Tiger Gao Market Watch: 05/17/2009

Correction continues, but bulls are still in control

Correction continues, but bulls still in control, that's my conclusion for today.

Euro finally drops below 1.40 as well as the US stock market becomes red today at the close.
The correction since 1773.13 still continues
Bulls still can not get the 200MA back
But the overall correction pattern is forming a bullish flag so far, bulls still in control, to date.

Also pay attention to GM, if it holds above $1, may be some short term opportunities. Don't know what will happen to it. May be bankruptcy ?

Lessons Learned In 2009

Last updated date: May 22, 2009

1. CSCO ER bet, beat doesn't mean up

Last updated date: May 22, 2009

1. CBOU break out 3.48, then to 6.49 in 8 trading days
2. TYPE break out 4.50, run to 6.13 in 2 trading days
3. CPE up 37% after beating the ER
4. Called the market top on May 7,2009

10 Bagger Stock Watch List

Last update: May 11, 2009

1. LIMC (added on May 4, 2009)
2. TYPE (added on May 4, 2009)
3. PDS (added on May 5, 2009)
4. CLFD (added on May 11,2009)

Last update: June 22,2009
Removed PDS from the list since the chart pattern is broken down.

Last update: July 08,2009
LIMC has been removed from the list since it is merged to TATTF. Good deal for LIMC. A Big Gain!!
Each share of Limco common stock held by the public was converted into one half of an ordinary share of TAT. 9,326,585 shares of Limco common stock were voted in favour of the merger.

Stock Breakouts Watch List

Last update: May 11,2009

ADLR - 2.55
VRAD - 9.31
PDS - 9.65
TYPE - 7.46
JASO - 5.38
CPE - 3.91
EXEL - 6.11
PPCO - 2.12
CLFD - 1.98
QID/QLD
FAZ/FAS
QQQQ/SPY

Special Reports

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List of Special Reports and the minimum donation amount:

A reliable day trading signal – divergence between the EURO/USD and the U.S.A. stock market (a minimum $5 donation)

6 pages
5 charts
2 recent application examples
Very accurate to spot the intra-day reversal as well

Kindly reminder to all

Today the market close early at 2:00 ET

More details:
Bond markets will close early at 2:00 PM ET on Friday, May 22, 2009. The stock and bond markets will both be closed on Monday, May 25, 2009 in observance of Memorial Day.

I will have some BBQ parties over the long weekend. Good relax from the market tension ....

Happy holiday to all ! Enjoy !

Bulls lose the control now,or bears?

Good morning !

As predicted yesterday [1], the market got a nice gap up this morning. But give up the gap very soon. The European stock market runs up well but finally jumps down very steep. formed an intra day reversal. Will the US market go the other way ? I mean \/ ? Let's watch and learn.

I already warned in yesterday's comments [2] that today the Bulls might fight back, so be aware of it and keep alert !

Oil has tried to break out 62. Gold GLD has gained $8 and stands above 959 now. Euro continues going up and now is above 1.40 . I really starts to worry about the Dollar's future, which is bad for all of us living in US and are holding dollars.

Yesterday, I mentioned the divergence between the US stock market and the Euro. So far, it seems the US stock market will follow the Euro. Crossing my fingers again

QID holds 38 well now. But I think now the important level of QID is 39 now. Only breaking out 39 could push QID higher. Otherwise, a pull back and consolidation is very necessary.

Some notable news:

1. Florida's BankUnited failed
So the financial crisis may continue, we should keep an eye on FAZ. I am hoping it can drop to $2 level.

2. GM may not go bankruptcy due to the restructuring
But GM's stock price dropped hard this morning. Yesterday I mentioned double check if GM can hold above $1 well during the pull back, if so, I plan to buy some around $1.20 to test some water.

Today's market close prediction has been updated [3].

[1] yesterday prediction

[2]Bulls might fight back

[3] close updated

Have a good trading day !

Failed Breakout Charts

1. ETFC

2. ADLR

3. ETLT

The chart pattern

4. SQNM

The danger of trading

Successful Breakout Charts

1. CBOU

2. BAC

3. PPCO

4. ADOT

Chart pattern

5. GROW

Chart pattern

6. VRTU

7. NGD

8. CLFD

9. TYPE

10. ETFC

11. SVA

12. STAR (A typical top pattern need to learn)
13. SPPI (The nice breakout chart to review)
14. GIGM (A nice review chart)

15. SCSS (A 15-fold in about half year (review chart))

16. VVTV (A 17-fold in half year)

17. JAZZ (Up 20-fold in 5 Months)

18. FFBC (what kind of bullish run)

19. RODM (Crazy bull up 4200% in 6 Months)

20. AONE (A new IPO up 50% in the first day)

21. YRCW (What a bull today)

22. RINO (Another bull)

23. EWBC (Bullish chart)

24. XRTX (Another bull )

25. UCTT (Bullish chart)

26. CIT (Abnormal gaps )

27. AVII (Possible bull )

28. CPBY (china play )

29. EPIC (Nice breakout chart )

30. VISN (another china play)
31. HOLI (nice chart)
32. HEAT (part1 )
33. CEDU (part1)
34. TSTC (part1)

Break Out Trading Rules

Last update: September 04,2009

Tiger Gao's Break Out Trading Rules Set A (complex pattern play)

Buy in only a new higher high is made (at least 1 cent higher than the breaking point)
If the breakout is fake, cut loss when the price is 5% off the breakout point.
If the breakout is real,take profit according to the technical target.
Always measure the reward/risk ratio.
Price above 200MA, (without the golden crossing is also preferred.)
Previous attempting to form a golden crossing failed.
Keep each trade the same size for every 10 trades.
The fundamental analysis of the stock should be good.
Play only the 1 year chart breakout (the formation time should be ~ 1 year)
Complex pattern only(up pole + round bottom + multi-level ascending triangles must mixed together)

Tiger Gao's Break Out Trading Rules Set B (trend reversal play)

Use weekly chart to spot the entry point
Down trend - no trend fluctuation - down trend again
MACD divergence below the zero axis
Breakout the overall down trend line
Then a new uptrend line (linked the previous low and the correction wave low) is formed
Buying when the price touches the new uptrend line
Target: the previous no trend fluctuation area
Cut loss at the new up trend line if broken down the uptrend line

TJTS pattern breakout completion key trading points

Straight up poles (two with triangles) with violence (such as gap ups, movement strengths) after a substantial down trend
Round bottom formation is followed then
Stock price stands above 250 MA
MACD above zero
Breakout target is at least double the breakout point price
Cut loss point is the round bottom support line
Patience is the key, time has its power
The pattern setup time should be more than 6 months
Enter once the bottom line of the V pattern is formed, at a price about the bottom line
Multiple V bottoms are more reliable, therefore, it can be traded several times before the real breakout
It's especially good for the people who don't want to spend too much time on trading
Above 250MA, any breakdown of V bottom line is a sign of weakness, and better to sell in order to protect the profits
The /\ top should create a new higher high, after a V bottom, otherwise, a sign of weakness too

Finally, if the weekly chart shows the topping sign (3 lines topping plus the breakdown of the low point of the 3 lines topping) then sell all position for safety. Otherwise, sit tight for the technical target!

Critical time for bulls now -close remarks

Critical time for bulls now ! Bears have fought back very nicely. Take NASDAQ as an example:

Bulls lost the 200MA again
As mentioned yesterday, if bulls lost the 1664.19 [1] a new lower low and a sharp down wave is very expectable
Losing a golden crossing in 3 days should be a strong warning sign
Tomorrow, bulls must fight back, otherwise, see NASDAQ at 1600 level pretty soon,my brave forecast.
QID might have a rest tomorrow, then it will try again to break out 40 level.

Very interesting, I noticed EURO is very bullish today, and hits 1.392, a new high. The divergence between the US stock market and EUROis rare, what's the meaning of this divergence ? Any insight for our future trading ? Let's watch and learn.

Ben Kevan mentioned yesterday, they lowered the expectation from 640K to 625K [2], and today we know such lower of expectation activity signals MMs want to drag down the market very well. This reminds me the RIMM ER, lowered expectation -> beat -> Gap up and run.

Today's market close forecast is correct [3].

Finally, I want to call attention to GM. The behavior of GM today reminds me BAC in March when it is about $3 . The market behavior is so similar. I am watching GM's next pull back very closely, if it can not breaks down $1.00, the bench mark, I will buy in. If you have some opinions on GM, please share with us. Especially, any possibility for bankruptcy ?

Actually, I have called GM very early,see my old post in [4].

I plan to write something to analyze GM, and double check if GM can become the next BAC, I mean 5 bagger in 2-3 Months. Keep watching !

[1] the 1664.19 support

[2] 640K to 625K

[3] close forecast

[4] GM calls

Nice day for bears so far

Will it be Bull's time this afternoon, crossing my fingers.

But I still keep my today's market close forecast [1] unchanged.

Since breaking out the down trend channel, after a short re testing of the down trend channel's bounday, QID has gained more than 2 dollars, what a nice bounce. I will expect QID will form the golden crossing again. If so, Bears really is back.

The key for QID is again the 38 level. Once it holds well above 38, it will try to break out 40 again.

Bear is back ? 200MA is the key for today.

Euro topped at ~1.384 and is heading down now. All other global markets such as China, Hong Kong, Japan and European stock markets have a big down day. Will US follow today ? will see. But be aware of the bulls fighting back. 200MA is today's key watching point for both bulls and bears.

The NASDAQ gapped down[1],as predicted yesterday, and broke 200MA, bears win back the 200MA again.
631K unemployment claim, worse than expected
UK reduced rating outlook
Oil was dragged below 61 now

For today's market close prediction, I have updated it.

[1] Gapped down today

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Thanks.

Tiger

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2. tape
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4. Tiger

Please thanks for their sharing and appreciate their efforts to improve our trading and investment skills.

Bears got the hope ? -close remarks

Bears got the hope ? Very possible, but still just some warning signs for the bulls, not confirmed yet. why ? because:

the NASDAQ still close above 200MA
the uptrend is still holding well
QID bounces back very nicely, but I am still waiting for its golden crossing to confirm its bullishness

Tomorrow is very important, if the bears can continue beating the bulls, then probably a new down trend will be in the forming.

So here is the conclusion:

the bullish trend is still holding well, but is in danger
For NASDAQ, watching 1773.13 and 1664.19, breaking either of them will signal a nice up and down wave.
regarding QID, unless the golden crossing is formed again, as I mentioned before, I won't consider to buy back again, at least for now.

To be honest, today's market reversal is a surprise to me. Although yesterday's comments [1] I have thought the intra day reversal. But this morning [2], and after lunch [3] in the market update, I totally ignored the intra day reversal. A lot of things need to learn from the market.

[1] intra day reversal

[2] this morning

[3] after lunch

Tomorrow the initial claims is expected at 640K, beat or miss could bring some energy to the market ...

but remember, price always makes news, not news make the price.

Have a good night and be ready for tomorrow.

Tomorrow's Gap Prediction Is Just Updated

Market Update

The gap is pretty much filled this morning. It's so nice.

The Federal Reserve expects the economy to improve in coming months. ho ho. so may be the rally can continue for just several months... crossing my fingers.

QID bounced back to 36, but until it can form a new golden crossing, I don't think it is a buy now.

JASO, one of our watch list, so far gained more than 24%.. very nice.

I still keep this morning's market close prediction [1] and still remains bullish so far [2]

[1] market close prediction

[2] bullish

Morning Comments

Good morning ! Friends.

What a day. I feel today is pretty much a trend up day. Luckily, I have warned to sell QID once 38 is broken, and warned the end of the market correction starting from May 7, see below the past posts:

1

2

3

The EURO is very bullish, and is almost 1.38 now. Oil has climbed up to 61. oh, man. I am thinking we should worry about inflation now, just kidding.

Asia market last night has a nice consolidation and rest, waiting for US market's signal.

Bank of America Corp. was able to raise billions of dollars in capital and it is on fire now, up more than 8% as I am writing this comments.

Today's market close prediction has been updated. The link is here.

Please notice that 2:00 PM FOMC Minutes

Today's Market Close Prediction

Past performance is meaningless in the stock market ! So I stopped recording more here. As a result, I can focus more on the current trading, not the past.

