A couple months ago, Tom Bulkowski, the author of Getting Started in Chart Patterns, sent me a copy of his book to review.

I've finished reading the book cover to cover, and overall it's a great book for any trader's personal library. The problem with a lot of technical analysis books is that they provide generic information that can be easily be found at sites like StockCharts.com or Investopedia. However, Tom's approach is unique in that he provides case studies of chart setups.

His book is a very thorough compilation of stock chart patterns including the common patterns like ascending triangles and head and shoulders. Again, what is very unique about his book is that he walks you through all the steps. First, he shows you how to identify the setup, and then he provides detailed strategies on how to trade the patterns, including stop-loss prices and sell targets.

He is very realistic in his charts, and even has statistics on how often chart patterns are successful or busted. He even has avg percent gains listed for every pattern. This book is a great buy for those who are getting started in technical trading, and for only around $12 at Amazon, it's well worth it!

My roommate Colleen mentioned that drug companies are looking at the CB1 receptor, aka the cannabinoid (think marijuana) receptor to help develop a drug that will curb appetite and therefore treat obesity-releated disorders.

Think about it like this. When people smoke marjiuana, they get a case of the "munchies" because the THC stimulates cannabinoid receptors, which somehow activate a pathway that upregulates hunger and taste. There has been some research done on mice that shows that blocking these receptors or removing them can actually decrease appetite (caution: I haven't read the research so I don't know how valid it is). Even in the absence of marijuana or THC, the body produces endogenous transmitters that stimulate the CB1 receptor.

SNY, Sanofi Aventis, is currently working on a drug called Acomplia (rimonabant) that blocks these CB1 receptors, causing a loss in appetite. If this drug is approved, it will be a huge billion-dollar blockbuster drug for SNY simply because of how severe of a problem obesity is in America. Americans are obsessed with slimming down without having to deal with diet or exercise. The drug's approval is currently in the air right now, with the FDA requiring that Acomplia meet additional conditions, and the management staying tight-lipped. There's supposed to be some more info released next week about the approval status, so keep it on your watchlist.

It's a bad idea to gamble on FDA rulings unless if you're a pro or if you're 'well-informed', but I just wanted to bring up this stock because I really like the chart technical analysis on SNY. It has a hot uptrend that is well-supported, and just from looking at the chart alone, it looks good as a buy and hold investment. I'm not sure how much Acomplia has already been priced into the stock, so do own your research on this one, because I honestly only spent 10 minutes on this.

DISCLAIMER: I do not have any positions in SNY.

I'm surprised how well Apple's iTunes service is prospering. I used iTunes a couple times but I just feel that people aren't getting their money's worth. AllofMp3.com, a Russian mp3 filesharing network, offer music downloads for about $.10/song with an interace just as nice as that of AAPL's. I'm not sure how legal AllofMp3's operation is, but it seems like theres a big controversy over it. Nevertheless, as more and more people discover this service, how will AAPL's iTunes service stay competitive? Something to think about.

I am focusing on only the Tysabri aspects of the ELN conference call. 

AAB-001 has moved from Phase 1 to Phase 2 clinical trials. This was new information for me (I’ve been out of the loop for awhile). This is an Alzheimer’s drug which has potential to be a bigger blockbuster than Tysabri because it has a much larger market. This drug is far from approval, but it’s good to keep this in mind if you are planning on investing in ELN longterm.

The FDA is expected to rule on the Tysabri sBLA, which was granted priority review, by the end of March. There will be a FDA commitee on March 7 which will discuss Tysabri risks, PML, efficacy, risk management, and possible remarketing plans. Patients will be able to speak at this committee, which is great news for shareholders because patients are very passionate about Tysabri’s return. In fact, I get a lot of encouraging emails from MS patients who have read my analysis of the Tysabri situation.

Their current financial model is based on the assumption that Tysabri will be remarketed in Q2 2006. AND, the model includes the assumption that Tysabri is expected to launch in the EU in the 2nd half of 2006!! This is HUGE news for me because Tysabri has never been available in the EU, which will greatly increase the number of patients who can access the drug.

