Top Trade Ideas for the Week of September 30, 2013: The Rest

Written By: DragonFly Capital

Here are the Rest of the Top 10:

Alexion Pharmaceuticals, Ticker: $ ALXN
alxn

Alexion Pharmaceuticals, $ ALXN, is approaching resistance at 117.50 after a shallow pullback. The Relative Strength Index (RSI) is bullish and rising and the Moving Average Convergence Divergence indicator (MACD) crossing positive but flat prepping for another move higher.

CIT Group, Ticker: $ CIT
cit

CIT Group, $ CIT, is moving higher, over the rising 100 day Simple Moving Average (SMA) after a sharp 3 day move lower. The RSI is testing the mid line as it rises and the MACD is turning back up.

Graco, Ticker: $ GGG
ggg

Graco, $ GGG, is consolidating under resistance at 74.50 after testing the 50 day SMA below and holding. It has a RSI that is bullish and a MACD that is rising to support more upside price action.

GNC Holdings, Ticker: $ GNC
gnc

GNC Holdings, $ GNC, is testing resistance from earlier in September and August, this time from a higher low. The RSI is bullish and rising and the MACD is also trending slightly higher.

Organovo, Ticker: $ ONVO
onvo

Organovo, $ ONVO, is testing the top of an ascending triangle after a shallow pullback, creating a higher low. The RSI is on the verge of a move into bullish territory with a MACD that is rising.

Up Next: Bonus Idea

The Best

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.

After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Saturday which, as the 3rd Quarter comes to a close sees the markets looking positive but softer on a short term basis. Next week look for Gold consolidate or move higher while Crude Oil continues lower. The US Dollar Index looks to continue its downward action while US Treasuries are biased higher near resistance. The Shanghai Composite and Emerging Markets are moving together and continue to look best to the downside. Volatility looks to remain subdued but with a drift higher keeping the bias neutral to higher for the equity index ETF’s SPY, IWM and QQQ. The SPY looks the weakest of the bunch and better lower while the IWM and QQQ consolidate in their uptrends. Use this information as you prepare for the coming week and trad’em well.

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Caterpillar’s Weekly Triangle and Daily Bull Trap

Caterpillar (CAT) has been forming a longer term triangle or compression pattern as seen best on the Weekly Chart, but let’s take a look at a Daily Chart Bull Trap and return within the larger pattern boundaries.

For traders, the stock may continue to set up range-based fading trades or an eventual breakout opportunity from this well-defined range.

Here’s the Weekly Chart Triangle:

Caterpillar Inc CAT Technical Analysis Weekly Chart Triangle Pattern Range Breakout

I highlighted the horizontal “Value Area” that has developed within the broader Triangle Price Pattern boundaries.

The “Value Area” region extends from $ 81.00 per share to $ 87.50, which happens to be roughly in line with the current triangle pattern boundaries we can use as a reference for planning short-term or intermediate term strategies for trading the stock.

As long as price continues to “bounce” between these boundaries, very short-term traders can continue to play between the price boundaries accordingly.

Do keep in mind that eventually, price will break free of one of these boundaries in a breakout style impulse, which is where the longer-term trader may begin to focus attention or add this stock to a watch-list of future breakout candidates.

Here’s the pattern as seen on the Daily Chart, along with a recent “Bull Trap” that triggered last week:

Caterpillar Inc CAT stock Daily Chart triangle rectangle price pattern bull trap fade trade range trading tactics breakout

We see a clearer picture of short-term trendlines that currently intersect the $ 86.50 and $ 82.50 per share boundaries.

Note also that the 200 day simple moving average (SMA) resides into the $ 87.00 per share boundary for an indicator confluence with price.

Unfortunately for buyers, Caterpillar (CAT) triggered a Bull Trap event last week on the collapse back under the upper trendline at the $ 87.00 level.

See the prior updates for additional insights and trading tactics for Bull Trap Outcomes:

Lessons from the August SP500 Bull Trap

Quick Lessons from Three Bull Trap Outcomes

For now, continue to focus on the alignment of the Weekly and Daily trendlines as we juggle the ongoing trading range (triangle) pattern with the likely future breakout of this well-defined compressing range.

