Speculative GOOG Short

While GOOG is on the bullish focus list and I am high on the setup on pullback, it is very overbought. The two period RSI is off the charts extreme. I took a small speculative short position. My stop is at $526. Target is $510. This gives me 2:1 risk ratio.Keep in mind that GOOG's... Continue Reading →

The RSI Effect

As long as the lows hold, the bottoming thesis is in effect. I have focused on more short term 3-6 month charts lately, but here is a two year chart showing the power of the oversold RSI, even in a longer term down trending "topping" market.

Why Do You Like DUG

Here is an e-mail I received today:MS,Why do you like DUG so much? It looks to me like you are trying to pick a top in oils, just like you are trying to pick a bottom in SSO. Don't fight the trend man. SSO is going lower and DUG is too.Before I get to the... Continue Reading →

Homebuilders are Hard to Ignore

It's tough to ignore the strong move in residential construction, aka, homebuilders. While my head tells me to stay away, the charts tell me otherwise. For months I have been using bounces in the sector to reload shorts, but not this time. There is something different about this bounce. Take a look at the chart... Continue Reading →

Breakout Chart: XOM

Exxon Mobil Corp. (XOM) broke out to new highs on above average volume. A low volume pullback to the prior highs, just under $79, would normally provide a good entry point.While the breakout is bullish, there are some concerns for this stock. Notice the negative divergences in both RSI and stochastics. One would expect new... Continue Reading →

New High Failure Trade and AAPL

One of my favorite short plays is the "new high failure" trade. There are three elements to this trade:1) That stock makes a new high2) RSI peaks at a lower level than the previous high3) Take a short position if and only if the stock dip below the previous highThe recent failure of AAPL is... Continue Reading →

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