Tom

ERPLQ Energy Partners Limited may Breakout Soon

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The market is taking a slight beating today but EPLRQ, a somewhat spotty and thin trade penny stock has a pretty decent pattern and may get a run going if it manages to consistently trade above .45. It pattern looks somewhat like a head and shoulders bottom formation with the right shoulder being much longer … Read more

Gold Needs to get Moving and Soon

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If the gold price is going to get a breakout going out of this large symmetrical triangle into the typically strong seasonal time period of mid-September, then it needs to hold above the blue trendline drawn above.  It needs to remain above this blue trendline for the next month or so if an accelerated breakout scenario is to take place.

It would be an ideal situation for a breakout out of this symmetrical triangle because going too much further into the apex of the triangle could possible weaken any potential breakout.

I have labeled minor support along that blue up trendline as 92.18 on the chart of the GLD ETF above.  I would expect at least a one day bounce after touching that line.  A break under it would invalidate the near term breakout scenario and open the door to a move back down to the bottom portion of the triangle.

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The Most Powerful Cycle Model Ever Created

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In case you do not know about it yet, I would like to tell you about what I believe to be the most powerful cycle model ever created.  I did not create it.  It was created by a man named Marty Armstrong who headed the former Princeton Economics Institute which was an institutional advisory and money management firm.  PEI as it was known has since been shut down by the United States government for reasons I can’t speak to because I don’t know the details or facts about them.  But I will say that it is a crying shame that their business and knowledge was shut down because it was in my opinion some of the most valuable and important financial knowledge ever devised.

The former website itself used to have unbelievable amounts of historical research on money and financial panics going back hundreds and even thousands of years.  The only reason I know about it is through a radio program that used to play in California and was hosted by Buzz Schwartz, a trader and radio host.  He used to have Marty on as a guest and I listened to their interviews and his advice on markets.  I also got a few of Marty’s monthly ‘Capital Market Review’ publications and that is how I am able to tell you about his cycle model.

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StockTwits is a Great App for Traders

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In case you do not know about it yet, you should really check out Stocktwits.  It is a great app for traders and connected to the twitter platform.

The reason why it is great is because it can be a good source of new trading ideas.  Basically all you have to do is go to the main site and watch new posts as they scroll down occasionally and automatically.  When you put your mouse pointer over the stock symbols at the end of each post a nice candlestick chart immediately pops up so you can judge instantly whether something interesting is going on or not. 

The nice thing about stocktwits is that you are looking at stocks that are the result of someone else’s analysis.  So there was some judgment involved in putting it there in the first place.  The caveat is that we have no idea how much experience or skill the person has who posted the symbol or chart and we have no clue whether they are more technical type traders or fundamental type traders.  Regardless, it can be a possible source of new trading ideas when either your scans are coming up dry or you cannot find good setups elsewhere.

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Stock Scanner Results for August 7, 2009 AWBC and VOCL

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Only a small handful of stocks came up on my new scan that I discovered.  I got 6 results from over 4500 NYSE and Nasdaq stocks. Unbelievable.  I continue to be extremely impressed with this scan because it is returning so few candidates out of so many thousands of stocks.  And some of the candidates it returns tend to be at optimal time and price locations.  Now part of this is the result of the positive overall structure of the broad market, or is it?  I will not really know until I start to see the results of this scan in a more choppy sideways market or bear market.

The stock scanner also tends to reveal a lot of spotty type stocks.  With more spotty volume and price.  That is because I have it open to give me results on as many stocks as possible.  I am not limiting it to stocks that just trade above a million shares a day for example.  I do this because I do not want to limit opportunities of what it may find.

Anyway, AWBC and VOCL came up in the scan.  Both of them have somewhat spotty charts and VOCL has quite a small trading float (about 6 million shares) so it’s moves can be fast and sharp in both directions.  (click on each chart to see full size)

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ETFC Etrade Breaks Down and Cannot Get a Rally Going

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Have you noticed how a lot of financial talk shows or internet sites seem to never mention the stocks or setups that turn sour?  Or maybe they only talk about the winners or how much percent they are up for the month or year.  I actually think it is a good idea to revisit setups that failed and then to try to figure out what went wrong or why it did not work out.  If we don’t learn from the failures then how are we to learn about what makes a good setup versus a bad one ?

Etrade ETFC is a failure.  I don’t mean their business is a failure.  The setup I initially talked about is.  Etrade Financial broke down today on pretty heavy volume and this on the same day the rest of the market was up very strongly.  I don’t like to see a break down like this in light of such market strength today, and also to see it with such heavy volume.

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GLD ETF Meandering inside a Triangle

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You probably just read my previous post on the US Dollar index where I talked about how the dollar really needs to stay below that funny blue looking line to keep it in a near term bear trend. 

But now we are looking at the GLD ETF which is in a sideways triangle.  Triangles can be a real pain because volume gets really light as price compresses into the triangle.  I am starting to think that the GLD ETF is going to make another trip to the bottom boundary of this triangle near the red shaded circle on the chart.

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Keep an eye on The US Dollar Bounce

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The US dollar has an upward bounce going today.  The chart above does not show today’s price move but it is near 79 right now.  It is no surprise that gold is taking a bit of a hit today. So now what?

First, before I even get into the meat of what I want to say I should tell you that there is always a bull side and a bear side to every trade, no matter what the time frame is.  There are always levels that if achieved, or if broken, can dramatically change what the outlook is. I am telling you this because there have been times when I have become extremely bullish on something, but then things started changing and key levels were broken, and I had to change my stance immediately. 

So why this talk about bull and bear side?

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EPEX Edge Petroleum coming close to a Decision Point

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This is an important alert on EPEX.  I did a post before on EPEX Edge Petroleum.  You can see the previous post under the related posts section down below.  It looks to me now that EPEX is coming close to a decision point and I cannot say for sure whether it will be up or down but the probabilities say it is going to be an upside breakout.

There are two significant swings on EPEX that make this analysis worthy.  You can see them more clearly if you click on the chart above.  They stand out like a sore thumb.  But the key point to be made about those two price swings is that the second one had volume that was substantially larger than the first one.  That is an important clue about what the future direction of the stock price will be upon a breakout from this pattern.

My analysis shows that the direction will be UP.  However we will not really know until it happens… that is just the way these markets work, let them give you the signal and then go with the flow.  As of now EPEX is still constrained within this tight range.

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