Wolf on Wall Street

Wednesday, March 31, 2010

NEW LIST UP

HERE ARE SOME NOTES ON TRADES TO KEEP AN EYE ON:

Reiterate ACV (S), MFN (S) HOLD, Watch for BHS to trigger a short.

As the pattern in the NBL short has developed, I'd suggest a stop of $73.98

Time to take profits on DCTH.

TRGL is looking like a strong short as is CPX and KALU.

For those long BEE, it looks like it's about to make another move up.

If you need trades- long or short for any particular industry, email me.

Tuesday, March 30, 2010

NEW TRADES FOR WEDNESDAY ARE UP

There's quite a few longs and shorts and inverse longs as well. Take a look and be careful-the last few are all homebuilders and you don't want to be overly correlated- especially to the dollar (ex: commodities, metals, oil, financial, tech).

MVIS

This one at $2.74 (assuming it can hold that level on a close) looks like a decent quick long.

UUP Going UP

The ETF for the Dollar Index pulled back as I suspected it would, I didn't think it would only last 2 days. In any case, I believe it can be bought here and now with the caveat that it closes above $23.92; if so then you can hold it and place an initial stop below $23.83.

If the dollar is moving up, now would be the time to go back and take a look at my recent short ideas among energy and commodity related issues.

Monday, March 29, 2010

HESITANT

I posted a few limit trades today, they are a safety net more or less. I'm looking into something right now that is making me hesitant on this market in either direction, it may be nothing, but until I fully understand it, I'm hesitant and when I do, you'll be the first to know.

Otherwise, not much changed today, the Q's-even being up, actually violated a linear regression channel on an hourly chart to the downside. Before that the best we had was a 10-min chart violation.

We'll see soon enough.

I'm also running a new scan right now, it takes forever and a day to tun as it scans the entire market but if I see anything promising there, I'll add them to tonight's list so check back in the a.m.

Update to last night's list

NCS was mistakenly classified as a short, it is not a short. If you saw the stop and target you would have seen that, but it's my bad.

NCS is a long, the stop and the target have not changed.

Sunday, March 28, 2010

A Bunch of Trending Trades

First, as I pointed out today on Trade-Guild, I believe the market is showing negative sentiment, selling off on good news and that we have begun to turn the corner as this rally wraps up, I think we'll see a move lower and a sustainable one at that. There are more then enough reasons to justify such a move.

Most commodities have an inverse relationship with the $USD, that mean many commodity based stocks should make for excellent short sale candidates. Even better, commodities tend to trend better then equities, we are still shorting equities, but tonight's list are commodity based equities. These are trades for the long haul.

If you have my Trend Channel for stops and my modified version for trending entries, these are the stocks you want to use it on. If you don't have my trend channel, which takes each individual stock's recent volatility or a form of an Average True Range and creates a channel around price using standard deviations, you should consider either StockFinder or TeleChart and I'll be able to give out the formula for all of my indicators including 3C.

Check out the links below and let them know Trade Guild sent you.

Thursday, March 25, 2010

Second Verse Same as the First-The Ugliness continues

Today we got pretty decent news, the kind of news that has sent this market higher for quite a while now, but not today-nope! It's called a change in sentiment and the market is spooked by something, my guess is uncertainty as it relates to our auctions of debt, the healthcare bill, possible downgrades, the fact that the real unemployment number is close to 1 in 5 people are out of work or under-employed and it's on a rising trend-by the same measure, the Great Depression had a reading of 25%-we are at 20%.

Tonight's List-

You'll find everything is at market and everything is short. If you are observant, you'll find that many ideas are in the same industry group-don't pick more then one unless you'll split them into half positions (avoid over-correlation). These are weak groups and stocks-I'll continue to add to them.

You can also get some short exposure on the market via FAZ or any of the UltraShort ETFs for the major averages. Again-watch the correlation-NOT GOOD RISK MANAGEMENT!

I'd suggest getting your toes wet in these and recent shorts I've posted (take a look at GOOG and AAPL as well), but let the market prove it's intentions before adding to the positions or making them full positions.

If anyone is enjoying any of the high-flyers that are trending up-email for the stop or use my Trend Channel if you have it.

