MGM - Continuing to trend down

MGM - WAIT



Unfortunately as I feared MGM continued its trend downward despite strongly being up yesterday. My entry seemed a bit pre-emptive, and my stop loss got trigerred almost exactly at where I had set it before it bounced back up, at $9.15-$9.16. Seeing this as not the first time this happened I will stop posting exactly what are my personal entry price and stop loss/buy triggers. However, I will still say if I'm currently Long or Short the stock I'm talking about. One big mistake I did with my stop loss order of $9.15 is the fact that it was so close to Thursday's low of $9.12, and often after such big moves whether it happens within one day or more, the stock will likely revisit the low of where it bounced back up from. However if I had to set a lower stop loss, I would have to be able to risk taking on a higher loss in case of a reversal. The only positive signal from today is that MGM held up at this current support level of $9.12-$9.13. With that being said I did take another gamble today, with the major trend of MGM being still down, and took a new position after getting whipsawed. I have to warn you that what I'm doing is extremely risky, and a move below the current support level will give us yet another SELL SIGNAL. My decision on taking a long position with MGM does not have to do with technical solely but a lot has to do with the earning report coming up. But this could go either way, and will depend on market conditions. I did feel that I still had to disclose that I'm currently long MGM, as I feel I may have gotten whipsawed again.

LONG MGM

Dow Jones - Back at Critical Level

Dow Jones - BUY SIGNAL FAILED - WAIT


The Dow Jones miserably failed to close higher today and has reversed back towards its 50 day MA. It now seems that my analysis from Wednesday is valid again. The market is showing signs of weakness after such a strong reversal today. What I feared on Wednesday seem more likely again today, but a clean break on Monday towards 9600 and below would trigger a big sell off. Here is again my analysis from Wednesday:

The Dow continued its pullback back today, and should go as low as 9600-9700 before seeing it bounce back off its 50 day MA. However, considering this is the 4th pullback within this trend, I wouldn't be surprised to see the Dow break the trend. What leads me to believe this, is that a few stocks have already started to cross their 50 day MA (e.g.MGM & LVS), and this may be indication for what's to come for the Dow. MGM & LVS are both high beta stocks and move much more quickly than the market, so this could be predictive moves towards the markets direction. Also, we are entering into the flu season, and if the H1N1 were to start spreading and which it seems like it already started, this could a cause some panic and effect the market directly. If the Dow does bounce back up strongly over 9600-9700 this would be a BUY SIGNAL where you could find a lot of good opportunities. If the Dow Jones does bounce back up, I wouldn't be surprised if the Dow hits its lows tomorrow morning before closing up, and possibly indicated a reversal and a continuation of the major uptrend. Another possibility is simply for the Dow to close down around 9600-9700 tomorrow and simply bounce back up on Friday. The worse scenario which would give us a STRONG SELL SIGNAL would be a sharp break below its 50 day MA. I believe any moves at 9500 or below would be enough to confirm it. (Update: A close below 9600 would be enough to confirm it). A breakdown of the Dow Jones, will open opportunities on the short side. Although, if the break does occur you may see an attempt of a bounce back up, but I believe it would start trending down. The Dow's next support levels, assuming a break down are at 9500, 9300, 9100, 8800 and 8600. Basically a break down of the Dow could send it as low as 8600.

Quick Analysis - Gold, Canadian vs. US Dollar, Oil, Market

My analysis on gold, is based on my observations of the Dow Jones, and the Canadian Dollar Index vs. the US Dollar. All three are very positively correlated with one another, and all have bounced back up strongly today. The Canadian dollar jumped back up so far from $92.7 yesterday to $93.7 today. The Canadian Dollar bounced back up strong support which was indeed around $92.7. When the Canadian Dollar is up relative to the US Dollar, this of course means that the US Dollar is down, and thus Gold is up as people start losing confidence in the US Dollar. The Canadian Dollar being up is mostly due to Oil being up because of the weaker US Dollar, and because Canada has a lot of Oil resources and its value is mostly driven by Oil prices (it's an Oil Dollar). The market being up so much, in part has to do with the fall of the US dollar, where it pushes prices up to compensate for the lower value. Usually when you see Gold up, the US dollar will be down, and therefore Oil will also be up along with the market. Basically what this means is if the US dollar and the market were to fall/increase by the same amount, you would only have artificial gains for that day, because the US Dollar will be worth less.

ABX (Gold Stocks)- Gold moving back up

ABX (Gold Stocks) - BUY SIGNAL

With the market bouncing back up, you can now expect gold to bounce back up too as it already did today. I took a long position with ABX at $36.27, with a stop loss at $33.75, and a stop buy order at $37.75. Almost all gold stocks are pretty much moving the same direction (EGO, AUY,GG...). Taking one gold stock over another should give you around the same returns, I chose ABX over AUY because I prefer stocks with a higher dollar value, making them somewhat safer. I decided to go long ABX because it bounced back up strongly over its 200 day MA, while this position also allowed me to set a stop loss order below the 200 day MA without taking on a loss of more than -7.00%, giving me more potential upside than downside. My stop buy order at $37.75 will be triggered if it goes back over its 50 day MA, which would give us another BUY SIGNAL.


Long ABX @ an average of $36.27 - Stop Buy @ $37.75 - Stop Loss @ $33.75

MGM - Up but still trending down for now

MGM - BUY SIGNAL (minor trend - Short-Term -1 week)
STRONG SELL (major trend monthly)


