A good day...

The market was a bit tempered today but I feel that was due mostly to the surge in oil prices today. In spite of that the market still registered more gains and the Rebeltrader portfolio has done well today.

This morning I posted a chart for PDGI. I posted the chart because it had a good technical setup and I also felt it could "go any minute" so I wanted to get it out to my readers in case it reached the buy point today. And it did. Late in the day I entered PDGI.

Also late today I took an entry on BVF. I mentioned last night that BVF was nearing the buy point and today it hit.

In the afternoon CNBC's Jim Cramer plugged my GRP pick and he called it the best oil play right now.

A full recount of the day when I post later tonight. Overall a good day for the portfolio.

GRP - Update

Update on Rebeltrader pick GRP. A short time ago Jim Cramer called GRP the best oil trade play now. Volume is coming into GRP now. The next buy point is the move to new 52wk highs ($60.00).

I may not be fond of Mr. Cramer and his TV show but it is nice to know he agrees with me that GRP is a good play... LOL

BVF - Update

BVF has reached the buy point ($26.10) but the volume is light. I'm watching for any signs of the volume to pick up because the buy point is a new 52wk high and that usually brings attention to a stock.

I am going to modify the buy point slightly. I will wait for a move over $26.20 before entering. (1/2 position to start with due to the light volume). Then will add on signs of increasing volume.

Oil hits 11 month high

Oil hit $74.00... This is slowing the market a bit..

WWAT - Update

Just providing some updates here at lunch time. I had an automatic order in place to add another 1/3 to WWAT when it hit $1.91. I got a fill so I am now in WWAT with two entries. The last entry for the remaining 1/3 is on the move over $1.97

Oil - slick spot

The rise in oil prices this morning is what has a collar on the markets so far.. The market wants to go but oil has put a slick on the road..

We will see if the markets get past the slick and rev up the engines again..

Watch PDGI

In the list of stocks I posted last night that I am working on one is particular interesting to me. PDGI has a nice technical setup.

I will enter this trade when PDGI breaks out of the pattern on above average volume. volume is always a key. If the move above the pattern is with a surge in volume then that adds confidence to the trade.

The chart has been added to the public chart list and can also be seen here.

Pre Market - July 13th 2007

Nothing of great substance in the press this morning. The expectations on the street this morning is that the bull rally is back on. We will see.

One note that I do find somewhat interesting is that a good deal of yesterdays huge rally was fueled by short sellers covering. Is there more shorts to cover, yes indeed. I am sure a lot of hedge fund managers are pulling their hair out on this rally after they were forced to cover because they were expecting a continued down fall.

Portfolio Question

Daniel..



Thank you for your compliment on the trades. To answer your questions:


AMX

• Entered on 7/3/07 @ $63.31 (1/2 position)


• Added remaining 1/2 @ $65.16 on 7/5/07


• On 7/9/07 the Mexican Government announced they wanted to crack down on large companies which they felt held a monopoly on the business. AMX was one of those companies named. Because I did not know what the reaction would be I raised the stop loss point to $63.90 (I did this because I wanted to protect the capatial put on this trade in the event there was any big selling on the news. There was and by the end of the day my stop out point was hit and the trade was closed. AMX has since recovered well but one can not predict the future of what the news impact would be so discipline always comes first over hope. I did not want to hope the stock would revover and instead stood by the discipline of protecting the capital.) Recall the chart I posted on AMX when the news was announced by the Mexican Government

GRP

• Entered on 7/6/07 @ $55.54 (1/2 position)


• The second buy point (on the move to new 52wk high) not reached yet. So the average cost on GRP remains at $55.54

WDC

• Entered on 7/3/07 @ $20.37 (1/2 position)


• Second buy point not reached yet (see chart)

NTGR

• Entered on 7/9/07 @ $ 38.61 (1/3 position)


• Added additional 1/3 on 7/11/07 @ $ 38.97


• Average cost is currently $ 38.79

WWAT

• Entered on 7/12/07 @ $1.83 (1/3 position)


• Average cost is currenly $1.83

The current watch list

A note about stocks which are on the existing watch list:

BVF is nearing the buy point

NGA did hit the buy point today but I did not catch it. Got away from me.

Keep the watch list stocks (the ones in my public charts list) that I provide annotated charts for handy, you may spot the move before I do and make the play. NGA is one of those that just slipped by me as I was watching too many indices today. If you did not get into NGA today then don't. May be too late to try and get in now, I'll get back to you on NGA.

A look of whats up on the wall..

The other night I said that I have a list of stocks on my trading wall which I have been watching for setups to develop. Here are some of the stocks I like which I'm working on new charts for and will likely become watch list items..

BKH
CCC
EDO
ENG
ESRX
FDP
HAS
HAUP
LEA
NTRI
OI
PDGI
RGR
RSH
SNDA
SONE
TKLC
TRW
TSYS
VSEA
WCG
WRNC

All of these stocks have something in the charts which I find have potential. Some of the setups are for short term and others are longer term. But each has something that makes it stand out and I will be adding these to the watch list as time permits. Of particular interest right now to me is PDGI, SONE, and ENG. One of the stocks, HAUP, has a setup that looks attractive for a longer term play and the setup can only be seen on a monthly chart.

Repeat of a commentary I wrote...

With the markets getting attention again with the new highs achieved today. I want to share an article I wrote some months ago. It highlights how one must remain in control. Don't get caught up in the excitement of the markets, or of any particular stock for that matter. Here it is:

The stock market is alluring with its vast amounts of money being exchanged
every second.

The sights and sounds of the floor of the stock exchanges inspire in us the
images of a fast paced nose to nose horse race, the fever pitch of a baseball
game, the feeling of rolling the dice in Vegas. It is sexy, it is powerful,
and it is addictive.. It conjures up within us all the dreams of being
instantly rich with the roll of the dice or the well placed bet on which horse
will win..

