Apple Poised For a Big Move $AAPL
I have been watching Apple Inc. ( $AAPL ) form a symmetrical triangle for the past two months. This is a Continuation Pattern, which means that the triangle is used as a way to head higher if the trend has been upwards and with AAPL it has been.
A symmetrical triangle is generally regarded as a period of consolidation before the price moves beyond one of the identified trendlines.The sharp price movement that often follows a breakout of this formation can be captured by traders who are able to identify the pattern early enough.
The Symmetrical triangle pattern needs to have a few things working for it and we will check them off here.
1. Trend Should be at least a few months old: Check !AAPL is from march to december.
2. Duration of pattern should be at least 3 weeks old: Check! This pattern is 6 weeks old.
3. Breakout occurs between 1/2 to 3/4 of the way through the pattern: Check! It's about 3/4 of the way.
So now that we checked a few major points off let's look at a price target. We take the distance from the widest end of the triangle and in this case is around $20.
From the breakout at around $200, this being a bullish trend apple has been in we add $20 to the upside and put it at ~$220 for a potential breakout target.
There are a few hurdles here for AAPL though the $207-208 area is major resistance so if it can break that $220 is well in sight.
I bought a January $230 Call option at 0.23 to prepare for the move instead of putting major capital in the stock
Here is the chart (Click to Enlarge)
Update: I tried posting it last night but my host was down so i gave up. $AAPL is currently at ~$207.50 (in between the resistance I mentioned)
I have also sold my Call options for a hefty 140% Profit from yesterday's buy-in price, if Apple breaks above 208 I might be re-buying some.
Merry Christmas!!
$TED Spread caught in an Ascending Channel Pattern
Let's start off with once more defining the TED Spread.
The TED Spread which measures the general risk in the economy. TED increase - is a sign that lenders believe the risk of default on interbank loans is increasing.
I first mentioned TED Spread around September 28 and what occurred was a decline in the markets the following week.
Here we are a month later and the TED spread hasn't lost steam and in fact it is now in an Ascending Channel (Bullish Pattern)
Price Channels usually show trends, With the moves in the TED from Sept 14 till now we are seeing unrest in interbank loans.
I won't keep the TED out of my radar but wanted to document the current possible move upwards. (Which would signal a major market correction underway.)
In the attached image I realized the lowest trend line isn't parallel to the other two but it's close enough to be valid for my benefit. (Click Image to Enlarge)
Happy Investing from K the Investing Freak.
A Week in Review: SPX 1035 Oct 1st Prediction Came True
I wanted to review a crazy wild week (7 market days or 9 days overall).
It all started with a twitter post on September 23, 2009 at 9:24PM
It then followed with a blog post about the prediction since twitter is known from moving very quickly and people can miss things at a blink of an eye.
This was on September 25th "S&P at 1035 by October 1st? I Believe it is doable." ( I misspelled doable on the original post.)
We were in a 3 day down move (23rd to 25th.) When I did my weekend analysis I saw a familiar pattern which was similar to a "Kicker Bullish".
That deserved its own post entitled "$SPX Stuck in a 9 Point range... which way will it Break?" Well next day we moved up 20 points.
I was not satisfied with the way the pattern was set up because S&P needed to open up at least 10 points above Instead it started at about the same price as the previous day.
The final blog post was written and titled "The One Day Rally Is Over" In brief, I stated that the pattern wasn't satisfactory to be a real Kicker Bullish and also the TED Spread had been going higher for the past 2 weeks. The TED spread measures the risk in the general economy. With Risk going higher & the pattern looking weak, all I needed was some negative news and got it when S&P began cutting company ratings.
On October 1st I checked back on the market late in the day and to my surprise we had fallen 27 points. the 1035 prediction was reached and breached right on the day I called.
So that is the week in review and the image below summarizes it even more visually.
(Click Image to Enlarge)
Have a good one,
-K
The One Day Rally Is Over!
Last night I posted about the S&P possibly having a Kicker Bullish Setup.
Well The S&P Rallied 18.60 points to 1062.98.
The Setup was not executed perfectly (market would have had to gap higher today then go the distance)
All bets are off on an extended rally that needs to go higher than 1080.15 to be worthy of anything.
While the market rallied the S&P only traded at half its normal volume.
Stocks like Citigroup which had traded over a billion shares a day, are lately trading at less than 500 million.
