This post is just a market commentary!

Wow is all that I have to say. Myself and every bear that I know and read are amazed that there has been no development in support for the S&P. It is amazing that everyday we grind lower and lower. Specifically GM and Ford have been getting utterly HAMMERED.

As far as support goes well that 950 level I talked about as my initial stoppage point for the S&P remains in effect... We will probably get there sooner than later and then we'll see if we hold. I'm not going to hold my breath this market makes no sense!

Jason

S&P Analysis for this week!

My was it another interesting week on "Wall Street". Bailout plan was passed and the markets dropped.. WEIRD... huh... NFP came out and it was crap showing that the economy still sucks... People I think are starting to realize that we are getting ourselves into tons of debt to save a bunch of cronies on Wall Street but that isn't going to save main street or the economy and frankly is going to make things worse in the long run. But with that said LETS LOOK AT THE CHART!



Okay so what we can see here is that obviously not much has changed from when I did my post on the first EXCEPT we made a new low but the 1100 level again held. The next big level of support should be the fib level at 1077 so IMO it looks like we might be in for a bounce. The RSI has hit oversold for the first time in a long time and the MACD is about as low as the previous huge low. I'm looking for a retracement at LEAST up to the bottom of the channel at 1150 or up to the fib at 1170 (which is a very strong resistance level now) and then we should resume the downward trend. This was a HUGE down weak for the market down almost 10% in a week there HAS TO be a retracement back up but we live in crazy times so who the hell knows.

Long term: Going lower breaking Fibs
Short term: Going back up to the 1150/1170 level as the 1077 fib level should hold to get us back to the downward channel.

Strategy: Buy puts on a bounce and wait for the VIX (chart below) to come back in line (a little bit)

VIX:


The VIX is a measure of the CBOE option volatility and is a general indicator of overall market volatility. When the VIX is high option premiums are high when it's low premiums are low. The VIX is basically a measure of fear and thus when the vix makes highs the market is down big when it goes lower it's going up.

Looking at the VIX it can be seen that it is at levels not seen since the last bear market. It's just crazy volatile and options are very expensive with implied volatility >70% on most near term expiry dates on INDICES! not even stocks on the S&P russel 2k WOW. What I'm looking for is for the vix to come back down to less than the green line at about 30 which should coincide with the market coming back up to the channel/fib I discussed earlier. If the market keeps going lower the VIX is going to shoot to the moon.

TA does not work on the VIX never play the VIX (learned this from the guys at Think or Swim THANKS!)

Overall: Look for an up week on the market to calm people down a bit maybe even an up 2-3 weeks but then look out!

Jason

Post for Grant

Okay Grant here is my analysis of all of the symbols along with their charts.. Hope you like it! (Although I doubt it cuz I'm shooting down everyone of them as long :-p)

AUY:
RSI: trending downward
MACD: trending downward
Broken all fibs and significant support, trendline and channel

Prognosis, Short or wait til bottom at around 4... Wait to break downward trendlines

MFN:
I really liked this chart it was very clean (besides the lack of a good trendline I guess I could go farther back but I don't carry as much weight into trendlines of stocks <10). onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGWZvwP6iwEE69OaSKC6qFPYITX9buXvG9qhoOOwqpncvqSgbQCjeohj15ksPh2sKgug1Sp_P0MR_eHmu1ExpfPgfa5OIlxNrdvyMqV787UTZORAYKAPdR_mxfBIlFuUfNhDMGP9AdkOI/s1600-h/svm.to.10.05.08.jpg">This was the ONLY security that I looked at that I thought was even close to find a bottom (although I still think that it looks bearish).

Fibs: All broken
MACD: downtrend but looking at maybe finding a bottom?
RSI: downward trend BUT oversold AND almost breaking the trendline upward (not yet though)
Trends on the chart: up trend broken
Prognosis: neutral I wouldn't really like this as a short unless it gets all the way back up to 5 but I don't like it as a long until we see some more positive divergences on the RSI and MACD! But of all of the charts I looked at this is the most promising long position

USO:
Okay so I lied this is the only other chart that has prospects for long positions but I'd be EXTREMELY cautious and have my stops very well in place

1. RSI: broken up-trend and now down-trending after going overbought (bearish)
2. MACD: broken up-trend and has gone negative (bearish)
3. FIBS: still has 1 fib not broken at 71 and also has support at 75 from the previous resistances in 2006
4. Chart: Up trendline still intact at around 75 but dangerously close to breaking this
Prognosis: Go long BUT either have a stop below the trendline or below the fib at 71. Personally I would say below the fib since the price action has already broken the 75 level but just keep in mind that that I really do not like the indicators for this chart. RSI is bearish, MACD is bearish, 50 and 200 day moving averages just crossed. Truthfully I would say to wait for a bounce up to the downward trendline at 80 and to that fib and then short or buy puts... and ride it all the way down to 45.
Overall: I would stay away from it because of the MACD and RSI it just looks too bearish and like it's just begun a big move downward!

SLV:
This was also an interesting chart:

1. Fibs were all broken but now above the 61% fib
2. RSI: downward although almost breaking the trendline
3. MACD: downward
4. Moving averages: Are extremely disparite therefore a lot of this move might be done?
5. No real trendlines on the graph and can't really go back farther (look at that volume in early 05/06 yeah right charts won't help there)
6. Support at 11 Resistance at 14
Prognosis: Hasn't shown that it's found a bottom yet as there are no positive divergences but again kind of close and could go long here with a stop at 10.50 (the 61% fib level)

GLD (FINAL ONE):

Again another interesting chart.
1. Fibs: Held perfectly at the 50% @ 72 and are now above all but the 100% (normal for retracements) (bullish)
2. MACD: Broken uptrend and new downtrend (bearish)
3. RSI: Broke support at 50 and right below 50 but is now back above it? Down trend (bearish?)
4. Chart itself: I personally think it again looks bearish. Look at the volume on these weeks there has only been ONE week where an up volume day was bigger than any of the down volume days in the previous year! That to me suggests a bigger thing than anything on the chart can tell you. IMO it looks bearish but I would not want to initiate anything here.