CHANGE IN CHARACTER

Finally, we see a change in character follow through from last Friday, it may not have seemed like much, but the market internals give it away. Take a look at the short positions. The longs, especially the ones working like BEE, RNN, ACAD,CIGX, etc should be switched over to my trend channel, if you need the stops, email me.

Uncertainty has been reintroduced into the market in a big way and the dollar was proof positive of that, now for the market to catch up on the downside.

Tuesday, March 23, 2010

ENERGY

There are a lot of energy short trades-most limit orders on tonight's list. take a look and see what works for you. There are a few more 1-2-day high flyers. Basically this market is in overbought territory and that is why you are seeing a lot of limit orders-"show me" is my attitude. I still am quite certain that we will see a major downtrend, the February ascending wedge was broken Friday on high volume and what we are seeing now is typical of wedges-institutions and middle men are running limit orders and stops and setting long positions. We may see more volatility as I warned, but soon we should have a definitive break down.

3C Quick Start

Many of the charts you see here at WOWS are my proprietary indicator 3C which reveals underlying institutional money movements and often contradicts price. To understand the annotations made on charts, you must first understand that 3C has no numerical value, it is a pure divergence indicator. Positive divergences represent accumulation by smart money, negative divergences represent distribution by smart money and when 3C trades with price, that is trend confirmation.

The chart annotation system is simple; white arrows represent relative positive divergences, red arrows represent relative negative divergences and green arrows represent trend confirmation. When 3C is in a white or red box, that represents a leading positive or negative divergence, leading divergences are the most powerful.

We analyse 3C in multiple timeframes, the longer the timeframe the stronger the accumulation. 1-2 min timeframes represent intraday moves, a 5 min timeframe can represent a day or two and 15 min timeframes average trends of a swing trade nature. 30 and 60 min charts can move the market for a month or more and daily charts can be over a year.

You'll get use to seeing the charts and understanding how the multiple timeframe analysis works and works well.

Welcome to Wolf on Wall Street.

The trades featured here are meant to maximize returns with the least risk and highest probabilities. Unless otherwise mentioned, all trades are meant to be executed at market. I prefer long-term trending trades which perform well in rising markets, but really stand out in declining markets. However, we get occasional one day gifts 30,40,60% 1-day gains. I'd urge you to consider taking some or all off the table in such cases, the markets don't give gifts like that often or for very long. Most of the returns that make the system outperform so well come in short-entry trades. If you are opposed to short trades, this is not the system for you, unless you are ok with buying an inverse ETF. If you would like more information about the truth about shorting stocks, just email me.

Risk management. I recommend a specific and consistent risk management approach to all positions. In most cases we try for 2% risk money (2% of portfolio) unless such a position size exceeds 15-20% of overall portfolio in actual position size. Each trader is different and each has a different allowance of open trades. I like to keep the overall money in the trade around 10-15% of portfolio per position in case of gaps against you. Stops are generally executed at the end of day and I personally never place a stop order, all my stops are mental; remember, the middle man gets to see everyone's cards. When you are not in tune with the market or opportunities just aren't that spectacular, I take my risk per position down to 1% or even half a percent of portfolio value.

Each trader is different and must determine their own level of comfort with risk. I do have a channel stop which I provide to TeleChart/StockFinder users for automated stops, I appreciate you using my links to sign up if you do. The Trend Channel catches trends and works well as it automatically adjusts for each stock's volatility. Arbitrary exits based on nervousness about the markets WILL decrease the portfolio performance dramatically. This system will not ever get you in at market bottoms or tops. The recent 1 year performance against the Russell 2k buy and hold had the system beating it by 3:1. Ultimately it is up to you as to how you proceed, but I'm always available to help you determine what might work best for you.

I do use other scans and systems when market conditions warrant their use and may change strategy with market conditions.

The MOST IMPORTANT tool you have to bring you long term success is RISK MANAGEMENT. There are plenty of articles linked at Trade-Guild.net on Risk Management. We can be wrong 75% of the time and still outperform the market with solid, consistent risk management.

Position Sizing

The position sizes noted in the positions @ 2% risk of portfolio are based on a $20,000 portfolio-adjust as needed. Due to tight stops, there is the possibility, even probability that one position could take up the entire portfolio. You need to decide how many positions you want to trade and reduce the position size according to that. For instance, if you want to trade 5 positions in a $20,000 portfolio, no one position should be valued at more than $4,000-not risk money or 2% rule, but share price entry x shares.