Stock Online TraderBulls & Bears Make Money, Pigs Get Slaughtered…Let Us Not Be That Pig…

Generally every day I try to target 2-3 stocks and trade max 2-3 setups only. I do not like getting involved in multiple stocks and be distracted.  Today was one of those distraction days. I made 5 trades.

POT was the wrong chart to go short. It was continuously uptrending. I made the mistake of shorting it, even though I shouldn’t. I was actually very patient with it and short @ 110.10, when it looked like it will go below 110 and sell off. I am holding this one overnight with stop loss @ 112.10. Hoping to get a sell off to cover into.

CSIQ was shaky in the morning but once it broke past 21.75 (days high) it never really looked back. I bought really late @ 22.20. Turns out I was not really too late, as CSIQ kept spiking. I sold almost in the last minute @ 22.77, pocketing decent profit.

VISN looks to be reversing back from its multiple days of sell-off. I am long @ 8.70, holding it overnight. Hoping for 9.00+ price action to sell into. Volume is on the lighter side, (I like stocks with heavy volume).  Hope it doesn’t crack back. Stop loss 8.30.

FSYS also looks like it might be reversing. It has taken a big beating from 50s to 30s now, in a matter of few weeks. I am long @30.20, hoping for more uptrend. I really liked the way it closed at 30.50.  Ideally looking to sell around 32 level.

SNDK was a buy for me on break above 27. I bought @ 27.10 hoping for more up moves. Unfortunately it dropped back to 26.80s. I am holding it overnight with stop loss @26.45.

Recently I received an interesting newsletter describing why China is where you should be investing…I have edited the newsletter to focus on the main story…

America’s biggest benefactor—the Chinese government—is about to pull the plug on the U.S. markets. The giant sucking sound you hear will be what’s left of your wealth going down the drain! If you don’t reposition your assets now, the shockwave could wipe out what’s left of your wealth.

Here’s why…
The banking crisis, the liquidity squeeze, and the collapse in home prices has sent China fleeing U.S. stocks as if being chased by the running of the bulls in Spain.

They hold trillions in U.S. debt that’s worth less and less every day. Their investment in Blackstone is down 84%, not to mention the shellacking they’ve taken on Morgan Stanley. Across the nation, China investors and workers are “mad as hell” as they see layoffs mount as China Investment Corporation executives are attacked in newspapers and blogs across the nation.

And the Chinese government is listening carefully. They know more than any other nation that financial instability can lead to political instability. Which is why they are taking their money out of U.S. Treasuries and using their trillions in cash reserves to corner the oil markets while prices are low and the returns are much greater. Why, in the last 30 days, $39 billion earmarked for U.S. Treasuries were diverted to buying huge stakes in Russian, Brazilian and Venezuelan oil companies. At the same time, they lent Brazil $10 billion in return for a pledge for 160,000 barrels of crude per day.

You can read rest of the article here…Is China Ever Going To Stop Buying Treasuries

Cramer predicted a worst-case scenario for these names: They could lose all the gains they’ve seen since April 2005. That means Vale [RIO 20.96] drops 68%; U.S. Steel [X 93.69] 50%; fertilizer stocks like Potash [POT 140.26], Mosaic [MOS 77.01] and Agrium [AGU 66.65] could fall 80% to 90%. But this is only if you believe that the rise of these stocks was due solely to the increased value of commodities and not any growth by the companies themselves, he said.

So what’s it going to take to stop this? The world’s central banks – U.S., Europe, even China – have to cut interest rates. Industry consolidation would help, too. A rate cut in China might revive that country’s appetite for commodities, and that would mean investors would be getting a great discount on all these stocks right now.

If China doesn’t come back, Cramer said, “the commodity collapse has the potential to bring down the whole market.”

Cramer is one of those CNBC clowns that almost everytime get it wrong. If Cramer thinks the commodities are going down, its a bullish sign. I bought RIO today at 21.09$ and KGC at 12.01$ hoping to see a turnaround soon. Both RIO and KGC have been hammered lately and provide much safer bet to go long.

5 day chart for RIO shows 17% drop. Is the pain over ? No one knows. The trend is definitely going lower, but I believe its time for some bounce back.

6 month trend shows RIO bleeding…..no end in sight…..can that trend change ??

As for KGC, gold is going through a huge correction. Market manipulation has lead to jump in the dollar. Upward movement of the dollar looks short-lived, driven due to lower oil prices and Freddie/Fannie news bringing in global investors. Hurricane season and world politics can easily send the oil prices roaring upwards. Housing has not bottomed. Inventory levels are still high. Job losses make it even more difficult. Foreclosures are still reaching record high levels. This can turnaround in a flash causing dollar to take a dump and gold to go higher.

6 month trend of KGC looks ugly too. It has experienced huge price drops. Is this the bottom ?