TRENDOCRACY

Gaining Bullish Momentum

2009-06-21T23:16:00.001-07:00

Friday's trading was under the influence of the quadruple options expiration. This week we'll see where we are. Large traders now believe that things are less bad than before with the economy and earnings prospects, but the lack of action suggests investors are waiting for headlines to drive the market. Looking ahead to next week, there are a few notable earnings releases, including Oracle (ORCL) on Tuesday (6/23). Apple was expected to sell as many as 500,000 new iPhones this weekend. QQQQ's implied volatility plunged as large trader dumped put options and bet on an upswing.

QQQQ poised to bottom out this week

2009-01-19T22:55:00.000-08:00

TRADING OPPORTUNITY: Bet on the QQQQ's next upturn. Buy below 29.80 and sell at 31.40. You have the 70% chances to close this position within a week and 82% - in a month. Don't miss it out!
RATIONALE: The QQQQ stock has a strong technical support at the 28.50 level. Besides, the tech sector has already factored in a very long list of negative news and expectations. Hence, upcoming earnings and outlooks from IBM and AAPL will most likely provide a relief rally.The tech sector is poised to bottom out. Large traders keep accumulating big tech names and buy call options in volumes to profit from the anticipated upturn.

Apple is poised to bottom out

2009-01-06T00:58:00.000-08:00

Apple looks very attractive at the current level. Especially, after positive comments from Steve Jobs. It is poised to bottom out later this month. This company remains very strong fundamentally and should lead the tech sector recovery. Large traders accumulate the AAPL stock and buy call option in large volumes.

China ETF (FXI) in play

2008-11-23T05:43:00.000-08:00

The China's exchange-traded fund looks very attractive at this level. The China's market has collapsed by 70% since last year but the central government is taking decisive steps. It approved a six hundred billion stimulus package designed to create valuable growth. We expect this exchange traded fund to gain bullish momentum next week. Our paid subscribers will receive our detailed Research Note with trading alerts as soon as we identify a good entry point.

Negative news are already priced in

2008-11-13T08:08:00.000-08:00

The market reacted positively on negative news. It shrugged off Intel's warning and bad jobs data. Large traders are getting ready to move higher.

S&P 500 is deeply oversold

2008-11-09T01:40:00.000-08:00

The trailing P/E ratio is 13. This represents a 30% discount to the average P/E of 19.3 since 1988, when S&P first started reporting operating earnings data. Earnings growth has also come under pressure in the past few months, as seen in the steady reduction of forecasts. However, according to our analysis, large traders have already begun the bullish play.

Google is being accumulated

2008-09-24T22:11:00.000-07:00

Google (GOOG) remains very strong fundamentally: forward P/E (18) << trailing P/E (28). PEG =0.7. However, large traders do not allow the stock to above the 450 level. They accumulate the stock at this low level and keep buying call options in large volumes. We expect this stock to bottom out in coming weeks.

Apple: Beaten Too Hard

2008-07-22T22:23:00.000-07:00

Apple (AAPL) shares hit on weak forecast despite strong earnings. However, the fundamentals remain very strong. For example, forward P/E (25) is well below trailing P/E (33) and PEG is less than 1.25.

On Jul 23rd, he stock dropped 12% at open but later successfully erased a half of these losses. This intra-day bottoming out as well as enormously high call option activity clearly indicate that large traders bet on the upturn and intend to push the stock higher. The overreaction offers a very good entry point. The AAPL stock looks very attractive below the 165 level.

Oracle (ORCL) Recovered as Expected

2008-04-19T21:19:00.000-07:00

In our post two weeks ago we predicted that Oracle should recover very soon. Fundamentals remained strong.
Smart traders bought the bullish ORCL May 17/20 debit call spread for 2.50 on April 4 and sold it for 2.75 two weeks later with a handsome 10% gain.

Google (GOOG) Surged as Predicted

2008-04-19T09:46:00.000-07:00

In our recent post, dated March 26, we stated that Google is poised to bottom out very soon. In fact, it surged as predicted. Smart traders joined this market play, i.e. bought the bullish May 430/440 call spread at 6.72 and sold it yesterday, on April 18 at 8.50. They received the 26.5% gain in 23 days!

Pumped to Dump?

2008-04-15T02:21:00.000-07:00

Large traders await IBM earnings scheduled tomorrow. The IBM stock consistently touches its top at $117 and is toying with a breakout.
We don't think that will happen. Fundamentally, the stock is almost fairly valued. Technically, it has a strong resistance at 119. We wouldn't expect a strong surprise today. In the same time, any other result may trigger a sell-off.
There are all reasons to assume that large traders plan to push the stock lower. They have loaded their portfolios with put options.
We recommend to buy the bearish May 125/120 Put spread at 3.50. The expected profit = 1.50 or 43% in one month!

