Tuesday, December 30, 2008
NNVC - BUY on Daily Chart
QQQQ - SELL on Weekly Chart
Both of these signals have proven very profitable in the past, but as they say in the Madoff penthouse, past performance is no guarantee of future success.
Saturday, December 27, 2008
Inspired by a suggestion from avid AllAllan reader, supporter & contributor, Professor John W. Kercheval, III, what follows is my selection of the top 10 AllAllan blogs/trades/picks from 2008. My selection process was a subjective evaluation based on results, timeliness, character and substance, all of which were determined by me on Christmas Day, 2008. In true David Letterman fashion, here they are, in reverse order and culminating with what is probably the most important piece I've ever written.
Note: All returns, unless otherwise indicated represent the gains from the opening price the day after the blog in question was published to the highest extreme price, high for buys, low for sells subsequent to publication. If anyone has a problem with that determination, please provide a link to your own blog.
July 6th: Buy SRS On the next day, SRS opened at 108.83 and reached a high of 240.27 on November 21st, for a gain of 120%. I didn't get out at top tick, but I did get out not long after based on a simple trailing stop. But this is what was possible, depending on your exit strategy.
June 19: Buy HGYS Next day HYGS opened at 1.05 and one week later, on my birthday, July 2nd, hit a high of 2.45, for a gain of 133%. As with SRS, this one got trailed out soon after trading at it's high, based on a theory that doubling your money in a week mandates a tighter stop then usual on at least half of your position.
June 22: Buy FSYS This was the Louis Navellier teaser that was discovered and communicated over my blog as a, "$32 Fuel Conversion Stock to $64 by July 7″. Next open was 36.37 and it traded as high as 61.24 on August 19, for a gain of 68%. I know it's gain was smaller then the two above it, but, it was a much cooler pick.
The above three picks exhibit what is possible from trading, depending upon personal trade management. I don't claim, nor do I expect anyone to pocket the entire gains posted above. But that doesn't diminish the value of the trade ideas at the time they were given. I supply the ideas, you do what you will with them. Capturing half the maximum potential is a realistic approach to these picks, especially when they are so front loaded with gains.
Feb 19, Apr 1 & Apr 15: Buy NNVC There were a lot of write-ups on NNVC, but lets face it, I was banging the table to buy NNVC back in February when it traded as low as 0.39. By the time I posted my Feb 19th piece, it was trading at 0.51 (on April 1st it was 0.53 and April 15th 0.63) and ran all the way to 1.78 on June 18. That represents gains as high as 250% in just a few months.
As you know, I don't trade NNVC and have only bought additional shares this year, not sold any. But I know some readers fancy themselves good enough traders to trade in and out of NNVC and still be in it when it quadruples overnight on some news event. I may be good, but am not that good to expect I can trade it and will be lucky enough to be long when some blockbuster news hits and a triple digit percentage windfall hits. Still, the traders among you had a good one here.
June 4th: Wings Win!
July 7: Sell POT It is so hard to find good pot these days and forget about finding anything close to the nickel and dime bags anymore. But, one could have shorted Potash of Saskatchewan
on the open, July 8th, at 204.90 and ridden it all the way down to it's lows on Dec 5th at 47.54 for a gain of about 330%. Even if you are still holding short at 67 and change, your return is just over 200%. Primo by any standards.
July 28: Sell AAPL
A late July sell at 162 has led to a decline all the way down to 79 on December 5th, for a return of 46%. Again, 46% is less then half of some of the other Top Ten picks, but Apple Computer was such a darling stock early this past year, touted far and wide, including James of Buffoonery the Cramer, that sniping 46% on the short side seems to me to be a lofty achievement.
Note: Advanced GET is showing that as of December 25th prices have completed a complete five waves sequence down for Apple and the false bar stochastic is in an area where it can turn up and trigger a Buy signal.
October 11: Invincible A personal note, because life takes some strange turns and because passion needs an outlet, in one form or another. Five years of upheaval reduced to five stanzas......and yet it still won't let go. All the while this blog has chronicled my journey, serving as a loyal and trusted friend in some of the darkest moments. Invincible brings the saga current.
The strength that came by her,
Feeling, touching, loving her
And in a moment, losing her
Gone, gone, gone.
In the vigil left behind
Not daring to stop kicking
Not wanting to go on.
In a narrow wake of time
No longer caring
No longer mine.
Hope and dreams
Against the northern sky;
Her heart upon me,
Gone, gone, gone.
I am no longer invincible.
Down, down, down.
Sell, Sell, Sell!
SDS 70-----> 133
DXD 49-----> 86
Perhaps one of my greatest calls of all time, what was I thinking? The easy part was recognizing a culmination of a lot of technical analysis, most notably Elliott Wave, Triangles and a host of fundamental factors converging on the market as a Perfect Storm. The hardest part was going public with what I feared was upon us.
In four years of writing this blog, not once, not once, have I used the word "crash" to describe what I saw coming in any time frame. Early September changed all that and introduced a new tool to address the big picture, The Elliott Wave Principle. Going forward, we will integrate Waves in our shorter term analysis, along with Advanced GET, my software tool for exploiting Waves by isolating specific trading patterns and larger, tradable themes in the markets.
My top trade for 2008 and maybe my most important blog ever:
November 2, 2008: Barack Obama replaces George Bush as President of the United States.
"I see the world embracing this man, a symbol of all that is good about the United States, honored that he and I are both Americans. Generation after generation are standing in line to hear his voice and listen to his words. He and they understand together the meaning of hope. I can no longer hide in my cocoon of indifference, withdrawn into the sullen void of, 'They are all a bunch of crooks.'
"Because this one, he is different, because this one, he reaches that little boy of ten, because this one makes this man in his fifties feel that he can make things better with a single vote, because of this, I am voting Tuesday, for Barack Obama."
Best Holiday of 2008 - Thanksgiving
Saturday, December 20, 2008
Enter Advanced GET. I have been using this software since 1995. Until very recently the program could only be run on Windows operating systems. With the advent of the new MacBook Pro, I can now run Windows programs on my Mac and the first Windows software I installed was Advanced GET. This program reduces Elliott Wave Theory to a couple of very tradable mechanical trading signals along with a host of supporting proprietary indicators like no others in any trading environment. Almost every one of these indicators is used to further refine Elliott Wave concepts into something that is actually tradable.
