Wednesday, December 23, 2009

Positive Experiences

One of the keys to developing as a trader is to remember what works and reapply those experiences.

Two investments I made recently, BOLT and ENDP were made after researching their value and deciding they were cheap.

I bought both and they turned into losses.  However, after several days, both started to rebound and are now green.  Many times I have bought cheap names and then sold them even lower... instead of giving these value swing trades time to swing back around.

My best wins have been holding value names for a very long time -- 4 - 6 months.  And sometimes even longer.

 Next year I plan to be very slow to act, make fewer trades, and make more by doing less.

 What has failed has been attempting to daytrade, focusing on short term plays, lottery type picks.  I will do less of these.  I will do none - how's that?

Tuesday, December 8, 2009

slow play

a few winners emerged like YUII and NEP

I have correctly charted a pullback -- indicated by the dollar breaking its downward trend.  Still, many China microcaps continue pushing forward.  Value stocks almost always win in the end.

 Not trading is the hard thing.  Most traders seem to always want to play something to kill the boredom.  I have started a position in ENDP which is tanking based on valuation.  It received several downgrades but I think the long term outweighs the short term problems.

Still, I notice all my 'original ideas' are doing pretty badly and all the China picks from the people I follow tend to do much better.   But right now the market is consolidating so very few ideas are working.

Taking it easy... being patient.  Keeping the size small.  Waiting for clear patterns to emerge is working.

Thursday, December 3, 2009

daytrading mistakes:

I think one of my weaknesses is daytrading.  I lose money consistently trying to make money intraday.  The largest gains have been made through multi-week /month holdings.  This is why my IRA outperforms my "trading" portfolio.

 I lost money trading BKS which was weak today.  I set a stop, lowered it, and lost more money while I bought the same stock in my IRA at a lower price, and held it.  I know BKS will be a winner, but I fear holding stocks in my "trading" portfolio because I'll get stuck with it.

I would likely outperform by treating my trading portfolio for now on as a swing portfolio.  If I feel the need to set a tight stop, I would do best to avoid that trade.

 I have adjusted how I use charts now (using no indicators) and it has helped me 'see' the markets better.

In general, I have picked many winners but still sell them far too early, even when I know they are going up... seeming to sabotage my own longer term timeframe when I make the purchase.

 The trading style that best suits me is a lot more boring.  Daytrading provides a great deal of excitement when I enter a trade.  I need to forego the excitement of trading.  Excitement equals losses.  Trading emotionally after a loss tends to result in bad decisions as well.  Once I determine a stock has support and is rising.  I can enter and exit if the support level fails.  But my timeframe needs to be longer and I need to be willing to leave a trade alone once I've determined it is suitable and meets all my criteria.

 Keeping the size small makes it easier to leave it.   To improve:

1) make fewer, better trades
2) keep trades on until support fails -- do not take quick profits or change spontaneously
3) lower position size.

Tuesday, December 1, 2009

back to basics:

another terrible day so I'm choosing to wipe it away.

I am 60% cash now and not planning to make any big moves for the rest of the year.

I am simply observing charts and seeing the cracks in the market appear.  The push up is almost 100% stimulus and printing.  There are a few bright spots like AMZN but the valuation is ridiculous.

The cracks I see now are a flat  JNK etf.

Investors seem to no longer pay up for debt.  Leaders in finance: axp, jpm and aig have peaked.  GS, BAC, and C also seem to have faded.

Utilities is one of the strongest sectors now.  Natural gas is in a glut.

The only question really is how long this can keep up?  Is there a bottom to the dollar?  And even if there isn't, can risk trade go on indefinitely with few signs of improvement?

Obviously, the charts will show the way.  Goldman peaked almost 2 months ago:

 However, it is not ready to collapse.

 The retail index RTH is almost at the peak of the collapse in the summer of 2008.  What a run for retail. Do people really want to be new buyers now?  Really?

  Just how long can this market keep doing this?  I don't know, but there are a few warning signs now.  This is all about stimulus... but eventually, it becomes about valuation and fear and reality too.

Monday, November 30, 2009

strength: LTUS:

This is the kind of chart to buy.   Value play on a break out.  Acting just great -- immediately.

market takes

I continue to lose money every day -- ever since the market turned... I have not adjusted to the new weakness.

 The inverse ETFs kept trapping me and the long positions kept dropping.

 Down again big this morning.  I bought several long positions and they are all quickly losing money.

 The only small exception is a breakout name:  XODG -- strength is doing okay.

 PUDA - one of my favorite coal names... is down big as well.  I just tried to buy some today but the bid bounced back up.  This may be a sign of strength/bottom.  

 With a weak market - I need to keep stops in place and remain mostly in cash.  The correct play is shorting now.

Wednesday, November 25, 2009

more frustration

I continue to hold stocks that turn red on every rally...

 and my attempts to short the market are useless.

