Thursday, August 26, 2010

Don't Do Anything Dramatic

Today is just consolidation until tomorrow's numbers - several names I want to get long into a bounce ($SFSF, $MSCC, $RYL, $RAX) and a few more.

More on this later.


Monday, August 16, 2010

Lesson Learning Day

I'll be the first to say - I did not get the full benefit from this run. This is partly because I was not at the desk, running errands and whatnot.

Originally I planned this as a short day trade - and really had no idea that it would run this hard because of the market choppiness.

I ended up selling it around 26.63 for a .78 per share gain - but definitely should've held it to the day's end where it closed at 28.

There are several lessons to be learned from this - some of which I used to my advantage and executed with perfection. The other, being the most important one, is the reason why I'm posting this.

First, lets take a look at the 30 minute chart:

I saw weakness around 1:00 p.m. so I stopped myself out - it had already passed my short day trade target of 26.35 (previous highs) and I felt as though I would be greedy to not take profits. Ultimately - I don't regret taking profits simply because I did execute my plan.

However - what is to be learned is something I practiced, but did not capitalize on. It is something that @ZMoose12 talked about in a video recap of Russell 2k futures I believe, where he said (and I think he was quoting someone else... but oh well) "Trade your plan but keep your mind open".

If you will look back to my older blog post I talked about this being a short possibility - and look where it ended up. 10%+ gain on a choppy, boring, Monday.

It started this morning as I was watching it at the open ripping higher on above average volume - bought in, placed stop - watched it run. This is why on flags like this I have alerts on b/o price levels and break DOWN price levels. This way you can go either way.





The other lesson to be learned from this is to LET YOUR WINNERS RUN. Move stops up - but not so high as to hurt yourself. This was my mistake today. I should've placed my stop at my original target (which is what I advised on twitter to others) - but it's funny how we don't take our own advice sometimes, isn't it? ;)

Daily chart:





Good luck tomorrow everyone. I'll be hunting weakness.

Sunday, August 15, 2010

SPY Monthly 20 EMA and 20 MA

Ever since chessNwine posted a chart about the MONTHLY 20 ma on the SPY and its relation to market direction I've taken a bigger interest in looking into a little more.

So after he posted it - I noticed the following things:




1) BIG PICTURE - A reversal occurs when both the MONTHLY 20 EMA and the 20 MA change direction (for example, January it is 96.75 and February it is 96.32) and diverge (meaning they pull apart from one another) - one thing I WILL note - this is the biggest divergence we've ever seen between these two averages. What does that mean? I believe it means a BIG move is coming.





2) FIRST INSTANCES - Here both remain positive and do not diverge, thus, trend maintains POSITIVE. There is NO negative change in either of the moving averages despite pullbacks, and both are basically holding tightly to one another.




3) FIRST CHANGES OF DIRECTION - The upward trend comes to an end by the divergence in the 20 ema and 20 ma and a negative turn in both moving averages. Then, the bear market ends by a positive number in both and another divergence.





4) ANOTHER COD - The 20 MA lags more, but when both turn negative and diverge from one another, a reversal occurs. The divergence does not have to be huge between the moving average.





5) WHAT NEXT? - Not ONCE in 20 years have these gone in one direction one month and changed the next (for example January -101.62 February - 100.85 March - 101.49) if they change their direction they have STAYED that way, so far for a minimum of 2 years.







More often than not, I shy away from discussions of technical long term market movements because frankly it's hard to establish patterns when there is, naturally, so little data to sample from.

On daily charts you have a plethora of information and patterns available, backtested hundreds of times across all kinds of markets and stocks - but with ONE chart of the S&P 500 and only 20 years to play with, it is difficult for me to even talk about these things.

However, I AM a technical trader, it is my JOB and PASSION to find these patterns and to capitalize on them. So, what do I think of these?

I think you can use this information to decide if you believe this will continue. Afterall, it takes a whole MONTH for each of these to develop. The moving averages do NOT matter until the close. As of today, (08/15/2010) the 20 MA and 20 EMA remain positive - like I said, not ONCE in 20 years have BOTH of these gone negative to positive or positive to negative within a month. Sometimes the 20 EMA does, but the 20 MA does not follow.