MGM gave us a BUY SIGNAL today after strongly bouncing back up, however the major trend is still down. Despite that, I expect MGM to at least move back up towards $11.00 and its 50 day MA, giving it a short-term potential return of 10%-15% before falling back again, if the down trend persists. A reader of this blog did ask me about MGM, and I was myself hesitant towards taking a position with MGM, but I finally did. I went long at $9.82, but have set a tight Stop Loss order around $9.15 assuming the BUY SIGNAL fails. However, I will be watching MGM like a hawk with any moves upward, when it gets near $11.00 and its 50 day MA. If I see any signs of a pullback then, if it does indeed reach these levels I will immediately sell my shares, because this would indicate that the down trend will continue. However if MGM does start to go strongly over $11.00 and $12.00, the trend will most likely be broken and the potential returns could be much higher than 10%-15%. In the end I decided to take a position with MGM because in the short-term (1 week) there is more potential upside than down side. Note that MGM is still a SELL based on its major down trend. So, if you are looking to be very short term like myself right now we have a BUY SIGNAL, that could very possibly pullback at the end of next week or the beginning of the week after. Please also note, that I will not bother making an analysis of LVS, because it will be the same analysis with simply different price levels. MGM & LVS are very strongly correlated and their charts are almost identical. Going long MGM or LVS could potentially give you approximately the same returns. Keep in mind that MGM will be announcing its earnings report next week on November 5th, so there is sure to be a lot of action. I think that after the earning report MGM could either have a huge fall or a huge break upwards, there is no way to predict. However, keep in mind that WYNN's results did dissapoint this week and that is why all casino stocks have been down. If the results of MGM are dissapointing I may sell all my shares in the after-hours in the event where MGM starts to fall strongly. So, be sure to watch MGM very carefully since this is a high Beta stock, moving very fast, which can give you huge returns or huge losses if you don't set stop losses. I've repeated it many times and I will repeat it again, you must absolutely, ALWAYS set a Stop Loss order or you will easily lose a lot of money, especially with high risk stocks such as MGM. Please note that MGM's previous STRONG SELL SIGNAL is based on the fact that MGM crossed its 50 day MA a couple of days ago, and did stay below it. This signal is still valid based on the major trend (monthly). The current very short term BUY SIGNAL is based on a potential weekly move, but could very likely pullback near $11.00, when the STRONG SELL will remain valid.

Long MGM @ an average of $9.82 - Stop Loss @ $9.15

Dow Jones - Bounces Back Up

Dow Jones - BUY SIGNAL

The Dow Jones gave us a BUY SIGNAL today with a very strong bounce back up, making it very likely it will hold and be confirmed most likely tomorrow. This bounce back up is related to the fact that "the U.S. economy (GDP) expanded at a 3.5% annual pace in the third quarter, as massive government stimulus helped drag the economy out of the longest and deepest recession since the 1930s". The fact that the bounce back up is related to news rather than a no-news day, is reassuring, and it looks now that the Dow is resuming its trend up. Assuming this BUY SIGNAL does indeed get confirmed, we can expect it to see it go higher than the last peak of 10100, perhaps as high as 10400-10500 before the next pullback. As you can see the market right now is moving waves, and you should focus on the Dow's or S&P 500 trend, to know when the market could bounce back up or pull back. Seeing the Dow bounce back up today and with a confirmation, indicates that there are a lot of buying opportunities after such a pullback.

AAPL - WAIT

AAPL - WAIT/SELL CONFIRMED

(AAPL did confirm the SELL SIGNAL when it went below $195.00, however since it continued as low as $191.00, we now have a WAIT signal where we could possibly see AAPL bounce back up)

Believe it or not, for the first time since the month of June, AAPL had a fourth straight down session. My stop loss was trigerred around $195.00 where I took my gain of approximatelly 5.00%, when I had 10.00%. I think comparitively to TIVO sacrificing not more than 5.00% of my gain is reasonable enough. In fact AAPL did then go as low as $191.10. At this point AAPL's major uptrend is still intact. I expect to see AAPL bounce back from around current levels along with the market if it does indeed bounce back up too. AAPL could still go as low as $182 before any support at its 50 day MA, assuming it continues lower than the current level. Although if AAPL does move any lower, it will break its accellerated uptrend that had been intact since mid-July. Any moves toward its 50 day MA will be the first time since early July. However, as long as AAPL is over its 50 day MA, the major uptrend will be intact, and any bounces back up will simply be buying opportunnities.

TIVO - Failed Reversal and lesson learned

TIVO - WAIT

Today, TIVO failed to bounce back up after I indicated an inverted hammer pattern. Therefore, TIVO gave us a SELL SIGNAL, and pulled back towards its support level of $11.00, going as low as $10.89. TIVO could still go as low as $10.50, before bouncing back up over its 50 day MA. A close below $10.50 would give us a STRONG SELL SIGNAL. I think at this point based on TIVO's chart alone, it should stabilize very soon and perhaps trade more narrowly. However I would wait before doing anything, based on the Dow's chart, and I would wait to see the market bounce back up before making any moves, even if at this point TIVO doesn't look like it has too much more downside but we never know.

For my part, my stop loss got triggered and all my shares were sold at $11.50 at practically no loss but also with no gain. I've learned a good lesson from TIVO today and the latest trading strategy I've been trying to apply. I was up just over +10.00% last Friday, but exited with 0% of that gain. I did not foresee such a harsh pullback in one day that happened on Monday. I now believe that despite seeing the possibility of a pullback at $11.50, I made the mistake of assuming it would automatically bounce back up. Although this will happen at times, I have to realize just like everyone reading here that I cannot predict the future and I will not always be right. Therefore after losing this +10.00% gain, despite exiting with practically no loss, I shouldn't have sacrificed the entire gain. I believe that whatever gain you have, you should not sacrifice more than 5%, when your up just 10% or 15%. I think the moment your up 20% or more you may increase your stop loss to -7.00% to -8.00%. The truth is despite being disciplined and not taking losses of more than -7.00%, I did take an artificial loss of my gain of over -7.00%, and usually such a pullback should indicate that it will or could fall even lower. I will updating my "Y-Swing 2.5" trading strategy, and fix this issue regarding exiting a position.

