BIG has hit the stop. This market pullback is nasty. BIG closed at $28.20
I was getting tired of waiting for BIG to make its move. So getting stopped out is not such a bad thing..
Market Update
July 23, 2007 By
At lunch time the markets were in good shape. Even the financial sector was showing some signs of life!
The sectors doing poorly are housing, and Oil services/suppliers due to the drop in crude oil price today. Coal and Natural gas also down today.
Most of the other sectors are in the green at this time.
The big movers today in the Rebeltrader swing trades is WWAT, WDC, NHWK.
FEEC is pulling back on low volume so I have no worries about that. Does not need to jump up overnight (even though we would like all our plays to do that 
I am patiently giving BIG some room to make a move. However if there is no significant movement by the middle of the week I will close the trade. Too many other moving stocks to play to just let this one sit and collect dust while it waits for the market to stop bouncing it around.
The Rebeltrader portfolio is making a nice gain today so far.
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Update
July 23, 2007 By
RebelTrader plays WWAT,WDC,BIG,NHWK, AKS all trading up. I expect to see GRP trading up soon.
WWAT already working on new highs again. NHWK running up quickly again this morning. Some good gains for the RebelTrader portfolio again.
A new week and a big week…
July 23, 2007 By
This week we have numerous companies reporting earnings. This week will be driven by earnings and forward guidance expectations that the companies tell the market.
This morning we already have earnings from Merch & Schering-Plough. Both released good numbers and we will see a boost in the drug manufacturers sector today. Some of the big companies (or ones that will be watched closely) reporting this week are AXP, STLD, TXN, T, CFC, DD, LLY, JBLU, KMB, LMT, MCD, NOC, ROH, UPS, AMZN, BA, COP, GLW, HMC, BUD, AAPL, ESRX, BMY, DOW, XOM, F, ICE, DECK, ESLR, MCK, BHI, CVX. This list is of course only a small sampling of the companies reporting this week, but these companies I list here are ones that will have an impact on the market and/or sector they are in.
Early this morning RIG & GSF announced that they will merge. The off shore oil drillers should move in sympathy today. Over the weekend Investors Business Daily provided a boost to the RebelTrader play on GRP. GRP is still a good swing trade and I’m looking for some good moves in the coming days.
RebelTrader play BIG is getting old. If there is not a bounce in the retail sector soon I may close out BIG because it has been stalled too long. And stalled money makes no money. So we need to move it along. Does no good to have it sit in a sector that is flat lined at the moment. This week will determine the course of action for BIG.
I have a new watch list coming with many new stocks to watch. I want to present you with one here this morning. This one stood out because it shows a divergence of price vs technical indicators. 
A divergence is a powerful leading indication of what is to come. When you look at a stock chart and see the price dropping but technical indicators are going the other way that is a ‘divergence’. And it can signal a pending change in the works. Acme Packet (APKT) is one of those types of charts. APKT went public last year and like many IPO’s they sell off to the level that the ‘market’ thinks they are worth. And in many cases the sell off is over done and it results in a period of settlement. In the settlement period the sellers and buyers reach an agreement on what the price should be. On the APKT chart you will see 3 point where the price hit a point and each time buyers would not allow it to go any lower. This happened 3 times at the same price point. This is significant in itself. But more important is the divergence in the technical indicators. Examine the MACD, RSI, and the CMF. Notice how they have been trending upward while the price was working downward. What this shows is that the market is starting to change it’s mind on APKT (in the case of the CMF indicator, even before the bottom was reached). When ever you come to a chart where you see a divergence of price vs indicators take notice! Something is in the making.
A divergence is a powerful leading indication of what is to come. When you look at a stock chart and see the price dropping but technical indicators are going the other way that is a ‘divergence’. And it can signal a pending change in the works. Acme Packet (APKT) is one of those types of charts. APKT went public last year and like many IPO’s they sell off to the level that the ‘market’ thinks they are worth. And in many cases the sell off is over done and it results in a period of settlement. In the settlement period the sellers and buyers reach an agreement on what the price should be. On the APKT chart you will see 3 point where the price hit a point and each time buyers would not allow it to go any lower. This happened 3 times at the same price point. This is significant in itself. But more important is the divergence in the technical indicators. Examine the MACD, RSI, and the CMF. Notice how they have been trending upward while the price was working downward. What this shows is that the market is starting to change it’s mind on APKT (in the case of the CMF indicator, even before the bottom was reached). When ever you come to a chart where you see a divergence of price vs indicators take notice! Something is in the making.