The TED Spread which measures the general risk in the economy has been rising the last couple of weeks. today alone it rose 5.42% which means interbank loans are now riskier. This is still not significant enough and I would like to see another 33% increase in the TED before I really put a lot of my sidelined money on the short side.
We had MBIA (MBI) stock trade up 11.38% today only to be down over 7% in after hours.. why?
Standard & Poor's on Monday cut its ratings on MBIA Inc and its structured finance insurance arm, MBIA Insurance Corp, citing an expectation the company will continue to take significant losses from insuring risky loans. ... The outlook for both companies is negative
Well if that wasn't enough the dollar has began to show some strength as well despite the almost 20 point one day rally.
Bottom Line: Be very careful if going long from here on out. The false optimism game has been played for far too long and you might get stuck holding a worthless institutional stock come October. It's also end of month markup so for the next few days prices might be kept afloat by institutions.
Have a good one.
-K
$SPX Stuck in a 9 point range..Which way will it Break?
The S&P 500 index is stuck in a 9 point price box.
1051 is resistance from October 2008.
1042 is support from the last 3 days and also the 18SMA.
We need to see 2 or more days of market closing either above or below one of these 2 points before there is any significant breakout or breakdown.
For the moment we have a setup for almost a Kicker Bullish setup but the 3rd red candle that was put in on Friday doesn't make this a perfect pattern.
If on Monday we follow the Kicker setup, we might have a move to higher highs (above 1080).
The setup is not exactly a Kicker but it fits the bill very well. If $SPX closes below 1042 for 2 or more days then next support is 1030 which would be the defining moment of this "Bull Market".
Here is the attached Daily and Hourly chart (Click to Enlarge)
Look for an update by next weekend if the setup plays out.
-K
$VION; A perfect trade using the Morning Star Pattern
Today I had a chance to experience those special conditions that cause a day trade to turn into great profits.
The stock chosen was VION. It was down 45% for the day on no news. (It is a Pharmaceutical so I thought some bad drug news came out).
As I watched the price slide down like a waterfall I saw a reversal form. This reversal in candlestick patterns is called the Morning Star.
The patterns is a bottom reversal signal. It is most effective following an obvious downtrend (in this case from 6.50 to 2.20)
According to Candlestick Trading Forum:
The Longer the black candle and the white candle, the more forceful the reversal.
The Pattern psychology for this specific pattern says that when the price goes down fast sellers get panicky. They keep selling off and as they are doing that bulls begin to step in.
Now that I have explained the pattern I used time to explain the entry and exit signals.
Entry 1: 100 shares at 2.90
This was an initial entry to test the playing field.
Entry 2: 100 shares at 3.50
I was looking for price to close above 3.25 for 2 consecutive candles to buy into strength. 3.25 if you can spot it is a resistance from earlier candlesticks.
Exit 1: 100 shares at 4.01
4 is a round number so that makes it psychological for people to dump shares
Exit 2: 100 shares at 4.53
Looking at the far left 4.53 is around where the 2nd large red candle begins. and if you look up further more candles tend to end around 4.75.
Initially I had the limit sell order at 4.74 but I then decided not to push my luck.
Conclusion: After concluding the trade I watched the price go at high as 4.90 then in one big swing it crashed back down to 4.
Overall it was a great risk reward ratio and a well thought out trade. Morning star followed by an initial entry to test strength of the pattern and if it goes your way add another position which will allow you to scale out. Now this did take 2 day trades out so if you have under $25k account you will only have 3 trades in 5 days so it's really not ideal to do every day.
Here is the image to illustrate all the text in this post. (Click to Enlarge)
Hope you enjoyed it and while I do understand this is not a stock pick because it is already gone I hope it serves as a teaching tool to how simple trading can be at times.
-K
Summary of picks from yesterday
Yesterday’s picks turned out to be right on. Although with pathetic moves, AMD gained its way up. It has been trying to break its new resistance at $4.50 majority of the day. Unfortunately, I followed my plan and sold it in the morning to break even (including commission) because I did not have any more patience from watching it a day before. If I would have kept it for the day and trust my own gut, I could have made easy $0.2501 per share (or 6%). I hope some of you had more patience and easily profited on AMD. The lesson to be learned from this is that I’m very impatient trader.
AIB is hanging strong. Even though I intended to keep it for a longer period of time, I sold it with $0.26 per share profit (or 9%) because I needed net liquidity for other trades I did today. With that said, AIB is still a keeper and I will very likely get back into this stock some time this or next week.
| Company | Buy Date | Sell Date | Buy Price | Sell Price | Gain/Loss |
|---|---|---|---|---|---|
| AMD | 5/18/09 | 5/19/09 | $4.1399 | $4.15 | - |
| AIB | 5/18/09 | 5/19/09 | $2.89 | $3.15 | 9% |
Although single digit, 9% profit overnight is always nice.
Let me know what you think about those two picks in the comment box.
Stock Alerts of the Week May 4 – May 8 2009
Last week's picks have so far turned out to be good. DRYS is up almost 30% since signal.
Let's move to the score card. 5 positive gains of over 10% each. BAC signal got changed to a buy from a sell just 2 cents difference, and $BKX is acting up in my charting software so I will just eliminate it from watchlist.
Picks of the week of May 4th to May 8th 2009
|
Symbol |
Buy Date |
Buy Price |
Sell Date |
Sell Price |
|
QQQQ |
|
|
5-7-2009 |
34.29 |
|
BAC |
5-4-2009 |
8.82 |
|
|
|
REW |
5-7-2009 |
48.31 |
|
|
|
MOV |
|
|
5-5-2009 |
8.98 |
|
DRYS |
|
|
5-8-2009 |
8.36 |
|
URE |
5-8-2009 |
3.70 |
|
|
|
CFX |
|
|
5-7-2009 |
8.50 |
I hope you are enjoying the picks so far. And just let me know about any suggestions on the comment box
-K
Stock Alerts of the Week April 27 – May 1 2009
As I stated in my latest blog post I wanted to begin giving stock picks based on my trading system.
I have created a page above with all the picks and wouldn't mind people asking for symbols to put on watch list.
I will also try to post a week in review with the signals given out for the week.
Here are the picks for April 27 to May 1st 2009
|
Symbol |
Buy Date |
Buy Price |
Sell Date |
Sell Price |
|
$BKX |
4-27-2009 |
34.54 |
||
|
BAC |
5-1-2009 |
8.84 |
||
|
DRYS |
4-30-2009 |
6.72 |
||
|
ICE |
4-29-2009 |
84.14 |
||
|
ING |
4-29-2009 |
8.34 |
||
|
UNG |
5-1-2009 |
13.72 |
||
|
ICO |
4-29-2009 |
1.90 |
As always these are picks but I am not responsible for any financial losses you make following these picks. I wouldn't mind a share of your gains though.
-K
Current Picks
LAST UPDATE: 9-25-2009
9-24-2009 is full of new signals, mostly sell.
This page is intended to provide buy and sell signals given by a strategy.
Those who like my calls can follow or at least consider the alerts; those that think this is all fake can keep opinions to themselves and check the info page. Amount of time in the market using this system is about 38% on average which means you are not in at all times. It is not a buy and hold strategy nor is it a day trading strategy unless very rarely a buy and a sell signal occur on the same day.
I am only giving the latest signal for each stock mentioned. Use at your own risk and make sure to take the date into consideration.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Market Indices and other important Quotes
(Note: I understand you can’t purchase an index so bear with me these are just signals)
| Symbol | Buy Date | Sell Date |
| $SPX | 9-24-2009 | |
| $INDU | 9-24-2009 | |
| $COMPX | 9-24-2009 | |
| QQQQ | 9-24-2009 | |
| IWM | 9-24-2009 | |
| SPY | 9-24-2009 |
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Rest of the Symbols (More will be added per request)
| Symbol | Buy Date | Sell Date |
| IYR | 9-24-2009 | |
| AAPL | 9-4-2009 | |
| DRYS | 9-23-2009 | |
| SDS | 9-24-2009 | |
| SRS | 9-24-2009 | |
| SSO | 9-24-2009 | |
| SKF | 9-24-2009 | |
| UYG | 9-24-2009 | |
| URE | 9-24-2009 | |
| JNK | 9-8-2009 | |
| HYG | 9-8-2009 | |
| REW | 9-25-2009 | |
| QID | 9-24-2009 | |
| QLD | 9-24-2009 | |
| XLF | 9-24-2009 | |
| DIG | 9-24-2009 | |
| DUG | 9-24-2009 | |
| SMN | 9-24-2009 | |
| VXX | 8-27-2009 |
Stock tips from the Freak strategy
After SKF's latest blunder in which I called the sell-off then couldn't resist the LOW LOW price of $155, I set off to design a strategy that overtime would bring consistent growth. I am using a 4hour interval for the strategy so it really isn't day-trading but also it's not long term investment (like those exist much anymore).
