Engage not

Another quote from The Ten Commandments of Mindfulness.

Engage not irrationally into profitable attractions, because jumping too quickly into temptation may well blind wisdom.

So many people have been incorrectly calling for a correction in the last several weeks. While I may agree with them, the timing was terrible. Market seems to move the in the oposite most pundits expect, myself included. The old adage, "Sell in May and go away" did not work in 2007. Will it work for 2008?

Next, you have to understand what defines a correction. Is it a correction to buy or a correction to sell.

Lastly, if you trade, I want to remind you again about 4ema cross 21sma on a 5min chart. Pull up a chart for your favorite and you will see what I mean. Volatility is the money maker if you follow the trend versus trying to buck the trend.

Use the 200sma as your guide for the upside of the market. A hold above 103% of the 200sma, means bulls return and a break below 97% of 200sma means bears return.

Look Not

Before I depart, I would like to leave you a quote from The Ten Commandments of Mindfulness.

Look not for a universal consensus regarding one’s personal opinion, because complete adoption to a single opinion will render narrow mindedness.

Hard Making Easy Money

Some earnings to look at.

Monday: ACV, HUM, LTR, RSH, V, VZ, WWY

Tuesday: ADM, BNI, BP, GLW, GM, LIZ, MA, ODP, X

Wednesday: CL, FPL, GRMN, K, KFT, PG, PRU, SBUX, TWX

Thursday: APA, CHK, CI, CLX, D, EK, JAVA, MET, TMA, XOM

Friday: B, BWA, CVX, DUK, ED, NT, VIA.B, WY

Remember that DOW already broke throught 12,500 and 12,800 !!!

Significant Numbers To Watch

DJIA:
12269-Support, the 4/15/08 low
12931-Resistance, the 01/10/08 high
12408-50-day simple moving average
13077-200-day simple moving average

S&P 500:
1337-Support, the 4/15/08 low
1396-Resistance, the 02/01/08 high
1344-50-day simple moving average
1436-200-day simple moving average

NASDAQ:
2266-Support, the 4/15/08 low
2503-Resistance, the 01/10/08 high
2308-50-day simple moving average
2531-200-day simple moving average

Update: Technical Event for SOHU



Results for Technical Event for SOHU

MOO, SLX, GEX

Keep an eye on them.

MOO, SLX, GEX Charts

Sometimes a different chart can help you see better.

Why did I short AAPL at 168.50 when I knew the resistance was closer to 170?

Worm Inside

Filling the GAP?





I will let you decide.

Forbidden

Both the Apple and the Girl.

She is from the movie The Forbidden Kingdom which I went to see today.



I am already in May160 straddle.

An apple and a girl a day, keeps the doctor away.

Disqus sucks !!!

I sold APPL may160 straddle !!!

One Big Bear

Click Title To Read.

Enjoy your weekend.

Update: This market will not go down until the bears are bleeding. The same was true for when the market will not go up until the bulls were bleeding. Use the force - 200sma !!!

Until the market closes above 103% above 200sma for 2-3 days, my opinion remains unchange.

This does not mean short 100% of the portfolio.

I am never 100% bear or bull.









Another update:

I am putting my neck out on the line again and saying that DOW, NAZ, SPX will not close above 200dma at the end of June. It might move above it, but ultimately, it will end up below it.

Fact versus Fiction

I am really disgusted at myself for not seeing the opportunity in ags. In the first correction, I bought and bought more. In this correction, I was blindsighted by all the negativity in commodities. Have I broken every rules that I have blogged about: Herd Mentality, Fallacy, Frustration, Myopia, Complacency, Penny-Wise, Pound-Foolish, Trend, No Pump and Dump Hypocrites Allowed?

I have definitely exhibited herd mentality and frustration because I was penny-wise and pound-foolish. I had a myopic view of the sector and fallacy that the trend cannot continue. Being complacent and shorting the sector only made matters worse.

In the comments, I will provide you some facts about the sectors from my research and not fiction such as ags are going to fall.

What To Believe?

The last time the VIX was at this level the market was a lot higher. Also notice the OBV is not quite as high.

Either the market is ready for a huge run up or set up to fall.





DJIA:
11634-Support, the 1/22/08 low
12767-Resistance, the 02/01/08 high
12363-50-day simple moving average
13121-200-day simple moving average

S&P 500:
1256-Support, the 03/17/08 low
1396-Resistance, the 02/01/08 high
1342-50-day simple moving average
1444-200-day simple moving average

NASDAQ:
2155-Support, the 3/17/08 low
2419-Resistance, the 02/01/08 high
2303-50-day simple moving average
2544-200-day simple moving average

Earnings to look for Thursday: MER, COF, PFE, UTX, CAL, UTX, NOK, AMD, GOOG, CHKP, ISRG, SNDK, SPWR, AMTD and ETFC.

TSL

Remember the post about filling the gap?

Now, let's apply the infamous 3% delta for the 200sma.

200sma = 46.63 x 1.03 = 48.0289



SPWR reports before the open on Thursday, April 17

passion

I think in order for you to be good at something, you have to be passionate about it. My passion has always been Technology and Taxes, and now, Technical Analysis and Trading.

While I may not be an expert at it, I am definitely learning.

There are a lot of bloggers out there you put a lot of time into the market.

Find them and follow them.

Hopefully, you get the point.

Next, I created a new sidebar - Need To Know and got rid of meebo.

good news bad news

The good news is that I have been offered a postion at a company.

The bad news is that I will not have the time to spend researching the market as I will need the time to spend researching technology.

I will have two weeks to construct a portfolio for the long run and hoping there might be a nice pull back for me to do that.

I will still try to create posts on a nightly basis on things I observed.

It has been fun while it lasted.

Best of luck to everyone.

frustration

The feeling that accompanies an experience of being thwarted in attaining your goals.

source: http://dictionary.reference.com/browse/frustration

I know a lot of traders out there are frustrated because the market is not acting in the way that they expect it to. Some traders quit, some traders compound their mistakes, some traders are just loss.

With all the bad economic news, the market still continues to go up. There are still plenty to investors who are gloom and doom. At the same time, there are plenty of investors who are bullish.

You can anticipate a market decline; however, it does not mean the market will decline. May be it will, may be it won't. Who as a crystal ball?

Look at FXP as an example, the stock rose from 73 to 84+ in a few days. And I am sure you noticed that I sold calls to protect my position and sold my may75c as well. Sure, I would love for FXP to hit 90+. But let's be reasonable.

Do you know where FXP closed at yesterday? 84.20. And where did I say the resistance was? Never even made it there did it?

Hindsight is 20/20. And how many times am I going to keep repeating that? But it's good to be right.

Lastly, looking to buy and executing a buy are two different things. I have been looking to buy GRMN and I actually bought a small position in GRMN today at 46.25. Yes I know that GRMN can fall to 40, where the support is. However, I was willing to take the risk. It's a small position and even if GRMN goes all the way to ZERO, it would not hurt the portfolio. Obviously, I won't hold it to zero, but you get the point.

Buy straw hats in the winter.

fallacy

A false or mistaken idea
An often plausible argument using false or invalid inference

source: http://mw4.m-w.com/dictionary/fallacy

I am sure we all have plenties when we trade or invest.

Example: VMW to the moon.

Need I say any more?

Myopia

A lack of foresight or discernment : a narrow view of something

source: http://aolsvc.merriam-webster.aol.com/dictionary/myopia

Recession is not a bad thing.

Think of it as an opportunity to invest in great companies at a huge discount.

Even in a down market, there are stocks that move up and vice versa.

Focus your time and energy on sectors that are strong.

