Why Some Breakouts Are Expectable and Powerful
Why some breakouts are real and powerful ? Why some breakouts fail and make new low? I always think about this question and want to have some clues. Here are some observations based on charts of CBOU (real breakout) and ETF (failed breakout).Some key conditions for a real breakout:
1. A failed 50/200 MA golden cross at the beginning of the pattern formation.
2. Before breakout, the price is already above the 200MA.
3. If breakout, the 50/200 MA golden cross can be formed.
4. Volume spiked at critical points, and showed the same pattern as the price pattern.
Nevertheless, Not every nice set up pattern can be 100% broken out, so cut loss as quick as possible, if breakout failed.
If CBOU can hold the golden crossing well, plus improved fundamental condition, it could become a long term bull. Just my opinion. For example, may be next SBUX. Watch and learn after the correction.
10 year Nasdaq chart and analysis
Some people have been recently driven crazy by this Bear Market Rally, including myself. Of course, following the trend and making money, no doubt about that at all. That's what I have already done since March. However, I want to show you as well as myself the big picture here in order to keep myself being cautious and calm, especially when nice profits have been accumulated recently.The key questions are:
1.How long will this 2009 rally from March last
and
2. is it the beginning of a new bull market ?
From the 10 year chart above, Please notice that:
1. The bear market rally, at most, can only result in a 50/200 MA golden cross. And will give up the golden cross very soon.
2. The bear market rally starting point is far away from the 200MA. It takes a SUBSTANTIAL bullish
move to reach the 200MA and make the golden cross.
On the other hand, a real trend reversal (such as early 2003), or a new BULL market starts without such signals.
In addition, every time hits 200MA, no matter what, the market always retreat back.
So here are the conclusions based on the chart:
1. A correction back to 50MA (~1600) is expectable, no exceptions in the last 10 years.
2. It's too early to say it's a new BULL market. Even no golden cross yet, not to mention
if it can hold the golden cross.
Possible leading indicator for the general stock market
is the semiconductor section. such as
PHLX SEMICONDUCTOR SECTOR INDEX (^SOXX)
That's just my observation.
PHLX SEMICONDUCTOR SECTOR INDEX (^SOXX)
That's just my observation.
Bear's good time is in the corner ? -Close Remarks
1. The up trend is still hold, but if you draw the trend line on the chart, you can see the NASDAQ-100 trend up line has broken yesterday, and today the BULLs can not get it back. A WARNING sign.
2. Now the 200MA is the support line for the BULLs, once it is broken, CORRECTION should come in, and may last untill the end of May.
3. QID's down trend has been REVERSED since yesterday, that's why I start building the QID position since yesterday.
4. QID's filled GAP down and GOLDEN crossing are very BULLISH in the chart, One more confirmation is the QID won't lose the golden crossing too quick.
I would like to make a crazy prediction, next Monday will be BLACK MONDAY. If so, then Bear's good time is in the corner for sure.
After this correction, I would say another leg up (say, DOW 10000) could be possible in July/August.
Enjoy reading and the weekend.
Today's Market Prediction Is Correct Again
Last update: May 8, ~10:00AM (ET)
Today (May 8): UP
ET: USA Eastern Time
Today (May 8): UP
ET: USA Eastern Time
Both long and short positions in my
portfolio are running up, very good.
Part of the Longs: TYPE, CPE, PDS, ADLR
Part of the Shorts: QID
A very nice week.
Part of the Longs: TYPE, CPE, PDS, ADLR
Part of the Shorts: QID
A very nice week.
Why Technical Analysis of Stocks and Futures
work well ? How can you just make trading decisions based on chart ?
My thought: Because the chart is drew by people and the market is manipulated as well.
Don't you agree with me !
Hope we well understand this is a game among human beings!
My thought: Because the chart is drew by people and the market is manipulated as well.
Don't you agree with me !
Hope we well understand this is a game among human beings!
