Daily Archives: July 7, 2012

Institutional Trader Spy Week Of July 2 – 6 2012

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Institutional buying was detected on Monday July 2, and Tuesday July 3rd 2012.

One of the things I’ve noticed this week is that the mainstream media groups like CNBC, the Wall Street Journal, and Fox News report the drop in oil as something bad because of manufacturing slowdowns in the U.S. and China; however, institutional trader activity indicates otherwise.

Institutional traders are picking up their buying on the drop in oil prices because a drop in the price of oil is the #1 way to stimulate an economy. In fact, Stephen Leeb wrote a book on the subject and proclaimed, “It’s all about the oil dummy”. He noted that every bull and bear market cycle since the 1940′s has been predicted by the price of oil.

This difference in perception between the public viewing the drop in manufacturing and hence the drop in demand for oil as a negative factor, institutional trader activity suggests they believe just the opposite and are increasing their buying on the drop in oil.

Institutional buying on Monday and Tuesday tracked and timed with news released from financial institutions suggests the reason for buying was:


July 2nd Monday – M&A activity in Tech: Dell buys Quest for $2.4 bln, Micron buys Elpida for $2.5 bln. Manufacturing data showed normal seasonal slow down with index drop to 52.5 in June but still above 50 which indicates expansion. 10 year treasury yields dropped to 1.58% on manufacturing slow down indicating little if any flight to safety. Oil drops $1.21 on manufacturing slowdown in China and U.S. oil drop is stimulus for economy, always leads to major Bull market eventually.

July 3rd Tuesday – Toyota U.S. June sales surge 60% YOY. Surprise jump in May factory orders of 0.7%, economists expected 0.1% increase.

Institutional buying on Monday and Tuesday was primarily concentrated in the following sectors:
#1 = Energy (+2.39%)
#2 = Materials (+1.42%)
#3 = Industrials (+1.05%)
#4 = Technology (+0.8%)

Song: Could Have, Should Have, Would Have
Album: Wall Street – Working On the Edge
Artist: Lance Jepsen
Available on iTunes now at http://itunes.apple.com/us/album/wall-street-working-on-edge/id529290850

Weekend Stock Screener 7/7/12

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On this weekend’s stock screener episode I noticed several hospital care providers appearing. What happened is that after the Supreme Court upheld the Affordable Health Care Act, hospitals and direct health care provider stocks surged, while health insurance stocks tanked.

There is no consistent theme on the stock screener this week that I can put my finger on. There appears to be a mix of both large and small companies across various sectors.

From last weekends stock screen the winner is LNCR up over 22% in 1 week!

The spreadsheet below updates in real-time and will keep track of the performance for about 1 month before they are removed.

Disclosure: I do not hold any of these stocks in my trading account.

Song: Risking It All
Album: Wall Street – Working On the Edge
Artist: Lance Jepsen
Available on iTunes now at http://itunes.apple.com/us/album/wall-street-working-on-edge/id529290850

Trading the Ascending Triangle Pattern – Beginners Manual

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Technical trading has without a doubt become one of the most widely used trading strategies used in the market today, and while there are several setups one could use in technical trading – very few has proven to be as successful as the ascending triangle pattern. If you would like to become a real gain-maker in the market, the following manual to understanding and trading this pattern will most certainly be of great help to you.

The Ascending Triangle Pattern Explained

The ascending triangle – also commonly referred to as the right-angle triangle is a bullish formation that is formed during an uptrend. This formation, in general is considered to be a continuation pattern and is easily identified by the distinct triangle shape created by two trendlines.

Here, the triangle itself is marked by higher lows (downside) and a set resistance level (upside). The share prices will bounce between the the downside and upside, essentially causing a squeeze. Once the price breaks above the resistance level (known as the breakout zone) – you have a buy signal and action should be taken.

How to Trade the Ascending Triangle Pattern in 3 Easy Steps

It is already an established fact that the ascending triangle is easily identiafiable and generally, has a higher occurence of breakouts as appose to other technical setups in stock trading. If you are new to the trading scene, then you will surely want to learn how to trade the ascending triangle. The following 3 steps will help you in getting started with ease.


1. Draw your resistance line by connecting the top level dots on your graph. The area just above the resistance line is where the breakout zone will be.

2. Place your initial stop below the support level on your graph.

3. When the price moves into the breakout zone (area above your resistance line) and you have confirmation that the given share can sustain a certain level in price – enter the market with a stop-buy order.

We can safely say that there is much profits to be made from using the ascending triangle pattern, especially since the ascending triangle produces less false signals compared to other technical setups. However, instead of keeping an eye on your actual pattern, place your core focus on price confirmation as an indication to enter the market. You are bound to reach success.