>SPY: Rising Channel Update

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On 3/25 I sent out notes and did a post regarding rising channels. I said they can be very profitable to trade long while it holds its uptrend, however they can be risky to enter near resistance zones because they tend to break downward – and once that happens the prudent thing to do is sell any long position, and in certain cases use as a short entry. I also made a chart of the SPY’s showing the rising channel they had put in place since the most recent move off the low as well as the impending resistance.

Today that rising channel broke (see charts) and we intend to follow our own rules. We continue to maneuver this market well because we don’t chase moves and take profits where it is prudent. It is important to remember that we are still in a bear market. However, there is still money to be made in counter trend moves if you are accountable, and pick your spots based on compelling entries and exits. Now it is important to measure the severity of this retracement, and using our retracement rules, the size of this down move should give us clues as to the action that is in front of us for the rest of the year. Stay tuned for updates and stay strategic!

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>OIH: Back On The Radar and Looking Long

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The OIH ( ETF for the oil service sector) has been beaten down over the past year as the price of crude has been in a nose dive. However, oil is now starting to see higher prices and although the OIH has lagged the rally it has built a nice channel that could ignite to the upside if the price of crude continues higher (see chart). The trade would trigger if the OIH can get above 85-87 on heavy volume. If the trade does ignite my first price target is around $103 and my second would be a gap fill around the $120 area (see chart again). That would be a %20 and 50% move respectively.

Stay tuned for updates and stay strategic! Track the most consistently profitable team on Wall Street and become part of the T3 community at T3live.com, it’s free and anyone can join!

>SPY: Rising Channels, Great Till They Break

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Rising channels are a common chart pattern across all stocks and appear on all time frames. It also is a tradable pattern – staying long while the stock (or whatever security you’re trading) trends higher. However, rising channels tend to break to the DOWN side! Therefore, once the bottom trend line is breached it is imperative to sell any long position, and perhaps at your discretion, use it as a short entry.

The S&P has rallied significantly off of its lows and during that time has been forming a rising channel (see chart). The SPY’s are also coming into a longer term downtrend which should act as significant resistance which on the S&P translates to between 838 and842. Additionally, I believe the market is overbought and it is hard to initiate new long positions at these levels. I will be watching this pattern very closely for clues as to how much further upside this rally can provide. Stay tuned to the blog and T3Live for updates and as always, stay strategic!

Track the most consistently profitable team on Wall Street and become part of the T3 community at T3live.com, it’s free and anyone can join!

>RIMM: Hangs Tough and Follows Through

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On 3/18 I said in my “Master the Trade” segment the tech sector was back after seeing the action exhibited by BIDU, AMZN, and GOOG. This naturally brought my attention to RIMM. The play was to get long over $42 for a move to 45 -46. Once the trade triggered I said to set your stop at $40 (see chart). It wasn’t the prettiest move, but after triggering on 3/18 today RIMM did reach my $45 price target (high was 44.96). The key to this trade was staying with it and sticking to the stop. At no point after the trade triggered on 3/18 did RIMM trade back below $40 while the market turned down. Instead, it traded sideways while the market pulled in and then today showed more upside as the market rally resumed. Again, this wasn’t the easiest or prettiest trade I’ve posted, but what’s important is having a plan with a good risk/reward setup and once triggered – sticking to that plan!

Stay tuned to T3Live and continue watching my “Master the Trade” segment for future calls. Track the most consistently profitable team on Wall Street and become part of the T3 community at T3live.com, it’s free and anyone can join!

>CME: Breaks Higher for Big Returns

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This morning in my “Master the Trade” segment I made a bullish call on CME. CME has been basing for awhile and a few days ago it put in its first igniting bar to the upside. Since then it has been consolidating nicely (see daily chart). The trade was to get long above $240 for a move to $255. Once the trade triggered, I suggested putting stops between 233 to 232, risking 7 to 8 dollars to make 15. Looking at the 15 min chart – the trade triggered soon after the open and reached my target around 11 a.m. That’s a $15 profit in an hour and a half off of a great set up! I do believe CME eventually trades higher but in this market I am an advocate of taking trades.