BIIB, Biogen Idec, has been continuing to ramp up production capacity as well! There has also been advancement in the high-titer process, which I discussed a few months ago.

A BLA for Tysabri’s treatment of crohns disease will be filed immediately if the FDA rules favorably on Tysabri’s sBLA for MS. This will also increase the market for Tysabri.

My speculation on Tysabri still stands. I believe that the reviews will show that PML cases only arise from patients who are immunosuppressed, and that risk for PML can be controlled by monitoring patient’s immune system activty.

Don’t forget to check out my past analysis of Tysabri and ELN.

DISCLAIMER: If you haven’t noticed yet, I’m long on ELN.

We trade ownership of companies on the NYSE, NASDAQ, and AMEX. We trade oil and metal on the NYMEX. We trade currencies on the FOREX. We can even bet on Hollywood movies on the Hollywood Stock Exchange. Awhile ago, a reader even pointed out a fake online market where people could trade futures on terrorism, betting on where acts of terrorism would happen next.

Enron invented the idea of trading energy, and their traders made tons of money moving energy around the country (though they manipulated the markets). Even though Enron's trading was crooked, I really wonder, what else can we trade? Or maybe it's possible to improve upon an existing market? For instance, the Nasdaq revolutionized the way we trade stocks by eliminating the need for an actual physical location for traders to meet.

Anyway, whenever I'm bored, I try to think of new ideas on how to make money. One of my hopes is to create an open, online, free market, where people can come trade some type of commodity (I can't come up with any good idea yet). All the easy things to trade, like stocks, oil, and gold, are already being traded on well established markets. I just hope to think up some crazy idea that will work. Maybe one day you'll hear about the BTX, The Bull Trader Exchange, where traders from all over the world come to trade _________.

WikiTravel is an amazing idea. I wish I had thought of this. Basically, anyone on the Internet can come to this website and write travel guides for places around the world. People will participate in building guides because a lot of people are really into traveling. A lot of people will use this resource because of how helpful it is.

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I have finally witnessed how easy it is to make money in a bull market and how easy it is to lose it in a bear market.

I only started tracking the markets just a few months ago in July, which happened to be in the midst of a roaring bull market. At that time, I woke up every morning to a watchlist bathed in green, which gave me a deceiving impression of making money in stocks. It looked so easy to me at that time.

Then in October, with the markets in a meltdown, I got a bitter taste of the bear market. It is nearly impossible to make money (going long) in a bear market.

An interesting indicator of market strength is actually the amount of traffic that comes into my blog. During the October meltdown, I saw the lowest web-traffic to my site ever. After the reversal, web-traffic to my site gradually increased again as "bull traders" returned to their computers.

So yeah, I guess the lesson to take away from this is to always track the indices and overall markets before initiating trades.

“Remember there are no shortcuts. Quick buck artists come and go with every bull market but the steady players make it through the bear markets.” - Lou from Wall Street.

It seems like everyone is mad that big oil companies like XOM, BP, and CVX have been reaping record profits this quarter because of high crude prices, but I don't think it makes sense to blame the oil companies.

"Big oil behemoths are making out like bandits, while the average American family is getting killed by high gas prices, and soon-to-be record heating oil prices," Sen. Chuck Schumer, D-N.Y., said in a statement."

So… just because this company is making a ton of money, you expect them give free handouts to help subsidize energy costs for low-income families? That would be nice, but it really doesn't make sense. Did Exxon beg for free handouts 3 years ago when crude was $30/barrel? If Exxon were a state-run oil company like China's CNOOC, then yeah, I would expect them to give back to the people, but this obviously isn't the case. Exxon is NOT guilty of anything!

Of course, I hate high oil prices too… It costs me $40 to fill up my tank, and it's slowing down the economy, but it would make more sense to increase funding for alternative energy research than to whine about a successful company.

However, a reasonable point made against XOM is that they have been holding off on building refineries in order to artificially decrease supply.

