In last night’s watchlist, sent to ProphetAlerts.com subscribers last night, I stated I was looking at shorting HTCH (Hutchinson Technology, Inc.) because the stock rallied 30% yesterday on no news. The company even stated they were unaware of why the stock price had appreciated so much.
Currently, HTCH is trading down 14.1% from yesterday’s closing price of $3.46 with a current market price of $2.97 per share.
Here is an excerpt from last night’s watchlist sent to subscribers:
“HTCH was up almost 30% today for no reason whatsoever (probably recommended by a blog with a massive following). The network storage sector has been hot lately because of the Dell/HP bidding war over PAR, so this is one stock that probably was hyped up and will be a great short. According to the company, they have no idea why their stock was up this high today. Definite potential short, you will likely be able to find shares at most brokers. If this can move higher, that will be better.. but also be warned that this stock has a float of 22.5M shares and can move pretty good with buying volume and short squeezes. Will be watching this very closely tomorrow.”
Today, I shorted HTCH at $3.36/share and I covered at $3.12/share. My alert stated my goal was under $3.00 with a stop loss of $3.65/share. I admit I was impatient with my personal trade, but subscribes banked off my alert and made a nice profit on HTCH as some held past my cover point. HTCH is now trading under $3.00, as I predicted in my alert today.
Here is an annotated chart of how my real time alert played out:
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On August 19th’s watchlist, sent to ProphetAlerts.com subscribers, I detailed that HSFT is seeing relative strength in an otherwise weak and bearish market. I predicted that if HSFT could crack the $15.65 area again (the previous day’s high) this could be a catalyst for a run to $17-18 in the near term.
Here is a copy/paste from that watchlist on the night of August 19th:
“HSFT is a recent IPO that is surging in price lately… today, it gapped up and ran nicely on strong volume… this is up from a recent price of $11/share and hit $15.65 today… although this could be considered a potential short (and may very well be) you cannot ignore strength like this when the market was so weak and bleeding today. This is a potential buy if it can crack the today’s high of $15.65 on volume, but with a TIGHT stop at $15.00 per share. I can see this running to $17-19/share based on this pattern.. but anything can go, always protect yourselves on plays like this”
This is just a great example of the stocks I send out on watchlists to ProphetAlerts.com members so we can prepare to watch stocks in play and also discuss in the chatroom during market hours. Come JOIN US
Here is a visual chart of HSFT’s great run since my recommendation:
Here is a video excerpt from last night’s video watchlist, sent to ProphetAlerts.com subscribers, that shows the technical pattern where I felt an oversold reversal/bounce could occur at $4.30 today. BIOS has hit $4.55 so far, looking like the reversal is following through nicely. The Dow was down over 150 points, but BIOS kept creeping up all day!
This is one of the many setups we give at ProphetAlerts, join up and start getting real time alerts, nightly watchlists (in video and text form), a live chatroom, and more!
UPDATE: BIOS has since moved over $5.00 per share since my $4.30 recommendation (as of 8/10/2010) for an over 17% move in a few days
Issued a real time alert to short LOCM today at $6.14 per share, and 1.5 hours later it made a low of $4.51 per share! That’s a possible gain of 26% from my short alert. Unfortunately, I was a bit impatient (and not trying to be greedy) when I covered at $5.40. Three minutes later it tanked under $5… oh well…. solid entry, poor exit- but a profit is a profit!
The main reason for this drop is THIS article published by TheStreetSweeper.org today which I quickly acted upon reading… and my subscribers benefited very nicely!
In this video (an excerpt from last night’s video watchlist) I go over ELN and BSX as potential long setups. BSX is still making new highs today… notice I clearly explained the potential entry in BSX on a two year triple bottom formation… this is a great setup, as proven by today’s 4% move that it has already started a potential longer-term reversal off this bottom.
Predictable technical patterns are what I look for, and if you combine the potentials of BSX, ELN, and LOCM today, you could have made over 30% in profits combined by being a subscriber of ProphetAlerts! Join up HERE
Here is a clip of the video sent to subscribers last night detailing the BSX and ELN setups (great example of the videos ProphetAlerts.com members get)
Check out my trades for July HERE on this detailed Google Spreadsheet (which is updated nightly) to see July’s trading performance so far. Overall, not too bad considering the the crazy market- but a profit is a profit. I believe the market volatility is stabilizing and we should be in for some great months of trading here real soon!
Make sure to check out my Profit.Ly profile here, http://profit.ly/user/ProphetAlerts where I update my trades when they are completed. The statistics show I my trades are successful 75% of the time! That was even during the crazy months of May/June/July where market uncertainty was at its highest level.
