The Morrisian Indicator

A very important crossover has just occurred on my indicator.  NBR (Neighbors Industries) went up on heave volume.  The new bar established a higher high and higher low even though the price increased by just four cents.  The volume was so heavy though that NBR appears to be readying for a breakout to the upside.  When analyzing the NBR nearterm chart it is clear that this stock is forming a flag pattern and is supported by NBR’s 20 day moving average.  I checked a longer term weekly chart for NBR for 900 periods.  That chart shows the current price for NBR to be supported by its 50 period moving average and clear upside potential to about $14 to $14.50 per share.  This is about where the 38% Fibbonacci line is as well as the 200 period moving average.  I wasted no time inputing an order to my paper trading account to buy 9 October Call options.  I set a limit price of $1.30 per option contract.  If the trade goes through I will look forward to take my first profit on 3 NBR options contracts when the contract price rises to $1.75.  I should mention that this crossover on heavy volume was from -.1 on my chart to .23.  It went almost straight up.

There was another crossover I should discuss, but this crossover was not nearly as exciting.  DNR (Denbury Resources crossed in a shallow way from -.07 to ,03 on onlymoderatley high volume.  On the shortterm chart DNR is caught between the 20 period moving average and the 50 period moving average.  The last bar was much closer to the 20 period moving average than the 50 period moving average.  Its high price touched the 20 period.  Now if only DNA can break above the 20 period moving average that would be a clear signal that DNR is headed higher.  On the long term chart it appears that DNR is struggling to launch off of its 50 period moving average to meet resistance quite a bit away at the 200 period moving average.

The only other news tha I have to report is that OAS moved to the cenerline but not above it and that MT moved from .3 on my indicator to .2.  It will give a signal to buy puts if it moves below the center line especially on heavy volume.  My current position in AMD is at a small loss.  I will monitor it through the end of the week to see if it improves.  If not, in keeping with my 2 week rule I think I will exit the position.

I forgot to mention that I just had another sale of FCX options yesterday.  3 more options sold out at a price of $1.70.  This gives me $70 of profit per option contract.  I put in an order to sell the last 3 options contracts for $2.10.  So long for now!

 

EC Morris

The Morrisian Indicator

I just completed my charting for today.  So far there are no new buy or sell signals.  Of the current positions that I have open, which includes AKS on the short-side, AMD on the long-side and FCX on the short-side I am merely getting confirmation to keep my positions open.  In my last post I think I mentioned that I sold 3 FCX puts for a solid profit of $35 a-piece.  I am looking to sell 3 more for $1.75 a-piece which give me a profit of $70 per option sold.  I think my chance to sell 3 more puts for this price is excellent.  I also have an order in place to sell 3 AKS call options for .55 cents a-piece.  So far AKS is moving in the right direction.

While I have no outright buy or sell signal several stock a showing the potential to give such a signal.  First there is CBG which briefly dipped below the centerline at -.03 and then came back strong to a .23 reading.  Should it dip below the centerline again on high volume and surpass -.03 this could be considered a sell signal and puts should be purchased.  The stock DNR is currently sitting at -.13 on my indicator and pointing upwards to the centerline.  If this goes above the centerline on high volume this is definitely a signal that I should buy calls.  Next MT is holding above the centerline at .3 for 3 days straight.  It is at the lowest its been on my indicator.  I am aticipating a breakthrough below the centerline then I buy puts.  Then we have NBR, which is virtually on the centerline.  It went to .03 above the centerline not it is at -.03 below the centerline.  I am looking for a push above the centerline at more than .03 on heavy volume to buy Calls.  We have OAS which is at -.2 and pointing at the centerline.  It has been on a constant upward drift since I started following it.  If it can get above the centerline on heavy volume it will be time to buy Calls.  Lastly we have TCK which touched the centerline and shot up to .17.  It needs to go below the centerline on heavy volume to signal me to buy Puts.

I just wanted to mention that I am noticing definite growth in my paper trading account since I started this experiment.  I think I started out at about $6,500+ to $6,600+ and now I am noticing my account at $6,900+.  So long for now.

 

EC Morris

The Morrisian Indicator

Well, yesterday I took my first profit in my paper trading account.  FCX went down substantially yesterday and 3 of the options that I bought for $1.05 sold off for $1.40 a-piece.  The number of options that I hold for FCX went from 9 to 6.  I put in an order to sell 3 more options for $1.75.  Also I have 9 AKS put options that I bought for $.40 cents a-piece is starting to show a profit.  I put in an order to sell 3 of these options for $.55.  If this is accomplished my next order will be to sell 3 AKS put options for $.70.  My 6 AMD options are showing a loss but not much of a loss.

I did my charting today and there is no buy or sell signals to report.  I can say however, that NBR is very close to producing a buy signal.  It is now at -.03 on my chart.  Should it break above the centerline especially on strong volume that will be a buy signal.  When one looks at a chart of NBR the stock is clearly acting like it wants to bounce off of its 20 period moving average to the upside.  The only stock I am following that shows a large volume increase is GNW.  While it is not showing a buy signal GNW is very much in an uptrend.  Actually it is in too much of an uptrend.  I do not want to consider getting into GNW until the price recedes and the stock bounces off of its 20 period moving average, which is still below its 50 period moving average.

