"Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions."
Sun Tzu

Thursday, January 24, 2013

Evaluating Selloff Risk

Equity markets are obviously overbought, but stocks could stay in this mode for quite a while.

Wednesday, January 23, 2013

New Long Trade: WLT

Yesterday, I went long WLT again. The pattern I'm playing here is the pre-breakout base from my playbook: instead of trading the breakout itself, I either get in before (breakout anticipation) or after (on a pullback).

Something has Changed...

Yesterday, Goldman was out with a piece where they hypothesized that "we are in a new [lower] VIX regime". Of course, the writings were immediately trashed by ZeroHedge.

Sunday, January 20, 2013

Game Plan Week of Jan 21

Equities continued to crawl higher last week and I actually did the opposite of what I sketched out in last week's game plan. Instead of reducing exposure, I added positions and ended the week 70 % long.

Thursday, January 17, 2013

Trade Review: RCL

The market continues to hold up and seems to work through oversold conditions by consolidating sideways. There are still stocks that setup on the long side, so I decided to add positions. Due to a weakening overall market, I plan to take profits quickly, though.

Monday, January 14, 2013

Game Plan Week of Jan 14

As I highlighted in my previous post, risk for an intermediate-term pullback or even trend reversal has risen. A market top will take time to form. Despite weaker market breadth, technicals still look good in many leading stocks. However, after the run of the last weeks, not many setups emerge. So "wait & see" is the current strategy and I keep scaling out of successful longs.

Earnings season might offer opportunities and I'm scanning the market for some "earnings gap" plays. Besides that, I like to keep my powder dry. As always: cash is also a position.

Saturday, January 12, 2013

Why I'm Still Long Despite Being Bearish

I believe that equity markets are in a very dangerous position. Yet, I'm trading stocks from the long side. Let me explain.

Sunday, January 6, 2013

Game Plan Week Jan 7

First of all, I'm traveling to Macau this week, so trading will muted, which is not a bad thing in the current market.

Friday, January 4, 2013

5 Reasons Why I Shorted Gold Yesterday

Shorting Gold is probably the most unpopular trade these days, which is why this position is so compelling. I like unconventional trades.

Here are my arguments:

Thursday, January 3, 2013

This is Where Swing Trades do NOT Buy

A little reminder: the following chart shows areas where swing traders do NOT buy - at the top or above the channel:

Yesterday's Action a Bearish Sign?

The first trading day of the year started with a bang and the S&P 500 gained over 2.5 percent. What caught my eye after the close was the NYSE New 52 Weeks Highs chart: