Keep an Eye on Stocks Showing Strength...

Here are several stocks that seem to be showing above average strength...

SHEN, TOD, SLI, MPWR, BW, SILC, HEW, SIMC, LNOP






SHEN






Although SHEN is too extended from the 50 day MA to make a low-risk trade, experienced traders may be able to take advantage of its daily fluctuations to its 10 and 20 day MA.












TOD




Despite TOD being a thinly traded stock, I still believe that it makes a good trade, even at its current level. TOD has recently recieved a Navy contract and expects to recieve many more in the future.


















These are just some of the stocks that seem to be bucking the trend and performing well despite the current markets indecisiveness. There are a few other top notch stocks that may be setting up to breakout. I will try to post them on the weekend. I will also post several charts of these stocks as well.

Still Stuck In a Lateral Trend

The DJIA is back above the 13,200 level but not high enough to break out of the lateral trend that it has stumbled upon since it closed below its 50 day MA back in late July. At this point, it wouldn't take much positive news to lift the DJIA over its 50 day MA. And if this were to happen, whether it would be able to stay above its 50 day MA is an entirely different question. It will take some strong positive news to help ease investors fear on the credit markets and sub prime mortgage fiasco. Still, a rally from this point is not entirely out of the question. On the flip side, it wouldn't take much negative news to send the DJIA back under 13,200 either. If your looking for a definite answer as to the markets future direction, you're out of luck. I am not a fortune teller and I cannot predict the future direction of any market or stock. All I do is analyze the situation and the possible future scenarios. The best advice that I can give you is to enjoy the extended weekend and holiday. September is right around the corner so enjoy your vacation while it lasts. I know I will.

Trade Journal

New Buys: BW


Reasons behind trade: BW seems to be coming off of a double bottom formation. It has shown consistant support at 35 where it had begun its positive reversal. The stock has recently climbed above its 200 day MA and has shown support above this level.





BW

Trying to Sit Tight...

Sitting tight and not trading is difficult to do. Yet, in our current market enviornment, it is probably the safest and smartest actions that an active trader can perform. I've been tempted to add some of my current holdings and I've been tempted to buy several interesting stocks. Still, I have to constantly remind myself of the markets volatile and trendless action. Of course, I will still be on the look out for any new possibilities for both long and short trades....

Lazy Monday

There is only one word that can accurately describe todays market action. And that single word is.....BORING! Maybe it was the lack of volume or interesting trading action or something else. Regardless, todays tepid action is a wonderful reminder that the traders and institutional investors are still in summer vacation mode. I couldn't find that many interesting trades. Previous candidates are still doing quite fine such as TOD, VII, SHEN, SLI, etc. I've built up my watchlist a bit over the weekend but I didn't have much time to go through it. After today, it will be much easier to weed out the bad apples on my list. Despite the markets slightly negative bias, the low volume makes this more of a pullback, which is to be expected following last weeks bullish action. For now, enjoy the last few weeks of vacation, go to the beach and just have fun because in a few weeks the warm, lazy days of summer will fade away.

Laterally Trending Market...

The current market conditions that we have been experiencing are quite possibly the most difficult to trade in. Laterally (or sideways) trending markets do not provide rewarding opportunities for both longs or shorts. Instead, they are filled with traps that can easily drain ones account. Trying to predict what the market will do next is not a game that I would like to play. It is a losing game at best. But still, by examining the chart a few days ago, I posted that if the DJIA can break above or close onto or above 13,200 that it would head higher and that if it closed below that point, it would have headed lower. Well it did close above the 13,200 point and lo and behold, it jumped up quite considerably. In order for the DJIA to break out above its 50 day MA, the 13,200 point needs to act as support (much like a spring board). Again, violating the 13,200 point can send the market further down again to retest the lows. Unless we trade sideways the whole time, next week should be rather interesting as far as the future direction of the market is concerned.

Potential Short Positions...

Here are a few potential short positions....

