Breakout Trade $RIMM $$

Day after day we as traders are in search of opportunity.  I have many conversations with traders who complain at the end of the day that this market is void of good trades.  They complain that there is only 30 minutes to an hours worth of good trading a day.  The problem these traders are having is that they are not in the right stocks.  The majority of our time should be spent looking for stocks that are going to move plus be readable. 

Today was a perfect example of being in the right stock.  The market as a whole was flat and basically trendless on the day.  Even though this was the case I ended the day thinking it was an easy day.  Why? Because I was in the right stock. 

On the open today there was one stock on my radar, Research in Motion (RIMM).  The previous day RIMM traded very well, with volume, and closed strong.  I was watching the stock trade in the pre-market and right around 915-920 RIMM started to show some strength on the tape.  My game plan was to get long around the previous days high.  This entry triggered at 933 and I got long.  This was the definition of a breakout trade as I was booking half of my trade for a point within 6 minutes.  The reason I booked is the market lately has been retracing opening moves only to resume them later on in the day.  The correct way to trade this breakout was to book some of the trade in order to manage risk.  RIMM ended up pulling back a bit but was still exhibiting strength on the tape so I added back in around the 53 level.  As you can see from the chart this was a good idea as I got another point out of the trade before exiting most of the trade during the consolidation of the move around 1030-11.  I reentered the trade when volume picked up at the 55 level and the bid held after the break.  I got a quick .90 on this trade before I recognized exhaustion coming and exited.  The tape started to get erratic and I knew this was the time to get out as something was changing about the way RIMM was trading. 

The key to this trade was that I was ready for it.  I had a game plan and the plan executed.  Many traders spend their time complaining about moves they missed or trades they mismanaged.  The reason for this is that they don’t have a good plan about what they are going to do.  Spend your time developing trade scenarios and spend the market hours executing your plan.  Best of luck in your trading. 

Kyle

EU’s possible support of Greece leads to rallies in US markets

The Greeks are known for many things. The Parthenon, Pythagorean theorem, mischievous God’s and a debt crisis that is moving the US markets. In this week alone, the market has rallied on news that the EU would help Greece with its debt.

Wednesday, Feb. 9, at 11:45 am the SPY (chart below) reversed their downtrend on the day and bounced from their lows of 106.27 to make new highs at 108.15 ($1.88 or 1.74%.) This 45 minute move was based on unfounded rumors the EU would help out Greece.

Thursday, after an announcement from Brussels that no resolution was made, the SPY bounced from 106.62 to it’s high of the day of 108.25($1.63 or 1.5%.) Again, nothing has been decided although the EU is pledging support.

The dollar, which was gaining strength against the EUR/USD (chart below), initially bounced after the news, but then came back in as it was found to be “premature.” The EU is looking to give in-direct aid, but there won’t be any more details until sometime next week. As of this writing, the EURO is continuing to give up ground to the dollar.

The biggest gainers in US equities on the strengthening dollar have been basic materials. Although the overall sector has been the weakest over the last month down -9.2%. This week it is up 3.7% and more than any other sector. Today it was up 2.7%. (Bar Graph Below)

AK Steel Holding Corp (AKS) was up today 4.74%. It found resistance at it’s 50-day moving average. I will be monitoring it closely to see if it continues to rally as well as paying attention to the EUR/USD.

Shaded areas represent the volatility to the upside in the market.

The dollar is clearly getting stronger against the EURO

Week performance

Day Performance

Morning Quickie$

Keystone Morning Quickie November 10th 2009

Market Commentary

Futures are slightly down this morning after a impressive rally yesterday. As impressive as it may have been, we must take not of the lack of volume that was associated with the run up. The Dow Jones made yearly highs at 10023, however the $SPY failed to make a new high and is sitting below the significant resistance level of $110.

A big reason for the rally was due to the G20 meeting in which the leading nations gave no indication to removing stimulus. The US dolard made 15 month lows as both Crude oil and Gold continued the stellar rally. Many believe that the price of Gold is a bit inflated, but as always we will not try to pick a top, but rather wait to buy pullbacks or wait for signs of a reversal.

Keystone 20 – Be the first 15 to enroll tomorrow, Wednesday, November 11th and receive $1000 of enrollment. Phones open at 8:30am

Become a fan of Keystone on Facebook http://www.facebook.com/pages/New-York-NY/Keystone-Trading-Group/99730034290

To learn more about Keystone and to receive a free e book and video http://www.keystonetradinggroup.com/trading.htm

Call us at 212-594-8900 if you would like to discuss any of our trading programs.

