Be Ware Of Popular Patterns

Today i got several emails asking me what i thought of that Head And Shoulder Pattern taking shape on many index charts. I have only one thing to say and that's BE VERY SKEPTICAL WHEN EVERYONE SEES THE SAME PATTERN. Check out this post i did on my blog a few months ago where in mid APRIL many people were calling the top to the rally due an OBVIOUS rising wedge on many indexes: The market will rarely hand the majority what they looking for. Let's see if this time will be different, i got a hunch it won't but i will the charts be the ultimate decider!

I Titled the post:

A Very Popular Pattern

Are You Seeing The Ball Right?

As a trader, you need to be watching YOURSELF and you need to be honest with YOURSELF. Have i been trading well overall this year? Yes. Have i been trading well or seeing the markets ebb and flows correctly for the past week? NO.
I do not care what kind of trader you are. I do not care what style or how many years you have been trading, you will eventually not see the plays right. It's a fact and it's a reality. What separates The "Pro" trader from the rest, is he/her ability to recognize when this is happening and take the NECESSARY actions to preserve his capital to hide in the shadows until his/her moment comes back again. IT WILL ALWAYS COME BACK! The only question is will your ego allow you to admit it?

New Swing Trading Setups

StockTwits

I am joining 2009's latest trend and i will be twitting!! wooohooo!!

My handle is : traderstewie

Check Out FUQI!

Long Setups To Watch

XLE & ERX Bear Flags

the bounce so far looks corrective after a hard dive down and now setting up in bear flags.

Art Of Trading Service Performance For Week 11

From now on i will display the weekly performance directly off my Website:

PERFORMANCE

Should be easier to see and puts all in perspective!!

What Is MACD Separation?

SOLD JAZZ For A 47% GAIN!!

Bot it yesterday at 3.3 > SOLD IT TODAY AT 4.86.

You know what they say guys, it's better to be lucky than good. I went off the chart pattern with JAZZ which was setting up in a beautiful tight coiling pattern and it looked like it was ready to explode.

Here is what the alert i send my members said:

"LONG JAZZ at 3.3 Stop at 2.9 Swing Trade

Very speculative trade. Trade it with caution but JAZZ is setting up in a tightening coil and looks ready to move. Hopefully higher! Might give a couple of days to play out."


Much to my surprise, many members did catch this trade. Even a small position like 1000 shares would have given you a $1500 gain!

Feelin JAZZy!!!!

Bought JAZZ at 3.30

Art Of Trading NEW Official Website!!!!!!

http://artoftrading.net


Come and CHECK IT OUT!!!!!!

NDX and ERX Setting Up

I would not be short here(not now at least). NDX showing some very strong divergences on the 15 min charts here and a bounce could be in the works. A classic BAIT and SWITCH day?? That would be THE surprise not many expected. we shall see....

FYI: for those who do not know what i mean by positive divergences(P.D.).

P.D> kick in when you see an extended selloff yet with every push lower, the MACD and RSI reading create higher lows indicating a lack of downside momentum and i need to see a falling wedge pattern reach an APEX while MACD and RSI creating very visible higher lows. see chart.


BOUGHT:

ERX at 26.74

Game Changer

We have a potential game changer on our hands here. Many support levels have broken and some are being tested as we speak BUT the bottom line is this:

The trend is changing and it's starting to be very evident!

We were in BUY THE DIP mode since march BUT now we will be SHORTING THE RALLIES mode.
Look, we are oversold, that's for sure BUT the bounces are not coming which makes me think that there's more room to fall before the serious bounces come. So now my strategy is to short strength.
100% all cash and waiting....



Let's see what the close looks like.

The Line In The Sand

Rally In The Brewing

here are the charts i will be watching next week. I have been telling you guys that thus far the selloff we have seen resembles a pullback within the context of a bullish trend, well plowing thru the weekend charts, i am finally getting the proof i was looking for. The selloff has spiked a fresh new spike in bearish sentiment, adding new shorts into the markets and even causing many bulls to think that the rally is over(me included). THE PERFECT STROM for a charge higher. Best sectors i think will be tech and energy.



It will be an interesting week that's for sure.

Art Of Trading Service Performance For This Week

i am calling it a week. It was a good week overall but what i liked the most is the small number of trades we did. Without a doubt, it could have been waaay better if I held on to FUQI(some of you had more patience than i did!) a little longer. Also POT and SLB short did what i thought they would do but bailed too early. It was a rather tricky week so to come out with the gains like the ones that place this week is pretty good! I hope you all had a good week as well. Taking all cash over the weekend and gonna be ready for next week!!