Prognosis: Short near 100 with a stop just above the high. long near 73 with a stop at 72.5. Also if you look at the previous 3 week candlestick analysis that's a bearish reversal pattern with an up white candle followed by a gap up doji (cross) (reversal signal pending reserval on next candle) and then a down candle. So with that said I'd even say screw long even gold is a viable short but not at these levels

Let me know what you think Grant sorry I can't really help you out with any of these as potential longs but IMO none of them look that great. And you better appreciate this cuz this took about an hour :-p

Jason

A long play! (for those that don't like the idea of shorting)

It has been no secret that I have a very negative view for where the stock market is going (950 on the S&P). There are only 2 types of equities you should consider going into and those are: Consumer Staples (Wal-Mart, Kroger, etc) and Healthcare (with no debt, tons of cash because of the credit crisis). Now I know that this is supposed to be a technical analysis blog but those are the only types of companies I will look at going long in this extremely hostile environment. With that said here is my long play that I've mentioned on this blog before that I've followed for several years now:

Viropharma (VPHM): currently they make Vancocin(R) the only treatment for a life threatening hospital infection called C-Diff. They were initially brought down because the FDA said that generics could come to market sooner and 2-3 years later there are STILL no generics on the market for this drug! They have tons of cash and have recently purchased a new pharmaceutical company I'm assuming to bolster their pipeline. These are the reasons why I have loved this company since the beginning they've been beaten up several times and have found bottoms both times. Now onto the chart:


The important points I want to show here are that the most recent high stopped at the 50% fib level (black circle) and then shot through the 38% level. This means most likely that VPHM is going to come back down to test all of the trend lines. The RSI is close to it's trendline and the 50 level. The MACD has a long way to go down to come near it's trendline and as long as the 10 level holds (there is that upward trendline and the support level at 10 (blue circle).

The reasoning for me thinking that this is a bottom for the stock is because of the other 2 circles (orange and purple) both of the lows are at exact the same level (approximately 7). This is considered a double bottom (IMO). The most important thing on a double bottom is an appropriate volume pattern. In March 06 (the first huge drop) volume was up in the 60 millions, on the second huge drop (April 07) volume was only 30m! Furthermore on the first bottom in July 06 volume was roughly 20m then in the bottom in November 07 the volume was less than 20m (which makes sense because if it really is a bottom the selling pressure should be less).

Now here is my gameplan for this security:

1. Wait until bailout happens
2. Wait to see how badly it tanks (probably down to the trend/support at 10
3. Make sure it holds this level
4. Buy calls and then ride it up to about the 17 level as that would make a new higher high with lower lows water fall sell out of the call and then wait until it falls back to the trendline/fib level
5. Make gobs of money!

We'll see how this plays out but this might be ready to be played in a few weeks!

Jason

Anatomy of how I pick the stocks (and how it played it out)

Okay guys just to give you my formula to learning when is right to start to short a security let me first give you the things I look for:

1. Trend-lines, channels, support, resistance. These are fairly straight forward and I hope that just by looking at a chart you can tell what is what.

2. Chart patterns and Volume. Chart patterns are extremely useful (such as bottom tops/bottoms, triple tops/bottoms, head and shoulders and many many others) and then their accompanying volume patterns (which are EXTREMELY important). If a trend line is broken on not very high volume you should consider that break suspect because of the low volume (for example).

3. Moving average crosses for weekly charts I use 10 week and 40 week averages (50/200 day moving average cross) which is a big lagging technical analysis long term indicator.

4. Divergences on the Moving Average Convergence/Divergence (MACD) and Relative Strength Index (RSI). The MACD will always appear at the bottom of my charts and the RSI at the top. The MACD uses 2 moving averages (for my weekly graphs they are the 12 week and 26 week) and subtracts the difference between the two and then graphs them along with a 9 day exponential moving average . Here again trend lines and cross overs are very important. The relative strength index simply takes the number (14 periods is the standard) and says this percentage of periods were up greater than 70 is overbought and less than 30 is oversold. Now with this indicator it is important to realize that just because it goes above 70 or below 30 doesn't mean you should be a contrarian immediately (as will be seen from this example).

With all of that said here is the chart:

Now the first thing it's obviously easier to look at things in hind-sight but I did want to invest in puts in POT earlier this week but unfortunately as can be seen I need to wait for a retracement. So firstly what do we see? Well we see that for the past almost 2 years there has been a very strong uptrend going from around 20 all the way up to 200! What a run up! The blue trend-line is the major trend that needs to be broken. The very interesting thing about this chart is that there is really no topping pattern at the top but that doesn't mean that there wasn't some hints that the run up was due to correct. First look at the RSI. About half of the way the RSI was almost 90 and never peaked above that. This in turn formed a negative divergence on the RSI as shown by that trend line. Now when the MACD is considered that trend line was never broken until the green vertical line. Furthermore an even better approximation of te top is where the MACD has the cross over roughly in July. Also the RSI never crossed below the 50 line (which is a line of support) until the MACD trendline and the chart trendline were broken. Finally look at the volume on this week as can be seen when this crossed through the trendline this was on a high volume day compared to the average.

So with all of this is how I came up with my notion that Potash was in for a fall. Now we get into the hard stuff which is the entry and exit points. First I need to again mention fibonnaci retracements. You take the low of the move to the high of the move and that will give you your fibonnaci levels. As can be seen the 140 fib level was a very important level as it bounced off this firmly several times and then broke through it this week on huge volume. The best shorting opportunity with the best risk reward is generally shortly after a breakout of a range/trend line. Generally the price breaks through hits support/resistance and then retraces back to test the old level. If it holds (as in this case it did as can be seen from the black circle) this is the best spot to engage in a position. For this case getting in anywhere above 160 is a good deal. The best place for a stop loss is about the 195 level or if you waited for it to test the level then come back down the the previous high (which is about 189/190).

Now for exit points well generally you should use support/resistance lines and fib levels. So here you could have either chosen the 50% fib at about 140, 61.8% at about 115 or since this move had been a 10 fold move maybe you just wanted to hold it for a long time but imo this isn't the correct play (although in hind-sight yeah it is but the odds of this play being this great are very small *although most of my picks recently have been*)

This move used with a January put option at a rough guess of 175 would have cost you about 20$ and currently the put is over 80$.. Not too bad a 4 fold profit. Also if you drew a downward trend once the trendline was broken this can also help determine entry points as shown on this daily graph:

As can be seen the downward trendline an the line of support match the spot where it is best seen to get into the position in middle september around 175.

Now with an example gone through I'll hopefully just start posting charts that I find interesting and then we can actually see how some of these play out! If you have any questions please feel free to leave a comment or get a hold of me somehow!

Jason

Not in a good mood

On Friday I was musing that I was getting really excited because I was funding my new account to trade options so that I could go on the short side of stocks and one of the stocks that I am currently looking at is Potash (POT).

Friday 160
Today after hours 117...

Damnit! I'm going to bed now because I have to get up for work in 6 hours but I will actually start posting some stocks and levels that I really like to get into stuff at!

Musings on where the market is and where it's going

It is my opinion that currently I am going to wait to get into any positions until this whole bailout thing is done and over with. I have a sneaking suspicion that some form of the bill will be approved and thus will cause a massive rally in the broader indices and thus I want to stay out of way of that. Plus it will also bring about better levels to buy puts and will also bring down the CBOE VIX (options volatility which will make options premiums cheaper).

