Chart of the Day

Today's Chart of the Day is SOLF. It finally made a move up today on above average volume. It has got rejected thrice at these levels. Will it be a case of third time lucky?? I took half position at 12.18 and will look to add more at a break of 12.30. On the downside, a break of 11.95 could signal an end to this upside move and another failure at these levels.

Click here for my take on today's action and thoughts on tomorrow. Also, check this free special report on why diversification doesn't work if you haven't done so already.

Take care and good luck!

Mostly in cash

An interesting day on the street today where the markets moved around quite a bit and ultimately ended up going nowhere. Technically, the support and resistance levels remain the same as yesterday - 1130 is the nearest support and 1150 the resistance - so, I won't bother putting up the index charts today. Considering the kind of bullish up move I did yesterday, I think the markets did quite a good job today of digesting the gains. Nothing wrong with that. If I were bullish, which I am, the one thing that would concern me a tad is the financials. They are lagging behind the overall markets and like I said yesterday, I don't see the markets carrying on with this rally without the financials coming to the party. So, watch out for the 15 level on XLF. A break of this level could give a second wind to this rally. That said, I will continue to remain bullish unless we break 1130 on the S&P. The corresponding number to watch out for on Nasdaq is 2325.

Personally speaking, I had one of my best trading days of the year, thanks to the solar stocks. But first, let's get the disappointments out of the way. I got stepped out of MIPS at 8.60 for 2.3% gain. I know I got a decent profit out of this one but I had my stop too close on this and got stepped out close to the lows of the day. Oh well. Moving on, the regular readers of this blog know that I have been bullish on solar stocks, particularly JASO, for quite some time now. Well, it did break out today and I sold it at 7.98 for 8.5% gain. It ended the day quite strongly too. I might repent selling it but I would have repented it more had the breakout failed and I had missed cashing in on the profits. Plus, I have learnt from past experience not to get too greedy on these solar stocks and take my profits in them when I can. A case in point would be LDK which I sold at 8.43 for ~ 3.5% gain and saw it end the day at 8.25. I took a small starting position in SOLF at 12.18. It's not the best entry point but its a small position. I will consider adding on break of 12.30s.

I also made one other trade today. As the market went up quite a bit after the FED announcement, I wanted to short it as it approached 1150, the next resistance level as pointed earlier. Now, as you readers know, I have been bullish for quite a while lately, so didn't have a watchlist of short setups ready. I thought of going with FAZ but triple leveraged ETFs are not my thing. Then I thought of VXX. It was not down much and seemed relatively less volatile. I didn't bother charting this one as I don't believe technical analysis actually works on this one. I took a small position at 16.48 and will be looking to get rid of it at the first opportunity. It behaved rather well but I will be damned if I trust this and fall into the VXX trap. 

My biggest position is cash right now and I am quite comfortable with it. 

Take care and good luck.

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