Thursday, December 29, 2011


TZA is sitting at the bottom of the channel it's been in for the last 8 months. Now would be a great time to take a long position. It could go up to $32 and possible $38. I would put a stop at $25.

Tuesday, December 27, 2011

Down We Go...

I'm fully expecting the market to have some kind of a drop today. $Rut could not break 750 last week, which wasn't a good sign. I would tread very cautiously until we see some kind of direction. For the aggressive one's, short TNA.

Thursday, December 22, 2011


TNA was able to breakout of it's wedge yesterday. We'll see some resistance at $47.50, $50.00 and $52.50. I'll be buying with a stop at $43.75. I think it will break $47.50 but then have trouble at $50.00. If it does break $47.50, I'll raise my stop to that support.

Other good buys today are FAS and ERX. I'm still intrigued by SOXL, but it has been lagging behind so I'll stay out of it. I still think it can get to $28.00 but it's not worth the risk.

Wednesday, December 21, 2011

Follow Through...

The question today is "Will there be a follow through?" The futures started up, when down after news from Europe and then opened nearly flat. The market started down for the first 45 minutes or so and now looks to be slowly correcting.

The question above is important and will lay out what we can expect over the next few days. TNA is trying to break out of the wedge pattern. A follow through day should allow it to continue higher going into next week. If the market heads down today we can expect TNA to go back to $40.00 and possibly $36.00.

Very important day ahead.

Tuesday, December 20, 2011


The gap up held and even went further as the morning went along. That is not something we have seen in the past week. Recent gap ups have faded as the day went along.

SOXL has rallied 13%. Hopefully, someone took our advice over the weekend, was patient, and got in that trade.

We are in an interesting position right now. BGU and FAS are at the upper end of their wedges. TNA has broken support which could mean the Santa Rally is on. An up day tomorrow will mean a rally is in place for at least a few days. TNA should then test the $52.00 range later this week or early next week.

Rough Monday...

The market gapped up yesterday but then fell hard after some news from Europe came in. As has been the trend, the market gapped back up the next day after bad news from Europe.

SOXL is at it's lowest since mid-August. ERX and FAS are also at the bottom of their wedges. As I said on Sunday, I believe we'll have a short term uptrend. If we don't, SOXL, ERX and FAS could see their bottoms fall out. It could get real ugly.

Many stocks are at sitting at support right now. I'm also starting to think that if the market can rally this week, it may extend another week or two. Everyone wrote off the Santa Rally, but there's a chance it could still be in-play. I'm leaving the long term trend as down, but that may change later this week. We'll have to see how this week shakes out.

Saturday, December 17, 2011

SOXL Up Against Support...

SOXL is about to hit an 18 month support line. With lower highs for the past year, we should be able to get a quick trade in sometime early next week for $4.00 - $6.00. We want to get in as close to $23.00 with a target around $27.00 - $28.00 and a stop around $22.00.

The market has tried to go up the past couple of days. If that continues, I won't wait for $23.00, instead, I'll jump on this trade Monday morning.

Stops are extremely important since we have a very tight range. We could see a breakout in either direction.

Looking Ahead...

Next 5 days: Up
Next 30 days: Down

I'm expecting this moderate bounce we've seen the past two days to continue for a few more days. Some stocks (SOXL, ERX) are right against support and can probably be played for a quick trade this week. These same stocks are oversold, so it makes it more likely for the bounce to continue.

With pennants forming everywhere we need to be careful since we could see a break in either direction. Don't be caught long if everything breaks to the downside. If that happens it could be a long way down. Stops are very important in any trade this week.

The weekly charts don't look as promising. Most stocks hit resistance a week or two ago and are on their way down. Although, I expect the bounce to continue in the short term, I'm expecting things to be gloomy over the next month or so. Most stocks I'm looking at are reaching the end of the pennants so I would expect us to break out of this 4 or 5 month range we've been in sometime in February. At that point we'll know what the first half of the year will bring us.