AYI

CCBL

JNS

TWB

Trade Journal

New Buys: FALC, SHEN

Add Ons:

Sell-Profit: IIN (40.12%)

Sell-Loss:

Several Things....

This week is a bit busy for me so do not be surprised if my posting is not as frequent as other weeks. There are several things to keep an eye on. If we close at the HOD today, the DJIA will be in good shape to head higher as we have faced some resistance at the 13,200 level. If it can't close above this level, we may head down a bit to retest the area between 12,800-13,000. The NADSAQ needs to close above 2,550 in order to continue its short-term uptrend. If it faces resistance at that level, it may retest the 2,500 level. Likewise, the S&P also needs to close at levels near the HOD (which is slightly above its 200 day MA). Otherwise, it may run into some trouble and take another nasty dip. The Russell 2000 Index needs some more work in order to reclaim its 200 day MA. If it faces resistance and can't climb above the 200 day MA, it may be a good idea to initiate a short-term short position in it.

As far as stocks are concerned, there are many stocks that have found support and pivot points off of their 200 day MA.

Some interesting stocks that are heating up the charts...


SVT


















PLX


Avoid this stock if you are afraid of heights. This is undoubtedly a momentum play and a potential future high, tight flag candidate.


























SHEN


















VSEC (comeback?)


















ACP


















CCOI










































VMW






Expect the stock to pullback a bit as it has had a quick run-up.






























SLI









































ARTW


























CVGW

Stocks to Keep an Eye On...

Here are several stocks that you should simply keep an eye on. Buy them up if you would like at your own risk. Remember to keep any new buys small. Technically, one should be patient and not risk cash on either the long or short side at the moment, but sometimes several bullish charts emerge when you least expect them...

Keep an eye on:

NUAN
VMW (recent IPO)
VII (already recommended)
MPWR ( already recommended)
CVGW (good add on point)
CCOI
WLDN
FOSL
SURW
KOP
PLX (very volatile...risky play)
ETC (bottoming out)
PEGA
ARTW (bouncing off of the 50 day MA)

Just Watching the Slow Action....

There hasn't been much action on my radar screen lately. The market is pretty much stale right now and there doesn't seem to be much potential on either the long or short side. I am simply keeping an eye on the indices. The S&P 500 and Russell 2000 may offer more shorting opportunities if they hit resistance near their 200 day MA level. If they do show more weakness it may be a good idea to short them. The DJIA and NASDAQ have recently found a little support above their 200 day MA level. The NASDAQ is looking like the weaker index and may crumble before the DJIA stumbles again. On the flip side, both the DJIA and NASDAQ may find more solid support at these levels. Any positive news on the condition of the sub prime and credit markets can help create a bottom at these levels as well. I know this sort of information may not satisfy someone who wants a definite answer as to the future direction of the market but you have to take it as the best possible answer. No one can predict the future direction of the market. No one has some sort of magic crystal ball. There are no tricks or short cuts to any answer. The answer, one or the other, will come to light in the future, however far or near. All I am saying is that you should be prepared to take advantage of the situation whether the market goes up or down.

Problems with Blogger....

Hey guys,

For some strange reason Blogger has a problem updating my blog. Because of this, new posts take several days to become published and readable. I hope they correct this problem soon because it has become irritating during the last few weeks since it began occuring....

Several Bullish Charts Emerge...

Despite the markets current indecisive nature, the last few days bounce has helped a few charts create bullish technical setups on their charts. I am not recommending them as buys just yet. I would like to see how the week starts off and how these stocks react. If they continue to look bullish it may be alright to buy just a little at first. Right now is not exactly the time to create big positions. All it takes is one negative news release to send us below the 200 day MA once again.

TRAK

ISRG

LKQX

MEAS

RBN

QEPC

RGEN

UA

STRL

STRA

NUAN

Not Impressed/Stand Still

Although today's market action may have seemed impressive at first, it was really nothing more than a continuation of yesterdays oversold bounce. Volume was a bit lower and we did not close at the high of the day. On top of that, there were many stocks that looked broken, busted and sold off from institutional investors...