Court said oil companies have strategically refrained from building new domestic gasoline refineries so that tight supplies would push up prices. "Now Exxon needs to invest that money in making more gasoline," he said. "Neither Exxon nor the industry has opened a new refinery since 1976 because the companies know keeping refined supply low is a recipe for huge profits."

Assuming this argument is valid, there still isn't much you can say. Exxon is a business, and the purpose of a business is to make money, not to make people happy.

Like it or not, that's capitalism.

I fell asleep in Bechtel Lounge today and when I woke up, I overheard some professors talking about Web 2.0. They were talking about how blogs would eventually come to compete with the corporate media (NY Times, c|net). I looked up the Web 2.0 concept and I really think everyone should read it.

Bloglines is one of the hottest trends on the web right now. Newspapers and online news sites like news.yahoo.com simply have way too much content. In my case, the only section I actually read in the newspaper is the front page and the comics. Bloglines is the newspaper of the future. I can quickly and conveniently scroll through new stories, and only topics that interests me is delivered to my account. In this case, I have sites like KnightTrader for market news, HardOCP for tech news, Reuters for real world news, etc.  It’s like having a personalized newspaper availible for me 24/7.

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I really question the existance of analysts. It's not like you can succeed at investing simply by arbitrarily buying stocks that analysts think are a strong buy. For instance, did you know that those idiots on wallstreet maintained buy recommendations on Enron up until the company collapsed? What about the 2001 tech bubble? I didn't take the time to look this up, but I wouldn't be surprised if tons of analysts set astronomically high price targets on stocks like CMGI, JNPR, BRCM, right before the dot com collapse.

So yeah, what the f*ck is the purpose of analysts on wall street? Why do their downgrades and upgrades have so much bearing on a stock price?

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AAPL hit a homerun with their recent release of the iPod nano. I've never liked iPods until now. The old ones were too chunky, white (too girly looking), and hard-drive based (too easy to break). The iPod minis looked like cheap toys, and the iPod shuffle is just retarded!!

The iPod nano is black (expensive looking), flash memory based (no moving parts, harder to break), and thin. It's so awesome that I just ordered a black 4gig nano. Be sure to buy through apple.com/education for a $20 discount if you're in college.

The singlemost expensive component in the nano is the flash memory. CANSLIM Investing has a great writeup on investing in Samsung, the company that supplies memory for the 4gb nanos. Arstechnica, a technology website, has found that Toshiba supplies flash memory for the 2gb nanos.

While Apple made a home run with the nano, they absolutely struck out on their joint venture with Motorola (MOT) on the Motorola iTunes ROKR. I was really surprised by that crappy design. How did the makers of the elegant RAZR and the sleek iPod end up designing something so nasty?!?

This article from Business 2.0 speculates that Google may be getting ready to launch GoogleNet, a nationwide WiFi service. This would be really, realy, big. Plus, the article is pretty convincing too.

It would obviously cost a ton of money to bring about nationwide WiFi coverage, but just think of how lucrative such a venture would be. Even if Google charged for such a service, I would definitely pay for it because of how cool it is.

AND, considering the recent emergence of Google Talk and the popularity of Skype (an awesome VoIP telephony service), imagine how hard celluar and land-line telecom companies could get hurt. If there really existed a nationwide WiFi service, that means I could throw away my cell phone and just walk around calling people for FREE with a VoIP compatible portable phone connected to GoogleNet. Seriously, the future of telecom lies in VoIP and WiFi. I wouldn't be surprised if VoIP mobile phones became the norm in 10 years.

The article also mentions that Google would be able to track GoogleNet users by their location. This adds a new dimension to ad-targeting. For instance, if I'm walking around Berkeley and I get hungry, I can just call up Google on my VoIP phone (Google has a beta voice search program in development) and ask for food places, and Google would be able to couple my geographical location with my search query to send me advertisements from nearby restuarants.

Just think how much advertisers would pay Google for such precise ad-targeting.

