New Long Position ICP:LSE

I have taken a new long position on ICP:LSE.   The price action has formed an asymmetrical triangle with  the completion point of an AB=CD pattern coinciding with the lower trendline.
You can also see  that there is a momentum step on the stochatsic indicator.....which I take to be an indication of a positive change in momentum.    The MACD, which I also use as a momentum indicator is supporting a move higher.
My stop is just underneath the lower trend line giving me a very tight stop and the opportunity for a good R:RR return.   I shall move my stop to break even if the opportunity presents itself.

Travelling in the USA

I am currently travelling in the USA so my trading activities will be restricted.   However, I still have live option trades running and I will be trading as and when I can and hope to post as normal along the way.

CPI:LSE - Hits target

MY short trade on CPI:LSE has paid me off handsomely this morning.  The price gapped down at the open....and I was filled below my profit target level which gave me an added bonus.   Gaps can work with you and against you and in this case it was in my favour.   The original down channel pattern was violated and the price came within 2 pips of my stop level.   However, my momentum indicators always appeared to "not be supporting the price action" and this has now proved to be the case.

Buying more Put Options

I bought a new batch of put options on Friday, on the QQQ index ETF and some companies.  They are all with expiry dated 18th May 2012 and are all with varying strike prices

This is  a list of the companies, they are in in the US markets:
INTU, CF, PCP, CHKP, CRM, PII,DVA, KLAC, LULU, SWI

They are all short term trades, banking on the market falling from the levels it was trading at on Friday.

Update - CPI:LSE

Oh well.....I entered my first tranche of this trade too early.   However, as you can see from my original post, I only took a half trade size in the middle of the channel.  With the benefit of hindsight, I should have exercised more patience and simply monitored the price to see if I could get an entry nearer the top of the channel.   However, what has developed is interesting.  The price action has proceeded to climb to a point just short of the top of the channel and consolidated.   This has all happened in what looks like a bearish rising wedge and  the price was making new highs but the momentum indicator was not.   That was enough to spur me into action and increase my trade size to my normal risk level within my money management strategy.    You can see that the price consolidated for around 7 hours at the 738p level so this gave me the opportunity to take my second position at  the 735p level.    The price has subsequently dropped to a point where my overall position is now at break even and any downward movement from here will be welcome!

APR:LSE Closed for a small profit

I have closed my APR:LSE short trade today for a small profit.   The price hit my first target yesterday but the action has been minimal since I opened the trade and the Company is due to issue results on Monday of next week.   I don't want to hold my CFD position open over the announcement so have taken a profit while I can

New Short Trade - CPI:LSE

I've just taken a new short trade on Capita Group.   My setup is on the hourly chart.   The price has been trending down in a clear channel.  The current price action is in the middle of the channel and appears to be stalling at a confluence of the mid channel line and the 50% retrace of the last swing.  Given that the market has had some selling pressure recently, the price may make some way toward the top, but I've taken my trade size on the basis of my money management strategy that will allow me to increase the size of my holding if the prices does rise to the top of the channel and I will continue to monitor the price action.

Closed for profit ARM:LSE

I've now closed my ARM:LSE trade as it has hit my first profit target at 575p.   This gives me an overall R:RR of 1:1.

As I stated yesterday..the price action of this stock has been resisting the drop so I decided to close 100% of my position at the first target level.

Why you should look after your own investments!

I frequent a website at http://www.cxoadvisory.com/.   This table caught my eye.   It is a list of performance statistics for "Professional investors".

Here is the latest table:-

I've highlighted in green those results that were better than 50%, which, statistically, you should be able to achieve on the toss of a coin!   Notice that only the top four, led by Ken Fisher and David Dreman, can outperform a coin toss, and then, only just. Media star and permabull, Abbey Joseph Cohen of Goldman Sachs (GS), is down in the dumps with a 35% success rate. Note also that the bottom position is held by Elliot Wave guru, Robert Prector, who is right a dismal 23% of the time.

Update - Sell in May and go away

I've closed my Put option trades in the following companies today.   Every one was a winning trade.  Thanks Mr. Market!

The trades were all listed in my post entitled Sell in May and Go Away on 3rd April.

The positions were all entered on 3rd April , were all as a result of established patterns and were in the following companies:-
ORLY, FFIV, PCP, PXD, SPG, BSFT, PII, VFC, CMI, IBM, NTAP, GS,GWW ( all US stocks)

Update - PMH:NYSE Hits all 3 targets

I've closed my short trade on PMH:NYSE as the price has hit all three of my profit targets in less than 4 hours.
My final R:RR on this trade was a very nice 3:1.

Update - ARM:LSE

My short trade on ARM:LSE is still in progress albeit it has not hit my first profit target yet.   The price action has shown some resilience to the current market sell-off.   However, the hourly chart has just closed below the neckline of a head and shoulders pattern so I am looking for the price to decline further and meet my first target.  I will review the chart at that point, but, given the resilience I referred to earlier, I am minded to close the whole trade at the 1:1 R:RR.

