Stock Blips

January 31, 2012

2012-01-31T18:35:00.000-08:00

SPY is fighting to stay above the horizontal support line (on the hourly chart above) after breaking through the sloping support line and failing a test of it. I took a small shorting position in SPY (by going long SDS). However better shorting can be had below the horizontal support line and even better below the recent low at $130.06.

Update: The Greek bailout deal is a lot closer than I thought it was. Apparently they have to conclude it by the end of this week, and when it is concluded, and it looks like it will, we probably see a push up in the US markets. I might sell my SDS tomorrow to wait out this bailout deal and go long for a few days.

Howard Milano

January 30, 2012

2012-01-30T18:56:00.000-08:00

I've just been watching the markets, waiting for an opportunity to trade. DIA has a pretty clear up trend line, which you can see on the hourly chart above. DIA broke that trend line, and is now testing it. DIA also made a lower low when it broke below the horizontal support line.

I don't want to short DIA till it made a lower high. Given the strength of the up trend, DIA could make a new higher high from here. Don't like to go long here either after this lower low.

Howard Milano

January 26, 2012

2012-01-26T18:11:00.000-08:00

I sold my GDXJ position early this morning when it reached stratospheric heights. Will consider buying back into GLD or GDXJ or GDX once they calm down a bit. I'm waiting for the market indices to either collapse or make a decent pullback.

Howard Milano

January 25, 2012

2012-01-25T19:03:00.000-08:00

The Feds spoke and the markets rallied. Bernanke thinks that stimulating the markets will have a trickle down effect where the economy and everybody benefits, but I think stimulating the markets will just enrich the already rich or well-to-do who are able to play the markets, it will do nothing for the poor or for anybody who doesn't have any investments.

Staying in my GDXJ position for now. I'm waiting for the market indices to collapse after their euphoric rise since last Christmas, but there is no top in sight yet. Apparently complacency is at an extreme high (fueled nicely by the Feds) which usually means dark clouds are forming.

Howard Milano

January 24, 2012

2012-01-24T20:02:00.000-08:00

I sold my UCO at a small loss. After that gap down today I'm not convinced anymore UCO will go up much. On the hourly chart above you can see how the price is hovering above a support line, if UCO breaks down below that UCO is looking ripe for a short. The bad news from Iran didn't make UCO go up for longer than one day, so UCO is not exactly displaying strength.

I'm still in my GDXJ. I think gold will go up higher in the near future but it might need to dip a little first to gain strength.

Howard Milano

January 23, 2012

2012-01-23T13:41:00.000-08:00

During the weekend I marked UCO as a possible short based on the price on the daily chart breaking below the trendline. However, Iran is in the news today with the EU's ban of Iranian oil and Iran threatening to disrupt oil transports. That made me buy a position of UCO this morning instead. A few more oil scares should send price of UCO higher.

GDXJ (Junior Gold Miners) had a confirmation today of its break up through the down sloping trend line. That made me buy a small position in GDXJ. I might be a little early with this one since it didn't finish with a good bullish candlestick today (I bought earlier in the day when the candlestick was more bullish), but I'll give it some room to test the trend line.

Howard Milano

January 20, 2012

2012-01-20T12:42:00.000-08:00

There was no follow through to the down side in NUGT this morning (see hourly chart above) and I sold my DUST position with a small profit. Price made a U-turn again later in the day but I could not watch all day. I'm fine with being in cash in the weekend. It might be that this is it for the down movement of the gold miners.

Part of the reason that I sold DUST was that gold is not done with its rally to the downward sloping resistance line, see daily chart of GLD above, and gold futures were up, all of which strengthened the gold miners. I'll keep watching GLD, if it breaks above the resistance line it means the downtrend of gold is probably over and I should be going long in GLD not short. If GLD goes down before breaking the resistance line I will consider shorting it when price starts making lower highs/lows on the 10 minute or hourly chart.

Howard Milano

January 19, 2012

2012-01-19T13:36:00.000-08:00

I looked for a better setup than my previous ones.... I noticed that NUGT was in a downtrend on the daily chart above AND it had just completed a rally up and was sitting above the horizontal support line this morning, support from the gap up early this month. So trend down, MAs pointing down, threatening to go down through support, all positive signs for a short. When NUGT went through the support line middle of this morning I bought a position in DUST (effectively shorting NUGT). Even though the trade is going fine up till now I have no illusions, price of DUST might gap up or down tomorrow, and I'll hold or sell accordingly.

The other potential setup is GLD. On the daily chart you can see GLD is trending down, but the 50 MA is flat and the 20 MA is pointing up. My plan here is to wait for GLD to come down to the support line of the last minor low and if price goes below that I can short GLD. Price of GLD might still go up to the down sloping trend line first and then go down.

Really, I would love to go long, but the market is just spiking up right now, I don't see a good setup to go long.

Howard Milano

January 18, 2012

2012-01-18T13:19:00.000-08:00

Well, I got stopped out of my TWM and QID positions. For QID when QQQ went above the third resistance line in the daily chart above, and for TWM when IWM went above the sloping upper resistance line in the daily chart. So no profits this time, and lesson learned that I should not short when the trend is still up (MA's still pointing up). Next I'll wait for a lower high before I'll consider shorting again.

Howard Milano

January 17, 2012

2012-01-17T13:15:00.000-08:00

The markets opened really strong, but ended weak. IWM had a very bearish candlestick, down from a resistance line and QQQ had a topping doji which ran into the next layer of resistance. The rising bearish wedge in the daily chart of IWM and multiple resistance lines in the QQQ daily chart made me decide this morning to stay in my QID and TWM positions despite the strong open, and now after the close my positions look fine (a little down), well within my comfort zone.

We'll see what tomorrow brings. I don't expect a long pullback, perhaps somewhere to the 20 EMA, due to the fact that the 50 MAs are still pointing up. Hopefully I can squeeze a few dollars per share out of this. If the markets decide to go up tomorrow, I might sell my positions at a small loss.

Howard Milano

January 14, 2012

2012-01-14T17:56:00.000-08:00

Watching the latest video of PSAadmin on YouTube made me understand the price action of QQQ better during last week. In the daily chart of QQQ I drew in the resistance lines based on previous highs. Notice that price has been trapped in between two lines for the last 6 days. So it wasn't the best choice (I made) to short here while price is still trapped.

If price goes up from here it will be trapped again with heavy resistance above it from the two resistance lines close together. So going long makes little sense at this point, there is just not enough upside potential. There is better shorting potential and it makes sense to short at the break of support at $57.62.

Potential scenarios are: 1) a move up to $59, a pullback to $57.60, and another push up from there, and 2) a pullback to $56.50 and a move back up from there. Watch those lines of support and resistance, price will basically bounce around those lines.

Howard Milano

January 13, 2012

2012-01-13T14:57:00.000-08:00

Fascinating how we got another hanging man candlestick today. Markets went down sharply in the morning and then the bulls fought the prices back up to around where it started. I did buy some TWM as mentioned in my previous post, so now I'm shorting the markets in two positions.

I'm surprised how well the bulls can keep prices up. A bunch of European countries got their credit rating downgraded which made the Euro sink and the US Dollar gain. For a long time last year the US markets tracked the Euro, but lately the US markets have been tracking the US Dollar instead.

I still don't see much upside in the US markets without some pullback to gather strength to break through the resistance areas above. That's why I'm fine with staying in my positions for now. We'll see how things go next week.

Howard Milano

January 13, 2012 Morning

2012-01-13T08:43:00.000-08:00

I also bought a small position in TWM (effectively shorting IWM) now that price has pulled back to the gap.