Attention ADLR & CPE with chart
These two stocks fundamentally are not good. But the set up in the chart is pretty nice for a home run if they can successfully break out the pattern. keep an eye on them, watch and learn what will happen.
Market Alert and QID update
By watching this morning's QID price movement, I am feeling that the market may topped already, if not very soon, better protect your long profits and start some short positions.... I already initialize some QID position yesterday as described in my yesterday's post.
I still think a sharp correction through the end of May is very possible ....
However, a confirmation of Today and Monday is still needed ...
After that, may be the second leg run to DOW 10000 ....
I still think a sharp correction through the end of May is very possible ....
However, a confirmation of Today and Monday is still needed ...
After that, may be the second leg run to DOW 10000 ....
Morning Comments
The stress tests were officially released yesterday after the close. The market has reacted favorably to them with a gap up this morning.
The pace of layoffs slowed in April when employers cut 539,000 jobs, the fewest in six months. But the unemployment rate climbed to 8.9 percent, the highest since late 1983. Keep watching the unemployment
rate since it is key for the economy.
The Nasdaq is currently on an 8-week winning streak. It’ll have to move up well today to continue the streak.
Overall it’s been a good week. The higher highs and higher lows model continues; the intermediate term up trend continues. The Russell is almost 50% off its Mar low; the S&P is almost 40%. In the grand scheme of things, I consider this a bear market rally, but as I’ve stated numerous times, I’m not going to try and guess a top. If the market wants to go up, by all means, let it go. If you’re bullish (I have been and am in the intermediate term), ride it for everything it’s worth. If you’re bearish, be patient. You should be thrilled at the prospects of shorting at a higher level.
Our first target of S&P(925) has been reached. Great week, lots of solid breakouts. Lighten up before the weekend.
The pace of layoffs slowed in April when employers cut 539,000 jobs, the fewest in six months. But the unemployment rate climbed to 8.9 percent, the highest since late 1983. Keep watching the unemployment
rate since it is key for the economy.
The Nasdaq is currently on an 8-week winning streak. It’ll have to move up well today to continue the streak.
Overall it’s been a good week. The higher highs and higher lows model continues; the intermediate term up trend continues. The Russell is almost 50% off its Mar low; the S&P is almost 40%. In the grand scheme of things, I consider this a bear market rally, but as I’ve stated numerous times, I’m not going to try and guess a top. If the market wants to go up, by all means, let it go. If you’re bullish (I have been and am in the intermediate term), ride it for everything it’s worth. If you’re bearish, be patient. You should be thrilled at the prospects of shorting at a higher level.
Our first target of S&P(925) has been reached. Great week, lots of solid breakouts. Lighten up before the weekend.
Nasdaq 100 analysis - Big Correction coming ?
1. Today's market correction is very strong, and CSCO didn't got a chance to run on it's ER with a "beat". Instead, Sell in May become true.2. This correction is very due, and should be stronger and longer before the Bull can pick up and run longer
3. However, the bears need follow through to confirm the correction is real
4. If tomorrow QID can break out 38, It will probably run to 40, so a good chance to catch some trading opportunities here.
5. Tomorrow and Monday will be critical for Bears to push down the market in order to get a substantial correction.
6. Personally, I think today is the end of the Rally since Much, the correction may continue to the end of May....
7. After this correction, The bulls may continue to run up and test DOW 10000, around August ...
8. Then a big down is coming after that ....
I will write up some big market picture predictions later once got the time ...
Section Change
The initial swing system signal section has been changed to Stock Breakouts Watch List, where I will post some potential breakouts. When they break out, I will post them in the blog. Please note, not all breakouts are real and run away. Some may fail and drop hard like a stone. Only one thing is for sure, the breakout is powerful, for example, look at the CBOU chart above. Breakout of 3.48 provides a good trading opportunity.
It seems this time the market correction
is real and may last until the end of May .
So I took profits today on long positions and set up some short positions via QID ...