The problem with the U.S. is not just with the banks and the credit crisis it is that the economy is complete crap too. Some people are predicting unemployment by next year will be 7.5% compared to the current 6%! GDP is looking to go lower year over year and thus will present even more bearish opportunities!

With that here is the chart of the S&P:

Monthly:


Okay so firstly I zoomed out to a 20 year monthly chart and I noticed that there is a 20 year trendline that stops at that previous bear market and will continue. In today's terms the trendline stops at 950! Anyways as can be seen from this 15 year graph it shows the previous bear market and when the MACD crossed over the zero line that was about 50% of the move. If we extrapolate this to where the S&P is where it crossed the zero that roughly puts us around 900 (pretty cool how they all end up at the same place). Also as can be noticed the fibonnaci retracement level (78.696%). The big levels on the S&P are: 1260, 1170, 1070, 1000 (mental), 940, 775 these are the fibonacci levels. For those that don't know Fibonnaci levels are based off of the Fibonnaci numbers which are seen prevalent in nature, mathematics and obviously the stock market.

So that's the big picture as to where we are most likely going. The market hasn't found a bottom there are no characteristics of a bottom yet (there are never V bottoms in a bear market there has to be a retest of the support level at least 1 time and maybe 2 times to form a double or triple bottom respectively). As far as the length of time that this might take... if you use the same length that the previous bear market took sometime next year.

Here's a shorter term perspective of the S&P:

So here is a "shorter" term chart of the S&P as can be seen the S&P has been in a declining trend channel since October of last year. The most important thing to notice is that the trend is DOWN and that we are also at the lower end of the range. I am going to say that we are probably going to have a bounce off of this trendline (and we probably will be having a bounce once congress approves the bailout) and that we will go up to the important resistance between 1230 and more importantly 1260. This is where I am looking at getting into the puts is after this bounce back. Furthermore as can be seen the MACD is clearly on a downtrend as is the RSI. The important thing of note is that the RSI has not poked through the 30 level yet on the weekly nor on the monthly.

So in conclusion we'll probably see a bounce after the bailout with the S&P going back up to test the 1260 level and then will quickly fall back to this level. Look to get into options at these price levels as the VIX will have dropped and the options will be less pricey!

Good luck!

Jason

For the new people

Welcome to my blog. The first thing that you will notice is that I haven't posted in a while (since May of this year). At that time I was busy looking for a job trading and I found one in Chicago in June and started working in July. So I've been pretty busy and with the market the way it is I didn't really have time to learn my job and to blog. But now I'm ready and frankly there are way too many opportunities for me to not comment on and to take advantage of.

Also, I just opened up a new brokerage account with Thinkorswim so now I can purchase options (mostly puts) so that I can take advantage of shorting companies without having to find the shorts (which is a problem I had when i wanted to short BIDU at 370 they couldn't find me the shorts and therefore I couldn't "invest" in BIDU *it currently resides in the 200's *sigh*).

Most of the strategies that I will be talking about in today's current climate will be shorting opportunities since I still think that there is a ways to go in the market. I will be doing an updated post on the broad market in general every sunday and I will mostly focus on equities during the week.

If you have any questions/comments please feel free to write it up in the comments or to send me an email at bouje13@gmail.com. Let's try to keep this site about investing/trading and making money. Also, if anyone has any ideas for posts that they would like to know more about (most likely a beginners section) I can do that to kind of explain terminologies and exactly what I am looking for when I'm looking at equities.

I think that that is all ENJOY!

Jason

Ideas for this week:

Again I really have to say that I'm loving the action on ICE. Here's the chart:

I know I called this one a few weeks ago but it is going so great I just had to bring it up again: As can be seen good h&S top pattern with a good volume pattern. RSI and MACD are all showing a bearish-divergence. Looks good down to 120-130 area!

IP: has done really well and will definitely suffer some pullbacks since it's gone all the way up to 28/29. A good indicator that it will do well in the long term is that Cramer bashed it in the lightning round so that's always good for business :-p

AA:
So from this chart of alcoa you can see that there is strong resistance at 48 that was established in July of last year. The next thing that can be noticed is that there is an upward trendline (green line). It was broken in early 08 but has since recovered above it. The MACD and RSI have the same trend and were also broken at the same time. The interesting thing about this chart is that AA looks to have form an inverted H&S with a neckline (in purple) at 39. My guess is that this is going to go up hit the resistance come back down to the neckline and then go back up to test that resistance. So we'll see what happens with that more of a watch and wait with this one...

ATI:
This chart isn't set up as well as some of my others but... here goes.

Trendline was broken. Strong resistance at 86. RSI bumping up against the 50 mark and also the downward trendline. Should go down to about 70 but if it breaks 60 it will go down a LOT farther!

SOPW:
DISCLAIMER: I currently own SOPW and this is more for the people that have invested in SOPW with me...
Now let's look at the chart..

Positives: To me it looks like SOPW has found a bottom. It has held support at 1.16 and the MACD has shown a positive divergence through the down-trend-line, ditto for the RSI. Furthermore it broke the down-ward trend-line in mid april.

Negatives: There is a LOT of overhead resistance. First the stock has NEVER been above it's 50 day Moving Average so just getting above that is going to be a real chore (as evidenced by it bumping up against it every time and going lower). But we are reaching a spot where it's going to go over the 50 day MA or it's going to roll-over dead (I hope it's the former and I think it should be the former since it looks like we got a bottom). Secondly right at 1.99/2.00 there is going to be a ton of resistance.

All in all I think that we'll be trading above the 50 day MA shortly and then also below the 2.00 line for the near term (unfortunately).

That is all for today guys I'll try to do some more different stocks tomorrow!

Ideas for the near future:

I wished that I had posted these first two yesterday as they had huge gains today. But c'est la vie!

FCX:

Short: As can be seen the major trendline is currently at around 75 (blue line). There is resistance at 120 (teal line) and the orange line above it is where I would personally put the stop loss (around 124). Now what is interesting that that there was an inverted H&S formed but the volume pattern was not correct and then the subsequent break-out was on lower volume. Thus to me it looks like a failed bullish breakout that hit resistance at 120 and then will fall below the neckline. Furthermore the MACD Histogram seems to have leveled off. I entered a position at 118.5 and will ride it down (unless my stop loss is hit) until about the 100 area when I will take out some profits and then take the rest of the profits at 90 or so. Oh yeah and it could also be construed as a double top... (it fell almost 3% today from the 118.5 mark)

IP:

Long: To me it looks like a double bottom could be forming in this company at $25.00. The MACD trendlines need to break through the trend-line to really get this security But the MACD Histogram has started to show a positive divergence upwards toward the zero line and thus makes this a good opportunity. Now as far as the trend-lines go it looks as if it is in a bearish trending channel but since it is at the lower trend-line again it is another good buying opportunity. Since today it ended up around 3.5% my price target is about 26.5-26 depending on how things are shaping up for the stock and the dow in general over the next couple of days but my ending target is around 29 with at stop loss below 25.