 Today -- the dollar was crushed and that was all that was needed the day before Thanksgiving to run the markets up.

  I bought CBST and AGO -- both fizzled and died and left me with losses.

 My problem is that I'm buying support lines instead of breaks on strength.  Today's big winner for example , were RINO and BKS and TSTC -- all of these charts the stock is very extended and expensive.  Same with AMZN.  Buying at support may work but will require greater patience.  APWR also had a great day and is far off its trendline.  Daytrading requires buying uncomfortably high stocks.  Swing trading requires much more patience -- so there's the trade off.  I guess I'm not as patient as I think I am.

 Fortunately, my IRA had gains in CSGH and XNYH so it wasn't a complete loss.  But my trading was.

 In my Mom's account, 13 out of 19 positions were down on a strong day.  As a swing trader, this should not bother me.  But it does.  It definitely does.

Tuesday, November 24, 2009

charts and patience

Making a few trades this week based on chart patterns.

some good ones like SENEA worked out perfectly.   A few did not work well.  In fact, it should be fine if only 50% of them work.  The main thing is having  a stop that exits the losers as early possible (without stopping out on noise).

 Today CKGT reported -- and it was a great ER.  Not surprisingly, the stock was flashing a buy signal, climbing over the 20 day MA.  Once again someone knew.

 I bought some ENG on a strong volume move and it immediately climbed higher and moving higher this morning.  It's just so easy when you wait and follow strength.  Forcing a trade or staying with a stock that isn't behaving just doesn't pay.  It never pays.

 What works is establishing how much I'm willing to lose first.  Then trading.  This is what you can control.  You can't control anything else.  Not being able to control yourself means you have nothing to back your plan on.

Friday, November 20, 2009

failures are life lessons:

this was a bad week for making money, but possibly a good week for learning

 On Friday, I started "seeing" things quite a bit better.  I am basically a swing trader and all the ideas I use that help me successfully negotiate the markets seemed to come together. 

 Using charts with MAs and volume and candlesticks and fundamentals... I made good decisions with NEP, PUDA, SPPI and especially SENEA -- which I entered just as it began to turn around and went to green within 5 days.  Now this is what swing trading is all about.  

 Too often, my failures are due to buying downtrending stocks with no signs of turnaround and then adding as they collapse.  There's just no point in that.  All initial entries should be partial buys with clear stops.  I can add so much to my bottomline by exiting the failures early.  But really -- the trick is -- NOT being in those trades in the first place.  

 If you start with only IDEAL set ups -- then your winners go up dramatically.  Then you can trade them too early or not -- but at least you're dealing with more or less profits instead of losses.

  Charting and annotating the charts has helped almost always.  If you assume a stocks 'needs' to go lower - -than you should never start buying.  Waiting until you're sure it HAS to head higher -- then set stops and go from there.

  I have a lot to think about but I feel like learning always comes from days of frustration... and maybe it shouldn't or doesn't have to.  Learning from successes would be a lot more fun.   So let's think about how to go about improving the win/loss ratio but more importantly, making those losers count a lot less from now on.

Wednesday, November 18, 2009


I took big losses in TBUS and CSR recently..  CSGH has also been failing.

 What did I do wrong?

 I bought weak charts.  How often do I get sucked into buying a stock going down?  TBUS guided lower and the charts were showing that way before the PR.  The charts matter.  They provide the REAL story.  And when the chart cracks -- you need to get out.

 I have been through this before.  As a swing trader.  You live and die through strong charts.  Don't trust anything else.  And always know the maximum amount you will lose.

 Giving away profits -- big profits -- is just not worth the education anymore.  Lesson learned.

Monday, November 16, 2009

All about the dollar$USD&p=D&yr=0&mn=9&dy=0&id=p83158616956&a=183594870

perhaps the most important chart there is now.

Horrible again:

Another quite terrible day...

 almost all my small caps were red and I lost a bunch on inverse ETFs... although made a few smaller gains later with them....

 I know the market is going down soon -- I'm just too early.

 Now:  AMZN put in a topping stick and $VIX has 3 bumps and the futures are down so I am NOW, finally, seeing the weakness about to unfold.  Today was saved once again by the falling dollar which ignited the hyperinflation rally... but this is going to end in a fast blast of selling with no bids on the way down.  I've seen this game before.  I will likely take more hits on the smallcaps.  Unfortunately I am (of course) carrying no inverse ETFs overnight but I am prepared to play  SRS/FAZ/TZA/ERY tomorrow.

 The markets are setting up for an epic drop.  I am about 50% cash so I'm prepared.   Bulls are full of big balls -- like they own this market.  It's such a psyhological trip.  At this point -- the markets rise because nobody can even IMAGINE a fall.  So it's easy to sell to the next sucker. Until the break.   You have to wait for the break.