Howard Milano

January 12, 2012

2012-01-12T14:20:00.000-08:00

Yet another attempt to go up through the resistance, and price of QQQ in the daily chart above managed to scale it and close 3 pennies above it. But volume was only 26 million while the previous days had volume from 35 - 46 million. Seems there is a lack of interested buyers and sellers, and a lack of sellers drives price up. I stayed in my QID position, price is still within my comfort zone based on potential gain to come.

Today's candlestick was a Hanging Man. If we get confirmation tomorrow in the form of a gap down or tall bearish candlestick, there is a good chance the top is in and the reversal started.

Howard Milano

January 11, 2012

2012-01-11T13:34:00.000-08:00

Looks like the bulls refuse to give up and they might want to try again to climb over that resistance line. If this battle drags on without some progress down I'll probably sell my QID position and try to short again when an actual top has been formed. For now I'm still in my QID position.

Howard Milano

January 10, 2012

2012-01-10T17:21:00.000-08:00

As I said in my previous post I bought some QID effectively shorting QQQ. On the daily chart above of QQQ you can see the resistance lines looming above the current price. Price already went up through the most recent resistance of the previous major high, but there are three more resistance lines. In addition the last two candlesticks were down days, not an uncommon sight in tops. Lastly the 50 MA of QQQ is pointing slightly down.

AAPL is at the top of an extended 3 week move up with no rest. GOOG just went down to its 50 MA. So the two QQQ leaders are not exactly ready for a big move up to help bust through the resistance lines of QQQ.

Taken together it made me decide to short QQQ. I think the odds of success are OK, but nothing is guaranteed so we'll see what happens next.

Howard Milano

January 10, 2012 Morning

2012-01-10T09:30:00.000-08:00

I went short the QQQ's by buying QID. My reasons are 1) topping behavior in AAPL after a meteoric rise, 2) GOOG is having troubles and has been going down for days, 3) Major resistance area above current price of QQQ. We'll see how it works out.

Howard Milano

January 9, 2012

2012-01-09T19:01:00.000-08:00

As I mentioned in my previous post, I sold my TWM position because of lack of clear direction resulting in low odds for either long or short trading.

QQQ went down a little, and DIA, IWM and SPY all had candlesticks approximating doji's indicating indecision. Futures are a little up right now. So a little down, a little up and indecision. Perfect time to relax some more and wait for something more major to happen. I would not be surprised if we do break up from this triangle, the MAs are still pointing up and Alcoa (AA) had OK earnings with a positive outlook. I might jump in long on a pullback if the market opens enthusiastically up tomorrow. I'm probably not going to short till we get two candles down.

Howard Milano

January 9, 2012 Morning

2012-01-09T06:54:00.000-08:00

I sold my position in TWM with a tiny gain. There is a chance the market goes down from here, but an even chance the market will make one more push up. I rather trade with better odds. Selling makes me happy to be in cash for now.

Howard Milano

January 7, 2011

2012-01-07T10:48:00.001-08:00

Today I took a look at some other indices, and yesterday I didn't realize how well QQQ did by making a new higher high after a new higher low, see daily chart above. That makes me look a bit differently at the market. SPY, DIA and IWM had lackluster reactions to yesterday's good job report, but that is balanced by QQQ good performance.

In addition I don't like shorting when the 20 and 50 MA of IWM are still pointing up (see daily chart of IWM in my previous post).

I don't see a good reason to go long here, no matter QQQ's performance. The indices all could use a leg down before going up. But my reasons for going short have weakened, and I don't see much more than 50-50 here (see my references to stale-mate in my previous post).

Plans have changed slightly: sell my position in TWM right away on Monday if market opens strong; hold if market opens neutral or weak; do not double up. I would not be surprised if any leg down was short and we make some more upside progress.

Howard Milano

January 6, 2012

2012-01-06T19:22:00.000-08:00

The bulls tried their best today to advance (with a good job reports), but they just can't do it. We are still in the apex of the triangle on the daily chart above of IWM. These kind of triangles have a good chance of breaking to the upside, but at the same time, the more the horizontal resistance line is tested, the less the chance price can break through. I see this as a stale-mate.

The 20 and 50 MAs are still pointing up, but I don't have a strong belief that this is a bullish situation. To test the waters, I took a small position in TWM (effectively shorting IWM). I'll be out right away if the markets open up strongly on Monday. I'll double my position if the markets decide to go down.

Howard Milano

January 5, 2012

2012-01-05T17:28:00.000-08:00

The markets first went down and then went up a lot. I was waiting for a decent pullback and then a leg up back to the rising line, but the pullback was over in a few hours so that made me stay out of any shorts. Now it's back to waiting what will happen, probably nothing till next week. IWM looks pretty weak, but the semi-conductors (USD) were up strong and so was QQQ. A mixed bag. No reason to go long till we break up above the resistance, no reason to go short till the 20 MA starts heading down or we convincingly break down below the triangle.

Howard Milano

January 4, 2012

2012-01-04T18:59:00.000-08:00

I noticed that IWM in the top daily chart has a much tighter triangle than SSO in the lower daily chart. If the indices go down from here, IWM would be breaking down below its triangle while SSO has some way to go. Breaking down below a triangle is a valid reason to consider shorting, so I'll be looking at shorting IWM in the near future. I might want price to rebound to the bottom of the triangle after breaking down before shorting it.

In any way, I'm relaxing to see what comes next. The indices could also break up above their triangles in which case that would be very bullish. I would then go long after price goes down to test the top of the triangle.

Howard Milano

January 3, 2012

2012-01-03T18:32:00.000-08:00

I was surprised about the extent of the gap up, apparently New Year exuberance. I sold half my SSO position some time after the open, and got stopped out for the rest later on in the day. When I sold my half position I figured I could make another dollar or so (up to the horizontal resistance line on the daily graph above) on the other half, so I made my stop 50 cents below the price at the time (targeted gain twice the possible loss). Markets reversed later on and I got stopped out.

Really, these gaps make trading harder although they are nice if you happen to be on the right side of the market when they occur. Price might still try to reach up to the horizontal resistance line, but today's candle was not that bullish (closed near the bottom). I'm not sure what I'll do next. If price shoots up more it will be pretty far extended above the MA lines and I might try a short despite the fact that the MA lines are pointing up. If price goes down from here I'll wait for another leg up, if any.

Howard Milano

December 30, 2011

2011-12-30T14:50:00.000-08:00

Not the best day today, but I figured the last trading day of the year would be like this. People selling their holdings for tax reasons or cleaning ship. Still, next Tuesday better open up higher or I'll have to jump out right away and wait for some more strength. So I'm still in my SSO position, let's see how Tuesday opens.

Howard Milano

December 29, 2011

2011-12-29T19:15:00.000-08:00

Nothing to do but wait. Everything is in place for a nice push upwards, 10 and 50 daily MAs pointing up (see daily chart above), bounce up off the downward sloping trend line, Christmas rally. No guarantees that we'll see more upside, but this is a fine place to be long with good odds of making some money.

I didn't have to work today so I could watch the market more closely than normal. On the 10 minute chart above, notice the retracement (the big red candle down) about 8 candles in for today (marked by the yellow line). I was looking for weakness to increase my position in SSO, and I doubled my position in the next green candle after that big red candle down.

I'm using the 20 EMA (white) on the 10 minute chart and when a stock is making nice swings, as SSO is doing now, you can use the 20 EMA for trading guidance: above the 20 EMA (or 20 EMA pointing up), be long, below the 20 EMA (or 20 EMA pointing down), be short. It's not a fool-proof system (no system is), but it works pretty good as a guide at times like this.

