Mastercard's Bullish Reversal

MA (Mastercard) has been on my bearish short watchlist every since it broke down below the 50 day moving average on heavy volume. However, the stock's technical pattern made a 180 degree reversal in one day, with today's 28 point gain that easily put it back over the moving average and close to making a 50 day high. I'd like to see a bit of consolidation to digest today's gains and enter on a low volume pullback or breakout to new highs.

Post Fed Game Plan

It is a relief to have the fed cut out of the way. The market's manic, ultimately negative response, lends credence to my thesis that we will at least test recent lows. I will look to unleash some shorts in the coming days, most likely in last year's momo stocks that look top-ish and ready to break (see DECK).

Short Play: Deck

DECK is one of those fad short plays I have talked about in the past. The stock looks to be forming a topping pattern that could send the stock back where it belongs (currently has a higher PE than AAPL).

Let's take a look at the chart:



The first thing that jumps out to me is the "top-ish" head and shoulders pattern that is forming. To complete this pattern, price would have to break below the line I have drawn that converges with the 200 day moving average. A break of this level would have the benefit of providing two resistance points, the moving average and price action.

Another key element is the distribution pattern. Note that high level of volume on the breakdown of the 50 day moving average and the break in the obv trend. This is a sign of a broken stock.

Finally, one of the few times during the trend, stochastic has turned over well before reaching overbought levels. This means buyers are not willing to buy the stock up at high levels.

There are two ways to play this stock short. First would be two enter on a pullback (up) to the 50 day moving average. The other would be to wait for a break of the 200 day moving average. I will most likely enter in increments, shorting with a small position on a bounce, and adding if there is a break of the 200 day moving average.

Short DSX

I am short a dry shipper . . .again. DSX's recent bounce offers a good short opportunity. The move seems to be stalling at resistance (200 day moving average), and stochastics are overbought and looks to be ready to cross down.

My stop is placed just above the 200 day moving average. I plan to take partial profits at the recent lows.

In Defense of Jim Cramer

Is there anybody more loved and hated in the stock trading community than Jim Cramer?

I doubt it. The guy is a lightening rod, and deservedly so. He's opinionated and isn't afraid to speak his mind. Anybody who takes that approach is going to make some great and not so great predictions. If he's wrong, I've got no problem with bloggers pointing it out.

Not surprising, there has been some intense Cramer bashing in the blogging community. What concerns me is not just the seething commentary, but the misrepresentation of his commentary. For example, Chris Perruna and Tate Dwinnell (bloggers I respect and enjoy reading) both point to Cramer's bullish October market calls, after the Fed had cut rates, and use it to put down Cramer and pat themselves on the back. This does seem a bit hypocrital since Perruna admits he did not follow his own advice, while Tate's model portfolio is down big this month. Anyway, I digress.

How bad were Jim's market calls? If you actually listen to what he was saying, they were fantastic. In fact, if you read my blog, you'll see that I made a boatload of money using a similar approach. In October, Cramer was talking about what to do *going into the end of the year.* He also said, once you get gains, *take some off the top* to lock in profits. Some specific stocks he mentioned were GOOG, BIDU, AAPL, DE, RIG, along with hot stocks from agriculture and energy sectors. You know what? He was RIGHT. Everyone of these stocks could have yielded nice gains if you bought, took profits as the stocks and sectors went up and sold at the end of December.

I am not saying Cramer is perfect. Nobody is. I can go back and find a lot of bad calls he's made. In fact, I could do that to just about anybody, including the bloggers that criticize Cramer (usually for self serving purposes), and myself. Criticism of public opinions is fine. What's not cool is misrepresenting those opinions and not giving credit where credit is due.

Weekly Spy Chart

Analysis of the weekly SPY chart leads me to believe the market still has room for a bounce before the next downturn.

Key factors in support of bounce:
1. Bounce at major price support
2. Stochastic oversold crossover developing
3. More room to move until resistance reached.

Note that each time stochastic has reached oversold levels and crossed we've seen a decent sized bounce.

Key factors in support of continued downtrend post bounce:
1. Topping price action pattern
2. Major volume distribution
3. Major resistance

If volume stays low, I will likely unload long positions once resistance is reached and deploy some shorts.

Weekend Private Chats

I have some time this weekend to do another round of private chats. For more info, check out this post.

Today's Hot Sector: Agriculture

Yesterday it was the financials and real estate, and today the hot sector was agriculture. Great move if you caught it. Now the million dollar question is whether this move was due to short covering or the start of a reversal that will resume the sector uptrend. More to the point, should we hitch on for a ride, short or just stand back and watch.

