Playing The Fade

So now we wait to see if the S&P pulls in (drops or fades) a little and holds.  As of this post the DIG (long oil) postion is working as is the TBT (short bonds).  No need to add or initiate any new positions yet. 

Join us for our next available FREE workshop in Solana Beach on Saturday April 18th.  March 21rst and April 4th are filled.  You can register online at info@proinvestorcoach.com or leave your name and number at 888-808-4472.  Seating is very limited.  You can also drop us an email and we will set you up with a 7 day trial to our M48 Timing Service.  You will receive time stamped videos that correspond to our trade recommendations.   We give you the fish and teach you to fish at the same time.

Stepping In

The M48 will be initiating a position today before the close in the SPY.  I prefer to see the market pull in and hold the low of last week before we increase the percentage long.  However, in the event this is a V bottom we cannot afford to let the train get to far from the station.   Overhead resistance is just ahead.  Let’s see how it reacts if and when it get there.  If this fails we will exit w/ an acceptable loss.

Education is the fuel that drives our business model. Check out our next in house workshop on Sat. April 4th at 9am in our Solana Beach offices located at 444 S. Cedros # 250.   The workshop will illustrate the unique tools that we incorporate to manage individual accounts and the M48 Timing Service.  These methods have saved or clients and subscribers from Wall Street’s wealth destruction.

The workshops fill up quick.  Register today at info@ProInvestorCoach.com or call (888)-808-4472.

Volume

Currently looking to confirm increased volume.  Back tomorrow with decision.  DIG (long oil) is working so far which was sent out to our subscribers as an optional trade Tuesday night.  Some of our subscribers did some light buying of the SPY Tuesday

These are not recommendations and should be viewed for educational purposes only.

Bottom?

Financials bounce huge-

It my last post in line one I said our next move will be to put some of this cash to work in the S&P when the M48 Timing Model gives us a green light.  That green light may come this week.  Yesterday’s close might have been a temporary bottom.  Do I think it’s a final bottom? NO.  Do I think we could rally huge from here? Yes.  Remember as trend followers we want to ride the wave and forget the noise. 

Price and Volume along with Pattern Recognition is our edge.  If we are wrong we exit w/ an acceptable loss.  It’s OK to be wrong (using protective stops to limit loss and capture gains).  It’s not OK to stay wrong (buy and hold as the market tanks).

NOW MORE THAN EVER MARKET TIMIING IS PARAMOUNT

If you still held a position is GLD you were stopped out.  Also in the last post I said to sit tight with new purchases in the metal unless GLD approached 100 (roughly 1000 an ounce) at which time we would re-access the potential breakout (based on probabilities) to a new high.  As of yesterday and more importantly today -I’m beginning to see further technical damage in GLD especially if this equity rally is real.  GLD was a profitable trade along with SLV (silver) in February.  Just another example of why not to buy and hold, but instead to buy and sell.

Watching TBT (short bonds) along w/ DIG (long oil).  Remember we dumped DIG at 28+ and 30+ with a nice profit.  Today’s close on DIG was 20.05.  The M48 had a decent gain in TBT during January.  We gave some of that back recently.  We are still net ahead in our TBT trades.  Our recent stop in TBT was probably to close.  Time will tell. These TBT and DIG potential positions can be tricky (in and out) so view this for educational purposes only and not as trade recommendations.

EDUCATION:

Education is the fuel that drives our business model. Check out our next in house workshop on Sat. April 4th at 9am in our Solana Beach offices located at 444 S. Cedros # 250.   The workshop will illustrate the unique tools that we incorporate to manage individual accounts and the M48 Timing Service.  These methods have saved or clients and subscribers from Wall Street’s wealth destruction.

The workshops fill up quick.  Register today at info@ProInvestorCoach.com

GLD

The M48 Timing Model continues to sit in mostly cash waiting for a confirmed buy signal in the S&P or Nasdaq.  The model often adds small positions in various individual stocks and ETF’s (exchange traded funds).  However, the bulk of the model is always made up of the S&P for diversification and simplicity.  Simple stuff works.  Complicated stuff breaks.