  The first rule of trading is being early is the same as being wrong.  You wait and wait and wait until it breaks.  Then you press.

Friday, November 13, 2009


Trading horribly today -- wanted the market to go down.  Felt it should go down... of course it went up.

 It just wasn't ready.  My chart pattern is showing there's a big wave down coming... but today's action didn't violate my main thesis... today was a back and fill day.  It was normal.  Now if Monday is another ripper, it might violate my thesis which is essentially this:

 But today's range was not unusual.  In fact, it made perfect sense with the dollar being trashed and all.  Waves are measured in days and I want things to happen too quickly.  The market does not turn quickly.  Stocks might, but rarely indexes.  I own QID and some SRS.  I bought a lot of QID and SRS for the managed account.  Be a swing trader.  My trades take time.  They require less maintenance but more patience.

 Let's see if the bulls can keep pulling tricks out of their asses on low volume.  If so, I get stopped out.  Next trade.

bears depressed

Tim Knight's last post on Slope of Hope was full of despair.  I've seen posts like that from him before -- he often gets like that just as the market does indeed top out.

 I can imagine the millions of shorts who are full of despair.  The dollar broke and all hell has broken loose to the upside.

 Large caps are ripping.  Small caps are up.  Everything is up again.  And 100 points... almost new highs for the year.  On lousy consumer conf. numbers.  This market eats bad news for lunch.  This market wants to buy expensive things.

 Does it ever end?  It must.  Be maybe not until every short has been blown out.  Maybe they can keep triggering short covers forever.  The market is all we have left in the U.S. that is working.  Maybe I shouldn't be shorting it.

  Well, my charts said to do it.  So I did.  Maybe I'm just too early.  But I wouldn't be surprised if Tim's lament nails a top here.  He's done it before.


the more I micromanage the portfolio... the worse I do.

 The key is to simply be patient.  You know which levels are good for buying and which are good for selling.  Make an entry, set a stop -- then let it go.  You already did the work.  Now let the market work for you or against you -- but it's out of your hands once you place the trade.

  The ability to let go of control is necessary.

Thursday, November 12, 2009

I Can See Clearly:

Today I sold all my TELT which was up about 90% today -- it saved the day.

 I am mostly holding just a few core positions now.  NEP is the largest.  It's been lagging and the ER is coming up on Monday.  My gut, unfortunately, based on the chart, is telling me it's going to be a shitty ER.  I'm holding it because it looks good on paper, the chart is still holding support (Barely), and almost everyone i follow and trust likes it for the long term.

However, my chart readings of the major indexes are now extremely bearish.  I can see clearly now, and there's clearly going to be a big correction coming -- starting with tomorrow's gap down open.  I do have a lot of cash but I know I'm going to get hit anyway.

 My managed account is about 50% cash.  NEP and SPPI and YUII are some big positions.

 What this market is all about is propping up demand when there is no demand.  Well, there is some demand.  But you can see that the big dogs are doing okay (amzn, wmt, aapl) but not much for the rest.

 I'm getting better at gauging entry prices -- although today I started a new position in YUII only to watch it get destroyed.

 UUP looks like it's ready to take off
 AIG looks like it's about to drop a bomb.
 XLF is ready to cave
oil prices appear set to plummet another 2 or 3 bucks.
It's like a perfect storm has set up on all the charts I review tonight.

 I argue it's impossible, simply impossible, for the markets to not take a huge gap down hit and big drop tomorrow.

  The best set up are QID and SDS.

  Well -- I have a lot of cash.  I need to hold onto it and wait to see how far down this market breaks.  It's almost as if the entire economy depends on a strong market. If this crashes, I think the repercussions will be so incredibly dire.  Expect sharp drops and continued strength end of day as the powers paint the tape up each red day to stave off panic.

Tuesday, November 10, 2009


As a swing trader, I don't need to watch every tick.  But I find myself doing just that.

I need to spend time doing more research, finding more promising stock ideas with good chart patterns.

Today was lousy day with most China small caps selling off.  The market appears to be elevated by some hidden force that keeps goosing the big cap index names higher, preventing any kind of selloff.  There's clearly outrageous manipulation going on here. 

But then again, China keeps putting out great data.  This is why I own China names.  It's best to buy them and not get too concerned about the daily action.  The swings will happen if you let them. 

Focusing on the Process

 What am I doing right that is working for me?
Longer term swing trades.  Being very patient and initiating trades after the charts set up, and the 'buzz' on the boards is positive.  Then holding for the big payoff and not selling halfway out for breakeven or a small loss.  Only buying the best ideas.  

* What am I doing wrong that is losing me money?
Buying 3rd tier stocks.  Selling far too early on the pocket-ace stocks.

