The Student Loan Ranger

Tough couple of weeks for trading here, still feeling quite rusty after such a long break.  Second consecutive losing week for the watchlist, with two open positions in TSO and RIG still to play out.  FCX went ballistic as it rejected the rules of technical analysis and failed the head and shoulders formation.  AFAM has just drifted up rather frustratingly as it also resists the foundamental rule of ‘prior support is new resistance’.  It is however still within the limit of the descending trendline (resistive).

TSO triggered nicely on Friday afternoon, and given the recent wicking at the $12 level it looks pretty good leading into next week.  The long term target is $7, but given the way the market is acting at the moment, I would look to take profits around the $10 area.  The same chart from earlier in the week applies (here).

RIG trade under the microscope:

There is no denying that RIG is a hard stock to trade.  It usually tests your comfort boundaries when you’re in a trade, so it is essential to do one of two things: stick to your plan, or don’t trade it at all.  RIG has broken the short term resistance trendline, as well as the 123 resistance at $72.  There remains a steady stream of punters opening positions here, however I interpret the volume pattern as weakening.  8 days and 15% worth of gains here.  Of all the negatives I mention in the mid-week post (here), I like a neckline retest, which is what happened at the close of the week.

RIG daily

Zooming in, I see quite a few bullish patterns throughout the past 2 days.  Ascending triangle, inverse head and shoulders and a few bear flags for example.  Short term (intra-day) resistance for me is at $74.25.  A support line and resistance line are in place here, and I will look to stop out at a break of the resistance line at $74.75, depending on volume patterns and the potential for a new high above the former h&s neckline.

RIG 5 min July 17th

I’ll hopefully get a chance to draft up a decent watchlist this weekend, at the moment I’m looking at DRYS (bull flag), IP (DT breakout), JNPR (2 way trade) and XLK (123).

I spent Thursday-Sunday on a trip to Scotlands West Coast, so I missed out on some intra-day action posts.  A lightning strike has also destroyed my router so my internet at home is down.  This means that trading will be difficult this week, so for just now I’ll cover the performance of last weeks Crystal Balling post.

Quite a so-so week for the market as the indices still hold the neckline of the head and shoulders formation, which is leading into a bear flag formation as the right shoulder forms fully.  I remain bearish for the week ahead (which by the way starts in 20 minutes!), particularly on FCX and AFAM.  JCP will open the week at the support line of the wedge formation, with support from the 200EMA.

Freeport McMoran FCX

FCX gave-up the $45 level on Wednesday, triggering an watchlist entry point, however some buyers came into the frame of the lows and jumped FCX back up to close the week at heavy overhead resistance.  I am very bearish leading into this week on FCX for a few reasons here.  First is obviously the H&S, secondly the short term bear flag formation, thirdly the price will test all overhead EMAs at $47.  Lastly, as FCX forms a new descending channel, it will soon retest the former supportive line of the ascending channel – this time as resistance.  To me, these factors represent a strong reason to short more FCX at the $47 area with a stop slightly above the 50EMA.

FCX Analysis

FCX remains a short-hold with a price target of $37.50 medium to long term.

Almost Family AFAM

Everything looking good here so far with a small rise on decreasing volume indicating the formation of a bear flag pattern.  I also like the rise into resistance at $25 where the moving averages look to press upon the price and force it down further.

AFAM Analysis

I’m actually short here at $24.22 having missed a better entry at $24.70.  My target firstly is $22.50 with a view to $17.50 in the longer term.  Stops at $25.25 here.

JC Penney JCP

No entry signal here as JCP continues to stay within the wedge boundaries.  I would like to see the support give way on volume after a failure of the 200EMA.  The same chart from the watchlist post applies here.  Market has just opened for Monday, JCP at a real key level today for me, as per this chart;

Key level for JCP

A very dull week for the descriptive alerts, with RIG the only stock that looks interesting at the moment.  I would like to scale in short beginning at $70.  Bit of a drawdown on watchlist profits, but minimal.  Down to only 3 main stocks on the list and a lack of computer access.