KRY:

This is an extremely risky play but I really like it. First the weekly:

What needs to be noted here is the down-ward channel that the stock was trading in and then the subsequent down-ward break-out of the channel on huge volume for the stock. The only other things of note are the RSI and MACD trend-lines which look to be holding.


Now these are the trend-lines from the first graph. The upper trend-line for the channel isn't as important as the bottom which I made sure was a very good trend-line. What is EXTREMELY interesting is where the 3rd up-day's high was after the bottom. It stops RIGHT AT the bottom trend-line which is now resistance. That held on very large volume.

From here I think that KRY will eventually get back down to the .6/.5. Stop is obviously above the bottom trend-line I think I might try to get in tomorrow around 1.10-ish or so

That is all for tonight more to come tomorrow

Ideas for this week:

As stated before:

Long CF

Short XOP, ICE

Now for some new analysis:

COP:

As can be seen from this chart it looks as if COP has made a triple top on the weekly graph. The MACD is still showing a negative trendline as is the RSI. Furthermore on a daily chart there is a hammer candle on Friday and a bearish doji on today's chart. So the thoughts on this one are:

Short at: 88.25
Cover at: 90.00
Profits: 76.00

Positions

Currently to do my trading I am doing a simulation using www.updown.com

The website currently is not real-time and thus is not very good for day-trading but will work for swing trading. Currently over the time that I have been trading on this "account" of a starting value of $1,000,000 since April (I didn't trade much in April) my return is over 7%.

Currently in my portfolio I have (symbol, position, price paid, stop price, profit price)

CF: Long, 134.00, 134.5 (moved up the stop price because of the 10 day MA that seems to be holding), 155.00

ICE: Short, 161.00, 165, 135

XOP: Short, 62.78, 64, 55

Some of my biggest wins have been:

Long: Pot, Mon

Short: Bidu, FSLR

I'll be working on keeping my portfolio up to date:

Currently I have a limit order to short COP at 88.25 (which should get filled tomorrow) (I will talk about this in the next post)

I am going to look through my securities list and see which companies also look good as potential candidates.

Market this week

So here is what we're looking at as far as the broad markets go:

Dow Jones:

So again it looks like the Dow Jones is still in a downtrend but this week will be affected a lot by the earnings reports coming out. The MACD still is showing a negative trend-line and so too is the RSI.

S&P 500:

Now this down-trend seems to be a bit more valid as it has 3 points on it. Furthermore it looks like the histogram has leveled off and the MACD has not gone above the down-trendline, and again the same is true with the RSI as with the Dow Jones.

It looks as if both indices will go back down to test the 1350 area for the S&P and the 12,500 area for the Dow Jones.

If either breaks above that down trendline decisively then the bulls might have a case that the "bear market" is finally over but that would take a decisive down-turn for crude oil.

Sorry again that I haven't been around lately

1. My girlfriend was in town this weekend

2. I had an interview on Wednesday, flew out Tuesday just got back... So here's some thoughts on some trades:

ICE:

Again looks like after today's 3% downturn they might finally be starting to show that h&S top I've been talking about!

XOP:



As can be seen there is a very nice channel on the weekly charts that was violated on very low volume compared to the run-up. Also the MACD has had a similar channel and will probably see a continuation of this pattern.

Stop loss: 63.5
Profits: 52.5
Total down to bottom of channel: 48

Also last week for my updown portfolio I added both Pot and Mon and both are at about 5-7% gains looking to get up to about 10% gains then i'll start dumping them as that is where some resistance is.

CF:

I said that CF was due for a pullback a while back and sure enough pulled back about 20%. Now it has stopped at support at about 130 and looks prime to continue it's upleg here's the weekly chart:


The keep points to take away are that:

1. The MACD is still showing an uptrend

2. The RSI has still not gone below the horizontal line (also above 50 another line of support)

3. The uptrend is still very much in place and to break this uptrend the price would have to drop to less than 120.

4. The only negative that I see on the graph is that the acceleration of the graph upwards has slowed down (as evidenced by the ADX). The trendline has shown that the chart is not trending anymore but that a new trend is not in place yet.

Now onto the Daily Graph:

Now here is the line of support again around 131. The MACD histogram looks to have formed a bottom and looks to be trending upward. The negative volatility has started to decrease as well as the + volatility increasing. Finally from this graph we can easily see that for the trendline to be broken that it would have to break 110.00.

So:

Get in at < 135
Stop loss: 129
Profits: 155

If it breaks the support on heavy volume might want to think about switching to a short and ride it back down to the trendline and then go long again.

ICE ICE Baby!

Okay guys so tomorrow is the big day and I'll work on getting some brief comments on where we should be looking at going after the GDP and the FED announcement. The only other big event this week is Friday's unemployment numbers...

With that said here's a chart to tide you over:

ICE:
Okay so that is the chart for ICE what needs to be mentioned is the teal trendline that was broken earlier this year. Furthermore it looks to me like a H&S top has formed with the correct volume pattern (decreasing). Now all that needs to happen is a break through the neckline at 110 and this chart is in business.

Other things in the chart the MACD has not violated it's downward trend and neither has the RSI as it has bounced right off the downward trendline.

As far as price targets and stops go:

Short at around 155
Stop at around 165.
Take partial profits at the neckline at 110.00 and take full profits at around 80 (although this pattern could go all the way down to 60!!!

That is all until tomorrow good night!

My database has been created and over the next day or 2 I'll start doing my analysis

The thing that I'm kind of waiting on is Wednesday because of the GDP report. This is going to set the tone as to which way that this market is going to move and pretty much everyone is waiting on this report to see which side of the fence to lie on.

So There probably won't be any charts until after tomorrow's report!!

Light Posting

Light posting will be happening for the next few days as I am building a data-base so that I can cover my stocks in less time.

Eventually I hope to be posting once a day about what is going on.

Beat the Street Picks:

Okay guys here are my BTS picks for this week. Keep in mind I picked extremely volatile stocks because to win this contest the gains for all 5 stocks have to be around 20%. With that said here are the picks:

HAL Short: Again Hal is at it's 52 week high. RSI is at 85% so there really cannot be that many more people to take the stock higher. Furthermore their earnings come out on Monday and SLB missed their earnings for this past quarter so I look for HAL to do the same and to give back these monster gains (and they are due for a pullback anyways).

