QQQQ Is Due For A Sell-Off

QQQQ is overextended, the market sentiment is bullish therefore it is reasonable to expect a pullback short-term from the closing price of 49.66.  QQQQ may hit ~47.50 within 3 weeks.

Some Stock Picks will be found on Carnal Stock

Some of my Biotech Stock Picks can soon be found on Carnal Stock and Carnal Stock Blog . I have been busy working on my trading systems and I am pretty happy with the results I got so far. I hope you can find the info and the new site useful.

Forecasting Oil: $57 , $59, ..., $100 maybe?

Apparently the same analysts who forecasted $57 oil in 2006 and $43 in 2010 just two months ago are quick to raise their forecasts: "Oil prices are likely to average about $59 a barrel this year, up from $56.70 last year, according to a Reuters poll of 32 analysts this week..." I am wondering if the Peak Oil theory is actually correct and what we are seeing now is just the tip of the iceberg. Could problems in Nigeria and Iran be just convinient explanations for the oil price rise, but the real problems are much deeper and can't be solved by resolving Nigerian and Iranian troubles? oil peak+oil hubbert+theory oil+forecast oil+futures

Trading Summary

I have decided to organize the trades I talked about in the last few months. I report all my stock picks before the market opens on the corresponding yahoo message boards (TELK is mentioned on TELK message board and so on). My nick on MB is trading_signal. Usually I enter my positions at the market open. Position exits are also at the market open unless a pre-set stop-loss or stop-profit is hit during the day. To monitor performance of various trading systems I separate my positions based on the systems that have generated them. When I started posting I planned to create a model Biotech-Oncology portfolio based on several of my trading systems. Looking back I see that these systems could not generate enough signals to fill in a portfolio. The starting value of the portfolio was assumed to be $100K and each position is typically equivalent to $10K. In the future I will be adding several more systems that hopefully will allow me to generate enough biotech stock picks to keep a reasonable portfolio. In the table below each profit/loss is for a single position, equivalent ~1/10 of the total portfolio value. So, for example, 50% loss in ABGX translates to 5% portfolio loss. The second table monitors my picks based on Elliott analysis and the third keeps track of various other systems. Biotech-Oncology Stock Picks

Stock	Long/Short	Entry Date	Entry Price	Exit Date	Exit Price	# Shares	Profit/Loss
TELK	Long	11/1/2005	14.86	11/11/2005	16.51	250	11.1%
TELK	Long	11/1/2005	14.86	11/16/2005	16.98	250	14.3%
CEGE	Long	11/1/2005	5.33	11/16/2005	5.78	1500	8.4%
GTOP	Short	11/30/2005	8.1			1200
EXEL	Short	11/30/2005	7.87	12/6/2005	8.8	1200	-11.8%
ABGX	Short	12/7/2005	14.39	12/15/2005	21.8	700	-51.5%
CYTK	Short	12/7/2005	8.47	12/13/2005	7.62	1200	10%
MEDX	Short	12/16/2005	11.5	12/21/2005	12.65	800	-10%
IMCL	Short	12/29/2005	34.66

Stock Picks based on Elliott Wave

Stock	Long/Short	Entry Date	Entry Price	Exit Date	Exit Price	Profit/Loss
AMGN	Long	10/31/2005	75.96	11/28/2005	82.26	8.3%
C	Short	12/5/2005	48.76	12/12/2005	49	-0.89%
AA	Short	12/12/2005	28	12/21/2005	29	-3.6%
AMGN	Short	12/19/2005	78.05	12/22/2005	80.7	-3.4%
AMGN	Long	12/22/2005	81.05	1/12/2006	76.65	-5.4%

Other Stock Picks

Stock	Long/Short	Entry Date	Entry Price	Exit Date	Exit Price	Profit/Loss
GERN	Long	10/28/2005	8.74	11/4/2005	9.05	3.5%
MEDX	Long	10/28/2005	8.22	11/4/2005	9.3	13.1%

I am using an excel macro by Chris Mead to generate the tables. because of this html code is noticebly shorter than the one genereted by excel.

Tech Tags: Trading+System Technical+Analysis Trading Stock Stock+Picks Biotech Elliott Elliott+Wave Investment TELK CEGE GTOP IMCL CYTK MEDX ABGX EXEL AMGN AA C

Wondering about the market

Elliott Analysis posted on Forex Lab Notebook Blog suggests that S&P 500 could move to and above 1400 (~10% from the current level) in the next few months: “In short, the index will continue to rise in the next 1-6 month to 1400 or higher. Then it will drop to about 1000. Although it will have almost 20 years to complete the correction and it may stage a long recession, most likely the market decline will be relatively fast in the impulsive wave pattern”. I find this type of scenario somewhat disturbing since my systems have shown noticeable short bias in the last month or so. My model biotech portfolio only has two short positions at the moment (IMCL and GTOP). 10% move in S&P 500 would surely induce stop losses in both positions. I already had several short positions that were stopped out recently. And I am wondering if in this particular type of market that are having today my trading system simply generate sell signals prematurely. My plan right now is to keep the open positions and watch the market for a month or so. At that point I will re-analyze the system and will see if any tweaks are necessary. Meanwhile, if there are good long or short signals I will keep posting them. Categories: Technical+Analysis, Trading+System, Stock, Market, Biotech, Trading, Elliott+Wave, Elliott, S&P500, Trading+Signal, Market+Forecast

Sell Signal for IMCL

I am initiating IMCL Short position in my model biotech-oncology portfolio. Sell Short 300 shares of IMCL 29-Dec-05 at the market open. Stop loss will be set 7% higher than the entry price. Tags:IMCL Imclone Sell+Signal Trading+System

AMGN Elliott Wave Update 12-26-2005

Trading strategy Keep long position. The invalidation point for this scenario is at 77.21 slightly above our stop loss. ...Read more AMGN Elliott We had quite a tough week with respect to our Elliott wave forecasts for AMGN and AA. AMGN limit order at 78.05 was filled but then the stock changed its direction and hit stop loss at 80.70 which transformed to 3.4% loss. After that we entered long position at 81.05 with the stop loss at 76.65. The recent activity let us think that we are still within our preferred scenario and zig-zag pattern was not completed. However we can be sure about it only when the price will make a new high above 84.5. Within this scenario our target zone is at about 90. We keep current long position. There is one observation from the last week – we were trading outside our time frame. In the future we should ignore Elliott Waves of such order and use them only to define probable entry and exit points in our longer term positions. amgen amgn stock elliott+wave technical+analysis trading

Alcoa Elliott Update 12-26-2005

The stop loss has been activated and we ended up with 3.5% loss. Apparently we took a trade from the time frame where we can not make adequate analysis using End-of-Day data. Also it seems now that the wise decision last week would have been to exit short position once we started to suspect that the price only touched the target zone and completed the correction wave. Although it seems that the price will continue to increase, it is in the overbought territory and there is a chance that we are still within a correction sideways pattern. During the next week we will continue to watch price movement and avoid taking positions. alcoa aa stock elliott+wave technical+analysis trading

Oil $57 in 2006, $43 in 2010?

Reuters has conducted a poll of 30 oil analysts asking them to forecast the price of benchmark U.S. light crude oil futures in 2006. The price will average $57.34 a barrel. In 2005 the forecast was $57.03. Actual average prices were: for 2005 - $56.63, for 2004 - $41.47. The analysts were remarkably accurate in 2005. I will try to locate the predictions for 2004 just to see how often these analysts are correct. oil peak+oil hubbert+theory oil+forecast oil+futures ...Read more Ok, the prediction for 2006 looks reasonable to me. But what struck me is the consensus that longer term the prices are expected to go down:”U.S. oil prices were expected to average $42.53 in 2010, with Brent crude seen at $38.45 a barrel. Analysts' forecasts showed divergence of $25 for 2010. Goldman Sachs was the highest, forecasting U.S. crude prices would be at $60 a barrel. The lowest forecast from NAB put prices at $35 in 2010” Basically, none of the analysts believes in the Hubbert Oil Peak Theory. This is totally amazing to me. I expected at least some analysts to be super-bullish on oil. As for myself, I am certainly in the Hubbert Peak camp.

