Four New Short Positions And Two Stocks I Am Adding To My Existing Short Positions For Friday’s Stock Market Session

February 14, 2008 | Leave a Comment

It was another one of these days where the market just does something the exact opposite of the day before. This should not be a surprise to anyone reading this blog as we have discussed this choppy market and how to handle it ad-naseum at this point. For the past month the market is really going nowhere but as we go along more and more nasty charts develop and less and less good looking charts stay good looking charts. Some of those good looking charts that are now ugly are in the energy-independent oil and gas sector. By early 2008 those charts looked fine, but a month later and now those stocks are starting to crack on some very strong volume. Hence the two oil stocks below as new shorts from very nasty near-perfect short patterns. Add SLB to it as it reverses here at both moving averages, and you have yet another top group starting to rollover. WYNN is another stock that was in a sector loaded with leading stocks. In fact, MGM, looked like a short tonight but I decided that stock was down a bit too much already and the reversal wasn’t close enough to the 50 DMA. SLF seems to be the best new short because the volume on the first selloff was very heavy and the distribution picked up as it fell. After a lower volume rally that failed to make it back above the 50 DMA, the stock has rolled back below the 200 DMA, and is now breaking down on very strong distribution. But the best short tonight based on chart pattern is ABB. I know ABB has some great fundamentals but all of this red on the chart (huge distribution and red to max red BOP) makes it way too juicy to pass up. I take comfort in knowing that estimates for ‘09 are lower than ‘08 and I know that the fundamentals are always the best at the top so with the stock chart selling off on such massive volume and knowing that technicals lead fundamentals I am fine with going short this stock. However, don’t get too nuts. You see how MOS POT MON are doing. Be careful out there. Keep your cash heavy. Bull markets are 10x to 100x easier to make money in than bear markets. This is not a bull market; wake up: it is a bear market. HAPPY VALENTINES DAY! XOXOXOXOXO

Posted by Joshua Hayes | Filed Under Free Archives Shorts

No New Short Positions For Thursday’s Stock Market Session

February 13, 2008 | Leave a Comment

There, of course, are no new short positions for Thursday as the market has decided to stage another powerful rally. However, do not get discouraged if you are heavily short (heck I am still 50-60% short) but if a stock you have recently gone short is not working out you should probably cover it IF YOU CAN’T HANDLE THE LOSS. Just rip the bandaid off and end the pain. I am still short my chemicals and big-cap stocks but I will let everyone know that FSLR MUST!!!!!!!!!! be sold. I got filled at 216 this AM and it is now at 228. So I am getting rid of everything I added. It is painful but I know the trade is WRONG and we need to get out. So if you are short FSLR, like I was, you do need to sell it all. But take a look at the chemical stocks. They were all lower. Even my fill on AGU gave me a gain by the EOD. However, I will also be selling this as the stock should never have gotten over the 50 DMA. If you invest the way I invest, sometimes you are going to be either early or wrong. Thank God we know what to do when this happens. We cut our loss and move on to stocks that are moving in our favor. As a courtesy to a lot of the new subscribers I am going to post all my covers in here so you can see what I am covering and therefore can learn why I am either covering all of it or part of it. However, stocks like AAPL, GOOG, and RIMM are still fine. But, once again, all the BIDU add must be covered. But my original BIDU short from January is still good to go. So today was a powerful rally but the trend in this market since the November top is down. Don’t forget the volume on the NYSE was LOWER than yesterday and today’s gains on the Nasdaq came with volume under the 50 day volume average and ONLY slightly higher than yesterday. This is a continued bear market bounce. Nothing more, nothing less. It is what it is. Trade the longs, trade the shorts, and keep the cash level extremely high! The trend is your friend and right now the trend is all over the place. Be careful out there.

Posted by Joshua Hayes | Filed Under Free Archives Shorts

Two New Short Position And Four Stocks I Am Adding To My Existing Short Positions For Wednesday’s Stock Market Session

February 12, 2008 | 1 Comment

It can’t possibly be a coincidence that all of the stocks that I want to load up on with large short positions all had bearish intraday sessions today leading to three of them setting up new areas to go short on the charts. None of the failures are perfect but they are at critical resistance levels that if they do fail it is not going to cause a ton of pain. And that is all you can do, until the final top or real breakdown occurs. AGU is the last chemical stock I need to get short that is above $50 and now my first round of short sells in the leading chemical stocks are now complete. ADSK’s long-term chart looks extremely toppy and the rollover is on some heavy selling making this worth a SMALL poke. Nothing more, nothing less. The big boys (three of them below) are the shorts I am focusing on. The way all of these former leading stocks look I would not be surprised if we had a down day tomorrow. Even though it doesn’t matter, since most of our stocks are acting correctly.

