Just as I expected, I made a call to myself that we would sell off this week, but I was prepared this time and had the short ideas ready for action! Now there are lots of types of sells offs. We do have a weaker dollar, and of course the weak Wal-Mart Store sales have been highlighted, but as President Bush's words would say, "This market is strong, and we intend to keep it strong" (appears redundantly on CNBC). I believe this to just be some profit taking, we've had our run up, the bulls conquered, the bears covered, now I expect the Put/Call Ratio to liven up quite a bit, and also the VIX should get shaken up from it's complacency. People will be thinking we're headed lower, but with over $9 BILLION DOLLARS$ spent on Black Friday, I am staying alert for reversals. I'm looking for retailers, tech, and some oil to play on, as they should all tread higher after a nice pullback, and maybe a brief consolidation period. Here were my short ideas coming into the day!
SunPower Corporation (SPWR)
Here, I'm going to highlight a technical candlestick pattern which I've head great success with, called Bearish Harami Patterns, and SunPower fit the criteria Perfectly!! The key to a higher risk/reward ratio is to short the stock on or near key levels of resistance.
Description of Bearish Harami Patterns:
1.) The market, or stock's chart, is characterized by an uptrend.
2.) A 2 candlestick pattern in which a long white candle on the first day, is proceeded by a black candle whose real body is completely engulfed by the real body of the first day's white candle.
What it Means:
1.) A sign of disparity about the market (or stock's) health.
2.) A small black candle shows some uncertainty.
3.) A change of the trend.
I will remain short both of these stocks until I see it necessary to cover from a reversal in the current market sell-off.
Electronic Arts Inc. (ERTS)
Also check out a great blogger and market analyst's Steve Puri's Market Opinion.
4 comments:
Excellent, I keep on storing my cash under my mattress !
No investment, no property, no bonds, no stocks, just gold in bars and lots of pints in bars also. And 2 suitcases always ready just in case... This is what my grand ma used to say, she was so riiiight !
Love and Peace from limelight Paris
Hi Cal,
Nice blog you've got here.
As for SPWR and ERTS, did you short the stock itself, or did you buy puts?
I am currently short both stocks. I'm still studying my bearish options strategies nightly. Thanks.
cath... I also live in Paris. Just moved from the states in June. Do you also trade?
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