Interesting Chart Patterns To Monitor In Coming Days...

[MR]

AIG did rally$4 above identified entry point but stopped out this morning for small loss at $55. I did not move my stop up because if it were a horizontal correction it would have tested and held $57-56 again. The stop loss was assigned to $55 because that is where we would now enter a more complex Wave 4 where there is no immediate support. Hence, it is safer to cut-and-run, stand aside for a period of time to better reassess future options, saver lower-risk re-entry later. I have created a chart with supports identified and will update later a new idea. For now, best supports now are around 48, 42-40, 37-34 worse case scenario.

Originally posted by MR
Wednesday, 5 January 2011 New Trading Year 'QUICK' Update --

Only the third day of trading into the new year, am still comfortable holding Long going into the new year.

NEW IDEA-- Would have bought 250 shares of American International Group AIG around 57-56 this morning. (mental stop loss below 55)... going to see how high I can ride it ... trailing a $5 stop to keep it out of the way for now.... (see chart below)

[MR]

Re: Alternate "New Idea"

PHILBY -- Your BHP post of Jan 6th is finally doing what you thought it was setting up to do. I think you should see your position profits improve more soon. Congrat's on a good idea! When you get time, please update your BHP Australian data as many readers of this post do not have access to your market data. I will try to post a US BHP ADR daily chart someday when I get more time. (see two posts below)

Originally posted by Philby
Thursday January 6th 2011

Marc, here is a possible alternate idea for you to think about.

BHP is a key supplier in the commodities business especially for coal, coking coal, alumina & steel, and with the floods in Australia being the combined size of Germany & France, many of the mines are flooded, rail heads are under around 20 feet of water, roads are blocked and the expectation is that supply will be interrupted for well over six months before infrastructure can be rebuilt and replaced etc. China & India are key customers of Australia and of BHP with respect to coking coal so the impacts are likely to have a global impact on the pricing of manufactured goods out of these countries as well. Queensland is where the floods are and it is a major food growing area and exporter as well and prices are expected to increase between 30-50% due to the wide spread devastation of crops so industries involved in this space will also have significant downward pressure on their P&L as well.

In the attached BHP price chart from today, price has broken out of the regression channel, passed below the 6,4 exponential DMA and looks to be heading south along with BHP's near term profits.

Today price touched the ellipse support and retraced, so I am waiting for price to cut below $44.68 before entering. The trade has a good risk reward profile with an expectation of around 2.5:1 by the time it hits the MOB.

As BHP is also listed in the USA, I would be interested in your thoughts on a simple PUT strategy - My plan is to buy the $44 Feb puts as they have a delta of 35 right now and this is the sweet spot for leveraging the growth of the delta curve.

Cheers

[MR]

Thursday, 20 January 2011 -- Earning season is picking up. While it is very hard to quantify, intuitively it feels like institutional money has been starting to move around in ways that does not fully seem obvious or makes total sense. I think it is an attempt to lock in some gains, lighten up on some positions, maybe reduce some risk exposure right now with option hedge/spread strategies, something like that. I believe it is more a risk and general fund management issues, not sudden or unexpected changes in fundamental perceptions. Therefore, I would interpret current stronger than normal profit-taking as something that can recover this uptrend once it is completed. Continue to monitor for potential buy setups to develop. The 'Bull" market rally is still ongoing. Just be patient right now as institutional money moving in bigger ways can really hurt a 'retail' trader if you try too hard to be smarter then big money and pick your entries too early. Just go into a conservative trading mode verse an aggressive mode. Be patient.

AIG UPDATE -- AIG announced some IPO new stock plans in the near future. Since that announcement the AIG stock that trades on NYSE is not doing as well. I am very glad I decided to cut-and-run immediately after my 55 stop loss was hit last Friday. Today AIG opened down over $6 and now is holding (11:15AM NYT) around $44 I said Friday to monitor best supports around 48, 42-40, 37-34. We gapped below 48. I still have an interest in getting back in AIG and try to get my small loss money back, but for now I need more time to figure this correction out.

Originally posted by MR
AIG did rally$4 above identified entry point but stopped out this morning for small loss at $55. I did not move my stop up because if it were a horizontal correction it would have tested and held $57-56 again. The stop loss was assigned to $55 because that is where we would now enter a more complex Wave 4 where there is no immediate support. Hence, it is safer to cut-and-run, stand aside for a period of time to better reassess future options, saver lower-risk re-entry later. I have created a chart with supports identified and will update later a new idea. For now, best supports now are around 48, 42-40, 37-34 worse case scenario.

[Philby]

BHP profits flood out ...

Hi Marc,

You were right again, finally, after about three days the penny seems to have dropped with the global markets that the floods in Australia will be very damaging to BHP and it various mining interests. Last week I looked to enter a long PUT one strike OTM. The actual trigger was to wait until BHP had broken below the support of $44.62. [A]

As the market began to consolidate at this point, which was also highlighted by the ellipse target, I decided to wait for a clearer signal. Luckily I stayed out and the price of BHP went up based on the news of China's economic growth figures. This was short lived as the market was reminded of the Australian flood damage and as of Friday the price of BHP gapped down, but not sufficient to pass the previous support level at $44.25 [B]


The plan now is to enter a $43.50 PUT once the the price had cut below the support at [B] $44.25 just in case the market decides to run back up and fill the recent gap before returning to the medium term wave 3 target low of $41.90 [C]

Cheers

[MR]

Philby -- I just wanted to update your BHP idea before the earnings (i think they are Feb 16th here?)... BHP did not follow-through with more weakness when it should have. You can now use the 87 area as a key 'directional' because if it ever trades below that now in Feb you have a short-term top you are looking for. If it does not, odds are increasing BHP (US data) still is trying to head to 97 or 100 next and is not ready to top.

[MR]

Monday, 7 Feb 2011 -- The overall US stock market is still bullish. I wanted to add to BIDU and GS this morning, and did a little buy on BLK, for example. The DIA, SPY, QQQQ, for example, continue to stretch higher after limited pullbacks at key resistances. All I know is if we do get a pullback I would still be a buyer. If you go back to all my various post you will see I have been Long or Net Long since Sept. While cautious at times I still maintained I was not going to cover some of those positions because I was still bullish.... I am still bullish.

[MR]

Monday, 7 Feb 2011 -- I am now willing to buy back a small position on AIG (see previous posts on this subject for details) AIG has been holding around 41 to 39 for over a week. This support level would be classified as an aggressive buy area because from a longer-term stand point it still is not at the lowers risk area... but having dropped over $20 in less than a month and now holding for over a week, odds favor it might be worth a try for those who are the more aggressive personalities. From an Elliott Wave standpoint it really cannot overlap much more before it becomes a more complicated A-B-C type setup that could take a couple more months to base out if it continues to not rally now but dip lower... From a risk verses reward standpoint, AIG holds above 38 now, odds are really good you cold get a rally that would take it to 45. If it ever closes above 45 bullish momentum will come back very quickly...in my humble opinion. If I am wrong and get stopped out will try again later again. My goal here is to catch the bottom of what I think can end up becoming a very decent rally later in 2011. (AIG Daily chart update below)

Originally posted by MR
Thursday, 20 January 2011 -- Earning season is picking up. While it is very hard to quantify, intuitively it feels like institutional money has been starting to move around in ways that does not fully seem obvious or makes total sense. I think it is an attempt to lock in some gains, lighten up on some positions, maybe reduce some risk exposure right now with option hedge/spread strategies, something like that. I believe it is more a risk and general fund management issues, not sudden or unexpected changes in fundamental perceptions. Therefore, I would interpret current stronger than normal profit-taking as something that can recover this uptrend once it is completed. Continue to monitor for potential buy setups to develop. The 'Bull" market rally is still ongoing. Just be patient right now as institutional money moving in bigger ways can really hurt a 'retail' trader if you try too hard to be smarter then big money and pick your entries too early. Just go into a conservative trading mode verse an aggressive mode. Be patient.