Dow Jones - Critical Level

Dow Jones - WAIT

The Dow continued its pullback back today, and should go as low as 9600-9700 before seeing it bounce back off its 50 day MA. However, considering this is the 4th pullback within this trend, I wouldn't be surprised to see the Dow break the trend. What leads me to believe this, is that a few stocks have already started to cross their 50 day MA (e.g.MGM & LVS), and this may be indication for what's to come for the Dow. MGM & LVS are both high beta stocks and move much more quickly than the market, so this could be predictive moves towards the markets direction. Also, we are entering into the flu season, and if the H1N1 were to start spreading and which it seems like it already started, this could a cause some panic and effect the market directly. If the Dow does bounce back up strongly over 9600-9700 this would be a BUY SIGNAL where you could find a lot of good opportunities. If the Dow Jones does bounce back up, I wouldn't be surprised if the Dow hits its lows tomorrow morning before closing up, and possibly indicated a reversal and a continuation of the major uptrend. Another possibility is simply for the Dow to close down around 9600-9700 tomorow and simply bounce back up on Friday. The worse scenario which would give us a STRONG SELL SIGNAL would be a sharp break below its 50 day MA. I beilieve any moves at 9500 or below would be enough to confirm it.

MGM - Crosses sharply down through its 50 day MA

MGM - STRONG SELL SIGNAL

MGM has given us a STRONG SELL SIGNAL today with a sharp move below its 50 day MA. MGM had been steadily holding up over its 50 day MA, ever since it crossed back over in mid-July. This is why today's move is very significant on a negative point of view. Something that was true for the last 3 months is not anymore. This STRONG SELL SIGNAL may be confirmed tomorrow if it stays below $11.00 and its 50 day MA. Although, I think there is a strong possibility that MGM will move higher tomorrow, I don't see it having a huge reversal and move back up over $11.00 and its 50 day MA. However, MGM being such a high beta stock, I would rather wait to see it trade two more days below $11.00 before confirming the STRONG SELL SIGNAL. However, if it does get confirmed this would mean that MGM may potentially trade within a lower range. Right now it can simply be around today's levels of $9.50 to $11.00. But any move lower and crosses down through the next support levels could make the ranger either wider or simply lower within these lower support levels. A move below $9.50 will send MGM to $9.00, a move below $9.00 could send MGM as low as $7.50-$8.00. Basically a STRONG SELL CONFIRMATION would mean MGM will most likely be trending downwards, and has more potential of hitting lower prices than higher ones. This simply means that a door that had been shut for the last three month (the prices below the 50 day MA) is now open, despite no guarantee it will happen, but it now has the potential to. The stochastic had given us also a SELL SIGNAL a few sessions ago, however it is currently in oversold territory and lower than it ever was in the past three months. This leads me to believe that even if MGM is down hard and may move lower, it shouldn't be long before seeing any bounce back. However another possibility is seeing MGM move strongly back up in the coming days, where there could possibly be a double bottom, and that's why I would preferably wait a couple days before confirming any STRONG SELL. This may turn into a buying opportunity with bounces back up. Right now we have to wait for more guidance.

AAPL - Three Black Crows

AAPL - SELL SIGNAL

AAPL has given us a SELL SIGNAL today with a three black crow pattern, which usually indicates a top. AAPL has moved lower for the past three sessions, hitting lower lows and lower highs. AAPL did start crossing through its support level of around $196-$197. I have currently set a $195 stop loss. I may either let it get triggered, sell preemptively. No matter what the outcome I will exit with a gain. Some people may have sold since the first SELL SIGNAL which I failed to catch on Friday when AAPL closed lower going though sharply the previous day's gains, however I held on, because once you have gains you should hold on as much as you can hoping the trend will resume and that it will bounce back up support levels, such as AAPL's $196-$197 support. This doesn't seem like it will be the case, but I prefer risking about 5% of my 10% gain rather than selling at a 10% gain before seeing AAPL bounce back higher and seeing it potentially giving me a +20% gain that I could have missed. My strategy implies entering positions as close as possible to support levels after the prices bounces back up these levels, and then possibly just like TIVO and AAPL now eliminate the potential of making any losses by increasing my stop loss to new and higher support levels. At these points you can simply risk gains, rather than taking the risk of making potential losses. I will possibly have my AAPL stop loss trigerred, and TIVO's also, but the goal of this strategy is not to make many small gains (+5% to +10%), but rather to not make any losses and on rare occasions make the the +20%-40%. This is how you make money, by taking the smallest losses possible (at times no losses at all). Keep in mind that the most successful traders/investors have more losing trades than winning ones. However, the losses are usually very small (limited to -7% to -8%), while the rare gains will be big, giving you potential returns of at least 20%. The goal is not to make many small gains, but rather a few big gains. I'm up approximately +50% this year with my portfolio, and this gain was mostly due to a few big winners, such as MGM back in March-April for which I made a 100% return, AIG 40%, and others also over 20-25%. However I had as much and possibly slightly more losing trades than winners. Except that they were all below -7% to -8%.

Now, back to AAPL. You can see that just about three weeks ago, AAPL had the three black crows formation also, but it was followed by a quick reversal for which AAPL managed to move higher from. This doesn't mean it will happen again, but simply that despite having signals, they can fail and that's why technical analysis should not be used as predictive tool but rather as a reactive tool. You have to react to what you see on a day-to-day basis and things can change quickly, and even within one day itself you can get different signals. That's why its best if I were to give any signals after the close. If AAPL does continue downwards, this may just mean that its minor trend in now down, but I would be very surprised if its major uptrend would be affected. If AAPL does go through $195, it may go back around $187-$188, and further fall would send AAPL to around $182. Any fall below this level under its 50 day MA would give us a major SELL SIGNAL. I would be very surprised if this occurred in the short term, as I elieve it would take major negative news to cause such a fall and break of its major trend which has been holding up since the beginning of the year. Overall, if AAPL continues downward I will possibly sell AAPL and take my +5% gain, because I'm not willing to give up the entire 10% gain I had. I may possibly come back after a few days if I see any bounces back up, even if I were to enter back at prices higher than my exit point. This is swing trading.

Long AAPL @ an average of $185.75 - Stop Loss @ $195.00

TIVO - Holding Up (Updated: Inverted Hammer)

TIVO - BUY SIGNAL

So far yesterday and today TIVO has managed to hold around the $11.66 support level hitting a low of $11.61 yesterday and a low of $11.62 so far today. This bounce back up is bullish and strengthens this support level, making it safer to enter a position around these levels assuming the price holds up.

