Archive for the ‘Technical Stocks’ Category

Solar & Coal Stocks Primed To Shine (NYSE:TAN) (NYSE:JRCC)

Monday, February 6th, 2012

Solar & Coal Stocks Primed To Shine (NYSE:TAN) (NYSE:JRCC) – Video of the current setups for an upswing in JRCC and TAN (solar ETF) Learn how to profit.

JRCC Bullish Wedge or here

TAN Bullish Wedge or here

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2-2-2012 Small Cap Watch List

Friday, February 3rd, 2012

Small Cap Stocks in review. Small caps reviewed AFFY, PEIX, BIOF, FRO, SIGA, AMSC, ASTI, EMKR, and QTWW. Techincal analysis breakdown with chart review.

View video here

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SP 500 Technical Range 1330 Top

Monday, January 16th, 2012

S&P close on 1-12-12 prior to the S&P downgrade of 9 Euro Nations and EFSF. The downgrade does not alter this technical analysis of the overall health of the markets. Headwinds however do remain. The analysis ranged from the daily extended further out to the monthly chart of the 1970′s. A bear technical double-top had formed in Oct 2007. Current top of May 2011 may signal a descending channel currently at 1330. Though this is a premature trend, we may be months away until confirmation is given- BUT PLEASE NOTE 1330-1350 range.

SP 500 Technical Range 1330 Top

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Stock Watch Of The Evening 1-11-12

Wednesday, January 11th, 2012

This evening we are launching for the first time, video log of ACE’s stock picks. Stocks have beaten down the last several months which provides a great opportunity to make tons of money. Last night, I highlighted 2 stocks prime for takeoff. Sure enough they exploded to the upside. The 2 stocks TXT January 22.50 for .02 or equivalent to $20 contracts. It had 5800 in open interest. The stock was trading at $20.25 at the time. The option contract closed up today a whopping 750% to .17. Today’s high was .36 or 1700%. That’s amazing. The second one was AMSC. A small cap stock that has been beatendown to shreds. It had 31% short float of 51 million shares outstanding. This is a target of a short sueeze. Sure enough today began it’s squeeze. Expect more gains!!

1-11-12

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S&P Hits 1266 Resistance; Markets Fall

Wednesday, December 28th, 2011

U.S. stocks dropped Wednesday, sending the S&P back into the red for 2011, as concerns about Italy’s long-term debt auction on Thursday pushed the euro below the $1.30 level. Investors were pulling back from risk ahead of an Italian auction of longer-term government debt on Thursday. Before the opening bell Wednesday, U.S. stock futures were gearing up for a higher open, thanks to a successful auction of short-term Treasury bills in Italy. Demand for Italian six-month bills increased from the previous auction, and the average yield of 3.251% was half of the 6.504% average, a euro-era high, paid a month earlier for the same maturity.

But that optimism faded as the euro tumbled and yields for longer-term Italian debt marched higher throughout the U.S. morning. Italy’s 10-year yield traded recently at 6.944% as investors looked ahead to Thursday’s auction, close to the 7% threshold that economists consider unsustainable. Adding to the concern, the European Central Bank’s overnight deposit facility reached a second-straight record raising worries that banks would rather park cash there rather than lend it to other banks. The euro fell as low as $1.2954, down 0.9% for the session and just short of the 11-month low of $1.2945 it reached in mid-December. As traders fled the common currency and other risk-sensitive assets in thin holiday markets, the dollar was boosted against nearly every major currency except a broadly stronger yen. However, some investors warned that thin markets tend to exacerbate price movements during year-end trading.

Italy sold 9 billion euros ($11.8 billion) in 6-month T-bills, with a yield of 3.25 percent compared with November’s euro era high of 6.5 percent.

The SPX or SPY remains bullish above the ascending triangle. A break below 1200 will say otherwise.

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Why Is 200 Day Moving Average Important

Monday, November 14th, 2011

A lot of technicians watch how the shorter-term moving averages make their way around the 200 day Moving Average. For example, if the 50-day moving average is crossing below the 200-day, you might be considering lessening that position. This coined the “Death Cross”. It depends on a lot of other factors, of course. If price is above it and it’s slanting upwards and you’re long, that’s good.  If price is below it and it’s slanting downwards and you’re short.