Every day is a new day in the market.

Every trade must be taken care very well.

I will keep updating every day's market close prediction in the side bar.

PAST PERFORMANCE for a 30 days period: (23/30=77% correct rate since May 18,2009)

RED means WRONG; GREEN means CORRECT

June-29-2009, predicted down, reality: up
June-26-2009, predicted up, reality: up
June-25-2009, predicted up, reality: up
June-24-2009, predicted up, reality: up
June-23-2009, predicted up, reality: up
June-22-2009, predicted down, reality: down
June-19-2009, predicted up, reality: up
June-18-2009, predicted up, reality: up
June-17-2009, predicted down, reality: down
June-16-2009, predicted up, reality: down
June-15-2009, predicted down, reality: down
June-12-2009, predicted down, reality: down
June-11-2009, predicted up, reality: up
June-10-2009, predicted down, reality: down
June-09-2009, predicted down, reality: up
June-08-2009, predicted down, reality: down
June-05-2009, predicted down, reality: down
June-04-2009, predicted down, reality: up
June-03-2009, predicted down, reality: down
June-02-2009, predicted up, reality: up
June-01-2009, predicted up, reality: up
May-29-2009, predicted up, reality: up
May-28-2009, predicted up, reality: up
May-27-2009,predicted up,reality:down
May-26-2009, predicted up, reality: up
May-22-2009, predicted up, reality: down
May-21-2009, predicted down, reality: down
May-20-2009, predicted up, reality: down
May-19-2009, predicted down, reality: down
May-18-2009, predicted up, reality: up

Tomorrow's Gap Predictions

I stopped this column so that I can focus more on today's market close prediction. Here is the link.

PAST PERFORMANCE:(correct rate: 16/23=70%)
RED means WRONG; GREEN means CORRECT

June-19-2009, predicted gap down, reality:gap up
June-18-2009, predicted gap up, reality:gap up
June-17-2009, predicted gap down, reality:gap down
June-16-2009, predicted gap up, reality:gap up
June-15-2009, predicted gap down, reality:gap down
June-12-2009, predicted gap down, reality:gap down
June-11-2009, predicted gap up, reality:gap up
June-10-2009, predicted gap down, reality:gap up
June-09-2009, predicted gap down, reality:gap up
June-08-2009, predicted gap down, reality:gap down
June-05-2009, predicted gap down, reality:gap up
June-04-2009, predicted gap down, reality:gap up
June-03-2009, predicted gap down, reality:gap down
June-02-2009, predicted gap down, reality:gap down
June-01-2009, predicted gap up, reality:gap up
May-29-2009, predicted gap up, reality:gap up
May-28-2009, predicted gap down, reality:gap up
May-27-2009, predicted gap down, reality:gap down
May-26-2009, predicted gap down, reality:gap down
May-22-2009, predicted gap up, reality:gap up
May-21-2009, predicted gap down, reality:gap down
May-20-2009, predicted gap down, reality:gap up
May-19-2009, predicted gap down, reality:gap down

What a consolation day - close remarks

Today is a classical consolidation day, not like yesterday,which is a well trended day. It is hard to do day trading today, and it is hard for me to predict the market close. Although

the initial morning close forecast (link)

is pretty good.

After lunch, I warned bears should

be aware of the end of the market correction (link)

However, at the end of the day, the bears has a nice fighting back. So everything is pretty dynamic.

From the charts, we can see

Nasdaq 100 holds above 200MA for 2 days so far
RSI stands above 50,usually a bulish sign
5 daily candle bars formed a nice uptrend
QID formed a dead crossing,bearish sign

Here is my conclusion for today:

The correction and the down trend since May 7 is over, as warned yesterday. Today the follow through is pretty nice for the bulls.
IF QID can not make a golden crossing in 3 days, I will expect to see QID a new lower low than 34.92
On the other hand, if Nasdaq 100 can not make a new higher high than 1435.80 , I will expect it to make a new lower low than 1339.82.

Tomorrow there are two important issues:

1. 10:30 AM Crude Inventories

2. 2:00 PM FOMC Minutes

So it could be a very volatile day and may make dramatic intra day reversals ... Enjoy!