An example of the horrendous chart action that I'm talking about...


NCR





Opened at 49.82, fell down to44.14, then zoomed up to 55.84 and afterwards, closed down to 48.81. These high volume, wide and volatile price swings are not terribly positive.

















MOGA





Another example of a chart gone bad. The huge run up and subsequent late day fall is due to selling pressure..not buying from institutions as one may believe.









The financial media outlets are bragging and boasting to you to buy these bounces hand over fist. If you want to lose money, go right on ahead. Following the general media (which the general population gets its investment and financial advice) is not going to give you the edge. The very best traders are keeping cash heavy and not going crazy with any new buys or even short positions from that matter. I'm not saying to not keep your watch lists ready with new buy ideas or short positions. In fact you should be doing just that. Not every stock chart looks bleak like the ones posted above. There are a few stocks ( a small handful) that may actually set-up nicely if the situation improves. As it stands, I haven't made any drastic changes to either my long or short positions. I'm holding my portfolio tight, and waiting to see what happens.

Oversold Bounce...so What's Next?

Today's oversold bounce should have been obvious. Fund managers and institutional investors can't keep their hands off of a good deal and the street was definitely littered with them after the past two weeks volatile downward spiral. On top of all that, the markets were shocked back to life via the Federal Reserves billion dollar cash injections. Today could have ended a whole lot uglier if the Fed hadn't stepped in. Unfortunately it is still far too early to tell if the markets primary trend will be saved. I tried to not be too greedy so I covered a bit of my futures contracts for some impressive gains. I still have a portion of them open just in case. My stock shorts jumped up quite considerably from today's late buying spree. I searched for some new longs but I haven't found anything worth it. For now, I'll just hang onto my current holdings as they are working out just fine.

Short Positions Working Just Fine...

Some of the short positions that I have initiated a few weeks ago are starting to show me decent gains. On the flip side, my remaining long positions are continuing to lag even more. I may have to liquidate more by the end of the week.

Short positions: MS, BSC, GS, AIG, AXA, LM, SVVS, MER, CE

Re-Short: HBC (I got stopped out with the first short position)

Trying to Keep Up With the Market...

Forget the Jones's. Keeping up with the markets action is the real challenge. Between last week and this week, I had to let go of countless positions that have fallen down 7-8% from my original buy point. What really got to me was the fact that I could have sold most of them a few weeks ago for decent profits. Still despite this, I am happy that I took a chance and stuck with my short market futures position. The mini futures contracts are a great way to play changes in market direction but they are not for everyone as they are a risky trade for someone without experience in trading futures contracts.

Some of my current holdings: VII, MPWR, FARO, OMCL, CVGW, GNET, IIN, SHMR, SPNC, SYUT, SYNP, TOD, CVU, AMAC, DBTK, QEPC, SCLD, WRLS, TCN

Sold for Loss: SCUR, BLOG, BOOT

In Play: ARCI

ARCI is showing impressive strength on weak market day. Remember to keep all new plays small.

Waiting Patiently...

To a trader, there is nothing more unnerving than waiting for a trend to develop. Lets face it, without a trend, a trader has no edge. Most of my trades are still doing fine. Most are down but the ones that I have continued to add to (IIN, CVGW, SYUT, etc) are still doing fine. On the flip side, my short market futures are performing quite well at the moment. Since I am a novice in respect to futures, I do not plan to add more unless the bearish action continues in the upcoming days and weeks. For now, I am sitting tight and keeping new buys very small. Now is not the time to be placing heavy positions. Small positions are fine in this environment. If they don't work out you don't lose your neck. If they do sway in your favor then you should add a little more to them. This is my strategy. You should do what works for you. In the end, the main objective is to preserve as much cash as possible so that you can use it to your advantage when a fresh uptrend begins.

Trade Journal

New Buys: BPHX (bought because it provided a low risk b.p. The stocks is also bouncing off of the 50 day MA), ALG (bought because it is bouncing off of the 200 day MA. Chart also suggests that the stock is under accumulation), STAR (grabbed some since it is bouncing off of the 10 day Ma with tremendous force. May begin a new uptrend)

Added to: OMCL (good buy point for an initial position as well)

Thinking of Buying: I've been keep an eye on DCO for a while. It looks like it may be forming a double bottom.

From now on, I will try to provide reasons for my buying, selling, etc. This serves to help me rationalize why I went through with an execution and it can help you the reader to understand why (the reasons) I performed a certain action.

Also, notice that I did not buy every stock that I listed yesterday (stocks at a good buy point). Good buy point or not, you should only buy a stock if it is performing well and to your liking. Because ASTE, TRAK and TLEO did not behave the way I expected them to, I passed on them. Of course, this can all change before the closing bell. We'll just have to wait and see.

Stocks at Proper Buy Points

One of the best strategies that a trader or investor can utilize in order to manage risk in their portfolio is by initiating positions in stocks at proper buy points. Buying at a proper buy point helps minimize down side risk, keeps emotions in check and gives you a better exit/stop loss strategy. The recent market correction has helped create several interesting buy points in many stocks.

Here are a few of them: ASTE, OMCL, TLEO, TRAK

ASTE

OMCL

TLEO

TRAK

A common theme that can be seen among these stocks is that they have all reported great earnings. In addition, their stock prices are at proper buy points, near their major MA's, such as the 50 day MA. The riskiest of the bunch are OMCL and ASTE as they are slightly further away from their 50 day MA. The correct stop loss would be if the stock drops 7-8% from the buy point or if the stocks closes beneath the 50 day MA on major weakness.

The Ugly Just Keep Getting Uglier...

Hey guys,

Is it just me or does it really feel like the list of playable long positions seems to be growing smaller and smaller with each passing day? There are several indicators hinting that the short side of things is the correct side to play in the mean time. My short portfolio, which at the moment consists mostly of short futures positions in the Dow, NASDAQ and S&P is already up nearly 35%. If this continues, it will easily surpass my top-performing long portfolio. In order to appreciate how much of a change this is, allow me to put this in perspective. This is the first time, since I began trading that my short portfolio has posted such a high gain and in such a small time frame. If the market doesn't climb back up above resistance, we will surely slice through the 200 day Ma.

Trade Journal

Market Comments: Despite the overall market indices weakness, many of my holdings held up well. The problem with subprime is not a new one, but quite frankly, its one that I've becoming sick of hearing.

New Buys:

Add Ons: VII, CVGW

Sell Profit:

Sell Loss:

Futures: Short Dow, NASDAQ, S&P 500 (e-mini)- In retrospect, I shouldn't have covered my first short position in the first place. Oh well. With the current market action I had plenty of time to re-initiate my short position. Hopefully I'll make an actual profit instead of breaking even.

Talk about a Bad Opening Act...

You know it can't be good if the market dips over 200 points within minutes of the opening. I wonder whats in store for us today. Keep an eye on those positions. Now is not the time to make any new buys...

Despite the Markets Move...

...I still have many stocks doing well and others not doing so well. This is not usually a positive thing. Still, I have to work with the trend that the market gives me. I have already closed my mini futures for a slight profit/break even. I should have done that yesterday, but I didn't get a chance. For now it is not worth being short unless a definite trend emerges. So lets see which stocks fared well, which didn't and which ones ended up mixed for the day...

Stocks Doing Good: GNET (by the way, GNET makes a good buy even at the current level as the stock is still within a proper buy point), IIN, CVGW (CVGW provided a small buy point on today's dip. After today's strong action, I am convinced that CVGW is shaping up to be a powerful mover), SHMR (a good time to buy SHMR is when it trades near its 10 day MA), SPNC, SYUT


Stocks Not Doing So Well: KTEC ( I should've sold it all yesterday. I got rid of the rest of my position and I still made a profit of over 20%). BOOT (ugly reversal...if it doesn't shape up tomorrow, I'm selling), LGTY (finally got rid of this pos...I failed to follow my own rules. I should have sold this one a few days ago), SYNP



I've been looking for any new longs and think that I may have found a few. If you choose to play them, play them at your own risk. Do not put a crazy amount of money in any new position. It is far better to just keep adding to your top performing stocks and getting rid of stocks that are performing poorly. In tonight's search I have found many past stock picks and holdings. I will try to post some either later or early morning. Today was a long day and I'm getting a bit tired.....