But the main thing is that it’s the one piece of technical analysis known and understood by those who don’t usually follow technical analysis. Most mutual fund managers are heavily oriented toward fundamental analysis. They’re looking at income statements and balance sheets and free cash flow and enterprise value and everything else they’ve been taught at business school. The subject of  price and volume patterns of stock charts is widely dismissed or asked to sit in the back seat of financial studies. Except for one thing and that’s the 200-day moving average. The mutual fund managers get that even if they get nothing else about the strange brew of apparent voodoo known as technical analysis.

Right now, I believe those managers are using the 200-day of the S&P 500 to reduce positions. We’ve tested that level from below twice now and each time, the market has been unable to sustain an advance beyond it. It smells like distribution. One of these days, SPX will take out that moving average with plenty of volume, but for now, the recent action confirms that a bear market remains in place. I’ll be watching for a re-test of the 1100 area or perhaps lower. In the SPY that correlates to the 110. See chart below.

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Markets Are On Monday Muteness

Monday, November 14th, 2011

Last week the markets were in a tug and pull action after the debt ridden issues Italy took front and center attention away from Greece. Two “Technocrat” governments are forming in Greece and Italy. The CBOE Market Volatility Index (VIX) clawed out a weekly gain, and held onto its perch above 30. With global investors still on edge, and significant technical hurdles just overhead, stocks remain stuck in limbo on the charts. Option expirations are set for this Friday the the 18th. The Dow Jones Industrial Average (DJIA – 12,153.68) and S&P (SPX – 1,263.85), finished in the green last week, overcoming a 390-point drop in the DJIA on Wednesday.

SPX continue to dance around their year-to-date breakeven points for the year, which are located at 1,257. During last week’s roller-coaster ride, it’s interesting that the SPX’s low on Wednesday was 1,226, a resistance point in September and October. The 1,225 area was one we flagged as being critical while the market grinded higher from its October lows, as it is the site of the SPX’s historically significant 80-month moving average, and a 50% retracement of this year’s May high and October low. That said, the SPX continues to struggle in the 1,257-1,260 area, which coincides with its 2011 breakeven, its lows in March and June, and a 61.8% retracement of the calendar-year high and lows.

Despite the presence of these technical speed bumps, we continue to believe the sentiment backdrop is one in which equities can muster enough buying power to clear these hurdles. For example, as we said last week, put buying on equities relative to call buying recently peaked at a two and a half-year high, indicating an extreme in pessimism that could mark a major market bottom.

Moreover, we are noticing increased call buying relative to put buying on CBOE Market Volatility Index (VIX – 30.04) options, after a long period in which put buying predominated and the market fell sharply. The change in the ratio’s direction suggests that market movers, such as hedge fund managers, could be using VIX calls to hedge stocks they are accumulating.

Speaking of the VIX, we find it interesting that the late-October low in the 24 area was half the August peak at 48, while recent peaks on Nov. 1 and Nov. 9 at the 36 area marked a 50% advance from the trough of 24. So, as we said a few weeks ago, not only is VIX 30 significant, but so are VIX 24 and 36 as the market continues to bounce around critical technical levels. Therefore, if the VIX moves below 30, we would view this as an acceptable level at which you can purchase your portfolio insurance to help ride out any sharp, overnight declines.

Finally, we’re currently on the cusp of options expiration week. Therefore, exchange-traded fund (ETF) options may impact the price action and levels to watch during the course of the week. For example, the 127 and 128 areas on the SPDR S&P 500 ETF (SPY) — which correspond to 1,270 and 1,280 on the SPX — are the site of heavy call open interest relative to put open interest, and could act as resistance on rallies. Pullbacks to 124 or 125 — which correspond to 1,240 and 1,250 on the SPX — could provide support, as these strikes are home to heavy put open interest.

Technical speed bumps remain overhead, and headline risks linger, suggesting hedging is still a prudent strategy. But a breakout above resistance levels could be very rewarding for bulls, as short-covering activity and an abundance of sideline cash could provide the fuel to drive equities during a seasonal period that favors the bulls.