Very choppy week for me, lots of fake entries in the watchlist too – The money was made in the excellent DRYS and IP trades, big money with small size on great risk reward setups. Gotta catch these!

AirTran Holdings AAI
Terrible action this week and a stop shortly after entering long at $7. Poor to trade.

International Paper IP
Great trade, very predictable considering the strong breakout and a low volume test of such a good number like $10. This trade excelled and it gapped up above the first target level.

Juniper Networks JNPR
Chopped up here too as the first short criteria triggered. Like AAI you’d have been in the profit quick, but since it didn’t get running and didn’t even get near the targets, you’d have had a small loser on your hands again. I like how JNPR is being supported by the former resistance trendline as it forms a small continuation triangle. A breakout to new highs over $23 still looks good to me.

Dover DOV
I thought earlier this week that DOV triggered the stop at $29.50, but it didn’t get there. Busy week and not much attention spent I think. Triggered the long setup number 2 with a scale in at $30. The target was first $32.50, the price was as high as $30.32 so if it was a scale in for half then that’s a scale out for half and still holding with a stop still at $29.50, Which I would now move to breakeven at $30. $32.50 for the breakout and $29.50 for the breakdown still remain the key levels.

Prosultra O&G; ETF DIG
We are in DIG from Wednesday and it remains a hold despite the choppyness. Needs to remain above $25 in what I think will be a messy week next week.

Dryships DRYS
Both entry criteria were hit this week for DRYS which was a really great setup. The 50EMA bounce off the consolidation lows at $6 was a peach of an entry, and the breakout above $7.25 was also strong (half at each for profit calc). Has not hit the target at $9.50, and I am moving the stop to $8 here.
A pullback to $7.50 would be nice here, especially considering the amount of buyers in the past 2 days.

Adobe ADBE
The cheapness of my entry and risk reward strategies meant that I was 22 cents off catching a wonderful trade in ADBE this week. Abode didn’t trigger, and closed the week at triple trendline resistance and on the end of a fully formed ascending (bear) wedge. Still a nice chart and would like a pullback to $25 still.

Energizer ENR
In at ENR at $58, don’t like the action here so moved stop to $58.25 expecting a drop.

From the price level list:

• RIG has closed above $69 and my sentiment is bullish only if we can break the resistive trendline on the daily chart from Jan 6th-Friday.
• 36 cents too cheap on the $20 retest on IR which had highs just shy of $23.
• No pullback on EBAY which maintains it’s consolidation range of $16-$17 and at the 200EMA on the daily.
• A breakout on EWU and we are long at $11.55, a retest of $11.50-.75 looks like a good long considering the amount of buyers on the breakout.

• MSFT on the $20 retest still holding with stops at $19.75 looking for $22. Strong forces at work as it’s pinned between the 200 and 20EMAs on the daily with significant wicking off both.

• A stop out on SOHU as it dropped $2 for the stop and then closed the week at $8 higher.

Results for the week:

Statistically you have to be happy with this, 70% winners and total actual risk not much greater than 2 positions worth. However there are still a lot of holders, so depending on where DRYS opens up the profit could be much lower. Yet ag
ain there is some pedigree in the list from this week which boosted the laggards (IP and DRYS). Without those two trades then the profit would be at $350 or so, which is still good enough for me.

For next weeks watchlist I’m looking to focus on stocks at key psychological levels – $10 & $20. There have been several on the watchlists at these levels for the past few weeks, and generally speaking this are the best performers given the buying or selling at such round numbers.

I will also try to keep the full list to 8 for this week, as I feel that’s the ideal number for a watchlist – I will have a strong preference for excellence in the setups next week lol as I think it could get choppy.

Watchlist most likely finished on Monday, didn’t have time for it this weekend. It’s Labour day anyway right?

This is a shorter than usual post given that my vacation is nearing and end and I’ve got things I’d rather be doing than messing about with a one monitored computer getting screenshots all over the place.