Join fellow members to receive daily commentary and detailed analysis each evening by joining our membership services for daily or weekly commentary, education (free education section), and timely analysis.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

SPY Trends and Influencers September 28, 2013

Written By: DragonFly Capital

A weekly excerpt from the Marco Review analysis sent to subscribers on 10 markets and two timeframes.

Last week’s review of the macro market indicators suggested, as we headed into the last full week of the Quarter that the equity markets looked ready to absorb their latest highs. It looked for Gold ($ GLD) to continue lower while Crude Oil ($ USO) continued to consolidate with a downward bias. The US Dollar Index ($ UUP) was pushing lower while US Treasuries ($ TLT) looked to continue to consolidate in the downtrend with a short term bias higher. The Shanghai Composite ($ SSEC) and Emerging Markets ($ EEM) were poised to continue to the downside in their uptrends and the Volatility Index ($ VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $ SPY, $ IWM and $ QQQ. Their charts were suggesting they needed to consolidate or pullback from the new highs first though.

The week played out with Gold basically running in place while Crude Oil broke lower. The US Dollar held lower, consolidating sideways while Treasuries moved up to test resistance. The Shanghai Composite and Emerging Markets continued lower, the latter finding the 200 day moving average. Volatility crept higher but remained subdued. The Equity Index ETF’s were mixed with the SPY pulling back but the QQQ and IWM consolidating. What does this mean for the coming week? Lets look at some charts.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

strong>SPY Daily, $ SPY
spy d
SPY Weekly, $ SPY
spy w

The SPY continued the pullback this week, but slowed the pace to a crawl. It ended Friday on the 20 day SMA and within the support zone of 168.85-169.35. There is a gap below though that remains unfilled to 167.73. The move lower has achieved the first target from the bearish Shark at 169.57 with the next target lower at 167.08, which would fill that gap. The RSI is bouncing along the mid line with the MACD crossed lower on the daily chart, both supporting more downside. On the weekly view the red candle for the week confirms the Shooting Star from last week lower, but it also closed the gap. The RSI is bouncing lower from lower highs but with a MACD that is level. There is support lower at 167.70 and 166 followed by 165.15 and 164.50 before 163.35. Resistance higher is found at 170 and 170.97 before 172.33 and 173.60. Continued Pullback in the Uptrend.

As the 3rd Quarter comes to a close the markets look positive but softer on a short term basis. Next week look for Gold consolidate or move higher while Crude Oil continues lower. The US Dollar Index looks to continue its downward action while US Treasuries are biased higher near resistance. The Shanghai Composite and Emerging Markets are moving together and continue to look best to the downside. Volatility looks to remain subdued but with a drift higher keeping the bias neutral to higher for the equity index ETF’s SPY, IWM and QQQ. The SPY looks the weakest of the bunch and better lower while the IWM and QQQ consolidate in their uptrends. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview September 27, 2013

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Last Weekend for the Sale Price!

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National Taco Day

I’m going to try to lose some weight this fall, so I’m swearing off McDonald’s and all of that fattening fast food. I’ll be having sit-down cooked-to-order lunches and dinners at Margarita’s instead. A press release indicates that they are bringing back a special taco for National Taco Day (October 4). Here’s what the weight-/health-conscious consumer will receive:

The two-pound goliath is hand-crafted, made-to-order and presented in distinctive tongue-and-cheek Margaritas style. The Taco Gigante is made with a crispy 12-inch tortilla shell and comes stuffed with lettuce, refried beans, Mexican rice, seasoned chicken, taco beef, pork carnitas, bacon, salsa fresca, cheese and queso sauce. Topped with crema, pickled jalapenos, picante sauce and hacienda sauce, the $ 9.99 gargantuan is worthy of its title.

I don’t want to overeat so I’ll be asking them to make mine without the lettuce.

Philip Greenspun’s Weblog

StockBrokers.com 2014 Review Planning – Criteria Feedback

Calling all passionate traders who want their voice to be heard.

We are getting ready to kick off hundreds of hours of work to complete the StockBrokers.com 2014 Broker Review which will be published in February, 2014 (read the 2013 Review).

Before we get started this year, we are opening up most of the 200+ variables we assess on for open feedback,

SB Ratings

2014 Broker Review Criteria and Feedback

The StockBrokers.com yearly review is the toughest and most respected in the industry. Our theme is always “for traders, by traders”. If you have feedback on how we can make the Review even better this year, I want to hear from you.

