Last Week’s Disaster

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Stealing Steels

Spanked

I am dual posting for the benefits of my readers.

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Lying Around

Just lying around and buying small positions.

Also, selling postions in SII and CAF for small profit.

The following Comment is from Market Edge:
Published 3/13/2009 6:50 PM ET

Stocks Need To Digest Recent Gains

The rally lived on as all three major indexes made it four days in a row for the first time since December, 2007. Whether this is a bear market rally or a real turning point won't be known for some time down the road. However, the more up days we have like the last few days, the more likely confidence will build in investors. Without investor confidence, the rallies cannot mark a longer term trend reversal.

After a three day rally, stocks had many reasons to take a break ahead of the weekend. But after a morning decline which took the S&P 500 back to the much watched 742 level (November low), stocks found some buyers and that support level held. Unable to push stocks lower also forced short sellers to cover their positions, pushing the major indexes to near their day highs at the close. The DJIA finished up 53.92 points (+0.75%) at 7223.98. The S&P 500 gained 5.81% (+0.77%) to 756.55 while the NASDAQ also finished up after spending most of the day slightly under water. The tech heavy index added 5.40 points (+0.38%) to close at 1431.50.

Breadth was modestly positive while volume contracted. Advancers outnumbered decliners by a 19 to 11 ratio on the NYSE and by a 15 to 11 ratio on the NASDAQ. About 60% of the volume was up on both marketplaces. The energy shares and regional banks pulled back while the healthcare took the lead. The contracting volume suggests that institutions have yet put their money to work in this market.

There are lots of events over the weekend and early next week which can drive the stock market. We have the OPEC and the G20 meetings this weekend. Fed Chairman Bernanke will appear on 60 minutes on Sunday and the FASB will discuss the mark-to-market rule on Monday. These events add an element of risk to the market so we can expect some roller coaster rides next week.

Technically speaking, stocks are overbought on a short term basis. A consolidation period which takes the market out of the overbought condition while keeping the bullish momentum (such as keeping the MACD positive) will set the market up for more gains later in the week. The S&P 500 found support at the 742 level today and it needs to hold that support level on any pullback. Should the S&P 500 break that support level on expanding volume, the market will likely retest last Friday's lows. On the upside, the resistance for the S&P 500 stands at 780 followed by 800.

by Yin Lin, CFA

Significant Numbers To Watch

DJIA:
6469 - Support, the 03/06/09 low
8315 - Resistance, the 2/9/2009 high
7852 - 50-day simple moving average
9773 - 200-day moving average

S&P 500:
666 - Support, the 03/06/09 low
780 - Resistance, the 2/25/2009 high
814 - 50-day simple moving average
1049 - 200-day moving average

NASDAQ:
1265 - Support, the 03/09/09 low
1598 - Resistance, the 2/9/2009 high
1482 - 50-day simple moving average
1893 - 200-day moving average

Break Time

Ever since my post, "Hot as ICE",

I have been infatuated with Scarlett.


Not only that, I have been going the wrong way with a few trades and not acceptable.

As I fade away, I have short position in AZO, AMZN, and small long position in SRS.

Leave comments or tweets and I will response.

GL

Hedging Cost

Transactions for GS.



I just wanted to show you the cost of hedging and the cost of changing your mind.

In yesterday's post, I stated I had a brain fart thinking this week was options expiration; hence, selling the 80c.

GS can fall as fast as it has risen and I did not want to take the risk.

Shorted AMZN@67.55. Missed AZO short.

I like fading some people, but may be you should fade me.

On the other hand, I can show you my numbers, but other people won't.

Possibilities

Catch this if you can. I am buying for the retirement account.


Bounce on OBV. Not bad but not a golden cross.


Still in play, but stop at 55 or below. Up on huge volume today.

Brain Fart

True confession - Last week, for some reason I thought this week was options expiration.

I did not have enough long positions.

Why is it that I am willing to accept 50% loss, but so anxious to take 20% gain, e.g. SRS Mar70p?

Penny wise, pound foolish.

If you make a nickel per trade, then how many successful trades do you need to make a dollar?

Nothing to fear but fear itself.

How is it that one student is at the top of the class while another is at the bottom?

My posts revisited:

everyone and his/her grandmas will be looking at $amzn short. so where is the advantage?

Everyone waiting for implosion, I am waiting for explosion.

if this was a bear market rally, you should be shorting $amzn $azo. action speaks louder than words.

Listen

It is not my purpose to save all the sheep, but only a few.



There's chatter out there to short $APOL. Don't you think you are a little late?

This is what you should be looking at

CandleGlance (IYR, URE, SRS, SPG, NLY, PSA, VNO, EQR, PCL, HCP)

Disclosure: someone I am training bought PSA@50.50

Hot as Ice

All things hot as ICE








Diamonds are girls best friends


See the pattern?

Counterintuitive

It means contrary to what intuition or common sense would indicate.

Friday, I went fishing in the stock market. Instead of being the big fish eating the little fish, I was the little fish. Just hoping I am not the smallest fish.



Started the day with $gs b 82 1pt stop 2 pts profit, no buts about it.



I was trying to anticpate a bounce and thank goodness for stops.

Next, I saw the golden cross on the 1m and proceeded to buy at 77.70.



I seldom use the 1m because there can be a lot of noise. You can see that in the above chart.



Compare the 1m to 5m. This is why I use multiple time frames, but did not on Friday. If you are going to fight the trend, then use stop and don't be too stubborn to take a loss. I was too stubborn.

In one of my conversation with tradefast -

tradefast@fortune8 charts don't lie, they accurately depict the past- determining the serial correlation of prices is the challenge, some art/science

Here, I was trying to predict the future move of the stock without any success.

Thursday Watch List

Stock about to cross above should the rally continue.

AZO double top

Is that a double top? See the striking similarity? It's call bend over.

I missed the 2nd round to short it.

POT Double Bottom?

Get the picture? Only tomorrow will tell. I own POT.

4-8-21

Why does it work? I don't have the answer. My hypothesis: If you are following the herd, are you in the front or in the back?

Full disclosure before we go any further. The system has been great for me day trading using the following time frame 3m,5m,5d5m,10d60m. I have not been sucessful using the daily chart. The last attempt to anticipate the cross above buying $THOR was a disaster (bottom fishing)

IT'S GOOD TO HAVE IDEAS; HOWEVER, IT IS BETTER TO MEASURE THE EFFECTIVENESS OF THE IDEA.

Before / After: which is more preferable?








On a little tangent and hindsight is still 20/10.

Let's see why 4-8-21 may be better.



From the charts above, you can see that 4-8-21 get you into the trend sooner and keep you there longer. Doesn't that make perfect sense, because you are now riding the uptrend?

Look at the distances betweem moving averages. Look at how the 20ema was breached while the 21sma was not.

My SRS tweets for the week of Feb9-Feb13

Conclusion: there are many systems out there, some are costly, some are cheap, some are free, some works, some don't. There is no one size fit all; therefore, use what works for you. For me this is it.