The Ambitious Trader: Stocks, Trading, Investing..My Ambitions as a Trader and Investor

This is a one way ticket that takes you on a wonderful journey into the vast world that is the stock market through my eyes, my point of view.

Monday, January 25, 2010

High/Low VIX Trading Strategies

Now that the VIX has begun to show momentum, it is prudent that one should switch their trading style to a shorter term holding strategy. The higher the VIX goes, the shorter term your holding period should become. Back in 2008 with the VIX at astronomical levels, only short term trades had a high probability of giving decent gains. I remember that if one didn't sell their trades in a day or two, they would get pummelled the next day. So for high VIX market, do short term trades on stocks breaking out and showing strength. Also note that in high distress time periods, most stocks making significant moves are lower quality, speculative stocks.

Once the VIX tops out and drifts lower, we tend to find more higher quality stocks breaking out. Also, a lower VIX allows us to hold positions for longer time periods which is key in reaping high returns from trades.

Tug of War

You can compare it to a tug of war match or a yo-yo. Regardless of its comparison, it is becoming increasingly difficult to know what side one should sit on. While the obvious side says the market is heading lower, another approach would be to sit on the side and wait for a clearer trend to develop. I feel as if I still have a bullish bias. Maybe I am wrong. But for now, I am sticking to it. I am mostly in cash at this point and just grabbing small positions here and there.

Stocks showing strength: HDSN, LBY, PEIX, QELP, SMTX, SPU

Long term buy: INTT, WWIN, WWVY

Bouncing: GFRE, ONP (?)

Sunday, January 24, 2010

Thoughts on Current Down Trend

Looking at the past index charts, the current down trend that we are experiencing is nothing spectacular and not something that is out of the ordinary. It reminds me of the July decline that we experienced months ago. Now is a good time to either hang tight or sit on the side with cash. Most likely, short positions will not follow through, so do not waste your time as of yet. Short term traders may have been able to grab some profits by shorting early on the temporary top and anyone who shorted the futures probably made a respectable gain, yet I still remain stubbornly bullish. I may be wrong, but I believe that we are just taking a short break before we're set for the next leg up. I will be constantly looking for strong moves in stocks that can lead to longer term trades (ala KIRK, KS, DTG, F, etc). I would pay extra attention to SPU as it has set itself up like HPJ did months ago.

note: also, HDSN has potential...

The first step is to look for support levels. The 10K level on the DJIA seems like a good place to start. So step one is to sit on the sidelines in cash and watch for a support level to form. While doing this, monitor stocks that are breaking out, making new highs or showing strength on high volume. Look for a brief period of consolidation. Even if market bounces from this level, just watch. You will want the market to post a follow through. In addition, you will want to see stocks making strong breakouts as well. I have seen markets bounce but no real follow through in individual stocks. That would be considered a warning sign that the market is not ready to climb back up.

Friday, January 22, 2010

Slightly Oversold

This is the point where the market becomes slightly oversold. Unless some catastrophic news hits the market, we should bounce from here. Anymore downside from this point on and the primary trend will be in danger of changing to bearish.

New Buy Candidates: CNXT, HDSN, ISRG, LBY, TLX

New Buys: SPU (in at 6.78)

Hold: ISR (decided to give it some more time...small position, so no big deal)

Update: Looks like the market has more room to the upside. My initial thoughts on shorting the market were correct. I may sit on the sidelines until we actually show some support on the charts.

Thursday, January 21, 2010

New Trade Ideas

New Buy Candidates: FIT, ISR, LTXC, PLXS

New Short Candidates: APWR, CGA, CLD, CXW, HRBN, NARA, OWW, RBS, TSS, YZC
(the best shorts are the ones that are showing a significant decrease on abnormally high volume)

Some banks are bucking the trend: CMA, DEAR, EWBC, FITB, HAFC, HBAN

New Buys/Shorts: FIT (in at 8.70), HBAN (in at 4.67), ISR (in at 1.56)

pick your arsenal...


my thoughts: we may have a multi-day dip, but I am confident that the indices will climb back up soon after. Remember, topping action in markets is not a clear cut phenomenon. Neither is the creation of a new primary trend in the markets. Not convinced? l urge you to take a look at past charts of the markets when they topped and bottomed. You will notice that what we are experiencing may be nothing more than a bump in the road. Regardless, nimble traders may be able to squeeze a few profits from some well timed short trades.

Wednesday, January 20, 2010

Not That Bad...

The markets didn't end up as bad as expected. Look for a bounce tomorrow. It may be a bit premature to short the indices. If we had closed at the LOD, that would have been a different story...

Have a Game Plan

Have a watchlist of possible buys...especially China stocks. Look for stocks that are showing support at key levels, via MA's or by other oversold/overbought indicators.

Have a watchlist of short positions, just in case things get really sour. Note that this is most likely a short term correction. Real tops are complex and take time to pan out before the real down trend begins. Look at past charts of the 2007-2008 bear market for clarification.

Shorts: AGO, BBD, LXP, MDCO, STEC

Monday, January 18, 2010

Analysts Bearish on China...

Translation: China stocks have more room to run...