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The Dow broke right through that 9,686 level I talked about last night (and the past month) and recovered later in the day, closing at 9,732. Why is that important? Because I am waiting for the signal of the real bear market that will occur if we drop under 9,000. There is very little support under 9,500 and then 9,100 – under these levels, you can literally short just about anything and sleep well at night like when everyone when short in 2008. Literally everything gaps down the next day, and you rarely get head fake gap ups the next day. Similar to how the bull market works by gapping each day almost like clockwork, a close under 9,000 will create the opposite. Pick a Dow or S&P listed stock (or more), short them, and sit back and watch your account grow.
We are not there yet. So when I see people yapping about “armageddon” “market crash” “double dip” I have to just sit back and laugh a bit. When the bulls become super bullish at the top (back when I was calling for a big market correction back in April HERE in this video) I knew that was the top and also going off of technicals. Now I hear the bears (who were previous bulls) becoming SUPER bearish like the world is going to blow up and Wall Street is going to look like Skid Row soon. This starts making me bullish- just like I was before the 700 point reversal from the 9,774 lows earlier this month.
I remember listening to those words back in February 2009 and looking at all the dead stocks left in the rubble and thinking to myself, DAMN this is a buying opportunity…. so many people looked at that like the beginning of the end and I thought screw it, I am buying. I loaded up with so many shares of LVS stock under $3.00 that I would be rich now… but of course sold too soon. How would we have ever known LVS would hit almost $30.00 one year after CNBC told us that the financial system and Wall Street as we knew it would be possibly eliminated by 2011 or 2012? We didn’t.
Listen- I am not trying to insinuate you all to start catching a falling knife…. or pick bottoms here, but you have to realize that the market is NOT in a bear trend yet. That means that short term rallies can – and will – happen until we get that no-brainer bear trend under 9,000… if it does indeed happen.
My entire point here is that ideal setups are not here yet (not even any big pumped up OTC stocks ready to dive) and most opportunities are simply scalps due to the intraday volatility and choppiness. Right when everything starts to look like a short, BOOM the market spikes right back up. You are better off playing a slot machine in an LVS casino, rather than trading its stock for now.
The job numbers come out tomorrow, and everyone is bearish on the numbers and expecting the worst. The market is sitting on some key support here, and probably the average joe went short overnight thinking the obvious- the job numbers will suck so the market will tank – Not so fast…. its not that easy. Always expect the unexpected in this market.
When the opportunities present themselves (long or short) you better believe I will be on top of it- for now, cash is better than gambling and when this market starts presenting opportunities again, it will be time to take that cash and put it to good use again.. I promise.
As Prophet Alerts subscribers know, I have been looking for a potential bounce in the market, namely from the 9,774 level as a potential bottom off the May 25th lows. It seems the market is looking for a pop, whether short term or longer term is still to be determined.
Key levels to look for in the Dow are 10,237 and 10,238 (200day EMA and Moving Averages). There is a lot of resistance above this market but I feel a short term pop to Dow 10,500 may be possible if we can get some catalysts next week. The market has become extremely news driven, and going into options expiration week I feel we should get a pop so market makers can profit on the puts sold to the bears this past week. I guess we will see!
I go over in this video our AKS position that I have been scaling into. My average price is now $13.56 in my trading account and $12.66 in my Roth IRA. I love this stock long term, my short term price targets are $16-18 however.
Subscribers also know I am bullish on UCO and oil in general. Crude oil inventory data was very bullish last week, and I dont expect a change of that trend next week. As I mentioned in the chatroom yesterday, I was looking to get long UCO on weakness and today was a perfect opportunity in my opinion. Looking for $11-12 out of this one.
I also bought SIRI at $1.02 because it is breaking a flag formation on the daily chart and it closed above the 10 and 50 day Exponential Moving Averages. I think this is a good risk/reward trade here as Sirius Satellite Radio may want to test the $1.10-1.20 levels in the near future.
Anyway, check out my video recapping the market and some of our open positions for this week:
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JTX broke out today, much higher than our $1.58 buy trigger from last week. Unfortunately, this buy trigger hit on Friday at $1.58, but was technically stopped out at $1.54 so I have to record it as an official loss on my performance tracking spreadsheet.
In our chatroom, however, I stated on Friday afternoon that JTX still looked like a great setup and I also stated I had went long with 2.5K shares at $1.54 per share.
Today, JTX hit a high of $1.92 per share, closing up a nice 21%. Many subscribers took this trade on Friday between $1.54-1.58 and sold into this spike, which is part of my strategy. I often look for chart patterns called “Oversold Reversal Spikes” which is how I can predict breakouts before they occur. I stated this in my video each night.
Although my personal trades are not always timed right, my subscribers are using the strategy I teach nightly to identify stocks before they break out, and how to read charts and trade off of technical patterns. Stocks can breakout without news, solely on technical breakouts as shown with JTX today when it crossed and spiked over the 10day EMA.