With this as an introduction, I want to walk through a few Advanced GET charts of the S&P 500 in different time frames and point out how theory can be distilled into something eminently tradable.
On the longer term Weekly chart the SPX is in the midst of a 3rd wave down. Two prominent markers stand out. First, that the S&P can climb as high as 1000-1100 and still be considered to be in a third wave down and second, that the software is citing the 700 level as initial support, but that by its wave count, the ultimate bottom of wave 5 is several hundred points lower. Interesting, but hardly the precise measurements we need to put on a trade.
Finally, above is a very short-term chart, a 10-minute chart of the SPX. The blue horizontal lines are where the software, in advance, alerted to where the index would reach at least a minor support level. The first horizontal blue line was generated by the first red price bar, 20 bars in advance of where the SPX found its support on Friday. But note that there is another horizontal blue line at the bottom of the price chart and running well into the future. That is where Advanced GET is suggesting the next level of support will be found, at about SPX 865, more then 20 points lower.
This is where theory and trading come together to provide excellent risk:reward parameters for real trades. The software applies basic Elliott concepts to it's own proprietary system providing rule-based signals with tight stops and huge rewards trades. Although it may be a departure from pure Elliott theology, it's result is a pragmatic application in a trading environment.
In earlier blogs I introduced Trade Triangles a simple mechanical system for trading stocks and indices. Recently I introduced Elliott Wave theory as applied by Robert Prechter and Glenn Neely as big picture analysis of where we are and where we are going. Advanced GET can be looked at as an approach to trading that combines the simplicity of mechancal, objective systems with the fascinating theory discovered by R.N. Elliott and widely practiced but seldom applied very effectively by analysts today. It is a very expensive program ($3,000) and is not for everyone. But it is for me, a Fibonacci 13 years and still going strong.
Thursday, December 18, 2008
What I am looking for is some indication that Wave 5 has started. The first clue will be prices dropping down to break the Wave 4 regression channels. Another trigger will be a drop below the Wave B low late last week and a third trigger will be a False Bar Stochastic cross-over below the 75 level. Any or all of these technical patterns will suggest Wave 5 lower has begun with an initial target of SPX 700.
Tuesday, December 16, 2008
Multi-year bear markets do not end because the Fed lowers it's target interest rates. The bond market had already priced government securities within the new targeted range well before the Fed acted. Today's rally, so enticing, so Crameresque --did you catch him jumping up and down on CNBC worshiping at the alter of Ben the Bernanke, exhorting all to Buy, Buy, Buy--what are the chances this guy is getting it right this time?
Lots of questions in my email bag today, asking me about this action and right you are to ask. It sure seems inviting, a turn-around economy and cheap stocks just off their lows. Except they are going to be a whole lot cheaper before any of this is over.
I kept the Elliott Wave labels off this chart in order to keep this as simple as possible. Instead, one downward sloping trend channel that contains all of the price movement from the past three months. Circled is the confluence of the top trend line and probable target for this rally, only a few hundred DJIA points higher. Also circled is the MACD which is spoiling for a cross-over that will take it a long way lower along with the market soon after that top channel line is addressed. There is nothing very bullish about this chart and it is showing everything we need to know about where we are, where we've been and most importantly, where we are going.
Is it any surprise that as prices approach the top of the channel that market sentiment is turning gigly again? We are still 3,000 DJIA points lower then we were just this past summer, yet according to Cramer happy days are here again.
The severity of the damage already done to our economy is poorly represented in media hyperbole surrounding a 300+ up day. Nothing is fixed, nothing has changed. Cycles have to play themselves out and this rally is playing a crucial role in creating enough optimism, enough bullish sentiment with attendant buying power to fulfill the underlying structure of the Bull Trap from Hell.
The only question is whether or not the trap door opens before or after Christmas? How utterly poetic to time the descent to coincide with the end of this Administration, timing rock bottom for the eve of Obama's new era.
What a game.
Saturday, December 13, 2008
The stock universe is filled with companies selling at or below net asset value, companies involved with China, companies in niche markets, companies with a great story and companies selling at PE's in the single digits with growth in the double or triple digits. What is rare though is finding a single company that has all of these characteristics.
GULF RESOURCES (GFRE @ $0.22 - OTCBB)
From Web site:
Manufacturing bromine and specialty chemical productsKey Statistics
Gulf Resources is a leading provider of bromine, crude salt and a portfolio of various specialty chemicals throughout China. Our products are necessary components for China's flourishing oil and paper-making industries.
Gulf Resources is one of only six companies with a highly coveted Chinese license for bromine exploration, production and distribution. Bromine is a chemical element that is used in the refrigeration, medical, agrochemical, and oil field industries. While the international market is large and growing, China currently consumes all the bromine produced domestically. Gulf Resource will capitalize on the growing demand for bromine with its large proven reserves in Shouguang, China.
In addition to bromine, our company manufactures and supplies crude salt, which is found in large quantities near the bromine brine wells. Gulf Resources also develops numerous specialty chemicals for China’s papermaking and oil & gas industries.
Gulf Resources is aggressively pursuing complementary acquisitions, which coupled with sustained organic growth, will help us become a dominant worldwide player in the bromine and specialty chemical industries.
Market Cap: $21.93M
Revenue per share: $0.79
Cash per share: $0.23
Price per share: $0.22
52 Week high: $3.15
52 Week low: $0.15
Above is a Weekly chart of GFRE. It is still in a longer term downtrend channel but only a few cents away from a major breakout. A breakout on the Weekly chart would confirm an MACD cross-over Buy signal and suggest an attempt at the 50 day moving average up at 1.35, a 400% advance from current prices. I've also included a smaller term uptrend channel forming since mid-October. The top of this channel is about 0.45, a 100% gain from current prices.
On the Weekly Market Club chart GFRE is still on a Sell signal. But it would only take a pop above 0.25 this week to generate a new Buy signal. Below is the daily chart, it flipped to a Buy on Friday and any strength this week, related or unrelated to this blog, will easily challenge the Weekly chart to get on board the bullish trend.
