New Trade - FWLT

Time to make those who take the other side of my trade cry. Nothing personal, but they've taken plenty of my money and time and it's time for them to pay the piper (or the Trent).

The markets are currently bullish, but they are a little toppy, so I'm expecting a pullback. However, you never know, especially in this market. So, we could also just keep trudging up. In any event, I'm taking a bullish trade here in FWLT.

First, let's look at the chart:

The reasons that I'm getting into this are:

1. It's currently in a bullish trend - so likely to continue up

2. Last week it broke above resistance, had a nice pullback and broke up through resistance again today.

3. Look at today's candle - that's a move! The bulls are in the house.

4. Check out that volume increase

5. The MACD has been going up and had a nice little tick up today

6. The stochs were in oversold territory and are now popping up out of it

7. And something you can't see on this chart, which explains the big pop up today. Today news came out that this company may be bought out, which usually means and increase in stock price.

So, when you combine the above, with the bullish market then you got yourself a trade that'll make those market makers cry.

The target, which you can't see on this chart, is around 28ish. I may get out just a tad before that in the mid-high 27's.

There's a good possibility that we'll go sideways for a few days since we had such a big move, but you never know, it could just climb up as well.

We'll be following this one closely, but I'm not going to get impatient, instead I bought plenty of time in an option and just let this baby go.

I bought the November 23 Call for $2.93. Let's make some profit.

Grrr, frackin' crackin' rootin' tootin farga.....

Sometimes you just step in front of an oncoming train, and yesterday was one of those times.

2 different reports came out this morning, both good, both bullish, and both against my trade. This in turn, sent me into immediate losses and immediate profanity.

Not much else to say, you just gotta take your lumps. Here's the charts:

I took a 25% ROI loss on FXI and a 23% ROI loss on QQQQ. I got out today because of one simple fact - the buyers closed well into the seller's territory. The buyers are back in control. Who knows how long this trickery will continue, but at SOME POINT, there will be a pullback.

In any event, you gotta make the best decision you can at any particular moment in time because (unfortunately) you cannot see the future. Over the next week we may drop 100 points and I would have made fortunes on these trades. Or, we could go right on going up and I would have lost it all. In any event, I took my risk, got my bottom spanked and I'm willing to swallow that and move on.

We'll see what tomorrow holds...

QQQQ & FXI entries

Here we go folks. Let's first start off with QQQQ (the Nasdaq ETF). First check out the chart:

The QQQQ was leading the other markets (SPY, DIA, and IWM) in this last leg up, and in my opinion has the furthest to pull back. I could be wrong, but if I am, then this is a much better entry than the other markets as the price is closer to where I'd get out if I were wrong - i.e. a smaller loss.

I like 5 things about going bearish today:

1. The other markets are already pulling back - this should drag the QQQQs down.

2. Look at the sellers tail on today's candle - nice to know those sellers seem serious.

3. The volume is staying relatively even while trying to pullback.

4. The MACD histogram is rolling over lower.

5. The stoch divergence - blue circled stoch highs going lower as prices continued to go higher.

So, I'm looking for a quick trade here - maybe only 1 day, or maybe up to a week. I think we continue to go higher after this pullback, so I'm not looking to stay in this trade very long.

I'm looking for the QQQQs to go down around the next level of support below our current level of support right now. We're basically sitting on a level of support and we need to break this (preferably with volume) level in order to go lower. We might not get all the way down to the next level on a pullback, but we'll closely watch the charts and let them tell us when to get out.

If we take a loss, it'll be above the sellers tails on the candles over the last few days. I want to make sure if I take a loss that the buyers overpower the sellers up at those prices, because as of recently those sellers are just sitting up there ready to pounce.

I bought a November 51 Put for $3.07.

That's it for QQQQ, now let's check out today's 2nd trade.

Onto FXI, here's the chart:

So, let's start at the beginning - the overall markets. As mentioned earlier the overall markets are all coming down after being overbought. It's time for the sellers to push back the bulls a bit before the bulls continue higher.

I got into FXI for the following reasons:

1. You just GOTTA LOVE that divergence in the stochs. Look at that, 3 tops all going lower as prices went higher.

2. Look at the last divergence in the middle of the chart - deja' vu. See what happened after the divergence? A nice drop in the price.

3. I like those sellers tails on the candles from the last few days.

4. Volume is dropping a little, but not much, so nothing really to worry about there.

5. MACD histogram and black line are both turning down.

This will also be a quick trade. Possibly 1 day or up to a week. I'm looking for price to go down and hit that level of support. A couple of other items line up nicely with that level of support: 1) the 50 day moving average is just under it, and 2) There's a gap from a couple of weeks ago that may get filled.

For this trade I bought the November 44 puts for $2.96. If price goes back up above all those seller's tails, then I'll get out and take a loss.

So, for both these trades, I'm going to just watch these two every day for signs of the bulls coming back into power. Once I see the bulls coming back, then I'll get out of the trades.

I'm looking to make a fast nice profit on both these. Game on.

I'm back

Today I got some entries. It's been a crazy month as the markets have gone higher with momentum slowing up. I've been staying patient waiting for the next trades. Before we go into the trades (next post) let's first take a look at the overall markets via the SPX.

As you can see until the last few days during this pullback, we were just going higher and higher - BUT, look at those stochastics. The stochs were dropping as we were going higher, that's officially called a "divergence" and points to a drop in prices. I don't know how low we're going to drop, but a good guess would be the level of support (solid purple line) immediately below it, or possibly the other level of support (dotted red line) below even further. I don't think we'll go much below that red dotted line because that would be 2 levels of support AND the 50 day moving average is just below that.

So, I think we have at least a couple of down days before the bulls come back in and drive this market higher. I do BELIEVE we are in an uptrend, but then again, I don't count on what I believe - I count on what the charts tell me and nothing else.

IWM - trade closed

I closed the IWM trade on 9/8/10. The expiration of my option was 9 days away and it looks like we're due for a pullback. I was looking for the move back up, but I simply ran out of time for the correction.

It was a mistake to enter this trade. The stochs should have been in the oversold zone and crossing up out of the zone. However, this DUNCE got in when the stochs were in the middle of the normal zone - not good - obviously.

So, not a real strong way to start back up the trading.

I took a $344 loss with a negative 72% ROI (return on investment). Not one of my prouder trades.

From here it looks like the markets are going to pull back. We may be able to get in a quick bearish trade, if not, then we'll figure it out from there. For now, we're just back to being patient and waiting for the next entry.

ADSK - took profit

I took profit today. I DO BELIEVE there's more upside to this stock, however, instead of guessing when this will occur, I decided to take the profits for now.

As you can see, after the entry price just bounced around sideways. The bulls and bears were playing tennis with the price. What kept me in the trade (instead of taking an early loss) was that both the Stochs and the MACD histograms were moving higher. I knew there had to be a pop up at some point and today we got that pop up.

The thing that got me out today was the recent stoch movement over the last few days - it's been dropping as price was edging up. We even had a big day up today and the stochs are still drifting lower - I don't like that.

So, I took profit of $33.00 per contract - YEE HAW!!!

A better way to compare "apples to apples" is to look at the Return On Investment (ROI). My ROI was 10% in 12 days. Not too shabby. So, don't laugh too hard, even if I did that twice a month that would be 20% ROI per month, which would be 240% ROI per year.

So, not too shabby overall.

From here, I'm still holding onto the IWM trade. I'm most likely going to take a loss on that one. However, now that the market broke out of that ridiculous sideways action maybe we can get into more trades now and start the profit rolling in more.