This week saw the introduction of the 30% drawdown from max profit rule, which was triggered on the majority of the trades that gave a signal this week – and on all of the stocks still being held from last week.

I’m not sure exactly how I feel about the rule yet, it is very difficult to manage a trade when you have these extra variables and this sheet took a lot longer than normal to compile. It protected my downside from last week but gave a lot of chop this week – that could just have been the market being different of course.

Statistically there were 3 big winners – BHI DECK and BRCD. DECK was initially a stop out loss, due to bad stop placement. The re-entry signal was at $61 (original at $60) and this is still in the portfolio over the weekend. JBLU was the best trade on the watchlist as it behaved as expected on the numbers front but my execution of this trade left a lot to be desired.

BRCD saw some good trade management and this continues to be held with a stop loss equivalent to a profit of $360.

And here are the trade management blocks for JBLU BRCD and SFD as according to the watchlist. JBLU was a cent off .50 and anybody with any wisdom would have cashed at .45 or higher. This pic is for my calculations so apologies if it doesn’t make any sense.

Blogger is playing up.. again. I need my own .com

Nothing worse than a gapping market for my style of trading, Thursday in particular was just straight up annoying as there weren’t really new trades for swing traders to take positions in.
Before I cover this weeks watchlist, our one hold from last week - RTN hit the revised target at $41.60.  The original target was $43 and that may still hit, but for record purposes lets stick with $41.60 flat. 

Wow, I have really taken 2 monitors for granted, doing this kind of work with one is a nightmare!

AMB Amb Property
Very close to both entry points in AMB for a long, but if I am honest with myself I don’t think I would have taken either.  I was wanting around $15 for a long, but the retracement from the double top at $18 went only as far as $15.29.  For my method of trading I wouldn’t have taken this as it would have ruined the risk:reward ratio as set out by my trading rules.

The other long trigger was a retest of $18 as support (working on 30d/30m), and this price level has not been hit.  A scalpable short was mentioned at $18-$15 and I said I wouldn’t trade this, therefore I can’t justify including any trades in AMB for record purposes.  Currently AMBis testing a resistance trendline with horizontal support now at $18 which represents the next good entry for me.  This stock remains on my watchlist given the variation of entries in the coming days and weeks.

BHI Baker Hughes
Short entry hit off the bat on Monday from $31.  Targets were $30 and $27.50.  I mentioned in a mid-week update that the position was closed at $28.25 based on a short term double bottom with positive divergence on the indicators.  Let’s assume $29 for the exit as you would have to be pretty elite to catch it at $28.25.

Current resistance on BHI is $31 again, with an entry long only on a successful looking retest of that price level after a breakout.  There are better setups out there at the moment so I will discontinue coverage of BHI on the main watchlist and will move it to the sub-list.

EWZ Ishare MCSI Brazil 
Same situation as at AMB this week.  Retraced to $0.30 above our trigger level and then had a nice pop over the resistance level.  I would not have scaled in or taken a position here as it would have also ruined my risk:reward setup.  The long above $43 will be triggered on retracement.

Current support levels on EWZ are $43 and $41.  I would short on a breakdown of these levels, first scaling in at $42.75.  I see no overhead until a few cents short of $47 – a gap level and where the 200EMA currently sits on the daily chart.  EWZ remains on the watchlist.

CHK Chesapeake Energy
No entry on CHK, current support at $20 which represents a decent entry.  Remains on sub-watchlist with $20 a key level.

WY Weyerhauser
Choppy without trades.  Remains on sub-watchlist with current resistance at $32.75, support at $31.

HCP HCP Inc
A few trades in HCP this week.  Resistance at $20 was hit on Monday for a short entry.  This hit a 123 at $18 and continued to break out.  With my channel trading rules I would have sold 1/4 at $18 and moved a stop for the remainder to $19.  I would have enjoyed seeing this one to $17 but no luck. 