Update: TIVO has given us an inverted hammer bar pattern today, which usually indicates a bottom within the current trend. Therefore, I expect TIVO to move higher tomorrow. Please keep in mind that when I give support or resistance levels, such as $11.66 it will rarely hold up exactly at this point and you could expect a bounce from around this level perphaps +/-$0.05 to $0.15. Also when using stockcharts.com it's hard to give the most precise support and resistance levels. That's why that despite having a support level of APPROXIMATELY $11.66, I had originally set a stop loss of $11.57 and not $11.66. This is to get a sharp sell signal or cross through the support level, that is significant enough to not get whipsawed.. However when I took a better look at the chart today it did have the potential to go as low as $11.48-$11.50, and therefore I slightly lowerered the stop loss to $11.52, specifically because this is the point for which I would be able to exit my position with no loss (including commissions). In fact after going as low as $11.55, TIVO did close slightly up over $11.66 at $11.72. My stop loss could have easily been triggered to then see TIVO bounce back up, because TIVO currently has a lot of support levels at prices that are very close to one another, but I still chose to set a stop loss of $11.52 to not risk making any losses. In fact TIVO next support levels below $11.66, are $11.50, $11.25 and $11.00. So it just matters how low are you willing to let it go, and mostly at what price did you enter. For my part I entered my position at an average of $11.43 at $11.30 and $11.75. Also, as you may recall I had set a stop buy order last week at $11.75 rather than $11.66 specifically to not get a false BUY signal and see TIVO fall back after hitting precisely $11.66. By waiting to see it cross more sharply at around $11.75 on Friday, TIVO moved up as high as $12.78 I believe. A big pullback yesterday, was to be expected after a +10.00% move for TIVO on Friday, however it's impossible to know for sure and it could have moved even higher too. Right now, there are a few bullish signals that lead me to believe TIVO will move highr starting tomorrow: 1) TIVO has managed to hold up over $11.50-$11.66 for the last three trading session since moving sharply over $11.00 2) Despite yesterday's big pullbback which gave up much of the gains of Friday, TIVO still held up over $11.50-$11.66. 3) Today TIVO only moved partially lower, held up above $11.50 and closed slightly up over $11.66 at $11.72, giving us an inverted hammer (bottom signal). You can consider today's action, possibly another buying opportunity. TIVO should be able to close up over $12.00 either tomorrow or by the end of the week, which would most likely make $12.00 are latest support level after any bounce back up from $12.00 then. Keep in mind that TIVO could still fall tomorrow and give us a SELL signal, and that is why you have to remember that I cannot predict the future, but usually when I give for example a BUY signal, this usually means that the probabilities of getting a confirmation or of seeing the price move higher are higher than seeing the stock move downwards. So basically that's what I'm saying towards TIVO for now. If TIVO does move down, my Stop loss will get triggered, I will exit my position with no loss, but may consider going right back in if TIVO were to move back as low as $11.00 and bounce back up. Basically there are many possible scenarios, and I prefer to make my decisions or plan on a day-to-day basis.


Long TIVO@ at average of $11.43 - Stop Loss @ $11.52 (+0.80%)

AMZN - STRONG BUY CONFIRMED yesterday

AMZN - STRONG BUY CONFIRMED

AMZN gave us a STRONG BUY CONFIRMED yesterday, by closing up, hitting a higher high and higher low. Current support level within this strong buy trend are at $120 and if it doesn't hold at $110. This means that by buying at current levels you can expect to see pullbacks within these two support levels

AMZN - Strong Rally

AMZN -STRONG BUY SIGNAL (confirmation very likely on Monday)

AMZN rallied very strongly on Thursday's after-hours and closed at an all time high on Friday up +26.80% at $118.49 (hitting a high of $119.65) with very strong volume. Hitting a new high is always a very bullish move of course, but just like AAPL not only did it hit an all time high it had big break out, which makes AMZN look even stronger. The MACD & Stochastic both gave us a BUY SIGNAL, while the RSI has entered overbought territory. Based on what I can see now, I think AMZN may move a little higher before pulling back to most likely $110.00. AMZN next Fibonacci Retracement levels at 38.2% and 50% would predict moves to $127.92 and $135.89. AMZN is currently standing almost exactly at its 23.6% level which is at $118.07. AMZN other retracement levels of 68.1%, 76.4% and 100% predicts possible moves towards $143.85, $153.70, and $169.62, respectively.

So, for people looking to go long AMZN here is how you should plan on when to enter. Your goal right now should be to enter AMZN as close as to $110.00 (assuming this support level will hold up). At whatever price you decide to go long, you should set a stop loss order of $107.00 -$108.00.It is possible for AMZN to simply continue up strongly from current levels, and enetering at around $118 should be relatively safe since it's only just below -7.00% from $110. Therefore if you get the chance to enter AMZN at around $118.00 or closer to $110 with a bounce back up, you can then put a Stop Loss order at around perhaps $107.00 to $108.00. Your potential loss if the price were to pullback should not be more than -7.00% to -8.00%, and going long at higher prices will force you to bear on more risk and a higher potential loss in the event where the price pulls back. The reason for that is that based on what the charts say now, any pullback from current levels could eventually send AMZN back towards $110.00 before bouncing back up (keep in mind that it will not necesssarily be exactly $110, it could hit $108 or $112 before it bounces back). Therefore, if you were for example to enter AMZN at $125.00 and simply set a -8.00% stop loss at $115.00, you would most likely get whipsawed. This mean that you could expect your stop loss to get triggered at $115.00 and fall as low as $110.00 and then bounce back up and most likely back over $115.00 and continue its trend up. This is just to explain to you how you should manage your risk. Keep in mind that AMZN could simply continue higher next week and create new support levels higher than $110, and perhaps at $118.00. Therefore if you could take a long position anywhere $118.00 it should be relatively safe, whether AMZN continues higher or if it pulls back immediately it should hold up around $110.00. The goal when you enter into any long position, is to go long as close as possible to strong levels reducing your chances of taking on a loss or of getting whipsawed. Keep in mind that AMZN is currently giving us a STRONG BUY SIGNAL, that will most likely be confirmed as a STRONG BUY either if it moves higher on Monday or falls and hold up or bounces back up $110.00. Keep in mind, that if you see AMZN falling on Monday, don't jump in immediately wait and see first if it manages to stay above $110.00, because a sharp fall below would give us a SELL SIGNAL and a possible reversal to $95.00-$100.00. Personally I really don't see that happenning though, and AMZN STRONG BUY will most likely be confirmed on Monday.