Stay tuned to T3Live and be sure to watch my “Master the Trade” segment for future calls. Track the most consistently profitable team on Wall Street and become part of the T3 community at T3live.com, it’s free and anyone can join!

>FAZ & SKF: Follow Through Complete

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Yesterday, after huge moves off their lows, we started to see sellers step into the banks and other names in the financial sector causing the SKF and FAZ (respectively double and triple short financials) to put in a positive day. In this morning’s game plan I said to look for follow through and to get long above yesterday’s high. If you followed the game plan both ETF’s traded above their highs off the open and at this point FAZ gave you roughly a $3 trade and SKF an $8 trade (See charts). At the moment, I believe the “easy” part of the continuation trade is over and it would be prudent to take profits. This was a nice micro trade set up where the purpose is to generate consistent cash flow, as opposed to swinging for the fences.

Stay tuned to T3Live and stay strategic.

>GLD: Starting to Shine Again

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At the end of the our last gold trade (“Golden Opportunities” posts) I noted on T3Live that in order for gold to break through its technical double top it would have to go from the “safety” trade to the “inflation” trade. After the Fed’s action yesterday we re-bought our tier 1 of GLD with the mindset that their policies will force an inflationary environment. If the dollar falls below 81.50, and gold goes over $1000 (breaks the double top) we will see a parabolic move in gold similar to the price action we saw in oil last year.

In December we successfully traded gold from $825 to about $980, once again we are now back in tier 1 to make sure it stays on our radar for a potential breakout move.

Just wanted to share

>S&P: Mission Accomplished!

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As a follow up to my post on 3/12 “Relief Rally at Resistance,” the market has continued higher and we have now reached my second, and for the moment, final price target of between 790 and 810 on the S&P (see chart). At these levels the market is coming into significant resistance and I believe it would be healthy for the market to either both consolidate and rest for a bit, or even retrace a small portion of the move before we continue higher. This was a large and fast move off the lows and hopefully many of you were able to get in early and profit from it. I believe the most prudent course of action at this point is to take profits and not initiate new positions until the market shows us where it will go next and then we can trade it appropriately.

Also, follow the link below to the latest CNBC “Market Insider” blog where I am quoted under the “Getting Technical” header. I comment on yesterday’s Fed action, levels in the market, and note that tomorrow is quadruple witching, which could result in stocks not acting in their normal fashion.

http://www.cnbc.com/id/29764917

Stay tuned to T3Live and stay strategic!

>FSLR: The Sun Has Set

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Yesterday, my play of the day during my “Trades for Thought” segment was shorting FSLR vs. the prior days high (see chart) which would put our stops at $133.60. Yesterday, FSLR opened at $132.37, never traded through the stop, and as of this morning opened at $118.32. That is roughly a $14 gain in a single day! And I believe there is further downside in the trade with my ultimate price target set slightly above $105 (Again, see chart).

This was a calculated trade with a great risk reward setup. This is another example of T3Live finding opportunity in what has been a choppy and somewhat unpredictable market. Stay tuned to T3Live and remember, a planned trader is a profitable trader!

>Now That We Finally Broke

>The sell off into yesterday’s close effectively caps part A of the recent rally off of the lows. Now we will measure the validity of this first move by how shallow a retracement the market puts in and at what point buyers and demand come back into the market.

The true signs that we were done going up was the weakness in GS and MS, as well as the semis and the tech heavy NASD starting to turn and head lower. Additionally, when aig, fre, and fnm are all up (which in this market would be the last things to go) you can bet the first move is over. Also, using a technical approach, the broader indexes were all starting to approach significant resistance and I believe it is healthy to see either a slight retracement or some consolidation at these levels before the market attempts another push higher. Something to take note of is the divergence between the SRS (short commercial real estate) which showed relative strength when the market was still moving higher.

Stay tuned for updates and stay strategic.