BIDU Short: I feel that Bidu had a huge play off of Google's earnings and I feel that they will have a big fall off (10% on friday) plus nearing some gap resistance at 340.

Goog Long: After google's strong earnings on Friday I feel like they will continue to go up.

Citi Short: Citi up HUGE on Friday I don't see how with their huge write-off's..

CF Short: Again at 52 week high high RSI needing a pullback..

Let's see how I do..

The Dow for next week Technicals

Okay guys here's the chart for next week as promised..:
Okay so I know a bunch of lines are on this graph.. So let's take a look at them. The blue trendline is the long term trendline and as can be seen has not been violated as it is at about 12,000. Then there is the H&S top pattern that is shown in Purple and it looks to me like that pattern is very suspect so I think I'm just going to discard that pattern. Then there are the green lines. The green lines are support (12,750) and resistance (13,000). If the bulls don't take it above 13,000 this week I will guarantee that the support at 12,750 will not hold and we'll go back down. Finally there is the Orange trendline which is the short term downtrend that we are currently in which goes from the head to the shoulder and then touches this most recent top. We need to break out of this trendline if the market is going to be going higher.

Onto the other idicators: The MACD has just crossed and the MACD histogram has come into bullish territory. The ADX DI- has gone down and is getting closer to the DI+ but has not crossed over yet. Furthermore it looks as if the ADX trendline might be coming down which would be bad for the bears. Finally the RSI looks like it is about to bounce off of the trendline formed from the head.

All in all this next week will again depend on the earnings announcements but technically it still looks like we need to go lower, base for a bit, form a bottom and then break out. Close on the week above 13k is bullish and below 12.75 is bearish.

Looking back at the week

IBM:
Had very strong earnings and thus had a nice pop today past the 120 barrier up to about 123.72. Look for it to continue to push higher and then pull back to about 120 (support) and buy on this dip and then sell at where the last peak was...

Should make for a good few percent.. again have a stop below the support at 120.

AMX:
Like I said it was a busted inverted H&S that failed a bullish breakout... Here's the chart:
Now like I said before because it did close below the neckline the inverted H&S is suspect but let's look at everything else.

First: The ADX trendline has pretty much stayed flat throughout this course although the + DI has gone up from the crossover. The MACD histogram just passed over the 0 line (buy signal) and the RSI has shown a positive divergence.

Second: The volume though has been puny and this "breakout" again above the neckline might not hold (again).

A few more notes on this chart: The low of the previous day and this day pretty much sit at the neckline (bullish) although today's was almost a hanging man formation... (bearish). Furthermore since mid January AMX has formed a series of higher highs and lower lows (blue trendline) so even if it does fall it will either stop at the neckline or the trendline probably at 63. Finally the Parabolic SAR has moved below the price so that's also bullish.

All in all it looks like AMX will probably go higher for a bit, then re-test that neckline.

VPHM:
Had some horrible fundamental news come out (again ugh I can't help that guys). Basically one of their promising drugs (I think it was in stage 2 of trials) had to be pulled because of health concerns for it's patients (for hep C). Now FUNDAMENTALLY they aren't as good of a play since they lost one of their pipeline drugs but they still do have tons of cash on hand and could (and probably should) now purchase either a company or a pipeline drug to boost up their pipeline but we shall see. Again this is a technical blog so let's check things out:
So technically the stock hasn't really changed all that much and the nice thing is that the 50 week MA and the 10 week MA will eventually cross over and that will be a very good day for the bulls. Furthermore the really nice thing (see the circle) is that the low of the week has stopped right at the 10 week MA. Now then going to the day chart it looks like VPHM still has a bit of a downward slope to go through so I'd like to revise my buying to around the trendline mark at about 8.3.

HAL:
It finally looks like HAL might take a pullback very very soon. Here's the chart:
As can be seen the RSI is greatly into oversold territory and the MACD histogram looks like it has peaked and has started a negative divergence back to the baseline. So right now isn't the right time to buy but I'd say give Hal a day or 2 and we might be seeing a nice pullback to the neckline.

So again wait and see on this bad boy to make sure that the MACD is going down and that the RSI will start to also go negative (and ya know for Hal to actually *dare I say it* have a negative day!).

SLB:
Another Oil Services play. From the weeklies it looks like SLB could still be going up. The MACD just crossed into bullish territory, the LOD was right at the 50 week MA and the 10 week MA is about to cross the 50 week MA. RSI is going postive and the Parabolic SAR is below the price. Now onto the daily chart:

Now the interesting things about the chart is let's look back at the H&S pattern. To determine the move after the breakthrough and your "rough target" it is the height of the head from the neckline (in this case about 20 pts) taken down from the breakthrough point which is coincidentally enough right at 20 pts. Wow the magic of TA.

Anyways again the volume breaking through the neckline isn't that great so that is rather worrisome for the bulls but the ADX trendine is pointing up and their is a good spread between the +/- DI. Furthermore the MACD was showing a negative divergence but then stopped and picked up a bit and then leveled off. (which looks like it might continue to go negative). The Rising wedge pattern i pointed out from last time (left here for illustrations sake) was broken on the upside so that pattern is suspect. But from right here tomorrow I feel that SLB is going to have a down day for the next couple of days. Why you might ask with all of these "happy things" in TA land..

Well:

OIH set a new high today right at about 200 (a nice round number) and also formed a hammer on the daily graph. And a hammer is a very good sign of a top (at least for a few days and a nice pick for a little pullback). Now if you look at SLB you will notice an even more pronounced hammer. So IMO SLB will probably make a pullback for the next 2-3 days back into about the 85-90 range and would be a good place to pick up some cheap shares.

Indu:
I'm going to wait to form my analysis of the Industrial Average until tomorrow but IMO it looks like we could finally break that resistance at 12,750. because I really doubt that tomorrow is going to be a down day and it does look like the INDU has formed a series of higher low's. Who knows though maybe we'll just trade in this thousand point range for a while...

CF:
Now CF was something I didn't put a lot of thought into but I've noticed some trends and this is extremely speculative and this baby really hasn't shown any technical forms to show it's at a top but like I said I think it's running out of steam. The chart:

Okay so the first things to notice is the last move was about a 50 pt move and then a pullback to about the 38% fib level. Then another 50 pt move and now hopefully a pullback to the 38% fib level (i'd personally say to take profits at 132 (which about a good 12% no reason to get greedy and try to go down to the fib at about 120 especially in a stock in an uptrend like this one with higher highs and lower lows.) Now the positive things as to why this is going lower. If you look at the Histo it looks like it's formed a top and it started forming a negative divergence back to zero. Also the RSI is into over-sold territory and the Parabolic Sar (circle) looks to be catching up to the price and might get to it as early as tomorrow or maybe the day after. It will all depend on what tomorrow holds. If it's a nice big down day with a big red candle it should be all systems go back to the fib level. Then buy back at the 38% fib level and go long for another 50 pts!