There are too many "ifs" to make a convincing long or short argument. The longs can say that most stocks have remounted the 50 day moving average and still remain in a long term uptrend. However, bears can point to volume and short covering.

That's why I don't plan to make any trades in this sector. However, if the stocks breakout to new highs, I will likely enter. And if they break down below the 50 day moving average, we will have a short signal.

I was going to post charts of my favorite Ag plays, including MON, CF, AGU and TRA, but there is no need to post more than one. They all look almost exacly the same.

Today's Plan

I am looking hedge my two long index plays (DDM and UWM), with couple of shorts. I went short NOV this morning and may pull the trigger on another stocks with a broken pattern that is bouncing. The shorts are less than half the size of my index positions, which are 500 shares each.

NOV has more room to bounce. I am using a small position size and loose stop.

Quick Trade Update

I was stopped out of SKF and bought UWM and DDM, which are ultra long the Dow 30 and Russell 2000.

Looks like this might be the capitulation bounce we've been waiting for.



Update: A few readers have asked how I timed the DDM trade so perfectly. I should have posted my entry prices. I did not buy at the bottom. I ain't that good . . .I bought toward the end of the day at an average price of $70.57.

Today's Trade: SKF

Well, I finally gave in. It's just too tempting. I had to short financials today. I took a hard look at MER and LEH, but decided to go with the "ultrashort" financial ETF. I still am not willing to make any big bets, so I went with a small 100 share position size at $115.73.

At the moment, this is my only position. I am still waiting for a big bounce to initiate shorts.

Today's Trades: QLD and TWM

The only thing I am willing to do right now is make quick day trades. As I stated last night, I am only watching index and sector ETFs for trades at the moment. I placed two profitable daytrades in QLD and TWM. I will detail the trades and my strategy tonight.

Longer term swing trades (2 days to 2 months) are not in the cards at the moment. I was tempted to make a few buys on the panic that would have been profitable (AAPL, MON and a few others) but decided against it. Also, financials like MER and LEH are tempting as shorts, but it's tough to short with the size of the bars and the "financial stimulus" plan on the horizon.

Game Plan

If you read my blog, you probably already know about the carnage that hit the world and the futures markets today, and might be looking to see how I plan to trade this market. Maybe the Spec has some well thought out game plan to make loads of money tomorrow.

Unfortunately, I do not. My focus now is on capital preservation, not hitting the jackpot. While it is true that fortunes can be made on panic driven days like tomorrow is sure to be, they can just as easily be lost.

I have placed logical stops on my three small long positions, and plan to do little else by way of trading. I am not going to watch any stocks on my watchlist. If I do get the itch to trade, I will make sure to use extremely small position size and will only trade index or sector ETFs.

Fibs Don't Work For Me (Q & A Part II)

Continuing the Q & A series of posts:

Suresh asks: Do you use Fibonacci retracement levels for your break-out pull back and earning set up trade ? (I remember seeing DCO was at at 38% FR level when you pulled the trigger)

Market Speculator answers: While I do trade retracements (pullbacks), I do not use Fibonacci numbers. Rather, I look to enter on orderly pullbacks to support.

Before I use a system, I demo trade and analyze my results. Over the span of three months I made over 100 trades using Fibonacci retracements. I also demo traded the same stocks using my normal pullback method. While both groups made gains, the Fib group trailed my pullback system by over seventy percent.

This does not mean Fibs don't work. However, I have no use for them in my own trading.

Suresh: Apart from price and volume action, what oscillators/indicators that 'ALWAYS' you validate before getting into a trade?

Market Speculator: See the previous Q & A. Short answer is I don't need any indicators for validation, though I do pay attention to stochastic and obv.

Suresh: On the day before you take a trade, do you check 5-min or 60-min
charts for arriving at the right entry price?

Market Speculator: It depends on the trading setup and time frame. When I trade very short term strategies (hours to 2 days), I'll look at intraday charts. However, for most of the trades I make here, I am only looking at the daily.

Another Trade Update

I have decided to take on two more small long positions, BVN and HWAY. Both have handled the bad market well. HWAY is in the medical lab sector, which has been somewhat of a safe haven in recent times.

While badly beaten stocks are usually the best short term bounce plays, I don't have the stomach to go after these types of stocks at the moment. Therefore, I've decided to play the bounce thesis with two strong stocks and one index play (QLD). All are small position sizes with logical stops that wouldn't lose me more than about $800 combined if the market continues to tank. Unless you have supreme confidence, I would not make any big bets at the moment.

