Friday, March 7, 2014

3-7-2014 - The Psychology of Failure + SPX and stock updates

I have observed a spectacular phenomenon over the past few years of this amazing bull run.  The more people are wrong about the markets, the more they stay the same.  They dig in their heels, they let their ego get the best of them, and they lose lots of money; because they can't admit they were (and are) wrong.  I have witnessed a few permabears come out of the wood work time and time again, every time the S&P advances another 5%, to call the crash.. and *this time* they'll be right.  It gets old, because not only are they so incredibly wrong, but they can't help but spatter their egotistical lunatic ravings all across the Interwebs.  Okay /rant off.  It's simple guys.  Break the bullish trendlines, then we can talk.  Speculating on 'The Top' is a fool's errand.

SPX Update: We are getting some chop as expected, but it's a little more upward biased than I thought and that is pushing the probabilities towards higher prices before any corrections. If it prints above the top of this week's candle at 1883.57, I would say that that is the case.

If on the other hand we continue chopping around and don't price above this week's candle then a decent sell is still in the cards.  The left shoulder of the theoretical inverse head & shoulders pattern was 46 points deep, so if right shoulder is symmetrical expect around 1835-1840, but it could head all the way down to the orange line.  The chop after the high print of the of the left neckline lasted for 11 trading days, and ideally that's what I'd like to see before right shoulder forms, which would give the orange trendline time to higher.

VRML - went back below $3 on high volume.  Still holding my position which is basically flat, their conference call last night was a snoozer.  Maybe they have something up their sleeve for the Roth conference on the 11th, but for now it doesn't look too pretty :)

EXAS - broke the blue trendline today, but made an excellent candle that would be a great looking hammer without the tape painting first thing in the morning on vapor volume.  It has seen heavy short selling as shown on daily finra data for the last few weeks.  They are hammering the tape but it's not working.

FCEL - another astonishing day for FCEL, that stock is doing phenomenally well.