Principal Asset Development

Monday, April 13, 2009

DOW 30

The Dow 30 finding resistance at the 8087 level where the 61.8% Fibonacci line YTD resides.

In the "must keep an eye on" category is the volume of the move away from this line.

If volume is weak during this retracement give creedence to the bulls and place your long calls in the 9k region.

If volume is strong and the retracement gains momentum to pierce throug the rising EMA's....Place your PUT orders in the 7500 area.

For the Web's best interactive charts, please visit http://www.Prophet.Net

Friday, April 10, 2009

2008 Top inverted

Inverted 2008 Top

2009

Pretty telling and easy to formulate a trading strategy with this kind of advantage.....

It is indeed a Good Friday...

Happy Easter

SPY

I'm seeing some pretty clear trading ranges as this bottoming process continues. And I guess we're going to become experts in the Inverted Head & Shoulders pattern.

The YTD darker dotted lines are sporting this pattern as the lighter shades show the slowing rates of trend change down as well as up.

As a note I went back and looked at the October 2008 top and found a similar 3 month topping H&S pattern. You may find it interesting that it retraced to the next to last line before falling. Meaning if this is the bottom we could reasonable expect to see 75 on the SPY or 750 on the S&P 500 before the Bull market can begin in earnest.

Short-term range from the rising EMA's at 81.0 to 87.41
and then again from 87.41 - 94.45

Remmber as the pattern completes the breakout will eventually fail and the swing down will be quick and violent. So as we approach these lines of resistance it's an easy trade to get short toward the tops of channels and get long toward the bottoms of channels with stops just on the other side.

For the Web's best interactive charts, please visit http://www.Prophet.Net

SPY - bottom a process

May go higher - may go lower
The rates of ascension/descension are MUCH slower....

The bottom is a process which ALWAYS has a test.

For the Web's best interactive charts, please visit http://www.Prophet.Net

Thursday, April 9, 2009

SPY breakout on low volume

The media are all abuzz, about the breakout to the upside...

Be careful as the Inverted H&S pattern has yielded it's breakout higher, but when this fails the turn-a-bout will be quick and violent to the downside

For the Web's best interactive charts, please visit http://www.Prophet.Net

FDX versus UPS annomally

And checkout the best in breed shippers....

UPS is killing FDX...what is that about 33% YTD outperformance on price? And the divergence did not begin until mid Feruary....

The same short covering question is raised here as well...

What gives: Are we seeing price performace out of the stronger company now becoming the BEST in breed? Or is this just Short covering?

Either way this is definitely tradable, I'm just not sure how to go about it....

Any suggestions or thoughts?

For the Web's best interactive charts, please visit http://www.Prophet.Net

Homebuilder retailer anomally

Why has Home Dopot outperformed Lowes by such a huge margin Year to Date?

Looking at the charts separately HD is over it's 200 day EMA and LOW is just now approaching the underside.

Could it be that HD had a HUGE short volume on the way down and those traders have been covering? Or is HD truly 20% better than LOW going forward?

Either way because of such a huge disparity could a safe trade be to short HD and get long LOW using out of the money October Options until this gap is closed?

For the Web's best interactive charts, please visit http://www.Prophet.Net

ProphetCharts: CALM

CALM the egg producer in New Enlgland area breaking the downward trend and moving sideways

Long with stop just below$22.50

For the Web's best interactive charts, please visit http://www.Prophet.Net

SMG

Scott's is showing strength as upwardly slanted Inverted H&S is consolodating on weak volume

Long with stop between 20 Day & 50 Day EMA

For the Web's best interactive charts, please visit http://www.Prophet.Net

GRAN

Bank of Granite is not an Optionibla security; however, they are still paying a healthy dividend.

The Financial group still has not turned and it is possible to pick up GRAN sub $1.25 as the descending triangle will soon break.

For the Web's best interactive charts, please visit http://www.Prophet.Net

MET

MET has broken the downtrend and crossed resistance back into a previous range by completing the Inverted H&S and breaking out....

Now the line of support at $22.50 must hold or $15 is a real possibility in a hurry....

For the Web's best interactive charts, please visit http://www.Prophet.Net

Wednesday, April 8, 2009

SPY daily

The inverted H&S pattern completed and consolodation on weak volume back to test the rising EMA's is making a bullish case and a fairly safe trade with stops just below or loosely below the EMA's.

Bottom-line is a significant move is getting ready to take place....which side has the greater risk/reward?

For the Web's best interactive charts, please visit http://www.Prophet.Net

SPY 10 day - 10 min

Channel-lines showing how the consolodation could be forming a Bull Flag back to rising EMA's

For the Web's best interactive charts, please visit http://www.Prophet.Net

Tuesday, April 7, 2009

S&P 500 60 DAY

About to break the uptrend....

Gotta get below 820

For the Web's best interactive charts, please visit http://www.Prophet.Net

Monday, April 6, 2009

China Check: FXI

For the Web's best interactive charts, please visit http://www.Prophet.Net

RIMM

RIMM on the other hand is looking very strong. That EZ short has long been stopped out and it's looking like a break above $64 and we'll see $76. The time to short will be the first lower low.

For the Web's best interactive charts, please visit http://www.Prophet.Net

AAPL

Apple's price may be going up, but for how long on such weak volume?

For the Web's best interactive charts, please visit http://www.Prophet.Net

FMD

First Marblehead showing signs of life....