On the APKT chart you will see a white line plotted on the chart with the price. That is the “On Balance Volume [OBV]” The OBV is an indication of volume flowing in or out of a stock based on volume and price advance or decline. When you see OBV diverge away from the stock price it shows a change in the stock price will follow in time. As one of the technical analysis instructors pointed out a person can think of the OBV as a magnet. The stock price will generally be attracted to move in the direction of the OBV.
How would I play APKT. I drew two green lines on the chart. I will enter a 1/2 position on the move over the first line. Then the stock may accumulate a bit then when it moves over the second green line I will enter the remaining 1/2. APKT has a low short interest of about 9%. Which is an indication that most short sellers have cashed out because they see the same technical indicators that I am seeing. The chances of the stock going up is much greater than it going down any more.
Futures are up at the moment. Get set for a big week with lots of news crossing the wires as companies release earnings.
The Day that Was – July 19th 2007
July 19, 2007 By
A good day for the RebelTrader portfolio. This morning I entered a new swing trade on NightHawk Radiology (NHWK) at $19.40 (1/2 position to start with). NHWK continued upward throughout the day and closed the day up 7.4% ( up 3.9% from my entry point). I had NHWK on my watch list since Tuesday and today it performed very well and met my buy point. I will monitor NHWK for the next entry point for the remaining 1/2. With the big gain today I expect to see some pullback on profit taking but I don’t see that lasting too long before it continues up again.
Today I sold NetGear (NTGR) because I saw what was starting to look like it was topping out. That means that there just was not enough buyers left to out number the sellers and that we were going to end the day with a doji (doji: The name given to a chart pattern which signals indecision). With that trading pattern developing I decided to take the gains and close the trade. NTGR provided a 5.1% gain in 10 days. Remember that it is not important to squeeze every penny out of a trade, what is important is that you have more winners than you do losers. Don’t focus on how big the gain is, instead focus on keeping the losses small. The gains will add up.. Every gain is a winner!
I said this morning that I would watch PDGI to see if there was any chance of a recovery and the trading did not show it was going to recover so I closed the PDGI trade to keep the loss in check. PDGI closed with a loss of 6.2%. The sector just did not gain enough strength to lift PDGI.
Today WWAT continued strong buying in the morning on very heavy volume. But I know from experience that it would not be long before profit takers would step in. After a 25% advance in just two days there would be a lot of profit takers. So I waited for the buyers to continue to buy up WWAT in the morning and then I sold 1/2 of the position at $2.39. That was a 30% gain in 7 days from the first buy point I entered WWAT. The profit taking increased as the day went on and that is OK, that was expected. I am holding onto the remainder of the shares for the next buying surge. That may not happen right away but if it does then I’ll sell the remaining 1/2 on the next upward move. I have set a stop loss on the remaining shares at $2.15 (even if the price comes down to that point and my trade is closed it is still a profit on the remaining shares!). At the end of the day the remaining 1/2 of my swing trade is at 14% average gain.
My swing trade in GRP also advanced well today and that trade continues to do well. Same with WDC, and after the market closed today Seagate (STX) reported their earnings and they were good. This should lift the disk drive sector and WDC with it! WDC was trading up another 1.8% in after hours.
BIG finally got some buying today and started lifting that swing trade back up. I’m watching it closely.
Some news on the earnings front. Google reported their earnings after the market closed and for the first time ever they missed the analysts estimates. They missed by 3 cents on the EPS. This sent shock waves through the Google investors and a massive sell off took place. At one point Google was down almost $50 per share (8%). This is a large event, never has Google missed their earnings and this will certainly put the brakes on Google bulls. This will have a substantial impact on the internet sector. In sympathy with Google; Baidu (the Chinese search engine giant) (BIDU) was also trading down in after hours. What we are likely to see now is analysts will downgrade Google, this will further push the share price down in the near term I feel.
SanDisk (SNDK) released good numbers and investors were happy as in after hours the trading was up 6.5%. This will help the PC hardware sector, and may even rub off a little on my Western Digital (WDC) trade..
Microsoft (MSFT) released their earnings also and they were fair. The market responded with mixed reactions and in after hours was trading down 2%.
The financial sector today was still a speed bump for the bulls. Kind of like driving a car with one foot on the gas and the other foot on the brakes. That is what the rising oil prices is doing to the markets. We are now near $76.00 for crude oil/barrel.