Trade Update and Short Term Trading Plan

I covered the remainder of the GS short at $186.23 and exited my QLD position at $79. I re-entered QLD at $76.23 with a tight stop (basically using my profits from the last QLD trade to cover this one) in case we bounce in the coming days.

We will eventually get a bounce. That's when I will look to initiate short positions. It's just too hard to enter right now. The T2108 indicator looks set up for a bounce, so I would not be surprised to get one sooner than later.

The Best Indicator is . . .

Way back in November I asked readers to submit questions for a Q & A session. The response was much more than I anticipated, and even after setting time each week to answer questions, I still have not finished answering half of them. So, rather than answer them all in one post, I am going to start posting my answers one at a time.

Jim asks:
What do you believe is the best overall technical indicator to use in trading a stock?

Market Speculator:
Wow, one indicator huh? That's a tough one, although I do like the Zen-like approach of using as few indicators as possible. As the saying goes, keep it simple stupid (kiss). I am a firm believer in simplicity, in all walks of life.

When I first started trading, I was a slave to indicators and probably have dabbled in just about every one imaginable. I have tested some extremely complex systems with mixed results. My breakthough came when I stopped focusing on indicators and zoned in on price and volume patterns, along with support and resistance levels.

These days I only look at stochastic and obv (on balance volume). To tell you the truth, I don't even need them, but they can be helpful in quickly identifying oversold and overbought stocks, along with spotting divergences.

I do pay attention to the following key moving averages: 10, 20, 50 and 200. This is in line with my strategy of watching key support levels, both in price action and moving averages.

I know I still haven't given you an answer yet, Jim. Gun to my head, I would pick OBV, since it is one of the better expressions of volume.

Quickie Trading Note: QLD and GS

I took partial profits in the GS short and QLD. I have lowered my stop on QLD which will allow me to either break even or have a profit on the trade (right now break even looks more likely).

Trade Update: QLD

I bought 200 shares of QLD this morning at $78.23. This is purely a short term bounce play. We are at August lows which may act as support, and Big Ben speaks today. The risk is we blow through the August lows and retest the March lows, which is a distinct possibility. This is why I am using a tight stop and small position size.

Remember, this is only a short term bounce play. I am still operating under a downtrend thesis.

I have been stopped out of all of my longs (TRA and GG) and took remaining profits in the AAPL short. I hope to update my trades this weekend.

Market Notes: Are We Oversold?

I am still finding this market tough to trade. I have no problem trading in bear markets, but my issue right now is that we are oversold, but not that oversold. So it's tough to initiate longs or shorts. If I do decide to trade, it will most likely be with an even distribution of longs and shorts.

Take a look at the chart below. It shows the percentage of S & P 500 stocks above their 50 day moving averages (I usually use Telechart's T2108 indicator, but I am away from my laptop), and is currently hitting oversold territory at 20. However, the last selloff reached all the way down to around 5. While it might be prudent to take on a few small pilot long positions, I wouldn't make any big plays just yet.

Market Notes

We are in a tough spot with regards to initiating short positions, and I'm in no mood to add longs. I was hoping for more of a bounce before short entry, but today's move ruined my plans. Amazingly, we are still above last week's low of 1378 (by two points). I'll probably let things play out a bit before making any new entries.

Time to enjoy today's profits (see last post), do some reading and sort through my watchlists.

Trade Update

I covered 50 shares of AAPL at $169.84 (entry at 177.68) for a $392 gain (+3.7%). I am still holding 50 shares short. As noted in the entry post, $170 was my first target and my next is in the $155-160 range. I will move my stop on the remaining shares to the entry price, thus locking in my current profit.

I had reservations about the trade with Mac World today, but decided to stick with my stop and target levels.

I exited 200 shares of MON today at $126.10 (entry at $115.23)for a $2174 gain (+9.3%). I still like ag stocks, but decided to place a trailing stop after yesterday's gains.

I exited 300 shares of KGC at $22.95 (entry at $21.03) for a $576 gain (+9.1%). Another trailing stop that was hit. As with MON, I still like the sector, but feel I need to take gains.

I covered 200 shares of the DRYS short position at $55.42 (short at $69.70) for a $2856 gain (+20.45%).

I covered 300 shares of the LEH short position at $55.86 (entry at 58.64) for a $834 gain (+4.7%).

