NNVC

Here is my current take on NNVC.  The chart below is pretty persuasive that we are in a third wave advance of some degree.  Note how the Elliott Oscillator in the bottom panel is confirming the wave count on the chart, with both prices and momentum at or near new highs for the entire six month rally.

NNVC Daily Trend Model

Also note what appears to be a series Waves 1 & 2 Up from the late October, 2009 low.  Needless to say, the Daily Trend Model is solidly up with its reversal well under current prices.  An objective risk/reward analysis based on this stop is that there is about 25c of risk against a potential $2.25 reward, almost 10 to 1.  

What can be a catalyst here? Any number of fundamental events as there are many different irons in the fire for NanoViricides.  But I see little reason to complicate the analysis with speculation, the chart speaks for itself.

Big Picture Perspective

Below the DJIA Monthly chart with proposed big picture wave count, retracement and stochastic analysis.

DJIA Monthly

Easter weekend takes me back to the 1980's, "BK" (before kids) days when as part of a yuppie couples community, we used to take these days off and drive down from Atlanta to the gulf coast, the Florida panhandle.  Amid the usual suspects of substances and debauchery, I remember numerous weeks leading up to the Good Friday holiday where the market was running up, my coffers were full and these beach vacations were the best of times.  But I also remember how time and time again, the market would turn right around these holiday beach trips and whether it be a stiff ABC correction or a more serious intermediate decline, the rest of the Spring season was never as sanguine as those days leading up to this particular weekend.

An observation, especially filled  with melancholy memories of simpler, more buoyant times, doesn't constitute a well researched empirical case for a top, but neither can I relegate it to the meaningless nostalgia bin, especially in the light of the above chart.  The wave structure, retracement levels, overbought nature of the stochastic all come together, along with the season at hand, to remind me that big picture bear market view is still out there to be reckoned with in one way or another. 

The Monthly Trend Model is too slow to change to be of trading value here, but the Intermediate Trends, defined by the Daily and Weekly Trends, will provide the first clues that the worst case scenario is unfolding.  Therein lies the beauty of trend following, we need only observe, identify and accept what the market gives us, a lesson decades in the making.

Respect

GOOG Trend Model

Below is the GOOG Daily Trend Model chart.  GOOG is currently on a Daily SELL, the stop/reversal level is 571.84.  Thus, there are about 10 points of risk in this trade, while if you look at the early January Sell Signal, it was good for about 100 points on the downside. 

GOOG Daily Trend Model

GOOG, along with GS, AAPL, AMZN and BIDU are the original five stocks in the Trend Following service and all have continued to perform well under the parameters of the system.

GS vs SPX

I wrote this one up yesterday as a watch and wait pending Short trade.  The prior two Sells on the chart worked well for swing trades, as did the most recent Buy.  Also note the divergence between GS and the market averages over the past six months.  Lower lows and lower highs versus higher lows and higher highs. 

GS Daily

SPX Daily

GNVC

GNVC is getting pummeled after hours due to the failure of its pancreatic cancer therapy.  Some comments and suggestions:

First of all, GNVC is more then a one trick pony; they have other drugs in their pipeline, including big pharma partners.  Don't panic, in fact, this could be a buying opportunity.

Second, if GNVC is part of a Biotechnology Basket, it represents only 12.5% of the portfolio; this is one reason to play these speculative biotech's as part of a basket.

Third, if you are following the Trend Models, GNVC went into this announcement with both the Daily and Weekly trends SHORT:

The models had no clue that this trial would fail, but they did detect persistent enough selling in the stock to cause both models to be in SELL modes.  Not a coincidence.  Same holds true for stocks that are reflecting persistent strength, they are in BUY modes.  Respect the models.

What to do now?

Think about whether or not this is a buying opportunity and/or wait for the Daily Trend Model to turn up again.

Or move on. There are plenty of stocks in the Biotech Basket in strong uptrends already, if you are so inclined.

MRNA, again

"It would be nice to catch one of these high flying biotechs before they take off."

---Wednesday, March 10th

 MRNA - premarket Monday, March 29th

Basket of Income

The success of last weekend's Biotechnology Basket has triggered another idea, a Basket of Income Stocks that will pay a healthy dividend when the Trend Models are LONG, and yet will not share the risk of loss when the Trend Models say, "Exit, go to cash."   

The past few days I've been researching high-dividend paying stocks across diversified sectors, Bonds, Utilities, Oil & Gas, REIT's and assorted other sectors.  The concept is to put together a basket of these income generating companies that is as non-correlated as possible and where the individual stocks have historically trended well under the trend following algorithm either on the Daily and/or Weekly Models.

The results so far are very encouraging and I expect to be trading this basket myself, especially as a conservative, low-risk strategy for the benefit of conservative, low-risk accounts.  As with the Biotechnology Basket, I'll send it out to the email list first and eventually will post some if not all of the names here.

This is concept in beta phase right now, so all suggestions are welcome and encouraged.  Below are some ideas along with their Weekly Trend Models.

NLY - Yield 14.70%

NZT - Yield 11.20%

SUI - Yield 10.20%

These are three examples of what I am looking for and will not necessarily be part of the Basket of Income. To be considered, I am looking for stable dividends and price histories that trend well.  Once in that group, I will look to diversify across uncorrelated (or at least, less correlated) sectors.

The goal will be to be collect the healthy payouts along with capital gains when the model is LONG and to be in cash on the sidelines when the model is SHORT, avoiding high risk periods characterized by weak and falling prices.   The Trend Models are ideally suited for trading these kinds of stocks.

A

Trend Models - Tutorial

This morning I want to explain my Trend Models and how they work, especially in conjunction with the email subscription service. 

I started the service on January 2, 2010 and just a few days later the first stock trade idea was sent to the list:

Thursday Morning, January 7, 2010 7:53 AM:

 Trade Idea : Short GOOG

As you can see from the above chart, GOOG closed Wednesday below it's trend line (solid navy line) and generated a SHORT signal @ 608.  The previous signal was a LONG generated November 9, 2009 @ 562.  

The early January SHORT was closed out on March 3rd at 545, for a gain on the trade of about 63 points:

That is pretty much the entire system, LONG above the trend lines and SHORT below them.  The system works on all time periods, below is the GOOG Weekly chart:

You can see from the interaction of prices and the trend line how effective the Weekly trend is on being on the right side of GOOG.  After the close each day I update the status of trends on Daily and Weekly charts for about 50 different stocks and ETF's.  They all are not as effective as the GOOG trends, but most are and even if you only traded GOOG (some subscribers do just that), you should be able see the benefit of knowing where the trend line is, either above or below prices, for any tradable.

The service also uses the same approach to trade the 60 and 240 minute trends of SPX and QQQQ, as well as their Daily and Weekly trends. 

How does this system fit into macro-trading, i.e. Wave 3 of 3 Down? 

It doesn't, not exactly. 

The system only cares about where the trend line is in relation to prices.  There are no other considerations.  Simple and elegant.  Yet, if there were to be a "third of third wave" decline this year, the trends can't help but catch such a decline early enough to profit handsomely from it.  By its very nature, it will identify the current trend and get on board.  That's what trend following does and this algorithm does it as well as any I have seen.

In addition to the trend models I occasionally include added value ideas for subscribers, for example, the Biotechnology Basket from last weekends, "Weekend Update."  Things I use to post on my blog I will usually post first to the email list, then to Blog, trying to make it worthwhile for subscribers to stay subscribers.  So far, my renewal rate is up over 90%, so I must be doing something right.

I hope this answers a lot of questions about what these trend models and the email list are all about.  I know it's pretty basic stuff, but, as we should all know by know, the complicated stuff doesn't work all that great.  As my mantra suggests, find something that works, then trade it.


A

Basket of Biotechnology

Last weekend I sent out a Basket of Biotechnology Stocks to my email list.  Now that all subscribers have had first dibs on these stocks, I'm posting the list to the loyal readers of AllAllan.

Below is a hypothetical portfolio established at Yahoo Finance.  I put $3,000 into each of the eight names set out in the basket, although subscribers know that three of these stocks are considered to be core holdings.  The portfolio's starting value was $24,000 (8 X $3,000), excluding any accounting for commissions.  There are a couple more names that I will probably add to this list in the coming weeks, but for now, this represents a nice speculative entry into what may become a very hot sector in the years ahead.

As you can see, the portfolio is up a little over 10% in its first week.  

That said, it is not too late to buy any and/or all of these names.  

Basket of Biotechnology Stocks

Road to the Final Five?

 VLE 240m

(1) Trend Model Sell Signal

(2) Completion of Five Waves Up
(3) Reversal at resistance (blue horizontal)

(4) Divergence in Elliott Oscillator (lower high)

(5) Break of Linear Regression Channel

(6) Vortex Bearish Cross-Over

TZA 240m

(1) Trend Model Buy Signal

(2) Completion of Five Waves Down

(3) Reversal at support (blue horizontal)

(4) Divergence in Elliott Oscillator (lower high)

(5) Break of Linear Regression Channel

(6) Vortex Bullish Cross-Over

These 240 minute charts are making a statement,  but they are not Daily charts so how significant a statement is unclear right now.  Should the late weakness of Thursday carry over into Friday, we focus on the Daily charts and Daily Trend Models.  If they flip as well, than its a whole new ballgame.  

ISCO - Weekly EW Update

ISCO Weekly

The Weekly EW target is now $6.50

Idle Speculation

As long as I had Advanced GET EW tools out today, I thought I'd run the SPX chart to see where it stood.  First the Daily followed by the 2-hour chart:

 SPX Daily

SPX 120 minute

Both charts reveal the index to be in a terminal 5th Wave with divergences in the Elliott Oscillator (bottom indicator). However, both remain in Trend Model LONG mode. The conclusion drawn from all of this is that while the rally is still in force, the pattern is consistent with the end of 5 waves up to be followed by at a minimum, a significant ABC correction.  What will trigger it?   

My working hypothesis is an SPX 240 minute Key Reversal Trend Sell Signal.

But the 60 minute and 120 minute models must turn down first and that has yet to happen.  When those flip, I will be on high alert to go SHORT.  

IWM 240 minute

A broader measure of market momentum, the Russell 2000 showing the same divergences but much closer to turning down.  This index may be a leading indicator of the expected turn down in the SPX. But like the SPX above, this index is still in an uptrend and until it flips Short, all of this remains idle speculation. 

A

NNVC Daily EW & Trend Analysis

NNVC Daily

I've posted the Daily Trend Model above along with the suggested EW count, including the False Bar Stochastic which suggests that NNVC is trending and all stochastic sells should be ignored.  Add that to the Wave 3 suggested count and the technical picture here is about as bullish as it can get.  Speaking of which, all EW and FBS analysis courtesy of Advanced GET.

BIDU Weekly - Update

In early January I posted this analysis of trading BIDU based on a very effective Weekly Trend Model.  Here is a follow-up, although there isn't much more to say:

First, the original chart using default Trend Model settings:

The latest signal under the old settings was a BUY on February 12, 2010 @ 488.00.  With BIDU currently at 608.50, that is a gain of about 25%.  

Below the Weekly chart using current Trend Settings:

You can see with slightly higher internal settings, the chart avoids the early 2010 whipsaw.  In either case, this Weekly Trading System has proven to be very profitable over the past few years.

ISCO

Another pick from my Biotechnology Basket, ISCO is a perfect example of my Weekends Only Trading System.

ISCO Weekly Trend Model

International Stem Cell Corporation
(OTCBB:ISCO)

International Stem Cell Corporation (OTCBB:ISCO) develops a powerful new stem cell technology called “parthenogenesis” that promises to significantly advance the field of regenerative medicine by addressing the significant problem of immune-rejection. Parthenogenesis utilizes unfertilized human eggs to create “parthenogenetic” stem cells (hpSC) that can be “immune-matched” to millions of persons of differing sexes and racial backgrounds. A relatively small number of hpSC lines could provide sufficient immune-matched cells to cover large parts of the world’s population. ISCO plans to create a bank of these valuable hpSC lines (UniStemCell™) to serve all populations across the world.

Human parthenogenetic stem cells have great therapeutic potential, yet do not require viable human embryos, thus avoiding ethical issues. ISCO’s scientists are focused on using hpSC to treat severe diseases of the eye, the nervous system and the liver where cell therapy has been proven clinically yet is limited by the availability of safe immune-matched human cells.

International Stem Cell Corporation Begins Its Second Pre-Clinical Phase of Testing Retinal Pigment Epithelium (RPE) Derived from Human Parthenogenetic Stem Cells for Treatment of Retinal Diseases

          ---March 18, 2010


A

GOOG

GOOG Daily Trend Model

CGEN

This past weekend I sent out a Biotechnology Basket consisting of eight smaller capitalization biotechnology stocks poised for stunning growth over the coming years.  Of those eight names, three are core positions.  Compugen is one of these core holdings.

CGEN Weekly Trend Model

"George Gilder and Louis Navellier both have strong buys on this one and after a little R&D this weekend, so do I.  Israeli therapeutic and diagnostic biomarker company, state-of-the-art computer based discovery platforms for analyzing RNA and DNA, the building blocks of life.  Collaborations: Pfizer, Merck, Bayer, Medarex, Roche, Teva, Siemens and others. $140M market cap a fraction of what this company (and stock) will be worth in the years ahead.  You wanted to buy Genentech in 1980. Here is your chance."

---Weekend Update, Sunday March 21, 2010

Compugen Announces Discovery Platform to Predict Cell Penetrating Peptides for Drug Delivery

Press Release Source: Compugen Ltd. On Tuesday March 16, 2010, 7:00 am EDT 

TEL AVIV, Israel--(BUSINESS WIRE)--Compugen Ltd. (NASDAQ: CGEN) announced today the development and validation of its Intracellular Drug Delivery (IDD) discovery platform for identification of cell penetrating peptides. Compugen also announced that as part of the validation process for the new platform, more than twenty novel peptides, predicted and selected in silico, demonstrated the predicted cell penetrating properties in initial experimental validation studies.

CGEN added yesterday in Global Growth Letter. Buy below 4.78. 

"Israel's Compugen (CGEN) is an innovative drug discovery company that uses its expertise in computer sciences and molecular biology to predict molecular behavior and discover potential therapies and diagnostic biomarkers. The company then licenses those discoveries, which are focused primarily in the areas of cancer, cardiovascular disease and immune disorders, to other drug firms for further development in return for milestone payments and future royalties. In a nutshell, CGEN's high-tech gear and genius scientists figure out the best potential cures, then someone else does all the work while Compugen shares in the profits! Compugen has formed licensing and collaboration partnerships with some of the biggest names in pharma including Biosite, Medarex, Ortho-Clinical Diagnostics and Roche, proving that it certainly knows its stuff.

"On Tuesday, the company announced the discovery of a potential treatment of autoimmune disorders called CGEN-15001. This has big potential for the company, with the potential for breakthrough profits. The stock is a great buy but is also thinly traded like PVD, so I must insist that you only place a limit order within 25 cents of the previous day's closing price. Again, under no circumstances do I want you to place a market order, since you could inadvertently send the stock soaring and hurt yourself and other investors."

So what is special about Compugen's announcement today?

"Compugen's predictive discovery of the parent protein in a field that has been systematically picked over by pharma giants is in and of itself noteworthy. The subsequent predictive discovery of CGEN-15001, a novel soluble recombinant fusion protein corresponding to the extracellular region of the Compugen discovered parent protein, and the results of the in vivo testing conducted by Professor Stephen Miller of Northwestern University speak for themselves.

"Equally important, however, is to place today's announcement within the context of previous announcements. The initial product candidates emanating from and intended to validate Compugen's discovery platforms do not seek to extend life expectancies by weeks or months and are not mere enhancements of existing medicines. Rather, we are seeing a growing list of new product candidates, tested by leading authorities, some of which hopefully will provide meaningful solutions for widely prevalent conditions for which medicines are lacking, e.g., pulmonary fibrosis, IBD, retinopathy, epithelial tumors and MS.