* What are my strongest areas of performance?
browsing the nets for ideas  / creating actionable charts

* Where am I weakest?

 lack of patience, my fear of loss, causing me to sell out too early instead of using charts for exit signs.

* How can I take more advantage of my strengths?
Being more patient, doing more research, charting every stock I buy.

* How can I minimize my weaknesses?
Understand your fear of loss.  Set clear stops that will minimize the loss then stick to it.  Keep position size correct so the loss doesn't hurt.

* What can I do today that will improve on yesterday's performance?
   Review the best ideas and the best charts.  Accept what the market is saying always.

* What can I carry over from yesterday to sustain good performance?

Don't be afraid to just watch.  Observe everything.

Monday, November 2, 2009

don't ignore the charts:

I've gone back and forth between value investors -- like Buffet who never use charts to buy stocks, and the legends like Livermore who only use charts.

Eventually, everyone develops their own style.  I think I'm working on combining both -- but it takes time. The best way to combine value and technical investing is -- I think -- to focus on swing trading.  Using the index charts as a guide to determine the kind of market we're in -- I can then select value stocks and ride them with the prevailing trend.

Lately, many of the China stocks I own are dying -- I lost money today with the market up.  What I'm noticing is that many of these stocks need to raise money and it seems they continue to do these sweetheart deals that really screw over shareholders.  Thus, these stocks constantly trade at 5x earnings at best.  You can't use fundamentals to know when it's coming, but the technicals often signal the big Screw Job is coming.

CSR, LPIH are the latest names to sag.  I think BSPM is setting up now for some kind of offering.  NEP has been dead since its offering.  At least I recognize the trend is down.  I'm 50% cash now.

I have been falling in love with these microcap names instead of being sharply cynical.  I let my guard down as the profits rolled in.  Foolish.  Fortunately, I'm up for the year.  I am not vulnerable to a huge drop now -- but still vulnerable.

 My powers of perception are growing.

 Today was a wild day -- but I don't often daytrade.  It's not my style.

 The main thing I realize is that stocks only go up for a limited time.  You have to focus on the big swings and not be afraid to get out at the top and maybe give up some upside (for the liquidity).

  There's a lot of hype out there but the Charts never lie -- so you need to listen to them always, even if you decide to ignore them.  Good stocks do not go up in a bad market.  The charts will tell you it's a bad market.  (It is now!)

  Be cautious of gurus - especially gurus on a 'hot streak'.  Hot streaks always end, and they usually end badly.

  Currently -- I have a bad feeling in my gut.  It's hard to just short though -- as today ended green and probably would have killed me on FAZ.   So I'll stay 50% cash until I think it's worth getting back into the market.  No rush.  I never want to feel rushed.

Tuesday, October 27, 2009

what the charts say:

strong:  UVE, ALIF.ob

on support:  BSPM, CSOL.ob, NEP, CHGS

close to support:  PUDA, LPIH, APWR

still selling off:  XIDE, CSR

overbought:  CPQQ.ob

  -- there is a lot more the charts are saying... but I need to listen more carefully.

taking my lumps

I sold INSM for a loss even though I may regret it later...

I bought more PUDA and BSPM -- names I like and the people I follow like a lot.

I want to only hold my best ideas -- when you start doing well, there's a tendency to allow second-rate stocks enter the portfolio and this is pretty much the same as giving your money away.

I'm not afraid to buy cheap China microcaps on a pullback.  I know they make money and will make money in the future.  Stupid stocks like AIG are going down -- and that's a good thing.  They never deserved to be so high.  A lot of StockTwits are shorting for small change.  I should make 50 - 100% on PUDA here.  I also like NEP which I sold out - and here it is just a bit above where I first bought it.

 UVE is green.  And I added ALIF to managed portfolio.   Traders love to focus on the daily fluctuations but I think as I grow older -- those daily moves are mostly a waste of time.  Today -- quite a few names got dirt cheap again... so I'm a buyer.  A few names are cheap but I think they can go cheaper.

 I'm feeling a lot better now that I got rid of INSM.. it was worrying me and once I exit a position like that --- I can see clearer.

 The more patient I am, the better I do.  This selloff is necessary and could last a while.  There is never any need to feel rushed when trading.  In fact, if you feel that way, you are probably on the verge of making a big mistake.  That's what happens to me.

Power of Outliers

I read a good blog entry from Don Miller -- great reminder.

When I look at my gains this year (and losses) -- well, I have a lot of losses.  I'm still learning.  But the gains are concentrated in just a few names where I really made a bundle.  And those big gains are what made this year work.  Trading is not about being right or wrong.  You will be right and wrong.  The difference between the pros and amateurs is how they capitalize when things go right and minimize the losses on their mistakes.  When you accept being wrong often... you can control the bleeding faster by taking action.   And knowing when to let the winners run (and add to them) helps the big winners overcome the mistakes.

I want to focus on being selective now as the markets drop.  I think I made a mistake following INSM.  I'm getting a bad gut feeling and I've already taken a moderate loss.  I think I will follow this advice, sell it out, and wait to reinvest it in a winner.  There's no reason to be patient with loser stocks, especially ones I'm developing a bad feeling about.

Monday, October 26, 2009

pain rising

bad day getting worse...

 I can see the market is in a trend down pattern now.   My microcaps all getting whacked.

 I've been adding to a few but I know this is hopeless when the markets are in selloff mode.  Fear trumps value.

 I trying to stick to stronger names.  PUDA / APWR are up today.  I bet these are good ones to add to.

 CSR is doing horrible and I have to wonder if bad news is coming out soon.  I'm almost sure of it.  A few people I follow have been adding today.  Should I trust their judgment or my own?

 In truth, I'm down about 1% -- so not like it's a ridiculously bad day.

UVE: New Idea

I own UVE at 5.16

Combining TA plus FA -- it needs to stay over 5.04 today to confirm a new uptrend.  

I am also watching PUDA, LPIH, CHGS for add-ons.  I did add PUDA at 7.23 last week too.

Friday, October 16, 2009

Going on Vacation

I go to Florida tomorrow.

This week was decent.  I am learning fast now.  Last two days were a bit weak.

I am upset because I exited a few rockets instead of doing nothing -- EGMI and CHIO to be exact.  Doing nothing is usually the right thing to do.  I do too much.

I lost a little bit on Thurs. and Friday but it was mostly a strong week.

I will just keep my positions.  I imagine doing nothing while I'm on vacation will likely be better than me micro-managing.

 I hope you had a great week.  Gotta go.

Thursday, October 15, 2009

SMID ready?

this one has no volume but I think the chart is set.  Just needs some positive news and this ticker, which lots of people I follow love, should move.

My Team On Top Of It

It wasn't a great day due to a certain blow up in AXPW.ob -- forcing me to exit for my biggest loss in weeks.  I bought AXPW.ob because I was following a tip not backed up by fundamentals.  Foolish.  The loss was less than 1% of my holdings but still hurt.

Fortunately, the gang that I followed, the China value people, have talked a lot about NEP and I've been sitting on a large position for a few weeks and today NEP was the 6th best stock on the AMEX and due for more gains.   So it was a good day.  I also did well with APWR which I charted as a breakout and it did fine.

It is amazing how well you can do when you follow a group of smart people and buy the best ideas.  I kept thinking I should add to NEP because there were three or four bloggers/posters I follow who all independently liked NEP -- when EVERYONE loves a good value stock that even I can see is understandably cheap -- those are the stocks that tend to do the best.  The more disagreement, the less so.

I also bought back a big position in CSGH.ob which might have been premature but this is still a profitable company.  I can understand it may not be the best idea because quite a few people I follow had reservations after today.  But quite a few bought on the big 20% plunge in the morning.

One name that everyone seems to like a lot now besides NEP is BSPM.ob.  I don't own much as I didn't like this one as much as NEP but I'm thinking it should do well.  My chart work is great lately.  For example I drew this chart of RODM this morning and it was dead on.

I also drew the breakout for APWR and have enjoyed the two day rally.  I think it goes even higher.  Oil prices are ripping to new highs.  There's no stopping it now that the dollar is toast.

It's just so much easier when you are working with a team than alone, even if that team doesn't know they are working for you!   Congrats if you hit it big once again.  I'm happy to work for you, for free.  Don't you wish all your employees were like that?

SEAC: nice chart

no position but found this chart compelling...  don't know much about this stock.

Will watch.

Wednesday, October 14, 2009

I Would Trade 10,000 Dow, And I Would Trade...

Well, there we go again.  Another benchmark broken again.  Two steps forward, 800 steps backward, a few giant leaps forward on the back of a broken dollar, and it's all good.

I'd be a bit more cheerful but somehow, my portfolio was down today.  I just had the wrong combo of microcaps.

What's irksome is I run a mock portfolio at tickerspy here:

And my fake portfolio was up 6%.  How's that?  It's weird how well I can do when it's not real money.  And my managed account was also up.  So hip hip hooray.

The past week I have been using charts well and I feel like another piece of the puzzle regarding my ultimate trading strategy has slipped into place.  Like APWR -- I had bought a big fat position for my Mom one day before today's move.  Now obviously, almost everything went up -- but APWR was up 8% so I really picked a great one.  On the terrible side, I sold CHIO even though I charted that as a break out chart and missed a 50% move.  Kind of annoying.  I listened to someone I trusted, who I'm sure was correct.  But the point being -- the chart is the ultimate judge and jury of your wins and losses.  When in doubt, trust the chart.  That's lesson #4532.

