SW S1 on rebound, entry zone=89-92, stop just above 92, IT=83.5
** DT S1 if it breaks key support just above 83, IT=79/80.

4. CROX: the post-earning plunge marked the reversal of the fortune for this stock. Bearish all around, but near-term bottom around 44 seems tentative.
** DT S1 on rebound it it stays below 50
** DT L2 if it breaks 50, but be nimble at profit-taking
** SW S1, entry zone 53.8-55, stop just above 56, IT=47.

5. DRYS (focus stock, currently shorted near 113 during the closing moment on Friday):
weekly still bullish but many indicators show developing bearish divergences; daily has several high volume sell-off caused extreme bearish candles seem to confirm the short-term top around 130, downside momentum on the rise and was the first since it Sept break-out; 30/60 min bearish but in over-sold position. Technically, the stock is at a crucial point here, a break of 110 level will almost guaranteed a test of recent lows between 103.46 and 107.75. However, I tend to believe that its first test of EMA50 (currently at 98.6) will be successful.
** for the holding position, CS just above 117, IDS just above 119.5. But I will consider exit the position early during the Monday session if it fails to at least break the 112.5 low for the last two sessions. Will take partial profit if it breaks 110 and spikes down towards 108, and may completely exit if it spikes towards 103, and possible reverse the position near EMA50 with a small initial entry and tight stop.
** DT S2 on rebound, entry zone=117-119, stop just above 120; IT=113
** SW S2 on rebound, entry zone=126-129 stop just above 131.5, IT=113

6. GRMN: the post-earning plunge may mark the reversal of the long up-trend. Weekly chart is confirming the trend reversal; daily also bearish with increasing negative momentum; 30/60 min point to rebound from the oversold area.
** DT/SW S1 on rebound if it spikes toward key resistances around 102/103, around 105, and around 109/110.
** DT S1 if it breaks the key support near 95, IT around 92?

7. SLB: weekly is confirming at least the temporary reversal of the up trend with increasing negative momentum; daily also bearish but shows firming of the short-term bottom near 95; 30/60 min mildly bullish but in overbought region.
** Speculative S3 if it spikes towards 102 or 107 with stops just above, IT=92.

8. SNDK: weekly bearish but negative momentum stalled and some indicators point to more rebound; daily suggests more rebound on the way; 30/60 min all suggest further rebound.
** DT/SW S1 if it spikes towards 47/48, with stop just above 48, IT around 42.

9. TIF: the bad news on the wall street translate into less lavish bonus fuled holiday buying binge at its main store in NYC? Weekly chart on the verge of confirming the trend reversal, bearish indicators point to further downside; daily more bearish with increasing negative momentum.
** DT/SW S1 on rebound, entry zone=51-53, IDS just above 53.5, CS just above 51 with a bullish candle., IT around 47.

10. UA: the post-earning rebound could not be sustained. Weekly show confirmed down trend with increasing negative momentum; daily also bearish, but 30/60 min in oversold region.
** DT/SW S1 on rebound, entry zone=58-61, CS above 61, IDS above 62, IT=53.

11. WLT: the post-earning rally propels it to new high and screaming bullishness.
** DT SW L1 if it spikes towards 32.5/33 use 32 as stop.

Eyes on the shipping sector:

1. TBSI: very much like DRYS; earning report on Nov9? A break-down through 58.5 may drive it to test 51.
** DT SW S2 on rebound, entry zone=62-63.5, IDS just above 64, CS just above 63, IT=58.

2. EXM: very much like both DRYS and TBSI; if it breaks down 63.1, it will test 60.

3. DSX: much stronger than other player in the sector...

Next Weekly earning plays:

1. CTRP: Nov 7, AMC, bullish everywhere and making new highs. It has always been a textbook buying on dip play, will this time be different?
KEY Support: around 45, 48, 51, 54,

2. SONS: Nov 8 AMC. Last Q was a disaster, but it has been on recovery, will this Q report support a perfect cup-n-handle formation?
Key S/R: 5.5, 6, 6.5, 7, 7.2-7.5, 8, 8.5

3. NVDA: Nov. 8. arguably the strongest in the dismal semi sector, it always delivers on the earnings, will this time be different?
KEY S/R: 30/31, around 32.5, around 33, around 36, 39.67 (high)