rumordude.com
[madtrader]
Tue May 7, 10:49am PDT bounce
This is how I am approaching this potential bounce in the market. I am reluctant to pick individual tech names, so I am sticking with QQQ. QQQ has enough volatility to participate in whatever upside we might have. The other part of the play is to focus on names that have either held up very well or are making new highs. For example, UOPX, AMZN, PYPL, EXPE, PNRA, PFCB, TOL, HOV, TUES, WFMI, MOVI, HLYW, BOBE, CHBS, URBN, PENN, ASA, HSIC. NONE.
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[madtrader]
Tue May 7, 10:45am PDT UOPX
Bumping against a new high here. Ascending triangle pattern as well. I would sure like to see more volume though. none.
[RumorDude]
Tue May 7, 10:35am PDT QQQ
$NDX.X
BRCM
OVER
JNPR
For the Q's and NDX's, I'm just taking some quick profits here and trying to continue to build out an assortment of calls for as cheap as possible. BRCM's move from it's decending triangle is certainly not a good one here. I still think they could see 20 on the downside. OVER's island top is certainly bearish but as we near their secondary price, I'll take profits and try to minimize cash risk. Lastly, I'll expect JNPR to play as the more volatile CSCO. While I don't expect great things from CSCO, I think they could move up on an oversold rally with mediocre earnings. Buy to open Jul 33 QQQ calls, Sell to close May 1200 $NDX.X puts, Sell to close May 30 BRCM puts, Buy to open May 25 BRCM puts, Sell to close Jun 20 OVER puts, Buy to open 1/2 as many Jun 17.5 OVER puts, Buy to open Jun 10 JNPR calls.
[madtrader]
Tue May 7, 10:21am PDT CTAS
Breaking out to a new high here with heavy volume. Both a defensive and steady growth name. long CTAS.
[madtrader]
Tue May 7, 10:00am PDT positive divergence
Since I am on the look out for positive divergence, I checked just about all of the major indices. What I have found is consistant with my observation on QQQ. The one index that stands out with the greatest amount of positive divergence is BTK, or for that matter BBH. The biotechs have been trashed, yet we are getting a higher RSI reading here. If you are a biotech fan, this is the place to get aggressive. Or cover the shorts! none.
[madtrader]
Tue May 7, 9:56am PDT RSI
Just to give an idea how "oversold" this market has been, at least for tech stocks. I went back and checked past levels to see where we stand now. On daily basis, the 9 day RSI reading got to it's lowest point of below 5 on April 29th, which is a new 52 week low. On weekly basis, the 9 week RSI reading is also lower than last September. The only other period that was lower was the March/April low of 2001. Granted, we don't have the high VIX reading of those two periods, which is probably going to put a cap on the bounce we are going to get. But if you are someone who likes to look for divergence signals. We are certainly getting one here. The daily RSI reading is actually higher today than on April 29th, and needless to say prices are lower. So, that is a classic positive divergence here. none.
[madtrader]
Tue May 7, 9:45am PDT Fibonacci projections
I am probably jumping the gun again. But let's assume this morning's lows for the major indices are indeed the retest lows. Where are we headed? If you are firmly in the bear camp, even a 62% retracement of the March high to this morning's lows won't reverse the obvious down trend we are stuck in. And the 62% retracement is my most optimistic projection of where things will most likely will settle in the short term. That would leave QQQ near 35.15, COMPQ near 1800, SOX around 570, BBH near 113.60, MSFT at 58.73, DJI at 10350, SPY at 1126. Hope this helps. none. |