The next entry in HCP is either a 123 at $20 long, or a retest of $20 as resistance on a breakdown which is why this stock remains on my watchlist, resistance at $22, support at $20.

Longer term setups

MRVL Marvell Technology
Probably my favourite chart from the watchlist.  Entry was triggered on retracement to 200EMA with entry price at $9.75 as per watchlist.  Was slightly drawndown with that early entry, but my threshold is higher for swing trades.  $10.50 was the measured move, and we closed in that region on Thursday.

Raising stop in MRVL to $9.90 with a target at the resistance trendline for partial, with longer term targets ranging from $11 (more partial) to $12.  Remains on watchlist and remains bullish until $10 is breached.  This still has all MA support underneath.

AAPL Apple
Short triggered at $120 as the week drew to a close.  Stop at $121, initial targets at $115.  Nuff said i think.

JCP J C Penney
Great setup which was falter
ed by a choppy and gappy market.  Entry long triggered at $22.60, stop triggered at $21.50 on an island reversal.  Closed the week at $25.42 up 12% from the previous day after that insane gap.  Disappointing.

I was very bullish here, and remain very bullish here – but a stop is a stop and a loss is a loss.  Remains on watchlist and I would love to enter long at a retest of $22.50.  I will be watching $25 and the 200EMA to act as support.  Next overhead at $27.50 with a target range of $30-$32.50.

XLK Tech spyder
Entry at $16.25 triggered.  This entry was a little strange when you consider how I missed out on AMB and EWZ.  I wanted the flat number on those stocks – which means I should have used the flat number here for the trigger ($16) but I was highly bullish here and felt this wasn’t going to keep pulling back to that level.  But it did, and AMB EWZ didn’t.  Oh well!  Due to this, next weeks entries will adapted for scaling in 1/4 at 25% whole number levels.

Target was $18 however it responded negatively to the resistance trendline.  Also there is a lot of overhead at $17 (horizontal) and $17.50 (200EMA).  Therefore I will be moving a stop to $16.50 to lock it in and see it out.  Next week will be an important one for the tech sector withXLK and AAPL at these levels.

Definitely remains on the watchlist, with $16 and $17.50 the key levels for me.

UNG US Nat Gas ETF
No indications to take a position either way.  Continues to get beaten down, but the positive divergence also continues.  A close above $15 will be the first sign of life here for me.  Remains on watchlist.

GPS The Gap Inc
Entry on pullback to $14.50 triggered.  This was a descriptive trade without the chart and looking back $14.50 is a horrible entry, given that it triple bottomed in the short term at the 200EMA at $14.  Moving stop to breakeven at $14.50, with aggresive trade management should GPS look like not making it above the recent high at $15.25.  Sub-listed.

GYMB Gymboree
Along with GPS and CSCO, this was a descriptive trade with a short trigger at $27.50.  This was hit right at the close on Thursday.  This setup is highly dangerous, given the immense volume on the day.  $27.50 represents heavy overhead and the 200EMA so this will be an interesting fight.  This has been promoted to full watchlist coverage for next week.

Trade chart for this week.  Testing it out with Excel as a web page.  Don’t like the lack of sharpness on this monitor so no .png file.  OK scrap that blogger is a nightmare importing html tables.  Screenshot it is..

No entries in UNG EWZ CHK WY AMB 
Drawdown from high: 30.56%
Running profit total: $4431
Realism factor: $2880

Decent week for the watchlist which looks stronger than it was due to the excellent RTN carry-over.  In my opinion the best technical trades were the HCP and BHI shorts, with 3rd place to the XLK long.  Unlucky not to get a trade in EWZ and MRVL, and was too strict on the entry criteria over at JCP.

The one negative issue from the past week was the drawdown from highs; as giving up 70% is unacceptable to me.  For next week I will test out two new trade management ideas;

Scale in long 1/4  at $0.25-0.35 before the target for all trades.