The 2014 review feedback page will be available until next Friday, October 4th.

Thanks,
Blain

Original post: StockBrokers.com 2014 Review Planning – Criteria Feedback


Stock Trading To Go

Tesla Does Not Need Recharging Yet

Written By: DragonFly Capital

tsla 1

You cannot look at the chart above without thinking it will end badly. Images of Apple, $ AAPL, recently come to mind and then tulip bulbs. But what are you supposed to do, sit and watch it go to 500 before it starts a pullback? that is one way. But if you are involved in any way shape or form with social media or news in general it is hard. So I suggest if you wish to participate, so you can look cool at the neighbors clambake, that you shorten the timeframe and follow the technicals. Other than being overbought, which it has been on and off for ever, the price action is really quite bullish. And looking at the close up chart below even gives a couple of targets and triggers. The break of the red triangle higher carries a target of 183 initially, which it found and is currently consolidating around. But a move over that consolidation carries it higher to 200 when measuring from the August 15 low ad extending into the triangle. A break higher also carries its own Measured move to 205 when looking from the triangle consolidation to 185 area and then extending it above. Two different patterns targeting 8% to 10% higher. And there is still plenty of short interest, over 25%, to fuel that move. Not too shabby!

tsla 2

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Learn about how bad white men are by seeing The Spectacular Now

A friend and I enjoyed the fine craftsmanship and lack of exploding superheroes in the movie The Spectacular Now. If you need to be reminded about all of the space on the planet that is being unjustifiably taken up by white men, go see the film right now. The basic white guy prototype in the movie is a selfish drinker/doper who abandons his responsibilities to the wife and kids, either by running away or overdosing and dying. Younger white guys simply drink. White guys who are too young to drink sulk on a sofa and play video games. Occasionally a white guy will become financially successful, in which case he is a stuffed shirt/blowhard. A final, but rare option for a white guy is to be a failing small businessman.

Not all of the male characters are reprehensible. There is one male high school student who shows some promise; he is black. There is one male teacher who cares about the students; he is black.

Most of the women in the film are strong, smart, prudent regarding the future, and trustworthy.

I would write more about the film but a buddy of mine is coming over and I need to crack open another 6-pack and bottle of oxycodone for him…

Philip Greenspun’s Weblog

STTG Market Recap September 25, 2013

We are seeing a very rare thing – in fact something not seen at all in 2013.  A 5 day losing streak.  While not common in the past, it certainly was not extinct like it has been in 2013… recall in the first half of the year the DJIA did not fall 3 days in a row – QE markets work in very different ways.   While the pulback has not been severe, about 2% in most indexes, it has been a sort of series of paper cuts.  The S&P 500 fell 0.27% and the NASDAQ 0.19%. There were 2 economic reports on the day to note:

Durable goods orders for August edged up 0.1% from July, despite expectations of a 0.6% drop. Sales of new homes rebounded by more than forecast in August, rising 7.9%, while economists expected a 6.6% increase.

The NASDAQ continues to look better than the S&P 500 – almost daily now.  The former is still holding its 10 day moving average and is over August highs, while neither is true for the S&P 500.

spx

nasdaq

I’d like to also point out the Russell 2000 which focuses on smaller companies – it is acting well which is usually a good sign.

rut

The NYSE McClellan Oscillator has worked off that extreme overbought condition AND remains above zero which is positive.

NYMO

Ten year Treasury yields continue to fall off as it becomes clear Bernanke won’t be cutting QE anytime soon.

tnx

Walmart had an interesting day as  Bloomberg reported that unsold merchandise was piling up, leading the big-box retailer to cut its orders from suppliers. A spokesperson for the retailer later called the report “misleading.”

wmt

JCPenney (JCP ) was crushed as Goldman Sachs said it expects sales at the troubled department store chain to improve more slowly than expected.

jcp

On the positive side, Chinese travel site Ctrip.com (CTRP) had a very nice day after not doing much the past few weeks.

ctrp

A name we highlighted a few times in the past, NPS Pharm (NPSP) also bucked the trend today.

npsp

Original post: STTG Market Recap September 25, 2013


Stock Trading To Go

iOS 7: Apple catches up to Android …

… in terms of draining the battery. My iPhone 4S used to last about 24 hours before needing a charge. After the iOS 7 upgrade it lasts from 8 am until about 4 pm.