LONG/SHRT	Symbol	Entry Price	Exit Price	% Profit/Loss		Holding Period
long	tna	27.94	28.44	1.79		day trade
short	fcx	53.2	54.76	2.93		day trade
short	nfx	33.28	34.44	3.49		day trade
long	BG	59	59.82	1.39		day trade
long	fuqi	13.85	14.25	2.89		swing trade
short	slb	56.25	55.38	-1.55		swing trade
short	pot	96.15	95.25	-0.94		swing trade
long	rax	13.32	13.12	-1.5		day trade

Why Are You In A Trade?

You need to always be asking your self that IMPORTANT Question. Why did you enter a trade? What was the setup? What was the time frame? Was it a Holy Grail(HG) setup? Was it a momentum trade? Was it a reversal? Was a bull flag breakout?
There are a million reasons why you enter a trade BUT when do you get out if the trade starts to poop out???? That's the question that will determine your survival as a trader. When should i bail?


My answer is: every trade stands on it's own merit. If i enter a trade because of the HG setups, then i need to exit on HG failure. If i enter on momentum(momo), then i exit on momo deterioration. if i enter on reversal, then i need to exit on reversal failure. If you entered a trade on the 5 min charts and the trade is not working, do not manage it using the 60 min. time frame. if you enter using the 5 min time frames, then you need to exit using the 5 min charts. NO ifs, ands, or buts!

Do not make excuses for the trade that is not working. It is not working because the market is not aligning with your thought process, that's all and it's that simple. Don't over think it. Cut it loose and move to cash where you cannot be wrong and can think more clearly.

Solars Setting Up In Holy Grail Patterns

How About That FUQI ???!!!

That's What I Call A Winning Trade!!

Check out this great trade by one of the Art Of Trading members!!!

"thanks buddy. think I will do just that. Stops tightened. Out fcx now +2.00=20k! Enough for like 33 years of your service ;-)"

M.

We are having an amazing week! Join us and try it with the 14 day FREE TRIAL and see for yourself!!!!

Major Improvements Coming Soon!!!

stay tuned folks!! Very exciting changes taking place at the Art Of Trading!!

Holy Grail Setup

Bought FUQI at 13.85 as it setups a nice HG trade here.

Short Setups

Scanning thru many stocks tonight, I am seeing tons of short setups which makes me think that this selloff is just starting. Commodities stocks look most vulnerable to further selling. Here are some stock shorts to watch tomorrow and the rest of the week.

No Buying Interest Today

we sold off on very low volume so it's not beneficial to make any conclusions from today's action. I am very interested in tuesday's action as we either see a follow thru selling day or a reversal. Today lacked any buying pressure which was different then recent selloffs where we saw some buying interest come in late in the day to lift stocks off the lows, today we didn't see that which makes me think that the selling might not be done yet. We need to monitor the price action tuesday and see if bounces resemble more like bear flags or something more meaningful.

Index Chart Updates

Finally seeing resolution to these 2 week sideways consolidations.

Art Of Trading Service Update

Art Of Trading Service is now offering a 14 day FREE TRIAL! Not just an alerts service but MAKING YOU A BETTER TRADER EVERYDAY!
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Index Charts

We should see a big move coming this week.

The Art Of Trading Alerts Service Performance For The Week Of June 8th

14 closed trades: 9 winners and 5 losses. I traded a bit much wednesday and thusrday and a result lost my focus and gave up some awesome gains. My goal next week is less trading but more focused trades much to what i was doing monday, tues, and part of wednesday. So, if you followed most of these alerts, you should have been able to come out with a gain in a week where the indexes pretty much went sideways! It was a very tough week but i think that overall we managed it well. If you put in $5000 into an alert and followed it, you'd be up about $490 minus commissions. Could have been a whole lot better if i stopped trading thursday but a gain is a gain and i will take that over a loss any week!!

LONG/SHRT	Symbol	Entry Price	Exit Price	% Profit/Loss		Holding Period
long	gg	36.85	35.42	-3.88		swing trade from friday
long	tna	31.75	31.41	-1.07		swing trade from friday
long	TZA	21.34	21.75	1.92		day trade
long	ERX	35.5	37.48	5.58		day trade
long	bg	64.72	66.11	2.15		swing trade
long	tza	20.5	21.65	5.61		day trade
long	cbak	3.45	3.51	1.74		day trade
long	hero	5.28	5.32	0.76		swing trade
long	cbak	3.55	3.74	5.35		swing trade
long	cenx	7.5	7.71	2.8		day trade
long	tza	20.95	20.58	-1.77		day trade
long	gg	36.5	34.9	-4.38		swing trade
long	pds	6.26	5.93	-5.27		swing trade
long	ico	3.62	3.63	0.28		swing trade

Weak Selling Forces

well, that was an 'ugly' close or was it?? felt ugly. But nothing has changed, we are still in neutral patterns with bullish bias. Back inside the trading range. Dips should continue to be bought that's what MACD is telling us at least. So tomorrow, don't be surprised if we open lower but eager bulls and nervous shorts should take the markets back up again. I believe the market is NOT done going up. The selling forces behind what looks like 'tired' upside moves is just not getting the job done so all this is just building power to propel us higher in the days/weeks to come.