Howard Milano

December 28, 2011

2011-12-28T13:16:00.000-08:00

We got the weakness we were waiting for. Best scenario would have been a retracement to the 50 MA on the hourly chart above of SSO, but when I saw price stabilizing around the $46 level I bought a small long position in SSO. Not sure of course if the retracement is done, but the 10 and 50 MAs on the daily chart are still pointing up which means there is still an uptrend happening and a long position after weakness has good odds of paying off. I'll give it some room on the downside, we'll see how the market opens tomorrow. My plan is to add to the position if/when price goes above the level where I bought it.

Howard Milano

December 27, 2011

2011-12-27T16:36:00.000-08:00

This morning I sold my DDM position, I wanted to protect the recent gains and I thought price was getting pretty extended, needing a retracement. Yesterday I thought I would stay in the position during any retracement, but protecting gains won. The daily chart of DDM above shows a small long wicked candle for the day, not a retracement and not a push higher. I might buy DDM back after a decent retracement.

EET (Emerging Markets) is shown in the daily graph above. Notice it has low relative strength compared to DDM. With EET the 50 MA is flat, the 10 MA is below the 50 MA, much weaker than DDM with its rising MAs and 10 MA above the 50 MA. There is a triangle pattern forming in EET with lower highs and higher lows, making it likely that a major move will happen at the apex. If the markets go down after this Christmas rally, EET will be a good candidate to short, which I'll do by going long EEV.

Howard Milano

December 25, 2011

2011-12-25T17:52:00.000-08:00

Merry Christmas!

DDM ended around the high of the day last Friday, 50 daily MA and 10 daily MA are pointing up as seen in the daily chart of DDM above, price went just above the most recent high from mid-December. What's not to like here? I'm staying in my DDM position and my stop is still around the low of last Tuesday, I will move it up a bit as soon as the markets open again on Tuesday. I hope to squeeze another few dollars per share out of this trade.

Howard Milano

December 22, 2011

2011-12-22T16:32:00.001-08:00

Nothing to add. Staying in my DDM trade with the same stop. Let's see where this goes.Howard Milano (from my phone, on the road)

December 21, 2011

2011-12-21T16:08:00.000-08:00

If there's going to be a Christmas rally, price better push above that horizontal resistance in the daily chart of DDM above. Price retraced nicely today and then went all the way back up. I'm still in my DDM position, and I'm maintaining the same stop around the low of yesterday. The 50 MA is pointing up. The 10 MA is above the 50 MA and should point up soon as well if price goes up. Looks like a place with good odds for a long.

Howard Milano

December 20, 2011

2011-12-20T19:10:00.000-08:00

If you compare this daily chart of DIA with the chart of SPY in my previous posts you can see that the triangle doesn't really fit with DIA. Price went above the triangle implying that DIA was a little stronger then SPY.

On the hourly chart of DIA above, you can see a rare sight: seven green up candles for today. I was waiting this morning for a retracement before jumping in, but price just kept going up so I bought some DDM (the ultra version of DIA) around half day. I think the odds are good to make a few dollars in the next days, but I set a tight stop around the low of today, there better be some buyers to drive price up otherwise I'm out again.

Howard Milano

December 19, 2011

2011-12-19T18:52:00.000-08:00

More of the same, yet another day with a lack of buyers. Price has now reached the support of the lower trend line. If price falls through that it will be more bad news for the bulls. The 50 MA is still pointing (slightly) up favoring some up-side in the near future, but if we keep having these down days the 50 MA will start pointing down favoring the bears. I have no choice but to stay in cash. I don't want to enter a short position at the end of 6 down days with the 50 MA pointing up, and I don't want to enter a long position till we see a bounce with some buyers coming in.

Howard Milano

December 17, 2011

2011-12-17T13:17:00.000-08:00

Above is the daily chart of SPY. Notice there was a lack of buyers the last 5 days with price ending much lower at the end of each day. However, the 50 MA is still pointing up favoring a short term bullish outlook. So a bit oversold, but no bounce yet. I didn't buy in Friday morning, Price never went above the high of Thursday, and quickly dropped much lower.

This is the 10 minute chart of SPY. You can see price shoot up Friday morning, tempting people to go long, and price then peters out. I was waiting for price to pull back from the Friday morning high and then push higher but all it did was fall lower than the opening price signaling no bounce yet. In the next days, watch for some trending action to the upside in the 10 minute chart with higher lows and higher highs.

Howard Milano

December 15, 2011

2011-12-15T19:40:00.000-08:00

At least there was no new lower low on the hourly chart of SPY above. If SPY goes up tomorrow there would be a higher low and reason to go long with a small position.

On the daily chart of SPY above it's clear that the 50 MA is still pointing up, which keeps me in a bullish mood for now. A little rally to say the down sloping upper trend line seems a good possibility. The futures are up, let's see how the market opens tomorrow. The other possibility is that price needs more correction to around the up sloping lower trend line.

We're trying to make some small profits here. There is no sign of any long sustained uptrend where the big profits are made. Perhaps when we reach the apex of the triangle in the daily chart we'll see a big move up or down. That apex is probably a few weeks away, perhaps early 2012.

Howard Milano

December 14, 2011

2011-12-14T13:29:00.000-08:00

SPY is making a new lower low on the hourly chart above, and the price is now nearing support at the bottom of the gap of early December. The 50 daily MA is still pointing up, so I'm waiting for a chance to go long when/if SPY decides to bounce up. Still don't want to short since the daily 50 MA is pointing up, although in retrospect it's clear that a short at the 50 hourly MA yesterday morning would have paid off handsomely. Scenario with the best odds for a long trade would be a higher low on the hourly chart while the daily 50 MA is still pointing up.

At times like this it seems obvious to ignore the 50 daily MA and just trade the ups and downs on the hourly chart following the hourly 50 MA. Trouble is that this is only obvious in retrospect. SPY doesn't necessarily make nice swings like we see now in the future.

Howard Milano

December 13, 2011

2011-12-13T13:24:00.000-08:00

I hardly ever do any transaction in the first 30 - 60 minutes after the market opens. This morning I looked at how SPY opened up (see hourly chart above), and what really stood out were the 3 lower lows and the lower high, with a new lower high forming this morning. I also looked at the semi conductors ( USD ) which almost immediately traded lower this morning, and the financials ( FAS ) and metals/mining ( XME ) which also were not taking off but heading lower instead. This all convinced me to stay out of the market.

SPY hourly price has now dipped below the support of the gap and today price formed a new lower high and new lower low. So I'm a lot less bullish for the short term. I don't want to go short because the daily 50 MA of SPY is still pointing up.

My plan is to stay in cash and wait. I will go long if this downtrend on the hourly chart changes into an uptrend while the daily 50 MA is still pointing up. I will consider going short if the daily 50 MA starts pointing down.

Howard Milano

December 12, 2011

2011-12-12T19:48:00.000-08:00

This morning the futures were down and the market opened lower, so I had to abandon my plans of perhaps going long in several stocks. Notice on the hourly chart of SPY above how price bounced off support at the top of the gap from early December. Yes, a lower low and the hourly 50 MA is pointing down, but this might be a bounce off support that will hold.

On the daily chart of SPY above you can see today's candle with a long tail hovering above the daily 50 MA, meaning support on the daily 50 MA.

The bounce off the gap and support at the daily 50 MA make me maintain my short term bullishness. If price goes up from here, an entry above today's candle and a stop below today's candle would be worth considering.

Howard Milano

December 11, 2011

2011-12-11T20:11:00.001-08:00

On the daily chart above of CREE you can see how price made 4 recent lows in the $23 region forming a base. The 50 MA is still pointing down so no full recovery and uptrend for CREE yet, but CREE is trying to form a bottom here. Not a bad place to make a short term buy of CREE banking on another bounce from the support around $23. As I said before I like CREE because it has no debt and is in a hype market and CREE is good for short bursts up (5 - 10%).

The major indices are trying to break above the down trending resistance line, as seen in the daily graph of SPY above. SPY has been trending sideways the last week, building strength, and there is hope here for up-side especially if SPY breaks above the resistance line. Notice the 50 MA that is pointing up which is bullish.

I'm watching ADBE, ADI, AKAM, ANR, and NVDA which all have rising 50 MAs as well. If the market shows strength Monday morning I'll be going long in some stocks.

Howard Milano

December 2, 2011

2011-12-02T19:16:00.001-08:00

On the hourly chart you can see how SSO popped above the declining trendline, and then sank back down below it. Still not enough weakness to make for a favorable long entry with good odds (especially before the weekend), but a step in the right direction. I would like price to sink to around the horizontal support line. So we're waiting for the right time to trade again.

There are some big problems with the market nowadays. Almost every stock moves in sync with other stocks and with the indices. Prices tend to move a lot in after- and pre-markets, regularly causing big gaps. Trends are lasting days instead of weeks. If this is how the market will be from now on, it will be pretty difficult to trade. I'm now waiting for SSO to retreat. Well, guess what, I'm waiting for every other stock I follow to retreat. Once SSO trends up for a few days I have my pick of other stocks to trade for a few days because they will all trend up at the same time.

Next week there will be NO posts on this blog, I'll be away on a business trip.

Howard Milano

December 1, 2011

2011-12-01T19:05:00.001-08:00

Just a sideways day for SSO. No enthusiastic buyers or sellers. Price is sitting against a declining resistance line. The 50 MA is going up, but this is not a high odds place to go long or short, I would like to see some temporary weakness first, perhaps a dip down to the horizontal support, before I consider going long again. If price continues to go sideways I might change my mind and take a small long position (an extended period of sideways movement is a sign of strength). No plans to go short at this time with a rising 50 MA. So I'm in waiting mode.

Howard Milano

November 30, 2011

2011-11-30T19:03:00.001-08:00

I can't show the hourly chart of SSO, it doesn't display correctly in FreeStockCharts.com, so here is the hourly chart of SPY. This morning I sold my SSO position, it was a tough choice between taking $5 profit per share, or setting a stop at $4 per share profit and perhaps be stopped out. Frankly I thought this run up was pretty much done. Well at the end of the day SPY/SSO shot up, and now there's still potential upside. It's a tricky balance, letting your profits run and get stopped out at a lower level or take profits at a point where you're happy with that profit. Anyway, I'm pleased with my compromise, I let my profits run for 2 days and then took profits. SPY/SSO might well go higher, tomorrow will tell.

I am now looking for the next chance to buy in. The 50 MA is pointing up so I'm looking for a long entry after a pullback. These two recent gaps are kind of freaky, so I'm not sure what kind of pullback to expect. If SPY/SSO gaps up again tomorrow, we'll have three freaky gaps. It might be tough to find the next entry.

Howard Milano

November 29, 2011

2011-11-29T18:41:00.001-08:00

Not much changed from yesterday. On the hourly chart above SSO made a slightly higher sideways move as compared to yesterday. This morning I moved up my stop to the close of yesterday, and that stop was just not hit so I'm still in a position. Price has climbed above the 50 MA which is encouraging, but the rally is not very strong up till now. Like yesterday I'll continue to wait for more development: 1) I might get stopped out in which case I'll wait for a low with the 50 MA pointing up before going long again or 2) price might creep up or shoot up in which case I'll move my stop up. Since the 50 MA is still not pointing up, I have not considered adding to my position.

Howard Milano

November 28, 2011

2011-11-28T19:53:00.001-08:00

SSO had a nice jump up this morning, on the hour chart above it clearly shows how price jumped back to the previous step level. Notice how price is still below the 50 MA so no uptrend yet. That is probably why there was no follow-through after the initial jump up, buyers come in when there is a clear uptrend. I sold 1/3 of my SSO and I have a stop at break-even around $39.90 for the rest. I'm now waiting for one of several outcomes: 1) price collapses and I'll either sell soon or get stopped out at break-even, 2) price drifts down but stays well above my break-even level and I'll stay in, waiting to see if a higher low is formed, after which I'll consider buying more, and 3) price goes up more and I'll adjust my stop-loss to around the low of today. It's really too bad that the 50 MA is still pointing down, makes me have not much confidence that price will go up much more.

Howard Milano

November 27, 2011

2011-11-27T13:21:00.001-08:00

My last trade from Friday, a small position in SSO, was not a trade based on good odds. Judging it now more clearly, it's nothing more than a gamble, yes it has some chance of paying out based on the expectation that SSO will revert to its mean, but let's look at it more objectively on the hourly chart:

I've been researching a different way of looking at charts. On this hourly chart I now plot the 50 MA and the 5 MA. The 5 MA is there to quickly show the approximate highs and lows. As you can see, price has made a step-wise series of lower highs and lows below the 50 MA the last 5 days or so. This indicates a clear down trend, and taking a long position at this time in the hope of a reversal bounce is nothing more than a gamble with questionable odds. The time to take a long position is when price shows higher highs and higher lows preferably when the 50 MA is going up. An example can be seen on the left side of the same chart around October 26/27 when price dipped to the 50 MA and made a solid higher low.

The reverse ETF, SDS, shows a step-wise series of higher highs and higher lows in the last 5 days or so. Each step gives an opportunity to go long with good odds since price is above a rising 50 MA. The best odds are at the beginning of a trend, so November 18 at the first step. Right now we're at the third step, still well above the 50 MA, but it's not the beginning of the trend anymore so odds are still favorable to go long but much less favorable than on November 18. At this third step it would make sense to add to a position started on the first or second step. The stop-loss for any position should be set to around $22.75, the bottom of this step.

My plan is to sell SSO around the open if the market opens much lower, and stay in it if the market opens flat or opens up. My next purchase should be timed to higher lows/highs as outlined above.

Howard Milano

November 25, 2011

2011-11-25T12:43:00.001-08:00

This was the seventh down day in a row for SPY. There is some weak support from September, and below that more weak support from September and October, but no strong recent support. Still, I thought 7 down days make the market quite oversold, and I bought some SSO for a reversal to the mean play. Most stocks and ETF's I look at are oversold as well (I guess most everybody goes up and down together). Perhaps it's the continued bad news from Europe that is pushing stocks down. If Germany would allow the ECB to print as much money as needed, like the Fed's do in the US, the Europe crisis would be resolved right away and we would get a nice year end rally in the stock market. Something to wish for.

Howard Milano

November 23, 2011

2011-11-23T19:47:00.001-08:00

Looks like I missed out on some money selling SDS too soon yesterday. SPY broke down from its channel, and it's not clear where it will find support. Quite a bloodbath in the market. pretty much all the stocks I watch went down. I didn't have time to watch the market today, so I didn't buy in.

Here is a stock to watch when the market recovers. NVDA had good earning earlier this month, and it has gotten some good press lately including upgrades. You can clearly see how the stock held up really well while SPY took a dive the last 5-6 sessions. That is a very bullish sign.