On Friday I was stopped out of 200 shares of RICK at $23.90 (entry at $24.90) for a $200 loss (-4.1%). The stock bounced today off the 50 day moving average, but doesn't look as good as it did last week.

This covers entries going back to last Tuesday, January 8th. I still need to update my exits from January 1-7. I am currently holding GS short, SWN, TRA and GG.

5 Profitable Energy Charts

Here are 5 interesting energy stocks. I've included longer term charts. Each has a slightly different pattern and can be played in multiple ways.

RIG (Transocean, Inc.) is looking good right now. We've got a support converging at both the breakout point and the 50 day moving average. My only concern is there doesn't look to be heavy accumulation right now. Still, it might be a good low risk play here.



SWN (Southwestern Energy Co.) has been trending and shows a nice accumulation pattern.



DNR (Denbury Resources, Inc.) is the most "iffy" of the group. The trend has been up and down, but if you can catch the right bounce, it has been profitable. It's pulling back to the 50 day moving average.



APA (Apache Corp.) has been trending along the 50 day moving average and shows decent accumulation.



ARD has been digesting some major gains, but could be a nice play around the 50 day moving average.



I see some low risk, high reward plays here, as long as the entry is timed correctly.

Quickie Trade Update: GS, TRA and GG

I took small long positions in TRA ($50.27) and GG ($37.95). These are ag and gold playes, two sectors that have been the sectors to play on dips.

I went short GS at $198.96.

Ain't No Egg on My Face . . .Yet

Many were quick to get on me after the market failed to rocket up after my capitulation call last week. While I conceded that I could be wrong, I also pointed out that it is not invalidated until a breach of 1378 on the S&P 500. Capitulation bounces rarely go straight up. As long as the low of the capitulation day holds, the thesis holds.

So far so good. Volume is showing accumulation (more volume on up days than down days).

Be advised that my capitulation thesis is *short term.* I believe we are in a downtrend with more room for downside. This is not a long or even intermediate reversal call. Rather, it was just a call to play a quick bounce. Nothing more. I still am more willing to short than buy this market, but will make long plays in strong sectors and when I see a bounce coming.

Today's Short Play: AAPL

I am short 100 shares AAPL at $177.68. I'll take 50 shares off the table at the recent low of $170, and the other 50 if the stock reaches the November low of $155. My stop is above the 50 day moving average, around $183.

It's always tough to short a stock like AAPL. However, the stock has broken down below the 50 day and volume shows major distribution.

Update: I did not know that that Mac World is tomorrow. A reader pointed this out and I probably would not have entered had I known. Should have check the news before entry . . .

Trading Forex, Currencies and Options

One of my resolutions for the new year is to place one forex, currency, and option trade. Of course, I won't do it until I have done a ton of research, demo trades and have a good feel for the market I am trading.

If any of you have any suggestions for background reading (book, blog or site), please let me know via e-mail or comment. My e-mail is SinghJD1@aol.com

This Bounce and Trade Update

I have received a few e-mails asking whether the bounce is over. I honestly don't know. However, in my mind, it's not officially over unless we breach 1378 on the S&P chart. There is still a ways to go down before that happens.

I think what we are seeing today is based on: some skittishness about the financials and exits/profit taking at the first sign of strength. Bounces rarely go straight up. As Rob Hanna points out, reversals usually pullback before making there move up.



Trade Update: I went short DSX (another shipper) at $26 and am still holding my few longs until they hit there stops or targets.

Focus List Stocks and Market Note

I've stated already that I am bullish oil, gas and ag related stocks. Here are some outside these industries that look strong:

CMED, JASO, RICK, INP (India ETF), EDU, IVGN, OFG, RSX

I am still in bear market mode. Although the market is bouncing, volume has been light and today's follow through was not as strong as one would expect. Definitely not a good sign.

That Capitulation Call Was a Thing of Beauty

I've gotta admit, I feel like a bad ass today. Over the past year I've really felt in synch with the market, but it's getting to the point of "ridiculousness". I have to keep telling myself to stay psychologically balanced and not let all the trading success get to me head. When a trader thinks he owns the market, that's when trouble is about to start. I am doing my best to keep the ego in check and not do anything crazy like start taking on bigger position size trades. As the undefeated New England Patriots like to say, it's time for some humble pie . . .

Who am I kidding, I have been on a freakin' roll. That capitulation prediction this morning was brilliant. Who da man?