Up 44% on triple average volume.....

Next stop $3.36

For the Web's best interactive charts, please visit http://www.Prophet.Net

SPY

Volume telling the story over the last ten days....
Voulme up on up moves and
Volume Down on down moves

This 10 day 10 min looks like a Cup with Handle getting ready to launch. This could be a huge setup for either side, but we may see a short squeeze to 875 before the end of the week.

I'm long calls with a stop at 82.20....

For the Web's best interactive charts, please visit http://www.Prophet.Net

Sunday, April 5, 2009

A Sunday night look at charts......

A look at Precious metals, Gold, & the 10 yr note: Is it conincidence they fall to support as the overall market has risen to resistance?

Here's a look at homebuilder KBH, LOW, HD, & MAS:
Pretty easy to see which are topping and which have yet to move or continue to plummet.

And lastly a glance at 4 major ETF's -

XLE (Energy), RTH (Retailers), XLF (Financial) , & XLB (Materials)

Energy & Retailers up quickly to meet resistance as Financials are still heading southeast.

Checkout Materials as they look to still have some upward move and momentum left.

Does this make a case to be:

Long short term Gold & Materials while shorting the Overall Market; especially the Retailers & Energy names who have "popped" recently as profits may be taken?

The case to stay away from Financials remains.

Economic Calendar & Earnings

So the media is saying that the market is holding up when it receives BAD news....
Well next week there will be O'Plenty of it folks. The way I see it you'll have Monday to make up your mind if you have the cojones to get short. But the real bottom line next week is "Will traders want to be in the market after Thursday?" Market closed for Good Friday and going into a vacation week for many. The answer of "is this Bull market for real ?" WILL be answered this week.

Friday, April 3, 2009

NUE

Nucor is ahead of the market...
looking to get long on the pullback

For the Web's best interactive charts, please visit http://www.Prophet.Net

AZO

I think Autozone is the giveaway short above $165...

Bottom line is this will sell-off on any overall market strength

For the Web's best interactive charts, please visit http://www.Prophet.Net

AAPL

Apple now hitting overhead resistance..

Does this look like a huge H&S pattern?
Problem is there is no left shoulder.......

For the Web's best interactive charts, please visit http://www.Prophet.Net

S&P 500 longer term

The next resistance up is at 877 and then 944

Checkout the overhead resistance between those levels....
That range must hold for any long term Bullish case. That is IF it ever gets there......

For the Web's best interactive charts, please visit http://www.Prophet.Net

$SPX Inverted H&S pattern

The S&P 500 60 day- 60 min chart is sporting a descending inverted Head and Shoulders pattern which appears have just completed the right shoulder.

What does this mean? Normally this is a bullish sign for the short term. So the 850-900 level is probable. But be aware that when the breakout fails it can be a violent swing to the down side.

How to trade- Using limited funds play the long side for the break higher, but only to load the heavy ammo short when tull run rolls over.

For the Web's best interactive charts, please visit http://www.Prophet.Net

Thursday, April 2, 2009

RIMM

RIMM exploding on earnings...

They improved their margins considerably

But this is an easy short from $65 back to $53.....

For the Web's best interactive charts, please visit http://www.Prophet.Net

Wednesday, April 1, 2009

XLF

Financial ETF still falling be careful.....

For the Web's best interactive charts, please visit http://www.Prophet.Net

RTH

Retail holders ETF banging its way to the 200 day EMA

For the Web's best interactive charts, please visit http://www.Prophet.Net

Tuesday, March 31, 2009

Dow 30 on a 10 day 10 min

The Dow 30 as well as most of the major indices are sporting similar patterns on the 10 day - 10 min timeframe. The question is are we at the bottom of a bull trend or topping out on a shorter time period bear?

What I know is that the volume today was anemic on the way up and then when the 5 day EMA held as resistance the Bears came in earnest to drive the market down. From this we can discern that the trend in play is down with tightening up stops on the way....

For the Web's best interactive charts, please visit http://www.Prophet.Net

$SPX

I believe the accurate terminolgy for the S&P 500 is "No man's land". Hard to get ong with conviction with the 5, 20 and 50 hour EMA's all falling. It's doubtful the 780 level will hold. Patience......

For the Web's best interactive charts, please visit http://www.Prophet.Net

$INDU

Will the Dow hold 7450?

For the Web's best interactive charts, please visit http://www.Prophet.Net

POT

Potash appears to be trading ahead of the overall market and may be a good indicator of things to come.

It's also shaping up for an easy long trade with a failrly tight stop at $79.45 just below the 200 hour EMA and 50% Fibonacci level. This level should act as support as the right shoulder of an inverted H&S pattern forms.

For the Web's best interactive charts, please visit http://www.Prophet.Net

Monday, March 30, 2009

More FED speak...and the best analogy I could find

2009 Challenge Quarterly Update

Laughing all the way to the bar..........

Sunday, March 29, 2009

S&P 500 2007-2009

If you can't see the pattern of the last 4 posts for yourself make a comment and I'll try to draw you a crayola picture of what to expect in the next month.

Here's a hint:

Near-term month: cautiously long looking for an exit or to -

get good short entry for eventual short-term test of 666 recent lows (which will hold and probably not be seen again)...

Then and only after the test of the lows bounce commences - get long and strong.....

There's the playbook-now go out and execute.....