Howard Milano

November 22, 2011

2011-11-22T20:20:00.001-08:00

The day was going up and down and up and down and going nowhere. SPY is now in a pretty channel going down, and I didn't think SPY was going to go down much more, so I sold my SDS position with a small profit. There was also some news about Bernanke hinting at QE3, it seems he still thinks he can fix the unemployment and other problems by making the stock market go up and enrich the people who are already well to do.

The futures don't seem to believe Bernanke, they're pointing down right now. Looks like we might still get some more downward movement tomorrow. Thanksgiving is usually an optimistic time, so it's surprising how much the market wants to go down. I'm fine with being in cash right now. Tomorrow might be a light day with everybody taking off around noon.

Howard Milano

November 21, 2011

2011-11-21T18:36:00.001-08:00

I thought yesterday that odds favored the market not going down with IWM looking fairly strong and SPY holding above the 50 MA. But SPY opened below the 50 MA and dipped all the way to weak support from a few weeks back. I took a small shorting position (by going long SDS), but it's pretty much around break-even. These big gaps on open make it tough to get any good price unless you already were in from the previous session.

The futures are already up again. The market discounts all bad news instantly it seems. Failure of the committee to reduce the deficit? Already discounted. Europe problems? Continuously and instantly discounted. Looks like we might get an up day tomorrow. I have a stop at the other side of the gap so we'll see if it gets hit.

Howard Milano

November 20, 2011

2011-11-20T08:15:00.001-08:00

IWM dipped below its triangle, but I don't see it yet as a decisive break to the downside. IWM is still comfortably above the 50 MA, with both the 20 and 50 MA's pointing up. I can't really lean bearish here, and I'm still expecting upside for a year end rally.

SPY shows more damage with the 20 MA rolling over, but SPY is still above the rising 50 MA and it's sitting on support from the last months. If SPY breaks below that support, and especially if it breaks below the 50 MA, I'll become bearish.

Combining the two, I'm moderately bullish, but I haven't put any money on that yet. Time enough to jump in long if/when IWM and SPY show signs of wanting to go up. Some attractive long candidates with rising MA's: ADBE, ADI, AKAM, HPQ, PSEC. Some stocks I like because they are great rolling stocks: BRCM, CREE, EBAY, RFMD.

My odds favor the market going up from here, but in case it goes down, say below the 50 MA, I'll short the market through TWM or SDS.

Howard Milano

November 17, 2011

2011-11-17T18:51:00.001-08:00

Despite the tail of the candle outside the triangle, IWM is still stuck in that triangle. The futures are up right now, so I'm not banking on IWM going down tomorrow, or up a lot for that matter. We're pretty much still waiting for something big to happen.

I'm experimenting with an additional moving average line, the 20 MA. The 50 MA gives a good indication of the longer term trend, but I also want an indication of a shorter term trend. The 8, 9, and 10 MA follow price too closely; the 20 MA is pretty smooth and is good at pointing out a trend.

So what can you do with that 20 and 50 MA? The most important thing is that you can categorize stocks almost instantly. You look for rising or falling 20 and 50 MA and how they are positioned in relation to each other. If you're looking for a long entry with better than even odds for a swing or trend trade, you look for stocks where the 20 MA is above the 50 MA and both are rising, and you wait for temporary weakness in the price so you can buy when price recovers again.

IWM above looks good in that regard, 20 MA above 50 MA and both are rising, and price is showing 'weakness' in the form of a side-ways consolidation. Now this is not a foolproof 100% setup. IWM can easily go down from here, but odds are better for IWM going up.

Let's look at another example. I mentioned a few days before that CREE is looking attractive. Well, if you add the 20 MA, the attraction fades a little, the 20 MA has not been able to make it above the 50 MA, even though the 50 MA is leveling out and almost going up. So CREE needs a little more upside before it becomes really attractive.

Howard Milano

November 16, 2011

2011-11-16T19:00:00.001-08:00

Apparently everybody who has anything to say about stock graphs has talked about the triangle pattern that IWM and other indices are stuck in. There is not much I can add. We'll just have to wait for a breakout. The market wants to go up for a year end rally so I'm not leaning bearish. More long term I'm still bearish especially considering the problems in Europe.

Howard Milano

November 15, 2011

2011-11-15T20:02:00.001-08:00

CREE really wants to go up, it was up 3 - 4% today, if I was day trading I could have scalped a few percentage points with no problem. But the general market was down, so I never felt it was safe to enter CREE long for a longer term position. Still, this shows how much CREE moves around on a daily and weekly basis.

IWM stayed beautifully in its triangle. The news coming out of Europe is just terrible, bond sales show high yields in all countries except Germany, Italy is not getting healthier, Greece of course is a total loss, now there is talk of France getting in trouble, Spain not doing too well, and the yields of Dutch and Austrian bonds are creeping up in comparison with Germany. Cash seems to be good these days. Watch for IWM, and the rest of the market, to break out above or below the triangle, and there might be a sharp move either way.

Howard Milano

November 14, 2011

2011-11-14T19:38:00.001-08:00

Well, I was excited to be long CREE, but I got stopped out this morning at break-even, so I'm out again. I didn't want my stop to be below break-even because the market is just too uncertain right now (see below). I'll be watching CREE and I'll go long again when price goes above that down sloping trend line.

IWM ( and the other indices ) is still stuck in that triangle. Soon it'll break above or below the triangle and hopefully we'll get some follow-through on that next move. Nothing to do but relax for a day or so. Lots of people are talking about a year-end rally, so any move up could be quite good and well worthy of participation. I was all ready to jump in this morning with buys of HAL, NVDA, BRCM, EBAY and UWM, but the futures this morning looked weak and I didn't buy anything.

Howard Milano

November 12, 2011

2011-11-12T18:17:00.001-08:00

As expected the market went up on Friday, but since it was a quiet day (it was a bank holiday) the move up was a bit subdued. I bought some UWM in the early morning and sold it again before closing. Didn't want to hold it over the weekend. At that time it was unclear how the weekend would shape up.

Here is the other stock I bought, CREE, one of my favorites, but it's been going down forever it seems so I haven't bought it in a long time. It just recently started to show some life with higher highs and higher lows. It broke above the downtrend line and it seems ready to move up. There are two things I like about CREE: 1) the company has no debt and I love companies with no debt, and 2) the stock price of CREE can move like crazy, it's pretty normal to see it move 3 - 5% on a day. CREE is a great rolling stock, it can easily roll 10% up and down in the span of a few weeks. I'm still holding this one over the weekend.

Berlusconi in Italy has just resigned. That should give the stock market a huge boost. I'll probably buy into UWM again in the early morning for a little ride up, I expect it to break out of its triangle to the upside. Let's hope CREE goes up as well.

Howard Milano

November 10, 2011

2011-11-10T20:51:00.001-08:00

Apparently everything is fine again in Europe. Italy had a successful bond sale, and Greece has a new Prime Minister. Asia stock are up, and Europe and the US markets will probably (for sure) follow suit. I sold all my TWM with positive gains during the day, and I'm now ready to join everybody else going long.

IWM is in a nice triangle, which, given the good news from Europe, might now break out at the top. This market does not seem to want to go down, or go down much anyway. Price of IWM is holding nicely above the 50 MA. I wanted a good pullback before going up, but this is fine too, IWM has been trading more or less sideways forming that triangle, and this formation would be a good base from which to go higher.