For the long term positions, I still keep some shares, so that I can feel the market's trend through them, and plan to buy back later at much cheaper price ...
So I took profits today on long positions and set up some short positions via QID ...
For the long term positions, I still keep some shares, so that I can feel the market's trend through them, and plan to buy back later at much cheaper price ...
As I mentioned the day before yesterday
QID needs to fill the 3 unfilled gaps above.
it is doing it now ... but a little too fast ..
it is doing it now ... but a little too fast ..
Updated the Swing System Signals
with the watching list. These are the potential targets for swing trading. Please be patient and remember CASH is also a position, and a much better position than taking losses.
the KEY for successful investment is never lose money, and, never lose money. I know some big guys holding cash for more than a year during the hard market time. During the hard time, cash in the money market or savings are very good since there are no inflations during recessions.
If you really want to trade, do some day trading or invest for long term ....
Finally, I want to stress that making your investment/trading decisions by your own judgment. This blog is just for informative and sharing purpose, not your trading adviser. Plus, some revealed trades here may be paper trading, not a real penny is involved. So be responsible for your own hard earned money !
the KEY for successful investment is never lose money, and, never lose money. I know some big guys holding cash for more than a year during the hard market time. During the hard time, cash in the money market or savings are very good since there are no inflations during recessions.
If you really want to trade, do some day trading or invest for long term ....
Finally, I want to stress that making your investment/trading decisions by your own judgment. This blog is just for informative and sharing purpose, not your trading adviser. Plus, some revealed trades here may be paper trading, not a real penny is involved. So be responsible for your own hard earned money !
Yesterday's Gap Up prediction is correct again
Tomorrow's Gap prediction
Last update: May 6, ~3:30PM(ET)Tomorrow (May 7) GAP UP
ET: USA Eastern Time
today the market topped
so far, looks like big mms are selling .
But again, the trend reversal needs confirmation ....
so be patient, and be cautious.
But again, the trend reversal needs confirmation ....
so be patient, and be cautious.
closed CSCO ER calls
this morning with a small gain. The MMs don't want to push CSCO above 20, which is a bad sign.
Morning comments
The market is in a crazy mode, that's the time to make very easy money for traders. That’s when the market gets bought up despite prior gains and all logic and when you’re literally amazed at the bulls’ ability to keep pushing prices higher. We need to remember these for the next bull as well!
For people who doubt technical analysis, I can’t think of a better persuasive argument. If you trade/invest off the fundamentals, you would have never been long off the March low and you certainly wouldn’t have gone long in the past week as literally dozens of stocks broke out and rallied. But technical analysts don’t study what should happen but what is happening. We covered our shorts within one day of the March low and went long one day after and have basically stay long or maintained our long bias ever since. We were able to do this for only one reason. It’s because the charts told us to maintain a long bias. Simple as that. The trend was up and there were no warning signs offered yet.
We must also be aware of a possible ‘buy the rumor, sell the news’ scenario.
For people who doubt technical analysis, I can’t think of a better persuasive argument. If you trade/invest off the fundamentals, you would have never been long off the March low and you certainly wouldn’t have gone long in the past week as literally dozens of stocks broke out and rallied. But technical analysts don’t study what should happen but what is happening. We covered our shorts within one day of the March low and went long one day after and have basically stay long or maintained our long bias ever since. We were able to do this for only one reason. It’s because the charts told us to maintain a long bias. Simple as that. The trend was up and there were no warning signs offered yet.
We must also be aware of a possible ‘buy the rumor, sell the news’ scenario.
Today's market close remarks with Charts
1. consolidation day
2. extreme point day as well
3. new higher high is very possible before the bull runs out of the energy
4. The up trend is still holding very well
5. Please notice how the market ignore bad news recently, they just go to where they need to go, no matter
what. For example, BAC up 17% today. This is the signal that we might be in the BULL's last but fast
run ups...
