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Overall we really can’t complain here as we are seeing some stabilization in many of the leaders out there. The real action is in the OTC and the real weakness is in the stodgy DOW stocks. So that said its looks as though we are seeing rotation out of stodgy into growth again. The real kicker will be the jobs report in the A.M.
So what if they gap us down on the jobs report? Well first off odds favor its already being built in. But should they gap us down we’ll look to nibble on some JUNE AAPL and NFLX call options (see charts in longside watch list).
In the meantime AFTER THE CLOSE SPRD- Spreadtrum reports. For us we’ll probably hold our position, but thats us, we know full well the net result could be a sink on the report, however we employ trade size risk management so any impact ought to be contained for us in the event it goes awry. What you do is up to you. You’ve got choices. You can get out ahead of earnings, you can sell off half or you can hold it all. Its really your choice.
This morning we stepped into pick off IRBT and INFA both on the longside as they are both sitting at support and that trade has worked out very well for us in the past as 90% of this is getting in the zone and 10% is sweating it out while in the zone. Will they work? Who knows as there are no guarantees in life except death and taxes but from a probability standpoint its a high probability set up. Remember "Only The Best And Forget The Rest"
As for silver and gold? Well odds favor that the highly emotional money is? Well emotional, this time in the emotion of fear. Welcome to the world of opposites. Thats what makes the market.
Here are your 60 minute index charts. Notice how to a degree the current pullback looks very similiar to the last time? Its all about an upside crossover of the pink channels to the upside, just like last time. Overall very orderly.
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INDEX ACTION AND GAME PLAN FOR THE WEEK Of 5-2 through 5-6
Over the weekend we said and still the order of the week:
"As you can see in both index charts we have a lot of structure. First off we have the current wave count of 3 waves up (abc). If we are going to complete 5 waves up (abc DE) then we still have work to do with a pullback to boot coming (a buy the dips set up?). What’s interesting is that any pullback ought to be contained to the green trend channel support and the neck line support of the head and shoulders bottom. So you see we have a floor baring any unforeseen events.
Remember this potential pullback is healthy and allows stocks to digest the recent thrust up. If we are going to continue to follow the 5 waves up script then we have one more swing higher after a buy the dips pullback. We want to be prepared for that as it’s going to set up a lot of names all in the realm of Pullbacks Off Highs (POH) with a lot of names already doing so that could go at any time.
This doesn’t mean that everything is going to pullback as it’s a market of stocks and stocks are trading to the beat of their own drum as the overall trend is up. We still have a lot of names reporting next week so that too is going to cause a lot of hoopla that we can use to our advantage.
So pace yourself and it’s all about selectively buying the dips and selling the rips as they say with POH’s being the name of the game! Well use pullbacks to start to take on positions all in the realm of 90% of this is getting in the zone and 10% is sweating it out while in the zone."
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LONG SIDE WATCH LIST 5-2 AND WE STRESS WATCH
If I were to put money to work here. Where do I put it?
NOTE: It’s earnings season, make sure you know when that is to occur with whatever issue you are stalking.
Only The Best And Forget The Rest
NFLX
AAPL
5-5 Folks we are really tempted to enter into the realm of 10% of this is sweating it out here while in the zone mode via some common stock and or a call option. Same goes for NFLX too.
ALTR
Gets deleted as its no longer pulling back with todays action. Besides there are better looking patterns out there. Nothing worng with it mind you.
Other names to take a look at in a daily chart frequency with the 50 day added are:
MAKO, SFLY, PLCM, TZOO, FTNT, RAX, SOHU, SINA and SIRO.
All of these are still in uptrends and above the 50 day that are just pulling back the excess as of this moment in time.
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FEATURED BUT NOT TRADE TRIGGERED BY US
This is where names that we have on our watch list that have triggered but for whatever reason we did not take them (can’t do them all) in our trade trigger alerts. This section is because a lot of our subscribers opt to use our information as they see fit from a do-it-yourselfer standpoint.
Long side
ALLT
5-2 The blue line is definite resistance, it’s going to take this issue to catch its breath and give it another attempt if it’s going to go.
5-5 This name gets deleted as its nowhere near any low risk entry point.
PANL
GLD
5-5 up off the lows and still in a clearly defined uptrend pulling back some serious excess. Much like SLV today, the pendulum swings both ways and usually further than you’d think.
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All About Options In The World According To All About Trends
NOTE: The exchanges recently started WEEKLY EXPIRATIONS of options. Going forward, make sure that you check to see which ones you are buying. Let’s stay with traditional options expirations which are the ones that expire the 3rd Saturday of every month.
Options Watch List
ALL JUNE Expiration from here on out folks
ISRG
5-5 EXCELLENT pullback to the 50 day and POW!
Current Holdings
SLV (We are now long 3 MAY 34 Calls to open at 5.10)
As we post they are currently trading at 2.25
MOBI (We are now long 3 May 12.50 call options to open at 4.60)
As we post they are currently trading at 3.10
DANG (We are now long 3 May 21 call options to open at 3.10)
As we post they are currently at 1.70
PAY (We are now long 2 MAY 46 Call Options to open at 7.40)
(We are now long 1 MAY 46 Call Options to open at 8.10 from 4-19-11)
As we post they are currently at 4.50
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"Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
IRBT (We are LONG 300 shares at 32.15 as of 5-5-11)
INFA (We are LONG 200 shares at 51.44 as of 5-5-11)
5-5 This and IRBT are EXACTLY the action one wants to see after a tag of support. One can look at this type of pattern as a guy walking uphill with a yo-yo. The swings up and down are the yo-yo all the while the green trend channel is the guy walking uphill.