Keep Adding to Your Winners, Cut Your Losses Short...

Today, I am adding more to my top performing holdings and cutting loose my poor performers.

Add to: IIN, BOOT, SHMR...


I will be gone for most of the day. I will try to post some of my thoughts and market commentary later on this evening.

Before I part, I want everyone to try to notice any new trends in the market. Try to notice the different group of stocks that are begining to lead the market. Also notice that the old winners and industries aren't working any more.

Trade Journal

New Buys:

Added onto: IIN, CVGW, BOOT, SHMR, SYUT (High, tight flag candidate)

Sells Profits: KTEC (sold some for a +32% return)

Sells Losses:

Looking for a HOD close...

If the market can close up 25 points or higher (anywhere near the HOD), the Dow may be able to start a new uptrend. If we don't, then we are facing resistance at the 50 day MA which will ultimately send us back down.

Nice Up Day...

Today was a strong up day. Unfortunatly for me, most of my new trade picks faltered pretty badly. The bounce that I was expecting in VCO and CU never happened. Even my micro-cap plays seemed to not want to participate in todays rally. What's going on? Could this day simply be an over-inflated bounce? Judging by the large amount of stocks that haven't reacted well despite the 280+ point rush, I would be slightly cautious. We were in oversold mode and in desperate need of a bounnce. Lets see how things work out for the rest of week...

My Outlook: The Glass Still Looks Full for Latin American Beverage Companies

Several months ago I recommended two Latin American (Chilean to be precise) companies that looked attractive due to the fact that they have been experiencing increased accumulation and strong technical breakouts. These stocks have had quite a run and consequently pulled back a bit. Both stocks have pulled back to their 50 day MA and seem ready for the next leg up. This is a great place for one to add more to their position. Also, if you were late to the fiesta, this is a good price level to initiate a small position (remember, keep all positions small for now).



CU


















VCO

Three New Micro-Cap Plays

Although these "new" plays that I've found are not entirely new, (several have been played before), they do look promising considering that they were able to perform well despite the horrible market action.

CFI

GRIL

NTOL

Back Down Again...

Finally and end to an ultimately bearish week. If it were still open, who knows how low we would have hit. As much as we would like to think and pretend that the subprime problems shouldn't effect us, we have to come to the realization that we have no choice. As much as we would like to shut the mortgage woes in a closet and forget about them, we just simply cannot. There is a lot of selling. Not just by individual investors and traders, but by institutions. There isn't much one can do. Well there is one thing you can do. Its all about changing strategies. If you do not allow your strategy to evolve or adapt to the new environment or circumstance, you will surely not succeed. Some so called experts will tell you that it is not time to short yet. I couldn't disagree more. A few days ago, I shorted a few mini Dow and S&P 500 futures contracts. While my stock portfolio, which is mostly long positions is slightly down, my futures portfolio has already skyrocketed in the last few days. Big difference. If things do not shape up next week, I will get rid of more positions and put more money to work on the short side. This what I've been doing since day one...adapting and reshaping my strategies...


So how did everything fare? Most of my newer stocks actually did good:
QEPC, TOD, LGTY, CVU, IIN and several others did fine considering the markets big drop.

Stocks such as WRLS, VSEC and BLOG didn't do so well.

My Canadian Stocks finished up nicely for week as well: GBI, TIM, HRX

In Play: CVU, SYNO, IIN, PAS

CVU (time to rebuy), SYNO, IIN, PAS

More Interesting Canadian Stocks...

Although I've been interested in Canadian stocks (mainly oil stocks) since the begining of my trading career, I've recently developed a renewed interest in not only the oil stock companies, but other industries and sectors as well.