That's about it for everything that I've mentioned recently. An update tomorrow on securities that look good for next week (hopefully CF, maybe CPST, maybe HAL, maybe CEPH, or even FSLR). Let's just see how the rest of the week unfolds.

Beat the Street

I am going to start playing beat the street. I'll be giving you my picks here every weekend and then following up with them throughout the week.

We'll see how things go! A post will be made about this week, an update on how the old stocks look, and hopefully a new post on some great plays for next week!

Remember guys you can be wrong. I was wrong on IBM fundamentals always trump technicals and their earnings bit me in the ass. But keep in mind that is why we have stop losses and mine was at 20.5 and I think it would have been exercised before the close.

Tuesday (A bit late)

It looks as if CF has finally run out of steam. RSI has made lower highs. The ADX is the thing that I just recently read about so I'm going to use it here. In a trending market/security the ADX should be above 40 but when it is about to stop it's trend it passes below 40 (as CF has done).

My guess is that they will push for 150 hit resistance and then fall back...

Almost bought a PUT on IBM today but didn't have my option account info filled out

I would have bought contracts for MAY 2008 puts strike price @ 120 with a price of $5.60. We'll see how I'll do... I'll keep you posted

Next Week Revisiting Some Old Plays:

AMX:

As I said before AMX looks like a good short (read the old post) and so far hasn't changed all too much from where I recommended it. The interesting thing is that the technicals have changed all too much but they have become more bearish so here's the new chart:


Obviously the broken H&S and it's neckline are still here. The intresting things that have changed since the last update is that the MACD has crossed into negative territory (as indicated by the dark green circle) (bearish sign) and so too have the ADX (Also bearish). Furthermore I feel that there is the dark green trendline underneath from the lows and another trendline near the top (which oddly enough forms a rising wedge). The RSI has continued to go negative and is at the midpoint. Obviously I still feel that this is a great short opportunity so:

Short above 62.5, cover at the orange line at about 56.2 and your stop loss should be at about 65.

But with this rising wedge I feel that it will break the bottom of the rising wedge this week and trade down to about 56.

VPHM:

Because of the huge movement down of the market on Friday obviously VPHM has been taken with it. Like I said I liked it to be bought around 9.20 where the 50 day MA is. The chart really hasn't changed all that much just like I said needed to test the support and then will hopefully come back up and finally break that resistance at 10.

HAL:

Has cooperated nicely and has broken that neckline and then blew by the resistance at 42. The MACD has went pretty high and most of the oscillators have pointed toward it being oversold but the trend is our friend. So:

Wait for a pullback and buy HAL at about 42.2

Buy:42.2
Stop Loss: 41.8
Profit take 43.9

We'll see if it keeps going up but I doubt it. HAL needs to pull back a bit and test that resistance IMO

Next Week some (NEW) Ideas

So again my view on the market hasn't changed but with all of the earnings etc coming out in the coming weeks the market could go either way but with that said I still think that we head lower and tests the lows from March. (11,750)

Here are the stocks I like coming out of the weekend for this week:

SLB:
here's the chart:

As can be seen from this chart SLB had a steady trendline heading upward since 2006 as indicated by the blue trendline. At the start of the new year though SLB broke that trendline on heavy volume (weeklies). The chart kind of looks like a H&S top as evidenced by this daily chart I annotated:

Now the interesting thing here is look at the neckline right at about 93.5 which is now resistance and SLB couldn't plow through it. So on the daily it looks as if we will be going lower because the MACD averages are coming together and have formed a top (to the right of the teal circle). So to me short term I'm thinking that we will be going back down to about the 85.00 region so here might be a smart short with a stop at about 93.1. It also looks to form a rising wedge pattern?

But on the weeklies I definitely form a different opinion long-term. It looks like we've formed a nice price channel (as evidenced by the purple trendlines). Furthermore the RSI, MACD are both making positive divergences from the lows with the histogram going positive for the first time as shown by the teal circle. Also the ADX has crossed (as evidenced by the teal circle) and the trendline has gone back to the "no-trend" position.

The very interesting thing here is this:

That the 50 week MA was crossed this past week and should now be a support level at 90.00.

So to break things down:
Closes about the neckline (Bullish) at about 93, buy, with Stop Loss at: 92.5 and profit taking at 100
Closes below support and the MA at 90.00 (bearish) sell with stop loss at 90.5 and profit taking at 85.
I'm also bullish near the purple trendline (currently about 83) so if it gets down there buy with a stop closing 2 days below the trendline (probably with a stop at about... 80) and a profit taking at the top of the channel probably near the most recent top at about 94.

Long term I'm not too sure which way this one is going to go and I'm going to reserve judgement for a week so that we can figure out which way SLB will be going. It could either stay below the neckline in which case it's probably going to continue going lower but if it breaks it then obviously going higher.

IBM:

IBM has earnings on Wednesday so it's always tough to predict earnings, but I'm fairly confident that IBM will miss earnings because let's face it if GE missed earnings IBM probably will too but because that whole fundamental focus thing let's look at the chart:

So as can be noticed the MACD histogram has topped off and has started making a bearish divergence back toward the 0 line. Furthermore, the RSI has again formed a negative divergence since forming the top in October of last year which I feel has formed a Double Top this past week (as evidenced by the two purple arrows). Now let's look at the resistance and support:

First support looks to be pretty firm at 100 and tested it numerous times. Resistance is obviously at the highs of about 120. During the first peak (purple arrow 1) the chart passed through the more severe trendline (blue) and then passed down to the less steep trendline (pink). Then the chart bounced back up to from the second peak to form the double top.

Sell >117
Stop loss @ 121
Cover @ 101

This pattern if it does break through the pink trendline could probably go back down to about 80 so that is the new price target if that trendline is broken.

Next Week 4.14.08 for the Dow:

The market traded mostly sideways this week until the big jump down on Friday due to GE's missing it's target EPS by .07. This sent the whole market into a tizzy because GE is a bellwether for the economy because it is so diversified and has it's hand in so many different facets of the economy. GE also had it's largest drop since 1987 (14% on the day).

Now why this is significant: (Fundamentally)This has now I think been the final "Nail in the coffin" so to speak for the bulls. I think that they will be very wary to push that hard and I feel that any negative news/earnings from any of the big players will have huge implications on the market, although now everyone will also have their expectations lower.

