April 28 2009 – Broader Index

This chart shows my concerns with the broader ASX market at the moment. Its a topic that we’ve been discussing for some time and whilst we haven’t had the drastic flip lower the divergence indicator has certainly seen price stall over the last few weeks. This stall is the major reason why the vast majority of stocks have been unable to get up and on with it, but there could be good news just around the corner once this stall has completed.¬† In the interim we’re reluctant to add long trades and not particularly willing to go short.

April 27 2009 – All square

As far as formal recommendations we closed our last long trade out last night for a small profit. TXRH was entered several weeks ago circa $10.00 and exited with some slight slippage at $10.90 last night. There continues to be many bullish patterns developing but the divergence remaining in place on the broader index is enoough to stand clear for a week until it full unwinds. Once that’s done we may be in for a very bullish phase to come. There aren’t a great deal of bearish setups that take my fancy so I’m happy to stand aside for a week or two for the market to define its current purpose.

April 23 2009 – Plenty of opportunitites

Without doubt the US markets are offering up many bullish patterns that we like to trade. My contention is that a reliable indicator¬† we use is still suggesting the market is not ready to move higher just yet so I’m wary of making formal recommendations. That said we are running a number of positions from ‘informal’ suggestions such as BWLD which is doing quite well. Here is the curent chart:

When our indicator unwinds itself then we’ll reassert ourselves to the long side.

April 22 2009 – Staying cautious

We opened a long trade in COE which immediately decided the upside wasn’t the line of least resistance and closed weak. This is currently the only position in the short term Model Account and we’re cautious about market weakness accelerating in the coming weeks due to divergence on the leading indicators. Until this divergence unwinds we’ll keep a low profile. Our daily trend filters remain bullish and weeklies bearish so there is a lot of conflicting evidence for swing trading at present.

The intermediate term Growth Portfolio is trying to hold recent gains – some very nice gains at that. This portfolio has an average hold period of 10-months but has been on hold over the last 18-months whilst the market declined. We turned it back on in late February expecting a reasonable upside swing. Participants have been rewarded but with the divergence discussed above we may see some of those open gains given back. I advised subscribers that should they be concerned about the coming weakness that they take some profits or tighten stops.

We’re about to launch our new website in the coming weeks as well as expanding the current service.

April 21 2009 – Continuing to chop

Trading US equities remains a frustrating chore. It seems the majority of breakouts are unwilling to establish sustainable trends. Yes, one or two will, which invariably is what’s keeping our nose in front, but to suggest the market is currently easy to trade on an EOD basis is a little over the top. Nonetheless we will persevere – experience shows we have a positive expectancy over the longre term so its just a matter of sticking to our plan.

The Model Account has 1 long position in TXRH. Here is the current price action:

April 20 2009 – Extreme Caution Alert

On Sunday afternoon we alerted all subscribers of impending weakness, weakness that was well supported by a series of technical signals and patterns. We’ve been under no illusions that the bear market bounce of the last 6-weeks had the ability to reverse and do so with vengeance. A final ‘washout’ could be underway.

It was suggested that subscribers bank some profits or tighten stops on long positions in order to protect profits as this weakness takes hold. Our short term Model account has no open positions and we’ll stay sidelined until the intentions of the market show more clarity.

Trading Results Update

Its been awhile since we posted the results of the short term portfolio, affectionately known as Power Setups. These are 2 – 3 week swing trades designed for both bull and bear markets. We started this portfolio on January 1st 2008 and its now become one of the most popular portfolio’s for subscribers.

Here is the equity curve since inception:

Here are the trade statistics:

Another statistic that is not obvious in these tables is the trade frequency. From Jan 2008 through September 2008 we made 158 trades, yet from November 2009 to today we’ve made just 27. The reasons are several; the ban on short selling, the lack of stock being offered for short sale and a lack of liquidity. These conditions will change in due course and if we get a significant bear market bounce we’ll start to see a lot more trades filter in so we’re looking forward to the next 9-months into the end of the year.

We’re taking next week off over Easter so we look forward to getting back into it after the break.

Nick

Past results are no indication of future performance.

April 7, 2009 – Reporting season wobbly

We’ve been playing a cautious game over the last few weeks not really placing too much faith in this renewed strength or bullish market chatter. Whilst we’re taking a few long positions we’re also keeping the risk very low at just 0.5% per trade. It was highlighted to subscribers that perhaps the start of the reporting season would induce some of that expected weakness so its of no surprise that the we’re seeing this weakness coming through. The question is how it will impact on the larger price patterns. If price dips on low volume and in a meandering fashion then we firmly believe that renewed strength will emerge within this bear market bounce. However, if reporting season sends a vortex of fear back into price then we must expect new lows will be the expected outcome. In other words we watch this decline with interest because it will in turn dictate what the next move will be and how we position ourselves.

The Model Account is still unwilling to get on with it. As stated above we have some longs on but unless this market can get some lift we’re going to be left dragging again. Whilst we’ve not made any head way for some time we also need to be aware that we’ve not lost our shirts in this volatility. As such we can be prepared for when the better times come along.

I’ll be taking 10-days break over the Easter period and will be closing down US positions.

Good trading,
Nick

April 6 2009 – A lot of pop

We’ve been long MRE in both the short term and intermediate term portfolio’s over the last week or two. We saw it jump 35% on Friday and it came out of the gates hard this morning rising another 28%. Subscribers were told to take some profit at $0.85 as the stock has a tendency to get up and fall back just as quick. Todays high was $0.785 before selling off after an ASX query. We’ll see what transpires from here. Our only other short term position, BRM, closed +4% and is moving at a more sustainable pace.

The intermediate term portfolio, the Growth portfolio, picked up some new picks for today, one of which was Toro Energy (TOE). It popped over 50% in early trade before settling back to +30% on the day. It seems some renewed speculative fervor has re-entered the markets, but can it be sustained?

3 April 2009 – On and on apparently…

We’ve been looking for a pause in what appears to be a relentless surge of optimism in these markets. Nothing wrong with that and its a welcome break. I’ve said all along that the good times would return for those that were willing to be patient and keep risk in check. Hopefully we’ll start to see trade frequency pick up again after 5-months of woeful opportunities.

With this surge we’ve managed a bit of luck. I guess one tends to make their own luck by sticking to the plan and taking the longer term view. Last week we had some luck with MCG surging some 90% in short order. We took 1/2 profits there and we’ll see where that takes us.

Another bit of luck with Minara Resources (MRE) surging 35% today – we actually have dual exposure to in two separate portfolios. Entry #1 was the Growth portfolio (the same that caught MCG) and Entry #2 was the shorter term Power Setups portfolio. Again, subscribers are being shown how to manage their positions accordingly. Textbooks are great in hindsight, but its the right hard edge in reality that counts – and that’s what we do and why subscribers can learn.

Here’s the MRE chart.

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