Now I don`t typically trade small cap stocks, but TIM pointed out a pretty nice set up in his most recent article here. CNEH is setting up for a perfect breakout, it closed right at its high of $4.65. This stock is likely to pop on strong volume and seeing as it closed at its high, it`s not too late to get in. Traders have the entire weekend to spot this breakout, so a massive move is probable. Also, keep in mind that this is an OTCBB play, executions are slower. For more on this play, take a look at Tim`s Why I Bought A Stock With The Most Perfect Setup-Technical and Fundamental-I`ve Seen So Far In 2008 post, but for the time being here`s a chart…

So you’re probably wondering why I plan to take a long position after months and months of talk that this market is still in a downtrend. Well although this position is to the long side, I plan to daytrade it. The S&P500 is due for a relief rally, it is oversold so a bounce to the upside could happen as early as Monday. This is the chart I posted on June 26, 2008:

So I illustrated a failed bullish formation on the 26th, but let me show you what I’m seeing now…

Instead of a failed falling wedge a larger falling wedge formed on the S&P. Further, we ended the week at 1278 which happens to be support. In March we had a double bottom here, so this is an important level. I mentioned on the 26th that we should move sideways from here…but who are we kidding? A move up or down in this volatile market is more likely. The technicals lead me to think that we’re headed higher. A falling wedge is a bullish formation, and again we are sitting right at a major support level. Further downside Monday morning may occur, but I’m expecting a turnaround by noonish. After making some good profits, I have been stopped out of all my shorts…so I am now more neutral than bearish. I often reply to my articles with updates on the current market situation, so make sure you read those comments and reply to them. Oh and if you haven’t already, feel free to subscribe to my feed or newsletter. I will let you all know when I think the next leg down will be, have a good weekend and happy trading to you all

Richard
richard[at]hedgeagainstspeculation.com

I won’t be posting any charts today but I’ll sum up what I’m expecting tomorrow. It appears that we may be going bullish fairly soon in the S&P500. This index is sitting at support but is oversold. It is also forming a falling wedge with a bullish divergence on the MACD. The S&P is the strongest of the bunch, but as I’ve been saying we are still in a bear market so it doesn’t make much sense to pump your portfolio with longs heading into tomorrow. As far as technicals are concerned, we are more bullish than expected so be prepared to get stopped out of your shorts. We could head in either direction tomorrow so expect the unexpected as we head into the Fed meeting. We got a lot of volatility today and tomorrow should be no different. A no cut has been priced in already but the market remains very vulnerable, be suspicious of any strength because this market still seems to want to go lower. The big picture is lower, but an oversold bounce should be expected.

June 26, 2008 update:

The S&P500 was forming a falling wedge (bullish formation) on the weekly and daily charts but this formation failed today as oil jumped above $140.

The short-term charts were indicating a move up but the monthly chart still illustrated a downtrend. We are now heading towards the March lows…we will most likely move sideways from there but further downside in August wouldn’t surprise me one bit. Start looking into those ProShares to gain from further panic selling.

Richard
richard[at]hedgeagainstspeculation.com

Now that the contest is over let’s talk about trading again. After getting my new laptop this week I decided to try THINKORSWIM’s trading platform. I’ve heard many good things about them but I had to try it out for myself. It’s not bad I must say, the charts are fantastic and best of all it’s all free. I’ll be using one of their charts in this article to demonstrate the 30-minute gap strategy but first let’s take a look at the broad markets.

As you can see, the S&P500 is still very weak. Nothing has changed since we last looked at the index on June 8, 2008. I included June 8, 2008’s marked chart just in case you missed that post. We have yet to reach the 1280 level, but we should by next month. We just broke below the “next level”/1325 level, so testing March’s lows in the coming month would not surprise me.

So as you can see, I’ve been bearish for the past month and still am. All my long trades have been day-trades and my large positions are in shorts. 70% of my portfolio is in QID and TWM. All the major indices have shown signs of weakness in the past month, but if you haven’t profited from this yet, it’s still not too late. In the second part of this article I will show you the power of the 30-minute gap strategy and how you can make some quick profits.

Attached is a 1-minute day chart of TWM on Friday 20, 2008 from THINKORSWIM. TWM is an ultrashort of the Russell 2000 index, so if this index performs poorly, TWM will do great. The markings illustrate the gap strategy…but what is it and how does it work? The 30-minute gap strategy is a guide on how you should trade a gap up while minimizing your risk. This day-trading strategy starts with a morning gap-up. After the first 30-minutes of trading scan the chart and draw in a line to mark the 30-minute high and 30-minute low. Note that I have 7:30 and 8:00 circled on the chart, that is 9:30 and 10:00 on Wallstreet, I`ve adjusted the settings to my time zone. Once the stock trades above the 30-minute high with good volume, buy/fill your position and place a stop loss at the 30-minute low. This higher high may trigger right at 30-minutes or 15 minutes later, how soon it triggers is irrelevant. After filling your position let the stock ride, momentum should push it higher but keep adjusting your stop loss to secure your profits. You never want a winning trade to turn into a losing trade. Many investors often turn day-trades into long-term trades because of that mistake. A long-term trade in this environment can only lead to greater losses.

