“Are we there yet?”
“You mean the market top?”
It sure looked grim with this week big red bar…
As the weekly chart reflected, the SP-500 made historical high and then proceeded to close lower than the last three precedent weeks. This kind of rough turn-around does not look good for the bullish side. The bear may be taking this to be a “warning” sign of more downside to come. From my point of view, it’s enough for me to play the safety route and hold only a few stocks and a lot of cash.
Also, notice the LBR momentum indicator (MACD indicator) below continues to reflect technical divergence which basically supports a potential market top. Whether this week red bar is the beginning of the minor or major correction will depend on where price is going to take us next week. Currently, there is a support in the 15 MA support (brown solid line). If this support holds, we may see a bounce.
Currently I’m holding only $IBIO and $SEED and plenty of cash.
$IBIO is all about waiting for the company to file IND application to kick off the Phase I & II combo trial using its IBIO-CFB03 discovered by Dr. Carol A. Feghali-Bostwick to cure and possible reverse the deadly fibrosis diseases. There is really nothing for me to do but simply to wait and forget about this position. Obviously, while waiting, frustrated investors and naysayers are going to dominate the stock chat rooms. I’m going to ignore them and focus on finding my next opportunities in the market.
I actually wrote off $SEED due to no information regarding the timing of receiving the $60 million dollars from the sales of their distribution business since last September. But I could not ignore the significance of the purchase of IBIO treasury shares by the CEO Bill Niebur, so I bought back some shares to bet on possible news on the receipt of the $60 million dollars.
Apparently, I’m not the only one who like the news regarding insider buying shares. The green bar on the weekly chart closed above both 5 and 15 MA and has the possibility of making recent decline a bottom. I also like the fact that both momentum indicators below are turning up from the bottom. Let’s see what news we will see soon regarding $SEED.
During the week, I bought back $HIMX (on Wednesday) but sold Thursday morning when the broad market opened negative. I tried to bottom picking $HIMX again on Friday but stopped out at breakeven when price could not hold the rally in the morning. I left it along even though price bounced back to close higher. I also traded $PI, $CARA, and $AMRN looking for bounce but decided to bail as well to keep more cash over the weekend. The uncertainty over North Korea, somehow, affected the market; or was it simply an “excuse” for the market to make a long overdue correction? Either way, as mentioned above, I opted to play the safety route and hold plenty of cash.
Despite taking drawdown from $IBIO and losses from $HIMX, gain from $SEED helped minimized the damage.
Main port: SEED IBIO (up 24.8% YTD)
Trading port: MENXF IBIO
My 2 cents
From my camera:
Categories: trading journal