This reminds me of first-generation Android phones.

Separately, the photography interface on iOS 7 seems to have gotten better for sharing photos. After taking a picture from the Camera app you can touch it and then share it. On the previous versions it was necessary to back out into the “Photos” app before sharing. For taking pictures, however, the interface is worse. There are on-screen controls for the flash, HDR, etc. that make it hard to compose the image (by obscuring the virtual viewfinder). I can’t see any way to hide these controls and look mostly at the image to be captured.

Philip Greenspun’s Weblog

Free Options Webinar: Steve Papale, Optionvue Systems, How Implied Volatility affects the Greeks

Tuesday October 1 2013 at 5pm ET

SMB’s Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each week the community will meet online for the primary purpose of watching live presentations made by outstanding veteran options traders and experts in the world of options trading.

Steve Papale of Optionvue Systems makes his first appearance on the Options Tribe to discuss the important topic of the effect of changes in implied volatility on the options greeks.

Register for this FREE Webinar here.

Seth Freudberg,

Director, SMB Options Training Program

The SMB Options Training Program is Read more […]
SMB Capital – Day Trading Blog

More on Cars and Mosaics – Dana Holdings

Written By: DragonFly Capital

Keeping with the car theme (American Axle, $ AXL, this morning and Autozone, $ AZO, for earnings today) there is another supplier of drive trains and such that also has a great mosaic in the chart, Dana Holding, $ DAN.

dan

The chart above shows that it created a failed Butterfly Harmonic, but with a Potential Reversal Zone (PRZ), the point where it is likely to turn bearish, at 21, and is holding higher. The consolidation channel gives a second positive point. After the move higher from 16.75 , a break over 23 carries a Measured Move to 26.25. The picture gets better when looking at the momentum indicators. The Relative Strength Index (RSI) is in bullish territory and trending higher and the Moving Average Convergence Divergence indicator (MACD) has crossed to positive a few days ago and is rising.

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Dragonfly Capital Views Anniversary Celebration Sale Ends this Week

For a limited time the Opportunity to join the Dragonfly Capital Views Premium Membership on an Annual basis is available for only $ 600.

This is 20% off of the standard annual subscription price and nearly 45% off of a rolling monthly membership! Don’t miss this limited opportunity to join or upgrade! Sign up here.

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Dragonfly Capital Views Performance Through September 2013 Expiry and sign up here

The post More on Cars and Mosaics – Dana Holdings appeared first on Dragonfly Capital.

Dragonfly Capital

What Does the Average Day Trader Make?

Q: What does your average day trader earn in percentage terms per year? 
@MikeBellafiore

SMBU recently sent a survey to the SMB Trading Community asking of their trading frustrations. From this survey we ferreted out the top five trading frustrations. Then we held a Webinar to offer solutions. Here is a link to that Webinar: Solving the Top Five Trading Frustrations From the SMB Trading Community. During this Webinar we were asked the question above.

In One Good Trade I wrote about the percentages a trader can earn on his trading book. Those returns can be obscene. So ridiculously good that I wrote no one would believe them. This is a function of many factors:

1) Day Traders Read more […]
SMB Capital – Day Trading Blog

Three Quick Indicators to Measure Volatility

When studying a stock or a market to trade, we often need to study the current volatility cycle to determine which strategy to use – or avoid.

Measuring volatility is especially important if you wish to use any sort of option strategy with a stock or ETF.

Let’s take a look at three quick tools you can use to measure where a stock is trading in its volatility cycle.

Volatility Measure VIX Price Movement Trading Tactics Technical Analysis Indicators

We’ll use the SP500 as our proxy and overlay three simple technical analysis tools:

  • High minus Low” which simply subtracts the low of the day from the high of the day (pure price)
  • Average True Range – similar to the “high – low” indicator, but takes into account overnight gaps
  • Bollinger Band Width –  subtracts the lower BB value from the upper BB Value (standard deviation)

The High-Low formula is a custom indicator that simply returns the price range of a particular trading day.

The Average True Range (ATR) indicator uses the same logic but also takes into account overnight gaps in its formula while calculating the average value over 14 days (default) or any time period you specify.