Here are some of the articles in question. If anyone else finds any, let me know. Post them on the comment section. Markets and their components tend to trend in the direction opposite to what the general public or consensus predicts. For those long China stocks, this is good news and an indication that you should hold.

http://www.cnbc.com/id/34919951


http://www.marketwatch.com/story/crisis-expert-says-chinas-boom-to-end-soon-2010-01-16


http://www.cnbc.com/id/34883179 (on the market in general



http://www.cnbc.com/id/34879085 (on Nat gas, which I am bullish on)

Saturday, January 16, 2010

Futures/Commodities

My stance on some of these:

Long: Cattle, Hogs, Lumber, Nat. Gas, Platinum, Silver

Short: Coffee, Corn, Soybeans, Wheat

Currency: Australian Dollar (long), Canadian Dollar (long), Euro (short), Japanese Yen (long) Mexican Peso (long), NZ Dollar (long), Swiss Franc (short), U.S. Dollar (long),

Indices: Short term bearish on all the U.S indices....

New Short Candidates: BTM, KNXA (support at 10.06)

Friday, January 15, 2010

One New Long Trade Idea

Take a look at PFSW. This one has potential...grabbed some at 2.49 when it showed up on my radar...

Another Buy: ONP (rebuy, in at 11.98)

Short Candidates

New Short Trades: AZZ (short at 30.45)

Update: Covered for basically breakeven

Other Short Candidates: CAAS, ONP, XRTX (if possible, as some brokerages do not carry shares to short)


my long positions in ONP and XRTX have been closed


Important to Note: These are short term short positions and will only continue to work if momentum picks up to the downside. But keep in mind that one negative day does not define a trend. Most likely, the markets will bounce from this and continue to offer better opportunities on the long side. Market tops are very complex and usually drag on for months in meaningless lateral action before a clear trend is identified. Be cautious and protect any profits. Always gauge your positions by how they each individually react, not as the market as a whole.

Thursday, January 14, 2010

Trade Ideas

New Buys Candidates: BJGP, CRDC, DARA, FSII, GNVC, HYC, ICLK, LMLP, OESX, SPA, TII, WAVX (rebuy)

Add To: CPBY

Wednesday, January 13, 2010

New Buys

New Buys: CYTX (in at 7.77), ONP (in at 13.27)

Add To: ASYS

Watching: ROSG

Tuesday, January 12, 2010

Don't Be Fooled...

There is an awful lot of doom and gloom out there about the market. It is still too early to tell if this is the end of the trend or just a short break...don't let emotions get the best of you. Have a clear cut strategy of when to exit positions that are not performing as you have expected.

New Trades

New Buys: CDII (in at 2.43), PEIX (in at 2.47)

Add To: RXII

Watching: DPZ, EFOI, EVK, ONP, TPI

Monday, January 11, 2010

New Buy Candidates

New Buy Candidates: CHNR, CYTX, ENTR, LPSN

More Short Candidates

While I am bullish to the very end, I can't help but notice that the rally is nearing a breaking point. Like it or not, no matter what we think, the market will dip sooner or later. Notice I said dip. I still believe that the intermediate to longer term trend will be positive, but in the short term time span, we may have a mini correction. The severity of the correction all depends on how long this uptrend lasts. Earning season is usually the best time to find short candidates. So far, there are a few stocks that are setting up decent shorting positions...

New Short Ideas: FMX, HOGS, MED, MELI

Could use puts if you want. Time frame is longer term. If you aren't patient and can't handle holding for a few weeks, do not bother as it would be easy to be shaken out of shorts this early. If the markets (for whatever reason), begin to sell off fast, you will be able to exit with decent gains at an earlier rate.

Saturday, January 09, 2010

Short Candidates

Here are sveral short candidates that one should look at. They are for only shorting for a short period of time (several days max)


MNI, MTW, XTEX

Thursday, January 07, 2010

EOD Buys

New Buys: MRLN (in at 8.74), RELL (in at 7.14)

Even "Perfect" Setups Can Fail

Last night, as I was doing my research looking for trades for this mornings session, I came across some stocks that seemed to have perfect chart setups. One of these was AIXG. I was almost certain that this stock would perform well. The stock closed at its HOD with high volume the previous session. And yet, because the market is acting indecisive, the stock has failed to perform well. Of course, this can all change. By the EOD, the markets can go green, and for all I know, the buying pressure may start up in AIXG. In order to function quickly and decisively, it is important to keep a narrow watchlist of stocks. Keep tabs on them and watch them near the close. Even if they haven't performed well earlier on, they may catch up by the EOD.

Wednesday, January 06, 2010

Stocks To Have on Your Watchlist

Top Stocks: AAU, AEIS, ANO, CDII, FNDT, MTW, ONP, PHMD, RODM, SMOD, SOLF, SWC, TLB, TTPA



Note: Given the fact that there are quite a few precious metal stocks that are breaking out and showing strength, coupled with the fact that there are a lot of stocks that have had 2 days of breakouts with HOD closes, I would say that tomorrow may have a dip in store...stay tuned...

Tuesday, January 05, 2010

OTIV is the Stock de Jour

OTIV (in at 2.23) might day trade this


ONP is another high powered stock that one should check out

Monday, January 04, 2010

Tons of Opportunities

There are tons of opportunities out there and my end of year selling of my positions may have been a bit premature. Still, I managed to pull off some nice gains for the year and now have plenty of cash to put back to work. I will be busy until 4pm watching any interesting breakouts and buying the ones that pop up on my radar. More on new trades by the EOD.

Friday, January 01, 2010

Happy New Year!

Happy New Year to Everyone! May 2010 be a healthy, rewarding, and prosperous year...





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