"In addition, examine today's announcement together with earlier announcements, and you cannot help but notice the broad applicability of Compugen's science. Compugen's understanding of biological phenomena on the molecular level has implications extending far beyond any single disease or disease category.

"How often can you enter into a conversation with a group of people and take enormous satisfaction in being able to acknowledge your own ignorance? This is what routinely happens to me when I visit Compugen, and I couldn’t be more pleased. If there is to be a new industrial revolution, i.e. a revolution in the pharma industry, involving a shift away from trial and error to predictive discovery, it will require a combination of creativity and brain power beyond my meager means, but which I am privileged to witness and admire at Compugen."

 CPP discovery platform announcement:

If you are brave (!) and want to understand the full implications of Compugen’s cell penetrating peptide (CPP) discovery platform announcement, read: “Cell-penetrating peptides and their therapeutic applications” by Victoria Sebbage.

http://biohorizons.oxfordjournals.org/content/2/1/64.full

“CPPs have demonstrated themselves to be capable of delivering biologically active cargo to the cell interior and the vehicular capabilities of CPPs have already been harnessed for use as laboratory tools. However, it is believed that their true potential lies within the field of therapeutics. Attached to a CPP, therapeutic cargo could be delivered to an intracellular target, thus overcoming the entry restrictions set by the plasma membrane. Since the discovery of Tat, the number of known peptides with cell-penetrating capabilities has grown and in 2003, the first CPP-based drug reached phase II clinical trials.”

"A likely scenario: Company X comes to Compugen and says “we have a biologically proven therapeutic, but we can’t get past the cell membrane, can you help?” This is one of the reasons the CPP discovery platform, IMO, is a unique and important part of Compugen’s “discovery-on-demand” offerings."

I could have stopped at the Weekly chart and would have made a persuasive case for being LONG this stock and company.  But the underlying story here is immense in implications for the future of diagnostic and therapeutic medicine.  I've included the above links in an attempt to tell CGEN's story, or at a minimum, provide some starting points whereby you can familiarize yourself with the science and opportunity here.   The stock is up about 3% from Monday's open, which is inconsequential in relation to the potential gains over the next few years.


A

On Compasses and Trend Models

Compass:  An instrument for determining direction

Trend Model: A compass for determining market direction

DJIA Monthly

DJIA Weekly

DJIA Daily

This is not a perfect methodology, but it is better then nothing, in fact, it is better then just about anything else.    I think I can make it better with daily/weekly observations, with periodic analysis and with the addition of confirming indicators like the Vortex at the bottom of these charts.  

The issue is whether you want to get onto a trend before it starts, just after it starts, or in the middle and/or end of it?  This technique is designed to identify trends just after they have begun and conversely, just after they end.  

Rather then argue the merits here, I will let these charts speak for themselves.  

Same rule applies to my trading;

No arguments with trends.

Instead, strict adherence.

NanoViricides - charts update

NNVC 390 minute bars

NNVC Daily bars

NNVC Weekly bars

Follow-through...or not

DJIA 240 min

Oh, Canada?

A comment to my Junk Bonds for Dummies post suggested I take a look at Canadian Royalty Trusts as a proxy or alternative for high yield junk bonds.

American hockey fans know to first consider Canadian royalty trusts, before trying out the thin ice of junk bonds at a time balance sheets of most financials, muni's and sovereigns are fraudulent. Yield is still excellent (despite run-up since 03/09)

I've been looking at time today and wanted to share my general findings.  I'll do it with one of the better yielding ones, AAV, with a 5 year annual average dividend yield of 14.4%.  Over the past six months, it's Trend Model looks like this:

AAV Daily Trend Model

Sell 10/26  @ 6.81 = +9.5%

Buy 12/14 @ 6.16 = +9.9%

Sell 1/20 @ 6.77   = -2.4%

Buy 2/11 @ 6.93  = +7.2%

Sell 3/8 @ 7.43    = +6.1%

Total Return  = +30.3%

In other words, trading in and out of these as per the trend models seems superior in every way to buy and holding them for the yield.  

