EQ

Something is not right about EQ. I have held the position for a couple weeks. But that is not the issue. The issue is that since it made its most recent lowest low on 1/30 and 2/2, the stock has not moved with the kind of strength I would like to see. Plus, today it opened below its diagonal trend line which is setting off some bells and whistles in my head that perhaps the strength that I had percieved this stock to have is evaporating. My trading philosophy is that if you are unsure what to do, go to cash, and that is precisely what I am doing here. I am closing out at 35.82. Rather than staying in cash though, i am taking up a position in KALU. Not sure what they do, nor do I care. The trend in this stock is good. I like trending stocks that stay relatively linear. I am entering in at 26.05. My stop is just below the diagonal support at 22.50. That will give the stock some room to work. It also is an area of support on the 30 minute chart. Max position I can take is 570. Ill take 550 to make it more round. Here are a couple pics of the 2 trades.

Market Review

And we're back!!! Im talking about back to previous levels of resistance which are now behaving as support. I will only pst the 30 minute charts for the NASDAQ and S&P, but suffice it to say the short term trend has gone sideways when viewed from a daily chart. I had mentioned the head and shoulders pattern yesterday that was present across all three major indexes. Well today opened with an explosion to the upside. The markets then slowly lost their initial profits until 1:30 when things dropped heavily down to support at the neckline of these different head and shoulders patterns. Now dont get me wrong, I remain neutral to slightly bullish in the markets right now just because I get the feeling like the market is trying to dig in its heels to prevent any more movement to the down side. That being said I expect tomorrow to finish even to slightly higher, though what happens in between is anybody's best guess.

PCU

Stopped out of PCU at 15.30. I know i had my stop set lower, but it was a mental stop and i missed my exit. In general, this industry is up today. FCX, RIO, PCU and others are all outperforming the market.

While like I was expecting yesterday, the support held in all three major indexes. Upon looking at these closer, i noticed an interesting little pattern forming up on the 30 minute chart. Ill illustrate it on the Dow because it is easiest to see there. However, the same pattern is present in both the S&P500 and the NASQDAQ. Its the classic inverted head-and-shoulders pattern. I highlighted in thick blue where the neckline is at, and i highlighted the shoulders and head in yellow. Based on this set up i would expect the Dow to go up about 120 points from the break out point above the neckline. We got there upon reaching the high during todays move, but then started to pull back a little. Based on technical analysis, I am seeing the strongest support at about 7930 and the strongest resistance at about 8230. Since momentum is up for the moment, i see the Dow going and testing the resistance line.

In the S&P500 and the NASDAQ, I am also seeing upward momentum carrying through for the one to two days. In the S&P, weak resistance is present at 1880 with stronger resistance at 1910 (coincides with diagonal resistance or the upper resistance in a longer term triangle formation). In the NASDAQ there is some weak resistance at about 1560 (the high on 1/28), and stronger resistance at 1590, which just so happens to coincide with the diagonal resistance of a longer term triangle formation (see some of my older psts to view this triangle). Well see what happens when it gets there, but for now I remain neutral to bullish.

Early morning action

Took down BTU at 25.79 about a minute after the open. Stop is at 23.90. 1000 share max. But need to take less based on remaining cash in portfolio. Bought 800 shares. Price target is 36.

Closed out of AOC on todays open. at 38.72. Took a loss on this one.

Market outlook

Sorry, I am not on my work computer so I wont be posting any pictures here so youll just have to follow along on your own charts. Of the three major indexes, the Dow looks the weakest as it closed sitting right on its Support line. This support was penetrated earlier in the day, but prices rose just enough to get the price just above this line. Both the S&P500 and the NASDAQ are sitting on diagonal support. I anticipate these levels holding (perhaps out of hope) but until i see prices close below support, then i will maintain that these levels will hold. For the next couple days i am neutral to slightly bullish in the markets.

January Review

So I have been going over some of my trades, and trade ideas. So far I am not off to a bad start. A 4.7% profit in only a couple of weeks. Not to shabby. Most of the profits came from a fortunate trade in GERN. The kind of situation where i was more lucky than good in my stock selection. Looking at other trades, I closed out of TTI because of general market weakness as well as weakness in the stock itself. I also closed out of PNRA. After reviewing this trade, I was correct in my forcast of direction, but wrong in my timing. If I had either made my stop a little higher, or waited another day to enter, I would have probably stayed in the trade and would currently be enjoying a profit. As for my current positions, i have 4 short positions (AOC, LNCR, PCU, and CRS). These positions represent a relatively diverse range of companies. But thats not why I traded them. PCU, LNCR, and CRS were all traded based on head and shoulders formations, while AOC was traded based on a break below support in the 30 minute chart. Both AOC and LNCR are showing the most strength relative to my trading plan for them and will likely be closed out tomorrow, though i will hold if my stop is not reached. The other two I am anticipating a pullback to the neckline of the head and shoulders pattern followed by a continuation south.

My single long position is in EQ. This stock appears to be setting up in an ascending triangle formation. This stock also represents one of my larger positions in my actual portfolio, so I am definitely in position in anticipation of a breakout. My stop is held pretty tight for this with a plan in place to re-enter incase my stop is to tight.

Other longs that I looked at but did not enter include EGOV, ABX, ABAX, MCK. These all worked out. EGOV broke out today, but i was busy at work so i missed the boat. ABX and ABAX I could not get in at a price that I liked, so I just stayed out. MCK gapped up the morning that I put it on my watchlist, so i never entered. No problem there, i can always get in later if i still like the stocks. We will see. I would like to mention, that MCK appears to be setting up in a bull flag pattern, and ABAX has a very nice nice looking pole forming, and I am anticipating a bull flag formation in this stock as well.

Stocks I may buy tomorrow include:BTU (ascending triangle), CAH (trending), DRQ (trending), GENZ (ascending triangle), KALU(trending-found through OA), MCK (bull flag), MHS (bull flag), OCR, RIO

I wont put on any more shorts for the moment since i a little more short exposed than I prefer. But like I said before, i expect to be closed out of some of these in the near future.

Happy Trading