TIVO - Rallies +10.00%

TIVO - BUY CONFIRMED - STRONG BUY

Looks like my strategy has worked to perfection today, regarding TIVO. First on Monday, TIVO gave us a BUY SIGNAL when I enetered my position at $11.30, and was confirmed when it held up above $11.00 on Tuesday. On Wednesday we could observe a shooting start for TIVO which usually indicates a top within a trend. However TIVO had strong support at $11.00, and I expected to see it go back around this level before bouncing back. Indeed TIVO did go as low as $10.94 on Thursday before bouncing back up strongly, giving a new BUY SIGNAL. Keep in mind that despite having for example a resistance level at $11.00 it will not always bounce back exactly at the level indicated, but usually it should be close. In fact, as I indicated since Monday I had set a BUY STOP trigger at $11.75, which is what I would have considered a strong enough move to continue to see the price move much higher. Finally today, after eventually going $11.75, TIVO continued to rally up +10.00% going as high as $12.67, and closing at $12.58. This gave us a BUY CONFIRMATION and a STRONG BUY the moment it went over $11.75. Please note that the $11.75 level is what I considered a strong enough move over the $11.66 level for us to get a BUY CONFIRMATION & a STRONG BUY. My average purchase price is now at $11.43, with a new STOP LOSS as $11.58, guaranteeing myself to exit this position with no losses. It's hard to say right now how high TIVO may go before pulling back again, but when it does whether it's on Monday or in a week or so, TIVO's new support level is now the old resistance level of $11.66. A sharp cross below $11.66 would give us a SELL SIGNAL. Right now TIVO is a STRONG BUY for the long term trend, but you can expect a pullback whenever it comes at around $11.66. So be cautious before deciding to enter a position. Keep in mind that TIVO is currently in overbought territory regarding the RSI and Stochastic, but stocks that have the tendency to remain mostly around overbought levels, indicates strenght and that the stock is trending up. Despite a STRONG BUY, the longer you wait to enter into a stock's trend, the more chance you have of getting whipsawed. The more you wait the less risk you take of seeing the signal fail, but when you catch a trend early you will reap in more gains while taking on more risk (risk/return ratio). It's for you to decide when to jump in. A word of advice is always to have stop loss orders set, and take losses of no more than -7.00% or -8.00% when a stock doesn't move in your direction. I like the fact today, that TIVO was up strongly when the market was mostly down. This is a sign of strength, and we also had heavy volume which only helps driving the stock higher.


Long TIVO@ an average of $11.43 - Stop Loss @ $11.57 (+1.22%)

MS, SNDK, TIVO - Signal Updates

SNDK - BUY SIGNAL FAILED (lost all of yesterday's gain, could either hold up at $22.50 or fall back towards 50 day MA at $20.00-$21.00)
MS - BUY CONFIRMED (moved strongly higher)
TIVO - BUY SIGNAL (bounced back up support of $11.00, but still has to go through $11.66 resistance)

CSCO - Rising Wedge?

CSCO - WAIT

CSCO currently looks to be in a rising wedge, with the price moving higher along a narrowing channel. Most of the time, near the end of that wedge, when both the support and resistance level get close to collision, the price will break downward. However, I'm not sure if this will happen now. Right now, there are three possibilities: 1) CSCO moves back down towards its support level of $23.50, and bounces back up. If that happens, we can't tell if its bullish or not. If it is bullish it will break up higher towards $25.00, which would give us a BUY SIGNAL. 2) The price moves towards $22.75, and bounces back up, which would give us a BUY SIGNAL. This would be bullish and perhaps the best scenario for the possibility of seeing CSCO continue upwards along its channel. The reason is that if CSCO pullsback to $22.75 at its 50 day MA and bounces back up, the rising wedge will no longer be valid, and instead we will simply have a regular up trending channel. 3) Obviously if CSCO breaks downwards below $22.75 and its 50 day MA, it would be a SELL SIGNAL.

MS - Ascending Triangle

MS - BUY SIGNAL

MS broke through its resistance level today at just over $33.00. There appears to be an ascending triangle formation, but I will be carefull before giving a BUYING CONFIRMATION with MS, as it seems to have gotten a failed signal just a couple weeks ago, when it topped at $33.00. Also despite being up, MS did give up most of the day's gain, which is bearish. The stochastic also gave us a SELL SIGNAL a couple of days ago, which is still valid. MS needs to hold up tomorrow, and it would be preferable to see it close higher and hit a higher high to give a BUY CONFIRMATION. I want to be careful with my confirmation of MS, as it seems just like other banks such as BAC, that calling BUY SIGNALS or CONFIRMATION have been difficult as it seems to have gotten a few failed signals.

SNDK - Breaks up to most likely continue its trend up

SNDK - BUY SIGNAL

SNDK had a breakout today and went above its resistance level around $23.00 to most likely continue moving up along its uptrend. The Stochastic also gave us a BUY SIGNAL, and the MACD is about to, with a move higher tomorrow. To get a BUY CONFIRMATION, SNDK needs to manage to stay and close above $23.00, and should then most likely hit it uptrending resistance line (the upward blue line) before pulling back a bit along its channel. As you can see, back in August, SNDK after breaking downwards with high volume, soon pulled back down in a wave towards its uptrending 50 day MA where it held up and basically bottomed around its break down level. Today SNDK broke upwards with high volume, which is required for a stock to move higher, and we will get a BUY CONFIRMATION likely tomorrow if the price holds up or moves higher.

