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

SLV

Sold the last of the silver (SLV) position this am on a market order that was filled at 14.06.  Purchase price back on 1/21 was 11.16.  Tight stops currently on GLD.  The M48 may buy the metals again soon.  Building a fence so to speak around the S&P short position SDS.  Purchase price was 81.54 on 2/12.  Stop is around 90 and will take profit in the 100 range if it makes it.  Current price as of this post is 94.42.

That’s it for now.  I expect we will get a bounce soon.

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

Trailing Stops

Moving stops up to the profit zone on DUG (short oil) and SDS (short S&P).  I see gaps that based on probabilities will be filled on GLD (gold) and SLV (silver) to the downside.  My decision is based off a 60 minute chart vs. a daily.   Therefore I am tightening the stops on the metals inside the M48 model.  Nice profits even if the stops get hit – especially in silver.

I believe we will get a bounce next week in the S&P.  This is not a buy recommendation but instead an observation based on a weekly chart to tighten up on the short inside the M48. 

Enjoy your weekend!

Sleep

So far so good.  The metals GLD and SLV are still trending higher.  I expect gold will pull in a little to fill a gap possibly before testing the old highs of 1000+.  If they hold the trend line I will add.  The chart pattern will make the decision.

Short oil using DUG w/ a nice move yesterday.  I would like to see it test 30 again to the upside at which time the model would take profit on part of the position.  A decent stop would be 24.50 +.  Close today 27.81. 

Eventually  the M48 model will get long the S&P.   That could be next week, next month or next year.  Pattern recognition along w/ price and volume will let us know when.  For now we’ll let the short position in the S&P (SDS) run looking to sell some in the 90 range provided it hits that number prior to the stop near 80.  Close today 87.

Radio Show:  If you listened to the show Monday I said I would be short financials using SKF rather then long using XLF.  The next day SKF (short financials) moved up 10%.  I’m telling you this so you see that cheap stocks (financials) can and most often get cheaper.  Never try to catch a falling knife.  The trend is your friend.

Parked in cash for most of the past 14 months has allowed the M48 subscribers to sleep more soundly.  Moving stops up to lock it profit puts the smile on your face.

Shorty

800 seems to be a target on the SPX (S&P cash) that wants to be tested.  Will it hold?  Possibly for now but eventually I think not.  Remember we are always following the trend and not trying to predict but rather deal in probabilities based on pattern recognition using price and volume.  In other words the M48 model will ride the wave with stops.  So the play is to put on a short position inside the M48 using the ETF,  SDS (ultra short S&P).  As of this morning the model has an equal dollar amount of S&P shorts as it does S&P longs w/ stops on both sides.  A strangle if you will.  If we break out we exit the shorts and add to the long position.  If we break down the model will exit the remaining long position and add to the short.  Here is what I think will happen.  I believe (based on probabilities) we will bounce here only to see the shorts load up and eventually take the market lower.  How much lower and when would be a guess.

I see this same type of scenario in crude.  Out of DIG (long oil) w/ a profit and watching DUG (short oil).

I would like to see TBT (short bonds) hold yesterdays low of 44.70

A beautiful chart pattern still exists on SLV (silver) with higher highs and higher lows.

This is for educational purposes only and should not be considered as investment advice.

Good News –moving to larger offices this weekend in Solana Beach on S. Cedros.  I’ll be holding free workshops two Saturdays per month.  Seating will be limited.  The workshops are for educational purposes only (no selling) and will run approximately 65 minutes in length.  The three main topics that will be covered:

1) Safe Money (market linked gains w/out the risk)  2)  Direct market participation using ETF’s (exchange traded funds) while controlling risk and capturing profit w/ stop losses.  3)  Collecting option premium on futures w/ extreme risk control.  Stay tuned for details in future posts.

Selling w/ Serious Volume

The model will add to its long S&P position w/ increased price and volume above 850.  Today however we had increased volume with the market selling off and a close of 827.  So no adding has taken place.  If you look at the last post on Friday the 6th I said in the first paragraph the model will not add if the market gives us continuous selling with increased volume, ala distribution.  The S&P position represents still 29% of the M48 model portfolio as stated in the 1/29 post.  Cash continues to be King.

GLD (gold) and SLV (silver) are holding up.  I’m going to sell more SLV on a limit order above 13 but below 14 provided we get there.  Today’s close was 12.98.  I had a limit order in on the accounts to dump some at 13.07 but we missed it by one tick.  Either way we have a built in profit on the metals due to our stops above our initial entry.  I see the metals, especially SLV as very tradable due to the nice upward trend.

The model as of today is no longer in DIG (long oil).  You can see that we dumped some DIG last week at just over 30 and moved our stop up on the balance to 28.73.  Today DIG closed at 27.54 and therefore the model was stopped out on the balance for a profit.  The model may get short oil (DUG) soon or possibly long again by jumping back into DIG.  The charts will let us know.  Bonds caught a bid today w/ the equities selling off.  No problem because we have plenty of profit built into TBT (short bonds) in the event we are stopped out or decide to sell some ahead of being stopped out similar to DIG.

I can here the train outside my office (Del Mar).  A reminder not to get in the way of selling w/ increased volume or you’ll get run over.  Wait for a bottom to form wherever and whenever that may be.

I’m watching the SDS which is the ultra short ETF for the S&P.  Watching, not buying. 

Close Above 850 w/ Decent Two Day Volume

In the January 29th post I said that the M48 model would add to its S&P positions w/ a close above 850.  I also said I’ll dump the S&P positions on a close below 800.  So today we closed at 868+.  Volume was greater  yesterday (an up day) but today’s volume was also higher than Wednesday’s which was a down day.  This means I’ll be increasing the S&P percentage inside the model over the next several days provided continuous selling w/ high volume does not occur.  My stop on the SPY will be in the 81 range based on support that I see on a weekly chart.  The SPY (S&P exchange traded fund) closed today at 86.97.  This means our stop will be w/in the 7% range in the event we are wrong. 

Keep in mind that we are obviously still in a bear market.  We could rally 40% from here only to turn around weeks our months from now to head down 60%.  If this is the beginning of some type of trend – we’ll ride it.  If it’s another head fake – we will exit to preserve cash.

DIG (crude ETF) hit 30 today so we took profit on a percentage of the position as stated in yesterdays post.  The metals are holding up, especially SLV.  TBT (short bond ETF) continues to trend higher too.  

Always hope for the best but make sure you have a plan for the worst. 

Stops in place – forget the noise on TV – have a nice weekend!

This is for educational purposes only and should not be considered investment advice.  Exact entry, stops and exit points are available to subscribers.

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