Saturday, March 27, 2010

TRADE REVIEW: ABIO





For exact trade entries and exits, you can refer to the blog comments or on my twitter (@WeeklyTA). It's documented in real-time and I have about 60 traders who saw me trade it in real-time in 2 different live chat rooms.

I had my 2nd best trading day of 2010 thanks to ABIO. At 8:30AM Friday, ABIO announced that "a patent was issued to them for treating heart failure patients with Bucindolol based on genetic testing" (http://bit.ly/c08SLF). Like other plays, I do not care what the news is. I only care about the reaction to the news. This is the principle of momentum short-term traders. That's lesson #1 - don't get too absorb into the news, instead, trade the reaction to the news. We see this rule all the time, but do you really put it into practice or do you let your personal biases get in the way?

Lesson #2 is actually watching and "stalking" a stock prior to a breakout. It may take forever, and yes it is many times boring, but you gotta pay attention to the setups during the day. Use a 1-minute time frame for momentum stocks so that you're able to capture the first breakout out of a base. That's what I did...I caught ABIO's first breakout at $4.57/58 (after the opening gap). Do not miss the first breakout, or else it'll get more difficult to maintain your emotional stability. Don't let thoughts like "it's already up too much" get into your head. If the setup is great, then take it.

Immediately after a huge power spike, I immediately look back to the multi-month daily charts to find key support and resistance areas. This helps me identify where I need to buy and sell intra-day.

We can see a high of $4.50 in November 2009. We can see a high of $4.88 back in July 2009. The next level would be the breakaway gap back in June 2008 with a high of $5.29. After that, the gap started to fill and the target was the filling of the gap between $8-9. Technically, ABIO breached every level, every high, on the way up. I keep these levels in mind because when the stock does break..it's gonna BTFO. I've demonstrated this nearly every single week. Lesson #3 is to pay attention to past major price levels. Don't sit there intra-day wondering where the stock should be because the chart will tell you.

Intra-day, you have to have focus and discipline when executing the trades. Of course, in hindsight someone could say "why didn't you hold the stock till $9 and just get 100% in one trade?". Well, problem is that when the first breakout happens, no one knows where it'll end up by 4PM. Heck, I don't know, which is why I trade each intra-day 1-minute setup as if it were the last. It's a way to protect yourself from sudden reversals. Why? Stocks that explode to the moon will fall the hardest and many times, without warning. The important thing is to trade comfortably, take profits at appropriate levels, and play the stock till the wheels fall off. This is lesson #4.

The star that burns the brightest burns out faster than the star that emits a cooler, darker light. Don't forget this.

Lesson #5 - pay attention to volume. Volume is absolutely mandatory with momentum stocks. No volume = no trade. Notice how each intra-day breakout displayed some sort of sustained multi-bar volume spike? Combine that with a price spike and you got yourself a trade.

Key characteristics that make this spike "legit" vs. the other spikes in ABIO:

1) The gap was above all 4 MA's (20,50,100,200) immediately. Not true for the spike in November and July 2009.

2) Volume was exceptionally greater than any other day in the morning. This signified to me that there was going to be a massive move. This alone does not confirm direction however. It just tells me that it's going to be "one of those days".

3) The stock was able to breach previous highs with very little problem. Resistance is supposed to knock a stock down, but it didn't. ABIO would flag at, under, or above resistance (pausing) to launch itself again.

4) Once the gap was filling, the stock could not be stopped. A breakaway gap that fills in only one day is extremely, extremely, extremely RARE. This was an exceptional case.

Let it all sink in. If you have questions, then let me know.

Thanks to the folks who @replied me on ABIO. Hope you folks made some cash.
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Friday, March 26, 2010

CALL FOR TESTIMONIALS / FEEDBACK

Hey, what's up? Hope everyone had a great week. I know I did. I'm just wondering about my readers, viewers, and followers and wanted to catch up on what you guys are doing. I hope this blog, my shows, articles, tweets, and everything else have greatly contributed to your growth as a trader. To me, it seems like I learn something new every day and that's how it should be.

If you made money from my calls, articles, or anything else, LET ME KNOW! I'd love to hear about it. In addition, if there's something you'd like to see on the blog, my show, or twitter, send me your feedback. My eyes and ears are open to you. I'll be free this weekend (no traveling) and would be more than happy to open up some dialogue with each of you. Shoot me an e-mail at JCLee84 @ hotmail.com (no spaces in e-mail address), or leave a comment below and I'll get back to you as soon as possible.

Have a great weekend folks, and yes, I'll do an ABIO trade review this weekend.

Wednesday, March 24, 2010

2-YEAR INTERNATIONAL MARKETS

Nearly the rest of the world is in some sort of IT/LT consolidation range, most of them in rectangles, asc channels, or desc channels. However, we are blasting higher. There's obviously a divergence here. Look for any breakouts of breakdowns from consolidations in multiple international markets for clues.




















LONGEST TESTIMONIAL I EVER GOT

I received my longest (ever) testimonial from a private coaching student I trained in January 2010. I decided to post it, unedited (sorry about the cuss words, but I didn't write them):

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(March 20, 2010)

When asked to summarize the core of his philosophy, Ralph Waldo Emerson replied, “the infinitude of the private man." If you asked John Lee for his outlook on life, he would probably offer a similar sentiment. However, where Emerson was known primarily as a thinker, John is a man of action. John is an example of someone that refused to be pigeonholed by society into becoming an institutionalized slave, and instead carved a path for himself through mastery of short term equity trading. For those of us lucky enough to know him, he is a true leader that changes people’s lives.


Before signing up for John’s training session, I was a college grad with a fresh job doing financial consulting . In college I had the average mindset of everyone else in the pack, “do as well as possible in school, and try to land the best paying job that will look good on a resume.” Both of my parents are self-employed, yet somewhere down the line I was brainwashed by society into thinking there was only one way to secure a future. I wasn’t sure where I really wanted my life to go. Soon after starting work, I quickly realized that being a corporate slave wasn’t for me. My biggest issue is that I am paid for my time. I know I can use my time more productively. As an employee you are rated on your “utilization” but for fucks sake how can you look at yourself in the mirror when you are being “utilized” essentially for someone else’s gain? How about trying to utilize your own time for your personal gain and development? This thought would eat at me constantly and I needed a way to live on my own terms, within a framework for creating self-made success. John’s teaching is geared toward those with the individualist spirit of Emerson, who wish to take control of their lives, but have the motivation to make it happen. He offers a framework for owning your future.


If you follow John’s blog, you know his methods work. The results speak for themselves. John has synthesized the knowledge contained within his vast library of financial texts (which he will share with you if you choose to sign up). His concise teachings are essentially a rundown of the most effective and powerful strategies for maximizing your gains while minimizing exposure (and risk). In my first month of trading and testing the waters, I was pretty much break-even, which isn’t bad for someone that had never placed a trade in their life beforehand. In my second month, I am up 22% in three weeks. This is not a matter of luck; I work a full time job and have put in at least 20 hours per week scanning for set ups and studying the methods. John is a terrific teacher and offers continual support, both during and after market hours.


The $4,000 fee for his service is truly a gift if you have the motivation and discipline to stick with it. Would you pay Peyton Manning to teach you how to quarterback? Would you pay Larry Bird to teach you to shoot a basketball? This may sound like an exaggeration, but it’s not. Coaching by those athletes would also come with a disclaimer reading “does not guarantee results, but it sure as hell would increase your chances of success. John’s training is just like anything else; the more time you commit, the better you will become, but how far you go is ultimately up to you.


This system requires organization, discipline, and self-analysis more than anything else. If you are motivated to self-improve, apply for the program. This has been by far the best decision I have ever made. I am incredibly motivated and will not let this opportunity go to waste. Two months after training, I feel like my life is at the apex of an ascending triangle, ready to BTFO.


-Michael H.


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That's whats up. Great work!