Trail a stop at a 30% drawdown from peak profit per trade or -35% if there is a sound technical indication (price pattern, not macd or stochastics).

Post-script thought;

Macs do not lend themselves well to a regular trader, blogger and spreadsheet analyst.

I’m on a spontaneous holiday to Australia at the moment for the Easter holidays which is why there hasn’t been any ‘intra-day action’ posts this week so far. Just sorted out my TOS platform on the computer here so will be looking to trade from tonight onwards. Apologies for any bad picture quality etc as I’m working off a one monitored Mac with a sluggish mouse just now.

Just wanted to cover a few signals that have been triggered on the watchlist this week so far. Also would like to give a shout out to a returning visitor from Estonia – thanks for checking out my blog.

Refer to the post here for technical analysis of the watchlist.

First off is RTN Raytheon, which was a hold into this week from last weeks watchlist. Here is the original chart, and I was looking at $38 again for another entry.

The $41.60 target has been reached for +$3.60 and RTN continues to look pretty good to me.

The potential short I mentioned in AMB was triggered off a double top at $18 at a resistance level. I was looking for $15 and it’s currently at $15.80 with lows at $15.50.

I said I wouldn’t trade this personally due to the nature of my account, but for any position traders or scalpers this was a nice setup even closing at $16 was a r:r of 15:1

CHK hasn’t triggered yet but looks ripe for a breakout. If the next low is higher than $18.75 (which I think it will be, given the gap level) then we are forming an ascending triangle with a target of $23 in the short term.

CHK remains in the support and resistance ranges for all patterns mentioned on the watchlist post.

BHI was an easy short as it gave up $31 at the open on Monday. I have closed this trade given the double bottom yesterday at $28.50 for +$1.50.

I was short term bearish on WY and anticipated a pullback to $30. WY double topped at a resistance zone and has since sold off to $28 from $31.

Limit orders would have had you at a loss already on this, however a sharp trader wouldn’t have gone long after that double top so we can assume a small loss for records here. I am bearish here.

Descriptive trade on the channel at HCP was triggered, down $2 and looking good. I would move a stop to $18.50 here to see it out to $17.

Longer term watchlist (check the dailies):
MRVL, hell of a battle at $10 but I’m feeling good about this. Anticipating a pop to $11 or so in the short term if it gets going.

JCP is also looking excellent here and I am bullish until $24 at the moment, but realistically I’m looking for $27.50. Long term trade was triggered at the close last night guys!

Trade also triggered at $16.25 on XLK. Stop at $15.85, would like to see $17.50 short term.

CSCO – rock or implode? implode by the looks of things. Big island reversal at the 200EMA and down over $2. Mentioned the stock but didn’t give price levels as it wasn’t a probable trade either way for me.

Also it looks like I meant $15.40 long on GPS not $15.50 as it hasn’t been above that to pullback to that level. Volatile chart at the moment, looking for upward momentum. GYMB also selling.

No triggers quite yet
EWZ, AAPL.

Bit of a wrap up here on what I thought was going to happen last week. LNC was probably the biggest mover on the list – I was bullish into Monday morning but the gap down meant no order was on here so I won’t cover the chart.

RTN Raytheon
I was bullish on RTN too, and said I would enter long on a retracement back to the gap area from $37.75-$38.25. We got an entry and we still have our position, however we are dead crossed on the short term MAs with the 200EMA coming up nicely underneath. Still bullish here above $38 – a pretty sound short term short trade is on the cards under that level for me.

BNI Burlingon N Santa Fe
Looking good here too, very nice bull flag out of the long term resistance trendline. Entry criteria here was a break above $63 or a pullback to the $60 region. We got the $60 entry first. The initial target was $65 which was hit on Tuesday. Nice trade and looking for continuation with $65 as support.

