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Market analysis for Tuesday + Q1 results

|Includes: DDM, DIG, QID-OLD, TBT, UGL, United States Steel Corporation (X)
 
 
April 6, 2010

We serve a balanced mix of institutional and retail clients. 
 
Commentary:
In addition to general market comments, including the issuance of a warning, this newsletter contains our Q110 quarterly performance review.
General comments:
The Market is facing midterm resistance, and this could be the last straw before a meaningful market surge. Already, almost half a dozen times, secondary resistance levels in our combined data summaries have been longer-term neutral resistance. The point is, longer term resistance showed up in our combined data table, where it usually does not. It only shows up when there are no other resistance levels standing in the way. That makes the spread between initial and secondary resistance extremely large, and opens the door for market increases. Secondary resistance is longer term resistance for Tuesday.
Every time longer term resistance has showed up, the Market has pulled back. Karmatically, because I have announced it this time, the opposite is more likely to happen. Nonetheless, the warning needs to be understood. Our combined analysis for Tuesday tells us to respect midterm resistance. If it holds, a pullback to midterm support is likely. If it breaks higher though, expect an unabated surge.
Because both midterm resistance is being tested, and the aforementioned declines have occurred when longer term resistance has shown up in our combined data table, as it has this time, the warning should be respected.
The next leg of market direction should be based on the Market’s ability or inability to hold midterm resistance. Either a test of midterm support will occur, or the Market will break out, break the correlation referenced above too, and surge towards longer-term resistance instead. Either way, it all rests on the ability or inability of the Market to hold initial resistance. Respect it as inflection.
Q110 review:
During the first quarter of 2010, the Market respected defined trading channels most of the time. This was not true in 2009, so I consider 2010 to show stabilization thus far. Obviously, my longer-term analysis tells us not to expect that for long, but while it lasts, we will participate.
Our best performing strategy in the first quarter was The Strategic Plan, with gains of 17.84%. This result included the easiest phase of this strategy on record, and the most difficult back to back. A close second is our Day Trading Strategy, and Lock and Walk, with 16.64% and 10.99% respectively. All of these have beaten the Market handily.
With Lock and Walk in mind, I made one of the worst mistakes I have ever made with the Lock and Walk Strategy when I first introduced it in January 2009. The result of my mistake can be seen in the 2009 performance numbers for the Lock and Walk Strategy. 
Arguably, this is my favorite strategy, and something I think everyone should use. In 2009, I modified the rules associated with the alerts viewers for lock and walk exclusively, rules that had been established over the course of seven years, and I expected Lock and Walk to perform with the new set of rules. I made a terrible mistake in doing this, and the strategy had meaningful losses in 2009. That made recommending it hard for me to do. Now, that has changed. After careful review, and a demanding look at all of the strategies in 2009, I found my mistakes, and I corrected them. The results from lock and Walk YTD are what I expect from this strategy. I am pleased, never satisfied, but have room to breathe. This was and is one of my favorite strategies, and I am happy to see it working. 
The most popular strategy is probably the Position Trading Strategy. Understand that the Position Trading Strategy is also holding paper gains of about 8%. Those are not shown in the summary table.

Updated weekly.  Last update: 4.1.10

 
STRATEGY
2008 Results
2009 Results
2010 YTD
Long/Short?
Risk Control?
Strategic Plan 
19.17%
31.73%
17.84%
Yes
Yes
Day Trading
129.44%
2.99%
16.64%
Yes
Yes
Swing Trading
96.52%
24.36%
0.27%
Yes
Yes
Stock of the Week 
60.82%
12.84%
-0.60%
Yes
Yes
Lock and Walk
n/a
-11.74%
10.99%
Yes
Yes
Position Trades
 
58.70%
2.20%
Yes
Yes
DJIA
-33.80%
18.73%
4.87%
No
No

 

The strategies with the poorest returns were the Stock of the Week and the Swing Trading Strategy. In each of these, significant gains have been on paper, but the strategies have each reversed gains and left us with small losses from time to time. The Swing Trading Strategy is a great example. I can remember two times, holding 4% in gains or more, and seeing the Market turn against us, and stopping us out with a small loss. This happens from time to time, but it does not sway me, and I find no fault in either of these strategies. I expect them to work well over time. In fact, they have the ability to catch up fast.
Many of us have been using Trend Tracker, and I cannot comment on your strategy using Trend Tracker specifically, unless you incorporate one of the alerts viewer’s strategies into your Trend Tracker Application. However, I have already dubbed this the year of Trend Tracker, and many of us have demonstrated that Trend Tracker can far outpace my standalone strategies if it is used correctly. To those who have been using it right, I salute you.
More importantly, to those who have been following a strategy, something that suits your time constraints of course, and who have been making money slowly but surely, I salute you twice. To those who are using a strategy religiously, controlling your risk every day, and making money like the Tortoise, the general comments I made at the onset of this newsletter will not matter to you.
Reasonably, if the Market pulls back, many of those who have recently let their guard down, and there are plenty of them out there, will receive a firm gut check. However, because Karma is probably going to play a role, we may see longer term resistance before anyone starts to care again anyway. 
Focus on mid term resistance, because that appears to be the governing force at this time.
 
Good Trading.
Thomas H. Kee Jr.
 