Finally, the Bollinger Band Width measures the difference of the value two standard deviations above the 20 day mean (average) and the value two standard deviations below the 20 day average.

With the ATR and BB-Width Indicators, you can increase or decrease the calculation period for greater sensitivity.

For example, an ATR look-back period of 20 will be “smoother” than a period of 10 which would be more “spiky.”

The same would be true for BB-Width where you could increase or decrease the average (mean) along with the Standard Deviation (1.5, 3, 4, etc).

The goal is to determine the current and potential future volatility by studying the Volatility Cycle from historical prices.

Volatility tends to go through cycles of high phases and low phases.  Specifically, a period of low volatility now tends to erupt in a period of high volatility in the future.

A period of high volatility (often associated with a sharp price decline) tends to settle-down into a lower volatility phase in the future.

From a psychological standpoint, periods of complacency/stability tend to move to phases of excitement/instability.

Here’s a recent example of Volatility Cycles in Apple (AAPL):

Apple AAPL Volatility Cycle VIX Technical Analysis Trading Education Average True Range ATR

As was the case in the highlighted regions of the SP500 chart, Apple (AAPL) also shows periods of high and low volatility.

While it’s far more common that volatility spikes during sell-off phases, we can see volatility rise also during periods of sustained upward price action.

In general, it may be preferable to see volatility as a measure of movement from “Stability to Instability” over time.

While the indicators are similar, it can be helpful to combine the indicators to get a sense of the broader cycles.

Here are just a few sample strategies you can use depending on the current volatility cycle:

Traders can look for future breakout opportunities to develop during a period of current low volatility.

Options traders can concentrate on net buying strategies during periods of low volatility and shift to net selling strategies during periods of high volatility.

Traders can also adjust position size to volatility – higher periods of volatility call for reduced position size relative to lower periods of volatility that may call for higher position sizes.

Similarly, stop-loss and trade target strategies may be adjusted to play for larger targets with wider stops during high volatile periods and smaller targets with tighter stops during low volatile periods.

However you trade, it can be essential to get a sense of what volatility looks like now, and what may develop in the near future.

Join fellow members to receive daily commentary and detailed analysis each evening by joining our membership services for daily or weekly commentary, education (free education website), and timely analysis.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

Macro Week in Review/Preview September 20, 2013

Written By: DragonFly Capital

Last week’s review of the macro market indicators suggested, as we headed into September Options Expiration the market was looking stronger again. It looked for Gold to continue lower, possibly resuming the downtrend while Crude Oil consolidated in the uptrend. The US Dollar Index looked to continue to the lower end of the broad range while US Treasuries were biased lower but might consolidate. The Shanghai Composite and Emerging Markets both might continue to consolidate in their uptrends with an upward bias. Volatility looked to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts looked as if they may consolidate first with the QQQ looking the strongest of the three.

The week played out with Gold starting lower before rebounding after the Fed meeting Wednesday higher while Crude Oil continued to consolidate in a slow drift lower. The US Dollar broke lower and accelerated after the meeting while Treasuries moved slightly higher. The Shanghai Composite turned lower, but was closed Thursday and Friday while Emerging Markets jumped but then gave up some of their gains to end the week. Volatility made new lows and remained subdued. The Equity Index ETF’s made new highs with the SPY and IWM making new all time highs and the QQQ multi-year highs before all gave back some ground late in the week. What does this mean for the coming week? Lets look at some charts.

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

The post Macro Week in Review/Preview September 20, 2013 appeared first on Dragonfly Capital.

Dragonfly Capital

From The PlayBook: Building Intuition

Learning how to build your intuition is a key element of successful trading. Here’s a discussion on this from Chapter 4 (“How Good Can You Be?”):

Arggh is the topic of trading intuition misunderstood. Newbs think they are born with a “feel” for the markets and trade accordingly. Yeah, so it doesn’t work like that. Intuition is your trading brain telling you when to buy and sell. For the experienced trader, this is an invaluable indicator. One to be listened to and honed. If you are a newb, tell that voice in your head to, as we say on Twitter, STFU. It’s like a crazy old uncle you want to avoid at a family picnic. You will develop intuition through screen time, experience, Read more […]
SMB Capital – Day Trading Blog