For stock traders and investors the dreams of fortune come from "winning
the game" of stocks. The problem is that there is no one throw of the dice or
one pull of the slot machine handle.. In Vegas you can loose everything on
one roll of the dice.. In the stock market you can not approach your plans
of being wealthy the same way you would roll your dice on the tables in
Vegas.. You have to control yourself, plan your next move, and strike like
a tiger when the time is right. And more importantly you have to sit on
your chips and only gamble with a percentage of your chips at any one
time. That is how we manage our portfolio and protect our
capital.

Because in Vegas if you bet the farm and the dice don't stop spinning in
your favor.. you've lost the farm and your out of the game with nothing. In
the game we call the stock market.. there is no "blowing on the
dice"... there is no "come on baby...daddy needs a new pair of
shoes"... For if that is your approach to the stock market then you have
already lost the game.. for you are relying on
hope... not a strategy.

Walking up to play the stock market game requires a whole different
mentally. Sure the attraction of fame and fortune is what brings many
traders.. But the ones who win are the ones who come into the game with the
plan of not winning. Yes.. I said that correctly.. Let me say that
again.. the winners in the stock markets are those that plan every move,
every step, every trade with the intention of not losing any money.. Accept
little looses and let the winners add up. If you run into the stock market
expecting to win big in the first few weeks... you will be out of the game
in no time.. Your approach to the stock market game must be to take bits and
pieces at a time.. Don't go for the gusto in one shot... that is the
wrong attitude and will drive you to make bad trading decisions. Winning in
the long run requires careful and precise moves... such as a chess game.
Don't let the lure of the 'big money' drive your trading decisions. That
will lead you to the soup lines. Instead make it your plan to NOT lose any
money, then the money you gain will add up slowly. This will also allow you
to remain focused on your trading style and remain disciplined to that trading
style.

Once the heat of the race takes over your emotions then mistakes will be
made.. And the ones who remain cool, calm, and in control of their strategy
will be the ones taking your money when you get wrapped up in the heat of the
money. Remember... when we perform technical analysis of the charts
and apply the understanding of greed & fear it is WE that will
be taking the money away from those being caught up in the heat and
excitement of money.. The stock market can be a vicious game.. the
money made every day by traders is not mysteriously printed
somewhere... For every dollar someone makes... someone has lost.. And
in order to be on the winning side.. remain in control.. don't let the
excitement and lure of big money take over your emotions.. For if you do
then those that sit on the side lines; disciplined and waiting to strike; will
be there to take the money from you.

Current Rebeltrader portfolio status

As of the market close, July 12th, 2007 the current open trades:

WDC 4.4% gain (open)
AKS 3.8% gain (open, average cost $38.58)
ONT 3.3% gain (open, average cost $2.77)
BIG 2.9% gain (open, average cost $29.91)
GRP 2.2% gain (open)
ALGN 1.2% gain (open, average cost $25.29, multiple trades)
NTGR -0.9% loss (open, average cost $38.79
WWAT -2.2% loss (open, multiple trades)

JDSA -5.3% loss (closed today)

Multiple trades means this is the second time a trade is being attempted on that stock. The gain/loss calculation takes into account the gain or loss from both trades!). Gains/losses are calculated on the average cost where the stock play has been to scale into the trade.

Money management stems losses and keeps the winning trades in play. You do NOT have to win every trade. That is not possible by anyone. All one has to do is win more than you lose over the year and your ahead. After each trade is completed you put that cash right back into your capital for use in the swing trade methodology, increasing your buying power as time goes on. Remember, take your trading capital you set aside for swing trades and divide it up into 10 parts. And each part is what you use for one swing trade,one stock. So no more than 10 stocks will be owned at any one time.

Where you read that I scale into a trade with a 1/3 or a 1/2 that means I have taken that one 10% part and cut it into more parts. This way I enter into the trade a little at a time until the whole 10% part is loaded into the one stock. This is done to protect capital. The more the trade works the more you add until it is loaded. The scaling into a stock is even more important in times of extreme market volatility where it can change direction in a flash. Under normal conditions entering a trade is usually in 1/2's and in some cases (depending on the situation at the time) will enter the trade with the entire 10% part all at once.

For the new members of the site please read this earlier post. Click me!

If you are new to the concept of swing trading please, I encourage you strongly to start out by paper trading and reading some books on swing trading. Never put all of your money into one trade, ever! That is financial suicide. Practice how to manage your capital and it's 10 pieces for swing trading. Get a feel for how swing trading works and the concept of compounding your gains into the next trades.

Retail sales data was huge catalyst

I said this morning pre market that the retail sales figures crossing the wires was looking better than most analysts were expecting. So many of the analysts were gloomy on the retail sector and that weighs heavily on the economic outlook in general.

When the numbers were coming in better than expected I said this morning that in addition to them being better than expected it was also a psychological boost. Investors and other large money movers were depressed over the potential economic troubles being suggested by weak consumer spending (as measured at least by retails sales data). When the better numbers were crossing that was the anti-depressant pill the market needed. The gloomy view of the economy was lifted, for now anyway.

A toned down sub prime view today helped as well. What was big news yesterday today was not being touted as much and that helped to ease some fears as well. Has the sub prime issue gone away? Don't count on it. we will hear sub prime for a long time to come.

For now rejoice in that we broke out of the 5 week long trading range and that is a huge psychological boost for all. And signals to others who have been waiting that the water may be OK to come in now. I'm not taking the yellow flag down just yet. That is the first thing the bears would want, but they won't get that from this trader. I will keep my guard up until I see the bear tracks leading away from Wall Street.

More commentary later as well as a wrap up of the portfolio holdings.

WWAT - Update

Recall I mentioned that WWAT was still going to be watched for signs that the setup would re-confirm. I will take an entry on WWAT on a move over $1.83.

I am still bullish on WWAT for a longer term swing trade. The buying interest in this stock is still rather impressive. Was tempted to buy on the bounce but needed to see some continued buying pressure to make sure it would not run out of gas. As of this moment the buying pressure is good.

Over $1.83 I enter with 1/3 position.

Sub Prime

Breaking news: U.S. House Finance panel Republican Bachus has introduced legislation to reform subprime lending.

 

Don’t know how the finance sector will see this. One hand some in the financial world may see that as a “saving grace” to stem the bleeding this sub prime issue has caused. And on the other hand some may view it as complicated rules that if a law is passed would only hamper the financial sector and the mortgage business.

 

Mid day update

The big winner so far today in the rebeltrader portfolio is ONT. It is up over 10% today so far. A good bounce play this has become. That was why I changed the setup conditions for ONT from the original game plan. When I identified the pullback to a key level the play changed to a buy on signs of a bounce (remember, we don't buy on the way down, we buy after it hit then catch it as it comes back up).

The metals sector is good today and AKS is slowly making upward movement. Oil Services GRP also doing nicely again today, BIG is another big winner today as the retail sector is hot today.

The only bad play in the book right now is JSDA. Has not been able to keep itself above water as the word of the CEO's conversation on CNBC has made the rounds and has let the shorts take over control for now. Too bad, without the CEO this could have been a good trend reversal play. It still might but I won't leave my money in there and risk it. Took my 1/2 position off the table when it hit the stop at $16.90.

The sectors that are doing bad today are biotech & restaurants.

Now, the biggest news of all is that the DJIA has broken out of the trading range (see the DJIA chart on my public chart list: Public charts.) Right now at this time we are above the top of the trading range. If we close above that trading range then we are one step away from returning to a bull mode.

ONT - added to position

Added to my ONT holding @ 2.75

Add remaining 1/3 on the move over $2.90

Off to a Good start

Most of the rebeltrader open trades are doing nicely this morning. As I expected, the retail sector is doing well so far from the recent better same store sales data being released this week.

ONT - Update

Rebeltrader portfolio holding ONT is set to open higher. Current pre market activity has ONT up a bit. Watch for the second buy point if this trend continues after the bell.

Additional note on retail data

Abercrombie (ANF) same store sales data was better than expected (6% better). This is one of companies that a lot of people follow as a benchmark for the retail sector.

Pre Market - July 12th 2007

I have some more retail same store sales data this morning and it is looking good. I say good because generally the data is better than some analysts were expecting. If this better than expected data keeps coming in from the retail front I see retail as having a boost.

This morning JOSB (rebeltrader watch list item) reported better than expected sales and added that their net sales for the fiscal month increased 11.5%. PSUN,JWN,BKE,WMT are reporting better than expected sales data. Macys (M) reported lower sales data and issues downside guidance for Q2.

The US Dollar set another record. The Dollar set a new record low against the Euro.

The Day that Was - July 11th 2007

Today the market was able to recover some of its big drop from yesterday. Yesterday the big driving force that made the already nervous market take a dive was that ugly word popped up again. That word is "sub prime". Any time the market hears that word there is a fear that runs all the way down the spine of the markets. Personally I feel the sub prime issue is still looming over the economy and it will manifest itself into other areas over time. We are not done hearing about sub prime woes.

Today the market was helped by the M/A news of Chaparral Steel being purchased by Gerdau Ameristeel Corp. That boosted the metals sector today. And the rebeltrader portfolio holding A K Steel Holding Corp (AKS) got a boost from that today as well closing up 1.78%.

Portfolio holding Grant Prideco Inc. (GRP), an oil services sector play remains in play. I am still bullish on GRP. Yesterday Motley Fool mentioned that GRP is still on their 10 highest rated stocks list per their investors subscriber base of recommendations.

Yesterday I took a position in JSDA as it was advancing throughout the day after it had closed above a key support level ($17.00). The entry price was $17.85. Today JSDA sold down to $17.07 on a CEO interview that made it through the markets as being "not so hot". I watched the interview and while the CEO was not well spoken he did not say anything in my view that warranted a sell off. But one always has to remember the market does not care about the old saying "what have you done for me lately", but instead wants to hear more of what are you going to do for me tomorrow. The CEO addressed that by the end of the year they would be introducing some sort of new product. For me it does not matter what the CEO says or not. I'm playing the chart. And for now $17.00 is still a support line that if there is going to be a leg up it has to start from somewhere. And $17.00 is that starting point. Every swing trade has to have a plan. You can not just buy something you hear about or see flash by on a ticker window showing a big gain. You have think like a tiger, stalking your prey. A tiger waits for the right moment to attack. JSDA was a stock that ran from $14 to as high as $19 in the span of 3 days. It was a moving target in the middle of a freeway at rush hour. Trying to rush into traffic to catch it could either get you run over or when you caught it the stock could change direction and head for the off-ramp. Smart traders will wait for a setup. The setup was the formation of a base above $17.00. That we got, we made the kill on the move up out of the base (albeit a short time frame base) and we will play it by the book. If it fails the base then this stock is not ready for prime time yet.

Discipline is always the key. Never buy any stock that is being talked about in the news blindly without looking at it carefully, plan your attack, and wait for the conditions to establish and then you have your trade. Have a plan and trade the plan.

Today I entered ALGN on a very healthy advance. The volume was good and it closed up 5.23%. Today it set a new 52wk high. I did not enter the second 1/2 of my swing trade funds to this trade yet. Although it did clear the second buy point it did it at the end of the day and by only a couple cents so I will wait until tomorrow. If you had a pre programmed trade setup to grab it at the second buy point then that is fine, you may end up with a better entry than I will when I enter my second buy.

We are still in a place I don''t like being. We are still in this sideways trading range on the major indices and it's makes swing trading difficult. But perseverance I have and I will keep looking for good trading ideas. For those of you that email me asking me what are some good trades I can only tell you that I have a list of stocks in my office up on the wall that I like, but I am stalking them and looking for the setups to establish themselves. Over the weekend I will post a picture of the RebelTrader 'research department' and you will see my wall of stock plays.. LOL

I hope all my fellow Rebels had a great day and to all I wish a wonderful good night.

p.s. - Today I was contacted by Lindsay, a wonderful lady at http://www.ino.com/ asking if I would be interested in providing some guest commentaries for their site. So from time to time I will provide her with some articles that I write and she will share with me some of their content in return. Thank you Lindsay for considering my market views as worthy for your site.

Updated ONT and ALGN charts:

After the Close Activity

After the close Genentec (DNA) reported healthy earnings,beats on Revs. This should help the drug sector. Some retail companies are reporting same store sales. And they are coming in better than expected for the most part.

HOTT, ZUMZ, MW, AEO all reporting better than expected sales. This will give retail a boost. Actually this sales data not only is better than analysts expectations but it also provides a psychological boost as many of the market fundamentalists were gloomy on retail and the prospects of good sales data. The numbers tonight from these few companies is dispelling that notion.

ALGN - Update

ALGN has been doing good all day so far. Next buy point for adding the remaining 1/2 of this swing trade is when it moves above $25.73

ALGN - Buy point reached

ALGN has advanced to the first buy point. Long 1/2 position on ALGN @ 24.86

Rebel Trader portfolio status

Today AKS is up nicely on the strong metals sector, NTGR is up on a breakout into new highs, ONT is accumulating here and is ticking up ever so slowly but looking good so far, BIG is still above the original buy point and is still collecting large buys going through the tape, GRP is also trading up and I am still bullish on the oil services sector, WDC is also holding on even after the big fall yesterday. The tech sector is doing fairly well considering the overall bearish worries of the markets right now.

Only holding not doing well this morning is JSDA. Down 3.7% on what I can assume is a lack of confidence in the company from comments the CEO made on CNBC last night. I was prepared to sell early and not wait for the stop loss point if I saw any panic selling on JSDA. It is down but I don't see any panic, and it is holding above the stop loss point through the morning. So I am giving it a chance.

NetGear (NTGR)

I posted yesterday the next buy point for adding to the NTGR swing trade was on the move above $38.95. I hope you were watching as it has been advancing nicely this morning. The rebeltrader portfolio has added an additional 1/3 swing trade funds to NTGR @ $38.97

Fp80

ONT - Update

Yesterday I took a position on the bounce from support at $2.65. In pre market trading there is some small amount of buying and the BxA is up a couple cents. If there is more buying up today I will add to my position on the move over $2.75.

Currently in with 1/3 of a swing trade position @ 2.65

Pre Market - July 11th 2007

Looks as if we are going to start of the open heading down. At least that is what the futures are saying at the moment. Asian stocks took a pretty big hit with the Nikkei down 1.1% and the Hang Seng down 1.2%.

The yield on the 10 year has come back to near 5.0%. This should give a little boost to the market today. Emphasize the word little.

Apple (AAPL) is starting to sound like a pink sheet stock as far as all the speculation that is taking place. Recently it was reported that a patent application was filed for technology that would suggest that Apple is going to release an iPhone Nano. This morning JPMorgan reports that they feel that the reports of an iPhone Nano being released this year may be premature. They also comment that Apple often files patent applications for products that give little indication of actual upcoming products. Right now Apple is being traded more on hype and greed than of any actual company statements.

Futures starting to move back toward the green side now.

Metals sector should have some strength today on sympathy with the buy out of Chaparral Steel (CHAP). The financial sector will likely be the most volatile today.

Trades today

Today I posted that I liked an entry in ONT on the pullback, and subsequent signs of a bounce from support. I took an entry on ONT today at $2.65 with 1/3 of a normal swing trade position. The chart analysis of ONT has good support at the 2.55 to 2.60 range. And today I observed a good bit of volume working on keeping the price from falling below that level. I wanted to get my toes wet at the bottom and took the entry at $2.65.

The reason for the 1/3 is money management. I want to get a bite of the stock at the cheap price but I don't want to risk a whole 10% swing trade position just yet. So I scale into the trade. The more the trade works in my favor the more I add until I have the entire 10% of my trading capital in the trade. By scaling into the position the risk to my total capital is less as I wait for further signs of buying pressure before adding more. This way if I am in only with 1/3 and the stock takes a dive for some unknown reason before more buying comes in then my risk is limited because a stop loss on only 1/3 of a 10% swing trade is minimal.

My stop loss for ONT is a 10 cent window from the break point I suggested to buy in at. Stop loss is $2.54.

Will advise on the next level to add to this trade as the market makes its next move.

Late in the day I took an entry on JSDA @ $17.85 (1/2 position). Remember to always check the watch list items in the right side column of this web site to see what the recommended entry points are for the stocks on the watch list. The trading on JSDA was healthy most of the day even in spite of the overall market. Stop loss is $16.90. The CEO was a guest on CNBC Fast Money tonight. We will see tomorrow if the market likes what he said or if they feel there is no fiz left.

Note: If JSDA exhibits signs tomorrow of any high volume selling I will not wait for the stop loss to be hit and will sell before that. A sign of any high volume selling early may be an indication that traders and investors did not hear anything they liked from the CEO and may want to exit. In which case I will also. And come back another time.

The day that was - July 10th 2007

Remember last night I said the market was trading like someone about to go to the dentist. The person going to the dentist got more and more nervous the closer he got to the door to the dentist office. That is how the markets traded yesterday as we got closer to the top of our trading range again.

Now today our "Mr. market" sat in the dentist chair, he was already nervous and then the dentist came in and began working him over. Then the dentist trying to make idle conversation with Mr. Market said things like:

• Did you hear about Sears? They had terrible earnings this morning. Their same store sales were way down. Sears (SHLD) tanked today. Lost 10% of its value in one day. For a company the size of Sears that is a LOT!


• Did you hear about Home Depot? They were gloomy on the housing industry this morning..

(Mr. Market gets his Novocaine shot, but he is getting even more nervous, he is sweating now)

• Did you hear DR Horton (DHI) lowered quarterly expectations due to a 40% drop in new home orders?


• How about that guy Ben Bernanke, he was speaking today and did not say anything to give investors much in the way of any comfort.


• Did you hear crude oil prices went back up again today? At one point today it hit $73 bucks.

(The Novocaine is not working, the more the Dentist was talking the more uncomfortable Mr. Market was getting, he is getting anxious)

• Did you hear that the sub-prime lending problem is back in the news? Looks like it is bigger than expected. And the financial sector got hammered today.


• Did you hear the US dollar dropped to a new low vs the Euro and a 26 year low vs the British pound.

That was it.. Mr. Market was now having a panic attack and could not take it any more. He got up out of the chair and ran screaming out of the office. And on the way out the Dentist said to him "Did you hear that Moody's downgraded 399 sub prime residential mortgage backed securities" ? That just made Mr. Market run even faster for the door.

Ok.. I made the market action today into a little story. But what happened is that we had a triple top today. Three times now the market has failed to break out of the trading range we are in. I said yesterday that we were reaching the top of the trading range again and the big money was nervous about that. When the markets are trading within a sideways trading range every bit of news is amplified. What may just roll off the shoulders of many in a strong bull market will instead weigh on the shoulders of the big money players when the markets are in a sideways state.

Every analyst and talking head on CNBC will say the decline today is due to this thing or the other. But few will say that the major indices were approaching the top of their respective trading ranges again and big money is cautious, so when ANY bad news comes along they leave the table again. I call it the way it is. Big money (who really are the ones that move the markets) all rely on each other to benefit in the markets. When the markets are trading in a sideways trading range the big money all tip toe through the sectors as to not make any big waves and hoping to catch a gain from some other big money holder and their play. And when some kind of bad news comes along they panic because they are concerned about how the 'other' big money will react. So they take their money out to protect their capital and the next thing you know we have a selling panic. Meanwhile us small traders are almost knocked over as the big money runs for the door. We do the best we can to protect our small money in the midst of the whirlwind of activity. We mind our stops and don't panic. We remain disciplined and calm. The market will come back. After we double check our wallets and make sure our trades are OK then we pull up a chair and wait for the big money to come back to play. How long it takes for them to come back? Well for that we keep watching the indices and charts for the clues.

Right now we are right in the middle of the trading range again. Will the DJIA 13260 hold again if the decline continues? It must hold otherwise the makings of a bear market will be set in motion.

What a day that was...

I will post details later tonight on the activity of the day. And there was a lot!

VIX is soaring again

This is a wild day. As soon as we get close to the top of our trading ranges the big money keeps taking their chips and walking away. This is getting frustrating! The volatility (VIX) index is spiking once again now.

ONT

My stop out point for ONT is 10 cents below my entry. Stop loss $2.54. Only went in with a 1/3 to get my toes wet at the bottom. Will likely see it move around down here but this is a good support area and stands a good chance of holding.

NetGear (NTGR)

Yesterday I took a 1/3 entry on NTGR on the move above $38.61. If the price advances above $38.95 add the next 1/3 to the position.

ONT - UPDATE

ONT has pulled back all the way to support. And is hovering around there now.

 

I see this as an opportunity for an entry if it starts showing signs of advancement. I'm entering a swing trade (1/3 position to start with) on the move above $2.64

 

 

Rebel Traders - now over 400 regular readers !

Thank you for joining rebel traders and for the many wonderful emails. Many of you have super trade ideas and I am anxious for the next stage of rebel traders which will be the addition of a live chat board and a member message forum. Once those features are completed and implemented into the RebelTraders site you will be able to interact with other members and discuss your own trading ideas.

Thank you to all of you !

Pre Market - July 10th 2007

The broad markets today are going to be a bit of a wild ride. We have Home Depot coming in with some numbers which further highlight the bad housing market here in the United States. And the big Sears Holdings company had some terrible numbers and low same stores sales data.

Today at 1pm Fed Chairman will be speaking in Massachusetts. It is being said that he will take questions afterwards. The market will move on his every word! Watch out this afternoon for a ride if he says anything that the markets perceive as "fighting words".

The price of a lot of indices are reaching the top of their trading range again. So added volatility may happen as we try and get through them again. Futures are down at the moment.

Take-Two Interactive Software (TTWO)

Another swing trade setup. Recent analyst upgrades. Watching for two entry point in order to scale into this trade. See the chart shown here.

JOSB - Update

Yesterday JOSB reached my buy point. But I waited before establishing my position because the buy point was taking place at the time the broad markets were getting "nervous". Like a good baseball player he waits for the right pitch to take the home run swing.

JOSB is still a good swing trade potential and my adjusted entry points are:

1/2 on the move over $43.40
1/2 on the move over 46.25

What this does is gets us in at the lower price (once we see additional commitment from buyers) and adds to our position once it turns into a rally (the move over $46.25). Remember swing trading is all about precise timing and waiting for the right pitch. A good swing trade can make big gains in a few days or they work out over a couple months. In either case our goal is to capitalize on the chart setups and let them play out. And all the time keeping our capital protected.

Someone on CNBC this morning (missed his name) said "Preservation of capital is job 1, appreciation of capital is job 2". That is the absolute truth and the only way to survive the markets.

JSDA - Why was $17.00 so important ?