6. CSCO is cooked up after hour now ...
Today's Market Prediction Is Correct Again
ho ho ho
hope you can gain from my predictions ...
Today (May 6): UP
ET: USA Eastern Time
hope you can gain from my predictions ...
Today's market Prediction
Last update: May 6, ~10:00AM (ET)Today (May 6): UP
ET: USA Eastern Time
CSCO ER play
I plan to bet a little with the gains from other stock trading on CSCO's ER
I plan to buy some CSCO May 20 calls around 0.30 and see if it can be 10 bagger tomorrow .... Don't follow me, it's very dangerous ...
The reason for this bet is that I expect another extreme point to show up before the bull die ...
QID prediction
IF QID can hold above 36.00 very well today, it will go up more to fill the unfilled gaps in a short time ...
Alert - Market might topped
today for this up wave ...
1. NAZ leads the down wave now, just like the leading up from March
2. QID needs to fill thoes unfilled gaps, as mentioned yesterday in my post ...
3. The possible down wave needs to be confirmed anyway ....
4. some big guys are down now, like AAPL, GOOG, and AMZN ..
I am looking for the next extreme point to see if the trend has been reversed ....
1. NAZ leads the down wave now, just like the leading up from March
2. QID needs to fill thoes unfilled gaps, as mentioned yesterday in my post ...
3. The possible down wave needs to be confirmed anyway ....
4. some big guys are down now, like AAPL, GOOG, and AMZN ..
I am looking for the next extreme point to see if the trend has been reversed ....
Yesterday's Gap Up prediction
Is correct again. ho ho
See Section: Tomorrow's Gap prediction
Tomorrow (May 6) GAP UP
ET: USA Eastern Time
See Section: Tomorrow's Gap prediction
Tomorrow's Gap prediction
Last update: May 5, ~3:30PM(ET)Tomorrow (May 6) GAP UP
ET: USA Eastern Time
Possible S&P500 targets - with chart
If the breaking out is true, the bulls could push up SPX to 925 & 975, or may be higher.
Please note that the market keep rising amid bad news, for example,
1. Bank of America Corp. stock rose in premarket trading after an initial decline, amid reports that it needs $34 billion in new capital.
2. GM to issue up to 60 billion shares to swap for debt
3. GM current stockholders would get 1 pct of new company
It means the market up trend is very strong, don't fight with the trend, follow the trend with caution.How about this break out ?
When 4.50 is successfully broken out, will it go up to $7 in a short time ?
The power of break out -CBOU
Once 3.48 was successfully broken out, more than 50% gains in a short time. Sweet!
Today's market close remarks
1. consolidation day2. The up trend still holds well
3. There is a need for the NAZ-100 to pull back at least to the 200 MA level
4. QLD runs perfectly in a UP channel while QID runs in a DOWN channel.
5. Unless the next extreme point reversed the up trend, following the trend means buying at the dip and holding the longs
three unfilled gaps on QID
at about 37,38 and 39
and an intra-day filled gap at about 40.
Will these gaps be filled in the near future ?
I think the chance is pretty high .....
and an intra-day filled gap at about 40.
Will these gaps be filled in the near future ?
I think the chance is pretty high .....
My portfolio management method
1. Set up a very diversified portfolio like the mutual fund with no more than 50% of the initial injected cash
2. Hold the diversified portfolio like holding some mutual funds, do not time the market
3. Check the portfolio holdings for POSSIBLE breaking out swing trading opportunities
4. Catch the break out swing using the cash position
5. Once gained from the swing, use part of the gains to build up the long term portfolio like mutual fund
6. Re balance the diversified portfolio like mutual fund, but only when both the fundamental and the technical said so.
Just very rough guidelines to share with you ....
