Rebel Traders – Analysis Without The Hype

Wow, what a day.  Trades were all over the place.  A lot of selling going on this morning, short covering into the afternoon.  So much “up and down”, it was like I was back on the LCM’s in the Atlantic.  And what a feeding frenzy with RIMM, AMZN, AAPL, BIDU and GRMN.  Dry shippers were up into the close.  The Q’s hit a new high, but promptly came down after hours when Amazon’s earnings came out.  They did OK, and guided higher, but it wasn’t enough for some traders.  After reaching the $100 mark, it is now trading at $92.44.  The conference call is going on now, so no telling what the final price will be.

TIF hit our entry price today, so take a look at the Swing Trade section.  We’ll be back later tonight with the wrap-up for the day.

Amazing how so much bad news this morning is rallying the market to the upside. Have to wonder sometimes if this is Wall Street or if we have entered into “The Twilight zone”

Our swing trade (BJS) reached confirmation price this morning and we entered long BJS @ $28.40.

The US dollar  is heading back down and Gold continues to go up.

Markets closed down today and good news is hard to find.  Sectors that were hot, shouldn’t be. And sectors that were hot yesterday are putting a hole in portfolios today.  Nobody ever said the market makes sense.  It’s even been said that one must put logic aside if they want to be successful in trading.  While I don’t agree that you can ever be successful without logic, for very short term trading I think you can put aside certain fundamentals and trade the “hot” sectors.  But, (and that’s a big but), you better not get reckless and start believing the ride will never end. 

The alternative fuel sector has been hot, now it’s not.  POT (Potash), a popular fertilizer stock, took quite a hit today because of news ethanol is no longer the “in” thing and corn prices will be coming down (thankfully).  This means farmers will not be planting as much corn around the world and traders/investors think POT might take a hit.  In the long run, I don’t think they will get hurt too badly, as they pretty much corner this market, and farmers around the globe will continue to plant crops.

Solar plays have been popular, as well.  Today, LDK’s CFO stepped down and it was said there were irregularities in their financials and has been reported to the SEC.  Apparently this was reported a month ago. True or not, LDK’s share price took it on the chin, trading down to 46.60 after hours.  JASO, another popular solar play, traded down as well.

China stocks are popular and are traded by daytraders whenever they gain a little momentum.  Just watch out for that “China Syndrome” (the melt down) and don’t stay at the party too long.

It’s great to trade the hot sectors.  Whether it’s for a swing or just a daytrade, as long as you remember your time frames and your stops.  Reminds me of that hot, popular boy I dated in high school, thought he was headed for great things.  Met him again years later, and, well, let’s just say I was glad I got out of that relationship when I did.  It’s the same with these momentum plays: know when to get out. 

The markets are in limbo with low volume so far. There is a general weakness theme to today’s action as there have been some attempts to advance but each time they were sold back down.

The consumer confidence numbers came out earlier and it was another decline. Consumer confidence is eroding and that is always a concern for the markets because it is a direct connection to the consumers wallet/pocketbook. When consumer confidence weakens so does the markets ability to sustain upward movements.

So far the markets have been floating with no solid direction (almost sounds like a broken record). We don’t like saying it anymore than you like hearing it. But it is what it is.

Just a few moments ago Vonage (VG) had their share halted for pending news. That news was Vonage violated Sprint’s (S) patents, Kansas jury decides, Vonage must pay $69.5 mln for using Spring inventions, jury says. Well, this may be the end of Vonage now.

The financial and housing sectors have taken a turn for the worse and are impacting the broader markets. Financials, Banks, and Housing all continue to weaken here at this hour.

Hello Rebels,

Sorry for the lack of a pre market report today. Had a small emergency this morning that had to be taken care of. All is OK now.

When the market opened this morning the US dollar had already set another record low against the Euro. The dollar just keeps getting weaker.

There was no significant news events this morning that would be market movers. But just moments ago the United Auto Workers called a strike against General Motors. At all the GM plants across the country the workers are walking off the job now. Be aware that AKS Steel (AKS) may fall in sympathy with GM as they are a large supplier to the auto industry. If you have a long swing trade in AKS you may want to cash out. No telling how long the strike will go. So why take the chance if your holding AKS.

So far the markets are trading with trepidation. The financial sector is in the red again and is pulling the broader markets in. No confidence in the financial sectors yet. Ironic, the rate cuts were supposed to benefit the financial sectors but it is not working.

Another update later.

Hope you all got to check out the new stock market show (see earlier post).

Had a meeting to attend this morning which ran much longer than I anticipated. Lisa will be posting some information on today’s market soon.

Goldman Sachs beat their earnings by a significant margin. And Bear Stearns missed by a large margin. Currently market is trading down. There will be much more shortly.

Could it be that the euphoria in the market is quickly wearing thin? Price action is showing strength but some of the market internals are showing a drop in the intensity of buying (or short covering). At the moment it seems we have hit a ceiling. May only be temporary or maybe the hangover from yesterday is setting in and reality is taking over..

The Advance/decline ratio is showing signs of profit taking increasing. And the trading volume has been tapering off.

Early morning selling with somewhat high volume ended with low low volume buying and short covering as more and more people just want to “get out of the way” of next week.

Next week the fun really begins and the markets are going to rally or tank. No body has a clue which way the FOMC is going to go. Everyone has a guess, but no one knows for sure. And because RebelTraders plays on facts we are not going to place bets ahead of the FOMC in ‘hopes’ that the ball lands on our number.

At this time no one should be trying to take on new positions with just two sessions left before the FOMC announcement. Next week will be wild indeed. And the volume WILL return next week after the announcement, regardless of any holiday, or any other reason the talking heads on TV have been trying to claim as the reason for the low volume. Low volume is lack of confidence in the market and waiting on the sidelines waiting for a sign from the FOMC (and the economy) on where they should put there money. Holidays have nothing to do with our current low volume situation.

Very uneventful day. The volume is very weak and basically the broad markets are just ‘floating’. No significant movement in either direction. There was some early moves in some stocks but as the day has progressed the volume dried up and there has been no pressure to keep those gains in force.

A new tropical storm has formed in the US Gulf of Mexico and that is helping to drive oil up today. And also note that the US Dollar continues to be weak.

A very uneventful day. Almost a ‘quiet before the storm’ type of quiet..

Ben Bernanke essentially had nothing to say over in Germany this morning that had any impact on the market. It is still a guessing game going on as to will they cut, and how much will they cut.

The market is currently bi-polar. It has no logic, only emotion is moving the market currently. So far today the indices have been stopped by resistance levels and keeps pulling back from those levels. Don’t let the green on your screen fool you into thinking that all has returned to normal. These kinds of moves are commonly referred to by the pros as “a bull trap”. The moves lure people back into the market on the long side and then it sells off again leaving the amateurs out to dry with a loss.

Stick with the positions we provided you on Sunday night. Currently two of them are ‘in play’ (reached entry point). The remainder of the stocks remain on the watch list for their respective entry points to be reached.

The movement in the market thus far today does signal the potential of an afternoon decline so be careful.

So far here at mid day the market is very quiet and that is reflected in the trading volume which is very low. The market continues to weaken and that is reflected by the lack of volume doing any buying here.

With regard to the plays we provided you last night already one of them has confirmed and has become a short entry. CLWR has fallen 12.5% just this morning so far. Keep an eye on the remainder of the short trades we provided you and look for an entry on those when the conditions highlighted on each of the charts becomes a confirmation.

We are seeing a continuation of what has been happening for quite some time now. Advances in the market are being sold off. The tape says people are selling into strength. We don’t argue with the tape.