Update on GOOG

How to view the entire chart:


1. Try clicking on the name of the most recent article in the column on the right. This will remove the "Archives" list.
2. Try right click on the chart itself and open it on a separate window.


I am sorry that I cannot always make the chart small enough to fit neatly on the left column. I want you to be able to see the details I want to point out.


I Hope this helps,


Juan

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Today GOOG tested and failed to cross the newly formed resistance line (see chart below). Other bearish signals include the engolphing candlestick pattern (open above previous day high and close below previous day low), several doji lines and a failure to break through the top Bollinger bands. The oscillators (MACD and Stochastics) have given mild sell signals while the volume is practically dried out.


The volume reduction is typical of what one expects in a triangle formation, which happens to be my top Elliott wave count for the current correction that started in January early this year. The triangle is described in Elliott wave parlance as a corrective pattern with a series of 5 waves labelled ABCDE.

If this count is correct, wave E of the series has just started and it should take the stock back to $380 or thereabouts. Once wave E is completed, one should expect the correction to be over.
In my experience, triangles are the most deceiving of Elliott patterns, and they are only truly recognized when wave E is completed. More often than not, the proposed wave D is merely a countertrend wave leading to new lows, and not to a halfway pullback. Note the the REO (Refined Eliott oscillator has just hooked down, and may cross the slow oscillator line. I have been expecting GOOG to have a failed rally. The movement has not been decisive enough and the lack of volume tells me that the stock is correcting still.
Given the circumstances, about 1.5 hrs before the closing, I sensed that GOOG was losing the momentum acquired early in the day and the 60 min chart was quite bearish. At the time the candlestick looked like the third daily doji which are indecision patterns. I decided to take profits by closing my long-term calls and opening the same number at a higher strike price. This accomplishes 2 things: While allowing me to stay in the trade for a possible reversal (which I am expecting), leaved the door open for Vega and Delta gains.
Here is the trade after today's move:

Here is the record from optionsXPress:

Note the risk graph below. Should the stock continue to rally strongly, my position will not be completely lost. In fact if GOOG goes above $500/share, I may continue to accumulate profits. Sure, I would not participate as much as if I had left the current position unchanged. BUT an experience trader does not worry about potential gains as much as he worries about the risks.

Finally, notice how volatility is still low with GOOG. Perhaps low volume show the same story. Once wave E is completed, I may by back some of the short calls, to take advantage of the explosive moves that follow triangles (if this is indeed a triangle).

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The updated trade of GOOG is in 2 formats in the shared folder. To download my shared folder follow the instructions below.

I am giving you access to a Platinum folder were I have placed all current trades and some of the trades I have done in the past. I intend to build from here. ALL trades are covered real time. That is, all these trades were entered at the time of publication or shortly before. Some of them are now closed, some are still active.

These are the instructions:
First, you need to be in version 4.1 of Platinum. At login, you can change from 4.0 to 4.1
From the Site Map go to the last block on the first column. It is red and labelled "Folder-Share Tools",
The second to last item in this block is a hypertext: "Share Transfer". Click on that text.
This action will bring you to a page requesting you to enter a share Transfer key.
Here is the key to enter:

a74f4e6096cd9a184b3e9e532d23b731

After entering the key, click "TRANSFER".

The Share Name will appear as JuanISar Share 1, and the folder transferred will be "SOTD". select that folder and click "GO" to transfer the checked item to your Platinum. The Folder and its contents should appear on your Site Map.

Please give me some feedback here or privately if you prefer to my e-mail (PaperProfit1@mac.com). I really need to know if this is worthwhile for you or not.