PHM:NYSE Hits First Target

My Pulte Homes ( PHM:NYSE) short trade has hit my first profit target and I have taken half of my trade off at 1:1 R:RR and moved my stop to break even.  I am now in a risk free trade for the remaining half of the trade.

New short trade - PHM:NYSE

Given my overall bearishness for the market at present and my belief that the US residential market is doomed for the next 10 years, I've gone short Pulte Homes on the hourly chart.  The price has just retraced to the Fibonacci .618 level and I've gone short at that level with my stop just above yesterday's high, which is just outside the downtrend line.

As far as the US housing market is concerned, there is still a huge demographic headwind, as 80 million baby boomers try to sell houses to 65 million Gen Xer’s, who earn half as much money. Don’t plan on selling you home to your kids, especially if they are still living rent free in the basement. There are six million homes currently late on their payments, in default, or in foreclosure, and an additional shadow inventory of 15 million units. Access to credit is still severely impaired to everyone, except, you guessed it, the 1%.

Fannie Mae and Freddie Mac, which supply 95% of all the home mortgages in the US, are still in receivership, and are in desperate need of $100 billion in new capital each. Good luck getting that out of Washington, which is likely to be gridlocked for at least another five years, and maybe more.

The home mortgage deduction is a big target in any revamp of the tax system, which would immediately yield $250 billion in new revenues for the government. How do you think that will impact home process?

There are undeniable signs of life in best prime markets, where the pent up demand can be substantial. In the San Francisco Bay area you are seeing bidding wars for anything that is commuting distance from Apple, Google, and Facebook, or the rest of the booming tech world. Real estate is more local now than it ever has been.

 

However, overall, in my opinion, the best case scenario for home prices is that they continue bumping along a bottom for as long as ten more years, when the demographic picture shifts from a huge headwind to a major tailwind. The worst case is that this is just another bear market rally and that there is another another 20% on the downside.

POLY:LSE Trade Closed

My POLY:LSE trade hit my first profit target on Thursday so I took half of my trade off and moved my stop to break even.  I was subsequently stopped out at that level.   Net result is a 1:1 reward to risk on half of my trade and scratch on the other half, giving me an overall 0.5:1 R:RR

New short trade APR: LSE

I've entered a new short trade on APR Energy this morning. (APR:LSE).  This is another stock which came up in my "overvalued" scan.

It suffered a massive gap down eleven days ago and has since recovered to the 50% retracement level but has now backed off from that.

I've gone short with my stop above the 50% retracement level.   My only concern is that at some point that gap should be filled....but it is a massive gap and sometimes gaps of this size can take years to fill.

We shall see.

New short trade POLY:LSE

I've entered a new short trade today on Polymetal (LSE).  I entered at the open this morning as a result of this stock coming up in one of my scans as being very overvalued on a fundamental and technical basis.  In a downturn, I expect these stocks to fall harder than the general market.

You can see that there are two clear down trend lines on the daily chart.  However, I expect some resistance at the 900p...but after that my two targets should be achievable.

In fact, as I write, the stock is down 2.3% from my entry which was just over two hours ago...Ah..if only they all fell like that when you are short!.

Update VOD:LSE

I think the market correction may be under way after the Federal Reserve indicated yesterday that there may not be any further quantative easing.  My Vodafone position is showing a profit of about 4% in 4 weeks so I've closed that position this morning.   Given my overall bearishness, I don't want to see that (small) profit turn into a loss....and nobody ever went broke taking a profit off the table!

Sell in May and Go Away

The above is a chart issued by Stockcharts.com and shows the cyclical nature of the S&P 500 index.   You can clearly see that there is a bullish bias from November to April and a bearish bias from May to October.

Whilst the market is undeniably bullish at the present time, most indicators are showing bearish divergence so I'm betting that the bulls' days are numbered.   The market has had a parabolic rise and whilst I expect any retrace to be short lived, I also expect it to be steep.......

Personally, I am more comfortable being short than long so I am taking a good few short term, short positions on the US market by buying Put Options with the May 18th. expiry date.

I have taken 13 positions in all and all are within my money management criteria.

The positions are all as a result of established patterns and are in the following companies:-
ORLY, FFIV, PCP, PXD, SPG, BSFT, PII, VFC, CMI, IBM, NTAP, GS,GWW

My strategy with option plays is to risk the total amount that I am prepared to lose and take profits at 100% return on risk.   In this instance if 50% of my trade are winners and 50% losers, I will break even.   However, If my win/loss ratio is greater than 50% I shall make a profit.   Of course, If my win/loss ratio is less than 50%, I shall make a loss.

That's trading!

Update - ARM:LSE

I have taken the unusual step of moving my stop away from the price action i this trade.   The original rising wedge is still technically holding but the price continues to rise.   This price action is not being backed up by the indicators and whilst price is the most important factor, I have decided to move my stop to just above the point where the rising wedge lines cross.   That, for me, is where the point of maximum resistance should be and I am therefore taking the view that If the price breaks through that...I'm out!.

Many traders will tell you that "moving your stop" is a cardinal sin and in general, I agree with that sentiment.   However, I can count on one hand the number of times I have moved my stop away from the price and therefore increased my risk amount but, in this instance, I am happy to do so.