Earlier this year, with GFRE trading at $2.80, Equities Magazine did an excellent write-up on the company. Below are some highlights and below that, a link to the article. But for the market crash, this was a good speculative buy at $2.80. At $0.22, it is a no-brainer.
GFRE is one of only six companies that hold a license to produce bromine in China. They already are China's largest bromine producer. Bromine is used in agriculture, oil and gas drilling and papermaking. China is still a net importer of bromine, meaning GFRE can sell everything they can produce to the world's fasting growing market. The world market for bromine is about $1.2B with $249M coming from China.
THIS IS A COMPANY WITH 20% THE CHINA MARKET AND A MARKET CAP OF ONLY $22M!
Kicker: In 2006 the Chinese government passed a law prohibiting the licening of any further bromine producers. Thus GFRE is one of only six companies producing bromine in China and the state has declared that there will be no further competition allowed.
Could this story get any better?
*Gulf Resources maintains property rights on over 87 square kilo-
meters (21,500 acres) of land containing over 2.27 million tons of
*Bromine is a non-renewable resource. Bromine is only found in large quantities in four countries: the United States, Israel, Jordan and China.
*From the CEO of Gulf Resources:
Already the largest player in the Chinese bromine market with over a 20% market share, we plan to aggressively pursue additional complementary acquisitions, which coupled with sustained organic growth, will help us become a dominant worldwide player in the bromine industry. In addition, we expect ancillary growth from the portfolio of specialty chemical products we manufacture for the oilfield industry. Gulf Resources, Inc. will continue to be a prominent figure in the Chinese chemical industry while obtaining international recognition.
Link to the March, 2008 article in Equities Magazine.
Kind of a Disclaimer
I usually own shares of a company before touting them on my blog. In the past few months, probably due to some prescient market calls, my readership has grown significantly. Thus any stock I write up, like Gulf Resources, is likely to get a certain amount of buying upon publication of the blog, causing a pop in price.
I DON'T NEED TO MAKE MONEY LIKE THAT.
As I write this on Saturday morning, I do not own a single share of GFRE. In fact, I would prefer to wait for the break-out above $0.25 before purchasing these shares. If the stock opens Monday and trades above $0.25, I expect to begin accumulating the shares. Since I expect near term price gains to easily exceed $0.50, I'll buy at any price under 50 cents. Any price higher then 50 cents will cause me to probably wait for a pullback. This is my road map to purchasing GFRE, subject to change of course, but this is how I am intending to play it as of now.
Take a good long look at the GFRE charts, read the above linked article from Equities Magazine and go explore the company's web site.
Then make up your own mind.
Thursday, December 11, 2008
This on top of the late day's drop of 25 points is clearly an impulsive wave down, probably igniting the next drop to new market lows.
If so, the 7500 level on the DJIA should be tested and breached by this move.
Wednesday, December 10, 2008
Make no mistake about this one, I DO NOT trade in and out of NNVC. When this one hits, it will be unforgiving to anyone not yet in and that is not a risk I am willing to take. Until further notice, buy on Buys and hold on Sells.
The Q's are more problematic. It was easy to be Short on the Sell signal because so much else was pointing to a hard down autumn. The current rally was strong enough to trigger the Buy (unexpected) but the patterns that I find so useful, Elliott Wave and NeoWave, are both still pointing hard down as soon as this rally peters out. When will that be? The triangles will catch it after it has built some momentum. I hope to catch it earlier and will try to post what as soon as I think this next leg down has started. Meanwhile, it's day-trading for me, which has been doing just fine, thank you.
Every December I go into the last two weeks of the month swearing to take some time off because nothing trades right around the holidays. Yet every year, I am at the helm, thinking a few decent trades are better then no decent trades and anyway, with all the stress there is no such thing as down time around the holidays. With what should be a heck of a dive coming in the indexes, this is not a time I want to be away from trading. Opportunities like those of the last three months don't come along that often and with my expectations as they are, it's no time to go bowling.
But it is time to go to a hockey game. I will be at Jobing.com arena Saturday night to watch the Phoenix Coyotes host the Detroit Red Wings. Last year Red Wing jerseys outnumbered Coyote jerseys about two to one. It's like going to a home game, without the snow, cold or boarded up businesses. Anyone who would like to buy me a beer, or give me a back rub, I'll be in section 116, Row T wearing a Red Wing sweat shirt......sitting next to a blond.
Monday, December 08, 2008
You may have thought you heard these songs before, but think again, this is the truth, as it unravels the beauty and depth of romance, of love found, of love lost, of love eternal. Others may have told these tales before, but no one shared the feelings of living sentiment with the listener like this.
It isn't until you hear Webb perform these songs himself, that you have heard any of them for the first time. "By The Time I Get to Phoenix" becomes the reality of parting from the love of your life, not some country pop song on the radio. You part, not knowing what happened, not knowing what is coming, or what is real anymore:
By the time I get to Phoenix she'll be rising
She'll find the note I left hangin' on her door
She'll laugh when she reads the part that says I'm leavin'
'Cause I've left that girl so many times before
You feel this music, the heartbreak, the sadness, the hopelessness of loss......a year passes, you miss her every day, you seek her out, she marries another. Webb takes those feelings here:
Girl I heard your getting married, heard your getting married, this time your really sure. And this is the end, they say you really mean it, This guy's the one that makes you feel so safe, so sane and so secure, And Baby if he loves you more then me, Then maybe it's the best thing, maybe it's the best thing that can happen to you, But it's the worst thing that can happen to me.At the end of your journey you have lost. Life has turned and now you don't fit anywhere, nor anyone. This is Webb's vision, but it's your own life. How does he do it? This is the genius of the artist, he fills you with your own reflection, your own sorrow and remorse. Where once lay two, you are alone. Does he love her more? You know the answer and Webb provides the soundtrack:
I fell out of her eyesWebb weaves a labyrinth of words and music around our lives. In the darkest moments, where thoughts ring hollow and heavy, you see and feel his vision all around you, the poetry and melancholy falling relentless, wrapping around a simple truth:
I fell out of her heart
I fell down on my face, yes I did
And I tripped and I missed my star
And I fell and fell alone
The moon's a harsh mistress
The sky is made of stone
The moon's a harsh mistress
She's hard to call your own
And then there is Webb's masterpiece. Seven and on half minutes of what was formerly pop vulgarity, it falls anew, mystifies the senses, a rapture of feeling so personal, so privately sensuous and sublime that your heart gasps and you face mortality with a glance at the end:
But the ending always comes at last,
Endings always come too fast,
They come too fast
But they past too slow,
I love you, and that's all I know.
There will be another song for me
For I will sing it
There will be another dream for me
Someone will bring it
I will drink the wine while it is warm
And never let you catch me looking at the sun
And after all the loves of my life
After all the loves of my life
You'll still be the one
I will take my life into my hands
and I will use it
I will win the worship in their eyes
and I will lose it
I will have the things that I desire
And my passion flow like rivers through the sky
And after all the loves of my life
After all the loves of my life
I'll be thinking of you
And wondering why
My first sit down and listen to Ten Easy Pieces ended in tears. To this day I don't know if it was the music, the words, the memories, or someone, but the experience buried me. Now what, you ask, does he mean by, "Buried me?" Surely he is still among us, having obviously written and posted this review. I will leave that answer to this music. This is no collection of songs, this is the fabric of life itself, full, robust, passionate and sadly tragic. Touched by love, never the same, this music will touch and change you.
What more can I say?
Sunday, December 07, 2008
This particular journey was too good to be left untold. I reluctantly paid a visit to Trader Joe's yesterday. I didn't want to go, but out of my daily trading nourishment staples, organic milk and cereal, I knew that if this task was not undertaken in a prompt and efficient manner, I would rue my laziness at a most inopportune time. So off I went, in my best impersonation of Hank Moody, rumpled clothes and two-day beard, gum in lieu of a hanging cigarette and only a passing hand upon my head as my grooming for the occasion.
In the isle of juices, I came upon her. A 40ish blond, tall and thin, blue eyes deep and penetrating all encased in skin so creamy white and utterly appealing that my inquiry of her, "What does pomegranate juice taste like?" spurted out of me before my mind could alert me that coming on to strangers in public is tactless and rude and fully the most risky behavior in the middle of a Saturday that a single man can embark upon if he has any dignity or self respect left at all.
Twenty minutes later I am leaving the store with her email address and a promise to make me her famous pomegranate martinis at some undetermined time, so I can integrate the juice of the pomegranate into my life that somehow, in my romantic stupor, was moronically stated as in need of the aphrodisiac qualities she described of this mysterious berry.
I bring this up only to show how the time otherwise allocated to writing a blog about Trend Following was usurped by what can only be described as biological based unfettered insanity in the presence of such overpowering female power shrouded in a pink and white sun dress loosely clinging to a form so perfect that wars would be fought and armies slaughtered to return her to the throne to which she so clearly belongs.
Pomegranate martinis. Such are the rewards that inure to the victors of market timing. What better allegory then this nectar of the Gods to remind us all what it is we are doing here. Our object is to win this game, pocketing the spoils of the market wars as those lessor souls forfeit to us in this marketplace of stocks, etf's, derivatives and gold. Humbly kneeling before the blond Goddess, oh ye of little faith, rise up and take your place among the victorious and righteous noblemen who through the ages have conquered their fear and vanquished their enemies before the magical splendor of Aphrodite.
But I digress.
Chasing the latest market fad isn't all bad.
Some investment funds that jump on trends are outperforming traders who pride themselves on outthinking the market. Increased volatility in markets from commodities to stocks is helping the trend followers profit.
A particular category of trend-following funds called managed futures funds have outperformed hedge funds this year by making a killing from the dollar's rally, the plummet of emerging markets and the collapse of commodities.
With $234.1 billion in assets, these funds gained 8.9% year to date through October, while the average hedge fund lost 18.9%, according to preliminary data from research firm Barclay Hedge. Barclay, which isn't related to Barclays PLC, doesn't consider managed futures funds to be hedge funds, though other data trackers do.
What is the common denominator of "...the dollars rally, the plummet of emerging markets and the collapse of commodities..."?
Trend following, in all of it's unsung glory.
I will be writing more on this subject in the coming weeks. For now, I want to provide some food for thought with the following excerpt from Covel's book:
Tom Rollinger, a friend of mine in the hedge fund world, approached me this spring about attending an investment conference in La Jolla, California, co-sponsored by Altegris Investments, Inc. Tom had just accepted an invitation to join Altegris. Altegris had placed over $1 billion in client assets with various fund managers of futures trading programs, commodity pools, and hedge funds, including significant placements with trend followers. Upon my arrival at the conference, Tom introduced me to the President and CEO of Altegris, Jon Sundt. Jon's presentation at the conference hit home. He postulated:
"Can a great trader have great skill and no opportunity to make money? Can a bad trader have no skill and tons of opportunity to make money? The answer is yes to both questions. Luck is at play in the short-term for most traders. There will always be "some guy" with a great one-year return, but the sustained edge appears only over time."
What's Jon's big picture point? He wants you to think about what happens when the bad trader with no skill finally finds himself with no opportunity. If you don't want to embrace his wisdom, you will eventually feel the pain in your trading account.
There will always be crictics, and there will always be cheerleaders. I, however, find solace in the performance numbers. And trend following performance numbers are the real story. No matter how many people agree or disagree with the content of this book, the performance numbers paint a picture you either accept or reject---it's your choice.
Wednesday, December 03, 2008
Here is my "You Are Here" ( see arrow) map of the markets tonight. Note that 5 waves down ended November 24 to end Wave 3 down. There has been a three wave rally since that low, labled A-B-C covering the past week or so. C may have ended today, or may end tomorrow, or could extend into next week. The take away is that once C is complete, Wave 4 up is complete and Wave 5 of 5 down will commence to new lows, under 7500 on the DJI and maybe way, way under 7500.
This is a good example of how I use Elliott Wave. The market will do whatever it wants to do, but I have identified a typical three wave pattern that is often a prelude to an new impulsive wave to the opposite direction. It's these wonderful impulse waves that we lay in wait for and that is where you will find me in the coming days.
Tuesday, December 02, 2008
Above is the Daily Q chart which triggered a Sell on Monday, signaling that those who tweak the Weekly system using the Daily signals to get back short, in line with the Weekly signal:
Above is the Weekly Q chart, revealing that it will take a print above 32 on the QQQQ to reverse the signal from Sell to Buy this week. Unlikely, but keep it in mind as this has been a very lucrative Sell trade and we don't want to get blindsided, unlikely as it may seem.
This is the Weekly NNVC chart, notable for it's Buy Triangle triggered today at 76 cents. Remember, NNVC trades best with the Daily chart:
As the above Daily chart shows, NNVC triggered long at 62 cents, now 80 cents, a gain of 29% in about a week, but with the Weekly now on board, this has the makings of a huge trade.
The truth is, these four charts are all I am interested in tonight. I can flip through dozens of other charts but I know from my EW analysis that the lows have not been seen and that most any long trade here is full of risk, much more risk then I am willing to take. My game plan is to remain very long NNVC and short the market at opportune times. There are times to be wildly bullish and times to be a raving bear, neither of which is present right here, right now. Being mildly bearish and very excited about NanoViricides just might be the perfect strategy going into the end of the year. Keeping it simple has it's place too.
Monday, December 01, 2008
AFID = Armed Forces Institute of Pathology
Dr. Mina Izadjoo = Publications
H5N1 = Bird Flu
"Very Excited" = $80B = Market for the company that cures common influenza
NNVC = The Company is developing anti-influenza drugs under the brand names FluCide™, and FluCide-HP™. FluCide is a broad-spectrum nanoviricide that mimics sialic acid, and therefore no influenza viruses (including bird flu) can escape it, no matter how much they mutate, say the Company scientists. FluCide-HP is expected to be more effective against all highly pathogenic avian influenza (HPAI) viruses than is FluCide, according to the Company’s proprietary data. Any of the HPAI viruses may cause a potential pandemic, according to the World Health Organization (WHO). The most prevalent current HPAI virus is H5N1.
120MM = Outstanding Shares of NNVC
$80B/$120M = Hold these shares tightly
Monday, November 24, 2008
What I am more certain of is that the Bear has not been broken and that lower, maybe much lower prices, still lay ahead.
Maybe we all need a few days off, to spend with family and loved ones and to give thanks for the better times and special people who have crossed our paths this time around.
Sunday, November 23, 2008
Let's start with the USO (Crude Oil ETF) Triangles Chart. I haven't been trading this one but want to include it here because it illustrates just how well the Triangle trading system works. In roughly the past twelve months there have been five trades on the Weekly chart. The first three were all modest losers, whipsawed out of trades as Oil sought to establish a tradable trend. Then on February 11, 2008 a Buy Signal at 73.43. This was followed by a Sell signal on July 18th at 106.83. This Sell is still in effect today, with USO at 40.91. A few modest losses and then two grand slam home runs, back to back. What more can we realistically hope for in a mechanical trading system?
Above is the chart of the QQQQ (Nasdaq 100 ETF). The Sell from September 2 at 45.92 is still in effect. I chose the bar chart for this format to point out that a Weekly Buy signal is far away, above the 32 level for this coming week. The Q's finished Friday at 26.66 so it would take about a 20% rally to trigger a Buy next week. Unlikely, but good to know just in case.
Above is a Daily chart of NNVC. This stock is one of the few that I have found that trades much better on the Daily charts then the Weeklies. For what it's worth NNVC triggered a Buy this past Friday and if you were following the bar charts, you could have anticipated the Buy Triangle appearing upon a break-out on the Daily bars, which occurred on a spike up in price just after Friday's Open. The Triangles don't distinguish between spikes to new 3-period highs or modest pops above three-period highs. The beauty of a mechanical trading system is that there isn't much thinking involved.
Above is a chart of GLD (Gold ETF) which triggered a Buy last week on the Weekly chart. I have just recently been following this Triangle chart because is appears to be doing a pretty good job of tracking the ups and downs in the price of Gold. Both GLD and SLV (Silver ETF) are tradables that can enter into huge price trends, both up and down, and like the USO chart above, represent other lucrative ways to trade a commodity, thus diversifying out of a trading portfolio of only stocks.
Finally, we have AAPL, which continues to trade very well under the auspices of the Weekly Triangle trading system. The pattern above is like many of the successful Triangle studies, modest whipsaws followed by huge trends followed by modest whipsaws followed by huge trends. Maybe half of the trades are losses, but the half that win more then compensate for those losses.
Short Term Analysis
I wrote last week that Friday and Monday should give us a clue as to whether a bottom was in. Despite the rally late Friday, the picture is far from clear. Now with Thanksgiving pending, it may not clear up until after the holiday. But as they say in the dance hall, lets dance with the one we came with. Since early September, all ambiguities in the market have resolved themselves to the downside. Until this pattern changes, I am favoring lower prices across the board and, believe it or not, maybe much, much lower prices. The primary trend of the market is DOWN and it is going to take more then a few hours (or even days) of robust buying to present a tradable bottom. When we go LONG we want to be buyers for weeks or months, not hours and days. We are not there yet.
Thursday, November 20, 2008
The major averages fell through the 2002 lows like a bowling ball off the top ledge of the Sears tower in Chicago in a freezing rain storm on a raw, cold, November afternoon as the Chicago Bears were shut out by the Green Bay Packers 10-0.
Yea, it was one of those days.
Is the bottom in?
What? Do you think I just make this stuff up?
This is the first time since I published Crash Warning in early September that I thought that a bottom of any sorts was possible.
The market will let us know more tomorrow (Friday, November 21) and Monday.
For now, let's just say anything is possible...........including a tradable rally.
Tuesday, November 18, 2008
Saturday, November 15, 2008
My father had never heard of R.N. Elliott, nor of Robert Prechter (until I brought him to my father's attention in the mid-1980's). But he was investing exactly as those two gentlemen would have suggested he invest at the time.
This is a chart from Robert Prechter's, Conquer the Crash (extended samples reviewable through Google Books). Look at the years that my father was Mr. Buy & Hold. From about 1940 through his death in 1987, he rode the waves, first a Wave III, then he held through the sideways Wave IV and then through the first half of Wave V.
Here is a another perspective showing how my father was fully margined and invested during major phases of expansion and growth in the U.S. Economy. Note how throughout most this entire time stock prices went up, a little sideways, and then mostly straight up again.
From this perspective, Buying & Holding from the late 1940's on was the only game in town and my father, through insight or just plain dumb luck, rode the waves up like the champion surfer that he was, always in, always fully invested, always on his board waiting for the big one. He didn't have the benefit of these charts, nor was he a proponent of The Wave Principle. He was just at the right place, with the right attitude and at the right time. When it comes to investing, it just doesn't get better then that.
Or does it? Take another look at the last chart above. It it a Grand Supercycle Chart of the entire 300 year bull market, roughly correlating to the rise of America on the global scene. If the Wavesters are correct that this Grand Supercycle Degree Bull Market has ended and that we are in a "Wave 4" correcting the nearly 300 year advance, where is this market going?
A major guidline of Elliott Wave is that, "Wave IV ends when it is within the price range of the previous subwave four of 3" Frost and Prechter, The Elliott Wave Principle, p.87 Now look at where the previous wave IV ends on all of the above charts.......
Yes, that's right, under 1000 on the DJIA.
Whether or not we get that low, if one accepts the basic tenants of Elliott Wave theory, that social mood drives society and that social mood can be measured with uncanny accuracy by stock prices, there's trouble ahead in River City (and all other cities). The perfect investment stance then is the exact opposite of my father's steady Buy & Hold brilliance on the way up. That would be taking a Sell & Hold position for the ride down (or at least that part of the ride down we will experience in our lifetimes).
"Sarah and Alana, if you are reading this after my time is up, remember what your grandfather built for you and your Dad. Now look back on your Dad's trading during the next 25 years and ask yourself, how did it work out? I suspect you will now know what to do with all that I have left you."
As for you, my loyal readers, I recommend you learn this stuff. Just click on any of the Elliott Wave content on the right side of my Blog. Much of it is free. Some of it an incredible bargain ($20/month for Robert Prechter's Elliott Wave Theorist). For those of you who reject it just because of the seemingly outrageous conclusion, do yourself a favor and learn it first. Even if you still reject it, as events unfold in the years ahead, at least you'll know where it was first above written.
Wednesday, November 12, 2008
About NanoViricides: NanoViricides, Inc. (www.nanoviricides.com) is a development stage company that is creating special purpose nanomaterials for viral therapy. The Company's novel nanoviricide™ class of drug candidates are designed to specifically attack enveloped virus particles and to dismantle them. The Company is developing drugs against a number of viral diseases including H5N1 bird flu, seasonal influenza, HIV, EKC/herpes (epidemic kerato-conjunctivitis or severe pink eye disease), hepatitis C, rabies, dengue fever, and Ebola virus, among others. This interview contains forward-looking statements that reflect the Company's current expectation regarding future events. Forward-looking statements involve risks and uncertainties. Actual events could differ materially and substantially from those projected herein and depend on a number of factors. Certain statements in this release, and other written or oral statements made by NanoViricides, Inc. are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements of the company to be different from those expressed or implied including the success of the Company's research and development efforts, the availability of adequate financing, the successful and timely completion of clinical studies and the uncertainties related to the regulatory process, described in the “Management’s Discussion and Analysis” section of the Company’s Form 10-KSB and other reports and filings with the Securities and Exchange Commission.
Note from Allan: In this fireside chat, Dr. Seymour answers questions from his emailbag. So take it away, Dr. Seymour:
Eugene Seymour, MD, MPH
Chief Executive Officer
I’ll try to address some of the queries I receive by email:
#1) You have been talking about discussions with various big pharmas. Why don’t you have a pharma deal done?
The glacial pace of my pharma negotiations has been a major source of frustration for me. It took me a long time to understand why these pharmas move so slowly. They’re just VERY large bureaucracies. Most all have adopted a new procedure when evaluating "deals" with outside biotechs. This process requires extensive analysis by outside business consultants. Following their report, there are a number of internal hurdles that still must be bridged. Most internal people are not interested in increasing their workload and they tend to drag their feet when it comes to new deals, especially when these deals are related to new technologies. Many of these lower level people have no significant stake in the financial success of their employer. It appears to me that these relationships may take at least one to two years to solidify. One year has just passed! The Japanese pharmas are even more risk averse and slower to act than the Americans. They are awaiting the test results from our collaborator in Tokyo. He himself is awaiting hospital approval to begin the necessary studies.
However, we did report on November 10th that we had presented at an international ophthalmology meeting. This was the first meeting in which we had made a presentation whose attendees were all clinicians. We had a very positive response from that presentation. Two of the previously most interested pharmas had representatives in attendance for our talk. The tenor of our discussions have now heated up because of that presentation. Nothing like the fear of potentially losing a deal to spur people on!
#2) What about large Foundations such as the Gates Foundation?
We have contacts at the highest levels of the Gates Foundation. Their focus now is on HIV, malaria and tuberculosis. When we complete the next set of studies on HIV, I plan to approach them. It’s all about the data! I don’t want to compromise my chances of success by going in to see them too early, without a complete data set!
#3) You had frequent announcements in the summer and it’s quieter now. Why?
During the summer we were wrapping up a number of studies. We’ve embarked on another research cycle and more data will be available over the next three to six months from the following animal studies:
a) Rabies (CDC) preliminary data by the end of the month;
b) H5N1 (contract signed with Federal agency);
c) HIV (repeat study to begin in Boston as soon as new expanded protocol finalized with Federal medical research institute);
d) Herpes of the eye (new location to be inspected November 11th);
e) Adenovirus of the eye (original site plus above location);
f) Ebola (US Army Medical Research Institute for Infectious Diseases);
g) Marburg (US Army Medical Research Institute for Infectious Diseases);
h) Dengue (Walter Reed Army Institute of Medical Research plus 2nd location).
All of the above, except f and g, once approved, have significant revenue potential.
#4) The website is out of date. When will you have a new site?
The new website has been completed and is now undergoing quality review. It has a number of features that people have asked for including a better explanation of the nature of the technology. This is always a problem because one can never be certain about how the technology works at the 20 nm level. That’s twenty billionths of a meter! Also, if you claim mechanism of action, the FDA can make you prove it. That merely extends the approval process. Personally, I only care that it works!
#5) In the past, you’ve spoken about moving from Connecticut to new facilities which also can serve as manufacturing facilities.
We’ve received financial offers from two States and are awaiting a third. I hope to make a decision by the end of the year. State money will help move us more rapidly to my goal of revenue in the veterinary world in the next 18-30 months. Achieving that goal is predicated upon a number of factors, not the least of which is funding for the prototype pilot as well as the toxicology studies, necessary for submission to both the human FDA side as well as to the Center for Veterinary Medicine at the FDA.
Wednesday, November 05, 2008
The Weekly chart above shows that the market is still on it's September 2, 2008 SELL Signal. Remember, I use the Weekly chart to determine the trend and for trading purposes. Since some traders prefer to trade in and out with the Daily charts, here is the Daily chart:
Note that today, the Daily Q chart triggered a SELL signal after standing aside from the previous BUY Triangle. All MC systems are now back aligned on the Short side of the market.
I found tonight's Weekly chart of Google of great interest and potential:
I've drawn in a wedge or triangle formation that has been developing over the past five weeks. Including after hours trading today, Google fell 10%. Is this a selling climax, or the beginning of a new leg down? A selling climax is defined as trading to a new intra-day low but closing up for the day. Clearly, Google's drop today was not a selling climax. That leaves one alternative, the beginning of a new leg down. Breaking and closing below that lower trend line in the annotated chart above would represent an extremely bearish pattern, suggesting new 52 week lows ahead for Google. That would be a drop to under $310 and probably well below $300.
There you have it, the market's recent counter-trend rally seems to have run it's course and path of least resistance is down.
Saturday, November 01, 2008
First, they know how to speak in such a way that you listen. Their words are not simply tools to pick your pocket and bank account, but to touch your heart and soul, to remind us that we are here at a special time in the course of the world, the years occupied by our presence on Earth and our effect upon society and upon each other.
Barack Obama speaks to me. His speeches, all self-written, do not for the most part merely attack John McCain. In fact, in most of Obama’s major speeches, he hardly goes to that well. In his recent half hour of a paid television advertisement, he did not mention his opponents with a single reference. What kind of man spends that kind of exposure and those kinds of dollars and doesn’t take a swipe at his opponent?
A decent man. A man so full of new ideas and new ways of dealing with our place in the course of history that 30 minutes could hardly be enough time to explain his view of our world and our role in this special time and place.
I have been around since about the middle of the last century. During these years there have been precious few decent men who asked me for my vote for President. I was too young to vote for JFK. I wasn’t given the privilege to vote for his brother Robert, but I did cast an anti-war ballot for George McGovern.
Since then, the body of candidates who have emerged from the cesspool of party politics were more or less mediocre and ambitious relics of a political system based on greed, power and spoils that inure to the winners. The fringe candidates, well they were just that, fringe candidates. So what was left? Angry and disappointed, what was left was my own personal boycott of the process. Yea, I certainly taught them a lesson.
This time he is different. His voice and his vision are different. His words empower me to do better. His ideas compel me to think about how good we can be as a society and how much I can make a difference in my small slice of life and presence on Earth.
I remember those feelings, they were the same ones that appeared on my screen as a ten year old kid in Detroit, circa 1959, when this strange sounding man from Boston captivated the good in me and encouraged me to start paying attention to the bigger picture in my life and my role in it. He made me want to be better, be all that I could be, contribute to making my world a better place and not want nor expect anything in return other then the satisfaction that we did make a difference, a positive difference and all was not in vain.
Barack Obama has rekindled those aspirations in me. I am no longer an innocent ten year old. I am closer to the end, then the beginning of my reign on Earth. But unlike then, I am now old enough to vote, old enough to be a part of this voice for change and old enough to be proud and privileged to be a part of history.
I see the world embracing this man, a symbol of all that is good about the United States, honored that he and I are both Americans. Generation after generation are standing in line to hear his voice and listen to his words. He and they understand together the meaning of hope. I can no longer hide in my cocoon of indifference, withdrawn into the sullen void of, “They are all a bunch of crooks.”
Because this one, he is different, because this one reaches that little boy of ten, because this one makes this man in his fifties feel that he can make things better with a single vote, because of this, I am voting Tuesday, for Barack Obama.
Thursday, October 30, 2008
(1) The Trade Triangles from Market Club (click on their advertisement somewhere around my photo) are an objective, mechanical way to trade short-term breakouts in indexes, stocks and futures. I tried to put up enough examples to prove that the concept works and that you can tweak the trading rules to fit your own trading style and emotional temperament.
(2) NanoViricides is our own lottery ticket to wealth. With much greater odds then the Powerball payoffs, this gem of a company has eight potential NDA's and an evolving pipeline that soon will be the envy of the entire biotechnology sector. It's selling at sixty-five frigging cents a share today. If only a couple of their products pan out, it's a $50 stock. Half the products, a $100 stock. All their products, $200. Their progress in the lab has been phenomenal. So why is it still a penny stock? Because their story is too good to be true. The bet here is that it is true. Every development, press release and periodic report to shareholders has been consistent with the claims being made. The time-line is a drag and the impatient have moved on. Those of us left standing with these shares will one day soon toast to them, to the bashers and to the unwashed detractors who have tried to loosen the grip of true believers on their shares from day one. It will be the most satisfying toast of our lives.
(3) The Crash introduced the concept of pattern recognition to our trading, specifically the eight wave fractal described in The Elliott Wave Principle. It has taught us that social mood drives society and our economy and that although invisible to the naked eye, social mood is manifested in the movement of the stock market, the collective psychology of society. These patterns can be measured in an empirical fashion through the use of Elliott Waves. Because these patterns can be identified and measured, because they are consistent, they are predictable. Because they are predictable, they can be an effective tool to wager on probabilities in the market.
The markets are on the precipice of another big move. It's not up. This little Wave 4 is playing out and when its done, Wave 5 to new lows will begin. The Dow will lose a couple thousand points. Be ready, be prepared and be forewarned.
Wednesday, October 29, 2008
Collaborative Agreements and Contracts
On December 23, 2005, the Company signed a Memorandum of Understanding (MOU) with the National Institute of Hygiene and Epidemiology in Hanoi (NIHE), a unit of the Vietnamese Government's Ministry of Health. This Memorandum of Understanding calls for cooperation in the development and testing of certain nanoviricides. The parties agreed that NanoViricides will retain all intellectual property rights with respect to any resulting product and that the initial target would be the development of drugs against H5N1 (avian influenza). NIHE thereafter requested that we develop a drug for rabies, a request to which we agreed. The initial phase of this agreement called first for laboratory testing, followed by animal testing of several drug candidates developed by the Company. Preliminary laboratory testing of FluCide(TM)-I, AviFluCide-I(TM) and AviFluCide-HP(TM) were successfully performed at the laboratories of the National Institute of Hygiene and Epidemiology in Hanoi (NIHE), against both clade 1 and clade 2 of H5N1 virus isolated in Vietnam. Successful animal testing of RabiCide-I(TM), the company's rabies drug, was performed in Vietnam during the first half of 2007, and reproducibly repeated in 2008. Rabies testing can safely be done at their BSL2 facility. The H5N1 animal testing requires a BSL3 (biological safety laboratory level 3) laboratory. NIHE has acquired a BSL3 animal testing capacity during 2008. The work with NIHE will likely continue through calendar year 2009. While the MOU provides for a final agreement between the Company and NIHE, we have not yet discussed a "final agreement" with NIHE and continue to work under the existing MOU. There are no financial obligations or responsibilities for either the Company or NIHE pursuant to the provisions of the MOU.We have finalized execution of a Materials Cooperative Research and Development Agreement (M-CRADA) with the Centers for Disease Control and Prevention (CDC), Atlanta, GA in July, 2008. This agreement was initiated based on our success against Rabies in the animal studies conducted at NIHE Vietnam. Preliminary animal studies against Rabies are expected to start in the last quarter of calendar year 2008 or first quarter of calendar year 2009. Subsequent to the agreement execution, the Company has supplied certain materials to CDC for testing. This testing, if successful, is expected to expand to involve potential use of nanoviricides as (1) a post-infection therapeutic drug against rabies, possibly in conjunction with a rabies vaccine, and (2) a post-exposure prophylactic drug against rabies, to replace costly human or monoclonal antibodies, possibly in conjunction with a rabies vaccine. To date, there is no effective post-infection therapeutic against rabies. Post-exposure prophylaxis market has been estimated to be as much $300M to $500M worldwide.
We have finalized a CRADA with Walter Reed Army Institutes of Research (WRAIR) to develop collaboratively antiviral agents against all four types of dengue viruses in April, 2007. Preliminary work has commenced under this CRADA. This CRADA is expected to be renegotiated due to changes in funding requirements at WRAIR.
We have finalized a Materials Transfer Agreement (MTA) with the United States Army Institute of Infectious Diseases (USAMRIID) to develop antiviral agents against Ebola, Marburg and other hemorrhagic viruses in October 2007. Preliminary studies began in February, 2008. Certain nanoviricides candidates were found to be highly successful against Ebola virus in pre-clinical cell culture studies. Ebola virus is known to produce, in vivo, a soluble decoy protein that is a portion of its surface glycoprotein. If the nanoviricides that were successful in the in vitro studies bind to the decoy protein portion of the Ebola virus envelope, then we would expect that the nanoviricides would be neutralized in vivo by the decoy protein. We are therefore developing novel ligands that would potentially bind to the Ebola virus glycoprotein portion that is known to be not a part of the decoy protein. The MTA was extended for another year in October, 2008 to continue these studies.
We have finalized a CRADA with Armed Forces Institute of Pathology (AFIP) to perform animal studies against H5N1 in March, 2008. The animal protocols are in review for final approval by their animal care committee.
We have finalized an agreement with a major Medical Institute to perform animal studies of our eye drop formulation of nanoviricides against viral EKC (viral Epidemic Kerato-conjunctivitis) in March, 2008. The first EKC-Cide(TM)-I animal study was completed in June, 2008. Biochemical testing of the samples is continuing. The study indicated that the best nanoviricide drug candidate showed excellent clearance of clinical signs of the disease, viz. redness of the eye as well as sticky exudates, in a short time after treatment. We have received significant interest from certain Pharmaceutical companies in this drug candidate.
We have a continuing job-based subcontract relationship with KARD Scientific, Inc., Beverly, MA. KARD Scientific is owned and operated by Dr. Krishna Menon, who also serves as Chief Regulatory Officer to NanoViricides, Inc. in a consulting capacity. KARD Scientific has performed repeated studies of nanoviricides against common influenza. KARD Scientific also conducted certain efficacy studies of nanoviricides drug candidates against HIV in SCID-hu/Thy/Liv mouse model beginning in March, 2008. The results from this study are being compiled. Significantly, the best nanoviricide drug candidate showed viral load reduction that was superior to that of animals treated with the oral HAART 3-drug cocktail. This drug candidate also showed superior survival of mice as compared to those given the standard cocktail. If these preliminary results continue to hold in further studies, and later in humans, the Company believes that, either alone or conjunction with existing anti-HIV drugs, it should be possible to develop a "Functional Cure" for HIV/AIDS as defined by NIAID, using our anti-HIV nanoviricides. Our belief is based on the excellent efficacy profile of these drug candidates, their excellent safety profile, and the understanding that the mechanism of nanoviricide action is complementary to that of the other anti-HIV drugs.
The Company's Drug Pipeline
Management believes that it has achieved significant milestones in the development of a number of antiviral nanoviricide drug candidates. We now have high efficacy lead drug candidates against (1) common Influenza (FluCide-I), (2) all High Path Avian Influenzas including H5N1 (FluCide-HP), (3) Rabies (RabieCide-I), (4) viral EKC (EKCCide-I), and (5) HIV (HIVCide-I). In addition, the Company has also established the technology feasibility for (a) broad-spectrum nanoviricides, and (b) Just-in-Time ADIF technology; both of which are well suited for stockpiling to defend against known as well as novel infectious diseases.