DY Dycom Industries
Entry here was a retest of the $5.30 region on a 123 with MA support. This setup was signalled on Monday with a nice candlestick formation off the 200EMA. The measured move for the ascending triangle was $6.75 which was hit on the button. This area looks congested here given it is also at the ascending channel resistance lines with negative divergence on the indicators. I am looking at $6.00 as a new support level. This has already been tested with a wick down so I’m not sure if this will hold next week.

HD Home Depot
Trade signalled here too, although it was a dangerous one. The short criteria was below $52 which came straight off the bat on Monday morning. at best this move was only worth $0.75 and either you would have sold out at the short term double bottom on Tuesday morning, or at the same level on Wednesday. If not there, you’d have been stopped. A re-entry on the gap up on Thursday would have been good enough yet again for only $0.75 as the $54 target was hit. With all these varibles (3:1 in favour of system) I can only put this in as a small profit trade for record purposes.

FCX Freeport Mcmoran
Another mixed entry bag with FCX, according to my setups we would have had 2 trades here. First was a short at open on Monday at open ($40) which you would have carried probably until the double bottom/bullish engulfing at $37 for 3 points. The other was a scale long over $39 with $43 as the target (also hit) for another 4 points. Nice trades!

DE Deere & Co
I was very bearish on DE, entry was triggered at the open on Monday at $33.90. I was looking for $30 but the exit would have been taken at a double bottom at the 200EMA at the open on Wednesday for approx $1.50. I was not looking for any long position here and DE actually broke out long this week which was surprising.

EXC Exelon Corp
I was very very bearish on EXC and was caught out on the trade here. I shorted at open on Monday and at best had $70 in the kitty. I kept holding as there was no real exit reason until $46. I closed a little before that on strength and this rippsed to $48.80. I am now looking to enter long on a retracement to $46. This was nearly a full risk loss but relative to the other setups was favourable.

Ok so some good setups this week, unfortunately I simply picked the wrong setups this week. Kind of difficult to hit it right when you can only make 3 trades a week with a small bankroll. Statistically my setups looked like this assuming each position was ~$5000 with risk measured accordingly.

Assuming slippage, partial fills and early/late exits (-30%) a more realistic profit figure would be $2041. With commissions this figure is ~$1970. Decent week as that’s just over 7% on a standard day trading account (25k).

Not so much a roundup this week, more of an evaluation of the patterns and indicators I’ve been seeing this week. Had a quick glance at a video of me evaluating a long in TSO at $14.82 earlier this week (it hit $18 on Friday). Anyway, there will be plenty more opportunities so I won’t be bitter about it.

For those that regularly check here, you will notice a little difference in my chart setups at the moment. Mainly a second price chart comprised of the Heikin Ashi candlesticks, 100ema and the Parabolic SAR. The Ashi is great for checking removing choppy patches and charts, and it shows consolidation periods better in my opinion. The SAR is a terrific indicator from what I am finding, so I’m doing a test here.

I’m going to go through the chart of Alcoa and using the corresponding mid-candle price on the actual price chart, in the lead up to this week we can use the following in terms of support and resistance levels:

We get the following entries using solely the parabolic SAR:
[NOTE: Consider each position size 200 shares]

Parabolic Entry/Exit P/L results:

Now on a technical level, trading using support resistance, candlesticks and moving averages, we get the following trades:

With the following results:

[NOTE: These values should be in $ not £]
[Subtract 20% to account for hesistancy/late entries etc: $880]

Quick statistics:

• We made 53% more trades using the Parabolic SAR indicator.
• The Parabolic SAR gave 2 more losers than winners, however profits nearly double losses.
• Losses only accounted for roughly 10% of the total trade returns using traditional methods.
• At no point using traditional methods would we have been at a loss.
• Despite half the trades, the second method gave over double the profits.
• The Parabolic SAR gave the largest profit return at $254.
• Sup/Res methods gave us the largest loss, albeit the only one on that system, at $110.

Very interesting I think. I was going to do the same for other stocks, but that just took me 1.5hrs to compile so might not be worth it. Ideally, we would use a combination of both, interestingly, the SAR seems to prevent losses very consistently. Although winners might not run as long, the SAR is a good early indicator to close or enter a trade, which must be used alongside the other methods and practices of technical analysis.