GLD (gold) and SLV (silver) bounced off their 50 day moving averages which is a good sign.  One bounce off the 50 is good.  More than one lowers the probabilities of a move higher.  If GLD holds 88 and change it most likely will test the old highs of 99+ and based on probabilities bust out to new highs. 

So what does this mean.  I prefer to wait for a clearer chart pattern closer to 100 (1,000 an ounce on the April futures contract) if it gets there.  If you are already in GLD place your stop in the 88 or 89 range.  Friday’s close was 92.29 so the risk is tight at around 4%.  The M48 Timing Model has already exited GLD and SLV with a profit.  I have no problem getting back in if a high probability pattern occurs.  You can learn these various patterns at our workshops.

This is not a recommendation.  Read this for educational purposes only.

The M48 exited UUP with a break-even.  The trade appeared to be running out of steam.  The trade may still work and the risk is minimal.  However, I think we’ll get a bigger bang for the buck elsewhere.

Next Workshop

Our March 21rst workshop is now full.  The workshops will focus primarily on pattern recognition using charts.  The next available workshop will be Saturday April 4th in our Solana Beach offices located at 444 S. Cedros # 250.  To register please call (888) 808-4472 or email your name and number to info@ProInvestorCoach.com

Need I Say More

I found this on Market Watch-

Wall Street’s dollar menu
GE       3/5/08: $33.55     Today: $6.66
BAC     3/5/08: $37.55     Today: $3.17
GM      3/5/08: $22.97     Today: $1.86
C         3/5/08: $22.15     Today: $1.02
AIG     3/5/08: $44.61     Today: $0.35

This is why you don’t buy and hold.  Cheap stocks typically get cheaper.

Current positions:

Stopped out of TBT (short bonds) with a little less than a $2.00 per share loss for a total loss of less than $200 to the M48.   Small losses are part of the game.  It”s OK to be wrong – it’s not OK to stay wrong.  The M48 Timing Model still holds a small position in UUP (long the US dollar).  UUP is just above breakeven.  I will let you know if it turn out to be a winner or loser.

So the M48 Timing Model is very close to 100% cash.  Remember we said that if we broke 810 on the S&P to go to cash with the option of shorting with a small amount using the SDS.  The S&P closed today at 683 which is 16% lower than 810. 

When the M48 Timing Model is wrong we take a small loss by using stops to preserve capital.  When we are right we use trailing stops to lock in profit.  Price and volume along with pattern recognition is our edge.

These are not recommendations but instead observations for educational purposes.

FREE WORKSHOP SOON!

The next Pro Investor Coach workshop will be held on Saturday March 21rst at 9 am in our Solana Beach offices located at 444 S. Cedros Ave # 250.  The workshop is free – however seating is very limited.  One hour in length and no selling.  The secret to thrive in a volatile market is proper education.

If you would like to attend please leave your name and number at  (888)-808-4472 or email us at info@proinvestorcoach.com

Day 1

Decent volume today so we call it day one of a rally attempt off of yesterday’s multi year low on the S&P.  Now we wait for more confirmation.  When and if that occurs – the M48 Timing Model will ease in w/ increased price and volume.  Most investors lose because they cost average down not knowing where the bottom is.  They eventually run out of money to buy back in.  The examples are endless. 

I used to have a sticker on my trading monitor that read – Patience Produces Profits.  Remember being flat (sitting in cash) is a position.  It can also be the most difficult one if you are new.

FREE WORKSHOP SOON!

The next Pro Investor Coach workshop will be held on Saturday March 21rst at 9 am in our Solana Beach offices located at 444 S. Cedros Ave # 250.  The workshop is free – however seating is very limited.  One hour in length and no selling.  The secret to thrive in a volatile market is proper education.

