Thursday, December 07, 2006

Wrapping Thursday

Dumped AFFX this morning for a one cent gain. I knew right away that it was going to be a miserable day just based on the PC ratio. I watch it during the first hour of trading on the 60 minute charts. I want to see two things - where it opens and where it closes in that hour. If it opens below yesterday and closes below yesterday (first hour only) that is generally a good sign. Today it opened below yesterday and closed above. That means churn and burn. And that's what we had.

Still every day brings something new to look at and this is a beauty. A tweezer bottom with a one hour separation. I didn't see it until an hour after or I would have played it. I take the tweezer bottom seriously. Here is GM with its tweezer bottom on the 15 minute charts.

See where that long spike touched at 9:30 (and it's valid - I checked on the one-minute charts) is then reproduced by another touch at 10:45. That's the tweezer bottom. This is also a mini blow-off bottom and the buy point is on the close of the next candle. The exit is obvious around 1:30 to 2:15 or so. The lower highs in a row inform you of that. Always take the tweezer bottom seriously - it is a set-up alert.

I bought some BKUNA this morning figuring on an up day and the financials have been doing a fine job of leading lately but that trade collapsed. I'm was down a dime all day until 3 P.M. and am now down 30 cents thanks to the late day market fold so I'm holding it overnight at least. Another investment. I hate investments.

Of the several stocks that I said I would be watching, ATHR, SYMC, PTEN, and CRM, ATHR set up about 11 A.M. for a nice little run, the other three didn't. Because of the kind of day it was I passed the ATHR trade too. We'll try again tomorrow with LEND, AVCT, IM, NFLX, and SY. Who knows - a good day and we might get some.

We had a good day, I miscalled it but still no matter - we need a relaxation of the tension in the indices and today helped. The up/down ratio is now 34% and that is in oversold territory, the new 20 day highs came back under 600 to 554 and the new 20 lows increased by 70 to 259. The VIX is printing 9%+ over its 10 day average and SPY, QQQQ, IWM, and GS printed a red candle in the final hour of trading. DIA printed white. Regardless that is a very positive sign - I would have preferred for them all to be down in the final hour but we can't have everything can we. All of this together along with a good jobs number tomorrow spells a one day rally and then we can all take two weeks off until Christmas. I won't be taking off - but I will cut back on trading - maybe only 2 or 3 a week.

The magic coin is 34 and 26 having nailed today and I doubted it - what a maroon. For tomorrow, I can hardly wait, .... heads - bull market coming. Well - we agree, we'll see.

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