Today's tape has the feel of more upside but the thing to look forward is a weak finish.  For example, MYST.ob is one I had a small position in and it's run almost 100% in the past few days.  I sold the entire position in my managed account but I bet it has at least one more day of big gains.  There was no weakness in the tape.  Meanwhile, it was clear that CSGH.ob topped out days ago.   CSGH.ob is actually interesting because I think it's going to find support soon and possibly bounce.

Well, I'm tired and Glee is on soon.  Congrats if you hit it big.

CSGJ.ob - Chart Pattern:

This is a lesser known China smallcap that I just bought a little bit of today based on today's new emerging uptrend.

So far I've caught CHIO one day before a big move, and APWR yesterday and CIWT two days ago.  Not a lot of science... just something I've noticed.

Tuesday, October 13, 2009


I am working on blending TA and FA together to find perfect plays.  CSR might be a possibility.  Quite a few people I follow like it.  It has numerous problems, but the question is, are those problems fully priced in?  Because if so, then what you've got is a super cheap stock that nobody likes -- letting you get in ground floor.  Today's price action and chart suggests this might be time to buy in.   I'll let the chart do the talking.  I do not own any yet but I did buy some for my managed account.  I'm finding that doing an annotated chart is extremely helpful for me to see what the market thinks about a particular stock.

Good luck if you decide to buy some CSR.  I don't think this is going to take off and zoom, but it looks to have a solid support line -- not too far away from current prices which can be used as a quick exit.

instinct override:

CHIO earnings came out and despite the now bullish chart, I didn't like the chatter of the people I follow.  This one has always kind of bothered me -- I hate companies that burn cash.

So I sold the whole thing.  I think I made a little bit overall... breakeven at worst.   Like I said, the chart is good but I am skittish so I decided to look elsewhere.  I feel better about names like NEP and even APWR which I don't even have a big position in.

Now -- see -- this is the problem with being a follower and not a leader.  I really don't know what's up with CHIO.  Is it good or not?  I never made a clear plan.  I guess what I saw was -- the ER came out today.  It seemed good, but some people had some questions regarding 'quality of earnings' and meanwhile - the stock is only up 1% for the day -- and the past 6 months have sucked while everything else has been running up.  Is it appropriate to bail out on a gut feeling?  It's not what Buffet would do.  I'm no Buffet for sure.

 I follow a lot of other people's picks.  That's my strategy. I'm 100% responsible if the stocks I pick fail.  I never blame the guy I was following.  So if I decide to bail out -- that's my decision too.  The good thing for CHIO holders is that I'm wrong a lot more often than I'm right.  I'm dumb money.  (Just having a decent year :)  So I move on.

Today the market was mixed but I still made money (again!) this time thanks to CKGT, CIWT --- and that's about it really.  But those two were good enough.

 I added NEP and APWR today.  (Neither did much.)  I feel more comfortable with those names.  I've followed them longer.  I also feel much more comfortable with big board stocks, even though I've probably made most of my profits this year in .ob stocks.    Well -- it's been another fine day.  And good day to you, sir.

shorts on Twitter:

see a lot of FAZ / SRS buyers on StockTwits today.

 Which means we power higher soon.

CIWT chart

I came across this name and thought it was good, but figured I'd check the chart to determine whether I should buy.  I created this chart last night.

Then I bought some this morning.  Turns out -- my chart was right on the money.  And now I'm up $1300 on day 1 of a new stock -- all because I browsed the 'nets and found what was getting some love on the boards.

Monday, October 12, 2009

New Rules:

1) never buy more than 1/4 position in a stock you've only heard about today.

2) stick to your bread and butter

3) stick to price targets

4) use charts for entries only after the fundamentals warrant a buy in the first place.

5) don't be impulsive

6) trust your instincts more 

Too Much Trading

Once again -- I did too much.

Took some profits in LPIH.ob for no good reason -- still have some but have already given up lots of profits by selling my best ideas.

Once you find a gem - you need to stick with it.  Now LPIH.ob -- which I think can get to 3 easily, is only at 2.19 and I've given away over 10,000 shares too cheap.  Stop doing that.

My other new China co,  CHIO, is also beginning to rev up.  I do not want to sell this for less than $3 share -- it's only .99 now.  Note to self:  Don't sell this cheap either.

When a stock has topped out -- there are signs.  I sold most of my CSGH and PUDA and CPBY look a little tired.  (I don't own CPBY.)   I'm also now watching CIWT.ob which is a low vol. play with no news but some higher volume came in today.

Despite being very cautious, today was a great day.  I can only imagine where I'd be if I weren't so afraid all the time.  Ha ha.  INSM -- my other value name, is acting horribly.  Well, you can't win them all.  The China stocks are on fire.  It's pretty clear where the action is.  The only question is when to get off the bus.