The idea is to give stock tips when the strategy throws me a Buy signal then to call the selling point when the strategy yells SELL.
Now If i use the S&P 500 or the Russel or any other index (all the stocks within it), I will get a lot of buy and sell signals that will drive me crazy.
I'm wondering if any of you have ideas on which stocks to put on watch list. I will also need to create a section on this page to show the buy and sell signals with their dates as well as how much gain/loss occurred.
I think i might be going a bit over my head as many people do this for a fee (Timothy Sykes anyone?) but I will think this through for the next week or two and then decide what to do. Your comments are really needed this time especially for ideas on which stocks to put on the alert list.
Till next Time,
-K (The busy man)
SPY Possible Bullish Pattern
While this past week has been tough on many investors, I have made my fair share of profits trading SKF intraday.
You can check out my covestor page and see my YTD performance to see how much more disciplined I have become in 2009.
Looking at the SPY 1minute charts, there seems to be a possible Bullish Three Drives Pattern developing.
Using Fibonacci retracements I created the chart below. Basically when SPY hits 73.39 area there is a strong case for a rally to kick-start. I do not know how strong the rally will be but you might not want to short on Monday.
Here is the SPY 1 minute chart (Click to Enlarge)
As Always, Feel free to add anything on this topic or ask any questions you might have.
-K
TSO Watch (in the near future)
TSO watch for a bullish harmonic pattern in the future (March-April maybe?)
Drawing fib on it in january there was a harmonic bearish pattern from 15-29th. That completed and stock fell temporarily then 2 weeks from earnings prices usually go up in buy the rumor sell the news.
If from 19 to 13 drop is as low as it will go right now then i have 2 choices for the highs.
(a) 61.8% is $16.83 Target then reverse to $10.87 which might prove a good entry for the next wave up.
(b) 78.6% is $17.84 Target then retrace to $11.85 which might prove a good entry for the next wave up.
This sets up a large bullish pattern which is "harmonic" to see if it holds.
Keep in mind I am using 60mins and not daily observation but 10.78-11.85 is the Possible reversal zone for TSO.
Here comes the chart (without dates below because I don't want you thinking at those certain dates the prices will match up. (Click to enlarge)
Hope you enjoy and always feel free to leave a comment.
-K
UYG short term bounce next week?
If you looked at my previous post I called for a break of support for S&P 500.
I didnt really set a target below but Matt Trivisonno had called this low back in October.
768.67 - Coming Soon to a Screen Near You … a screen about 18 inches in front of your face that is. 768.67 was the S&P 500 intra-day low on October 10, 2002. That was the day that the last bear market ended.
Since that Call was made almost 5 months ago and things have gotten even worse now.. I don't think the bear market will end here.
The interesting stock of the day is UYG
I have been looking at Fibonacci numbers lately and UYG has 2 targets which it hit. One was at $2.39 and the otheer at $1.95.
I loaded up at 2.43 with an idea of doubling down at 1.95 but missed the the boat.
If 1.95 is really a reversal zone there are a few projected upside targets. Probably strongest resistance will be at
$2.61 (38.2% fib value)
$3.05 (61.8% fib value) also that would fill the gap-down UYG had on February 17 which could mean UYG then is free to begin another leg down to -zero-.
If i were to be bullish on this ETF (which I am not at the moment) other resistances above are $3.37 and the extreme $4.29. I do not see these last 2 prices near term however.
Here is the chart to show you what I am looking at. Note: projected upside values are not shown. (Click to Enlarge)
Sources:
Matt Trivisonno (768.67-Coming Soon to a Screen Near You)
Wild Market
The only reason I have not posted much in my blog is because I don't want to play with the August wild market and therefore watched Freddie and Fannie get taken over without saying a word.
I am still holding onto SKF and even bought more as the price dropped.
I do see energy stocks making a comeback at least in the short term.
One of the symbols I am watching is UGA (United States Gasoline) stock fluctuates with the prices of Gasoline in the US.
With Gasoline beginning to rise thanks to hurricane Ike hitting Texas this is beginning to look good.
This is a short post but I should get back to posting more opinions and charts within a few days. Thanks for Reading and please feel free to voice your opinion in the comment box.