Market Update

It is a hard day for bears. The only hope this morning gained for bears has gone. QID lost the golden crossing and formed a dead crossing this morning. I hope you bears have unloaded part of your shorts when QID broke 38 yesterday,which has been mentioned in the blog several times. Don't worry, you will be able to buy back QID at much lower price than 38. Now I am looking forward to a new lower low for QID. It may break 36 any time from now on.

The correction from May 7 has ended. Today the follow through is so far so good. Let's see if Nasdaq 100 will make a new higher high with this wind up or just a lower high. IF lower high, I will start to build QID position again.

I am revising the morning's prediction, and think,now, the market will close up.

Today's Market Prediction Is Just Updated

Today's Market Prediction

Morning Comments

As predicted yesterday,

Tomorrow's Gap Prediction

Last update: May 18, ~3:30PM(ET)
Tomorrow (May 19) GAP DOWN
ET: USA Eastern Time

Today the market gapped down. Today, the bears task is to get back 200MA, or at least don't lose the golden crossing too soon in order to keep this correction to a lower level.

Euro has topped at about 1.3655, oil is about 59 level now. Global stock are all up last night including Shanghai, Hang Seng, NIKKEI , and TSEC , European market are forming an intra-day /\, and may close
down today.

All of these are pointing to a bearish day today. But also be aware of the bulls fighting back later, and a possible \/ for today.

For today's close, I predict that we close down today.

Today's Market Prediction

Another notable news is that housing construction tumbled to a record low in April.

Some strong movers today:
FONR
ONTY
KLIC
TRID
IGC
KAZ
KOG
SKS
THC

Today's Market Prediction Is Correct

Today's Market Prediction

Sign of the correction ending ? - close remarks

What a nice run up day today. When I am watching the market, I really felt the bullish market mood, and the feeling is very strong. Very fortunately, I warned myself and my blog viewers the madness of the bull this morning:

Morning Comments

and at around lunch time again:

Market update

Is the correction since May 7 ended now ? probably, and we still need some follow through to confirm this conclusion. Here are the key points from the charts:

The Bulls successfully get back the 200 MA
Moreover, the down trend line since May 7 is broken out. And a new up trend is in the forming stage.
Qs are going to form a golden crossing soon.
QID may lose the golden crossing and form a dead crossing as soon as tomorrow.

All of these are pointing to a WARNING SIGN for bears. Very clearly, and no kidding. The bear's hope now is tomorrow not to lose the golden crossing. I have emphasized QID 38 level before, once it is broken, it looks not good. And you will be able to get it below 37 when you unload above 38.

So keep watching. The market will be more fun this week.

Tomorrow's Gap Prediction Is Just Updated

Market Update

I sincerely hope the bears are not burned by the mad bull's fighting back.

This morning I already warned today is a strong trend up day. So far it really is.

Morning Comments

This afternoon, I expect some pull backs, but I still keep my earlier prediction: the market will close up.

I have a feeling that the correction may end and the market may climb high from now. One reason is that QID broke down 38 now. QQQQ has broken out the down trend channel this morning, which is pretty bullish. Now only one more confirmation is needed. I am waiting for that confirmation now in order to confirm myself to buy QLD.

After the market close, I will draw more conclusions.

Today's Market Prediction Is Just Updated

Morning comments

The future has a nice run up last night, and points to a higher opening today. China's Shanghai stock market index finally closed in green. HANG SENG closed up 1.38% while NIKKEI 225 closed down 2.44%.

The oil has climbed back to 58 level, and the EURO also got a nice run up to about 1.35.

ALL of them are pointing to a BULLISH day today for US market.

The USA investors are waiting for the National Association of Home Builders' release of its index of builders' confidence for May at 1 p.m. Eastern, USA time. If this beats the expectation, then it could be something push the market higher.

I feel the market mood for today is pretty bullish. It could be a big WINNING DAY FOR BULLS, just a kind WARNING for bears.

Some mad bulls this morning so far:

KONA
IDMI
SMCG
REDF
LGTY
SIFY
INOC
FUEL
HWFG
WBNK
KNDI
ROYL

china, asia and future

down big now.

ho ho

Today's Market Prediction

Today's Market Prediction

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