TIVO - Waiting & BUY or SELL

TIVO - WAIT

TIVO is currently struggling to go over and close above its resistance level of $11.66, and today have given up all gain closing lower. Today we can observe a shooting star, which is usually the sign of a top. However, TIVO did break above critical resistance at $11.00, and has been holding up since. It may take more time for TIVO to close over $11.66, if it does happen, but one possible scenario that I expect to see occur is see TIVO pullback to around $11.00 and bounce back up. If that occurs this will further strengthen TIVO's support at $11.00. What could happen then is seeing TIVO trend with this narrow channel within approximately $11.00 and $11.70, until it breaks up or down for another BUY or SELL signal. However the fact that TIVO despite pulling back today, has manged to stay above $11.00 is very bullish. My current stop loss order is set at $10.60, which I will probably raise to $10.75 tomorrow. I also have a Stop Buy order at $11.75 to buy more shares if the break occurs upwards. If you already entered into a position with TIVO on Monday, I would suggest to HOLD and set stop loss orders similar to the one's I indicated. A break below $11.00 would be a SELL signal, but to avoid getting whipsawed I will be setting it at $10.75, to get clear sign, since the bounces back up support or resistance levels will never be exact to the very cent, as indicated. If you are looking to enter into a position with TIVO I would wait and see if it does indeed bounce back up $11.00, and then you would have another BUY Signal. However, you may prefer to even wait for a break above $11.66, if you believe TIVO might trend within a narrow channel at $11.00-$11.70 for a while.

Long TIVO@ $11.30 - Stop Loss @ $10.60 (-6.19%), likely increased tomorrow to $10.75 (-4.86%) - Stop Buy @ $11.75 (+3.98%)

AAPL - STRONG BUY

Today, as expected, AAPL closed over its resistance level and all time high at $204.92, giving us a STRONG BUY. The BUY SIGNAL was indicated when AAPL had a breakout yesterday, the BUY SIGNAL, became a BUY CONFIRMED, after seeing AAPL hold above yesterday's lows, and finally the STRONG BUY is now issued because AAPL has gone over its critical resistance level, closing at an all time high. AAPL for now, is a long term hold, as long as this trend persists and remains above its 50 day MA. The MACD & Stochastic have both given us BUY SIGNALS, and the Volume has been increasing as well today. The Stochastic however is near resistance levels, but a move above it would be bullish. What's great about AAPL is that it's a slow moving stock, meaning that if it were to actually give us a SELL SIGNAL, it would probably be more reliable than more volatile stocks and we would also have more time to react without sufferring a big loss.

I expect to see AAPL continue trending up along its channel which has been holding up strong since the beginning of the year. However, AAPL is currently in overbought territory and near resistance. This means that you can expect in the very short term to see AAPL perhaps have a minor pullback, around its support level at $198.00-$200.00, but the long term trend is up. Note that stocks such as AAPL who continually enter overbought territory and have the tendency to remain at high levels within the RSI, indicates that the stock is indeed trending up, and this is a sign of strength.

AAPL appears to have started a 4th up trending channel, after its jump following the earnings report. You can observe this in the chart, indicated by the blue trend lines. The pink line represents the major trend up, and the blue lines the channel trends with the major trend. I have raised my stop loss order to $195.00; This would indicate perhaps the reentry into a lower trending channel, but still within its major trending channel. The reason I have raised my stop loss, is to lock in some gains from my average position at $185.00. I may eventually set a Virtual Trailing Stop Order, once the trending support and resistance levels are more clear. Basically I have to measure the average dollar value difference between the support and resistance line, to set a fixed dollar trailing stop order.

As I posted in one of my previous posts, according to Fibonacci, AAPL has now the potential to go as high as $300.00 within a year. For now I expect to see AAPL trade within a new channel indicated by the bottom blue line near $200.00.



Long AAPL @ an average of $185.75 - Stop Loss @ $195.00

AAPL, SNDK, MS Quick Updates

I will be posting detailed analysis later tonight.

AAPL - STRONG BUY
SNDK - BUY SIGNAL
MS - BUY SIGNAL

AAPL & TIVO Updates - Jim Cramer's AAPL Price Target & TIVO Buy Confirmation

AAPL - BUY SIGNAL (most likely confirmed tomorrow)

I usually don't pay much attention to what Cramer says, and watch occasionally his show just for entertainment. But I find it funny that he just raised today his price target of $264.00 to $300.00 (most likely based on fundamentals) that coincides with the price target I have set yesterday based on Fibonacci's technical analysis of $299.57 ($266.19 is one of the other retracement levels). For once it seems that the fundamentals and technicals are telling us the dame thing. AAPL will be a BUY CONFIRMED tomorrow with a move higher, and a STRONG BUY once it goes over $203.00, as indicated yesterday.

Jim Cramer's Article: http://macdailynews.com/index.php/weblog/comments/22799/

TIVO - BUY CONFIRMED

TIVO gave us a BUY CONFIRMATION today after it moved higher and bouncing back up its old resistance level at $11.06 which is now support (~$11.00 ). The next challenge for TIVO is to close sharply above $11.66. It did go to $11.70 today but closed at $11.30. That's why my BUY STOP trigger is set slightly higher at $11.75, to make sure the move will hold, rather than getting whipsawed.

AAPL - Beats expectations

AAPL - BUY SIGNAL/BUY CONFIRMED & STRONG BUY (Tomorrow)

Today AAPL has beated its earnings expectations, and has given us a BUY SIGNAL that will be a BUY CONFIRMED tomorrow, after it bounced back up its support level along its uptrend. Based on the after-hours, AAPL will have a breakout tomorrow, confirming our BUY signal with a second straight up day, and continuing its uptrend. AAPL also had a nice pop to its volume adding fuel to the BUY SIGNAL. We will likely have an accelerated uptrend tomorrow with a close above $200.00-$205.00, in which we could possibly see AAPL trade within a new channel. I am still long AAPL with positions at $184.24 (61.60% of max intended position) and $189.76 (23.92% of max intended position).