Posted by Joshua Hayes | Filed Under Free Archives Shorts

No New Short Positions For Tuesday’s Stock Market Session

February 11, 2008 | 4 Comments

There was no one single stock that setup in a good to great short pattern. Therefore, the best thing to do is not force any trade that is not setup naturally and to bide our time until the stocks we are watching to short touch the 50 DMA. Many of the past bull market leaders that we are now short are rallying on lower volume getting closer and closer to the 50 DMA. Even though the chemicals are not working yet, if you know how to read charts, you can see that the charts are still as topped out as can be as they rally on low volume and selloff on higher volume. But since they did not crack immediately, I am cutting 1/2 of my position in all of my chemical shorts. I will look to reenter with a better setup.

Posted by Joshua Hayes | Filed Under Free Archives Shorts

Four New Short Positions For Monday’s Stock Market Session

February 8, 2008 | Leave a Comment

There are two shorts here that really interest me in the potential gains that can be gained from them and the other two shorts are excellent setups for some high reward/low risk gains. TNH and BG are part of the chemical-fert, agricultural sectors that have been major leaders during our last bull market that lasted five years. However, as it is obviously clear to even the value guys by now, the stock market is not in the best of health. There may be some values out there but something tells me those stocks are going to get more valuable before they go higher. Therefore, I would love to make some gains on the short side in these stocks before any value can be found. TNH and BG will both be heavily shorted but I have cut loss areas VERY CLOSE by, in case these stocks are not ready to top yet. If that is the case and these stocks go on to make new highs, you can guarantee the markets bounce will last longer convincing more amateur market players that this is the bottom. It may be the bottom for now, but stocks like AYE and TMX are saying that the lows probably will not last long with so many charts looking like theirs. I am going early in TNH and BG but why not try to get them near the top? They are showing clear parabolic climax run topping patterns and the market is weak. Works for me.

Posted by Joshua Hayes | Filed Under Free Archives Shorts

One New Short Position And One Stock I Am Adding To My Existing Short Position For Friday’s Stock Market Session

February 7, 2008 | Leave a Comment

I am keeping the new short and my pyramid position small as I am not confident that the market wants to move down as fast as it did look like it wanted to. The current bounce looks to have caught a bid more of a bid then I thought it would and despite the weaker close on the Nasdaq it is possible this bounce could last longer than I thought it would. Folks, that is the market. It will almost never do what you expect it to do. It was down a bit too much on the short-term but so many charts were freshly broken that it looked like the selling would have continued with the conditions being overbought on the short term. But the market doesn’t always do what you think it will do and that is why the shorts from last night were kept small. Trust that gut and keep ‘em small.

Posted by Joshua Hayes | Filed Under Free Archives Shorts

Six New Short Positions And Two Stock I Am Adding To My Existing Short Positions For Thursday’s Stock Market Session

February 6, 2008 | Leave a Comment

I am getting to the point that I thought I would never be at: too short. But I am not short with what I want to be short as the Chemical and former big-cap tech leaders still have not had ANY perfect setups. The shorts have been much heavier than the others by a HUGE margin (25 to 50-to-1 ratio from leading shorts to other shorts) but I am still not as short as I would like to be. However, my other 80 shorts are now of some big size that today’s selloff really had a BULLISH impact on my portfolio. Like I discuss in the longs section, I know a lot of you can’t trade like me and I don’t think you should. But you should focus on the few shorts you take and if you take any of these tonight you have some amazing risk to reward ratio setups here. However, none of the new shorts are the shorts I want to load up on. But the two oil stocks (NOV and SFY) will be a heavier position than the other shorts. RIMM is the only one I want to load up on but it has been down around 10% the past two days and if it gaps lower with AAPL and CSCO it could be a tough short. So don’t load up on it. It is best to wait, I guess, for another low volume rally in the future and if the market chops around for a few months we might get some setups that lead to major breakdowns. And if we can’t get these shorts, hopefully that means that a raging bull market is around the corner. Anyways, please if you go short any of these to use the cut loss areas. Remember, I am not loading up on any of these but if I did decide to the key to remember is: the more red the more it will play dead. Be careful out there and make sure you keep that cash high. My shorts are adding up already and I have gone from 45% cash to 30% cash in two days so I am pretty comfortable here.

