Ciena Corp ( $CIEN ) is a maker of Telecom Equipment. It's industry group is $DJUSCT. Peers include $ANET / $CSCO / $JNPR / $ARRS / $UBNT among others
The Bullish Case for $CIEN
These technical factors make for a nice bullish set up on the weekly chart
Annotated Weekly Chart of CIEN HERE
Thank you for Reading!
Good Luck and Happy Hunting!!
Short and Sweet
A couple of weeks ago I had my eye on $JWN for a potential breakout. That trade never triggered with price pulling back and oscillating for a couple of weeks. Now price has taken out resistance rather convincingly, RSI is breaking out, and the PPO momentum indicator has had a bullish cross. Just as important, I have a clear line in the sand to shoot against.
I bought the July 20 $52.50 calls for $2.55. JWN has earnings after July expiration. Hoping for a run up into earnings. My stop is $52.50; just below prior resistance which is now support
Reminiscences of a Stock Operator pg 57
"... the big money was not in the individual fluctuations but in the main movements—that is, not in reading the tape but in sizing up the entire market and its trend."
"Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance."
“All of humanity's problems stem from man's inability to sit quietly in a room alone.” Blaise Pascal
Question for you. What is your job as a "Trader"? Is it to "Trade" or to "make money"? I often am confused on this point. I know it is to make money but at times I believe it is to trade.
I think one of the great paradoxes of "trading" is that fewer times you actually "trade" the more money you make. As Jesse says sitting is when you make the big money. It is a lesson I have not fully learned yet.
The monthly chart of the SPX for the past 20 years nicely illustrates the point. Somewhere out there is a guy who has managed his IRA over the past 25 years with 5 trades and is doing quite well. In fact I know one, my Dad. He never made over $45K in his career but was long from 1982, sold in 2000, re-entered in 2004...... etc. He retired in 1995 with $400K and has seen his net worth grow and grow to this day all the while living the good life. Mom and Dad are heading to Europe in a couple of weeks to enjoy a 3 week cruise on the Danube and Rhine. Simply incredible. All on less than 10 trades in 40 years. Probably a slight exaggeration but you get the point. And you know what, he still looks at the charts every damn day because there will be a day he gets out, just like in 2000 and 2007. He's been lucky, good, and very very patient.
Am I advising "Buy and Hold"? No. What I am saying is that if we are smart enough to identify a trend, we should stick with it. Let it play out on it's own time table, not whatever time table we assign to it. It's the impatience that gets us and I've been as guilty as the next guy. It makes me sick to look at stocks I've owned, then sold, that have gone on to the moon without me. I am often right, but can't seem to sit tight. Maybe you're the same way.
I think there are a few things we can do to improve our patience. See what you think.
Thanks for Reading; Hope it helps and see you next time
January 2016: In the midst of a Global Deflationary Spiral, the commodity index $CRB was below support that had been in place since 1973. Oil was trading sub-$30 and Copper was at post crisis lows of around $2/lb.
June 2018: In the last 30months the $CRB has bounced from 155 to 200. Not really very much despite oil's recent run. Copper surged from $2 to $3.31.
Copper falls 11% in 3 weeks
Since June 11, Copper has fallen 11%. Today July 5, Copper futures indicate its off another 1.5%. From the chart below we can see price at key support at $2.875. It's gotta hold here. On a measured move basis from the double top, price is projected to move into the low $2.60 area; another 11% lower from here if this last bit of support is broken.
The Monthly chart of Copper shows a darker picture. Price retraced 50% from the 2011 high of $4.60ish but is now rolling over. In my experience these big sweeping trend changes on a monthly chart are so important. They just don't turn on a dime. I think copper goes much lower.
The tradeable ETN for Copper is JJCTF
It's not just Copper - Look at Base Metals ($DBB)
Below is a weekly chart of the base metals ETF $DBB. You can clearly see price dropping out of the rising uptrend channel that has been in place since January 2016. Going lower from here.
I am bearish on commodities near-term. Aside from a fairly productive chart on oil, everything else is pointing down. Is it all trade talk related? No idea. I just don't see any bullish charts. I am curious about the meager bounce over all. Is demand that tepid or has over-supply simply swamped the system?