Below is an excerpt from last night’s video watchlist that was sent to subscribers:
As ProphetAlerts.com subscribers know, I have been predicting a sharp market rally for some time now. On April 12th, 2010 I sent the following annotated chart to my Twitter followers:
What I essetially indicated here is that the market was about to hit some MAJOR resistance at the 200 day Moving Average (purple line on above chart). Simply put, it would be very difficult to see an extremely overbought market push through this strong resistance.
I send nightly video watchlist’s of stocks to subscribers with new trading setups and reviews of stocks from the previous night. On the night of April 15th, I also reviewed the Dow Jones Industrial Average’s ($INDU) weekly chart and essentially said “this is the top”. After watching the trading session from April 12th through April 15th, I felt very uneasy about what I was witnessing. I even recommended in our chatroom to short AAPL’s stock as it neared $250 per share. I truly felt that this market has moved much too far itself, completely detaching itself from reality. There was essentially no real reason for a market rally in February.. especially one that has lasted this long.
What I have noticed in this market is very unsettling. The media essentially reacts to the market’s movements by issuing news claiming the reason of that days trading session. Notably this year, the Greece debt woes. If the market is up that day, it is because of the potential Greece recovery, if it is down that day it is because a bailout plan may occur in Greece. Say what you want, but this and last years market rally was nothing more than a technical rally with news to assist the trend. Fundamentals were completely thrown out the window, and only speculation was used as a forward-looking statement, if you will, to fuel the market rally.
This brings me to another topic. My market comparison to a garbage promoted OTC stock.
As you know, I have successfully called the tops on ALME, MSEH, and the latest promotional stock, AMOK. What do all of these stocks have in common?
1) Inflated market caps compared to their actual fundamental earnings
2) Media and press with ‘forward-looking’ statements indicating “potential” revenue and “possible” business deals and future success
3) Controlled technical uptrending charts
4) Promotions and advertisement, usually paid, in order to generate volume in the stock so insiders or shareholders can sell
5) Excuses when stock takes a hit due to insider or promotional selling
Look at the following charts for ALME and MSEH:
These charts obviously are very strange looking. But imaging if you were in these stocks during the climb, you almost start to think that they would never pull back and that they were going to keep going up forever. As we all know, stocks do not go up forever. Watching stocks like ALME and MSEH climb on complete fluff press releases, horrible financials, paid advertising, and downright disturbing SEC filings. This is how I have felt with this entire market rally these year. The bulls are cheerleading as if they were in the latest penny stock and all it does it move up each and every day. Bears are losing money because although they know whats going on, price action dictates otherwise and they lose money. In the stock market, what seems real and true often is not.. common sense is thrown out the window and laughed at. Who cares about foreclosures and unemployment numbers as long as Joe CEO’s stock options are maturing and making his millions back from the market crash.
This brings me to the Dow Jones chart:
Does this chart pattern look familiar? The stock market is essentially one gigantic “Pump and Dump” which is apparent by even the latest Goldman Sach’s fraud charges by the SEC. Have we been all pumped and dumped by Goldman Sach’s similar to a crappy pennystock, but in a much larger scale?
I think so. Lets outline the comparisons to promoted stocks for this past year’s market rally below:
1) Market caps inflating at an incredible pace, with some trading with huge P/E ratios (see AMZN). Many companys are losing EPS while the market still rally’s their stock on pure speculation
2) Media using forward-looking statements looking ahead to “possible” recovery, yet fundamentals are still horrible. Speculation horrible companies will do well again has rallied some stocks 1000% on the same fundamentals we had pre-market crash (Casino stocks such as MGM, LVS, WYNN, etc are a great example)
3) Promotions and advertisements. Ever see a CEO speak on Jim Cramer’s Mad Money? See random tickers flying across the screen on CNBC? The recent Citigroup pushing on CNBC? Media saying that this is a great time to buy stock and invest.. etc.
4) Excuses when market has a bad day or pulls back. “Greece debt worries” … “Alcoa earnings dissapoint” etc.
Whatever it is, I am more of a technical trader than a fundamental investor, simply because what we read and see I believe is complete crap. The charts don’t lie, and fundamentalists can talk all the smack on the technicals that they want, at the end of the day we have had the biggest market rally during the worst recession since the 1920’s on downright scary fundamentals. Price action of the market has been completely out of sync with reality.
I truly believe that the Goldman Sach’s SEC fraud charges were correlated and timed perfectly to be issued right at the key market resistance area (Dow 11,133) and on a Friday so people can absorb this over the weekend and possibly reverse this trend. Why have we been seeing unusual call option activity on TZA and FAZ this whole week? This was a perfectly timed bull trap this week in my opinion.
The market is one big manipulated pool of frauds and con-artists. We simply ride in the wake of the big fish, and hope we can shake a few coins from their pockets and make money. This is why I am a technical trader, not an investor.
Watch my video below, this is an excerpt from Thursday night’s video watchlist (April 15th) that was sent to subscribers:
