Two Down, One Up

or is it three "down" days for every "up" day now? At least it makes it easy to pick out the leaders ... and you get a good entry point on the others when the selling is done.

Stocks from my watch list up over 10% in the last two weeks.

I'm just going to sit back and watch the trailing stops fire off. Other than kicking me out of some likely long term holdings I don't mind. It's better than watching gains disappear (or worse). "Hoping and praying" is not an investment strategy.

Trades: none.

Reversal alerts: 16. Nothing jumps out at me.

Sputtering Along

There was a drastic improvement before the close, but still down: -40 / -9 / -2.

Trades: I had hope for LGL. Good fundamentals, and it looked like it was coming out of a base, but it couldn't stay above the trailing stop so it's gone (-16.5%).  I tighten up the stops when the market gets dodgy. Keep the powder dry and we'll make up those losses when the market turns for the better.

That still leaves me with positions in BEXP BRKS CF CSTR CBAI FMCN OMG SKX VSEA VECO VSH and WLL. SKX is the only rotten apple in the group; I'm happy with the rest.

Reversal alerts: 12 of which only AMCC and DO were modestly interesting. AMCC could perhaps get to a P/E of 28 one day, and DO has good valuation unless you take the shrinking earnings and sales figures into consideration. Bleak prospects all.

I missed the value-sales portfolio report Friday, so here it is: up +27.5%.

Black Friday

The short post-Turkey Day session ended down -95 / -9 / -9 respectively.

Trades: WATG had looked like it might be turning around ... or not, so I put a 3% trailing stop loss in. It triggered Friday and sold the shares bought from the Nov. call. (-12.1%)

Reversal alerts: 17. TRCR (c f) has a P/E falling from 23.5 to 18, rising earnings estimates, 24% YoY sales growth mrq (decelerating), estimated earnings steady at 0.25 (mrq) then 0.25 and 0.26 cps which is 19, 37, and 84% growth YoY.

Cleaning House

If a stock can't go up on a day like today, it's time to get rid of it. DJIA +151, Naz +48, SnP +18.

Trades:
I sold my PWER shares left over from the repaired Nov. spread (+13.8% net after everything).

I sold my Dec. YGE calls (-69.6%).

I put in an "execute and sell" order on my LOCM calls since they were trading below intrinsic value (-35.1%).

I bought CF shares and calls.

Reversal alerts: 67 filtered down to 12 but none looked interesting.

Rough Tuesday

DJIA -142, Naz -37, SnP -17.

No trades today.

Reversal alerts: (14) filtered down to CF (c f) and ROK (c f). CF is strong here. Rising earnings estimates, P/E falling from 37 to 16, rising sales. Options available.

Post-Expiration Monday

Maybe it has happened before and I didn't notice. Two of my Dec. spread's limit orders sold at the open this morning. I'm guessing some spare cash from closing options had some buyers rolling into December options at the asking price. Cool.

Trades:
BEXP ($25.60) Dec. $17/19 bull call spread sold early (+39.1%).That left me with a $15/22.50 Jan. spread. The bid on these has been so low I went shopping and bought a Dec $22/27 spread for $2.85. Not a fire sale but hopefully good for 40% in 25 days.
DIOD sold early (+92.5%).

Reversal alerts: (41) filtered down to APWR NPO QSFT TRCR TG NNN HSII HCP QSII & GMCR. Many of the charts for the reversal stocks look good. Many had a good consolidation phase and there's good symmetry in the indicators.

Let's Play "Pummel the Expiring Options!"

Why do the issues you want to finish strong fizzle going into expiration week?

Trades:
Dec. bull call spread ANR sold early (+89.7%).

I sold Jan. bcs LCC (+14.2%) at a big discount to intrinsic value before the TSA controversy kills holiday air travel and the value of the spread. (The spread's value was always heavily discounted.)

Nov. call spread NTAP expired at full value (+26.6%). I normally aim for more gain but this was a for 30 day holding that opened 9% above the short call. Seemed like a good option for some spare cash.

For Nov. call spreads WATG and PWER, the upper, short calls expired worthless, leaving me to sell the stock at a later date. The returns now stand at (+11.1%) and (-13.9%) respectively given today's closing prices.


Reversal alerts: (t2) ACAS ACE ARBA AVT BKCC BRLI ED EMR FIS GR GRS NRF RGR RRST SLH & WST. (hlr) ABT ADM ASR CBK CUB CYT GEO ICUI MBI MNTA MU RMBS ROK SNPS & WHR.

The value-sales port is up +27.3%.

New Blood

Despite my skepticism (*) about the near-term outlook for the market, there are always good stocks to invest in.

I probably looked at TRLG 10 times, and even canceled a buy order for call options after considering my previous evaluation of its potential in conjunction with my sense of the market's likely direction. It broke out yesterday. Sigh.

When I look at most of the leaders, they're at the top of their charts. Some of their fundamentals are deteriorating, some have become fully valued. I'm too scared to buy them at the top, so what now?

Start over. A fresh screen. Forward P/E below 20, current P/E above 20 to catch earnings growth. Sequential sales growth in at least 4 of the last 8 quarters, at least 4 instances of YoY earnings (including estimates) or sales acceleration, and optionable. Tada ...

(35) potential new best friends. I prefer the ones coming out of a light consolidation: PCP TSRA NIHD AXE & AMAT. The rest are either beaten up, choppy, or at the top. I'm ignoring airline stocks JBLU and DAL because of the whole TSA thing (I wish I could short them!). In fact, I'm looking to ditch my well in-the-money LCC spread for a modest profit instead of waiting for it to tank by January expiration.

G'luck folks!



(*) OBCHX up for 10 straight weeks. Down the last two. Not a coincidence.

Oops

I called that one right, didn't I. DJIA +173, Naz +38, SnP +18. I guess after a week of sell-offs and lackluster rebounds I was sensing a trend. Today's enthusiasm for the GM IPO, good news on Ireland and the jobs report, and no bad news today with regard to China moved everything up. But I'm not convinced. Maybe I just want some consolidation so I can get some good entry points. We'll see.

Today's trades: none. Bull call spreads for NTAP, PWER, and WATG close tomorrow. Fingers crossed.

Reversal alerts: 88 alerts, 83 in my screened database, 17 meet forward P/E and growth requirements.

Baiting the Trap?

Today was not so bad, right? Feels like a bull trap to me.

Trades: none. A few were pretty close to selling.

Reversal alerts: (t2) ANDS & FRPT. (hlr) ATAX BNCN SCHL & UFPT.

Reset Button

DJIA -174, Naz -44, SnP -22. Those greedy profit takers. Oh wait, that's me.

The bad news is really bad, the good news is only encouraging. So I tightened up the trailing stop loss orders this morning; anywhere from a dime to 3% below yesterday's close. And off they went ... AMAT (+7.9%), CHK (+3.1%), CRZO (+8.8%), OMG (+23.6%) and YGE (-9%*). None of my options sold.

The plan is to curtail buying and close out the options as sanely as possible until conditions change.

The value-sales port has dropped to a 22.7% gain.

Reversal alerts: (t2) FPFC. (hlr) ASIA GILD KRA & WTS. In a better environment I could dabble in the last four based on chart patterns (and reasonable fundamentals) alone. Um, not now.

(*) Still net positive for YGE.

Shaky Ground

I'm still buying here but not feeling good about it. This morning I thought we might be coming out of last week's slump but the day's action sure didn't help to confirm it.

Today's trades:
BRKS hit the trailing stop (+8.7%).

I bought VSEA stock and Dec. calls.

I rolled my Nov. PWER ($9.06)  8/10 bull call spread to an 8/9 spread. That reduces my cost but also locks in a loss since now there's no way the value of the spread will ever cover my cost. But I think minimizing my loss here is the best I  can realistically hope for.

Reversal alerts: (t2) KMB & QCOM, (hlr) CTSH DOX GRMN NBIX RAH SONA & SPIL. QCOM is a marginal pick here, based on valuation. Modest growth and the chart pattern doesn't make a stronger case.

Fat Turkeys

have come home to roost and are weighing everything down. DJIA -91, Naz -37, SnP -14.

It has been a disappointing week. I expected more trailing stop loss orders to trigger today but the close ones held their ground. LGL and YGE aren't protected yet and are down (15.9%) and (7%) respectively. I don't like to put in stop loss order for a position until its made some profit or found a base. (A lot of "reversal" stocks tend to drop again in the first week or two before getting traction so I like to wait on them.)

If the markets continue to deteriorate I'll tighten up the stops and sell the laggards and post-November options.

Trades: I bought more VECO near the day's low, and I'll look to add calls if it finds support next week.

Reversal alerts: CRXL, KAR, and RYAAY. RYAAY is the best of the litter here but nothing special.

I moved VSEA ($32.04) back into my top watchlist (potential buys). Good growth, valuation, and rising earnings estimates.

The value-sales portfolio dropped this week but is still holding a nice +26.3% gain.

Down with Cisco

CSCO missed which left the indexes trying to dig out of a hole all day. DJIA -74, Naz -23, SnP -5.

However a few of my picks with earnings surprises or good mojo were hitting new highs: BEXP, BIDU & WLL. ANR, BRKS & CRZO also had nice gains. LGL and PWER lost ground, CBAI ran out of steam.

Trades: ASML hit the trailing stop (+5.0%). My Dec BIDU spread sold early (+81.6%).

Reversal alerts: GILD MRK SUPG and HGSI. Meh.

Fake Out

The market's drop this morning led me to take some money off of the table.

Trades:
FMCN ($25.25) hit the trailing stop (+6.1%) leaving me with a Jan 22.50/25 spread.

The rest of my VECO limit buy order filled.

I start out selling Dec 19 CHK ($23.41) calls to cover the cost of my Dec 18 calls. Then the limit order for the spread (at slight discount) sold immediately (+36% on call cost basis). I'd have been better off just selling the call since there was no upside in exchange for more risk, delay, and commission. I still have CHK stock.

I sold 2/3 of my CBAI since it's gone up 35% and 33% the last two days. It was underwater for quite a while so I was glad to finally exit with a profit. The last lot is up 88% so we'll see what happens tomorrow.

Reversal alerts: nothing worth repeating.

Backsliding

Some stocks are backsliding, others are surging ahead. Industry peers are moving in opposite directions. Odd.

Trades: none:

Reversals: t2: APEI NVTL PFE TRLG WX. hlr: CTSH FORD SAVB.

PFE has fairly strong growth with the right valuation but chart patterns suggest that it won't be moving up very fast. TRLG has modest growth and a fair valuation, and chart patterns that suggest a break-out from the bottom. It doubled for me the first time I bought it so I have fond memories of TRLG. But this time the valuation and novelty of the brand aren't as compelling.

Still Going

Trades: I bought VECO again. Same old story, triple digit earnings and sales growth, P/E falling from 10 to 6.3, rising earnings estimates.

Reversal alerts: t2: LOGI, hlr: CLX CRME TNP. Nothing interesting here.

A Good Week

Trades: I picked up some LGL shares. No options are available.

Reversal alerts: RTIX SGK & ANW ACP. Not very interesting.

The value-sales port finished the week at +28.6%.

My holdings are performing well overall. Exceptions - PWER is just a tad underwater, SKX is going to leave a mark, and CBAI is just an expensive lottery ticket as I dollar cost average to 1,000,000 shares.

O.M.G.

What a day! DJIA +220 Naz +37 SnP +23.

Trades:
LOW wasn't moving and I wasn't fond of its sub-5% sales growth so I had a limit sell order in which triggered. +6.6%

My $5 NFLX spread sold early for $4.90. +37.4%

Reversal alerts: t2: BMS CLB COLB EXC LGL MLR NTWK RAS. hlr: FNBN MDCO NCI RAS RF RTIX SAVB SNV.

I really like LGL (f c) with its P/E falling from 22.7 to 8, solid triple digit earnings growth, and 74% sales growth (MRQ YoY). BMS (c f) is okay here too.

The value-sales port is up 27.1%.

Don't Buy It

Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. Will Rogers

I've always appreciated the retrospective humor of the last sentence, but also wondered if it should be taken literally. That is, in the IBD sense of "Buy High, Sell Higher" or "Stocks hitting new highs tend to hit more new highs".

That would certainly be the case lately with BEXP BIDU CSTR FMCN NFLX NTAP & VSH. Even LCC.

So can a case be made for bottom fishing? Not so much in this market. In other years, bottom reversals have tended to be late bloomers catching up with their peers, or companies whose business dynamics had just changed for the better and they were beginning to be noticed. But not now. So look for me to go with the "strong getting stronger".

Trades: ANR hit its 8% trailing stop loss orders at the inverse peak of the not so Republican Rally for gains between +0.7% and +3.4%. Hey, anything green is better than a loss.

Reversal alerts: (unfiltered) t2: ARIA NYNY OCNF UTSI. hlr: CRME CWT FMER MI NTWK SBIB UTSI. Here you either have to gamble on a bank or pharma, or park your money in a utility with single digit sales growth. Pass.

Election Rally

Dow +64 Naz +21 SnP +9. I'll take it.

PWER, YGE, and BRKS finally rebounded a bit.

Trades: COCO dropped 8% at the open when they whacked their earnings and enrollment estimates. I sold my Nov spread and went from a 43% gain at yesterday's close to a (5.1%) loss. I may try again once the new estimates are digested and the price stabilizes.

Reversal alerts: LOCM WHR OCFC PRSP CTRN ICLR MOH MLR ICUI UTL JJSF GBCI IDXX & TBBK.

LOCM MOH & MLR and maybe UTL stand out slightly and may warrant further investigation.

Yuck

Not a pretty day for the market. Up, down, sideways.

PWER took a hit, -8.5%. It gets an outperform rating and bounces around like this. Dunno.

Reversal alerts: (17) filtered down to CQB TEVA TESS ACTU TNP MRTN ACV & LFT. Nothing interesting here.