Richard
richard[at]hedgeagainstspeculation.com

What a week, I’ve been trying to fix my laptop for the past few days but am having no luck. Looks like I’ll be heading out to get a new one later this afternoon. Anyways, I’m fortunate enough to use someone else’s laptop for the time being so I’ll be posting the contest results right away. First I’d like to once again thank all the contest sponsors, without them this “Cooly Amazing Contest” would not be as “cooly”…and “amazing”, lol. We had a pretty good turnout with close to 75 contestants but I expected more…seeing as we didn’t hit the 100 mark, Prize 21 ($100 PayPal cash) will be saved for the next HAS draw. Without further delay, here are the contest winners randomly picked using random.org

Prize 1 winner: Michael Aulia
DVD entitled “Building An Internet Business From Scratch” from Marcus Hochstadt ($100 value)
1 year free hosting on a Standard Plan from Think411 ($50 value)
1 hour consultation time with The University Kid ($50 value)
1 month 125×125 ad space from The Wild Invester ($11 value)
1 “Work Smart, Get Rich” eBook from Ebook-Rich ($15 value)
1 month full membership to to Daily Day Trades and Option Day Trades ($96 value)
1 year VIP membership to CreateBanner.com from Xavier Media ($35 value)
3250 EC credits* from Freebie Reporter ($16 value)
10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing ($25 value)

Prize 2 winner: RollerKaty
Self Caricature Portrait from Fresh Meat Design ($100 value)
3000 EC credits* from DesignersDepot ($15 value)
1 month 125×125 ad space from Life is Colourful ($30 value)
1000 EC credits and a 1 month 100×100 ad space from Webmaster Plaza/WebSterly ($15 value)
2 week 125×125 ad space from Michael Aulia’s Tech Blog ($8 value)
1 permanent link in the Madmouse Web Directory and 1 permanent link in the Deep Links Listing Directory ($24 value)
A *Bundle Pack 2* from 1 Cool File ($20 value)
A blog review and custom EC design from eyespi20 ($40 value)
1 year VIP membership to CreateBanner.com from Xavier Media ($35 value)
10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing ($25 value)

Prize 3 winner: Becca
Your choice of a piece of artwork in the ACEO section (Art Cards, Editions, and Originals) or a custom order from Christy DeKoning ($20 value)
$10 SpoofCard from PagedLife ($10 value)
500 EC credits, 3 months of free ad space, and a pair of earrings from DecMeadow Studios ’s Etsy Shop ($30 value)
1 hour consultation time with The University Kid ($50 value)
30 minute blog consultation with The Net Fool ($40 value)
1 “Work Smart, Get Rich” eBook from Ebook-Rich ($15 value)
1 month 125×125 ad space from The Orange Paper ($50 value)
1 permanent link in the Madmouse Web Directory and 1 permanent link in the Deep Links Listing Directory ($24 value)
1 year VIP membership to CreateBanner.com from Xavier Media ($35 value)
2500 EC credits* from Yimto Affiliate Marketing Blog ($12.50 value)
1200 EC credits from Sherry Rambling ($6 value)
10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing ($25 value)

Prize 4 winner: Riyanne
500 EC credits and a Premium blog header design from ROCKFUSE
2000 EC credits from Joan Joyce
1 month 468×60 ad spot from Webmaster Plaza/WebSterly
1 month 125×125 ad spot from Intermission at Work
1 month 125×125 ad spot from Jean Costa
10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing

Prize 5 winner: adrain
2000 EC credits from Sense to Save
1000 EC credits* from Reap Money Online
1000 EC credits* and a blogroll link from The Path to the Pegasus Letter
A free blog review from TysBlog
1 month 125×125 ad spot from Jean Costa
10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing

Prize 6 winner: Khyle
1000 EC credits from JoeTech
1000 EC credits* from Saxon
1000 EC credits from Scramories
1000 EC credits and a 1 week 125×125 ad spot from Chica & Pumuckl
1 month 125×125 ad spot from Jean Costa
1 month 468×60 ad spot from Time For A Smile
10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing

Prize 7 winner: bunny
2000 EC credits* from Archon Digital
1000 EC credits* from Entrecard Favorites and a 1 week top ad spot from Diet Pulpit
1 month 125×125 ad spot from Jean Costa
300 EC credits and a blogroll link from Blogpowered
1 year VIP membership to CreateBanner.com from Xavier Media
10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing

Prize 8 winner: Haspel
2000 EC credits from Virtual Millenium
1000 EC credits from Webmaster Plaza/WebSterly
1 week 125×125 ad spot from shearyadi
300 EC credits and a blogroll link from JunkieYard
1 year VIP membership to CreateBanner.com from Xavier Media
10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing

Prize 9 winner: Louis Liem
1 month 125×125 ad spot from getonebyone and a “GetPaidToWatch.info” domain from mozay
500 EC credits from Fantasy Baseball, 500 EC credits* from The Realtor, 250 EC credits from Worldwide Travel Blog, and 200 EC credits from tenForty
300 EC credits and a blogroll link from Nick Throlson
1 month 468×60 ad spot from Webmaster Plaza/WebSterly
1 month 125×125 ad spot from Domestic Goddess
1 week 125×125 ad spot from Magpies Zone
10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing

Prize 10 winner: Marc 1000 EC credits and a 1 month 125×125 ad spot from Kacper Wrzesniewski
Prize 11 winner: Sherry 1000 EC credits* and a 1 month 125×125 ad spot from Treasure Nature
Prize 12 winner: jeflin 1000 EC credits* from Personal Finance Management Guide and a 100×100 ad spot from Webmaster Plaza/WebSterly
Prize 13 winner: Apollo
1000 EC credits* from The Money Kings and a 1 month 125×125 ad spot from Intermission at Work
Prize 14 winner: gLf 1000 EC credits from Orangeinks and a 1 month 125×125 ad spot from The Germz
Prize 15 winner: Sandra Cobb 1000 EC credits* from A Singaporean in London and a 1 month 125×125 ad spot from Make A Pound
Prize 16 winner: Cah Kontes 1000 EC credits from Dot Com Mogul and a 1 month 125×125 ad spot from Better Interpersonal Communication
Prize 17 winner: David 1000 EC credits and a blogroll spot from Is a Mans World
Prize 18 winner: Wenbin 1000 EC credits from BaReFooTeD Me, 250 EC credits and a blogroll spot from The Sugarbuzz Project
Prize 19 winner: Austin 1000 EC credits from, 50 EC credits and a 125×125 ad spot from sekelumit sikap, tindakan dan pendapat saya
Prize 20 winner: Klajdi Hena 1000 EC credits* from Article Specialist, 10 free paper-&-ink greeting cards at SendOutCards.com from Word of Mouth Marketing

I will be contacting the winners individually but if you see this article before an email from me, feel free to contact the contest sponsors asking them how you can receive your prize. The contest sponsors are listed in green, simply click on their link to look for a contact email on their website.

Note: Some contest sponsors have already sent me their donations, so if you see a * next to your EC credit prize, please email richard@hedgeagainstspeculation.com to claim your prize.

Richard
richard@hedgeagainstspeculation.com

Hey all at hedgeagainstspeculation (HAS), I know it has been a while since my last post, and I’m sorry, but I have been very busy at work. Anyways, about HAS, the stock not the site. HAHA, play on words, and I swear I will try to keep them to a minimum. I recently ran a search for stocks in an uptrend in the three year weekly chart, with recent positive breakouts on the daily chart in the fast stochastics and MACD’s, as well as stocks that have beaten their estimates over the past 4 quarters. Only six stocks came up, but two worth mentioning are HAS and BIG. 

HAS is in an uptrend not only on the weekly, but also the daily charts. On the daily charts, it is showing a nice looking bullish flag formation and is sitting near its support at around 37.25. If it breaks out of the top of the flag (also resistance which sits around 39.25) it should meet its target of around 42. 

As for BIG, I got into this stock at the end of the day two days ago and have ridden over 2.5 to its current position. You COULD get in now, but I would probably wait for a pull back a little closer to the 30 day MA.

As for short opportunities, they are a dime a dozen right now, especially with todays recovery rally. This week just, the NASDAQ finally broke below support, as well as the transports, making the last of the major market indices that I watch be ALL bearish. It’s a lovely thing if you position yourself right. I had previously made comments about shorting financial stocks like LEH and other financials, CMG, and several others. Though I haven’t back tracked onto all of the shorts I have recommended, I believe just about all of them are doing well if you had bought puts or sold short. I began trading options in the initial downturning of the housing market 2 summers ago, so I am very familiar with the patterns that are present in downturning stocks. The overall markets are all moving lower, so you should position yourself in the same manner. Take short positions, or play puts, and you’ll find yourself a happy trader over the next couple of months.

Happy Trading

-Dylan