2. Hold the diversified portfolio like holding some mutual funds, do not time the market
3. Check the portfolio holdings for POSSIBLE breaking out swing trading opportunities
4. Catch the break out swing using the cash position
5. Once gained from the swing, use part of the gains to build up the long term portfolio like mutual fund
6. Re balance the diversified portfolio like mutual fund, but only when both the fundamental and the technical said so.
Just very rough guidelines to share with you ....
Our pick of 10 Bagger stock yesterday
this morning GAP UP and FLY 15% ......
TYPE's EPS beats ...
7:08AM Monotype Imaging beats by $0.03, beats on revs (TYPE) 4.05 : Reports Q1 (Mar) earnings of $0.09 per share, $0.03 better than the First Call consensus of $0.06; revenues fell 13.6% year/year to $23.6 mln vs the $23.1 mln consensus. "Our first quarter results demonstrate our ability to effectively manage the business and deliver high levels of profitability and free cash flow even in the face of a challenging economic environment. We remain optimistic about our long-term growth opportunities and plan to continue selectively investing in our key strategic growth initiatives, including emerging consumer electronics markets."
TYPE's EPS beats ...
7:08AM Monotype Imaging beats by $0.03, beats on revs (TYPE) 4.05 : Reports Q1 (Mar) earnings of $0.09 per share, $0.03 better than the First Call consensus of $0.06; revenues fell 13.6% year/year to $23.6 mln vs the $23.1 mln consensus. "Our first quarter results demonstrate our ability to effectively manage the business and deliver high levels of profitability and free cash flow even in the face of a challenging economic environment. We remain optimistic about our long-term growth opportunities and plan to continue selectively investing in our key strategic growth initiatives, including emerging consumer electronics markets."
Today's close remarkets
1. When a trend is clearly formed, follow the trend is the best way to trade. Remember, when to exit from the trend following? My rule is when the current extreme point REVERSED the trend, compared with previous extreme point. Then, when to get in and follow the trend, during the reaction period and buy in at some support levels.
2. Today is an extreme point day.
3. The up trend is still holding very well.
4. The up trend with a 45 degree is pretty stable, like this one.
5. Once pulling back, it could be very quick and very deep, so be ready.
what might be early warning signs of inflation
When the unemployment rate begins to drop and then, should it drop rapidly, that could be a signal.
All investments has a risk
Trading stocks/options/futures,etc has much more risk ....
I think, to some degree, investing and trading is a gambling, just play the game of probability ...
So always keep this in mind, IF YOU ARE NOT CAREFUL, just ONE UNCONTROLLED LOSS could wipe you out ....
My risk control list:
1. Never bet on one trade too heavily, even you are 100% sure you can win the trade. It's just a good habit for any good investors.
2. Diversification.
3. Hedging with both long and short positions.
4. Always keep 50% of the portfolio's market value in CASH.
I think, to some degree, investing and trading is a gambling, just play the game of probability ...
So always keep this in mind, IF YOU ARE NOT CAREFUL, just ONE UNCONTROLLED LOSS could wipe you out ....
My risk control list:
1. Never bet on one trade too heavily, even you are 100% sure you can win the trade. It's just a good habit for any good investors.
2. Diversification.
3. Hedging with both long and short positions.
4. Always keep 50% of the portfolio's market value in CASH.
The market mood
is very bullish, it just ignores the bad news and go where it should go ... Please also notice that we have up for 8 weeks without serious reactions. This reminds me two possibilities:
1. The reaction will come eventually very sharp and create a new lower ....
2. We starts a new bull market, after a short reaction, a new higher will be made ...
So far, it is hard to judge which will be true, we need to watch the coming reaction carefully and make a
decision based on that....
So far, follow the trend, add at each dip works pretty well, a typical bull market feeling...
1. The reaction will come eventually very sharp and create a new lower ....
2. We starts a new bull market, after a short reaction, a new higher will be made ...
So far, it is hard to judge which will be true, we need to watch the coming reaction carefully and make a
decision based on that....
So far, follow the trend, add at each dip works pretty well, a typical bull market feeling...
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