Recent Swing Trades Begin Working

Today was a nice day for my swing trading ideas. Only Nike (NKE) failed to offer a trade remaining within its high-level consolidation base throughout the day. Las Vegas Sands (LVS) jumped nearly 10% today rocketing back through the $22 level and closing up nicely for the day at $23.34. I think there's still a good deal of room for LVS to run. The $30 level doesn't seem unreasonable as LVS is a great leveraged play on the economic rebound theme going into first quarter earnings season. I am following advice out of High Charts Patterns: "The best trading advice we could ever give is to trade around the base. The base is everything." I'll stay long but continually buy on pullbacks and sell on rallies. Sometimes I do this well, other times I cause myself a bunch of headaches. Either way, I've gotta do something while I'm sitting here all day, right?

I have the same "base" strategy in WFMI as that traded through the 52-week highs of $37 and tacked on another 70 cents for a solid 2% gain on the day. I've booked a lot of the trade but I still see more upside possible to $40. Last but not least, TLT broke down hard today falling 1.5% as the 30-year took out support. I never got the chance to add to this position but it seems like it has a good deal of room to the downside over time.

Disclosure: Long WFMI, NKE, LVS. Short TLT.

Last Day of the Quarter, Bulls Still Driving

Last day of the month, last day of the quarter. What a month for shares of Apple, up 12.6% in March alone. Apple is now the third-largest company in America eclipsing Wal-Mart yesterday. The indexes are fairing well this year with the Dow up 4% YTD, S&P 4.75% and the Nasdaq 5.8%. Chinese rockstar Baidu (BIDU) is up an astounding 44.7% YTD.

The Federal Reserve ends its mortgage-backed securities purchases today. The Fed bought $1.25 trillion in junk from Fannie Mae and Freddie Mac helping to keep interest rates low. What does this spell for bonds? 30-year Treasury futures are bouncing this morning after a poor jobs report from ADP but we'll see if there's a substantial impact in the coming weeks. I don't see Armageddon but removing a major buyer from the bid probably allows rates to drift higher. I am still short a small position in TLT to feel out the market. Bonds have yet to breakdown to trigger a full size trade.

I'm still sitting in my longs of WFMI, LVS and NKE. Wish I would have sold some WFMI pre-market yesterday when it was printing $37 but oh well. I'll give a small position down to $35 just to give it time to play out. LVS is acting a bit weak but I'm giving it some extra room based on how it trades, seems to act weak and then rip out of nowhere. I'll probably give my initial position to $20. NKE is holding up, still drifting along in its flag. The out on NKE is around $72.50. All these positions are just initial feelers and are not of make-or-break sizes. I just want to be early and feel out the stocks and learn how they trade before committing real capital through breakout levels. To review the breakout levels: WFMI, $37.00; LVS, $22.50; NKE, $75.00.


Disclosure: Short TLT, Long WFMI, NKE, LVS.

Holiday Week Begins Higher, Opened Longs in LVS, WFMI & NKE

• The Dow closed the day 45 points higher, more or less where it opened for the day. Volume was light with Passover today and the holiday week with the markets closed on Good Friday. Citigroup (C) lost 3% after the Treasury announced it will begin selling its 7.7 billion share stake in the company throughout 2010 likely acting as a ceiling on the stock throughout the year.

• I picked up a couple longs today. After blowing a trade in LVS I re-entered today after the stock has consolidated for a few days and now offers another good risk-to-reward opportunity should it trade through $22.50. There is a lack of overhead resistance until the $30 area. I also bought WFMI through $36 and I will be looking for a breakout through $37. Shares look good on various timeframes and while the valuation may be high, the underlying fundamentals are very strong with solid growth rates fueling the momentum trade. I also picked up a small position in NKE and will look to be aggressive over $75 as shares have held the earnings gap and a move higher should kick up the momentum again.

• One of the smartest guys I know started up a blog today, Alata Zerka. He reposted a bunch of his older writings that are worth checking out. He has an excellent understanding of the macro economic picture with plenty of financial content intertwined. Definitely check it out!

• This week we'll be entering what has historically been the best month in the market averaging a 1.94% gain over the last 50 years. (Bespoke)

LVS: An Epic Failure (...For Me)

Wow, sometimes your failures can be simply incredible. I was an absolute failure today in terms of executing a swing trade in Las Vegas Sands (LVS). Today's trade shows me precisely why return calculations based on "calls" are complete BS. One of the most difficult components of trading is the execution of your ideas. I could have told you LVS would be higher sooner or later and will probably trade up to $30 eventually. Yet, putting a solid trade on with good risk-to-reward can be damn hard!

I had some success to start this month buying breakouts in some tech names and financials that I outlined two weeks ago. Yet, even with my successes in those trades, I was unable to put on sizable positions because I was primarily buying breakout levels. On my better trades I had a small position in the base and then added on the breakout. For this LVS trade, my goal was to begin buying on the pullback and add into the upswing allowing me to size up comfortably with quality risk control.

I starting buying LVS last week around the $20 area on its first pull-in. I've been watching the stock for a while looking for a breakout through the $20 level. The stock has no technical resistance to the upside until around $30 on a weekly timeframe so the move could be highly profitable for swing traders. Last week Tuesday saw a strong move higher and a close above $20. So, I started buying Wednesday on the first pull-in expecting the $20 level to hold roughly. I expanded my stops a bit and gave my position to $19 for a stop (a 5% potential loss). Shares continued pulling in on Thursday and I averaged down in my position around $19.40. I held my position over the weekend and into today's gap down.

Today's gap down was discouraging but I still thought the stock had a good chance of quickly recovering and rallying positive. Knowing that whole numbers are foolish places to put stops, I smartly placed my mental stop at $18.90. Five minutes into the day the stock broke through $19.00 and dropped below $18.90 so I hit the bid getting my fill at $18.89 on my entire position. With my overnight losses and hitting out, I surpassed my maximum loss limit and my company's system locked me out of making any further trades for the day.

The above chart was what I was looking at when I hit the bid. Nearly the entirety of last week's Tuesday move had been retraced and I had to adhere to my pre-determined stop loss. The low of the day turned out to be $18.88. I literally hit the bid one penny from the low of the day as the stock was trading down over 3% on the day. Shares turned and never looked back. LVS rallied $2.50 (a 13% gain) from where I hit out. The stock ended the day 10% higher!

All I can do is laugh. What a freakin' joke. All I can say is this trade was an epic failure. For the trade to work, the short-term selling pressure needed to be relieved. The break through $19 set off a flurry of stops and overhead selling pressure was taken out. I panicked right along with the pikers and lost my position and my ability to trade for the rest of the day. Frustrating indeed but I live to fight another day. So often stocks need some type of capitulation to reverse trends. Technical patterns need to break in order to work. It's amazing how often the majority needs to be wrong in order for the trade to work in the opposite direction. Oh well, what can ya do? I just needed to share my war story today because it was laughable, just laughable.