Sunday, July 24, 2011

market Outlook for July 25th

We closed strong on Friday forming a long lower shadow. Now, after a solid move upwards, this is not exceeedingly bullish. I know many would call this a hammer, but one must realize that candlesticks are only valid because of the psychology of the market participants that the candle represents. When we have a strong move down, the bears are in control here, so a long lower shadow forms hammer because a new buying force that was not present during the down move is now looking to gain control by "hammering" in a bottom. So the reason a hammer is bullish is because there is a new buying pressure that was not previously present. After an upmove, however, buyers were very present, as the upmove is evidence to that, and a longer shadow after an upmove shows that in fact, bears are gaining strength as there is a new selling force in the market causing a intra day sell offf that was not strong enough to cause significant selling during the upmove, so the bulls are weakening. Seeing as the shadow is fairly long, we see that the bulls are still strong though. A huge gap up followed by a hammer is bearish and called a hanging man, as if the bulls are in fact strong enough to gap up but than let bears take control intra day, than clearly this move was an artificial markup to provide a profitable exit for longs. But since we didnt gap up much, and did not form a hanging man tells us that the bulls, while a bit tired, are still very present, and may only need to regroup before making a next leg up. This week could be very telling. On friday, we did hold a close above the 23.6 fib, and that is rather bullish, but the momentum is now waning, and if the bulls can rest while holding near 1337-1345, without rounding, we could look for a nice break. A strong move down on Monday is unlikely as there is usually a warning candle of an impending reversal first. While not overly bullish, Friday's candle does not warrant a clear bearish warning, and we first must see more weakness if we were to expect a reversal down. We want to see a break of 1345 and than to use it as support, but look at price to use 1337 zone for support while it consolidates if we dont break right away. Next support is 1325, which is technical support and the 38.2 fib retracement, right under there is the 20EMA at about 1320, than look for 1305, 1294, which is also the 61.8 fib retacemnt. This summer mentality of buy the dips and sell the rips is being put to a test here, as we have ripped in early July, and gave back only half, and are now approaching highs again. If we cannot keep moving this is a lower high so remain nimble.

Friday, July 15, 2011

Doing the $CAM $CAM

HT to EP

No Mos

The leaders of the agricultural chemical space are clearly $POT, $AGU, $MON , $AVD..$MOS is lagging but the leaders bottomed in May while $MOS bottomed for now in June. Is $MOS a possible laggard? BY the way, the charts of the first four stocks are extremely constructive.


Tuesday, July 12, 2011

Tape Reading from a Dummy

Not trading today due to my trading mentor is not in today and I dont want to do anything rash. I am watching the tape action of several stocks and writing them out will allow me to analyze and criticize my thoughts more subjectively due to the fact that when they emerge from my brain, they are automatically biased. But if I put them on paper before acting, the visual factor will hopefully dilute my objectivity and allow me to subjectively view my thoughts. If I do not subject my thoughts to an object, and act on them right away, the lack of objective exposure leaves me with just one opinion. My first and only opinion. But when putting them on paper, they are automatically re evaluated from a visual perspective, allowing for me to criticize my own thoughts as they are thoughts that are not simply thoughts anymore, they are now just words on paper, diluting my bias. So here I go.

$POT: 57.50 my inflection point for severe scrutiny Strong out of the gate, making new highs rather quickly,with a ton of huge prints going off, and it was hidden. So that told me that someone wanted this one bad, and he knew that showing size will cause him to chase his tail. So it was interesting. When prints hit the bid heavily, the prices didnt fall. The selling was absorbed and than pushed higher.My thoughts were this. that 58.60 to 59 level was key, and there was way too much buying that was required for $POT just to get near 58.50..No selling virtually, and you know there are plenty of sellers in potash. The move higher was more of a pop than steady accumulation, and the second it popped near 59 the sellers came out of the woods. Than I saw some buying at 58.50 area but it was weak and sloppy, and it dripped throughout the day, and has now constant hidden sellers pressing on every pop.Every press is going uncontested here. Strength was created in this stock on thursday and friday, so it looks like shakeout, but the buying is weak here. gonna watch what happens when it breaks lows at 57.60........some buyers here at .65...but it looks feeble. waiting for the press off of the pop to .80...might pop as selling seems to lack the conviction near lows at .60-.70..wooosh there we go lets see what happens here at .50. not bouncing strongly here, barely hanging on to .50 zone. gonna drip imo. gotta jet be back soon.

