PAL

North American Palladium (PAL) had a nice breakout today. I had posted about PAL couple of days back, after initiating a 25% position (2000 shares).

At 2:20pm today, there was heavy buying which pushed the shares up by 20%. Most probably recommended by some newsletter or the other.




I'm modifying my strategy to add another 25% on a retest of the support (earlier resistance) trendline.

Out of Status

I was earlier nibbling on Visa (V) Calls. Got out of those positions today for a nice 26% profit.

Sweet Mother of Oil

Or should it be called the Sweet daughter of Oil?



This is one sweet looking chart. I've initiated a 10% position in Valero (VLO). I'll continue to build on this longer-term position. I'm also planning to sell OTM (2-3 strikes OTM) Calls to harvest some income.

I've also bought a 25% position in Prestige Brands (PBH).

Locking in some profits

I've sold some more of my Hologic (HOLX) Sep 12.5 Calls. All that remains is 5 of the original 30 contracts. If there is a pullback after results, I'll buy some more on a test of the trendline. If it breaks out & run away... well I've made my money.

Recent Decent Trades

I bought some Sangamo Biosciences (SGMO) yesterday- 33% position. This will be a longer-term trade.





I also bought some North American Palladium (PAL). I'm playing the auto-recovery solely through PAL. I've initiated a 25% position. This too will be a longer-term trade.





I've sold some naked Puts on MicroSoft (MSFT) (August Strikes):





Today, I sold some naked Puts on Aetna (AET) (August 25 Strike). Inspite of staring long & hard at the chart yesterday, I did not open this position then. I've kicking myself hard (well -deserved).

Another Decent Chart

In a market where all manner of crappy sh.it (redundancy intended) has been shot to the moon by the GS boys, this is a decent company which employs Ph.Ds and is profitable to boot. That Carl Icahn is there to safeguard my interests is a plus as well.



To me Amylin (AMLN) looks ready to break out. I've initiated a 25% position. On a retest of the up-trending-line, I would add another 50%.

Constructs of a Reverse Gear

The Market is all about Sentiment. Not (just) about Fundamentals or Economics or Cheerleading in CNBC.

I'm thinking out loud on some of those elements that would reverse Sentiment. Not trying to be sour-puss mini-bear, but just thinking ahead. I did a similar exercise (posted as comments on Slope) way back in Feb/Mar. And being positioned for what could change sentiment prepped me to get bullish early on (with MA, V, RIMM, etc).

So here it goes:

1. Bernanke not re-appointed as Chairman of Federal Reserve (high probability)
   
2. Deteriorating Jobs Numbers (high probability)
3. If Healthcare reform Bill does not pass, O goes back to bashing business (high probability); I sensed some of that anger during last night's speech
4. Regulatory Reform from DC (high probability)
5. Someone with stature such as Buffett (well, there is only one person like that) calling the market as frothy, etc (medium probability)
6. Power outage in Secaucus, NJ where CNBC is located; with a sudden disappearance of persistent brainwashing, some people come to their senses (low probability)
   
7. Geo-political events like China attacking India (low probability)
8. Some confessions from an ex-GS Manipulator (low probability)
9. More people smelling the coffee and waking up (extremely low probability)

Something Decent enough to Buy

It's been difficult to buy anything with conviction over the past 2-3 weeks. After searching hard, I've found this chart of Genzyme (GENZ) which offers a decent case, for a longer-term trade.


Possible H&S:




Shorter-term, it shows a poorly-formed H&S pattern. Given the history of H&S pattern this should not be successful either. Actually there is a decent case to be made that the longer-term support provided by the trendline will invalidate the H&S pattern. Should the H&S pattern be successful and the full potential be realized, it will be just at the support from another not-so-longer-term trendline.

Long-term Support:


The Trade:
Part 1: I've bought Jan 40 Calls; the stop limit will be a new 52-week low (<50.04).

Part 2: If I'm stopped out in Part 1, I'll re-enter at the tinted area which is the support provided by the not-so-longer-term trendline.

Worm in the Apple

I've bought Puts (Jan 170 Strike) on Apple.

Stopped out of Coach earlier in the day.

This Coach is running out of Energy

Shorted COH with a tight stop.



Also shorted the Oil Complex by Buying the 3x ERY.

Bear Steak, to be followed by Bull Soup

I've been stopped out of my TRLG short. Yet again. And looks like my MON Puts will be stopped out into the open.

I've bought some TER yesterday.


And initiated a short on INTC, with more to come.

Market Giveth, Man screweth

The headline says it all. And the blame cannot be all placed on the failed Head & Shoulders pattern. The fundamental thesis of Technical Analysis is that "it works until it doesn't". As corny as it sounds it's a fact. If one's got strict rules on where to put on a trade and where to cut one's losses, the losses will be limited.

Well, I screwed up with my timing on BGZ, TYP & FAZ. And was stopped out yesterday.

I'm taking it easy for the next couple of days, and watching some charts. SKX looks interesting on the long side, but would wait for a pullback.



Monsanto has an interesting H&S pattern, and today was the retest of the neckline. Picked up some Puts.




1:30pm Update:

As someone who consistently fails to see religion in expensive jeans..... TRLG is a good short now. It would be a great short once it breaks down from the shaded area. The stop-limit would be a breach of the incipient shoulder level.

Bubba Bear & the Badland Band

This picture kind of summarizes the market scenario...



Bubba Bear is the lead singer. He has a big bear lurking in the background and playing second fiddle. There is also a weak bull in the band.. he periodically surfaces and does silly things. And gets his ass kicked!

Pay attention to the Weasel (Goldman) at the right extreme. As to be expected, he is selling Snake Oil to the masses. He also has a side business of slaughtering the bulls and selling "Bison Hoof Coff Syrup". Btw, has anyone noticed that all GS top brass look like metrosexual versions of Smeagol?

I'd sold my ERY on Wednesday. I got into TYP, BGZ & FAZ today.

Spring Showers, May Flowers ....

.... June Swoon, July Destroy.

I have been stopped out of 90% of my long positions. As soon as they violated trendlines or supportlines, I've been mercilessly culling them. While the recent peak for the market was on June 11th, my portfolio peaked 10 days ago.

The only survivors at this point are V, NVDA, RTI, DELL, WFR, WMT & HOLX.

I also bought some ERY on Friday. Other than that, I'm just looking at a number of charts right now. Once I see a trend developing, I'll pull the trigger, and write about it here.

Closing some positions

Closed my MercadoLibre (MELI) that I had bought earlier. Also closed half my existing position in HOLX, bought at the same time.

I've sold my Jul Monsanto Calls (at a loss), and bought OTM Oct Calls.

I've also been adding some lottery longs (not more than 5k each), mentioned in Tim's site.

In my not so humble opinion, the Government has spent a lot of money to fend off another great depression. But we're in the midst of a larger-than-usual recession. We're pretty much at the point where the bad karma associated with the failure of Lehman has been purged. Whatever course things would have taken without Lehman failing... that is the course we are on. Time will tell.