GBI (Global Railway Industries):Transportation- Equipment Mfg
(same industry group as U.S. traded GBX, TOD, STS, TWIN, WAB, etc.)































TIM (Timminco Ltd): Steel- Specialty Alloys
(same industry group as TIE, ATI, RTI, CRS, etc)
































HRX (Heroux-Devtek Inc): Aerospace and Defense- Equipment
(same industry group as SIF)


























DWI (Dragonware Inc):Telecom- Wireless Equipment

Industry Group Strength- Medical related Computer Software

The Medical Computer Software Industry Group is one that I have kept a close eye on since I began trading/investing. Its first real winner was QSII back in 2004-2005. Since then, QSII has fallen out of favor. Now, there are two interesting stocks that have recently started to burn up the charts. They are ECLP and ERES. The best one in my opinion is ECLP. It has stellar earnings and increases in sales. Not far behind is ERES that is able to hold its own with strong earnings and decent sales strength. Both stocks look technically strong on the charts and both boast high RS.

Update: Another interesting stock in this group is ACCL. It also has an attractive chart and may make a good play as long as the market can hold itself together.

Even the chart on QSII is starting to improve...

ERES

At the time of my initial posting, ERES was doing much better. The late day plunge messed the chart up a bit.

ECLP

ECLP was also performing well early on in the day. It doesn't make much a long trade now since it closed at the LOD.

QSII

QSII closed well in comparison to the last two stocks in its group. Still, the chart is not that good as the stock has not put in a definite bottom.

ACCL

It only makes sense to save the best for last. Out of all the stocks in its group, ACCL is the most technically attractive. Its chart is strong and resilient even amid a 2.50% slide in the NASDAQ.

Attractive Opportunities Arise...

Today's strong action was a pleasant surprise. I was even more surprised to see so many stocks setting up strong chart patterns. I revisited some old favorites and became acquainted with several new comers as well.

First off, which stocks one should add to...

Add to: WRLS, BLOG, SHMR, VSEC, FARO, TOD, LGTY, SCLD

New Buys: SYNP, TCN, MPWR (traded it back in '06), SCUR, QEPC (good time to get in)

Make sure you add to your top performing stocks before buying any new ones.

Remember....keep new trades small for now as the market can switch up and toss and turn in both directions rather quickly

Trimming Down...

With the market all over the place, I decided to trim down on my positions and sell for some profits and some losses (PRGX and BZC). All of the stocks on my watchlist seem to work for a day or two and then they start to fail. It seems that the only way to play the current market is by day trading and that is not my style. No thanks. I'd rather sit on the sidelines and wait for a definite trend to emerge. It can be up or down. I don't care. As long as there is a trend, then there is a way to profit from it. This lateral or sideways trend is a great way to lose your shirt. It's a dumb play and I've learned to pass on it and wait for better opportunities. The worst thing you can do is lose all your money now trying to press your luck and not have any left when the next bull market begins.


Update: 12:52....By now it should be obvious that going long is becoming less profitable than just sitting on the sidelines or going short. Different market trends require different strategies. In a lateral market it is sometimes better to do nothing at all. What you should be doing is paying attention to the charts of the major indices and their support and resistance levels. If the DJIA hopes to regain its up trend, it needs to reclaim its spot above the 50 day MA (around 13600-13700).

Several Stocks that are doing well: BLOG, WRLS, VSEC, SHMR

Market Whiplash...

The Indices wild and erratic movement has many on the NYSE floor rubbing the back of their necks in pain from the whiplash they have sustained since today's opening bell. As I am writing this, the Dow is up over 70 points. Quite a difference from where it was trading 30 minutes ago. Is this an invite to jump back in long and strong? Maybe. I've decided to sit this one out and wait for more signs and clues that may indicate that the worst is over.

At the moment, I will not be adding any new longs. I will simply add to stocks that are showing strength and getting rid of the ones that are weak.....

Showing Strength: VSEC, BLOG, SPNC