Strategies Summary (Review these strategies on our Website):  

 

Updated 4.5.10
  • Strategic Plan:  We are in DDM with risk controls in place.
  • Day Trading:  Every Day ends in cash.
  • Swing Trading:  We ended in QID. 
  • Stock of the Week:  X was called, (see bottom of page).
  • Lock and Walk:  Every Day ends in cash.
  • Position Trades:  We are holding TBT, UGL, DIG, and 1 position of cash. 
 
Boot Camp and Private Consultations:
There are a few different options:
  • Free Support:  First, we offer support through email, phone, and through online live private chats.  This support is free, but no recommendations or trading advice is offered through these free venues.  We will tell you where to find answers to your questions, and help you understand everything that we do.  Start by sending an email to support@stocktradersdaily.com, and arrange an appointment to talk with someone today.
  • Support Webinars are offered on a regular basis.  Watch your email for invitations.  These are free.  They are a public forum, hosted by Thomas Kee, our President.  You can ask questions, and receive immediate answers there.
  • Private Consultations:  For persons interested in speaking with Thomas Kee directly, and asking him questions in a private forum, 1-1 consultations are available for $200 per hour.  These can be in person, or by phone.  Private webinars are also an alternative communication.  Request a 1-1 consultation by sending an email to support@stocktradersdaily.comAppointments are required and arranged on a first come first serve basis.
  • Boot Camp:  For those interested in going the extra mile, and getting the most out of this service, Boot Camp is also available.  The cost is $1000.  This is a 1-1 intensive review of all of our analysis and strategies.  Mr. Kee will work with you personally to help you find the Comfort Zone.  According to him, managing risk, protecting wealth, and realizing opportunities is easy if you start by Keeping It Simple.  Usually, these Camps consist of 5 separate phone consultations, but there are no time constraints.  He will help you until you understand everything, and have a plan.  Request Boot Camp by sending an email to support@stocktradersdaily.com
Email Neal for details: neal@stocktradersdaily.com

Trend Tracker
Trend Tracker is an automated correlated Market Timing and stock selection tool that trades QID and QLD exclusively.  It is a risk controlled strategy that allows anyone to control their risk and realize opportunities in any market environment, regardless of economic conditions, and without sacrificing time or lifestyle.  Download the Demo today, practice using it, then talk to us about using the live version, which trades real money.
  •   Trend Tracker DEMO:
Go to the following web page and click on the ‘install’ button:
page for members only

 

Longer Term Analysis: We are long term Bears.  We expect a GREATER DEPRESSION in the next 5 - 10 years.  The Investment Rate explains why.  Find the link in the Main Menu.
Our combined longer term analysis tells us that the Markets are in longer term neutral channels.  In addition, our combined longer term analysis tells us that the Markets are headed towards longer term neutral resistance.  As a result, our combined longer term analysis tells us to expect the market to move higher from current levels until such time as neutral resistance is tested again.  This assumes that recently converted support remains in tact, but thus far it has so the bias remains positive.  If support breaks, this positive read could change,
 

The Investment Rate
 
Here is a summary of the Investment Rate:
page for members only

 

Tuesday's analysis:
Our combined analysis for Tuesday tells us that the Market is in the process of flirting with mid term resistance levels, and it offers a warning.  The warning is, a decline from resistance to support may occur within the mid term patterns if mid term resistance remains in tact.  That makes resistance important, and our inflection level for Tuesday's trading session.  Initial resistance, as represented in our combined data table, is both a measure of both near term and mid term resistance, and that makes it even more important.  If initial resistance holds, expect a decline first to initial support, but then to secondary support afterwards.  On the other hand, if initial resistance breaks higher instead, expect a surge towards longer term neutral resistance instead.  This could be the last straw, before a surge, according to our combined analysis.  In other words, if initial resistance breaks higher on Tuesday, do not be surprised to see unabated momentum market increases.  It all rests on the shoulders of initial resistance.  Specifically, if 2430 holds, expect a decline to 2405, and then 2389.  However, if 2430 breaks higher, expect a surge towards 2537 instead.  Our combined analysis tells us to be prepared for a move either way.
 

 

 

 


Raw Data
Here are the raw data parameters for the three markets we follow.  The charts used to define these parameters can be found on our website.
 
Initial intraday trading parameters for the NASDAQ exist between 2405 - 2430
If 2405 breaks lower expect 2389
If 2430 breaks higher expect 2537
Otherwise expect 2405 - 2430 to hold
 
Initial intraday trading parameters for the DOW exist between 10878 and 11022
If 10878 breaks lower expect 10789
If 11022 breaks higher expect 11725
Otherwise expect 10878 - 11022
 
Initial intraday trading parameters for the Russell exist between 689 and 698
If 689 breaks lower expect 680
If 698 breaks higher expect 755
Otherwise expect 689 - 698
 
 Initial intraday trading parameters for the S&P 500 exist between 1172 -1189
If 1172 breaks lower expect 1158
If 1189 breaks higher expect 1237
Otherwise expect 1172 - 1189 to hold.
 
This call is for the week ending 4.9.10
X (Long) Support Plan: Buy near 65.47, target 69.78, Stop Loss @ 65.21
Rationale:  Inflation?  Found by using the stock filters in the analysis tab.  Search: swing trading long support plans.
The Stock of The

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Disclosure: no positions