Technical Levels

50 Day 200 Day
S&P 1056 1008
DOW 9765 8647
NASDAQ 2100 1805
Keystone’s Trades

CVS Caremark(CVS) Short sale – After gapping down on earnings last week on an exhaustion volume bar, CVS has rallied back and recovered some of the losses. However, we believe that this is nothing more than an opportunity to position ourselves for a short. We will look to see how it reacts around the 200 EMA ($31.78). If we show signs of weakness early this morning, we will enter the trade on the first rally.

Closing Price:$29.79

Target: $27.49

Stop: $31.76

20 EMA:$34.64

50 EMA: $35.97

200 EMA: $31.78

Apple (AAPL) Long – Apple has been tried remain above the $200 “psychological” level since December “07. It failed back in “07 and after their earning release in late October it once again breached that level, only to sell off and retrace back to $186. Yesterday it once again has risen above the $200 level and we believe that it is there to stay. Technicals strong, fundamentals strong. A must own stock. Buy the pullbacks.

Closing Price: $201.46

Target:$210

Stop:$193.66

20 EMA:$193.46

50 EMA:$186.05

200 EMA:$141.82
Economic Calendar

7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
8:55 Fed’s Lockhart: Emerging Trends in Real Estate
9:00 Conference: Cross-Border Insolvency Issues
10:00 Job Openings and Labor Turnover
10:00 Q3 Metro Home Prices/State Resales
10:05 Fed’s Yellen: The Outlook for the Economy and Real Estate
11:15 Fed’s Rosengren speaks
1:00 PM Results of $25B, 10-Year Note Auction
7:30 PM Fed’s Fisher: Economy

Notable premarket earnings: ARM, BZH, DSX, JASO, TYC
Notable postmarket earnings: AONE, ATO, CLWR, PAAS

Top News Stories

EU casts shadow over Oracle’s Sun. European antitrust authorities formally objected to Oracle’s (ORCL) proposed $7.4B takeover of Sun Microsystems (JAVA), issuing a statement of objections that focuses on whether Oracle ownership of Sun’s MySQL database software would reduce competition. The move doesn’t necessarily mean the EU will reject the deal, but should delay the process. The U.S. Justice Department, which has already signed off on the combo, reiterated that the merger is “unlikely to be anticompetitive.” Oracle, meanwhile, said the acquisition “does not threaten to reduce competition in the slightest,” adding that the EC’s concerns “reveal a profound misunderstanding of both database competition and open source dynamics.”

Lending standards loosen. A smaller percentage of banks tightened lending standards in Q3, according to the Fed’s loan officer survey, but credit conditions remain far from a comfort zone. About 25% of banks tightened standards on good quality real estate loans, down from 75% in July 2008. Banks tightening standards for credit cards fell to 15% from 35% last quarter, the lowest percentage since April 2008. And 15% of banks tightened standards on commercial and industrial loans, down from 80% in October 2008. “We’re back to just normally tight, not pathologically tight,” says an economist.

U.K. most at risk of AAA downgrade. The U.K. is most at risk among large developed economies of losing its AAA rating, Fitch said Tuesday, but the ratings service maintained its stable rating which it said “reflects our expectation that the U.K. government will articulate a stronger fiscal consolidation program next year.” In response, U.K. Trade Minister Mervyn Davies insisted Britain’s sovereign rating is “absolutely” safe, and said the government’s “been very clear that over the next four years there’s going to be a program to reduce the public debt level.” In May, S&P put the U.K.’s AAA credit rating on negative outlook, saying it would make a decision after the government makes its intentions clear.

Moody’s sees AIG comeback. AIG (AIG) will be able to repay its $60B Fed credit line and “much or all” of the Treasury’s $69.8B investment if financial markets stabilize, Moody’s said Monday. In a vote of confidence for CEO Robert Benmosche’s strategy of rebuilding some of the businesses AIG previously targeted for sale, Moody’s said, “We believe that the slower approach to restructuring could help AIG to generate more favorable values from its business portfolio than would be the case under rushed asset sales.”
Employment trends turn corner. In perhaps the most bullish employment report since the onset of the recession, Conference Board reported its Employment Trends Index rose 0.7% to 89.3 in October from 88.7 last month. “The

Employment Trends Index has likely turned a corner in September, and the historical relationship between the index and employment suggests that job losses will end in early 2010,” the group said, adding, “While layoffs have certainly declined in recent months, we still expect to see employers adding hours to their existing workforce before hiring will strongly increase.” The improvement was driven by positive contributions from measures of jobless claims, temporary hires, industrial production, and sales. Conversely, Gluskin Sheff’s David Rosenberg said unemployment may hit a post-war high of 13% as growth stagnates. “This is going to be the mother of all jobless recoveries. At the beginning of the year, who was calling for unemployment to go up to 10%?”