Posted by Joshua Hayes | Filed Under Free Archives Shorts

Seven New Short Positions And Two Stocks I Am Adding To My Existing Short Position For Wednesday’s Stock Market Session

February 5, 2008 | 13 Comments

The market got hit with a nasty distribution day today which pretty much has erased all of the gains that were made available right after the 1/22 and 1/23 bounce. A lot of bottom-callers were for sure the bottom was in but the charts completely disagreed with them and after a low volume rally this is what normally happens. There were a ton of short candidates tonight and that should be bearish for this market as there were easily 20 stocks that could have been shorted and still had an excellent risk/reward ratio. However, the ones listed below are the weakest of them all with the heavier volume and price patterns they have developed. The best part about this list is that three Chemical stocks look like they are ready to finally break. The other stocks in the sector that I want to short did not look as bad as MON, MOS, and POT did. These three are still very close to all-time highs so if I am wrong my cut loss is clearly defined. If the shorts workout the potential rewards I am looking for in these stocks since they were our bull market leaders is going to make up for possibly being wrong. However, with the way the stock market looks and the way it reversed today I doubt I am wrong. But no matter what happens I have my game plan and I am ready to execute it. The difference between a MOS short of $25,000 and a short of MYGN of $1,000 is all due to sector participation. If you are too new to know why I am putting so much in MOS compared to MYGN or CME all you need to know is that I focus ONLY on the top bull market leaders that top last when it comes to shorting stocks. I load up on the best-of-the-best when they top. Those stocks are the chemical stocks and BIDU, RIMM, GOOG, AAPL, FSLR, GRMN, and AMZN. I might miss AMZN, but the fact I am short all of the other stocks I want to be short (minus a few more chemical stocks that have not broken down yet) and also have an extremely healthy amount of cash has me feeling extremely great at this inflection point of the stock market. I feel like I am in complete control. This is a great feeling, I must say.

Posted by Joshua Hayes | Filed Under Free Archives Shorts

One New Short Position And One Stock I Am Adding To My Existing Short Position

February 4, 2008 | 14 Comments

FULL ANALYSIS BEFORE 6AM EST.

PCH is throwing one bearish intraday reversal today on some large volume. When today’s action is combined with the past six month’s price action it becomes apparent that the choppy uptrend from the 2003 lows is getting horribly volatile and is rolling over. MSFT is just looking so nasty on a price and volume chart the past month that it is shocking that anyone would be going long. But some of the worst traders that seem to run the most money (for one, Doug Kass–saying it is strong to the tape; PLEASE!) want to be long this stock. So I want to be short. The only clear problem about going short MSFT here is that it is already down so much in such a short time frame. I would keep the short very small due to it only being up two of the last 14 days but the chart is nasty enough that going short here doesn’t seem that crazy.

Posted by Joshua Hayes | Filed Under Free Archives Shorts

Three New Short Positions For Monday’s Stock Market Session

February 2, 2008 | Leave a Comment

The best potential setup out of the three shorts, tonight, is the HRS chart as it rallied on lower volume right to the 50 and 200 day moving average and then failed putting in a bearish reversal on heavy volume. That along with the red BOP the past month makes this a very near-perfect short pattern–max red BOP and heavier distribution would make it perfect. MSFT is the most eye-popping out of all the shorts as it is reversing the October breakout, this month, on extremely heavy distribution off the news it is bidding for YHOO. This is one ugly chart and it is getting very red. However, it is down a bit too much, after selling off 11 of the past 13 days, and too many people notice the weak price action. So the stock might not work out immediately. But the stock is broken and it represents 6.6% of the Nasdaq so if this stock cracks…look out below. ITU is in a very bearish setup as it has been throwing up a ton of distribution from late July to now and with the stock finally rolling over and failing to get back above the 50 DMA recently it is safe to say lower prices should be next after an incredible 5 1/2 year bull market that saw this stock move up 1,700% plus. I am not loading up on any of these but I am not going to be shy about taking some short.

Posted by Joshua Hayes | Filed Under Free Archives Shorts

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