Best Trading Vehicles for Riskier Market Plays

2008-04-08T07:51:00.000-07:00

Debit Call Spreads are really the best. This trading vehicle has a lower break-even and delivers higher returns. You can afford to put ten times less capital at risk. Here is an example.

In our recent post we described the ORCL “Slur and Slurp” Play. Every one can participate in this play. It is enough to buy the May 17/20 Call spread at $2.50. The underlying security price is $20. So, you put at risk only a small fraction of it.

This spread means that you buy the May 17 Call at $3.60 and sell the May 20 Call at $1.00. You win, if the ORCL stock price stays above the 19.50 level on May 16^th. The maximum return = $0.50/$2.50= 20%.

All market plays are risky, especially, for small investors. Option spreads give outstanding possibilities for everyone to join “big boys” in very many market plays. In this example, the very worst that can happen to you is you lose the initial debit -$2.50.

Join the Oracle's (ORCL) "Slur and Slurp" Play

2008-04-06T02:32:00.000-07:00

The company reported earnings in-line with expectations. The average earnings projections remained unchanged. However, the stock has been beat hard. It looks like large traders just wanted to push the price lower. They convinced small investors to sell the stock, thus giving large traders get a chance to grab it at lower prices. The stock price should eventually get back on track. This crude trick will deliver lofty profits to large traders and to anyone who decides to join this play.
The most suitable trading vehicle would be a debit May 17/20 call spread. You pay $2.50 and get over a 75% chance of receiving a 20% gain in 5 weeks.

China ETF (FXI) Surged As We Predicted

2008-04-02T11:57:00.000-07:00

In our post one week ago we recommended to buy the China ETF (FXI). It was poised to jump, led by large traders. We saw many signs of trendocracy's activity. In fact, the stock surged from $125 to $143. Smart traders bought Jul 140 call options for $10.10 and sold them for $17.90 with 80% gain in one week!

Qualcomm (QCOM): Upside Limited Here

2008-04-01T05:38:00.000-07:00

No doubts, QCOM looks strong both technically and fundamentally. Besides, it has been recently upgraded. Even more, it is already it is already bottoming out.
However, we don't recommend to touch this stock above 41.50 because it has very limited upside. QCOM stays in the trading range 37-44 since Feb 2007.
Remember, large traders had accumulated this stock two weeks ago (see the chart). They are trying to establish the uptrend and distribute this stock. You have good chances to enjoy the ride, if you buy this stock below 41.50.

QQQQ: Getting Ready to Bottom Out

2008-03-30T22:42:00.000-07:00

Intermediate-term outlook (weekly chart): BEARISH

Short-term outlook (daily chart): BEARISH

Very short-term outlook (60-min chart): BEARISH

TODAY'S PRE-MARKET SENTIMENT: BEARISH

Strong resistance at $45.00. Should bottom out at about 42.50.

All ten key NASDAQ-100 (QQQQ) components look weak.

Implied volatility inches down.

Large traders keep accumulating QQQQ before the long run.

We don't recommend to enter new positions today. However, Jun 42 Call options may look attractive later this week.

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Google (GOOG) is getting red hot

2008-03-26T07:22:00.000-07:00

This industry leader (GOOG) has been hardly beat by negative comments and lost 30% of its value since Jan. Large traders have already loaded their portfolios and started the promotion campaign. Small traders have a small time window to buy this stock and call options and enjoy the ride.
Learn more about most suitable option trading vehicles and receive trading alerts from our sister site -OptionSmart.com

China ETF (FXI): Your Last Chance to Join the Play

2008-03-25T01:39:00.000-07:00

The China exchange traded fund (FXI) has been hit after the impressive 84% run in 2007. Now, all negative news, especially, recent inflation fears, seem already to be priced in. Its fundamentals remain very strong: P/E =18, P/B = 3. The GDP growth will stay above 10% in years ahead.
Large traders and global speculators took a lot of efforts to push the as low as possible and accumulate this stock cheaply. They kept doing this since Nov 2007 while spreading out very negative comments.
What is next? There are all reasons to assume that the stock will bottom out in coming months.
Large traders have already placed their bets. Option traders have put some 10,000 Jan09 call option contracts in play. So, the stock is ready to move higher. On this stage, large traders will start to distribute this stock against the upward trend they establish. In opposite, small traders will rush in. Why don't you front-run trendocrats and buy this stock cheaply at the bottom?
Even more, why don't you use low-risk option strategies recently available only for professional traders. Learn more about OptionSmart option picks.

Why the TRENDOCRACY blog?

2008-03-23T09:25:00.000-07:00

It provides critical information hardly available from other sources. Stock markets nowadays are not the same. It is not enough to study charts and fundamentals. You must know what the market game is being played out. We will keep you posted about noteworthy market plays initiated by large traders.
“Egg heads” unite! Share your opinion and tap into the expertise of this blog. It will help to avoid being manipulated by trendocrats. Even more, you can join some market games and front-run large traders.
Please bookmark this log, and feel free to leave on-topic, non-spam comments as often as you like.

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