CHINA

CHU, CHL, PTR, FSIN, LFC, CBAK, JRJC

WINDOW DRESSING

This week I suspect a snap-back rally from the large move triggered by the Fed's 50/50 rate cut on 9/18. Included during this rally is a little monthly ending window dressing. If this comes true, I plan to estalish bearish positions on Thursday and/or Friday. The stocks I've chosen is shown on Saturday. Let's have a great week!!!

SNDA

Cup and handle on weekly. Orderly pullback with snap back up in progress.

RIG

LR30 buy signal on 9/19. Ascending nicely with hockey sticks showing a pullback. Will consider adding more when snap back up signal ready.

CMI

all-time high on 9/19. Pullback nicely and perfectly set up for snap-back up to take out all-time high.

ADSK

Hit all-time high on 9/19. Pullback nicely to LR-30. Perfect setup for Snap-back up. Should take out all-time high next week.

MA

Snap back up on 9/18. Stopped and consolidated around 50ma. In position for another snapback up next week.

WATCH LIST

RIG, GOOG, PCU, CLB, BXP, MC, MA, GS, AMZN,XOM, ADSK, CMI, RIMM, FTI, EBAY PSA, NVDA, SNDA

PROFIT TAKING

Took a little off FTI after a nice profit. Letting BZP ride after adding on a few more yesterday @ $7.50. Quadrulple witch day. Market setting up for a pullback next week but T2118 still shows uptrend. Will have the weekend to contemplate. A very good week.

FTI - IN PLAY

20 CONTRACTS @ $1.60. FTI JY

Lookin for a snapback up over $58.62 within next day or 2.

RIG

Nice move today. Target to be $120. Expect a consolidation or even a pullback for entry tomorrow or next week.

MA

Hit the 50MA on strong volume. Beginning of 8/1/07 gap @ $152.45.

If MALJK's bid loses 1.9 points or MALJK's bid decreases to 1.3 then buy to open 20 contracts of MALJK at 1.3 on SmartEx and beep. This conditional order will remain active for up to 60 days and may trigger as a result of a stock split or other corporate actions.

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MA closed higher. It did not drop intraday like I expected. I changed my buy order to trigger at the 50MA. Also, strike price will change to $150. I will not chase this. Let the game come to me.
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If MA's bid decreases to 145.60 then buy to open 20 contracts of MALJJ at market on SmartEx and beep. This conditional order will remain active for up to 60 days and may trigger as a result of a stock split or other corporate actions.

WATCH LIST

FTI SNDA FMC PSA CLB SCHN ADSK BXP BOBJ NVDA MTH

**Feds cut rate by 50 points. The market was expecting 25. When it got 50, big move on DJ-30 +300 points. Huge short covering here. Even though everything went up, there's a feeling the economy must really be bad for the Feds to cut rate that much. I will remain on the fence and wait for the market to tell me what to do.

**FTO went up $3.00 to $47.18. No pullback. Will not chase it here.

**BZP is really going good. Up to $7.75. Note the hammer finish. Will add to any pullback.

**T2118.... +116.95...resuming uptrend

**MTH...See bounce at 50MA to pullback. Consider entry after

**NVDA...bullish 3 day candlestick reversal. Excellent volume. See pullback on hourly @ $36. If close above $36 on hourly, will consider going long.

**BOBJ...Very choppy on daily. On longer term chart, looking very bullish. Possible long @ $47.20 with stop @ $45.50.

**BXP...Broke 50MA daily...Nice volume. Upper BB and 200MA are overhead resistance @ $105. If it can get through $105 will take a long position.

**ADSK..Took out both June and July swing high. Excellent volume. Is in All-time high territory here. Will monitor here.

**SCHN...Took out July swing high. Excellent volume. Will check price action ala 7/10 after that gap up. That was good for a 4 point move.

** CLB...maybe too late. Can't chase. But, notice the scout action on the candles the last 2 days prior to today's breakout.

**PSA... Nice bullish action of the 50MA daily. Bumps into the upper BB and 100MA. Nice volume. Needs to clear $80.34 before consider long position.

**FMC...Excellent move after split on 9/14. Might be too late.

**SNDA...Can't chase. Let the game come to me. :-)

FTI - THE ANALYST PLAY

Stock split 2for1 on 9/4. Price action very bullish since. What makes this stock interesting is the difference of analysts comments. One day there was an upgrade. That lead to that hangman candle on 9/17.


Today was a downgrade. Notice the huge down volume on daily. However, when seen at the 5 minutes, notice huge up volume into the close. Even closed above the 50. I will go @ $55.50 with a stop at $53.70 (todays low).

LONG $55.50 with stop at $53.70

FTO

This week is options expiration week. Tomorrow, the Fed's meet. The market is anticipating a rate cut. However, based on these two events, no new positions will be taken. FTO is probably an exception. I am hoping it will pullback to the 20MA which is around $42.50. At that point, I would like to see more volume to confirm a resumption of its upward trend. If this happens, I will take a 1/2 position. If it closes above $45, i will initiate the other 1/2 position.

Targets: $46...$49.

T2118

This is my bread and butter indicator. Notice how it nailed the March and August lows. At this point, it is darn near neutral. This is another reason for not initiating any new positions.

T2118 SHOWING 1987 CRASH

There is a significant amount of traders who are comparing this market with the market of 1987...specifically the Crash of 1987. Here is what T2118 looked like before, during and after the crash. Notice the possible similarities with 2007.

MONEY MANAGEMENT

One of the biggest factors in becoming a successful trader is money management. For now, here are a two strict guide lines I stick to:

1. I've learned in order to open a new position, one must earn the right to open additional positions. You must prove to be profitable after one trade to earn the right to have two open positions. In other words, why have three open positions if you have not been profitable with two. For that matter, why have two open positions, if you haven't proven to be succesful with one.

This principle keeps me very humble. One can see if this is followed, one would have more open positions if he is on a roll. If you are on a losing streak, you will have lesser and lesser open positions. When I first started, I was losing so bad that at one point I was paper trading for a few months!!! :-) But, that is how I learned to define and redefine my trading process.

2. At most, only 20% of one’s current bankroll is allotted for one position. For example, if your bankroll is $1000, only $200 max is allotted for one position. If this trade becomes positive by $100, the bankroll would be $1100. Since the bankroll increased, the max for the next position is increased to $220. Since one has earned the right for another position, the maximum allotted for a 2nd position would then be $176 (20% of 1100-220).
I learned this technique from my horse racing days. This system has kept me alive in more ways one would ever know.

From my experience, stick to these two rules keeps one’s bankroll very healthy.