GRACE UNDER PRESSURE

OCT 5  weekend report  

   I love the way the above picture captures the theme of GRACE UNDER PRESSURE  ( Picture Credit to Rush & Hugh Syme).

  Ermest Hemmingway wrote that “Courage is Grace under Pressure” and for the past few weeks, the markets began selling off,  thus pressuring  ‘buy & hold’ investors.  Remaining Graceful while enduring the “Pressure’ of the markets selling off allows one the “Courage” to make good decisions.  I feel that most readers here are that way.  For protection , We actually trade with stops in place  ( be it mental or a be it a hard stop),  looking  forward to pullbacks  in hopes of buying at ‘discount prices’.   While I haven’t see all out panic,I have seen CNBC  interviewing many lately asking,  “Is this it?  Have the Markets topped & is October going to be the month of a crash?” 

The question is….”What were you doing?”

   On Thursday , OCT 1 , I Tweeted this SPY CHART , pointing out OCT 2013 selling off to the 26 WMA (Red line) . Would we get that 193 area ?

 

 

   We Did get that red line  (193) and it looks to have reversed.  Yay for the chart & reliability  of these markets so far.

 

 

If you bought a nice set up in that reversal ,  you displayed Courage and  Grace under Pressure…

 

 

    SIDENOTE:  A “SLIGHTLY” concerning factor is that some markets are holding up better than others .  Look at the SPY chart above (and the QQQ)  compared to IWC, IWM, RUT for example. At Market Tops, the  industrials and various sectors  can lead the mkts down and break down first, so to Stay Frosty –  we will be watching how things unfold going forward.  I posted this chart on SEPT 19 of IWM WKLY just  to keep it on our minds.

 

 

It is, however, also possible that IWM , RUT , and IWC are in a large bullish consolidation for another leg up in a bull mkt.  Thats where being alert and graceful can give one the courage to buy despite a sell off. Notice the GREEN BUY’s at the bottom of this chart. We’re pretty much there & this is what I posted OCT 2 , before the jobs report , with that in mind.

 

 

And here is what happened after the jobs report  (Now) . I’m Happy – its a low risk entry.

 

 

OH YES!! And for the sake of forthright honesty… and a great lesson ??   GOLD /  MINERS! 

  -I wrote a report that GOLD & MINERS were almost looking exhausted in their sell off .  I was (Still am) Getting deeply oversold extremes.

  -I even got a BUY SIGNAL  that is extremely rare (like 2x a yr) . It is actually still valid but I got stopped out for a loss. Let me walk you through my Gold/Miner attempt.

The C.O.T.  is shaping up for meaningful lows. Extremely oversold.  My “Buy” signal triggered, so  I bought JNUG at $13, it ran to $14, and dropped , stopping me out for a small loss under $13. 

HHMMMM,  I was early.   THEN I saw a slew of “Gravestone Doji candles” on Wed OCT 1.

They can be a reversal, so I posted this …let me walk you through the process...Chart Oct 1.

 

 

 

OCT 2 –  Did we go higher and break above the trend line?  Yes to higher, but still no trend line break and no break of the 10sma, but another  reversal candle.

Going against the safe entry ABOVE the trend line or ABOVE the 10sma…I entered JNUG again here. 

 

 

The trade Felt a little like this on FRIDAY after JOBS REPORT-  The BEAR was still in the room.

 

   Yup,  I definitely got stopped out for another loss.  A tad bigger this time.  I didnt go in huge,  because it was a starter position that I would have added to the position with a move above the 10sma.

   It WAS, however, a gap down and a lesson learned. When the falling knife is still in a downtrend,  its best to wait for a break of that downtrend, maybe get above the 10sma…even if we are oversold, overdone, and over due for a bounce or new low before a short covering rally. I knew this lesson already, but I had several things lined up to take the trade.               It failed,  so we brush of the dust, study what could have prevented that  (trendline break, etc) and move on.

Yes, I still believe that  We ARE near those lows, but I see other opportunities worth investigating since, as mentioned above , SPY, QQQ, RUT, IWC, IWM, etc may have reversed their recent selling and some charts appear to be setting up nicely.

 

             —————————————————–TO THE CHARTS!!  ———————————————-

 

There are SO MANY set ups on BIOTECH / PHARMACEUTICAL / MEDICAL stocks …but they can be HIGH risk.  Many have already POPPED or RUN UP and will need to pullback to offer a safer entry.  A Warning: If the FDA doesnt approve a trial or pushes back the release of a new drug, these stocks can and often do  get cut in half…so buyer beware.