Thank you Henrik Zetterberg:

Vancouver, British Columbia -- What are the odds of scoring a tying goal and winning goal with a fraction of a second left on two consecutive nights? 

"Probably not very good," said Henrik Zetterberg, whose backhander with .3 seconds left in overtime Saturday beat Roberto Luongo and gave the Red Wings a critical 4-3 victory over the Canucks.

No Man's Land

No man's land is a term for land that is not occupied or is under dispute between parties that will not occupy it because of fear or uncertainty.

From Wikipedia

 

IWM 240m

IWM Daily

The IWM (Russell 2000 ETF) charts above pretty much sum up the current state of market direction, still Long, but barely so.  Weakness early this week will likely trigger a host of Trend Reversals from Long to Short, while anything but weakness will keep the current Long Trends in place.  There are no high probability trades here, not yet.

Junk Bonds for Dummies

A freind of mine like to trade junk bonds, specifically JNK.

The investment seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Capital High Yield Very Liquid index. The fund normally invests at least 80% of total assets in securities that comprise its benchmark index. It may also invest its other assets in securities not included in its benchmark index.

The problem with JNK and any yield sensitive instrument is that when yields go up, the capital value goes down and when the economy goes south, well, in 2007-2008 JNK's went from the mid-40's to the mid-20's.  That's a heck of a price to pay for a little extra yield.

Enter the JNK Daily Trend Model:

JNK Daily Trend Model

Below are the trades for the past 12 months in a proforma, which includes a capture of half of the monthly dividends, which is an assumption of being in the fund about half of the time.  What neither the table nor the chart above shows is how the model was in cash for most of the 2008 drop from the mid-40's to the mid 20's.  As you should know by now, the model sidesteps all nasty declines with an objective, rule-based, trend-following algorithm.

If you like the high-yield stuff but abhor the risk of higher rates or sinking economies, this model is one way to capture the best of the junk bonds and their generous yields while managing risk by only being Long when rates are dropping and/or JNK is rising in price. 

Up 42% YTD

Going LONG Only

TNA & TZA Daily Trend Models

TNA Daily Trend Model

TZA Daily Trend Model

 Daily Trend Signal BUY = Go Long on close

Exit trade upon Reversal

DJIA short-term

Below is the 5 minute view of the DJIA.  Noteworthy is the Trend SELL signal, the impulsive nature of the decline (compare with previous decline on left side of chart) and the ABC correction over the past few bars.  If the low is taken out impulsively later on today, I expect longer-term Sell Signals on my longer-term models.  Subscribers should be watching their Key Reversal Levels.

DJIA 5 minute

Biotechnology Sector Trend Models

BTK is the AMEX Biotechnology Sector Index and provides a good heads-up view of the health of the Biotechnology Sector.  Below are my Weekly, Daily and 480_minute Trend Models of  BTK.  

BTK Weekly

BTK Daily

BTK 480

I have about thirty biotechnology stocks under review for inclusion in a Basket of Biotech's which I intend to send out this weekend.  After I narrow them down to the most bullish charts and trends, I'll be looking at fundamental stories.  To everyone who has been sending me biotech ideas this week, many thanks for taking the time to bring these stocks to my attention.  Some of these ideas have been compelling, to say the least.

A

Trends beget news?

PALM Daily Trend Model

Palm plunges on woeful sales forecast

WASHINGTON (MarketWatch) -- Palm Inc.'s shares fell sharply in premarket trading Friday after the company posted dramatically smaller losses but offered a lower-than-expected revenue forecast and said smartphones sales to consumers fell short of expectations.

The wireless device maker's stock plunged as much as 18% in premarket trading.

Inventory of Palm's (PALM 4.62, -1.03, -18.23%)  latest smartphones has built up at wireless carriers, and the company expects future sales to be weak until it can clear out the channels.