AIG UPDATE -- AIG announced some IPO new stock plans in the near future. Since that announcement the AIG stock that trades on NYSE is not doing as well. I am very glad I decided to cut-and-run immediately after my 55 stop loss was hit last Friday. Today AIG opened down over $6 and now is holding (11:15AM NYT) around $44 I said Friday to monitor best supports around 48, 42-40, 37-34. We gapped below 48. I still have an interest in getting back in AIG and try to get my small loss money back, but for now I need more time to figure this correction out.

[MR]

Updating BIDU, posted: 10-18-2010 11:53 AM -- I am still holding Long shares of BIDU, initiated back in October and added to on pullbacks. Best short-term estimate right now-- as long as BIDU can stay above 113 to 110 now, trend should continue to extend more quickly. (updated Daily BIDU chart attached below) If it backfills it will just take more time.

Originally posted by MR
Monday, 18 Oct 2010 -- I bought a little Baidu (BIDU) because it looked like a completed internal wave 4 correction completing itself within a Major Wave 3 in progress. It is not as obvious because of the stock splitting 10 for 1 back in May. With Googles (GOOG) great response Friday on earnings it looks like the market is anticipating shortly BIDU will follow in Googles example when it reports earnings on the 21st this week. (caveat: be careful buying something before earnings. Do it at your own risk.)

[MR]

Tuesday, 8 Feb 2011 -- The Dow Jones Industrial Average ($TRAN) looks like a Type 1 Buy setup. (see chart below)

[MR]

The tradable iShares Dow Jones Transport. Avg. (IYT) ETF looks identical to $TRAN... has a similar Type 1 setting up... it just has to stay above 90 to work out.

[MR]

Thursday, 3 March 2011 -- We are now in our 3rd day of trading for March and I still do not know what to expect for this month. Here's what I am seeing and will predict will occur:
(1) The demand for Energy futures contracts will continue into the Spring months and traders will continue to buy the dips and pullbacks.
(2) NY Unleaded Gas prices will hit new highs this year.
(3) Precious metal prices will maintain overall upward bias near-term.
(4) A form of stagflation will start to show up more during the next few months and you will start to hear debates how to deal with it without pushing the economy back into a severe recession again.

I think the bulls still are holding their own but I might start to monitor more for ideas how to adjust trading strategy to reflect what I think is the beginning of the early stages of higher risks coming back into the markets over time during this Spring. It is still early. Typically takes a while for these things to be seen by the majority of traders so I think it is still safe to trade aggressively bullish trends... but, as a contrarian, I will be starting to build more temperance and cautions into my trading strategy over the next several weeks to two months if what I think might start showing up actually does.

For now, March is still being nice to the bulls, in general.

(PS: TIP OF THE MONTH) -- Canadian stocks are a great place to be right now. Pretty decent uptrends still showing more potentials.

(PSS- OBSERVATION) -- As a value player, I still think Petroleo Brasileiro SA (PBR) is at the early stages of what I think will end up becoming some kind of a Wave 3 up the next several months. It is under the radar and lagging currently. Even if I am wrong, it is at a manageable area where most traders could work themselves out of it later with a minimal lose or small profit. Just a heads up.. go do your own due diligence to see if you agree with me or not.

[MR]

Monday, 7 March 2011 -- I have decided it is time to scaling out of some Longs I have been in a while and lock in some decent short-term good profits. Will try to re-establish again at lower prices. I think Energy prices are finally becoming a concern.

[MR]

Thursday, 10 March 2011 -- In general, I think today's action opens the door for the real possibility we can expect shortly more of a correction this month. It is going to either be a quick short drop, or a hard deeper drop. Not everything has to go down, but some of your very best high-flying stocks are certainly vulnerable for real profit-taking this time. Just an observation. Let's see if I am right.

[MR]

Monday, 14 March 2011 -- Continuing to hold cash because am still thinking current odds favor anticipating further stock price declines are forthcoming in near future, particularly in the very strongest, highly overbought stocks of recent months that have yet to sell off... like PCLN, for example. ~ Marc

[MR]

Wednesday, 16 March 2011 -- I think the Dow Jones Industrial Average is heading shortly to 11,300 or 11,011... particularly if it closes below 11,700 today it makes it more vulnerable for pushing lower this week.