Wednesday, July 22, 2015

Chart of the day: CALA

CALA is a biotech stock that has shown some buying interest while in the midst of a down trend. The recent volume surge has the stock over it's 50 dma, which could start a remount and give it the momentum it needs to make a short term run. This is a speculative setup.
  
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Tuesday, July 21, 2015

Stock Chart of the Day: IBB

Biotech ETF IBB has been on a spectacular run since the market selloff, but now the chart is telling us that it looks ready to rest. Intraday today a negative candle pattern is forming at overbought conditions. If this pattern can hold going into the close, we could see a pullback. Two key levels are the old pivot high at $382, and the 50 dma at $370. These areas provide initial targets for the expectation of a shallow pullback. I would not get more ambitious with targets until IBB gives a strong signal of a deeper correction since it's been so resilient over the past year.
  
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Friday, July 17, 2015

Chart of the day: ANFI

Yet another earnings season is upon us and we have our first earnings breakout setup. ANFI broke out  from a down trend and remounted the 50 day moving average on huge relative volume. I will look to enter on a slight pullback.


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Monday, July 13, 2015

Chart of the day: AMAZON and the new high breakout

Amazon is setting up as a new high breakout entry. The stock is currently above it's earnings breakout level, which sets it up in a "new box" above the $415-445 range.

A close here could set it up for a run to $500.

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Friday, July 10, 2015

Chart of the day: GOOGL and the moving average remount

$GOOGL cracked $600 in early 2014 and quickly pulled back. Since that time the stock has been consolidating and actually broke below the 50 dma. After a few failed attempts at remount, the stock has gapped up over the 50 dma today. If this level holds we could see a run to $600 and another attempt at breaking out over this key round number.

I am holding $GOOGL in my longer term position trading account and may trade it in my short term swing today.
  
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Yesterday I talked about how to trade VIX in volatile markets. Here is the video if you missed it!

https://youtu.be/avpW0l1NhMU

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Thursday, July 09, 2015

Chart of the Day: How to Trade VIX

At the first sign of a market sell off or correction, my eyes leave my well developed focus list and turn to the CBOE Volatility Index, otherwise known as VIX. During market selloffs, it is crucial that you learn how to trade VIX.

Why do I love trading the VIX during sharp selloffs and corrections?
 
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It's because the VIX smells fear and acts accordingly with wild spikes. Okay, so in truth an insane calculation that some Ph.D wrote is used, but I like to think of the VIX like a shark smelling it's prey, attacking with a mad rush, enjoying the spoils of it's victory, then settling down.

In other words, the VIX will spike up when the market sells off, hang out at the high for a short period, then ramp back down as the market settles down.

Study this chart of VXX (VIX ETF) to understand the last few times VIX has made huge moves. We are talking 30-100 percent moves in 1-2 weeks. Notice that they always correspond to SPY selloffs.


Here you can see that when volume spikes, so does VIX. We are currently in the midst of a big volume spike and VXX has ramped up from a low of $17 to $21.35. Studying recent volume spikes, it looks like we still have some room to run.

In the Trade Report, we are currently up 10 percent, as we entered VXX at $19.30 and are still holding. Once the spike is over, we will reverse and "short" VIX using invese ETF XIV.

Watch this short video on trading VIX during volatile markets and using pair trading with VIX as a strategy to profit without knowing which direction the market will move. If you like the video, please hit like on the youtube clip!

https://youtu.be/avpW0l1NhMU

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Wednesday, June 24, 2015

How's Microsoft Doing?


My friend asked me how Microsoft is doing at a dinner party. This is how our real conversation went last night:

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Friend: How is Microsoft doing?
Me: I don't know.
Friend: Don't you trade stocks?
Me: Yes.
Friend: Then how do you not know how Microsoft is doing?
Me: I haven't traded Microsoft in years.
Friend: Why? It's one of the biggest companies.
Me: It's too big and not volatile enough for me to trade.
Friend: Have you been following what's happening in Greece.
Me: A little.
Friend: So what's going on?
Me: There's a debt crisis, the economy is bad. They could default.
Friend: Deep analysis bro.
Me: All I care about is how the markets react to Greece. I don't care too much about the details. I'm not an economist.
Friend: Okay, if you say so. You may want to start looking for a day job again.
Me: And you might want to give your portfolio to someone who knows what he's doing.
Friend: Yeah, I'm just now starting to recover from my big losses.
Me: Your porfolio manager knows a lot about economics, huh.
Friend: Yup.

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If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 14 day free trial at BullsonWallStreet.com.