Some Trades

First of all, if it wasn't clear from my post, we are at a hugely transitional moment, I believe that the market has set up a volatility-Bull trap-two separate traps, both take your money just as fast. We had very bullish price action in the Dow, next the S&P, however, if it isn't clear to you yet, then you are probably a new member and it will be soon-there's so much more to price action. I've used the example before of two cars that both can do 200 miles an hour, except when you look under the hood, you find one was built well and will do 200 miles an hour every day, the other was built to do 200 miles an hour, but not built so well and when you hit the 20o mile an hour mark you have something to be fearful of because you know what is under the hood and it's not quality. The same with a price advance, a 2.5% advance in two different markets can mean two very different things. One can mean more to come, the other can mean-CAUTION, you are in a danger zone.

So hopefully the charts I showed you make that clear. I also hope you understand that tops like the one we are in are built for one thing, taking your money by shaking you up and down and never allowing a trend of more then a few weeks to a month. Investors get caught up in the very natural human emotion of hope, but I will tell you after studying every top and bottom of consequence since the early 1900's, both are processes, not events.

That being said, the most important thing you can do is be on top of your risk management game and I have a link on the site all about it and if you have questions, PLEASE email me and lets get them straightened out before you get into trouble. I say this every night-that is how important it is.

As for trades, being we are where we are, I urge patience. I'll list some trades for you, there are plenty more and you should find a service to set alerts so when they are triggered you can get into them. The trades tonight are designed as "show me trades". We want to see them doing what we expect and then we jump in, not all of my trades are like this, but it;s the environment that dictate the kind of trades I look for.

So here they are-see if you can figure out the common denominator.

AIXG short. Most of these will be on 5-day charts, this means that most of them are meant as long term trend trades, but they should be close to breaking in our direction. Here we have a clear top that was violated on heavy volume and a run above resistance which is a short squeeze-or a bearish trap. However, the stick is still sick, it just had the good fortune of being able to run with the market as most stocks do. The volume on the last bar and the candle are ugly. The limit order to go short (these are just my opinions, feel free to choose your own) is below $29.40 the stop is $33.60. While the stops will be wide, that is initial stops to give the trade a chance to work. You must use position sizing and lower the amount of shares you take on in a wide stop, when it breaks in our direction, you can tighten the stop and add shares.

BAC short on a daily chart. The red box is the resistance zone. You can go short below $13.75 as it stands now with a stop at $14,75 or you can wait to see if it enters the resistance zone and pull the trade then.

CHCO short on a 5-day chart. There's a clear top, resistance at the trendline and a bad looking candle setup that indicates a reversal. The short level is below $29.33 with a stop at  $30.57. This trade has a decent risk profile. The rally to resistance was weak.

CYH short on a daily chart. The red trendline is a resistance zone. It acted very bad today in an up market. Short below 30.93/ stop $33.55

Here's a long based on a descending-bullish wedge. Targets for wedges are their base-near $21. Volume is correct for the pattern, it's broken out on good volume. there's a yellow line, it's the 10 day moving average, that's where you want to buy and use a 22 day moving average as an add to. If the trade works out, email me for current stops-the same as any of these.

SUSS long, you want to wait or maybe you don't, but I would, for a breakout above $12.27, the stop is $11.47 As with all of these, take a look at the longer charts and determine" is this stage 1,2,3 or 4?"

TEL short, this is a pullback in a downtrend. The stop is $27.65 and go short under 26.20

VRUS short on a weekly chart. Again a top, a breakdown and rally above support where it is barely hanging on. I'd go short just below $25 with a stop at $28.13. Again, when it works, you can narrow the stop and add shares. First though you need the trade to work before you have huge exposure.

WFMI short on a 5-day chart. I'd go short below $37.25 and stop out at $40.47

XRTX short, this is a very apparent top, and a perfect pullback-this is an ideal short setup if you see it ever again. I'd go short below $12.55 with a stop at $14.55

These will be on the spread sheet, but let me remind you; YOU HAVE ONE ADVANTAGE OVER WALL STREET-YOU DON'T NEED TO BE IN THE MARKET, SO IF YOU DON'T SEE YOUR TRADE OR IT'S NOT TIME FOR YOU, THEN STAY IN CASH-THEY CAN'T DO THAT.