Rocket Fuel Stocks Continue To Fly

October 13th, 2010 | by Hugo Gullett |

The rocket fuel stock portfolio continues to perform. I expect a nice day tomorrow. SIFY is lagging/consolidating big and DNN is starting to heat now. DNN had a nice breakout mid afternoon crossing 2. I am overweight in DNN and it looks like its up about 6% in the AH. Probably an errant purchase.

I am still 100% long 2x funds. You see I’m committed to doing what I am supposed to do (According to my systems) and its paying off. The minute I fall prey to noise or whatever other bullshit and jump off the plan I will lose. This week alone I could have gotten out on Tuesday. How much has the market gone up since then? Now tomorrow is going to be a classic blow off since GOOG is up in the AH about 9.5%. Couple that with STX and WDC the Nasdaq and tech indexes should have a phenomenal day (I know STX and WDC are Dow stocks – but they are included in many tech etf’s indexes).

I’m not sure what my % gain is on this move since I tried to play the short one time inside of it and have used different positions ranging from the minimum of 50% to 100% long. The process of being long started on 9-10-2010 and its working. I’m expecting a reason to manage this trade at the close tomorrow.

There are a few possibilities on the horizon, I mean after this week’s close and this comes from previous patterns Scenario 1: We have a hefty 1 week pullback. This scenario is almost an automatic buy next Friday.

Scenario 2: A pullback over the course of say 3-4 weeks in small ranges. Tends to be a soft retest of the previous highs or new highs, but rollsover after the new highs. Not the best scenario.

Scenario 3: We Roll higher and get into the “overbought can last a long time” zone. I have some indications that this is what is going to happen. One item with this is that there is ALWAYS 1 weekly candle that takes back roughly 3 weeks worth of trading. After that drop, market tends to stabilize and either retest previous highs before rolling over (this process would probably take us until January) OR we continue to new highs and have a slower roll over process (this process takes us into 2011 beyond January). Remember though don’t

I have to see how we close tomorrow, but its looking like a take some risk off type day, but don’t lose site of where the trend is. Nothing pointing down yet.

Sold HBAN today -3% and replaced with TBT. Sold some PWER (hold it in multiple accts) today at 0%

Current positions: Rocket Fuel Portfolio: AUGT, DNN, SIFY, SSN, CGR, GBG, URZ; STP Nov 11 calls Other accounts: AKS, DNN, DNN, TBT, PWER, CYD 2x NDX, RUT, SPX funds: 100%

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