Keep an eye on this stuff. They call it Dr. Copper for a reason. Its often a precursor / canary in the coal mine for other markets. Let's see what the summer brings.
Technical Picture on $GLD
Earlier this year GLD was consolidating in the upper third of its recent trading range. From the Daily Chart of GLD below we see that since April GLD has been selling off hard with the re-emergence of US Dollar strength.
That said, the breakout of the steep descending wedge right at key support is bullish. Trader's wishing to go long $GLD can shoot against the recent low with a stop just below. Although they are not shown, even a modest 38.2% Fib retracement bounce measures to $122.00 and a 50% retrace is $123.36 near the 200ema.
I would use those 2 areas as initial targets.
Annotated Daily Chart on $GLD HERE
Gold Miners ( $GDX ) Technical Set up
The technical picture of the miners looks better than Gold.
Here's what stands out to me.
Trade Set up
Before considering a long on GDX I want to see the following
If the Dollar continues to be strong I think it might be tough for Gold and the Gold Miners to really crank up. If the Dollar falters over the summer, Gold and the Miners could see a nice rally.
Set some alarms for yourself for a head's up if you are interested in the set ups on Gold and the Miners.
Annotated Daily Chart on $GDX HERE
Reminiscences of a Stock Operator Ch 3 pg 28 top of page
"It took me five years to learn to play the game intelligently enough to make big money when I was right."
Trading and the game of speculating is a unique beast. Its seems that most people entering the fray are somehow under the impression that success will come relatively quickly and that the process will be closer to a walk on the beach than back-to-back tours in Vietnam.
That's how I thought. Trading shouldn't be a huge problem for a well-educated businessman who'd seen success in most areas of endeavor should it? I got this. Little did i know that "well-educated" and "prior successes" were liabilities, not assets in the game of speculation. I also entered with goals which were closer to delusional fantasy than reachable and realistic. I don't think I am alone.
By his own words, it took Livermore 5 years "to play the game intelligently" . If it took a Market Wizard 5 years, how long will it take us to play smart?
Sidebar: I will add here that although Livermore was a great trader and made many millions in the market, he went broke at least 4 times in his career. I say that because risk management is a part of playing the game intelligently...
Don't get frustrated with unrealistic expectations. Re-align your thinking, set process-oriented goals, then measure against them. You will see yourself grow and you'll feel a well-spring of confidence as you pass milestones.
Thanks for reading!
Hope it helps and have a happy holiday!!
With June and Q2 in the bag, I thought it was a good time to review several of the key global markets that I monitor. I cover off the monthly and weekly charts of Brazil, Germany, UK, Spain, Indonesia, Hong Kong, South Korea, Japan, Russia, China, Euro Stoxx 600, and Canada.
This is my virgin run at attempting to produce videos so your patience will certainly be appreciated. I am sure the production quality will improve over time. Regardless, I hope you find the information useful. The video is 20 minutes.
You are welcome to watch the video here or if you prefer, use the link below to view on YouTube. You'll be able to view the video on full screen.
YouTube video can be found HERE
I gotta give credit to Boris and Kathy over at BK Forex for the Plato quote. It was included in their weekly Forex recap newsletter. It got me thinking......
One of the things that often frustrates aspiring traders is comparing their progress to that of other traders. How come I am not winning more? It comes so easy for Sally; what am I doing wrong? Looking at how others are progressing I wonder if I have what it takes to succeed at trading. We've all been there; you are not alone.
A couple of thoughts.....
Becoming a consistently profitable Trader is all about Perseverance
Trading is a craft. Like most crafts, gaining a level of expertise takes time and constant effort. There will be times of almost imperceptible progress and other times where you may take a step back. This is all normal and to be expected. It doesn't mean your are an idiot. It means you are like everyone else. The important part is grinding through it and not quitting in disgust. If you keep on persevering, you will be rewarded with regular break-throughs.
I think the graphic below summarizes it nicely............ we want instant and continuous progress. It feels like we're going no where. All the while, if we keep going, our competencies are improving as we grind away, Nobody becomes a black belt ninja trader just by showing up.
Path to Mastery
Are there other aspects to becoming consistently profitable? Sure there are; you know that. We will explore many of those things in future posts but none of that matters unless you're willing to consistently do the work.