Okay, now that I've got that off my chest, let's get to work. As noted, I unloaded my shorts and took on a few long positions. That does not mean my short bias has been lifted. To the contrary, I am still bearish on this market. However, I do foresee an oversold bounce. While I've taken a few small long positions in relatively healthy stocks, I am not playing the bounce with big long bets. Instead, I will use the bounce to reload on shorts. See you soon, DRYS. We have not broken up, we are only on a break.

If anybody is interested in a private chat, I can do a few tomorrow night after 9pm eastern time. See this post for details.

Short Term Capitulation?

I have a feeling we might be in the midst of short term capitulation. Things look really bad, many former leaders are getting abused and it is really tough to buy right now.

Note that does not mean we are going to see the uptrend resume. If we get a post capiutlation bounce, I think it will be of the "dead cat" variety, and we we resume the downtrend later this month. A bounce might be a good place to add shorts.

I have exited most shorts and made two buys.

I took a pilot position in RICK at $24.90. My stop is just under $24, with the recent high at $28. Low risk, decent reward. If the market continues to tank and I get stopped out, no big deal.

My other buy was MON at average price $115.23. This one got dicey when it dropped below $110, but it has recoved and his back up over $117.

I likely won't do anymore buying. I don't like to go all in on up bounces in downtrending markets. I'll make a few small long plays, but that's it. I do still like gold and oil related stocks on the long side.

Broken Momentum Stocks

It is inevitable that most momentum stocks will fall just as far as they climbed. Many investors and traders end up losing most or all of their profits either holding on or continually playing the bounces in these stocks. Here are 9 recent momentum plays that are showing signs that their incredible runs are over:

Excellent Article Highlighting Momentum Plays

Tereas Lo has posted an excellent article highlighing sentiment cycles. It's ironic that she uses the dry shipping industry as an example, since it is a sector I played on the way up and have recently been playing as a short on the way down (I've already shorted DRYS three times in the last two weeks, and just shorted again today). If you understand these cycles, you will make loads of money and not fall into the traps that many investors get caught in.

As you guys know, I am big on accumulation and distribution patterns. It's an excellent way to catch the euphoric up and panic down moves.

Market, Trade and Chat Notes

Trades:
I initiated a few shorts on the morning bounce (DRYS, LEH). I bought KGC, a gold stock for which I had a buy stop in place on breakout of $21.

Tough Market:
Four of the six people I've had private chats with have said they are having trouble gaming this market. My first question has always been "why?" The answer seems that many either have trouble shorting breakdowns, or cannot get out of the "buy the dip" mode. While buying dips has worked, one must recognize market sentiment and accumulation/distribution patterns. Another key point is sector strength. I hope to discuss this more in the coming days, possibly via video webcast.

Stops:
I've narrowed the number of blogs I read, but The Kirk Report still tops my list. He has a good post on using tight stops. Personally, a well placed stop saved my from taking a big loss on my BIDU trade.

Quickie Trade Update

I've been even busier than usual, so another quickie trade update. I took partial or full exits in all of my shorts. The AAPL and FSLR shorts have been magnificent.

I added 100 shares of MON at $119. If things slow down a bit tomorrow, I'll have a full update.

Tomorrow I may take a pilot position in an oil or gold stock. I am looking for a nice bounce to initiate some more shorts.

The private chats were a huge success. If you missed out (I had to cap it at 5), I plan to do a few more later in the week.

BTW, if anybody would like to trade their Best Buy gift or store credit, I have over $200 in Barnes $ Noble store credit to offer in trade. I would also sell the Barnes & Noble cards for 80 cents on the dollar.

Current Market Thesis

I just finished up my research for the coming week. It's clear to me that there are only three sectors I want to buy right now. In the coming week, I'll be looking for clean entries in gold, oil and farm related trading vehicles.

Lots of good looking shorts, but many are extended, thus not providing good entries. Bounces in housing/real estate, financials and certain momo stocks could provide attractive entry points.

Anatomy of a Broken Momentum Stock - Bad Signs For Market

I am seeing a lot of momentum stocks which have broke down below their trend lines. CPLA is a good example. During the trend, the stock has continually bounced off either the 20 day or 50 day moving average. Just as important, down moves have not shown much distribution.

That's not the case right now. We've seen a high volume move below the 50 day moving average, and volume continues to show a negative pattern.

The fact that there are so many momo stocks that look like CPLA means one of three things:

1- new momo leadership is emerging.
2- the market is going to tank
3- correction that will resume.