So far Agricultural Chemicals is still the leading sector.

http://www2.barchart.com/sectors.asp?base=industry

The numbers to watch:

DJIA:
11634-Support, the 1/22/08 low
12767-Resistance, the 02/01/08 high
12339-50-day simple moving average
13144-200-day simple moving average

S&P 500:
1256-Support, the 03/17/08 low
1396-Resistance, the 02/01/08 high
1340-50-day simple moving average
1448-200-day simple moving average

NASDAQ:
2155-Support, the 3/17/08 low
2419-Resistance, the 02/01/08 high
2303-50-day simple moving average
2551-200-day simple moving average

Complacency

A feeling of quiet pleasure or security, often while unaware of some potential danger, defect, or the like; self-satisfaction or smug satisfaction with an existing situation, condition, etc.

source: http://dictionary.reference.com/browse/complacency

What I am trying to tell you is don't get too complacent just because the market turned down today. Market was overbought. A normal pullback is healthy for the market. Know the support on the way down. Stay ahead of the game. When the market rises, start looking at resistance. When the market falls, start looking at support.

Earnings season has started and will determine the direction of the market as well.

Fear from Risk

In general, the more risk you take the more fear you will have.

I recall the times when I was playing BlackJack in Las Vegas and doubling the bet every time I lose. The fallacy is that I cannot lose 6+ hands in a row. The bet would be something like this: 10,20,40,80,160,320,640... If I was betting $10, and I had 16 while the dealer shows a face card, then I would hit, because that is the strategy. For the same situation with a $640 betm then I would be afraid to hit because there are only 5 cards that could possibly help me and 8 cards that will hurt me.

The same principle applies to investing. I bought AAPL for my daughter's account on Feb 22 for 117.50. She now has 30.28% gain in the postion and her dad's APPL shares were liquidated at 130.

People tend to panic when they have a lot at risk.

Filling the gap

I think all good stocks will need to fill the gap, but it does not mean that it always will.

It's like having closure for humans so that they can move on.

See comments for links to some charts.

Lastly, ignore the noise, filter out the news, learn who to trust, trust someone who is compatible with your trading or investing style, learn support and resistance, don't fight the trend.

I am sure it has been a great learning lesson for most so far in April.

Hindsight is 20/20 (f8 trademark).

However, how much money would you have made investing in coals, agricultures, steels in the recent sell off? SLX made a new 52wk high today.

I need to keep better notes and I need to review nots more frequently.

Thank you for your response

U.S. Stocks Rise, Led by Commodity Producers, Financial Shares

I had tunnel vision today and did not see the big picture.

Because of the news -
Jobless Claims Shoot Up to Highest Point Since September 2005,

I already had the conviction the market would be down.

What Tim Knight had to say Don't Dream It's Over

Pay attention to the VIX chart. There is no fear in this market.

A few days ago, I blogged about herd mentality.

Are there any bulls out there? Is everyone now a bear? I am scared and normally when I am scared, I should be buying and not shorting. Hopefully my fear is irrational.

Here is the chart for WYNN and why I shorted at 116.


Here is what I missed on STP. Does anyone think STP is a short candidate?

Shutdown Abort

I don't have a bean counter.

However, can I see a show of hands on who is reading the blog?

If no one is reading it, then I will just shutdown abort and go camp at some place else.

You now, why buy the cow when the milk is free.

Fear Greed

The only thing you need to fear is greed as greed will destroy you.

Don't let fear prevents you from investing, trading, and profiting.

I am talking about missing out on solars because I have been ignoring the sector,

Funny enough, my purcase in PBW and LDK are still down.

But my purchase in MOO and MOS are still up.

Herd Mentality

Herd mentality describes how people are influenced by their peers to adopt certain behaviors, follow trends, and/or purchase items.

source: http://en.wikipedia.org/wiki/Herd_mentality

What scares me is that everyone and his/her grandmas bought FXP today and it keeps going down. Now I wonder how much pain a person can endure.