An email from a subscriber asked why I was so concerned with $17.00. Why I was watching that price level was due to the gap up that took place back in March of this year. During that time Jones Soda broke out on high volume. The high volume is an indicator of a significant increase in money coming into JSDA. And in that increased money was many new investors.

Technical analysis of the charts is at the core the study of human behavior. The price of any stock is the collective result of buyers and sellers fighting each other. And the study of technical analysis is the study of what the buyers and sellers are doing as they confront each other. It also shows us what is likely to happen when buyers and sellers who have not seen each other in a while are reunited.

Many people bought shares when JSDA became popular in March (where the gap is). Lets say you are someone that got in during that time. And your a "buy and hold" investor (which many people are). Then in mid April the price started rolling over so the 'buy and hold' investor keeps holding on and hoping that the price will turnaround. Often they ignore their holdings and only really take notice when green turns into red. In late June JSDA dropped below the price where many new share holders got in. Now their holding turned red. And the red made them say "if this gets back to my original buy point I'm selling". They think that JSDA ended up being a loser and all they want to do is get out and hope they can get out at a break even. They have been 'burned' by JSDA in their mind and all they want is to exit the stock, so as the price got back towards the price where many got in they were now getting out. In their view they are taking advantage of the price increase to get out because they don't trust the company anymore to hold it any longer than that.

This is why I set $17.00 as the significant level the stock must close above. To signal that the number of sellers trying to get out was getting smaller. Now that we have those sellers out of the way we can concentrate on a more stable baseline setup to work with. And with the added benefit that a lot of sellers have left the table. The movement back up through the gap was a war zone of the old buyers now selling, new buyers now buying, and the shorts covering. Trying to establish a swing trade setup in the middle of that war zone is not the smart thing to do. And waiting for the close above $17 gives us the signal that a truce may have been reached.

The swing trade setup I have laid out is for an entry of a 1/2 position once the price advances up past the recent war zone and the second entry as the price advances up past the final remains of the war zone. If we want to make money in the stock markets we must stand back and observe the stock with a wide angle view. Imagine your standing on top of a mountain and can see rival gangs, one off to the left and the other off to the right. They can't see each other but you can see them getting closer together and think that when they meet there will be a battle. Technical analysis is the standing on the mountain and watching for what might happen at certain times (price levels). And the one that was standing on the mountain waits for the battle to end before making a move. It increases his chances of survival because he waited for the battle to end before moving along the road.

NightHawk Radiology (NHWK)

In a scan of the markets NHWK comes up as a new setup. I like this setup as the weekly Stochastics is oversold and heading up. The daily chart shows the MACD working on a slow but steady upward move. Buy point is the move above $18.95

ONT - changed swing trade setup

Because ONT has been pulling back towards a support area I have change the entry conditions. See the ONT chart in the public charts section for details.

JSDA - Chart setup for swing trade

Jones Soda (JSDA) finally closed above $17.00. It did it on weak volume and after a nasty pullback on Friday. That sell off on Friday and the weak volume today reveals that there just is not much interest in JSDA and the price advance has trouble sustaining itself. That is why I did not want to take an entry on JSDA until there was some kind of a base line to work from.

Now that it has closed above $17.00 we have a baseline in which to work from. Today JSDA closed on weak volume which is not good but we will watch to see where this goes. My setup for JSDA is a first buy point on the move over $17.85 (not before!). The second is on the move over the 50MA (the 50MA may offer some resistance but a move over that will signal increasing strength and is why I chose that as the second buy point).

A Tripple Top ?

As I said in my earlier post the market was nervous today as it was once again approached the top of the trading range that we have been in since early June. Will we hit the top of the range again and bust through or will we have a tripple top and fall back yet again?

The MACD is showing a slight divergence during this month long sideways trading. See the MACD on the chart shown here. Notice how there is a slight upward trend that is visible when drawn with a trend line. Is this a signal that were building up pressure? Yes it is. But is it enough yet remains to be seen. Also the CMF is working it's way up as well, albeit still weak.

Also notice how today the +DI reached the trend line and stopped right at the line. Would like to see the +DI break above the recent down trend.

The day that was - July 9th 2007

You know how many people hate going to the dentist, they worry about going and have a bit of apprehension all the way to the door of the dentist office. Well the market action today reminded me of just that type of action. All day the market was trading like it was afraid of going somewhere. And one look at the charts it is easy to see where it was afraid to go. We were getting close to the top of our trading ranges again. And the market was apprehensive about it. Another way of thinking about today's market action was how you feel when you walk down a dark and unknown street at night alone, a bit of looking over your shoulder every minute. And the market did that all day.

There was some news today that under normal conditions would send the bulls on a rampage. Bond yields pulled back and oil also came down some today. There was some good corporate activity today and overall the analysts were bullish. But all of that did not help the market, it still kept looking over the shoulder every minute and just would not move freely.

One of the RebelTrader portfolio holdings had some news today during the lunch hour which was the Mexican Government is looking into an anti-trust suit against some companies, and AMX was one of those named. While the news may end up being a mute point and have no affect in the long run a swing trader needs to always protect their capital. In light of that news I posted that I was going to change the stop loss point for AMX in order to protect capital. I raised the stop loss to $23.90. At that level it would give AMX a fair chance to stay alive while at the same time it would protect from a loss. And by the end of the day AMX had hit the stop point and my trade was closed automatically. See this simple chart from today to see how the price started to dive on the news.

After the close of the market Alcoa (AA) reported their earnings. While the numbers were about as expected the market was hoping for tiny bit more. In after hours AA was trading down to $41.90. So far it does not seem to be weighing on the other companies in the metals sector but tomorrow will be a better indication if there is an impact on the sector.

JOSB reached the buy point that I have noted on the chart in the public chart list. But the buy point was reached at about the same time the market started acting "nervous". So I am going to wait until I see how the markets act tomorrow. If the markets act well tomorrow and JOSB continues going up then I'll consider taking a position.