I'm amazed that Google continues to innovate and grow so rapidly. In a few months, the $280 pricetag on Google stock is probably going to look dirt cheap.

on august 8th, i made a post about ELN lifting off for no apparent reason. the chart is reposted again on the left. i was confused at the time, because no news had come out, yet someone was desparately buying/covering in huge blocks.  

10 hours later, though, ELN and BIIB announced an official tysabri update and the stock jumped 15% when the markets opened.

looking back, its OBVIOUS someone with deep pockets knew that ELN and BIIB would be holding a conference call on august 9th before the open.

who knew? who was behind those suspicious transactions? isn't this kind of trading illegal? woudn't it be pretty easy for the SEC or the NASD to pinpoint the person or institution behind those trades? why haven't they done anything about this?

this is just another example of how heavily the odds are stacked against us on the market. wall street crooks are bribing doctors for information, trading on insider information, and theyre getting away with it! instead of going after smalltimers like martha stewart, the SEC needs to go after the real criminals.

the good thing, though, is that i'm learning to play the game now. for instance, from now on, if i ever see ELN's stock move like the way it did on august 8th, i'm going to immediately buy everything in sight without hesitation.

-JW

on friday, i jumped back into ELN with a purely speculative position because of some new information that i picked up. i came across several posts on the yahoo msg board stating that tysabri patients are known to relapse 6 months after treatment is halted. i verified this information by searching through ThisIsMS, a multiple sclerosis community which is pretty unbiased.

in this article, the author states that: "Previous studies (Phase II) showed that patients who were taken off of Tysabri treatment had relapses begin recurring after about 6 months– though there was no rebound above the level seen in the placebo patients. Therefore, the FDA will theoretically be aware that MS patients in the Tysabri trials before the marketing suspension are reaching the point where they should begin relapsing. As such, there is a sliver of hope that re-dosing of former Tysabri clinical trial patients could begin by early September 2005. To be clear– This is SPECULATION. However, note that it is easier to restart clinical trials then it is to re-introduce the drug to the general market."

this is interesting. the 1808 trials were suspended around february 28th. today is august 6th, a little bit more than 5 months since tysabri was pulled. august 28 will mark 6 months since tysabri infusions were halted.

both elan and biogen made it very clear in the Q2 conference calls that they plan to resume clinical trials for patients who are at high risk. therefore, if the FDA's interest is to put patients first, there is a chance that they will try to resume trials before the august 28th. the reasoning is that the FDA will be criticized if they delay the resumption of trials if patients in the 1808 study relapse since the FDA (according to ThisIsMs) is aware of the 6-month relapse statistic.

of course, like i said, this is highly speculative, but according to elan/biogen, its really just a matter of weeks before trials resume. i'm not sure if trials will just restart all of a sudden, or if eln/biogen will need to submit any formal requests/data before the FDA gives an OK.

i was burned by this stock last week when i was speculating on their Q2 CCs, so i'll be speculating carefully. good luck.

DISCLAIMER: I personally hold long positions in ELN, and this post is purely speculative.

i'm getting tired of rollercoaster biotech stocks, so lately i've been trying to learn about oil. oil is still trading near $60, and i'm going to try to see if theres anyway i can make some money in this sector.

in the long run, what it comes down to is whether oil prices in the coming years will make $60/barrel look expensive or cheap. i have no idea on how to trade futures, so i'll be doing some indepth fundamental research on smallcap oil stocks in the next couple weeks.

in fact, i've spent the last hour checking out a company which specializes in oil exploration. i'm not going to post up the chart until monday's open, however, because i have to see how the stock opens tomorrow to get a better idea of the risk/benefit assessment before i establish a position. in the meantime, you can check out ABLE and GEOI which are popular oil stocks for short-term traders. also, i found FickleTrader's chart on XOM to be pretty interesting as well.

anyway, since i don't understand oil at all, i've been reading this website which talks about how oil drilling works. i also read about how gas prices work, since i've always been curious. its a pretty useful read and theres a lot of other articles to read for fun on the website.

awhile ago, i heard that toyota is going to start making hybrid camrys. this is going to be big for toyota and even bigger for companies who are contracted to provide batteries and hybrid components for the car.