Looks toppy:

The dollar kill trade can't last forever.

got cautious:

Two things got my hackles going:

1) guy calls a Fib ratio at 1.61 since the March bottom.  Natural tendency for markets to cycle downward from here.

2) uber-Bear Tim Knight recently bought a bunch of long positions, frustrated at missing the March run up.  Even worse, he's just buying based on charts, so he's long crap like CROX.  Can there be anyone else later to the game than Tim Knight?  I really doubt it.

I sold AHC for small loss as my very knowledgeable brother-in-law pointed out the assets probably won't fetch close to what they would in a firesale.  I rushed into this one.  Like a fool.  Just not a greater fool.

3) Dollar is down and the markets still went red.  That's really a bad sign.  What happens when dollar goes up?

Overall though, making a mint on China smallcaps.  (LPIH +14% today)

So it's all good -- but I would watch out.  Not feeling so good being heavily long today.

ripping it

Another huge day with

LPIH.ob  going over 2.00 now.

Some of my favorite bloggers like AHC so I tagged along since newspaper stocks are blessed.  I got the idea from one of my links.

Market does seem extended.  A  StockTwit msg today said that the SPY is now a Fib ratio -- 1.631 times the low = today's price.

I believe in cycles, even though there's a lot of hocus-pocus surrounding Elliot Wave believers.

The GFRE.ob (now GRUS) I bought on Friday is up 13%

The China names are insane.  The dollar is being trashed once again -- so there's just no stopping the push into risky stocks.

 You gotta love this market, even if you hate it, you know?

Saturday, October 10, 2009

Think Big, Think Less

I'm sure 99% of traders are having their best year ever.  Either that or they were bearish and have been completely blown out.

It's time to think big -- if you haven't already.

Why won't the markets pullback?   The U.S. is a mess.

Whenever I take the macroview though, it makes sense.  The U.S. is 5% of the world's population.  I know we consume 25% of the energy.  But there are 3 or 4 billion people out there and they all want to live like Americans some day.  The drive to consume, to grow will continue even if every American becomes as frugal as they say.  And Americans won't ever be frugal.  I know Americans.  They'll stop spending only because they ran out of money.  But give an American a job, and he or she will spend a good deal of it on shit he or she doesn't need.  'New frugal' is a passing phase.

What happened to Prius sales as soon as oil prices dropped?  You see?  People don't want to do what's right.  Well, they do.  But they want to do what feels good more.

And what feels good now is making money in China small caps.  By keeping my eye on the Yahoo/ Twitter boards, and the charts, it doesn't take a brain scientist to see where the money is flowing.

RINO, CPBY, CMTP, HRBN, KONG, CAGC.  A new one I bought on Friday (which I'm really late to) is GFRE.ob.  Why daytrade for $500/day -- most of these stocks are up 200 - 300% in the past few months.  Think big.  Find where the money is flowing and go with it.  You don't have to be a contrarian.  You don't have to be smarter than the market.  Just be in sync with the market.  Run with the hope and greed.  The bad news has dominated the news for so long.

I'm going to focus on finishing the last quarter strong.  Buy 'em and hold 'em for the big rips.  Keep it really stupid simple now.  Overthinking is deadly.  Think big, but think less.  Yes we can.

Friday, October 9, 2009

SRZ: duh!

I just figured it out.

SRZ has 435 facilities.

The sold 21 for $200 million.

So how much does that value the co?  A LOT more than $5/share, that's for sure.


So I was actually right on HUM -- got a full point and I took it.

So $600 profit

and currently about to be stopped out of ERY for a $650 loss.

Add the gains from LPIH and this week will be a great week.

If oil actually tanks -- might not even have to take that loss.  But the HUM is sold and locked in.

Added some FVE today with SRZ doing so well.  FVE is a value name I like (nobody else does).  Very slow roller.

update:  lost about $350 on ERY so the daytrading provided minimal profits.

why 3x inverse ETFs suck

 I thought OIH would be down today.

 I was right!

 Guess what?  ERY is red anyway.  Correlation just isn't there.  (I'm guessing CVX is the reason.)

 Oh well -- I'm still not stopped out yet.  Lesson learned.  Trying to get too cute just never wins.  Patience does.

 One of my favorite bloggers likes NEP a lot -- and bought some today.  That's two 'smart guys' I follow now who love NEP.  So I'm feeling stronger about NEP -- but it will take time.  Good, the slow rollers are usually my best ideas.

Bernanke Saves the Buck

What a call.

 Dollar should be strong all day -- can't afford to let it fade -- absolutely not -- or it means Ben has no credibility.  If he says he will defend the dollar -- then the dollar has to man up -- if at least for one full day.

Thursday, October 8, 2009

Chart thoughts:

Once again perusing the charts.