Howard Milano

November 9, 2011

2011-11-09T21:40:00.000-08:00

On the daily chart above, IWM broke down through the rising support line. I shorted IWM this morning (by going long TWM), and I sold 1/3 at the end of the day so I can give the rest some room before I get stopped out. If this was a normal market, we could expect some more down side, say to the 50 MA, but given the frantic up and down moves lately often occurring on the same day it's anybody's guess what comes next. For now we have a lower high. If we get a lower low as well, we would be 'officially' in a short term down trend.

Futures are slightly up, so I'm not convinced we'll get any more follow-through on the down side tomorrow. In this "new" market we're all forced to become day traders.

Howard Milano

November 8, 2011

2011-11-08T21:37:00.000-08:00

On the 30 minute chart of IWM above, you can see the days progress (the yellow line), up, down, and up again, some 2 - 3% each way. This is an excellent example of a messed up market which is only good for day traders and automated trading programs. On days like this, entering a position and setting a stop is instant suicide. I'm glad I was too busy with work to entertain any thoughts of making a trade.

And IWM is creeping up in the resistance zone. I still see no reason to go long here after this steep up trend for the last month, and no immediate reason to go short for lack of any progress on the down side. For now I'm waiting for more direction. Need a decent pullback before we can go up further.

Howard Milano

November 7, 2011

2011-11-07T19:22:00.000-08:00

Got stopped out early this morning on my small short (by going long TWM), notice on the 30 minute chart above that IWM opened up (just enough to stop me out), then fell, and then recovered and ended up pretty much flat. So again my stop was just a bit too tight.

The chart above is the daily chart of IWM. You can see how IWM is still hanging out at the bottom of the resistance zone, not able to rise above the zone, and not willing to go below the zone. On the 30 minute chart a nice triangle pattern is appearing indicating indecision. So again it's waiting time. I really have no idea if that triangle will break up or down, so we'll have to wait and decide on a move long or short when the triangle breaks. It seems trouble is now brewing in Italy so it's hard to get bullish.

The chart above is the weekly IWM. This is not a bullish chart, weekly price is below the 50 MA which itself is level. This is the reason I'm not long-term bullish right now and I'm mostly in cash. Yes, I missed a lot of a nice move up last month, but I simply can't be much long while price stays like this below the weekly 50 MA.

Howard Milano

November 5, 2011

2011-11-05T17:36:00.000-07:00

Not much happened yesterday. On the 30 minute chart of IWM above you can see that IWM looked weak early in the day, and then recovered again. Notice how price is revisiting the broken trend line but can't get above it, a sign of weakness.

Basically price is hanging out at the bottom of the resistance zone. I still believe that the market needs a leg down before it can go up strongly, and with that in mind I took a small shorting position (by going long TWM) Friday morning. My stop is kind of tight, so I will probably get stopped out if the market opens up Monday.

Howard Milano

November 3, 2011

2011-11-03T18:28:00.000-07:00

On the 30 minute chart of IWM above you can see how price shot up at the open, then plunged several dollars, and then up again for the rest of the day. Roller coaster in just the first few hours.

Above the daily chart of IWM. I didn't participate in this last leg up since I figured the market needed more down time before going up strongly. I'll see where it tops out, price has now entered the resistance zone again. Volume is kind of low the last days. I still have my doubts that price will go much higher, so I'll stay out of the market for now. I'm waiting for an opportunity to short if the next top falls below the previous one.

Howard Milano

November 2, 2011

2011-11-02T20:25:00.000-07:00

This is what I saw this morning after a few hours, that is a 30 minute chart of IWM at 11.30 am ET. I thought yesterday I might go long if the market opened OK. Well, IWM on this 30 minute chart doesn't look like a great long candidate. The reasons are 1) 50 MA is going down, I think you should try to trade with the trend, that is short with the 50 MA going down, not long, 2) price broke down through the trend line and is now going up to test that trend line but there's not much to gain there, a dollar or so?

Switching to the daily IWM at the end of today. My next concern, which I didn't realize yesterday enough, is that price has not pulled down much after that monster 20% rally up last month. I would like it to pull down to the 50 MA. It's hard to believe IWM will go up much without putting in a lower low first to gain strength.

So I didn't do anything, I just don't think the odds were good enough for a big rally, say $5 or so.

After I couldn't get excited about IWM, I had a look at GLD. What bothers me about GLD today (should have noticed it more yesterday) is that the 50 MA is still heading down, so yes, the price pattern looks really good, but it's happening at the wrong time. So no buy here either. I'm waiting it out for a few days, perhaps I'll see something I want to buy.

Howard Milano

November 1, 2011

2011-11-01T19:21:00.000-07:00

Notice how IWM opened at the bottom of the candle which has a big wick meaning the price went up quite high before falling down again. I was short IWM from yesterday (by going long TWM), I sold some early in the morning, and got stopped out a bit later for the rest when the market did a good job trying to recover before falling down again. So back in (a little more) cash. The futures (http://www.finviz.com/futures.ashx) are up right now, so it might be that this is as far as the market wants to fall for now. If the market opens higher tomorrow, I'm considering going long for a little bit, targeting around $76, right in the middle of the resistance zone.

Look at how nice GLD is doing, bouncing off support. I like what I see here, but I'm not sure I can get in at a good price tomorrow morning. GLD might just gap up 3 or 5 dollars, and such a gap would be too much for me.

I'm hesitant starting a long term position in SCHW. Brokers are out of favor with the news that MF Global brokers, who are now bankrupt, ripped off the deposits of many clients. I'll see, perhaps I start a small position tomorrow if the market opens well.

Howard Milano

October 31, 2011

2011-10-31T19:41:00.000-07:00

On the above 30 minute chart of IWM it is clear that IWM started weak, gained some during the day, and then collapsed the last hour, ending around the low of the day and below the 50MA. Not an encouraging sight for tomorrow, but we've been jerked around a lot lately, so I would not be surprised if IWM gaps up tomorrow early. The odds favor more down side though.

On the daily IWM graph, you can see that IWM stalled out at resistance late last week. Since IWM is quite overbought and high above the 50MA, I decided to short IWM early this morning (by going long TWM) in a small position (it's small because the trend of IWM is basically up now and this short is against the trend, which has lower odds than going short in a down trend). We'll see tomorrow if I can stay in my trade.

This retracement of IWM is expected since IWM is really overbought. The waiting now is to see where IWM will rebound. The resistance line at $74 or another resistance line around $72 or the 50 MA? It's anybody's guess, best I can do is have a stop and wait for what happens the next few days. At the rebound, be prepared to go long, there is still a lot of optimism in this market.

Howard Milano

October 29, 2011

2011-10-29T15:47:00.000-07:00

This is the weekly Russell 2000 (RUT-X). I like to have the 8 and 20 MA on the weekly charts to get some sense of direction. Well on the weekly it's not all positive news yet, the 20 MA is barely leveling out and the 8 MA is under the 20 MA. Price has now moved above the 20 MA which is a good step towards an uptrend, but to be in an uptrend, the 8 MA should be above a rising 20 MA. This is why I'm just playing around on the daily scale, I don't see a good position for a long term buy, and I would really like to buy long term.

And here is the daily RUT-X. I look at the 50 MA on the daily to, again, look at long term buying opportunities. A comfortable buy for me would be price dipping to about 720, 710, meaning around a rising 50 MA. At this point I see RUT-X as short-term overbought, and not a good buy yet.

Here is a stock I'm considering for a longer term buy. SCHW has been dragged down with the rest of the financials, and is now leveling out right above the 50 MA. The forward P/E of SCHW is a bit high at 16.70, but SCHW is swimming in cash which is great for a bank.