EC Morris

The Morrisian Indicator

Yesterday in my paper trading account I bought 9 Oct Put options for .40 cents a piece on AKS and 6 October call options for AMD at $1.19 a piece.  When you include FCX I have 3 open positions.  I am about even on FCX but looking to do much better expecially since FCX dropped below its 20 period moving average yesterday and is currently holding barely below it.  Obviously my new positions will take some time to produce results.  They currently show very small losses.

After doing my charting today possible entries to look out for include DNR that is at -.2 on my indicator and is a possible buy if it goes above the center line especially on heavy volume.  Also CBG is looking like a possibility for the purchase of Puts.  It is currently at .2 on my indicator.  I may take a position especially if it drops below the centerline on heavy volume.  Lastly there is NBR, which is showing Bullish tendencies.  It is currently sitting at -.2 on my indicator after briefly breaking through the centerline at a positive .03.  I am waiting for another break above the centerline on high or moderately high volume and above .03 to actually take a position.  The only stocki that had especially high volume on this charting is EXEL but there is no clear buy signal.

Hopefully I will have time to post again tomorrow.

 

EC Morris

 

The Morrisian Indicator

I was hoping to write for this blog more than once a week, but here I am, about a week after my last post.  At this time I have at least a couple of things of importance to report.  First CIE produced quite a reverse signal last Thursday that helped me decide to exit my position on Friday.  I did so with more than a $300 loss.  FCX on the other hand has not produced such a signal and seemed to be headed lower, so I am keeping that position for now.  On Friday I have a new signal of some import.  AKS crossed below the centerline on my indicator on heavy volume.  When you look at the chart for AKS there is every indication that it will go lower still.  AKS clearly broke beneath support of a little more than 5 dollars per share.  The next support level is about 4 dollars per share.  I intend to enter a position in AKS using my paper trading account tomorrow.  I will discuss later exactly what position I took.  I also need to decide whether I should take a long position in CIE.  I must say however that I do not like taking opposite positions in the same sector, which is what I would be doing given that I am short FCX.  I notice that FCX has not yet broken below its 20 period moving average.  I am looking for this to happen to really make a profit on this position that will overcome my loss on CIE.  I do not want to compromise this possibility by going long CIE, at least until there is a better indication that FCX will be turning up as well.

Another interesting development from Friday is that the stock AMD went up for the second straight day on major volume.  The current position for AMD on my indicator is .97, a new high.  When you look at a chart of AMD there is a clear break above the resistance level of about $7.10 to $7.15 per share.  According to FINVIZ AMD is part of the Technology Sector.  When one looks at this sector using XLK as a proxy it is easy to tell that this sector is doing very well and is indeed wanting to bounce off its 20 period moving average short term.  Even though my indicator did not produce a signal as such, it is still very positive to have two back to back days of high volume increases for this stock.  I need to consider getting into a position using AMD tomorrow as well as AKS.  Let me just comment on one other thing.  I notice that the Stock MRO, Marathon Oil produced a buy signal a while back.  It produced a buy signal, but not on impressive volume six days ago.  Perhaps that is why I did not choose to enter the position.  four days ago the stock exceeded all prior highs on my indicator with a position of 3.  I could have entered the position then but failed to.  All I can say for now is that MRO keeps heading up.  Most recently it is at a position of 6 on my indicator  I do not like entering a position so relatively late.  If I had only gotten in when I should have I’d be making a lot of money now in my paper trading account.  That is all for now.  I hope to discuss my decision regarding AKS and MRO tomorrow.

 

EC Morris

The Morrisian Indicator

This is my second attempt to post this weekend.  My first attempt was somehow deleted after I fell asleep.  I just want to say that I spent much of Saturday charting the stocks that I am using with my indicator.  So far no new buy or sell signal have come up.  My short position in FCX was affirmed as the signal line crossed below the center line again as I expected it would.  While CIE maintains itself below the center line it is tending to hover too close to this line rather than making new lows.  When I checked my paper trading account I noted an overall small profit of $81 as FCX is creating a greater profit than the loss for CIE.  If CIE  maintains a losing stance for the rest of this week I am inclined to get rid of it.  On the other hand I am looking to sell at least 3 shares of FCX for a $1.40 which gives me about a 1/3rd profit on those share.  If things work out as I think they might I can then sell 3 more shares of FCX for $1.75 and the last 3 for $2.10.  I would thus get rid of my entire position that I entered into for $945 by getting out of it for $1,575.00.  This is about a $600 profit.

The stock SDRL had heavier than usual volume as it maintained below the center line.  Should the signal line cross above the center line it may be a good idea to buy calls on SDRL since most of those shorting the stock probably got out.