AAPL has hit an all time high during after-hours and will most likely close at an all-time high tomorrow, giving us a STRONG BUY. Since the month of March, AAPL has consistently increased along its 50 day MA. A record closing tomorrow with a breakout, would indicate that AAPL will have gone over its 0% retracement level, which means that AAPL could then see its price increase as high as $299.57($202.96+$96.6078) within 1 year ($202.96-$76.51= $126.45 x 0.236= +$29.8422; x 0.382= +$48.3039; x 0.50= +$63.225; x 0.618= +$78.1461; x 0.764= +$96.6078). The next resistance/retracement levels for AAPL regarding Fibonacci would be: $232.80, $251.26, $266.19, $281.10, $299.57. This means that any move above each of these levels would likely lead AAPL onto the next higher level before going through some resistance.



Long AAPL @ $184.24 & $189.76 - Stop Loss @ $172.74 (very likely increased soon)

TIVO - BUY SIGNAL - Ascending Triangle Breakout

TIVO - BUY SIGNAL - BUY CONFIRMED - October 20th

Today TIVO gave us a BUY SIGNAL for an ascending triangle formation, after having a breakout above its critical resistance level at $11.00. We should get a BUY CONFIRMATION tomorrow if the price holds up above $11.00. TIVO has some resistance at $11.66; a break and close above this level would give us a STRONG BUY. I have taken a long position (anticipating a BUY CONFIRMATION) at the close at $11.30, with a stop loss at $10.75. TIVO has support around its 50 day MA at approximately $10.44. However, a move around $10.75 would mean that TIVO will have fallen back (reversal) within its ascending triangle trend, and would most likely go as low as $10.44 before having a chance of bouncing back up. Therefore, there is no point on taking on a higher loss than we need to and that's why my stop loss order is higher than my usual -7.00%. As I indicated a close above $11.66, would give us a STRONG BUY, but it would be preferable to see a second consecutive day of gains before confirming the STRONG BUY. Despite that, since I cannot always be in front of my computer at each significant moves, i have a set a Sop Buy order for more shares at $11.75 (approximatelly an additionnal 27%-32.5% cash of my max intended investement for TIVO).

Please note that I will be soon posting my updated trading strategy Y-Swing 2.5, which will explain my reasoning towards my change in strategy regarding how I set set my stop orders.


Long TIVO@ $11.30 - Stop Loss @ $10.60 (-6.19%) - Stop Buy @ $11.75 (+3.98%)

Updated Trading Strategy - Y-Swing 2.5

This updated strategy mainly fix the risk issues towards Stop orders, which are now variable within a range, as well as the timing. Please note that this posts may seem a bit clustered, and not very clear in some parts, and I will work on doing a clearer and more simple version of it. I felt it was important to post this soon, despite being a draft, to explain how my trading strategy has evolved.

Y-SWING 2.5 Trading Strategy:

STEP 1 Determine the total value of your portfolio

STEP 2 Determine the maximum number of stocks you can hold in your portfolio
Note 1: If you have: less than $5000 = 2 stocks; $5001-$10000= 3 stocks; $10001-$25000= 4 stocks; $25000-$50000= 5 stocks; $50000-$100000= 6 stocks; >$100000= 6 stocks.
Note 2: If the total value of your portfolio is of $5000, you should have up to $2500 invested per stock ($5000/2=$2500 per stock); $20000 ($20000/4=$5000 per stock), and so on.

STEP 3 Buy stock ABC with 50.00% of cash, for your intended maximum position
Note 1: If the total value of your portfolio is $5000, meaning that you may hold up to 2 stocks with a maximum of $2500 for each stock, start by investing $1250.00 to open your position on your first stock. For example if the share price of stock ABC is $10.00, buy 125 shares @ $10.00= $1250.00.
Note 2: When your stock's share price fluctuates between -6.99% & +2.99% for 28 days (20 business days), you should sell the stock no matter what the price and move on to another (Unless you strongly believe that the stock is about to make its move and move in the direction you desire, whether you are long or short)

STEP 4 Set, up to a -7.00% Stop Loss order based on technical analysis SELL SIGNAL
Note 1: Make sure to select a stock with not too much downside. This means that you should be able to catch a trend early on. Look for stocks with more potential to rise, and try to buy near strong support levels once it bounces back up. For example: if you buy stock ABC at $11.00, after seeing it bounce back up strong support at its 50 day MA at $10.50, you should set a Stop loss order sharply below $10.50, around maybe $10.35 (-5.90%) - to get a clear SELL SIGNAL. Your stop loss order may vary but should never be over -7.00% of your entry point. If there isn't strong enough support within -7.00% of your entry point, you would have to take on a higher possible loss (more risk), and probably have more potential down side than upside; Also you may possibly get whipsawed. If your stop loss gets triggered, take your loss and move on to another stock.

STEP 5 Set a Stop BUY order at a level for which you would get a BUY SIGNAL based on technical analysis (Note that you may not always have to set a BUY STOP order if the nexy BUY SIGNAL is not clearly identified yet) (timing optional) (use 32.50% of your remaining cash for that stock, or next addition to your current position)
Note 1: When you enter into a long position with 50.00% cash of your max intended position, you may set a stop buy order if you see any breaks above resistance levels currently in sight. You may however, prefer to set market or limit orders, live, rather than having triggers, if you happen to regularly follow your stock and perhaps make a more thought out decision then. Keep in mind that even if you set a BUY Stop order, nothing prevents you to cancel or modify it as you get new technical signals that may indicate new developments. You may also prefer to set Stop Buy orders, when the current price is near a BUY SIGNAL, which could possibly be confirmed.

If you have $2500 as a maximum intended position, and have already invested $1250, you should add $2500x0.325= $812.50/$10.30 =78.88 ~ 79 shares ($813.70). You would now hold a total 204 shares, for a total of $2063.70. The purpose of doing this (averaging up) is if the stock's share price starts moving your way it will be safer to add more money to your position and reap in more gains, while limiting your losses if you were to immediately invest all your intended position for that stock at once. If you were to invest everything at once you wouldn't give yourself the chance of being wrong, and despite having a -7.00% stop loss order, you would still lose more money.

Note 2: The risk when this order gets filled is to see your stock pullback below -7.00% before you get the chance to place a new stop loss order, in case you are not present when the order gets filled. This could and should only happen if you invest in very volatile stock, and is therefore better to set it manually if you invest in such stocks.