Howard Milano

October 27, 2011

2011-10-27T20:15:00.000-07:00

Funny how an inability to follow the market during the day can influence decisions. Here is how it looked early this morning in the 30 minute chart when I had to stop watching the market and go to work:

I didn't think it looked that healthy, I hate chasing a stock so I didn't buy at the open, and I like to wait for a pullback, which I saw but no sign of IWM going up again. So I had to stay in cash and not participate. Here is how it looked at the end of the day:

The pullback finished and IWM went higher soon after I quit watching. So it goes sometimes. Cash is fine as well. The market is getting really overbought now, first from the run-up from the expectation of the Europe summit, and then now this blowout up from the lame decisions made at the summit. As if Europe is now saved, Greece will still cause huge problems, the economy there is totally hosed.

But the market wants to go up. I'll look for long entries during pullbacks.

Howard Milano

October 26, 2011

2011-10-26T20:05:00.000-07:00

Despite my big words yesterday that I would try to stay in GLD, the tension caused by the Europe summit meeting got to me. I realized I was gambling the odds instead of trying to trade with good odds. I sold RWM and GLD early morning and made a small profit, so I'm back in cash again.

Looks like there is some half-baked decision from the Europe summit, Greek bond holders will get a haircut, and Europe is going to leverage existing guarantees five times (I guess they're going to guarantee to bail out 5 countries with money that is enough to bail out 1 country, figuring it will never get to the point they actually have to bail out any country). Futures are up, looks like the market will spike up tomorrow. Really, the problems in Europe are not over by far, but for now it's all "solved" I guess.

GLD is still below the 50 MA. It might have a hard time going up more if the markets go up tomorrow. I'm not unhappy that I jumped out, and I'll watch for a good time to buy back in.

IWM ended in a nice doji candle, not quite a hanging man, and it's in the resistance zone again. The Europe news might push it above the resistance zone which would be bullish. I'll see what happens tomorrow at the open. I might go long a bit to participate in this euphoric high.

Howard Milano

October 25, 2011

2011-10-25T20:05:00.001-07:00

Well, GLD made a nice break to the upside. Yes, it's still below the 50 MA, and long entries are best taken above the 50 MA, but gold is still very popular so I think GLD has a chance to go up a little. We'll see, if the market goes down due to Europe disappointment, GLD will definitely go up with people fleeing the market. My target is around the 50 MA and I'm going to give GLD some room to retrace if it wants to.

I think the market looks weak, as shown in IWM, which yesterday strongly entered the zone of resistance pictured and today left it again just as strongly. I shorted IWM some (really I went long in RWM) in a bounce of resistance play. I realize I might get stopped out if Europe decides to have really good news anyway in the next days, but the odds are good based on the chart that the market is going to take a breather by going down a bit. My target is around the 50 MA as well with this one.

Howard Milano

October 24, 2011

2011-10-24T19:42:00.000-07:00

I'm very impressed with how well the indices are doing, SPY is reaching up towards resistance gaining 20% in a few weeks, and the price is now above the 50 MA making it much healthier looking. However, there has not been any retracement or dip, it's all been up and up making this rally awfully extended. If you're long here, good for you but have some stops in place. Personally I had troubles believing in this rally since SPY came all the way from looking terrible at $108 or so to now looking great at $125 with no good place to jump in.

Once SPY retraces some, for instance towards $120 or $117, and then bounces back up, SPY would be in an excellent buying situation with a) the 50 MA going up, and b) price bouncing up around the 50MA.

As I mentioned for weeks now, GLD is just hanging out in a trading range. Look at how far price is below the 50 MA, making GLD not an enticing long right now. At the same time a short does not look very good either with good support in the $150 - $155 area. Best advice is still to wait for a move either up or down.

Howard Milano

A simple trading system

2011-10-23T12:16:00.000-07:00

I have been working on a simpler approach to stock trading, and this weekend I wrote it all down and added it to my stock trading site, see http://www.stockraider.com/simpletradingsystem.html. I will change my posts here and talk more in terms of that trading system, so you might want to read up on it.

Howard Milano

October 22, 2011

2011-10-22T09:32:00.000-07:00

GLD never made it below the recent low and is now working on establishing a trading range which is encouraging for people who are looking to go long. A good time to go long would be above about $164 when it breaks up from the range.

IWM and the other indices are in a more extended rough trading range since early August. I have to say the last move up surprised me enough that I didn't participate. I tend to be more bearish than bullish, so in ambiguous situations like this, I tend to be too bearish.

I read that the European countries might take up till Wednesday to make decisions that can make the market either shoot up or down. I'll see early Monday, depending on how the futures look I will probably participate on the long or short side.

Howard Milano

October 20, 2011

2011-10-20T20:49:00.000-07:00

Well, not much changed. GLD gapped lower, but closed at the top of its day range with just a little higher than average volume, really it's hard to short this, so many people are waiting to jump back in so they're aboard when Gold goes to $2000 and GLD who knows how high, $200, $300? I'll gladly participate when it goes up again.

The indices were basically sideways. I tried a small short on IWM when it dipped below the 30 minute trend line (the chart above is a 30 minute chart), but got stopped out very quickly. We're waiting for the Europe meeting this weekend, and till then optimism will keep the indices up.

The plan: when is it finally the weekend?

Howard Milano

October 19, 2011

2011-10-19T19:36:00.000-07:00

I'm at a disadvantage since I can only trade the first few hours of each day before I have to work for the Man. NUGT tanked early on, but at that time the indices, such as IWM, were up, so I didn't feel shorting NUGT was the right thing to do taking into account that the weekend with some major Europe decisions is coming up and I expect the market to trade side-ways till then. NUGT continued going lower the rest of the day, so I missed the chance to short it. I think I made the right choice being careful this morning.

IWM and the other indices are trading side-ways, in the case of IWM right below resistance of the last major high.

GLD dropped a little outside its ascending triangle again. Since Gold is sooooo popular, I hesitate to short GLD. I'll definitely go long when it has bottomed out.

The plan: wait for the weekend to pass. Go all out long if any Europe decisions are seen as positive, go all out short if those decisions are seen as negative.

Howard Milano

October 18, 2011

2011-10-18T19:34:00.000-07:00

GLD went all the way down outside of its ascending triangle, which gave lots of bears the temptation to jump in, but then GLD went all the way back into the triangle, leaving us again in limbo. I don't like shorting GLD, so I stayed out.

I had good success with my short of NUGT, which went down hard, and then retraced. Never had an opportunity to add to the short, and got stopped out in the morning hours with a decent gain. My short of IWM was less successful, I escaped with a tiny loss when I got stopped out around my shorting price.

So we continue to get jerked around by who knows what, optimism, Europe?

Now IWM still looks pretty tired here so I'm waiting for topping out (again) and will probably short IWM again. However, there seems to be some news from Europe this weekend, so I don't want to be in the market at all during the weekend. The current leg up of SPY, DIG, IWM, etc. is getting pretty extended, and if this keeps up till the weekend, and there is any good news from Europe, it might go much higher. However, it's hard to justify going long at this point just based on possible future hype of politicians, bankers, etc.

The plan: stay out of GLD till it's clear where it wants to go; watch SPY, NUGT, DIG for topping and consider shorting some of them with small positions. Perhaps go long when we get a decent pullback.

Howard Milano

October 17, 2011

2011-10-17T19:35:00.000-07:00

I took a small shorting position on NUGT since I think it looks weak. Price has not really been able to get above the 20 MA and is far below the 50 and 200 MA. This looks like a classic retracement top during an overall downtrend. I will add to the position if tomorrow shows a confirmation candle.