If commissions are a big thing for you, then trading the SAR method is probably not a great idea. I factored in $8 as commissions for each entry and exit during this experiment. The most blatant thing about these results, well, from the physical “hit the button” point of view, is that I factored in a 20% loss to the results. I did this for the following:

• You will never exactly hit the bottom and you will never hit the top
• Most traders will wait another 2-3 sticks for confirmation
• If a trade instantly goes against you and you see a loss on the blotter, you might close out
• Technical difficulties
• Distractions

This equates to missing 1 trade from 5, which I think is a realistic ratio.

In terms of the solid patterns I saw in this chart, the wedge formation beginning at open on the 5th, that lasted until 14:30 on the 7th was the most powerful indicator. Also the prevailing resistance level displayed in the ‘lead-up’ chart was the most influential horizontal price, slightly outpowering the initial support line. The overall large downward trend line was struck twice with good drops following it.

The double bottom from 5th open to 8th open was also a great indicator. There were a few double bottoms and double tops near the faster lined MAs, especially on the 6th and 7th, in the scheme of things these are better ignored, but both would have given over $45 in profits, thus are profitable, but risk reward wasn’t that great
in each occasion.

Man, I am so annoyed. I just spent ages writing a huge blog and then Blogger logged me out after I published it and didn’t upload it.

Assume a nice week for trading, a bad Friday and lots of action that I don’t have time to write about twice.

Slight rotation on the US hitlist.

Stupid Blogger!

Going through the motions here, haven’t really looked at anything on the list since Wednesday. New strategies etc mean a watchlist like this isn’t really effective, but let’s wrap it up quickly anyway.

• BRWM – Failed 200MA, about to trigger a short.
• ADN gave out short signal under 115m but this could be a fakeout
• AGK has done as expected and dropped to 660, let’s see if it off this moves next week
• Perfect setup on GSK, 100% accuracy trade as it did what it said on the tin
• ADM just triggered a short entry on the closing bell on Friday
• No signal on AMEC as it looks to retest support at 855 again and holding up
• Descending wedge on BAY tightens, possible new all time lows as oil price soars here
• Would have caught a ST long on EXPN, but this dropped hard on Friday, potential breakdown
• FGP had strong gains until it hit my trend line and crashed hard
• IEC untradable at the moment
• MPI and SDR both on the verge of a similar breakdown
• No signals on IMI this week

The news about Fannie Mae (FNM) and Freddie Mac (FRE) in the US hit all the markets hard on Friday, with a lot of indices really crashing hard on the news, despite the shares gaining 50% on their daily lows. FNM and FRE were once $70 stocks in the last 7 months, both are now around $7.

RBS has hit another new low as it crashed hard below 200. The FTSE had a bit of a shocker, even as the US markets came back during Friday. Oil price is at another record high – this is why everything is so dangerous to hold overnight at the moment.

The price of oil only moves to new highs when the US and European markets are closed – therefore if you hold financials or anything oil related (airlines, car manufacturers etc) then you will get smashed at the open. There are no stocks that are safe to hold overnight, and certainly not over a weekend.

In my opinion, all this stuff about Iran is just hype, and they will not attack. Why would they? And why is ok for the US to have nuclear power and weapons but nobody else, the US would use them if they had to too.

Anyway, geo-political issues are driving the market more than ever, so you have a lot of action to monitor while you’re trading. This is why I have setup my stall completely different over the next few weeks, until all the business is settled.

If you check these posts: here and here then you can read up on my new tactics and stocklist. Unfortunately this means no Crystal Balling posts, which is good for me as I need as much time as possible for analysis. I will try to post some trade analysis on the intra-day posts to let you know how I’m attacking the markets.

I’m looking forward to trading clearer markets once a bottom has been established, and the volatility has been reduced – but the scalp option is the only option at the moment.