If you would like to attend please leave your name and number at  (888) 808-4472   or email us at info@proinvestorcoach.com

The Charts

An M48 TRADE ALERT went out last week to purchase DUG (ultra short oil) at 32 or less.  DUG closed today at 34.50 up 13% for the day.  A small position was also taken in SDS (ultra short the S&P).  This position was closed out today for a nice profit at just over 106.  Close was 107.64.   

Again it’s important to point out that we can play the markets either way – up or down.  If you look back to Friday’s post I said the M48 was again favoring the short side (betting the S&P would fall further). 

I believe we will get a rally soon w/ so much bad news in the market.  The market is clearly (technically) oversold which is the reason I covered (closed out) the S&P short position before the close.  Because the M48 uses stops, we now have the cash in order to participate in the next rally inside this bear market.  Those who have bought and held cannot.

Long UUP (the dollar)  w/ tight stops.  The model is also short bonds again using TBT.  I want to tighten the stops on the TBT because I’m not as excited about its current chart pattern.  The majority of the M48 is in cash with small positions remaining in TBT, UUP.  Cash will remain king until we go long (buy) the S&P inside the M48.  I will let you know if the UUP and TBT positions turn out to be winners or losers

 

These are not recommendations but instead observations for educational purposes.

FREE WORKSHOP SOON!

The next Pro Investor Coach workshop will be held on Saturday March 21rst at 9 am in our Solana Beach offices located at 444 S. Cedros Ave # 250.  The workshop is free – however seating is very limited.  One hour in length and no selling.  The secret to thrive in a volatile market is proper education.

If you would like to attend please leave your name and number at  888-808-4472   or email us at info@proinvestorcoach.com

Cash

The M48 model is almost 100% cash w/ sales of GLD (gold), SLV (silver) and DUG (short oil).  Our stop was also hit on the SDS (S&P short).  All of these positions were profitable. 

As of the close today I am favoring the short side again.  In other words the little bounce (dead cat) we got off the double bottom was just that.  A close above 780 on the S&P is a level that has been rejected all week.  Keeping an eye on the SDS (S&P short).   TBT (short bonds) may want to test 50 again.  Close today 47.62 w/ support in the 44 range. 

These are not recommendations but instead observations for educational purposes.

FREE WORKSHOP SOON!

The next Pro Investor Coach workshop will be held on Saturday March 21rst at 9 am in our Solana Beach offices located at 444 S. Cedros Ave # 250.  The workshop is free – however seating is very limited.  One hour in length and no selling.  The secret to thrive in a volatile market is proper education.

If you would like to attend please leave your name and number at   (888) 808-4472  or email us at info@proinvestorcoach.com

Trend Lines

Half the short position on the S&P (SDS) was stopped out today for a nice profit at 90.54.  Purchase price was 81.54 on 2/12.  I expect the balance to get hit tomorrow if the market closes higher and the trend line is broken.  The short oil position DUG may be taken out tomorrow too.  The M48 model sold half at over 30 two days ago and the existing balance has a stop at 28+.  Close today was 28.42.  Purchase price was 25.45 on 2/12.  Don’t worry I’ll let you know when our subscribers have small losses. 

Today might be the start of a bounce in the S&P via a nice double bottom on a weekly chart.  The model will wait for more confirmation and not try to pick an exact bottom.  How high we bounce would be a guess.  Price and volume will determine the start of a new trend.  It’s important to know that you can make money even if the trend is down.  The M48 model has done this so far in ’09 by playing the downside on the S&P (SDS), bonds (TBT) and crude (DUG).

FREE WORKSHOP SOON!

The next Pro Investor Coach workshop will be held on Saturday March 21rst at 9 am in our Solana Beach offices located at 444 S. Cedros Ave # 250.  The workshop is free – however seating is very limited.  One hour in length and no selling.  The secret to thrive in a volatile market is proper education.

If you would like to attend please leave your name and number at (888)-808-4472 or email us at info@proinvestorcoach.com

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Welcome fellow traders and investors!

As Money Managers and Traders, the mission of our Blog and Radio Show is to go on record and further educate our readers and listeners in technical analysis and proper money management across all asset classes.

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To Your Success,

Doug & Gary