Another pretty uneventful day. As of yet the markets still look very strong. The S&P 500 is trading very close to its January high as opposed to the Nasdaq 100 that is already printing new highs for the year. It looks like the markets need a breather here. I would expect an orderly consolidation. A huge sell-off seems very unlikely as the vast majority of stocks still display rather bullish chart patterns. Then the S&P 500 should be able to march higher and print new highs for the year. Time to closely watch how specific stocks digest a possible correction. Strong stocks typically don’t hurt traders. That is, they don’t trap them and pain during a correction should be minimal.

A quick update on my portfolio positions. All the corresponding charts are available on my Public List:

• MMR – McMoRan Exploration: Bullish consolidation above the 18.00 USD$ level. I still expect that one to provide a great move to the upside any day now. I expect a gap up on good news. Time will tell.
• GMO – General Moly: My original plan was to wait for a consolidation pattern instead of ‘jumping right in’. I obviously changed my mind and initiated a position. I am somewhat surprised the advance of the long white candle was almost completely retraced. Then again I see solid support around the 3.50 level which I consider makes my entry more of a ‘buy at support’ as opposed to ‘jumping right in’. Overall the pattern is extremely bullish and if the stock can manage to close in the 3.60 – 3.70 range those who shorted the stock will most likely have to cover their positions. A close around 3.90 and we are probably off to the races.
• YUII – Yuhe International: Excellent looking bullish ascending triangle. Not much more one could ask for.
• SPU – SkyPeople Fruit Juice: Trading behaviour is somewhat erratic to say the least. The overall pattern looks very bullish though. Extremely tight free float. Less than 4 million shares that is. If someone decides to enter a position with size, the ’sky’s the limit’ as a part of the company name implies. I suggest holding a small position, putting in a stop loss and not be too concerned about the daily noise.
• MRZ.V – Mirasol Resources: The stock’s potential is absolutely compelling. Right now the momentum is somehow lost. But volume is drying up and I don’t see anything I would consider extreme selling pressure. Price is king though and I’d like to see a move to the upside materializing pretty soon.
• MXI.V – Merrex Gold: The stock has outstanding potential. Almost all West African Gold Mining Stocks I watch are doing pretty well. But MXI.V has turned out to be a losing trade. The only thing one can do is to cut one’s losses short. This trade will serve as a great reminder to put more emphasis on being disciplined going forward. My plan is to exit any trade once a predefined maximum percentage loss is reached. The percentage will depend on the stock and its pattern. I have applied this rule to my overall portfolio in the past. A draw down of 30% is the ultimate signal to go to cash and take a break. It is a clear sign something is wrong and things need to be reassessed. For single stocks the maximum loss should be less than 30%. In any case, a loss greater than 30% should be avoided at all cost. This goes to show traders have to be willing to constantly improve, adapt and apply necessary changes in order to improve their performance.