the Trade-Radar + TradingStockAlerts blog

Markets have gyrated this year, but overall the outcome has been a significant move lower. The major averages are down double digits from their 2007 peaks and are currently located somewhere between correction and bear market territory. Investors are in a quandary. Is it a recession or not? Are stocks cheap or not? Have we seen the bottom yet? Can we call a bottom back on January 22? If we are near the bottom, shouldn't we all be buying stocks like crazy? Merrill Lynch has assembled several indicators to help determine when it is advisable to get in or get out of the markets or at least overweight or underweight equities. Yes, it is an acknowledgement that there are investors who are interested in market timing. Market timing is a concept that always leads to controversy but many of us try to do it anyway so I believe it is worthwhile to present Merrill's indicators and discuss their current opinion on the state of market sentiment. As things currently stand in the market, ever...

Having watched the Chinese stock market soar to what looks like bubble levels, I have been reluctant to look at any Chinese stocks as serious investments. I do watch a few though and I thought that it might be time to highlight one that is beginning to display accelerated growth. China Automotive Systems ( CAAS ) has been drooping most of the year from a high of about $13 in January to a low of $6 in August. Still, CAAS came through with a big 2nd quarter earnings report and eventually the stock began moving up. In early October it managed to close over $9 but has been slipping since then to just over $8. This could be as cheap as the stock will get. Industry Background -- As written in the Asia Times, July 10, 2007: China has managed to chalk up year-on-year growth of 25.9% in car sales for the first half of 2007, according to the China Association of Automobile Manufacturers (CAAM). From January to June, 3.08 million passenger vehicles were sold nationwide, up 22.3%. The total includ...

Today MarketWatch wrote that Zilog Inc. ( ZILG ) cut its fiscal first-quarter sales outlook, saying it would be 11% to 13% lower than the fourth quarter's $19.1 million. Based on fiscal fourth-quarter results, the San Jose semiconductor company is expecting fiscal first-quarter sales in the range of $16.6 million to $17 million. The company also said it still expects to post a quarterly loss of 16 cents to 18 cents a share. This will make it six quarters in a row that Zilog has lost money. And yet, as of earlier this month, it had tripled in value since its low point of about $2 back in March of 2006. Founded in 1974, Zilog is a supplier of 8-bit microcontrollers. A microcontroller is a computer-on-a-chip that is optimized to control electronic devices such as motors, remote controllers and user interfaces on appliances and various other gadgets. Microcontrollers are essentially a small PC on a chip and typically include a central processing unit, different kinds of memory and vari...

If anyone is interested in gold mining stocks, Agnico-Eagle Mines Limited ( AEMLW ) is flashing a TradeRadar BUY signal. AGNICO-EAGLE MINES LTD. is a gold producing company and is involved in the acquisition, exploration and development of precious metal properties. The company's operations are located principally in Northwestern Quebec, with exploration and development activities in Quebec, Ontario, Mexico and Nevada, U.S.A. I can't say that I have any expertise at all in analyzing gold mining stocks. In checking the charts of some stocks with potentially bullish options activity, I came across AEMLW and took a look at it using the TradeRadar software. Based on a time period starting in December, it gave a BUY signal just last week. Not the strongest signal but good enough to give the green light in the TradeRadar dashboard. You can see a pretty clear signal peak has formed in the bottom chart in the image below. The stock trades on the Toronto Stock Exchange and the New York ...

I wanted to write a small post to describe what steps I took that led me to believe it was time to bail out of QLD , the ProShares Ultra QQQ ETF, and jump into QID , the ProShares UltraShort QQQ ETF. First, general intuition came into play. I was not alone in feeling that the markets were over-bought. There was plenty of discussion on this topic in the financial press and on financial web sites and blogs. The economic news continues to be somewhat downbeat so the current healthy earnings season and rising stock prices came as somewhat of a surprise. This lack of correlation between the economy and stock prices sounded a cautionary note. Checking the StockConsultant.com site, which is one of the tools provided on the TradeRadar blog, my overbought assumption seemed to be reinforced. The site showed QQQQ, for example, to be at the top of their proprietary RallyBand and the reversion to the filtered trend or down to the bottom of the RallyBand seemed to be the most likely next move. ...

A pattern has been developing where TradeRadar generates a BUY signal and then, within a few months, a weak sell signal is generated. The signal appears weak (Signal Strength indicator less than 60% or 70%, Kurtosis not high enough) because the the reversal is not abrupt. What about those stocks that move up nicely and then run out gas, dropping little by little until the profits are all gone? I have just seen this happen with PacificNet ( PACT ) and TradeRadar never flashed a solid SELL signal. I believe the issue here is that the TradeRadar engine generates its best signals when there are more than eight months of daily data available. When you have less data to work with, the solution is to reduce the amount of filtering. The default value is 5 days. Try 3 or 4 days. Not only will the Signal Strength increase, the Kurtosis will also increase. At that point the Dashboard may flash the three green lights that indicate a solid, actionable signal. As two examples, I have been reporting ...

Ok, I finally sold my last few shares of SanDisk ( SNDK ). Having posted a list of bottom-fishing candidates for this month's pick a few days ago, I expected to choose one of them as the Pick o' the Month and immediately put the money to work. As I mentioned in my post yesterday, however, I have fixed a bug in the Signal Strength calculation for SELL signals in the TradeRadar software. The new version gives the same SELL signal ( click here to view full size) on the QQQQ but now it looks strong enough to give me the confidence to act upon it. QQQQ sell signal. As a result, I turned around and purchased the ProShares UltraShort QQQ ( QID ). The "Ultra" classification means they are trying to achieve twice the daily performance of the associated index; in this case, the NASDAQ 100. So if the QQQQ is going to go down, QID should start moving up and moving up smartly. I have been considering doing this for a while, at least since mid-December when TradeRadar first st...

With this month's pick I am continuing a trend of identifying lesser-known stocks that are undergoing a reversal and appear to be moving up. Stock markets have been red hot in China and India for the past year. This month's pick is a Chinese stock, PacificNet (PACT) . The TradeRadar BUY signal was first flashed on 12/19/06 at $5.23. Since then, the stock has seen more good news and has moved up to $6.18 as of the last trading day of 2006. To see this TradeRadar BUY signal, click here . Note that the signal strength is pretty decent and the signal shape is quite well-defined. This leads me to believe we have a real reversal underway and that the newly established trend upward will continue. PACT has exhibited plenty of volatility over the years though so I am sure the path upward will not be smooth. PACT had recently taken a hit as a result of taking charges for exiting a business segment related to telecommunications. They are continuing with their involvement in providing CRM ...

The web site pages that augment this blog are in pretty decent shape now and I have made some improvements to the blog itself. The screenshots of the TradeRadar application are in place with explanations of what each screen does. I have deployed the Tracking page where I keep the status of past TradeRadar picks updated. You will see a ticker with the latest prices and a table describing the current situation. Here is where I will admit to failures and revel in successes. For those of you who have downloaded the TradeRadar application, I intend to update the Help file soon and will be posting it on the Download page. It should be ready within the next week. I have also added some cool new tools to this blog. Those of you who have visited lately may have noticed the Trade Radar Stock Consultant form in the left sidebar. The Stock Consultant site provides automated technical analysis of stocks and options including charts, timing indicators, support and resistance, etc. I have joined an ...

Introduction Many money management professionals take advantage of various hedging strategies to avoid being whipsawed by the markets and to avoid losing money in down markets. They may use combinations of swaps, options, futures and derivatives to offset risk and to generate returns when traditional investments are losing value. Some of the investment tools used by these professionals are now available to the public. There are several companies that have developed families of mutual funds and ETFs that bundle all these exotic vehicles into easy to understand funds that track common indexes. I will focus on two companies, Rydex and ProShares, as I describe a strategy that will allow you to invest and profit like the professionals. Both companies have products that track, as a minimum, the Dow, the NASDAQ 100 and the S&P 500. What is interesting and pertinent to our discussion here is that they also have funds that track the INVERSE of the associated index. For example, if one fund...

With the market in uncertain territory lately, the buy signal for FCEL did not come through. The stock has been mostly down for the past week and TradeRadar clearly indicates this is not the time to buy. As for the other two picks I have posted about, Generex (GNBT) and Eight-by-Eight (EGHT) have both slowed their advance. Generex continues to put out press releases about successes it is having with its new drug delivery systems and Eight-by-Eight recently announced that Office Max will be carrying it's products. The news is decent but the charts are weakening. An analyst announcing that he still has doubts about EGHT effectively killed a bounce-back in the making in that stock this week but I am still rating it a hold if you had purchased at the time TradeRadar gave the buy signal. I am still holding GNBT, as well.

As I said in my previous post, it would be prudent to watch this stock for a few days. Well, it sure got hammered today as the entire stock market had its worst day in months. Caught in the down draft, FCEL moved in the wrong direction and the TradeRadar signal didn't get to a level that provided any confidence in going long. I have previously stated that charts are great but you should pick stocks that have reasonable business fundamentals. FCEL is lacking in this area and has registered a string of losses over prior quarters. This could be a time when I am proving the rule rather than finding an exception to it. We'll keep watching but I am already losing confidence.

Doing a little post-Thanksgiving stock hunting and I came across this one at Bernie Schaeffer's site. It's getting some high call option activity and the TradeRadar buy signal looks pretty good (just beginning to signal a buy on 11/20/06 at $7.05). This trade is playing out right now; this is not a back-test. Buying it anytime within the last week or when the market opens Monday would be the agressive approach. Waiting a bit to see how things look over the next few days or so might be more prudent. Note that the red signal line is just barely below the green trigger point. Seeing that signal go a little lower would provide more confidence. Let's keep an eye on this one.

Here is another stock that I actually spent money on. The signal was given by the TradeRadar system around 8/18/2006 at less than a buck. The stock is currently closing in on $2 a share as we approach Thanksgiving. It has nearly doubled in three months. I have been testing the refurbished TradeRadar system on some volatile, inexpensive small caps and this one is working out pretty well. Note that the stock itself has a certain fundamental interest. It is involved in providing low cost VOIP services to small and medium size businesses. VOIP is a trend that is accelerating. My own opinion is that charts are great but the underlying stock should still have a good story and solid business potential. The company's products are now being handled by a major office products chain and the stock is beginning to move to the upside.

Here is a view of what the system looks like. Note the red peak in the lower chart. This indicates that a low has been hit. The horizontal green line intersects the red peak. Where it intersects on the right side of the peak (the trailing edge, as the engineers would say), we have a Buy signal. This Buy signal is clearly earlier than that provided by the 20-day EMA moving above the 50-day EMA, for example. That is the benefit this system attempts to provide, an earlier signal that is still reliable. To make it interesting, I did put a few dollars on this one though a bit later than the date the system indicated. I consider this signal to be "decent" because the peak is kind of sloppy at the bottom which also causes my Signal-to-Noise indicator to be a bit weak. In any case, if you had bought when the signal indicated (at $1.69 on 8/24/06), you'd be sitting on a 20% profit today, two and a half months after entering the trade. I'll provide more information on...