The most likely possibility is 1 or 2. I have a feeling it might be 2, because the negativity cuts across so many momentum plays and sectors.

Sunday Private Chat Sessions

As more people discover my site, my e-mail traffic continues to grow at a blistering rate (which I enjoy). I receive many requests for personal mentoring and specific stock analysis. While I've tried to accommodate all of them, it's getting unmanageable.

My solution is to offer private educational chat sessions. This is going to take out from my personal time, so I am going to charge a small fee. This Sunday, I will be available to chat on any topic that pertains to my trading style. You can ask me questions about my trading strategy, trades I have made, specific stock analysis, your portfolio, market outlook, my watchlist, trading psychology, time management or any other pertinent questions. I strive hard on this free site to provide excellent content, so you can be sure that I will go above the call of duty when a fee is involved.

Fee Breakdown:
10 minutes: $10
30 minutes: $20

You will need to download google talk, which takes less than 5 minutes to download and install. I will take payment via paypal. More details provided via email.

E-mail me at SinghJD1@aol.com to schedule a Sunday chat. Be sure to include your name, e-mail address, and times that work best for you. I plan to do 5-10 chats.

{Note: While I am planning some fee based services for 2008, nothing will change on this site. I will continue to provide the same level of content as I always have}

Quick Trading Notes

I covered some of my shorts today, though I am still holding the GS short.

I was stopped out of BIDU. Still holding MON.

I made two trades today. I bought SWN, an independent oil stock that I like quite a bit. I also initiated two shorts, AAPL and FSLR. These are quick momentum shorts based on broken trend lines, which make them low risk, high reward. If the broken trends are short lived (which I suspect, especially with AAPL), I will have small, insignificant losses. If there is a sustained downtrend, I could make big profits.

I hope to have details on the trades posted this weekend.

Mon Posts Earning Surprise (and BIDU Trade)

What a freakin' relief. MON posted monster earnings this morning, and the future of this ag company looks bright. I bought 400 shares yesterday at $110.22 and the stock is currently trading above $119. I sold half my position at $119.10 for a $1776 gain (+8.0%). I am going to let the remaining 200 shares "ride", and may even purchase more on a pullback to the $115 breakout point.

While I am happy about how this trade worked out, it still goes into my journal as a mistake. Gaming earnings is just too risky of an endeavour. We are talking high risk, high reward, and I prefer low risk, medium to moderately high reward.

As I posted in comments earlier today, I bought 50 shares of BIDU at $370.52. The stock has pulled back close to the 50 day moving average and seems to be acting well. Historically, this is a good place to enter the chinese internet play.

First Mistake of the New Year

Well my friends, it didn't take me long to make a boneheaded move, on the very first day trading day of the new year. I went long MON. It looks great. A sector I love, and have made some mad coin playing (agriculture). Nice pullback to support. Nice volume pattern showing accumulation. Entry not too far from the 20 day moving average. The stock ends up only slightly down on a horrible day for the indexes, and up about a dollar from my entry. What's not to love?

I forgot to check the earnings schedule for the stock. Of course, as reader Tom pointed out, MON reports tomorrow morning. WTF??? How could I have missed that? I'm getting sloppy. Inexcusable mistake. As many of you know, I love to play earnings, but only post breakout. I never like to hold a stock going into earnings.

Even if the stock knocks the socks off the street, this will go down in my journal as a bad trade. I had absolutely no edge going into earnings, and set myself up for failure. Words cannot express how mad I am at myself.

I will probably place a stop before the earnings report just under today's low. If I'm feeling a bit more risky, i'll place it under the 20 day moving average.

Quicke Trade Update

I went short DRYS (81.30), long MON (110.22).

Covered a few profitable shorts: NCTY, AKAM and DHI.

I'll fully update later.

Thoughts to Start the New Year

Ignore the market forecasts. It's all bunk. Nobody knows where the indexes will be a year from now, or which sectors will gain interest.

Pay close attention to sector accumulation and distribution patterns, along with price action. Some sectors will fall off the map, allowing for new sectors to enter the trading radar.

Pay close attention to new breakout stocks. Some of these will turn into the new momo leaders.

Earnings season is here again. Lots of money to be made post-breakout and breakdown.

Keep an eye on developing consumer and technology trends. This is where I cultivate my longer term investments.

Write down a few important resolutions, post them on a big board in your office, look at them every day, *act* on them everyday and stick to them. I will post mine soon.

Following our 2008 resolutions will make 2008 the healthiest, happiest and most profitable year of our lives. Let's do it!