i really think that toyota is going to sell a ton of hybrid camrys. judging by the number of toyota prius cars that are around, its obvious that people like hybrid cars. as long as the hybrid camry can be competitively priced below $25K, i really think that they'll be a hit.

who will be supplying the major hybrid components for the camry? i couldnt find a clear and precise answer online, but the battery makers that came up were matsushita and sanyo. i also read that ENER is a big player in hybrid technology. they have a history of financial shortcomings, but businessweek's take on ENER seems positive. i'll be watching ENER more closely from now on.

any other ideas on how to cash in on hybrid technology?

UPDATE (6:51am PST): so, basically kelly martin tells us that tysabri will be back…. and that 1808 trials could restart at any time… and the stock drops?

UPDATE (12:44am PST): i'm disappointed with the Q2 financials. prialt sales seem to be lagging. but, its not really going to affect shareprices. everyone expected eln to post an increased loss this quarter b/c of tysabri. also, no one really expects much out of prialt anyway.

one thing however, that i want to mention, thats relevant to share price. i was glad to see that shane cooke reiterated that elan is still on track to achieve breakeven EBITDA by the end of 2005. at the moment, the euro exchanges are both trading sideways, both with low volume, so it appears that shareholders are hanging on, waiting to hear from kelly martin in the conf call.

good thing though, i was reading through the NCB and Davy's Stockbrokers reports on yahoo (courtesy of 'paddystocks') and their takes on the Q2 financials are way more upbeat than mine.
theres a good chance i'll be up all night studying, so i'll to recap the confcall before the market opens.

—————–

i didnt realize that ELN won't be releasing Q2 financials until irish time, so check back 11:30pst tonight for an update. however, the main event will be the conference call which takes place 8:30am EST. the stock had wild swings today, and i managed to add to my positions, but i have to admit, i'm pretty nervous about tomorrow. oh well, i've placed my bets on tysabri, and i'm hoping for the best.

by the way, tomorrow (july 28), the new england journal of medicine will be officially publishing in print its research/editorial on Tysabri. i dont really understand the scientific material in the research papers, but if you do, you might want to check it out. im curious why BIIB and ELN held their conference calls 1 day apart this quarter…

UPDATE: look at the July 28th publication of the NEJM. it was just released 10 min ago on their site. look for the tysabri articles.

another point that i forgot to mention in yesterdays biogen call is that Elan and Wyeth may be looking to expand the drug manufacturing facility in Athlone. elan and wyeth have been in the news for their alzheimer's drug AAB-001 which just recently entered phase2 FDA trials, so we should expect to hear some developments on that as well.

finally, ever since Q1, ELN has been in the news for its nanocrystal deals with other pharma companies. i expect to hear updates on that area as well, but of course, whats ultimately going to move ELN's stock tomorrow is tysabri progress and updates from shane cooke on their break-even EBITDA guidance.

i'm listening to the biogen Q2 call right now. there are no material developments, but the executives are very upbeat about the reviews. jim mullen, the CEO, said that it is too early to make any conclusions, but that the MS portion of the review is almost complete. i assume that the crohns patient reviews are the holdup. he has reiterated that reviews should be done "by the end of summer." jim mullen also stated that studies on PML have been very fruitful and that onset of PML can be detected and managed. the important inference to make here is that there have been no new confirmed PML cases!

also, biogenidec is continuing to fund development on the high titer process for tysabri, which allows higher production capacity for the drug. according to the financial officer, peter, "we are assuming that tysabri is only temporarily suspended".

the KEY point that one of the executives brought up is the restart of tysabri trials. he stated that in the coming weeks, biogen/elan could be in talks with the FDA and EU regulatory agencies to restart tysabri trials for MS patients. he is most likely referring to a restart of the tysabri 1808 ms trials.

i continue to be very upbeat on the future of tysabri, and i'm looking forward to ELN's call on thursday.

