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Pregame the Harvest Moon with a Little History 9.27.2012

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Below is a series of charts that display the trading day on or before the harvest moon. The 2008 harvest moon indicated a reversal in a channel, as it came to test the lower end, bounce, and then set up for a perfect sell into a 30% decline in the S&P 500 E-mini future. The 2009 harvest moon confirmed a textbook trend-line; which from the anchor point lead to many higher lows. In 2010, it was a strong confirmation candle, overtaking the prior day’s high, into a strong trending market with little pullback. And finally the last harvest moon, in 2011, was in a consolidation pattern bottom, during the USA debt downgrade fiasco last summer, but did serve a significant low, both in line with others and at horizontal support, reversing price up and throwing it 6% higher within a few days.

It is obvious that this is a significant event in technical analysis, but it is vital to be aware with current patterns prevailing in the chart.

E-mail the author with any comments, questions, or any inquiry

mark@keeneonthemarket.com



HarvestFinal

 

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Morning Rage 9.27.2012

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Continue to watch developments in Europe and expect violent protests to continue while unemployment remains unstable in Southern European countries. For now, markets are showing a positive consensus on data with all US indices futures up around the 0.40% mark. Crude oil futures are up 0.89 and metals futures are positive. Gold futures gained 4.60, silver gained 0.2, and platinum gained 10.10 points.

Nike (NKE) and RIM (RIMM) will be releasing earnings reports before the market opens this morning. I expect RIMM to have a negative earnings report, as the company reports it will continue to show signs of weakness in the near future, but they may bounce back on any positive subscriber gains or hopes that the BlackBerry 10 could become a top phone in the market. Analysts are expecting that Nikes sales grew by $35 million, but that profit will decline $0.24 a share to $1.12.

Keep track of the associate daily trade pick on the blog.

Alex Kalish has a master’s degree in economics from Suffolk U.

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Associate Option Battle 9.26.2012

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Reward: $4.85 if the stock reaches or goes over 75

Break-even: $70.15

Why I like this: This stock has been in a solid bull channel for a year so I don’t mind the poor risk reward ratio. The recent earnings missed its mark, but I believe a change in macro prices may have made Cracker Barrell eat some of it’s cost, which to me is great management. I expect the stock to continue to grow and analysts expect increased earnings and revenue. The 65 – 70 strange is priced at $7.20, a 10% move, and a measured move target of 57.80 – 77.20.

Associate Jim’s Trade

Trade: Buying 65 lots RIMM Sep 28th (Wkly) 7.5-8 Call spread for $0.15

Risk: $15.00 per 1 lot

Reward: $35.00 per 1 lot

Breakeven: $7.65

The stock is up around 14% in the past few days and I think the trend will continue. The measure move target is around $0.90 and historically RIMM moves a lot on earnings. The stock has tested recent lows around $6.20-$6.25 a few times and bounced back. I think the new Blackberry could compete with other smartphones on the market.

Alex Kalish has a masters in Economics from Suffolk U. Email: AlexK@KeeneOnTheMarket.com

James Ramelli B.S. in Finance from UIUC. Email: James@KeeneOnTheMarket.com