Now onto the technicals, here's the chart:


So again from last week I mentioned that in 07 the Dow had formed a H&S top formation with the neckline shown in blue (currently crossing at 12,500). The nice thing about this neckline is that we finished again this week below the neckline thus keeping the H&S intact. The levels of support and resistance are shown in orange with resistance at 12,750 and support at 11,750. Furthermore in purple a trendline could be drawn from the lower lows (and the neckline shows the lower highs). The RSI has still shown negative divergencies.

The ADX has shown that the chart is still trending but that the - has shown some bullish convergence with the +. but formed a bearish cross in mid December of last year (as shown in the circle). The MACD has just had a bullish cross near the oversold area but probably will not go very high because of the big red candle we formed today.

Where we go from here:

It still looks as if we still have to retest 11,750 and frankly from a fundamental point of view I don't see how we don't go lower and how we will get past 12,750 in the near-term.

Look to re-test 11,750 and if it holds and see if we can re-test 12,750. If 11,750 doesn't hold we could be in for a longer "bottom" then what a lot of the talking heads think

Thursday Analysis:

Dow:
The dow has still stayed below the neckline so the h&S pattern is still intact. Again it looks like we should finish down for the week and should finish below 12,500.

Short:
Everybody has been pumping up AMX as it is the majority player in Latin America but from a technical analysis perspective it looks like they may be taking a bit of a break. Here's the chart:
As can be seen they did form an inverted H&S pattern and then broke-out on higher volume but here is the thing they broke the neckline and whenever that happens the pattern is suspect. Also as can be seen the OBV has been trending lower since Februrary and the RSI since April. Should get back down to about 56.00

Long: HAL, VPHM

HAL: First again lets look at HAL: as I said in yesterday's post HAL had formed an inverted H&S and everything looked good but there was that huge resistance barrier at 42. Well HAL broke it yesterday but not on that great of volume and today is up another 2% as I post this. Look for HAL to come down from these highs to test the 42 line and buy here at this opportunity.

VPHM: Has been a stock I've followed now for several years since their run in with the FDA and the FDA wanting to allow generics to come to market sooner which subsequently dropped their stock a good 50% in a day and since then has been languishing in the single digits after being in the 20's and teens. Here's the chart and why I like it now:

So on first glance we see that there is a lot of resistance at 10.00 which is obviously a big round number. But what we see from the chart is that an ascending triangle has been forming since August. Also the other thing confirming the triangle is that the volume has been dropping ever since the start of the Triangle in August which is a sign that a Triangle has formed. Furthermore, we see on this weekly chart that the RSI has been increasing since the big drop and has just passed over the 50 mark. Also, the MACD is just about to go positive and has shown positive divergences since August. Finally as can be noticed is that the ADX has finally crossed over and is not to be trending which is a good thing since the last trend was a downtrend. There is one bad thing about the chart the 10 week moving average is right at 9.00 and should provide support but the 50 week ma is at 10.50 right now and will bring added resistance at 10.50 so if it does break out at 10 it might be in a very small trading range for a month or 2 until it either breaks the 50 week MA or breaks the support at 10.00.

From the looks of things it looks as if VPHM will be breaking out sometime this month there are a few options for this type of play:

A: Buy on weakness near the lows of 9.00 and ride it up to the resistance at 10.

B: Buy on weakness near the lows of 9.00 and wait it out and see if it will pass the resistance at 10.

C: Wait until it shows a positive break-out with increasing volume and then wait for the pullback to test the new line of support at 10.00 and then buy there and ride it up.

Wednesday Analysis

The market didn't really change that much yesterday so the Tuesday analysis is still in place which either way it goes will have large implications on securities in general

HAL while I have been Bearish about Halliburton in the past week I think that I have actually changed my tune a little bit here. Here's the chart:

So as can be seen the OBV has been trending up the whole time for over a year and a half which is tending toward a bullish breakout. Furthermore the MACD just turned positive over the zero line and still has a ways to go so that it can really become bullish. Also, the RSI has gotten close to becoming oversold but it hasn't pushed over the 70 mark yet so it obviously has some up leg to go.

Again though there still seems to be a lot of resistance at 42. My guess is that it will bounce off of the resistance and then fall back down to the neckline of this inverted head and shoulders pattern (that I feel is kind of weak because of the volume as the volume on the downlegs should have decreased with each trough). If the neckline stays in tact and HAL doesn't close below 40 then that would be a great buying point if it does close below 40 then all bets are off and I think that it'll be going lower.

Tuesday Market Analysis:

I was on vacation in Ann Arbor this weekend visiting friends so when I got back on Sunday I didn't have much time to do an analysis so here is the analysis for the week:

As can be seen the OBV has had a very positive trend since 06 accompaning the uptrend. As can be seen recently there were 3 peaks one in July of 07, one in October of 07 and one finally in December (all with purple arrows). To me this looks like a classic head and shoulders pattern with the neckline being the Yellow line sloping downward. It looks like a head and shoulders because of the 2 shoulders that have lower peaks and a head that has a higher peak all of which were formed on lower volume throughout the formation from shoulder->head->shoulder. The problem is that the neckline is coming dangerously close to being penetrated this week but since the close did not happen above the neckline the pattern is still intact. Furthermore it looks like we are in a rectangle pattern with the low trendine at around 11,750 with the upper trendline at 12,750.

The one thing that the bulls have going for them is that where the stocks have paused is right at the 38% fibonnaci ratio which is the farthest a retracement will go to. Furthermore the rectangle has been filled with ligher volume since the penetration of the neckline. Finally the ADX has also started trending significantly lower and if it continues on this trend will cross and will turn bullish.

All in all the theme is this:

1. Pass through the neckline and then 12,750 and we'll be going higher. And the next stop would be 14,000.

2. Stay below the neckline and we'll probably be going lower pushing through the 11,750 barrier on heavier volume. If the 11,750 barrier is broken it looks as if the next level of support is at 10,700 which would be another 10% of a loss for the market and a really horrible start for the 08 year (except for you bears).

Tomorrow will be a really important day and I might update the chart depending on what happens tomorrow...

Friday:

Okay guys so the jobs report comes out tomorrow and let's be realistic it's probably not going to be good. But everyone is expecting it to be bad so what will happen tomorrow.

The Dow is at 12626 with HUGE resistance at 12,750. I think that we will continue to trade sideways for the for-see-able future (into next week) between 12,750 and 11,800.

Probably a good bet would be to either get puts on the dow or to go short on some ETF's. The huge problem that I see is that when the DOW closed below 12,750 the volume was huge. In those 5 down days the dow traded about 5b and was averaging (obviously) about 1b shares a day and since then it's been about 750m and even on that 400 pt day this week the volume wasn't that large to get us back up there.

