Puts to the rescue

AKAM continues to move higher as our puts are kicking in today. We are travelling the first part of next week so we will get back to business on Wednesday.

Stay smart, stay hedged.

Trade well,
Trader D

Mid Day update

The markets are cruising and the Solar related stocks are on fire! We are selling the NUAN at break even since it can't seem to get going. We are still holding on to AKAM.

The puts we bought are down but the longs more than make up for them.

Trade well,
Trader D

Giddiness

Defined as:

frivolous and lighthearted; impulsive

We are buying protective puts on the IWM (Russell 2000)

Trade well,
Trader D

AKAM

Buying AKAM here...

Trade well,
Trader D

NUAN

We will highlight our new positions with the chart as we start buying:


NUAN is getting close to a possible breakout and could be helped by a large short position.

Trade well,
trader D

500 point surge

We spoke about a "screaming buy" yesterday if the markets reversed. We got it. HOWEVER, it has been extremely difficult to find good setups at this point since we have come off a major rise last week and haven't had any pullbacks.

The charts shown above are a perfect example..we had breakouts in both with less than stellar volume and the the risk/reward is weak. We bought the qqqq calls and will stick with that and update new buys on the blog on pullbacks.

Trade well,
Trader D

btw/ we will be offering analysis on any stocks that readers post to the comment section to share with all.

Easy like sunday morning

Although we like the original by Lionel Ritchie the version by Faith no more is the best ever.

Now back to the market... we will keep it very simple and easy with one chart to view. Any proper analysis starts with a macro look at the market and for this we will look at the Dow Jones and it says it all:


1) The index reached the top of it's trend line and reversed. Until it can break above we can not get excited.
2) The stochastics are overbought AND reversing. The higlighted blue circles show that this pattern holds true for the market reversing it's current upward trend. The circle highlighted in RED shows where the stochs reversed back up relatively quickly and even at this point the market still could not get going.
3)MACD is headed back down
4) The DMI made a positive crossover which is great for the market but it looks like we may see it cross back down once again.

There you have it 5 negative signs. If the market could show some strength this week on decent volume then we could possibly see a SCREAMING buy. At this point though..keep your powder dry and wait from the sidelines unless you want to take small positions on the short side.

Status Quo

The markets are digesting the Fed news from yesterday and the extremely overbought situation. We have options expiration tomorrow which should only add to the volatilty. It is great to see the market hold it's gains but we are neither a buyer or seller here.

We will look at hundreds of charts over the weekend and get a decent feel for some possible longs and shorts.

We took a small hit to the portfolio the past few days but still have decent gains from the original push higher last week. Steady as she goes at this point and maybe we will get the typical rally in April and then....sell in May and go away!

Trade well,
Trader D

Reversal of fortune

We were very blunt yesterday calling for the bear market to continue. we still hold fast in our view and will show some charts tomorrow to back up our thoughts.

Trade well,
trader D

Stretched too far

You take a rubber band and stretch it and it reverts back to it's original shape.

The stock market is the same. When the market get's too oversold it bounces back (i.e. last week), when it bounces up too high (i.e. last week) it doesn't take long to move back to it's averages. simply put: we went TOO FAR TOO FAST AND NOW WE ARE HEADED SOUTH.

Trade well,
Trader D

TIMING

One of the most important functions of trading is Timing. You may be able to pick out stocks well, and learn to read and understand the markets like a pro. But, without timing...you may find it difficult to be a profitable trader.

we were long the FAZ (3x financial short)and covered with a loss of 8% today. That is using proper risk management and was the right thing to do. Had we waited on the trade and bought on a dip we would be doing very well right now. It all comes down to timing which can not necessarily be taught but is approached more with feel and intuition.

We did hit the nail on the head mid-morning by buying some Bank of America puts today when it was going through the roof and made back our losses.

Trade well,
Trader D

Exiting FAZ

The markets are starting off strong this week and the financials are leading the way. This was just a tiny position but there is no need to stay in a losing position.

Trade well,
Trader D

Stay the course

We are holding on to our FAZ - the financial 3x short position and nothing else. This week will give us clear direction as to whether we continue the long term bearish trend or can head higher continuing last weeks rise. If we were going to make a prediction we would say:

Bearish

Trade well,
Trader D

btw/ we here at ITM have some GREAT new services brewing so stay in touch!!

The FAZ and the Furious

The volume was o.k. today but nothing great. We are coming close to the 21-day moving average on the indexes and it's time to see if this rally is for real or not. We decided to take a very small position with e FAZ today. This ETF represents 3 times the movement of the financial index (XLF). We are hitting some support and in the last three days this security went from $117 down to $41ish currently. This is what we call a "lottery ticket" trade since we know the risk is high but we are willing to commit a small amount of capital for a quick reward.


Trade well,
Trader D

Pump up the Volume

Absence of volume makes the market grow weaker. We were correct picking the timeliness of the latest rally, however if we do not get follow through VOLUME....we will drift down the abyss once again. We took off 1/2 our longs and will wait for confirmation before searching out more candidates.


Trade well,
Trader D

Brighter Days

One of our favorite bands here at ITM is Mofro.One of favorite Mofro songs is "Brighter Days" (http://www.youtube.com/watch?v=ghhIQvDsNKs).

There is strong reason to believe that the market is headed for BRIGHTER DAYS (if not for a short time). Let's rundown the reasons:

1) the market is oversold (we know, it has been for awhile)
2) Gold (GLD) is headed down
3) the market had a nice reversal this past Friday on high volume
4) THE XLF (Financials) went up today!!
5) Oil is going back up (and the airlines too)

We have covered our shorts and went long the indexes.

Trade well,
Trader D