Don't Ignore This Chart

LONG SETUPS

some need a couple more days to really setup but in general these longs look ready to tack on new highs.

"Predictable" Volatility

lol. this market has been amazing for day trading that's for sure. check out this nasdaq chart. setup a perfect short near the top of the range on this morning's gap up and set up a perfect long near the bottom of the range. it was a rather 'readable' day if i dare say that. always fun when it plays according to the plan. Went long HERO(@5.28) and CBAK(@5.55) as the market worked it way off it's lows near the end of the day.

and just like that, bulls are back in command.

LONG CBAK at 3.45

stop at 3.2

DOW down 20 pts, Nasdaq down 15pts but looks like the decline is contained for now and we are headed higher from here. Getting long makes sense.

TZA Trade Taken Today

On this morning huge gap, sold out of long positions and quickly switch to short via TZA and here's why. Market internals were deteriorating badly soon after the gap up. More declining than advancing issues and this rally is slowly dying.
this was the reason behind the tza trade. see chart. aapl, goog, gs, bidu and many leaders were all down as the markets gapped up open. also, many small gainers in premarkets while the futures were rocking higher. this sort of divergences always favor the stocks, not the indexes. down we go! Long TZA at 20.5 for day traders and swing traders. Not calling a top here but at least a short term pullback as clearly upside looks capped for now.



Advances & Declines
NYSE NASDAQ Advances 1,229 (44%) 886 (34%)
Declines 1,496 (53%) 1,564 (61%)
Unchanged 100 (4%) 126 (5%)
Up Vol* 793 (59%) 158 (32%)
Down Vol* 527 (40%) 328 (67%

The Art Of Trading Service Performance Over The Past 8 Weeks

$5000 into each alert. We average about 2-3 alerts per day. After 8 weeks of trading, you would be up $9,000(commissions not included, that will depend on your broker and commish structure) or about 18%. Average holding period is anywhere from a few hours to 2 days maximum. Stop losses average about 5% from entry. If returns like this with that type of trading style interest you then feel free to join us.

Take advantage of that 10 free trial folks!!

P/L % / Trade	$ Total (5K / Trade)			$P/L
7.34	5000			367
5.65	5000			282.5
10.74	5000			537
0.85	5000			42.5
1.05	5000			52.5
-8.04	5000			-402
-7.65	5000			-382.5
7.87	5000			393.5
-0.5	5000			-25
2.09	5000			104.5
6.2	5000			310
-1.94	5000			-97
			Total	1183
0.84	5000			42
1.22	5000			61
3.39	5000			169.5
4.58	5000			229
-3.34	5000			-167
0.08	5000			4
-0.34	5000			-17
7.54	5000			377
1.56	5000			78
			Total	776.5
0.8	5000			40
2.62	5000			131
1.79	5000			89.5
-4.62	5000			-231
6.03	5000			301.5
2.13	5000			106.5
-2.53	5000			-126.5
1.97	5000			98.5
-1.66	5000			-83
-2.55	5000			-127.5
-2.84	5000			-142
-8.81	5000			-440.5
-2.75	5000			-137.5
-2	5000			-100
-2.77	5000			-138.5
			Total	-759.5
14.41	5000			720.5
9.64	5000			482
0.69	5000			34.5
3.5	5000			175
-1.02	5000			-51
-3.51	5000			-175.5
0.97	5000			48.5
-3.35	5000			-167.5
2.16	5000			108
-1.64	5000			-82
-0.27	5000			-13.5
-2.4	5000			-120
-1.06	5000			-53
0.57	5000			28.5
-0.34	5000			-17
			Total	917.5
-2.6	5000			-130
4	5000			200
-5.8	5000			-290
0	5000			0
-0.6	5000			-30
-2.8	5000			-140
12	5000			600
10	5000			500
4.8	5000			240
2	5000			100
4.8	5000			240
2.4	5000			120
3.7	5000			185
0	5000			0
8.5	5000			425
6.6	5000			330
0	5000			0
2.9	5000			145
4.5	5000			225
0	5000			0
1.1	5000			55
3.29	5000			164.5
5.5	5000			275
-1.8	5000			-90
-0.7	5000			-35
-5.5	5000			-275
2.6	5000			130
4	5000			200
			Total	3144.5
6	5000			300
2.3	5000			115
-1	5000			-50
7.3	5000			365
1.7	5000			85
11	5000			550
0.5	5000			25
-3.3	5000			-165
0.8	5000			40
5.1	5000			255
6	5000			300
7	5000			350
			Total	2170
0	5000			0
-5.3	5000			-265
1.6	5000			80
0	5000			0
6.3	5000			315
1.7	5000			85
5.5	5000			275
0	5000			0
10.74	5000			537
0	5000			0
0	5000			0
7.6	5000			380
6.7	5000			335
			Total	1742
14.5	5000			725
1.5	5000			75
2.85	5000			142.5
-0.75	5000			-37.5
0	5000			0
-3.8	5000			-190
-2.5	5000			-125
-4.8	5000			-240
1	5000			50
-1.4	5000			-70
1.2	5000			60
3.6	5000			180
3.5	5000			175
-2	5000			-100
-9.2	5000			-460
3.4	5000			170
-11	5000			-550
			Total	-195