Back from lunch . Happy to see $POT has indeed did what I thought. I expect prices to bounce from here, at 57 level. Will not be a strong close, as the transfer of shares has already occurred in my opinion to set the stage for a nice move tomorrow but I am sure that I can be , as I am many times, wrong. The time is now 1:30 PM, I left right after potash lost the .50 area, and the bounce according to the chart, that I missed, from 57 was accompanied by heavy buying. My opinion is that the hands that have accumulated at 57 and have caused this doji will now simply accumulate more passively and follow through tomorrow. But, the tape knows all, so I will watch.

Sunday, July 10, 2011

Bullish Scenes from an American Restaurant

The restaurant sector looks constructive to me. Here I posted the proxy for the restaurant sector followed by some select issues from the sector.

When Will the Parade Begin?

As of now I see no signs of a reversal candle coming. I do not like to be bullish when everyone else is bullish, and I always look for signals that the market will do something that nobody expects. Usually the signs that the market will do something unexpected are there, but they are harder to spot, and everyone is blinded by the more obvious and easier things to see. However, there are no highly alarming signs of a reversal downward here, besides one and it is somewhat minor. We close below the 1,344 level on Friday, which is pretty valid support. It was on very light volume and the bulls did put in a rather large lower shadow, and, in broader perspective, we are approaching a vacuum to the upside and prices are hanging in there. In numerical terms, any consolidation above the 1,330 level is constructive and healthy, and a break of 1,356 warrants at least an intra day tap of 1,370. A break of 1,330 means we likely reversed and long positions should be liquidated. Not an intra day touch but a decisive close beneath 1,330. Friday's down move ended well and was accompanied by light volume, providing the ingredients of that of a very bullish test. Another few days of light tests holding smartly above 1,330 should be taken as a signal to add to longs. I would like to see a tighter range to hold above 1,344, and buy volume come in. But the volume will come if we hold here, and than we are in the vacuum .

As you can see, I am leaning towards the bullish argument here. Simply because that is what the chart is telling me. That being said, the bulls are not on parade yet. I present to you this chart:

Friday, July 1, 2011

The Reincarnation of Swooon

I am back. Tuesday morning I will return from a highly undesired and painful hiatus, to my trading firm in NYC, better than ever. After roughly two weeks, I have overcome the conditions (regrettably, financial and personal, but one can assume some things and be on the right track)that have tried to prevent me from pursuing my calling. Like any true pursuit worth fighting for in life, this one, trading will prevail. Always.
Did I make mistakes in my first couple of months as a trading professional? Yes. Countless. Have I learned from them, fallen and figured out how I fell, so I can comfortably run again? Yes
Will I make more mistakes? 1000 percent. Will I do my absolute best to realize that those mistakes are only wars for the weak, but minor battles, learning opportunities, for the strong? Yes. Most importantly though:
Have I spent the time off reading, studying, working, and analyzing my ass off, knowing that no matter what pitfall reveals itself trying to shake me out from my pursuit, only the weak hands get shaken out, and I am not weak? Yes. Like anything in life worth pursuing, hardships in such a meaningful pursuit are abundant. If something comes easy, that it isnt worth anything. This is my calling, trading is my art, the chart is my canvas. As you saw in my first post on this blog, I have worked very very hard to get here, survived to get here. This is what comes next. I will be great. I need much work, my learning, reading, studying will never subside to even the slightest degree. And if it does, than I will not survive. Thankfully, my experiences have given me the ability to have unlimited motivation when it comes to my destiny. I am strong. Trader Strong