Remember, in swing trading we always want to get in close to the buy point but it is not the end of the world if we don't. We never chase a stock to get a position, but we can certainly get on board at the next train station. If a stock ever gets away from us don't worry, there will be many other plays that will come along the track.

JOSB

JOSB has reached the buy point. But I am going to wait until I see how this closes. Market is too shaky today in my view. If JOSB closes over $43.40 then I will look to enter a position tomorrow based on how it trades at the open.

NTGR - Long @ $38.61

1/3 position for the time being.

See the NTGR chart in the public chart list.

AMX - UPDATE

I'm raising the stop loss for AMX to $63.90.

That will be essentially a "no loss" exit if AMX falls. The reason I decided to tighten up on the stop loss is a news article that just came across the wire that the Mexican Government wants to crack down on big companies that have a monopoly on the businesses they are involved in. And AMX is the leader in the telecom sector for Mexico.

May be nothing at all for AMX. But protection of ones capital is critical.

Market Update

Broad market is still "sluggish". Keep in mind that the DOW is coming close to resistance again. see the DOW chart in the public charts list:

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2147404

Today kicks off the earnings period. If we can get some big names to report better than expected numbers this may give us the extra boost we need to climb above our trading range and get the markets moving again.

JSDA is above $17.00 but I am not going to do anything with it until I see it "close" above that point.

I like Netgear (NTGR) and may take a 1/3 position on the move above today's resistance which is $38.56. If it moves up beyond that point I will scale in with a 1/3. I'm being a little extra cautious only because the broad markets seem to be undecided here. And the fact that we are getting close to resistance again on the indices.

Market Update

The broad markets just don't seem to be running on all cylinders this morning. Needs some high octane fuel to get it moving.

JSDA looks to be out of the race yet again. It just can't hold on to any gains it makes. So I will likely NOT be jumping into JSDA.

I like the action on NTGR. The chart is in my public chart list. It is a good play on a close above 38.00 but with the market the way it is currently I'm not interested in it, yet.

JSDA

In pre market trading JSDA had run up a bit but has now pulled back again in pre market. JSDA struggles to keep it's gains.

I will still watch it to see if the health of it looks good enough to begin an entry with a 1/3 position.

WDC

Western Digital (WDC) got an analyst upgrade this morning.

Keep in mind that the next buy point for scaling into WDC is $21.80

Pre Market July 9th 2007

Asian stocks pick up steam, the Nikkei 255 rallies to a 7 year high. European markets up.

Analyst 'ThinkEquity' raises their price target for Google (GOOG) to $700.00.

I'm watching JSDA. After pulling back most of its gains on Friday on a steady drop all day Friday it is trading up again in pre market. $17.00 is a key pivot point for JSDA. A close above that point will add confidence that JSDA is reversing the trend. I may take a 1/3 position in JSDA today, but I will watch the trading pattern before I decide. JSDA so far has not shown a commitment to continue the rally. The trading on Friday was a huge signal of a possible failed rally. But today it looks as if it will make another try.

I'm seeing some potential for strength in the metals sector today. May have a boost for our open position AKS. Also seeing strength this morning in solar stocks. The solar plays have been volatile, fast runs then hard stops and some wild pullbacks.

The week ahead:

• Monday: 10 year TIPS data (description of TIPS)
• Tuesday: Redbook, Consumer credit
• Wednesday: Wholesale inventories, Crude inventories
• Thursday: Initial claims, Trade balance, Monthly budget statement
• Friday: Export/Import price data, Retail sales, business inventories

On Tuesday Fed Chairman will be speaking about inflation in Massachusetts, on Wednesday Fed reserve governor Kevin Walsh will testify before the House financial Services Committee on hedge funds and systematic risk.

Futures are essentially flat, oil has dropped some but is still above $72. Note: If oil moves to $75 then we will start seeing more pullbacks in many sectors.

"May the bulls be with you"

New watch list item - AGEN -

Antigenics Inc. (AGEN)

A swing trade setup provided on the chart shown here. This is a triangle pattern that could break either direction. There are two buy points for scaling into this trade. The first buy point for 1/2 of a swing trade position is on the move up out of the triangle pattern. The second buy point for the remaining 1/2 of the position will be on the move above the confirmation level (white line on chart).

The chart shown here is a static image. For the live chart click here: AGEN

Quote of the Day

"It's not that I am so smart; it's just that I stay with problems longer"

... Albert Einstein (physicist 1879-1955)

AXR - one more chart

I use Metastock for most of my technical analysis. But stockcharts.com is easier to use for posting charts.

Here is a Metastock chart showing a more accurate trend line. Performing analysis in Metastock is more precise than in stockcharts.com.

The other colored lines are the moving averages I use. The dark blue line is the down trend resistance line.

200SMA (green)

50SMA (yellow)

20EMA (red)

9EMA (blue)

AXR - Additional information

Daniel.. You are correct. a company that maintains a large inside ownership is always a company that is better viewed than one that has little inside sponsorship. However you have to keep in context when the inside ownership / shares were acquired or purchased.

Going back a couple years there was only one reported inside purchase ($213,750) in 2005.

And in late 2006 (before the large drop in their earnings release) there were sales by insiders of $5,895,824 ! That is a large percentage of sales vs buys by the company executives.

Chart Request - QQQQ

A Rebel Trader member has requested information on the QQQQ.

The Q's as they are conveniently called is a fund which is tied to the performance of the Nasdaq-100 index. The QQQQ can be purchased and sold just like a stock. It can be shorted (no uptick requirement), day traded, swing traded, or long term buy and hold.