 

EC Morris

The Morrisian Indicator

Ive just done an anylisis of various exchange and sector charts.  These are long-term weekly charts for 900 weekly periods.  Following is the breakdown of those charts.  Of the 4 major exchange charts SPY(The S&P 500), DIA (Dow Jones Industrial Average) & QQQ (The Nasdaq) all have A chart rankings.  Only IWM (The Russell 2000) has a weaker B ranking.  Moving on to the Sector Charts XLY (Consumer Discretionary), XLK (Technology), XLI (Industrial), IYK (Consumer Goods), XLU (Utilities) & XLP (Consumer Staples) all have A rankings.  The sector XLV (Healthcare) has a B ranking.  The sectors XBI (Basic Materials), XLB (Minerals) & IYT (Transportation) has C rankings.  Finally sector XLE (Energy) has an F ranking.

The reason it is important to know the rankings of all of this Index and sector information is to know where it is more helpful to go both long and short the market.  For instance I have put in orders to take trades in my paper traking account to buy puts on both CIE & FCX.  Both of these stock are in the Basic material sector tha has no more than a C ranking.  A close look at the 900 period weekly chart for XLB also  indicates a possible stallout for this sector which had been in an uptrend.  This could easily indicate a reversal of trend and possible excellent profits for my 2 stock picks to short.  The point is I should resist shorting stocks in Sectors showing a clear long-term uptrend such as A or B ranked sectors.  I should also avoid going long in stock that are in downtrending sectors that have F or G rankings.  I can make a rule in my trading plan that takes these things into account.  How about making a rule against going long in a stock that is in a sector or index that is two or more letter grades below a long indication.  Also never go short a stock that is in an index or sector that is two or more letter grades above a short indication.

Buy the way I successfully entered CIE at 50 cents per option with a total of nine options.  I successfully entered my FCX position at $1 per option with a total of 9 options.  In my next post I will discuss the stops that I need to set on these positions.

 

EC Morris

The Morrisian Indicator

Hey, everyone.  I’ve collected 8 days of full data using my indicator.  I’ve worked out where 20 stocks that I follow stand using my indicator & I can give out initial trade suggestions on at least 2 stocks.  First, the stock symbols CIE, which stands for Cobalt International and FCX, which stands for Freeport Mcmoran are both showing signs that they should be shorted by either outright shorting the respective stock or by buying puts.

First let me tell you about each of these stocks.  CIE is essentially a penny stock and the cheapest of the stocks I follow.  The last price for CIE is $1.04 and its options are measured in 50 cent imcrements.  Through my paper trading account I choose to input an order to buy 9 options for no more that .90 cents.  These options do not expire before October giving my trades plenty of time to work out.  In order to purchase them at the price I am requesting the stock must rise first to a point where I can get in at a price that minimizes my risk.  The reason CIE looks so weak on my indicator is simply that the indicator is dropping below the position of a recent heavy volume indicator, which is simply and asterisk below the plot line.  Earlier the indicator went above the centerline and then right below the centerline indicating weakness.  By the way CIE & FCX are both in the basic materials group.  When I look at a long-term chart of the group I find that it has no more than a C ranking and it appears that the group has stalled and may be on a downwards trajectory.  This seems to validate my position in shorting each of these stocks by selling put options.

On my paper trading account I decided to buy 9 Put options at $1.10 a piece expiring in October.  This is because FCX cut through the centerline of my indicator like Butter.  Although it did not do so on especially high volume the fact is that my indicator has been pointing downwards almost since the beginning.  This is clearly a weak stock.  There is clearly one problem here.  The stock is clearly resting on its 20 period moving average, but given the status of other indicators that indicates this stock is weak, I feel confident in predicting a downside to come.  Again I am setting my entry so that it minimizes my risk.

Except for the above two stock most stocks are moderating their downward trends or are trying to reverse trend, but are doing so on extremely weak volume.  This may indicate that the market is weaker than it seems.

I’ll be back with another blog post tommorrow which will deal more with my overall trading plans.

 

EC Morris

 

 

 

The Morrisian Indicator

Well my vacation is over and this is my first blog post since my vacation.  I now have 5 full days of complete data on my indicator and am ready to share the results.  Out of 20 stocks that I am following 14 are above the center line and in every case are trending downward towards the centerline.  Six stocks are below the centerline are also trending downward.  Three stocks: CIE, VX & ODP have seen excessively large spikes in volume as defined by my indicator.  Two stocks: CIE & MRO have crossed the centerline in both directions, above and below.  CIE is too cheap to trade right now.  It is essentially a penny stock with its last price at .98 cents per share.  MRO is resting on its 200 day moving average with a bottom tail that indicates the stock may go higher, but the current market environment seems to be down so it is too risky to trade MRO to the upside.  My strategy for this position is to see MRO drop between the 200 day moving average and then run-up to touch that moving average before bouncing off to the downside.  The stock MTW is barely above the centerline, registering in at just .03.  Should this stock drop below the centerline, especially on heavy volume and the price itself goes well below the 20 period moving average it may well be worth buying puts or outright shorting this stock since the price is still well above the 200 period moving average.  In this case one should use the 20 period moving as a possible stop loss when one enters a position.  This is all I have to say for now.  I’ll try to be back tomorrow with more information and explanation as to how I intend to play this market.

 

EC Morris