STEP 6 Review your Old Stop Loss order and decide if you should set a New Stop Loss order for all your shares based on technical Sell Signals at up to -7.00% of your average purchased prices.
Note 1:Your average purchased price can easily be calculated: If your first trade represented an investment of $1250 for 125 shares, and your 2nd trade $813.70 for 79 shares. Simply do the sum of your investments and divide it by your total number of shares ($1250+$813.70= $2063.70; 125+79= 204 shares) $2063.70/204= $10.116 average purchase price. Now that you have your average purchased price, simply do $10.116-7.00%= $9.407 stop loss order.

STEP 7 Set a Stop BUY order at a level for which you would get a BUY SIGNAL based on technical analysis (Note that you may not always have to set a BUY STOP order if the nexy BUY SIGNAL is not clearly identified yet) (timing optional) (use the remaining 17.50% of your cash for that stock, or next addition to your current position)
Note 1: Still using our last example, your last purchase price would be $10.30. Therefore you would set a stop buy order at $10.30+3.00%= $10.609 with $2500x0.175= $437.50 for 41.23 shares~ 41 shares x $10.609= $434.969. You would now have a total of 204+41= 245 shares for $2498.669 ($434.969+$2063.70).

STEP 8 Review your Old Stop Loss order and decide if you should set a New Stop Loss order for all your shares based on technical Sell Signals at up to -7.00% of your average purchased prices.
Note 1: Your average purchased price would now be $10.198=($2498.669/245). Your new stop loss order $10.198-7.00%= $9.484.

STEP 9 Set -7.00% VTSO (Virtual Trailing Stop Order), the moment you are up +8.00%
Note 1: The moment your stock increases +8.00% over your average purchased price, you may want to set an average -7.00% VTSO (based on the average purchased price -7.00%, and the current price -7.00%). You will now be guaranteed to exit your position without any losses. Another thing you could do is set a VTSO that corresponds to sell signals. This could be appropriate in the event where your stock is trading within a very strong narrow uptrend
Note 2: Withdraw 50.00% of your gains, while maintaining a minimum set total balance for your portfolio.

STEP 10 (optional) Cancel VTSO and Sell portion of shares representing gain
Note 1: The moment you have a gain of +20.00%, you may consider selling the portion of shares representing that +20.00% gain. You may choose to start selling before or after you achieve a +20.00% gain, it's up to you. You may want to wait for any signs of weakness before selling a portion of your shares.
Note 2: Withdraw 50.00% of your gains, while maintaining a minimum set total balance for your portfolio.

STEP 11 (optional) Set new VTSO for remaining shares
Note 1: For your remaining shares set an average -7.00% VTSO,based on the average initial purchased price -7.00%, and your last sell point -7.00% (Step 4).
Note 2: Withdraw 50.00% of your gains, while maintaining a minimum set total balance for your portfolio.

STEP 12 (optional) Repeat Steps 10 & 11
Note 1: Withdraw 50.00% of your gains, while maintaining a minimum set total balance for your portfolio.

If you have a more or less risk tolerance you can adjust your stop loss to your liking. What is extremely hard when you start trading, it's the inability to take losses, and set your stops in advance. When I first started trying to apply this strategy, I found myself either canceling my stop orders before they would get triggered or wait till it hit my stop loss target and tell myself I would just place a market sell order then. It took me about 2-3 years to be able to accept the fact that I had to take some losses. The most successful traders have more losing trades than winners. The reason is because, those traders cut and limit their losses while when they start making gains they try to ride those trends as long as possible and will make huge gains. If out of 3 trades, 2 represent losses of -7.00% each, while your winner made you 40.00%, you are profitable, and that's the goal of this strategy. Most people will hold on to losses and hope they bounce back, while they quickly sell their winners because they're scared of losing it when they have it. Think of it like this, if you are making gains it means that you are doing something right, and probably made the right call, and you should hold on to it as long as you can or as trend persists. The beauty of this strategy, is that even if you're not good at picking stocks, by limiting your losses, the chances are that you may be profitable in the end. You may get frustrated, if you get stopped out several times consecutively. If this occurs, you should set back and stop trading for a little while, and try to figure what is it that you're doing wrong.

With this strategy, each stock you buy should be from a unique sector.Some people may argue, that this strategy implies not having a well diversified portfolio. That is partially true, but the reason is because you have to be able to follow your stocks, and if you have a portfolio of 15 stocks, it will be hard to keep track of where each stock is heading. On top of that you will be diluting your gains.

This strategy allows you to be disciplined and well diversified, and to cut your losses @ -7.00%, while cashing in gains as they come along. You may need to follow the price moves of your stocks almost everyday, while paying close attention the technical charts when the price gets close to one of your buy or sell points If there is a crash, despite having stop losses, the stop losses are not active during pre-market and after-hours, you would need to place a separate live order, and even if the stops were active during these periods you still won't be completely protected. If a crash occurs the first opening trades during the pre-market for example may be much lower than the previous day's closing price and may be much lower than your stop. For example assume you bought stock ABC @ $10 with a stop @ $8, and the price closes for the day @ $8.25. If a crash occurs the next day, when the pre-market opens the bid and asks could be $6.00 and $6.50. However, if you trade in the stock market this is a risk you have to assume; Only the careless would invest all their money that they have earned over the past years, it is important to cash in gains each year. For example when you first started trading you started with $10,000 and over the years you accumulated $5000 of gains. You would be stupid to invest your $15000 and risk all everyday, you should continue to invest $10000 and cash in the $5000, or just each year increase a little bit your investments if you can afford it to maybe $11,000 or $12,000. The whole point of this strategy is to cash in gains when you have them while continuing to investing the same amount of money without risking more, so that in the future your $10,000 investment may only represent a portion of gains you have accumulated over the years that you would otherwise never have had to begin with.During accumulation periods when the market moves sideways it may be harder to successfully use this strategy either way, you would need to be more precise in your buys and sells; and you may need to lower the profit point where you decide to take some profits or sell your position completely (for example selling portion or all shares of gain @ 10%-15% rather than 20%).