My pick for the week is ALNY short. The stock has been in downtrend for a good time now. ALNY bounced from below 9 levels to weekly value before turning down again with the overall market. On the daily chart stock dropped below the 50dema and looks like there might be going on a bear flag formation. In case of broader market weakness this stock is likely to be a potential participant.

I am planning to sell this stock short below the Friday’s low at 10.27 and will place my stop at 10.85. My first target is at 9.

For the future: If ALNY pulls back it is likely to form nice bullish divergence on the weekly chart.

Congratulations to all of you who traded SGG during the summer months. That has been very sweet business. Also I’d like to thank you my dear fellow trader who pointed out the chart for me early in the June. I apologize that I didn’t post this idea right away but two weeks later. I’ll try to do better job in the future.

However, I’d like share you my style of trading this sweet commodity. I like to go long on those short counter tides of the market. I find them myself using moving averages pointing out the value zone and 2dEMA of the Force Index pullbacks to give me a signal to go long.

13wEMA and 22wEMA are crossing on the weekly chart conforming the strong uptrend.

Pullbacks into the value zone with FI2 below zero is as good as it gets. I really love to work with the FI. I have to thank Dr. Alexander Elder to introduce that fantastic instrument to me.

Sweet trading,

Matias

The box play continues. I have to admit that I totally missed today’s strong move. I have some small longs but closed my SPY and TNA Longs yesterday. That was a mistake in retrospect. Trading in the middle of the chart is so easy. Too bad I don’t have a luxury to put my trades there. I need to do my work on the right end of the chart.

However, the breakout from the down trend channel offers us some new options. In case we see a pullback to 106 area but not bellow, this market is a short-term buy. We might be looking for a move up to the 110-113 area. That is the zone where shorts will be placed in the game again. Thus the Bulls need some very good news to push the market higher.  I still have a feeling that the July lows could be tested until this correction will be end.

The money stream is lagging. That bothers me a bit.

Money is running from the bonds. Soon the programs start to sell the bonds too and float the money to other asset classes. It won’t be far from here when grand mothers will be surprised what happened to their safe-heaven bonds.

Best performing sectors

Lagging sectors

Peace,

Matias

The markets are very foggy and it is not anyhow fruitful to try to make any long term guess. The markets are best suitable for day trades and for one to two day swing trades at the moment. 

I could write about how I think the markets would go up or down, but we all know it is a coin flip and not serving the purpose here.

I decided to post some follow up charts for the July MMM- report readers. We can easily see that the overall stock markets have basically done no sustainable move since the report.

TLT and gold have both gone up since July 16th issue meaning that the both camps are still convinced that their view is right. So far both ways have been profitable. However, my bet is that one of those will end up tears pretty soon. It is your guess which one it might be. 

Have fun!

Matias

The 1040 has held and each move towards this level has been rejected so far.  Today the Bulls didn’t get the follow thru they were looking for so dearly. SP500 sold of after filling the opening gap and ended just below the magical 1050 level ending up to 1048.8. There were nothing dramatic. The Bears pushed the prices lower all day with pretty low volume. Some short covering rallies occurred painting nice downward sloping channel on the tape. 8-min chart offered simple to trade day trade set ups.

The daily chart shows that  there is a big fight going on between Bulls and Bears. It won’t be easy for neither one. However, the path of least effort seems to be down for the short to intermediate term.  

Some short rallies should be expected. We are looking for any kind of strength that gets us up to the daily value zone or over to be shorted. However, we are still trading inside the box drawn during the last 4 months and thus current levels might offer tradable bounce and even some kind of mini rally. I’d like to emphasize that don’t bet your retirement on any hopes of strong long lasting rally any time soon. This is not the market you want to buy for long term, yet. This is a market that offers a lot of somehow tricky day trade opportunities and some swing trades. However, swing trades have been quite difficult to trade successfully lately. 

Keep your eyes on 1040 level and possible rejection to enter for a bounce play. Losing the key level would spread some real hesitation and panic into the markets.

Plan well, trade well and keep good trading records. We always have two goals for every trade. One is to make money and the other is to learn something. If you don’t accomplish neither of these, you are wasting your money and your life. We can’t get always the both but we should get at least one of them.

Peace,

Matias