I also took a small shorting position on IWM which looks a little weaker than SPY. IWM has troubles reaching the resistance of the recent high, volume is low, and even though IWM managed to get above the 20 and 50 MA, those two MA's are still trending down, all of which makes the stock weak.

SPY basically has the same pattern as IWM, and GLD stays stuck in that ascending triangle. DIG is trying to decide if it should go up or down.

The plan: maintain stops in shorts of IWM and NUGT a bit above the recent highs; add to shorting positions if tomorrow brings confirmation candles; wait for GLD to make a decent move up or down. I think there is a decent chance the market will go down a little bit, and then reverse again to continue its short term uptrend, all on mixed news from Europe. There is still the looming default of Greece though which might cause a big downtrend sometimes in the near future.

Howard Milano

October 16, 2011

2011-10-16T18:50:00.000-07:00

Both SPY and DIG are in an exuberant mood, pushing higher for almost 2 weeks now. Prices easily moved through the 8, 20, and 50 MA's. SPY is now challenging the high from end August, early September. Volume is not confirming the move up though. But it appears the market is trying to resolve the horizontal trading range since mid-August to the upside, ignoring any problems in the US or European economies. Hey, that is all priced in by now isn't it?

GLD is still struggling in its ascending triangle pattern, sure GLD moved up a few dollars, but volume has dropped significantly, it seems everybody is waiting for a major move up or down.

The plan: I got stopped out last Monday in my small shorting positions, and the rest of the week I couldn't participate in the run up due to my business trip. I still don't have any trading plans for GLD, I don't like this hesitant waiting with decreasing volume, GLD can go up as easily as it can go down from here. I'm looking for a long entry in SPY and/or DIG after I see some weakness and retracement, it looks like those two have some more upside ahead. I might take a small short position for the retracement, it depends if SPY will go through the resistance on the chart above, or bounce sharply off that resistance.

Howard Milano

No posts till October 16, 2011

2011-10-11T18:41:00.000-07:00

I'm on a business trip, there will be no posts till October 16, 2011

Howard Milano

October 7, 2011

2011-10-07T19:26:00.000-07:00

The suspense continues with GLD, almost 2 weeks stuck in a trading range between (about) $155 and $162. Volume is tricking down. The graph is forming a small ascending triangle, which has a 70% chance of breaking up.

DIG got a big red candle with a touch of the down sloping trendline. Today was a good day to take a small shorting position with a tight stop a little higher than today's high. If Monday shows a red conformation candle down, more shorting would be possible.

Essential the same graph can be found on SPY and IWM, so shorting is possible on those ETF's as well.

There is talk that the recent low is a major low and it's up from here. Let's wait for some higher highs and lows first.

Howard Milano

Oct 6, 2011

2011-10-06T20:10:00.000-07:00

Not much changed. DIG and SPY continue higher, SPY just tagged the 20 MA while DIG has a little more to go. The general trend is still down for both. If you went long in SPY for a short trip up against the trend, good for you! Volume is not that great for SPY, so it's difficult to believe this is a big turn-around for SPY as some people believe. Volume is much better for DIG, so I give the bounce there more credit.

GLD is hanging in its trading range with decreasing volume and far below the 20 MA. If SPY goes down big, I can imagine GLD going up as a safe haven, but GLD seems stuck in a bear flag with a large chance of continuing the down trend with one more leg down.

The plan: Have patience with GLD, it will go either up or down with vigor from here, just don't know yet which way. I'm waiting for DIG and SPY to run out of steam with this retracement which will set up a good shorting opportunity as long as the new high is lower than the previous high affirming the current down trend.

Howard Milano

Oct 5 2011

2011-10-05T14:00:00.000-07:00

It's amazing how some tech stocks move, see EBAY above. It easily moves several percent a day, and can move 10 - 20% on a swing up or down. EBAY is not in a general downtrend, like many stocks AND the general market right now, so it's a great stock for swing trading during this bear market.

GLD is still hanging out in its trading range. DIG and SPY are moving up, but since they are in a general down trend, their moves up are considered retracements for now; prices are piercing the 8 EMA but are still below the 20 MA. Looking for a top and a shorting opportunity around the 20 MA.

The plan: As long as GLD stays in its trading range, we don't know if it'll go up or down next, so wait. High beta stocks like EBAY might give decent long opportunities, but in general the market is down. Wait till DIG and SPY top out, and short them then.

Howard Milano

Oct 4

2011-10-04T23:22:00.000-07:00

The markets had some wild action today. Thee was an explosive mixture of Bernanke promising to take more action as necessary, positive remarks from Europe, prices dipping into bear territory amid talk of market capitulation, all of which triggered a mad buying spree at the end of the day.

It's necessary to just concentrate on the stock graphs and try to ignore all the confusing news.

DIG and SPY went up enough to stop everybody out of their shorts.Both are trying to get back into their previous range, and both are still in a general downtrend with the price below both the 8 EMA and the 20 MA. DIG did have excellent volume, I said before Oil is reaching long term support levels, so it makes sense lots of traders are watching the same trying to guess where the bottom is before a big turn-around.

GLD has been in a tight horizontal range for the last week and a half giving no clue about where it will go next.

The plan: With GLD there is not much to do except wait for a breakout either above or below the current horizontal range. Despite their excited moves up, DIG and SPY both still look weak, wait to see where this retracement is going, if no higher high is made, there will be an excellent shorting opportunity.

Howard Milano

Oct 3

2011-10-03T21:03:00.000-07:00

DIG went down nicely through support at around $32.05, and on good volume as well. The 8 EMA is still moving away from the 20MA and the candle is hugging the descending Bollinger Band. I don't see anything bullish here.

GLD had a flat day after a quick gap up, and on tepid volume. I hear a lot of 'bottom reached', and 'up from here', I guess people assume gold will always go up, even after it fell down hard. I can't get excited on the long side till we see some higher lows or higher highs. Looks like a retracement to me for now with a possible next leg down.

SPY had a good down day as well, but only on average volume despite breaking through some support levels. The problem with shorting at a support break like this is that SPY already went down for days and has little energy to go down with force from here. Better to wait for a retracement and short from there.

The plan: if you're in a short in DIG, enjoy, the stop could be moved to resistance at $32.05; I don't think GLD is a buy at this point, let's see if we get some trend up started, or a next leg down; with SPY it would be great if we get a little bounce so we can short it with confidence, if you're in a short already, move your stops to the new resistance.

Howard Milano

Reading a new stock trading book

2011-10-01T18:18:00.000-07:00

I'm reading a new trading book: "The Trading Book: A Complete Solution to Mastering Technical Systems and Trading Psychology" by Anne-Marie Baiynd. You know, I like it, although parts of the book are not that interesting to me. What I like is where she explains how she works with basic tools such as support and resistance levels, and the 8 EMA and the 20 MA. What I am not so fond of is how she explains her use of Fibonacci retracements, I like Fibonacci retracements for short pullbacks, but she uses them for long trends. She also talks about emotional, disciplinary, and organizational aspects of trading, that was fine for me, but might be too much for other people.

What I did get out of the book was how a stock graph is like a dance. She says you need to pay close attention to all details and put it all together. The slope, and closeness of the MA's, the slope and width of the Bollinger bands, where the support and resistance levels are and are we breaching them or bouncing off them, what kind of Candles were there lately. To me it becomes a painting which gives meaning and a mood.

Howard Milano