I’m keeping my eye on SCUR. This is a stock I mentioned yesterday. It is nearing a buy point when it crosses above the trend line.
On Monday I posted a chart for Apple saying that I feel the $140 price was going to be difficult to break. Today Apple tried to break above $140 but it could not hold the gains and came back down to close right at $140.00. And in after hours trading Apple is down to $139.00. If you look at a chart for Apple (candlestick chart) you will see what we call a gap up doji on lower volume. That is more often than not a signal of upward buying pressure being exhausted. In technical analysis the chart says Apple will pullback now. Eventually Apple will resume a new upward run but not right now according to the chart.
Good day to be a Rebel !
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NetGear (NTGR) & Western Digital (WDC)
July 19, 2007 By
Both posting additional gains for the Rebeltrader portfolio. BIG is trying to stay green. Not giving up on BIG just yet. GRP also posting more gains to the portfolio this morning.
The day that Was – July 17th 2007
July 17, 2007 By
Sub Prime made the headlines again after the market closed. It is being reported that a comment made by Bear Sterns is that two of their hedge funds with ties to the sub prime mortgage business are now essentially worthless. Reportedly now worth less than 10 cents on the dollar. I said last week that we have not heard the end of the sub prime woes and I’ll say it again here. The sub prime problem has yet to fully propagate into other areas/sectors. There will be more headlines concerning sub prime in the months to come.
The financial sector needs to be watched closely as it is a heavyweight in the markets. Where the financials go the rest of the market follows in time. We must get some good earnings reports from the big finance giants in the coming days and weeks to lift the sector. Today there was profit taking ahead of what I see to be apprehension on the part of the traders of more bad news on the financial sector front.
Today On2 Technologies (ONT) hit my stop and my trade was closed automatically. I sold my shares at $2.55. A shame too, because I am still bullish on ONT. But rules are rules, discipline in trading is the ONLY way you will survive and win the game for the long term. If you never set limits (stop loss) for your investments then you are on the road to a financial disaster, for you are relying on hope and not a plan. All winners on Wall Street will tell you the same thing, they have a plan on when they exit their trades/investments, no ifs, ands, or buts. Preservation of capital comes first.
Remember that you have to earn more gains to make up for your losses. Lets say you have a stock that you bought at $20 a share last year, and the current price is $10 a share. You have lost 50% of your money on that investment. Now in order to get your money back (break even) that stock now has to increase 100%. That is why the experts and pros always cut their losses quickly and within a set limit. It is easier to make up for the loss if your losses are kept small.
RebelTrader portfolio swing trade BIG (retail sector) is lagging. But looking at the sector chart 
I’m seeing what is looking like a bounce coming soon. So I’m still bullish on BIG as long as the sector is still bullish which it is, just in a pullback currently. The $RLX chart is telling me a rebound is near.
I’m seeing what is looking like a bounce coming soon. So I’m still bullish on BIG as long as the sector is still bullish which it is, just in a pullback currently. The $RLX chart is telling me a rebound is near.
RebelTrader portfolio swing trade Western Digital (WDC) is in a good spot right now as that sector is in a breakout mode. Will keep 
WDC for as long as I can squeeze a gain out of it. NetGear (NTGR)is also on a good run and will keep an eye on it so as to not let the gains slip away if the broad markets turn sour.
WDC for as long as I can squeeze a gain out of it. NetGear (NTGR)is also on a good run and will keep an eye on it so as to not let the gains slip away if the broad markets turn sour.
GRP, the oil service sector company is set to rebound according to the oil services sector chart. I’m watching the $OSX and I see a bounce from the moving average to be the most likely event 
to happen.
to happen.The remainder of this week will be wild in the markets I anticipate. Be sure to have a seat belt on! Any bad earnings reports from large companies are going to be felt in the markets more than usual.
Current open swing trades
July 17, 2007 By
Most of my open swing trades have opened to the upside this morning. NTGR is performing very well.
BIG has been basing around the original buy point. This stock is not catching the retail wave yet. I’m sticking with it until I see a signal that says it is not going to make it.
ONT has pulled back to the support range. Each time ONT pulls back to around the $2.60 area then some big trades go through on an uptick. Other traders are seeing this $2.60 area as a key support as well. I’m holding onto ONT
WDC is catching the beginning of a tech rally (albeit still weak). My entry on WDC could not be more perfect to take advantage of a tech rally. If Intel reports good numbers when they release their quarterly numbers then expect to see WDC and NTGR to be lifted up as well.
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