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Bear Market vs. Bull Market

Wednesday, October 5th, 2011

It’s tough to be an optimist these days. Unemployment is high, economic growth is weak, and many leading indicators are pointed in the wrong direction. And that’s just in the United States. Elsewhere, Greece and other European countries are struggling to stay solvent, Japan is facing one crisis after another, and even China’s red-hot economic engine appears to be cooling down. So it’s no wonder the mood on Wall Street is bearish. And it’s no wonder investors are on edge. Market turnarounds can be sudden, and they can be spectacular. And if you abandon the stock market when it’s at or near a bottom, you abandon the opportunity to take advantage of the rebound. Being out of the stock market when a recovery occurs can be costly, as history shows.

Reviewing nine bear markets between 1960 and 2010 (defining a bear market as a decline of 20% or more in the S&P 500 over at least a two-month period), you’ll see that in nearly every case, the market experienced a strong rally soon after hitting bottom.

Throughout history, bear markets have been buying opportunities. Although we certainly don’t know when market or economic conditions might stabilize, and we’d be foolish to try to pinpoint any potential ‘trough,’ the historical implications are pretty clear.

S&P 500 bear market Decline
(from peak)		 One year later
1961–1962 –28.0%
(as of June 26, 1962)		 +31.3%
(as of June 27, 1963)
1966 –22.2%
(as of October 8, 1966)		 +33.2%
(as of October 9, 1967)
1968–1970 –36.1%
(as of May 26, 1970)		 +36.6%
(as of May 27, 1971)
1973–1974 –48.2%
(as of October 3, 1974)		 +37.9%
(as of October 3, 1975)
1980–1982 –27.1%
(as of August 11, 1982)		 +56.2%
(as of August 12, 1983)
1987 –33.5%
(as of December 4, 1987)		 +22.8%
(as of December 5, 1988)
2000–2001 –36.8%
(as of September 19, 2001)		 –12.5%
(as of September 20, 2002)
2002 –33.8%
(as of October 9, 2002)		 +22.8%
(as of October 10, 2003)
2007–2009 –56.7%
(as of March 9, 2009)		 +68.6%
(as of March 9, 2010)

Stocks in Asia ended in the red today, thanks to familiar concerns about the fiscal fate of Europe. Late Tuesday, Moody’s cut Italy’s sovereign debt rating by three notches to A2, with a negative outlook — echoing a similar downgrade from Standard & Poor’s last month.

Conversely, the major European benchmarks are pointed higher at midday. Italian Prime Minister Silvio Berlusconi’s office expressed a general lack of surprise at the Moody’s downgrade, and traders seem to share the government’s nonchalance. Instead, stocks are on the upswing after the Financial Times reported that euro-zone finance ministers are working toward a plan to recapitalize financial institutions. “Capital positions of European banks must be reinforced to provide additional safety margins and thus reduce uncertainty,” said Olli Rehn, commissioner of economic and monetary affairs, in a statement to the paper. At last check, the German DAX has jumped 3.4%, the French CAC 40 is up 2.8%, and London’s FTSE 100 is 2.1% higher.

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2011 Summer Market Meltdown; DJIA Down 500

Thursday, August 4th, 2011

Stocks plunged sharply Thursday, with the Dow down more than 500 points, in its worst one-day drop since December 2008. All three major averages tumbled into negative territory for the year as investors were rattled over an intensifying global economic slowdown. The S&P 500 sank 60.27 points, or 4.78 percent, to end at 1,200.07. In addition, all three averages fell into “correction territory,” defined by a drop of 10 percent from its peak from its intraday high in Apr. 29. The Dow Jones Industrial Average (DJIA) may have halted its losing streak on Wednesday, but the bears were back with a vengeance today. Ahead of tomorrow’s highly anticipated nonfarm payrolls report, Wall Street was none too impressed with the weekly jobless data from the Labor Department. The discouraging stats sparked an ominous note ahead of the July jobs report, and buyers hit the exits en masse as the session progressed. By the time the bell mercifully sounded, the DJIA found itself more than 500 points south of breakeven, marking its worst single-session drop since Dec. 1, 2008. On the flip side, the CBOE Market Volatility Index (VIX – 31.66) or the Street’s “fear barometer” skyrocketed more than 35% to tag a new 52-week high, marking its heftiest daily percentage gain since early 2007.

When markets are heading south buy Short ETFs and bonds

S&P Marks to keep in mind

6 Month 300 day Moving Average/61.8% retracement- 1220-1225 -BROKEN

2nd support – 1195 -Will it Hit tomorrow and bounce (5 points away)

50% Retracement – 1120-1150 IDEAL AREA TO BUY

May – August 2010 Neckline Low – 1050

10 year 200 day Moving Average/Ultimate Support/50% retracement – 1103

Below 1103 – Double-Dip Recession -Highly unlikely

What is a Market Correction

Secondary trends are short-term changes in price direction within a primary trend. The duration is a few weeks or a few months. One type of secondary market trend is called a market correction. A correction is a short term price decline of 5% to 20% or so. A correction is a downward movement that is not large enough to be a bear market (ex post). Another type of secondary trend is called a bear market rally (sometimes called “sucker’s rally” or “dead cat bounce”) which consist of a market price increase of only 10% or 20% and then the prevailing, bear market trend resumes. Bear market rallies occurred in the Dow Jones index after the 1929 stock market crash leading down to the market bottom in 1932, and throughout the late 1960s and early 1970s. The Japanese Nikkei 225 has been typified by a number of bear market rallies since the late 1980s while experiencing an overall long-term downward trend.

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What Is A Short Squeeze In A Stock

Wednesday, August 3rd, 2011

The short ratio (or short interest ratio) for a public company is derived by dividing the number of shares sold short, divided by the average daily trading volume. It is an indicator of the prevailing sentiment the market has for a specific stock and is used by both fundamental and technical traders to identify trends. The short interest ratio can also be calculated for entire exchanges to determine the sentiment of the market as a whole. If an exchange has a high short interest ratio of around five or greater, this can be taken as a bearish signal, and vice versa.

A short squeeze can occur if the price of stock with a high short interest begins to have increased demand and a strong upward trend. To cut losses, short sellers may add to demand by buying shares to cover short postions, causing the share price to further escalate temporarily. Short squeezes are more likely to occur in stocks with small market capitalization and a small public float.

Best Place To Determine A Short Squeeze Candidate: ShortSqueeze.com

If you ever spot a stock that is surging by double digits within a very short time span, you may have run into a stock that is being “short squeezed”. Short squeeze is a term used by investors describing a situation in which stocks get “squeezed” upward rapidly, driven by the short sellers who are covering their short positions.

Short squeezes often result when the price has risen to a point where short sellers decide to cut their losses and get out. This can originate from stocks that have been targeted heavily on the short side with high % of short sellers relative to the % of shares floating. All it takes then is one big news for the demand of the particular stock to surge, disrupting the balance between supply and demand. Often times, this is followed by a series of buying sessions, which drives the short sellers to cover their positions by buying the stock back.

So you can see that identifying the right stocks with potential short squeeze can reward you greatly.  Now how do you go about identifying that?

shortsqueeze.com is your answer.

Short Squeeze dot com is one of the most popular websites for identifying short squeeze opportunities.  It features an array of useful data at no cost but also offers more in depth data with a subscription based service should you need more in depth features.

This is what you get to see when you enter a quote at shortsqueeze.com.

“Short Squeeze Ranking” is the proprietary data that it offers as part of the content.  Taken directly from shortsqueeze.com:

ShortSqueeze.com has developed the Squeeze Ranking™ system used to gauge a stock’s squeeze potential. We use a proprietary algorithm used to rank a stocks potential for either a bullish or bearish stock price move. Squeeze Theory™ is the creation of Dylan Wetherill, the founder of Short Squeeze™. The theory seeks to identify the basic principles that cause a stock to experience a short squeeze (bullish) or a long squeeze (bearish).   For example, a Squeeze Ranking™ of 0 is neutral, with unlimited up or down values to mark bullishness or bearishness. A Squeeze Ranking™ of 2,000 would be more bullish than a Squeeze Ranking™ of 50. Conversely, a negative Squeeze Ranking™ of -3,000 would be much more bearish than a Squeeze Ranking™ of -50. As a Short Squeeze™ member you are able to search all stocks and find stocks with the highest Squeeze Rankings™: short squeeze (bullish) and long squeeze (bearish). The process Squeeze Ranking™ system is designed according to the principles of Squeeze Theory™.

Whether you sign up for their monthly service or not is up to you.  However, you must check out the site and understand just how useful its data can be.

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