I think some smart philosopher once stated that "a journey of 1000 miles begins with a single step". Accomplished trading is a long journey and one that is truly never finished. If you love markets, if you love learning, if you love trying while knowing you'll often fail, you can do it.
Plato's quote said another way "Don't be discouraged with your progress, no matter how slow"
Thanks for reading!
Good Luck and hope it helps!
This morning it was my turn to get the rug pulled out on a position that was doing well; Cal-Maine Foods ( $CALM ) This morning in my blog post, I noted that $CALM had been doing well. My long options position was up 11%. Not monumental, but green during the recent market turbulence isn't all bad. Not long after my post the market opened and the floor fell out of Cal-Maine. Down 10%. That's a lot for any stock. I still have not found any real news. #$%# happens!!
Holders of Drug Distributors ( $CAH, $MCK, $ABC ) and Drug Retailers ( $WBA, $CVS ) know what I am talking about. All those names got their rugs pulled out when Amazon entered the drug space with the purchase of PillPack. A fellow trader friend of mine was lamenting that he just entered $WBA a couple of weeks ago and the chart looked good. Rug Pulls don't consider chart patterns. Lots of value was destroyed today on that news.
Expect the Unexpected - Manage your Risk
"Expect the Unexpected" is one of those phrases that are often thrown out there almost as a throw away line. Everybody shrugs their approval then move along. When it comes to the stock market, the phrase speaks to risk. Unexpected news, flash crashes, Trump Tweets, drug trial failures etc happen and you never know when or from where it will come or how bad it will be. Daddy, where were you when the terrorists unleashed a dirty bomb on the doorsteps of the NYSE? And why do we live with Grandma now?
I learned my Lesson
Bad things don't always happen to someone else. A few years ago I had a tiger by the tail. Gilead $GILD was going to the moon and I was hitching a ride. I had a very over-sized position. Stupidly oversized. I was lovin' the ride. Then one day $CVS announced that it wasn't going to include Gilead's super Hep-C drug in their formulary due to it's price. Gilead dropped 20% in like 5 seconds. That stock has not been the same since. When #$%@ happens on an over-sized position it is a mortal wound. I lost body parts. When the unexpected happens with a 1%, 2% or even 5% position, it hurts, but you will get over it. Manage your risk! I learned my lesson. Cal-Maine hurt me today, but as a 1% position, all I will do is shrug my shoulders and move on.
Sidebar - Be wary of crowing about wins
Although posting about a suggested trade and subsequent winning position can hardly be called crowing, I've noticed something. Rug Pulls seem to follow folks who talk about their winning positions. Maybe a silly superstition, but its happened more than once or twice. It's happened to me and friends of mine. I don't open my mouth about anything. Do me and yourself a favor, if you feel the need to crow about a win, do it after you've closed it. Otherwise the market might close it for you. It's my responsibility here to report on wins and losses, but you wont hear me say much or tweet about it. I learned my lesson.
Happy Hunting and Good Trading
The US Dollar continues its advance as it nears taking out resistance at 95. The Euro and the main commodity currencies fell. Being a safe-haven currency, the YEN has been holding up well. Not shown is the Chinese Yuan which continues decline as trade tensions mount.
SPY 60 minute Chart - Ugly Price Action
Referring to the chart, we can see price is bound by 2 sizeable gaps. In morning trading, they quickly ran price up to gap resistance, then took a peek into the gap. That look failed and price fell apart for the rest of the day. Now price sits at gap support at the lower end of the range. We may see a small reaction off of this low, but I ultimately expect a lower gap fill to 268 followed by a retest of the most recent May low at 266.5. I am short SPY
Annotated SPY 60min Chart: HERE
QQQ Daily - Positioned for further downside
Price rolled out of the recent divergent high ( marked ) with an impulsive gap down on Monday. Tuesday was an inside day, followed by another sizable bearish engulfing candle Wednesday. I am positioned for further downside and expect a test of the 166-167 level that I have marked. It has to be noted that the gap down on Monday has left an open gap. These gaps tend to get filled; we just don't know when. Keeping an open mind with max flexibility.
Annotated QQQ Daily Chart - HERE
IWM - Price going lower