 

Notice Daily BCRX–  It has exploded again, but often pauses sideways or pulls back to the 10 sma half way through the run  (Watchlist?)

 

 

WKLY BCRX-   On a wkly chart,  buy & hold on those RUNS UP paid off

 

 

 TROV  has some real buyers since AUG, and had a healthy pullback. (Actionable)

 

 

 

  Obviously the  EBOLA  scare has increased attention to some Biotechs.

 

-I have  4  main EBOLA PLAYS  that I am watching ( 4 of them So far , there are a few others I am watching also.  SRPT for ex )   They  may be a little overdone on a daily chart, but sometimes these things can just rocket up & go parabolic, especially if Ebola spreads in the U.S. or other countries. My 4 Ebola picks are:

TKMR – LAKE – ARDX – APT

Again they look overdone on a daily chart  , not  exactly a safe entry, but here is LAKE and here is why it is worth watching. 

For ex:  LAKE WEEKLY CHART –  I can see that this could become a CUP with  a handle up at $11,    However …

 

 

 

LAKE  Monthly chart –  WHAT IF EBOLA SPREADS IN OTHER COUNTRIES AND DEMAND SURGES ?

Or now that the Risk is better known and preventative measures increase, orders increase whether it spreads or not ?  Maybe this? (Click on chart)

 

 

                                 OK, lets look at some trade set ups

I was asked if I would show more of the new set ups that are catching my eyes.   SURE!!  

 

 I have  discussed  VIMC, CMGE, SCOK, NETE, OTIV , etc etc  in the past ,  so I will skip those for now…

After that  recent pullback , I’d like to share part of my list for you to follow, buy, trade, play around with.  Lets see some CHARTS!!!

 

I mentioned that I just bought COUP  Thursday in my last report. 

I have been watching this one for weeks, hoping for a double bottom. At first glance, you may not see what I liked about it.

Earnings came out  AUG 6.  Click here     http://www.marketwatch.com/story/couponscom-incorporated-reports-second-quarter-2014-financial-results-2014-08-06?siteid=bigcharts&dist=bigcharts

 

COUP

 

I bought as it crossed the 10SMA OCT 3, and then sent this close up chart below to a friend  . I would like to add to this position. (Click chart)

A pullback as low as the 10sma wouldnt bother me, but volume is swelling, it is unlikely  I.M.O.

 

 

 

RADA –  I bought on the 10msa. 

It is still there, with intraday “POP”s.  I am hoping it POPS and runs, but a stop must be in place.

 

 

 

 

NNVC  –  NANO in the medical field.  I Love this weeks sudden volume & Reversal (possible EBOLA play too )

Buy that reversal tightish stop , or wait for break out & above 10WMA

 

 

 

I have traded CENX  on this run up, but recently it just ran away from me.  With the recent sell off in the past couple of weeks, 

It has now “Re- Set” itself.  It might run up & Double top?   It might form a cup & Handle here (Similar to June lows) ? It may Run a 2nd leg to $40’s…

Likely it depends on the markets.

 

 

 

 

ZGNX – Sometimes just a familiar “Set up” will Catch my eye. Seems to be a large BASE pattern.

They can gradually climb up and form a large cup, or break up steeply if buyers step in sharply and short covering takes place.

I havent researched this company…do your own D.D.

 

 

ZEN   –  Let me ask…Is $8 to $30 in 4 months with hardly any real selling good?

 

 

 

ZEN WKLY  –  Let me put that another way (Wkly May thru Sept)

 

 

LEJU –  moves pretty fast , and may be recovering here

 

 

 

 There are more of course, but thats good enough for now. With the reversal last week, it’ll be interesting to see how stocks act this week.  I really like the set up on many stocks mentioned above and many that I havent mentioned. If Monday is RED / DOWN  …I am not going to conclude that the reversal didnt stick unless its a damaging SLAM DOWN MONDAY..  A  little light volume pullback to ‘scare new longs’ is fine with me, however a little  follow through would be great too.

Thanks for reading along, thanks for all the comments and emails      I just want to mention :   Comments in the ‘comments section’ below the post are best…that way everyone sees the question and gets the answer.  When people privately email me with questions, It is possible for me to get the same question in emails about a stock or chart by 3- 5  different people.  Then I have to answer it 5 different times.  HOWEVER, I was told by one reader email that he works for a company that doesnt allow him to post about investing in a public forum, he has to discuss investing privately. That is totally understandable, and if that is the case, I will try to answer any or all emails & comments that I get too. 

Thanks again & Happy trading!

 

~ALEX