CNXT Setup

Dollar Reversal and Weakness

going long commodity stocks here.

VXX Potential Double Bottom

Looks like a trend day down today. Long positions will be seriously fighting the tape today.

Bulls Holding The Indexes Steady and Basing Near Highs

I am expecting to see the bulls attempt to tack on even more gains from here.

The Art Of Trading Alerts Service Performance For The Week Of June 1st

Overall it was a good week. Had a couple of large losses which i did not like but this is trading. We also had a few big winners. This market requires us to be very fast guys. Constantly booking profits and constantly seeking to cut the losing positions quickly. I did a lot of swing trading this week because that's where all the action these days, in holding overnight and playing the gaps. Intra day trading is very lame and stingy(look at today's action as a perfect example, huge gap up and choppy all day long). I personally had a decent PnL this week BUT i know it could have been better with a little better timing. I am hoping ALL you guys did well, that's very important to me!!

This week we opened and closed 12 trades: So not much trading once again and i love it like that! Less is more! How many times did i tell you guys that??! lol. It'll sink in eventually.

12 trades. 4 Losers and 8 winners. Here's are the details:

LONG/SHRT	Symbol	Entry Price	Exit Price	% Profit/Loss		Holding Period
long	nm	5.45	5.85	7.34		swing trade
long	tti	8.68	9.17	5.65		swing trade
long	gmo	2.42	2.68	10.74		swing trade
long	gsi	5.88	5.93	0.85		swing trade
long	shld	61.95	62.6	1.05		swing trade
long	wti	11.2	10.3	-8.04		swing trade
long	abat	3.92	3.62	-7.65		swing trade
long	ERX	34.32	37.02	7.87		swing trade
long	mtl	9.95	9.9	-0.5		day trade
long	cmed	24.93	25.45	2.09		swing trade
long	mtl	10.33	10.97	6.2		swing trade
short	agu	46.89	45.98	-1.94		day trade
long	gg	36.85
long	tna	31.75

Have a great weekend everyone and i will see you guys next week ready to tackle these markets again!! Look for my weekend updates as usual!

God bless!

Another Great Testimonial From The Art Of Trading Member!

Stewie - I am starting to get the hang of this- thanks to you!
Still learning it all- thanks for the Accelerated Course- there is noooo way I could gain all this experience without you sharing yours. Thank you –your education and alerts are the best $50 per month I have ever spent!

Mike T.

This is much more than a simple stock alerts service, i share with you live real time trading thoughts and lessons that took me years to understand and implement!

JOIN US TODAY!

IYT Cup and Handle Formation

Sell Signals Negatated

Markets worked off those MACD sell divergences by briefly trading in the red and then chopping sideways and we now in neutral territory with bullish bias. XBD breaks to new multi month highs on GS upgrade, that always helps! I like the bulls chances here.

Turbulance Ahead

Looking thru many charts tonight, much to my surprise, i believe that we are probably going to enter a correction here for stocks. This correction can come in two forms: A: a selloff that takes us several percentage points down or B: a few weeks of sideways action to slightly down. Either way, i think that the upside for many stocks looks capped for now. I am starting to see many stocks that appear to be printing topping patterns of some sort. This most recent pop and rally we saw in the markets set up many negative divergences on many key stocks. This is a warning sign to me, to not trust any more upside from here.

NYSE Holding Support

today's correction resembled a garden variety pullback within a bullish trend. Bulls need to defend this turf the rest of the week.

SOX At Support

ABAT Setting Up In A Tight Coil

Stocks Setting Up In Nice Patterns

Some of these need a couple more days to setup a little better.

Hilarious!!