Furthermore the Fast Stochastics crossed (a bearish sign), along with the RSI starting to decline from about the 60 mark. Also the Chaiken Money Flow (an accumulation/distribution signal) has a divergence (again bearish).

Either way tomorrow really hinges on the jobs report! More tomorrow when I woke up after the Jobs report!

A great real life example:

So one of my picks last week was Urban Outfitters URBN. Here is the graph:

As can be seen from this graph it looks as if for most of March the trading range is in an ascending price channel as indicated by the green lines on the chart with higher highs and higher lows. Highlighted in pink is the low of the day when I gave the recommendation. As can be seen it is very near to the 50 day Moving Average and just sits on top of it. The orange circle is the base of the candlestick which formed a hammer which near the bottom of a valley is a bullish indicator. Furthermore as an be seen from the MACD lines they show positive divergences along with the fast stochastics also showing a trend at crossing (as they crossed over the next day).

All in all these are the reasons as to why this was a great pick for that day and the subsequent days for the 10% run-up.

After this URBN will probably come down as it formed a spinning top near the upper bollinger band, come down to the support at 31.5 and then continue to go higher depending on the retail market in general.

Thursday Pick:

It looks as if the market will be heading lower on Thursday and with that being said I have a few stocks that I feel will also be heading lower.

Citi (C) closed below the 50 day moving average and is also at the top of the bollinger band. Furthermore it also formed a doji which in this place probably signals a reversal. Also it is near resistance at 25.00.

Short above: 24.0
Cover @ 24.24
Profit take @ 23.52 or end of day
Equitable Group Inc (ETC.TO) if they can cross the resistance

Intel (INTC) also looks like an attractive short as it formed a hanging man formation and closed near previous resistance at 22.00. Also it is near the upper bollinger bands:

Short above: 21.9
Cover @22.12
Profit take @21.46 or end of day

Wednesday Short:

Very light blogging today as I had to drive home for 15 hours yesterday:

My pony today is again my best friend Halliburton:

Short:
HAL

Short Limit: 39.5
Stop Loss: 40.1
Profit Take: 38.71 or close

Also looking at the chart for the Dow Jones obviously after yesterday's huge day the market will probably be down today for the following reasons:

1. It is near the top of the bollinger bands
2. It is nearing the HUGGE resistance at 12,800

If it can pass through the resistance and form a base for a few days then we might be seeing the start of an uptrend but my guess is that we'll be trading sideways.

Extremely Early Tuesday Pick!

From the looks of it it looks as if Crocs (CROX) will be near support at 16.50 and might also form a hammer therefore I really like to be long on CROX tomorrow with a stop loss at 15.80.

Update:
(HAL): It looks as if Halliburton will continue to slide tomorrow as it looks as if they will be forming another inverted hammer. Furthermore, it is near the top of the bollinger bands and is also near resistance.

(CROX): It looks as if it will be forming a hammer at 17.50 today which is a bullish sign along with being at the bottom of the bollinger bands with support underneath at 16.50.

Long:
Crocs (CROX)

Stop Loss: 15.80
Profit take: 19.00 or days end

Short:
Halliburton (HAL)

Stop loss: 40.00
Profit take: 38.00 or days end

Monday Analysis:

Here are my picks for today (Monday). It will be light blogging until Wednesday since I just quit my job and will be moving home until then.

Because of this there won't be much analysis of my choices and frankly they might not be very good. But here goes for the sake of staying an "everyday stock picker"

Short:
Halliburton (HAL)

with a stop loss at: 39.70
Cover at: 38.00

Long:
Urban Outfitters (URBN)
Since there is a lot of resistance at 31.00 I would recommend to take the 2% profit and to sell at 31.00

Sell at: 31.00
with a stop loss at: 29.9

Bear Stearns Explained

As I'm sure that most of you know Bear Stearns (BSC) recently had a tremendous amount of downward pressure from their high exposure to the mortgage loan market.

Now this is not a technical case as to why you should have invested in BSC when the offer came in at 2$ that weekend because all of the technicals were screwed... but there were many reasons as to why the stock price began to creep up on March 17th until the new offer was posted at 10$ a share on March 24th. Here is the reason:

At 4$ a share BSC's market cap (worth of a company) was 545m. Finally after snooping around for a while I found that the assets alone of the buildings of BSC was 605m (from AOL). Which is not even including any of the "Actual" cash that they may have because banks cash flow statements are very confusing since their investments are cash and can be leveraged which is why BSC says it has a book value of 80$ a share (which is obviously false).

So with just the assets of the company alone of 605m that has a price of $4.50 a share. So when it bottomed out on the 17th at 2.84$ this was an obvious buying opportunity for anyone that was smart enough to get in at that 1.20$ ish range of the bottom. Even if you got in at 4$ and then sold at the value of the PHYSICAL assets of the company at 4.50 that is still a 10%-ish swing in a day or 2. (Which is pretty much what you can get from a good mutual fund in a good year).

These are the types of values that you need to keep in mind and when something gets announced after hours like this do your homework, figure out what happened and if it is correct because even if that was the correct offer at 2$ that doesn't mean that someone else can't realize a fire-sale when they see it and outbid JP Morgan.

Next Week:

Possibilities:

Short:
HAL (39->36.50) MA 200 @36.50 MA 50 @ 36.00 inverted hammer @ 39 then doji

Long:
URBN (30.27 ->33.00) MA @ 29 hammer from 29->30

Update after Week #1

The first week of my light stock analysis has come and gone and the only prediction that I made on this blog was that the Dow had reached a TOP on the 25th because of the DOJI that was formed. Let's see how I did.

As can be seen this graph the reasons for my thinking that the market was going lower was because there is resistance at roughly 12,800 and support at around 11,750. On the 25th as can be seen from the blue circle a doji (a cross)/ hammer (it is kind of a combination of the two candlesticks). When a doji or a hammer is formed during an uptrend it generally signals the top. Also as can be seen from the RSI on the top of the chart it began declining from about 60 (which is almost over-bought). Also the MACD began declining and the Fast stochastics cross which are all negative signs. All in all about 2% of a decline since the 25th.

I had also mentioned to my friend that AMD looked like a good short on Wednesday but didn't have enough time to really look into it. So lets look at what happened here is the chart:

As can be seen from this graph there is support for AMD at around 6.00 but a descending triangle had been forming since the end of February. Also all of the other indicators were all showing negative divergencies. It is because of this that I felt that on the 25th that AMD was in for another fall and they went from around 6.25 to 6.00 in the past several days which is about 4% of a loss.

I'll get out next week's analysis over the weekend.