Significant Q/A Session Information
-Someone asked biogen to confirm that there are 3 cases of PML, but biogen refused to comment because it is too early to make conclusions from the safety evaluations. Instead, he reiterated that Biogen intends to push the FDA and EU regulatory agency to allow MS Tysabri trials to restart.
-The expenses associated with developing the high-titer process will create some additional charges in Q3, but they will be "continuing to produce Tysabri throughout the year."
-Tysabri's sales team has been temporarily reassigned to pitch Avonex, but the sales force for Tysabri is still availible for the relaunch of Tysabri.
-The executives made fun of the Boston Globe and WSJ during the call (they reported a 4th and 5th 'case' of PML last month).
-Clinical trials might restart before commerical relaunch of Tysabri. Resuming clinical trials is more simple FDA-wise than a commercial relaunch because of potential labeling issues.
-FINALLY!! THE END OF SUMMER HAS BEEN DEFINED! The exec during the Q/A threw out the date September 21st as their definition of the "end of summer."
-"Have you guys sent the data to the FDA necessary to take the hold off trials" *silence* "No." *next question*.

-JW

in 2004, if i had taken 100K and stashed it away in HANS, i would be a young millionaire right now. in the time span of about 1.5 year, the price of HANS stock skyrocketed from $10 to almost $100. however, the reason im talking about their stock today is to point out that the price of their stock is increasing at a an unsustainable parabolic rate.

parabolic stocks are pretty rare, especially when they can sustain themselves for years. nevertheless, im sure everyone has seen a parabolic stock before. you can see a ton of them in fact, if you look up all the tech companies that got hit in ~2000 when the dotcom bubble burst. i'm not going to bother posting graphs of companies hit during the dotcom bubble though, because those examples are simply TOO extreme.

instead, i invite you to look at this graph of EBAY in late 2004 when the stock exhibited parabolic growth. you can see the 4 consolidation bases referenced to in this site. briefly after the 4th base, EBAY announced 2005 growth projections that were not in line with the company's previous explosive expansion.

investors got nervous and the $60 pricetag on the stock became unsustainable because of EBAY's belief that their continued growth would be questionable in 2005. whats funny is that immediately after the news, a lot of analysts STILL reiterated their $65 target price for EBAY, trapping a lot of unsuspecting retail investors in the impending crash. thanks a lot, analysts. (what exactly are they paid to do?)

now back to hansen's… hansen's is a great company. i really like their drinks and i like how they've diversified and expanded their product pipeline. im not saying that HANS is going to suddenly crash, because i'm not qualified to make such bold statements (dont take investment advice from a college kid). also, i can't really imagine HANS tumbling down that drastically since the company isn't over-hyped by the media the same way that techs were hyped in 2000. perhaps a noticable pullback followed by a prolonged period of consolidation? i dunno, but i'd definitely like your thoughts on what you think will happen.

what i want you to take away from this article is that stocks cannot continue to grow parabolically forever unless if they can continue to deliver exponentially better quarterly results every single quarter.

-JW

My last post was regarding the efficacy of the Starbuck's franchise. John Tait, aka Fickle Trader, was kind enough to post a chart for me under the comments column of my post. While analyzing this chart, my fellow writer, jwu, suggested the possibliity of Elliot Waves in the SBUX trend.

I did some research on the idea of Elliot Waves and this is what I came with. Essentially, this wave theory states that the market, as well as stocks, move in a wave-like pattern. There are two phases, where it either goes up or down in an alternating pattern. Each phase consists of 5 seperate "waves" as it moves to its eventual low/high. For more information regarding this subject, go here.

Although not as well-versed in the theory as many people out there, I believe there is an aparent wave trend in the SBUX trend line. Following the chart within the last year, it seems that there have already been 7 seperate phases, 4 of them downwards (blue) and 3 of them upwards (red). From what I can tell, it seems SBUX is following an upward trend, currently on the 3rd wave of the phase. If I'm correct, look for this stock to hit an eventual high within the next month.

If anyone has further suggestions or corrections regarding the subject, feel free to leave a comment or email me. That's all for now. Good luck and happy trading.

-KW