Messing around with my Blogroll

For some reason Technorati does not see new links that I have added to my blogroll. you may see some weird posts appear/disapper in my blog in the next few hours as I am testing various things.

RNAi is One of the Areas to Watch in 2006 according to Science Magazine

Today Science magazine highlights major scientific breakthroughs for 2005. It also talks about eight major areas selected as potential breakthroughs for 2006. RNAi is one of the hot areas for the coming year. This is what Science says about RNAi-based therapies: "They're moving into human patients with startling speed, and 2006 should offer the first hints of how well the highly touted technique works. Company-funded trials in macular degeneration and the pediatric illness respiratory syncytial virus are under way; another targeting hepatitis C is supposed to launch soon, with some therapies for neurological diseases to follow. Oh, and another treatment that's coming down the pike: RNAi for permanent hair removal." Alnylam (ALNY) is one of the companies seeking to capitalize on RNAi-based drugs. Since I highlighted recent research at ALNY in Nov-05 the stock is up ~40%. But I would not be adding ALNY shares here. I think the market is ripe for some correction and will present plenty of better buying opportunities for ALNY and other Biotechs in the coming months.

Tech Tags: RNAi ALNY Alnylam antagomir Stock Investment

Position Update

MEDX short position was closed today after the stop loss @12.65 was triggered (10% loss). AMGN short position was initiated on Dec-16 @78.05 as suggested by our Elliott analysis (stop loss @80.70) I have noticed that Matthew Frailey is Long GTOP in his public charts on stockcharts.com. I want to remind everyone that I happen to have been short GTOP since Nov-30. GTOP is still hanging around the break-even since I entered my short. Will it go up or down? Who is right: Matthew Frailey or Me? The suspense is killing me :). Tags: Trading+System Trading Elliott+Wave MEDX GTOP AMGN Amgen

Amgen Elliott Update (enter Long @81.05, enter Short @78.05)

Trading Strategy 1. Enter long at 81.05, stop loss 76.65. 2. Enter short at 78.05, stop loss 80.70, take profit at 72.0. 3. Should the price fall below 75.50, set the trailing stop at Low+1.50 4. Update scenario when the price makes a new high above 80.52 or a new low below 76.70 or if there is more certainty about price motion in the shorter term. Our buy limit order at 81.05 entered last Monday has not been hit and the price went down almost immediately after market opening on Monday. During the last two trading sessions the price went higher but has not reached our limit order....Read more The situation has not changed much compared to our previous outlook. Since the price made a new low we should update the target zones for the current wave. Wave 3 of the Impulse is expected to complete in the price range 86.52 to 146.12, but more probably between 88.01 and 101.92. This wave is most likely to complete sometime between 22-Dec-2005 and 20-Jan-2006 Note that it cannot complete until 19-Dec-2005 but must complete by 17-Mar-2006. * Note this analysis has two important drawbacks: i) it is based on the End-of-Day price data while some patterns could be hidden in the intraday patterns; ii) in the long and medium term high rating counts can be found only for the “Hidden waves ON” option which means that the software can assume some patterns are hidden within the daily bars. There is a chance that the valid scenario is the alternative outlook mentioned last week “The alternative scenario assumes that the current zigzag pattern was completed on 22-Nov-2005 although the price did not reach high probability price zone for the higher degree double zigzag wave. In such a case the market should continue down in the impulsive wave as it was described in the Scenario 2 on October 30.” We can not distinguish between the alternatives because in the short time frame there is no Elliott pattern with a rating high enough to make trading decisions. Both factors reduce reliability of the outlook and some precautions should be taken into account in the trading plan.

Tech Tags: AMGN Amgen Technical+Analysis Elliott Elliott+Wave Stock Investment

Citigroup Trading Plan based on Elliott

Citigroup (C) Trading strategy 1. Buy at 50.00, trailing stop loss at high “–“1.30 (approximately 2 ATR) We will update Elliott analysis later in the week.

Alcoa Elliott Update

Trading strategy 1. Keep the current short position with the stop loss at 29.00, take profit at 26.50. 2. If the stop is hit, update outlook and be ready to enter long. Elliott Details It is likely that on the same day we entered our short position the wave 4 was completed and now the price is in the fifth bullish wave that should complete in the price range 28.66 to 34.39, but more probably between 29.90 and 32.58. This wave is due to complete anytime from now until 09-Jan-2006, but is most likely to complete before 21-Dec-2005. ...Read more The alternative count assumes that the first wave of higher degree is completed and we observe a correction wave that should complete in the price range 22.28 to 28.08, but more probably between 25.21 and 27.48. This wave is due to complete anytime from now until 11-Apr-2006, but is most likely to complete before 21-Dec-2005. We can not distinguish between these two scenarios based on the end of day data right now. The price level of 29 is the invalidation point for the second scenario therefore we will stick to the initial trading plan but if the stop loss is hit, we will revise outlook before taking long position.

Playing around with my Blogroll

I have started experimenting with Blogrolling. Looks like a very usefull tool for a blogger. One can easily add/edit links to other blogs and keep an eye on recently updated blogs. I will be playing around with my blogroll in the next few weeks so don't be surprised if there is massive disappearance/appearance of links in my blogroll. So far I have found about 60 blogs related to the Stock Market and/or the Biotech that I like. I will surely find more interesting blogs. One thing I am not sure is how many blogs are too many for a blogroll. Feel Free to Blogroll Me!

Sell Signal for MEDX

My trading system has flagged MEDX as a short candidate. Sell Short 800 shares of MEDX at the open on Dec-16 with stop-loss set 10% higher than the entry price. Let's see if I have better luck with MEDX than with ABGX. Yesterday with Abgenix it did feel like a kick in the nuts but, psychologically, I seem to be over my loss today. My ABGX position got closed at the open because it blew through my stop loss. Medarex and Abgenix are both developing antibodies to treat cancer but I just can't see myself so unlucky as to witness BMY or some other company buying MEDX while I am shorting it. Of course, MEDX could be bought but not at this juncture. MEDX is technically weak and this is what counts for the short-term trade. I limit my exposure to ~10% of my account in case the stock does move against me. Biotech-Oncology Portfolio Open: GTOP: entered 1200 shares short @8.10 on Nov-30, stop loss @8.91 Closed: ABGX: 700 shares short opened @14.39 entered Dec-07, closed @21.80 on Dec-15 for 51.5% loss. CYTK: 1200 shares short opened @8.47 on Dec-07, closed @7.62 on Dec-13 for 10% profit. EXEL: entered 1200 shares short @7.87 on Nov-30, position closed @8.80 on Dec-06 for 11.8% loss. Elliott System Open: AA short @28.00 entered Dec-12, stop loss 29.00, take profit at 26.00 Closed: C short @48.57 entered Dec-05, covered short @49.00 on Dec-12 for 0.89% loss

Slaughtered by ABGX

AMGN is buying ABGX for 22.5/share and I am SHORT ABGX @14.39. The stock is halted so my stop-loss can't be activated. ABGX will probably open around 22$ tomorrow, ~50% cut for my position. The only good thing here is that only ~10% of my money is allocated to ABGX. On a day like today, I can't stress the importance of not putting all the eggs in one busket.

Open/closed positions quick update

Biotech-Oncology Portfolio Open: ABGX 700 shares short @14.39 entered Dec-07. Take profit @12.95. Stop loss @15.83 GTOP: entered 1200 shares short @8.10 on Nov-30, stop loss @8.91 Closed: CYTK: 1200 shares short opened @8.47 on Dec-07, closed @7.62 on Dec-13 for 10% profit. EXEL: entered 1200 shares short @7.87 on Nov-30, position closed @8.80 on Dec-06 for 11.8% loss. Elliott System Open: AA short @28.00 entered Dec-12 Closed: C short @48.57 entered Dec-05, covered short @49.00 on Dec-12 for 0.89% loss Sorry, yesterday I forgot to mention that I am still short GTOP

CYTK position is closed

CYTK dropped today triggering my profit target that I updated yesterday. CYTK 1200 shares short position is closed now: opened @8.47 on Dec-07, closed @7.62 on Dec-13 for 10% profit.