Will these next few months go down and change the pattern from the last 20 years? Or will it maintain the same thing that has been going on? Keep in mind markets CHANGE - as does everything. Those that do not adapt do NOT survive (don't believe me? Watch this: FLOORED) - keep this in mind when you see this, and with what happens in the coming months.


Wednesday, August 11, 2010

PRACTICE.

These last few months have just been practice. I'm practicing for out of summer volume. I'm bored of these summer markets. Every day I'm itching to get out of the office and do something productive.






We talkin bout PRACTICE?








I think here we're gonna probably consolidate a bit - probably the rest of the week. More than likely I'll stay cash. As I report this futures are down 3 points - and I don't expect them to move too much. On the $SPY chart above we're sitting right on the 200 ema, in fact, took a little bounce off it today - but not a positive one.

Before open tomorrow we have Initial Jobless Claims - if the reaction comes out super negative (which wouldn't really surprise me) I like these names short:

SA - flagging after a steep selloff, expecting this to drop much lower on weakness.



MDC - Approaching a triple bottom, watch for a big dip if this loses 25.85.





URBN - the 200 ema is tough resistance, however I think what I find interested is this could be a potential inverted head and shoulders if it can hold the lows of the day today - it would fill the gap and then look for a b/o higher. However, I think this will ultimately fail and will go lower.





SQNM - I was hoping this would hold so I could take this long for a potential gap fill. But today it closed below the support trend - if tomorrow we dip, I'll be looking at this one as well.


Sunday, August 8, 2010

Comeback Time



Shortly after I took a small loss in $PEET at 41.45 (now trading at 36.90) I posted this on twitter around 9:30 on the 3rd:

"
Make no mistake - that gap WILL be filled in the next several days. Don't get caught overexposed long. $SPY $$"







Got exactly what I was looking for - now I believe we can continue a move up to at least a retest of the 113 area on the $SPY. If you're long, watch this gap still and use it as support.

Couple of setups I'm watching:

CRS - I'd like to see it pullback to the 200 ema for a buy, but if it doesn't, look for a b/o. I'd rather buy the pullback after the break, but that's how I trade breakouts on stocks I haven't traded before.





SBGI - This is another one I'm probably going to play cautious, however, if this thing starts ripping Monday morning over 7.05 I might load up. I'd rather see it pullback to the trendline, though, but the way this is looking, it may not want to.






Happy trading this week.

Wednesday, August 4, 2010

July Recap

Simply win this month

29/
Out $SPXU 30.88 (+.30)
27/
Out $PTRY 16.43 (+1.19)
26/
Out $SO 35.93 (+.21)
23/
Out $AIV 21.07 (-.21)
22/
Out $SWKS 17.68 (+.30)
8/
Out $AIV 19.79 (+1.15)
Out $LEN 14.50 (+.36)
Out $RYL 16.84 (+.38)
1/
Covered $CSCO 21.30 (-.08)
Out $SVR 20.42 (+.11)

Sunday, August 1, 2010

New PC



Long story short - I went to best buy on friday to grab a new monitor, then realized my mother board only had one PCI express slot (old, I know). And if you don't know what that is, well, I didn't either a few minutes before I found this out.

Basically, I was going to have to buy a new computer. So my bill went fr
om $300 for the monitor to a little above a grand for everything else. My girl tells me I'm an impulsive spender. Clearly, she is incorrect.


Clearly.

This is the weekend's result:






And of course a little partying on the side








Back to business -






I like HOV a lot here on strength - watch it if it has trouble with the 200 ema, though. I'm not a big fan of buying below moving averages - so make sure you stay careful in chop city, and keep a lot of cash. Cause cash is cool.







If you do decide to go long, I believe off the upper channel line would be a good opportunity, definitely wait for confirmation but I'll most likely be buying. The SPY thus far has reacted according to plan the last several days, so I'm looking for follow through and a bounce.