Steve is our newest Spiker. His presentation on Squash Bottoms received the top rating at the 2009 Spike Reunion.Remember last Spring when we were waiting for an interim bottom? Bullish divergences were showing up but we kept getting false bottoms that led to whipsaw trades. Now it feels like we’re at a similar juncture, waiting for an interim top while the bearish divergence signals continue to become more evident. After observing the SPX then versus now, their similarity became apparent. Back then we had a triple bullish divergence, similar to the triple bearish divergence now. That was followed by an exhaustion move down which led to the current bull run. The divergence pattern seem to give an alert or warning of change, but the exhaustion move was the pivot point that led to a solid tradable run starting with an immediate explosive move.Is the current SPX MACD-Histogram peak forming the last gasp before a significant drop? Could it be a pivot point?
This market is ruled by exhaustion moves, sometimes with an additional punch down – orchestrated by the market makers. Stocks get shorted like there is no tomorrow, down to support, pull up slightly, then they drop the bid and run the stops so the big boys can get shares on the cheap for the next leg up. This pattern provides a very profitable opportunity IF the impulse stays blue thru the retest as shown in these charts:
So if the inverse holds true in consideration of the SPX and this latest MACDH peak in fact develops into an exhaustion peak then we should see a subsequent retest of the high without the impulse going green, followed by a hard sustained drop?Happy Thanksgiving,Steve M.
Those who have been hanging around Spike Trade for awhile probably remember watching Alex and his past epic trading of CPST, an alternative fuel company. It was a multi-month drama–full of reward, bruises, and redemption. As we watched Alex wrestle with this small-cap rocket, I realized we were watching a master at work, picking entries and timing exits skillfully. It was very educational, and maybe one day Alex will take us through another long-term trade, so generously sharing his thought processes.Flipping through my charts yesterday, I stumbled on CPST again. I noticed that it has avoided complete disaster–though plunging from a high of $4 to a low of $0.45. After several months of sideways action, we’re now recapturing the 39 week EMA. This is about as clear a Fallen Angel pattern as you will see; so it may be in our best interests to pay attention. The weekly chart clearly shows support around 1.14 and resistance at the 5-week EMA around 1.20. The daily chart shows price is ST/OB and it looks like a squeeze is developing. Target is around $2.50. Personally, I’ll wait until the short-term indicators sag before taking a shot; and for now it goes on my watch list with a glow of anticipation.
New members often ask what brokers we prefer.
This headline comes from Sunday, November 15 SpikeSpeak in which I shared my market views with Members.
For the last year or so, life’s exigencies have driven me away from stocks and toward the ETF market. My trading these days is greatly reduced and probably 80% ETFs; and I am more and more pleased with the results. As most know by now, ETFs come in all flavors and power, and I’ve settled mostly on the ProShares 2X.There is one trade I take routinely and since we don’t recommend commodity trades for Spike, I thought I’d mention it in the Blog. I like to trade the long bond with the opposing ETFs, TLT and TBT, or the 3x ones TMF and TMV. It’s a simple trade–simple is good–I buy either ETF at the outer Bollinger Band and look to sell a couple of days later around the 20 EMA. I use the 2 RSI as a trigger, so when it gets into oversold territory, I get ready. While I use the 3X ETFs–TMF and TMV (they have crummy volume so use limit orders) to trade, I use the TLT and TBT for the pattern.Every once in a while, the bond goes on a major trend trade as measured by the ADX (see fall 2008); at that point I try to trade the trend. But the rest of the time, the bond goes back and forth from overbought to oversold without much fuss. I usually get 2-3 of these counter-trend trades a month at the extremes. The gains average about 3-5% on the 3X in 2-3 days, with a low-risk, high percentage average (use tight stops). No one will get rich on the trade, so think of it as cigar and wine money.
This message came from Susie W – a Spiker based in Mexico.
Nils F, a SpikeTrade Member, sent us this photo and message:Thought you guys would appreciate this story featuring my son Eric, a recent college graduate who just recently landed a job in Investment Banking!When Warren Buffet was a business student at Columbia University his mentor was David Dodd, co-author of the most famous book ever written on the topic of investing, Securities Analysis. After he graduated and started his investment company Professor Dodd gave Mr. Buffet a modest sum of his own money to invest.Tragically, Professor Dodd’s wife passed away at an early age leaving him to raise his daughter Barbara as a single parent. He decided to send his daughter to a Quaker boarding school in Newtown, Pennsylvania called George School. The experience made a lifelong impression on her due to the care she was shown while there. Two years ago, after Warren Buffet decided to give much of his money to the Gates Foundation, Barbara Dodd Anderson, with Buffets’ encouragement, decided to donate some of the gains from her fathers investment with Mr Buffet, and gave $128,000,000 to George School. This past weekend was the dedication of the new library. Eric (graduated from George School class of 2004, Emily class of 99) went to the reception and had the attached picture snapped with the Oracle.”
Hi to Pat, Alex, and Kerry,Checked out of the DanHilton [John stayed with Spiker Dan K during the Reunion]
Vladimir writes:It was a great pleasure to meet Spikers last time in Zurich, share ideas and experience. It was definitely worth it! I would also like to thank Alex & Kerry for joining the meeting via remote, answering questions and supporting us.Today I am glad to announce our next SpikeTrade meeting in Zurich.
Alex, Kerry:You both are