SLV (We are LONG 300 shares at 38.18 as of 5-4-11)
5-5 Whoa nellie! we got a gap down this morning and are now underwater in this issue. So what are we going to do about it? Nothing, we are going to sweat it out while the highly emotional money who were chasing it on the way up caves in here.
5-4 Why is it on 4-29 everyone had to have it (of course the market obilged, just not the way everyone wanted it to have it mind you) now everyone is scared of it and wants nothing to do with it? Isn’t the name of the game buy the dips, sell the rips? Isn’t it we buy grand slams to the 50-day average? Isn’t it all about letting them come to you? Enough said.
DANG (We are LONG 300 shares at 23.51 as of 4-28-11)
5-5 No big deal here, just needs to wake up. But before it can wake up its got to stabilize first and hoepfully that is what its doing.
BSFT (We are LONG 300 shares at 42.89 as of 4-18-11)
5-5 There is a reason we pay attention to support and resistance vs our emotions and today’s action is exactly why. Yesterday chicken little was screaming help! its in the 38 range and I bought at 43! Today? Support held and now here it is at 42.59 and now dang near breakeven for us vs yesterday emotional disaster had we not managed our emotional state. EXCELLENT Educational tidbit on the importance of managing your most important asset- your state of mind.
SPRD (We are LONG 300 shares at 21.17 as of 4-18-11)
5-5 See notes at beginning of mid day update on this one.
PAY (We are LONG 200 shares at 52.00 as of 4-12-11)
5-5 This issue now has resistance at the blue line/50 day. So far today so good actually.
MOBI (We are Now LONG 150 shares at 12.39 as of 4-11-11)
We added to our position two days ago in the face of fear to the tune of 300 shares at 16.30
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To our NEW SUBSCRIBERS
What we’ve tried to do is break our watch list down into chart pattern recognition structure from a visual standpoint. Learn the patterns and the components of patterns and you’ll blow those Wall Street MBAs away. You don’t need a $3,000 software program either. All you need is a BURNING DESIRE to be the best that you can be and we’re here to help.
We have a lot of new folks here and we thank you! We want you to take it easy, get to know how the routine works around here for awhile and to feel comfortable.
We hope you all aren’t here because you are chasing performance. For us it’s more about educating and making you the best you that you can be first (that’s what we focus upon!). Like many of our long time subscribers they have all found out that they have no use for traditional Wall Street (and we don’t blame them) and it’s our hope that over time you’ll have acquired enough knowledge from us to say the same with conviction.
One of the most important things we want to stress is that of RISK MANAGEMENT via POSITION SIZING. You don’t need to stack your account with just a few big positions as we’ve seen it time and time again that those who get into trouble are the ones who take large positions and do not employ any risk management system IE shoot for the fences. Those are the people who live on the fringes of extremes and yes ultimately get burned.
As a guideline a good initial system is that of the following example.
Let’s say you have a $100,000 virtual portfolio and let’s say that as a guide you never place more than 10% ($10,000) into any one position. Now let’s say that one day a news driven event hits (over which you have no control over anyway) and one of the positions tanks 20%. On its own that position is sporting a $2,000 loss, while that may seem devastating on its own its really no big deal overall.
Why? Simple its all about risk management being properly employed. What is the impact of a $2,000 loss to the TOTAL VALUE of the virtual portfolio in this example.
Answer: A whopping 2% LOSS. Now you know why we say no big deal.
We can also tell you new people here that you will get stopped out of names and you will take hits. There is nobody on the planet living that has ever hit 18 holes in one and there never will be. We’d rather get you grounded in reality right away vs talking about pie in the sky all the time like a lot of other sites. In so doing your head is screwed on straight from the start and when those days happen (and they will) mentally it won’t mean a thing to you. To us that’s what’s most important is YOUR state of mind as it’s your most important asset. We hope you appreciate our honesty.
We have a very good retention rate here at All About Trends and a lot of great outstanding people here. We like to think that a part of that is being upfront about what can happen (in both directions). Verses those up 500%, I turned $50,000 into $3 million or some other absurd number to get you to bite. That’s not who we are.
WELCOME ABOARD!
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Lastly with regards to taking any trade:
Remember the moment you take a trade you are at the mercy of the market and have no control except when to sell. If you are not willing to take the risk and are not willing to pay that price do not take the trade. We are willing to take that risk knowing full well the end result could be a loss. That said make sure that virtual portfolio management trade size is used accordingly. With any position you may take make sure that should something go awry the amount of total impact to your account does not devastate your acct. Try to stick to a 5% position That’s the key to virtual portfolio management, not biting off more than you can chew.
Remember the mechanics of reality with regards to the stock market states a stock can only do one of three things: Up, Down, Nowhere. The moment you hit the enter button you are at the mercy of the market therefore the only control you have is when to sell/cover. You can’t manage your gains as you have none to manage initially. Knowing this in advance it allows you to stay in outcome, that being you will either:
1. Make a gain
2. Wash
3. Get stopped out at a loss
Remember the market IS the boss. IT is going to do what IT wants to do.
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SUBSCRIBER ONLY WEB SITE
Don’t forget you can view updates in the middle and the end of each trading day complete with current charts, along with our current performance at our subscriber only web site.
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