The overall market looks choppy and a bit difficult to trade. However, I wouldn’t be surprised to see some follow-through of Friday’s bounce on the technical side. At the same time market participants might question the future economic recovery potential due to fact that Japan will be out of the game quite some time. This makes me hesitant and willing to look for trades on the both sides. I have mostly sat on my hands last two weeks and made only some minor trades.

My pick for the week is event driven pick based on the horrible tragedy in Japan. Even though the world was incredibly lucky to avoid the worst nuclear disaster scenario during the weekend I guess that the attitudes toward the nuclear energy might turn sour. Coal might be the beneficiary and my trade is based on that speculation.

I chose to go long on KOL which is a coal ETF. The weekly impulse is blue and KOL is trading near the weekly value zone.  Daily chart shows us that KOL is trading in the middle of its 2011 trading range, just below the 50dema. Support has been around 45-45.30 and resistance close to 49.  

My planned entry is somewhere below 46.43 and the stop below the recent support at 45.11. I am looking for a move towards 49.

I mismanaged my PSUN trade badly. The entry was disastrous on Monday and I didn’t bail out on Thursday at flat. However, PSUN traded above the recent support area and looks still potential upside candidate. Stock has based since the beginning of the January.  In case the overall market makes its move upside, this puppy might join the party.

Trade safely and do something good for someone just because you can,

Matias

I was privileged to have a quick dance with an old friend last week before the she passed out. My entry on Monday was a bit sloppy and I wasn’t happy with it. However, COCO made its move on Tuesday and I thanked the lady at 5.47. I was totally satisfied even if I left 11 cents on the table.

I was fortunate last week with my old friend. I decided to try my luck with another old date this week too. My pick for the week is PSUN, which has drawn interesting patterns on the weekly and the daily charts.

The driver now is oil and it might be a bull party spoiler this week, but I am still willing to trade PSUN on the long side.

My planned entry is around 4.47, stop at 4.21 and target just below the upper channel line. I will decide my exact tactic after I see how the markets open.

Do something good for somebody just because you can.

Trade safely,

Matias

I have had a lot of difficulties with my setups lately. It does not matter if it has been a beautiful short candidate or my favorite long candidate but it has left me cold. No luck with these girls so far. Some setups I stocks I have tried time after time just to see them explode without me after several weeks of frustration. I have to say that I am very confused but at the same time understanding that it is the part of the game. This week I changed the music in my office. Right now I am listening Johnny Cash song One. It makes me feel loved and all the shorting ambitions have disappeared.

My pick for the week is a little bit unusual play for me, even though I used to play these in the early part of my carrier. I chose PSUN as a long play. It has a history of sharp rallies that end badly back to the support zone. The characteristics are easily seen on the weekly chart. The weekly impulse has turned blue and PSUN is near its weekly trend line. MACD histogram on the weekly chart is around the same area where the earlier upturns have happened. Weekly FI is also showing bullish pattern as well as the stochastic. On the daily chart the price has already bounced up to the value zone. This is not the most attractive entry for me but I am looking for a continuation of the momentum and will place the entry @ 4.57 and the protective stop @ 4.96. I am looking for the stock to move back to the upper channel area on the weekly chart. However, my first target is at 4.96.

Don’t let the markets take your money. Use tops and trade carefully. This is a weard market. We are here not to fight with the tape but to take money out of the markets.

Peace and love,

Matias

Lyrics Johhy Cash One

Is it getting better
Or do you feel the same
Will it make it easier on you now
If youve got someone to blame

You said one love
One life
When its oone need
In the night
One love we get to share it
It leaves you baby if you dont care for it

Did i disappoint you
Or leave a bad taste in your mouth
You act like you never had love
And you want me to go without

Well its too late
Tonight
To drag the past out
Into the light
We’re one but we’re not the same
We get to carry each other
Carry each other
One

Have you come here for forgivness
Have you come to raise the dead
Have you come here to play jesus
To the lepors in your head

Did i ask too much
More than a lot
You gave me nothing now
Its all i got
We’re one but we’re not the same
Well we hurt each other and we’re doin it again

You said love is a temple
Love the higher law
Love is a temple
Love the higher law

You ask me to enter
But then you make me crawl
I cant be holdin on
To what youve got
When all youve got is hurt

One love
One blood
One life
Youve got to do what you should
One life with each other
Sister
Brothers
One life but we’re not the same
We get to carry each other
Carry each other
One

I spent a bit time to go through my market posts from the last year. I got a spark to do that after receiving a mail from one of our regular readers of the Money, Markets & Milestones. He shares us his pair-trade inspired by the July issued of the MMM report. Trade was simple short TLT & Long SLV at the early September after the indicators confirmed the trading idea that was based on fundamental analysis. Nothing fancy there but it felt good to see how well he was able to catch two big moves linked together. This also shows very rare capability to stay in the trade long enough when it is going into your way.

I also spotted our SPY rounded bottom post from last summer. The outcome was nothing but very uncertain at that point, but in retrospect the market behavior fits together perfectly with the BOX theory discussed in July 2010 Money, Markets & Milestones Report. In case you are interested in reading those reports, you are welcome to download them for free from the www.theMMMreport.com site.

I market white vertical line on the charts to illustrate the point when investors and traders stopped buying the story of low future inflation or the deflation scenario widely discussed in the main stream media at that point.

Trade well and have fun!

Matias

GMR is a date from the past I am asking to dance again. I am looking for a run up to the 50dema placing my stop below the last week’s trading range.

GMR has formed a nice bullish divergence pattern on the daily chart I call an explosion trade as well as bullish looking pattern on the weekly chart.

Overall I am quite a bit confused about the markets and I have tried to short it one way or another with more or less success. However, I feel that I have to turn my focus from trying to guess when the markets tank to the individual setups. I have traded successfully shorts as well as longs even if something is calling me from the short side very strongly. It is totally possible that the red hot money printing presses keep this market going even if the indicators are trying telling that it is time to pull back a little. I surrender and stop fighting with the tape.  My main focus is on money management right now. I want to trade to trade another day.

Trade Safe!

Matias