An ETF is independent of trading volume. Where as the amount of volume shown for an ETF such as the case here with the QQQQ is only a representation of trading activity. It in no way controls the movement of price. The price is a representation of the Nasdaq-100 index. For a list of the companies that the QQQQ indexes to see this link: Powershares QQQQ

Performing technical analysis on the QQQQ is much the same as any other stock. However formulas that utilize volume in their calculations will not be reliable. But support and resistance along with trends are still valid tools for evaluating the ETF.

Currently the QQQQ is trading at new highs. Shorting the QQQQ is a matter of examining the broader market for signs of a top, or by examining the major holdings that make up the QQQQ for signs of individual stock performance and if they are working on a rollover and a new down trend.

Amrep Corp. (AXR) Profile

In this post I highlight AXR (Amrep Corporation). AXR has been on the Rebel Traders watch list for many weeks. It is a play on a trend reversal along with a high short interest.

Amrep began in 1961 and began trading on the NYSE in 1972. The primary business of Amrep is magazine subscription services, and real estate development (Fp80 comment: The two business operations of Amrep could not be further apart, processing magazine subscriptions AND real estate development is not a successful business model in my view). Amrep has their headquarters in Princeton, NJ (25 miles from RebelTrader HQ). Picture shown is of the building they occupy from the real estate owner in Princeton.

Amrep started getting attention in June 2006 as shown by the increase in share trading volume and in the span of 8 months went from $35 (special dividend adjusted) to almost $150 per share. The share structure as provided by Thomson Financial data provider is:

shares outstanding = 6.65 million
shares in float = 1.73 million

As you can see based on the share float it does not take much buying activity in order to get a substantial price movement in the shares. What had taken place was the share price got way ahead of the true share value (based on fundamentals, market cap, and growth rate). In other words people were willing to pay up for the stock even though the business suggested it was not worth that much. In July and October of 2006 Amrep reported EPS numbers that were way ahead of analysts expectations, and that brought buyers to the table thinking the company was way under priced. Always remember that investors and traders will pay what they 'feel' the stock is worth. Hype goes a long way to the investor. Greed & Fear drive the real price movements

But in January 2007 Amrep released quarterly earnings and they went from an EPS of 2.42 (October 2006) to 1.04 ( 132% drop ). Reality had set in. Now all of a sudden investors were holding onto a stock that was in no way worth the value they paid for it in their views. The massive sell off began late January 2007 and has been a straight drop ever since.

The share price of Amrep is nearing a more realistic value now based on the actual earnings of the company. More importantly is that the share price a level investors "feel" it is worth? Where the price will stop falling can only be answered by technical analysis. At the present time on a weekly chart there are weak signs that it may have bottomed. But I caution that those signs are weak. (see the weekly chart shown below). What we need is to see more evidence of a reversal in the works before we can consider this a swing trade (mostly to capitalize on the short interest covering). We do this buy using the charts to establish criteria to test those conditions.

First we have long term support areas. Currently the share price is close to one support area with a stronger one below it. Is this the support area that is going to hold and be the base for the start of a trend reversal? We can't say. That is why we next set conditions which must be met to confirm to us that the bottom may have been established. We then look at a closer view of the stock chart to show the trend line and a baseline level we want to see the share price trade at to give us confidence that buyers are working up the price (daily chart shown below).

Is Amrep worth $46.91 a share (July 6th closing price)? Is it worth even lower than that and we will drop to the next support region around $34? A company with a current P/E ratio of 6 may sound good and may sound like a bargain but P/E ratios don't necessarily indicate that the share price is undervalued or even a good investment. A stock always trades at the price the investors perceive the value to be. And this is why I rely on the technical analysis of the tape (charts) to tell me what investors are willing to pay for a stock. Go back to Amazon a few months ago. They had a P/E of over 100 leading into their earnings release in April. Many analysts were saying that the price of Amazon was overvalued already and that any further upward price gains would be difficult. Well they were all wrong and even with the way overvalue condition investors bought up Amazon shares like they were printed on money themselves.. If one were to use P/E as a guide for determining growth potential or the lack thereof the chances for successful investments/trades will be lower. In swing trading I never use a P/E ratio. I look to the chart to tell me what the investor is willing to pay. And when there is a consensus that it is time to start buying upwards, then I join in for the ride and then hop off before the ride ends. Don't want to get stuck at the end of the line in a roundabout and then head back down.

RebelTraders Portfolio Performace

The Rebel Traders portfolio began with the first trade on May 24th, 2007

Each trade represents 10% of the overall Rebeltrader capital account.

Risk management is to limit losses on any one position to no more than 4% (8% worst case). A loss of 4% on any one trade equals a loss of 0.6% against the total capital. This is how to successfully win in the markets. You never throw all your money into one trade. For if you did that then a 4% loss on that one trade would be 4% loss on your entire capital! By dividing up your capital into slices you reduce the risk to your capital. See my previous post on portfolio management here.

RebelTrader portfolio trades to date (some stock symbols include multiple plays, i.e.. purchased once then sold, then bought again at a later date and sold again)

The breakdown:

• ARRS 7.1% gain (closed)
  
• B 6.4% gain (closed)
• ARD 5.7% gain (closed) (multiple buy/sells)
• BIG 3.6% gain (open) average share purchase price=$29.91
• RGR 3.6% gain (closed)
• WDC 3.6% gain (open)
• AKS 3.1% gain (open) (multiple buy/sells)
• AMX 3.0% gain (open) average share purchase price= $64.22
• GRP 2.2% gain (open)
• ALGN 0.6% gain (closed)
• CPO -0.2% loss (closed)
• IMMU -4.0% loss (closed)
• HGRD -4.1% loss (closed)
• WWAT -4.4% loss (closed)
• MTRX -6.0%loss (closed)
• CMGI -6.3%loss (closed)
  

As of Market close July 6th, 2007 Rebel Trader win/loss ratio= 1.5:1

As of Market close July 6th, 2007 Rebel Trader compounded annualized performance based on trades to date and length of time each trade held= +98.3%