Hedge funds alive and well. Hedge fund assets may top the previous high of $2T by the end of 2010 as double-digit returns lure investors, Deutsche Bank says. “We fully expect to see material inflows into 2010 and beyond. The expected growth is reflective of continuing institutional demand for increased risk-adjusted returns in the face of low bond yields and disappointing passive equity performance.” Global hedge funds have rebounded faster than expected, recovering to $1.53T in September from $1.33T in March, even as regulators turn up the pressure to increase scrutiny of the industry and amid some high-profile scandals.

Barclays accused of huge Lehman heist. In a recent court filing, Lehman’s creditors claim Barclays (BCS) received Lehman securities valued at $50B for just $45B in cash, accusing the U.K. bank of the “largest theft in banking history.” Some Lehman executives who negotiated that deal, the complaint asserts, knew they would receive offers to work at Barclays, and received or were offered plump compensation deals. At the time, the deal was presented in bankruptcy court by Lehman’s lawyers as a wash.

Cadbury bitter at Kraft’s bland offer. Kraft (KFT) took its offer for Cadbury (CBY) directly to shareholders, disappointing investors who had hoped Kraft would sweeten its original bid of 300p and 0.2589 new Kraft shares for each Cadbury share. Kraft said its proposal “offers the best immediate and long-term value for Cadbury’s shareholders and for the company itself compared with any other option currently available, including Cadbury remaining independent.” Cadbury, not surprisingly, recommended shareholders “emphatically” reject Kraft’s (KFT) “derisory” offer, which it says “is worse than the proposal that the Board has previously rejected as fundamentally undervaluing Cadbury and its prospects,” due to a drop in Kraft’s share price. The cash and share offer originally valued Cadbury at £10.2B, but is now worth about £9.8B. Kraft now has 28 days to publish a prospectus on the offer for Cadbury shareholders, and 60 days to collect enough shares to clinch a deal.

Google picks up mobile ad leader for $750M. In a push to expand its digital advertising empire to cellphones, Google (GOOG) agreed to acquire mobile advertising start-up AdMob for $750M in stock. AdMob is a leading seller of banner ads on iPhone apps and mobile-specific web pages; the acquisition could help establish Google as an early leader in the small but rapidly expanding mobile phone advertising business. Aggregate sales of mobile ads were just $160M last year.

Madoff payback fund could swell. Settlement talks between Madoff trustee Irving Picard and lawyers for the estate of Madoff investor Jeffry Picower are making progress, with Picower’s family lawyer saying discussions range between $2.4B (the amount Picower withdrew over the six-year recovery period allowed for the trustee’s claims under New York State law) and $7B (the total amount of his withdrawals over several decades). The estate is large enough to add at least several billion dollars to the $1.4B the trustee has gathered so far.

news provided by seeking alpha

Follow Keystone on http://twitter.com/KeystoneTrading

Read the Keystone Blog https://keystonetrading.wordpress.com/

http://www.keystonetradinggroup.com

$Debbie: What is the trade in AXP?

On the daily chart, AXP is in an uptrend since March; however, it has gotten sloppy at times. Currently the March trendline has been broken on the daily and price action is bouncing off 31.68 which is somewhere near September’s lows.

The monthly chart shows a trend up since March but recently on this chart we have two melted candles which signifies indecision. The hourly chart shows range bound price action since around Oct. 12 th. The 15 min. chart also shows range bound price action.

AXP is range bound; hence, with an intraday, momentum bounce off of a significant level could warrent a test trade long off of support as long as booking profits into resistance is quick. This developing trader would not short AXP as the overall bias is still up in the higher time frame. Since recently AXP has been presenting some choppy trading intraday, this developing trader is being cautious with AXP.

However, if AXP starts taking out multiple day highs and, better yet get back above that daily trend line from March then that could signal continuation of the trend. At this time this developing trader is on the side lines regarding AXP.

 

Profitable Trading All!!

 

Debbie

$Debbie: What is easily forgotten by longer-term traders?

As a trader there are so many things to monitor, watch, and interact with throughout any given trading day as well as the need to self regulate and keep the reigns tight on oneself to follow one’s own game plan, rules, and strict dicsipline guidelines that one simple item can easily be forgotten even by the best, most skillful traders. This is especially true for traders seeking to not only enter a great, high probability trade but one that has a high potential of being the trade that can be built into a “longer term” intraday position.

The item  that is easily forgotten is the rate of activity that is appropriate for the type of trading day it is that unfolds. Specifically, as a platinum trader, I don’t need 20 trades a day; rather, I am looking for a few high probability trades that may turn into the one or two trades of the day. This is especially easy to forget when one is down of the day. The psychological drive to make something “lost” back can cloud thinking and negatively impact trading.

As a developing trader this is one area that I am focusing on right now.

 

Profitable trading all!!

 

Debbie