Gold is ridonkulous and RSI is pinging overbought.  Same with many oil stocks but not all.

meanwhile,  SPY did a doji and  QQQQ and XLF were both black candles (a win for bulls, but close was lower than the open) -- this denote a lot of selling pressure throughout the day.

The answer can be found in UUP -- a tremendous volume day and the lowest close since March.  Yep -- this is the Greenspan/Bernanke strategy writ large.  Just look how the destruction of the dollar can create rallies, that benefit the top 10% and let the rest of the fuckers out there deal with inflation and no jobs.  Now Geithner knows the drill.  Whenever things get too hairy he will say "the U.S. supports a strong dollar policy" which really means "the U.S. supports whatever get the guy in charge reelected".

Market rallies get you reelected.  Nobody wants to be like Bush Senior.  But -- there is a caveat.  The pussification of the dollar cannot -- absolutely cannot -- go exponential.  You can't have people mad-rush exiting the dollar.  That's going to be totally screw everything up.  You still have to sell a few trillion in Treasury debt each year.  Reckless abandonment will also obviously -- create a rush to commodities and ignite inflation.  And this of course, is what happened today -- you had a madrush to gold/oil and the dollar blasted.

 So there's two things at play in the short term for OIH in particular.

1) filled the gap on the weekly chart
2) overbought gold/commodity play dangerous to Fed
3) XLF/SPY/QQQQ mostly non-confirming

Basically we've reached the point, I think, where this rally is at this point in time, completely running on a dollar collapse move.

 If I'm correct, the dollar will receive some intervention support for the next few days to avoid a blow out.  I have kept and loaded up ERY with a wide stop -- now this is probably going to end up being a small disaster but I'm still only risking 1/3 of 1% of my portfolio.  I think it's a worthwhile hedge and I continue to dabble in inverse ETFs despite dozens of failures.  Still -- I think my read of the market is absolutely correct.   So I bid you all good luck.  The dollar has just about fallen off the edge.

 But as with all things, the Fed is the master of stick saves.  And if indeed the dollar does go up -- well, the rest of the market is already gearing for a takedown.  Trade cautiously.  Be humble.  I'm sure most of you are better at this game than I am.  But it's always nice to get another opinion.  Even if you think I'm completely wrong here.    good luck out there.


  Amazing -- I just finished my thesis and there it is -- Ben responding exactly to the story of the day. He must get out there and defend the dollar on ripshit drops like today -- a mega selloff is terrible for the U.S.   Now he's obviously not going to raise rates unless he has to -- but if this selloff continues -- he definitely might have to step in... so Geithner is calling Goldman right now and saying "Look, boys, you got to cool it for a few days, Ben's getting a little testy."

 If the market doesn't drop tomorrow, I really will be shocked tomorrow.  It's all plain as day now.

Arrogance Meter

If you follow a lot of people like me, you've probably come across a few "arrogant bastards" that kind of tick you off sometimes.  They love to talk about how great they are -- especially on big win days.

 Well, they're usually great and they have something to teach all of us.  However, one thing I look for is when the Arrogance spikes to a certain level -- it's time to get cautious.  The key to success in the markets is humility.  You are no better than anyone else.  And when great traders get arrogant -- they are liable to make huge mistakes.  There comes a time when some traders think they'll never make a mistake again.

 Today the Arrogance Meter was off the charts.

 Now notice what's happening into the close.  Yep, pretty damn weak.  The craptastic leaders like AIG, GS, FNM and even AAPL (great co) are all red.  Are you sure you want to follow Arrogant Winners long and strong tomorrow?  I don't.  Look, I did just fine thanks to LPIH.ob, but tomorrow I could get defaced.

 The dollar got blasted to shit today -- of course commodities are going to rally.  But we're at very depressed levels here.  The Fed still has debt to sell.  Lots of it.  They can let the dollar sink -- but it can't drop this fucking fast every day.  Pardon my French.  That's not going to do at all.  Tomorrow, I wonder, how are commodity investors going to feel with a bouncing dollar?  They're just going to let today's monster profits sit there and let someone else take them?

 Or maybe I'm totally wrong.  I probably am.  Today was a curious day.  SPY closed with a doji.  Indecision there.  All I'm saying is...  when you're full of ego, chance are you're not paying as close attention as you should be.  When the money's rolling in, I suggest you be more cautious, not less.  Tomorrow might not be the same.

Oh, the Humana(ty)

I ran a DCF analysis...

I assumed 3% growth the next 10 years... I shaved $7 off their book value.  I plugged in $3 earnings  (estimates are for over $6 this year).  I still get fair value of $47 assuming these horrific estimates...

I bot HUM.  It makes no sense not to own it.

The market is taking a very short term view of this company.  They just can't lose money fast enough to justify the current price.

 They'd have to earn around .80/share this year to justify the current price.  That means they have to show huge losses for the rest of the year because they made a lot more than that last q.  If someone can justify 35.89 as a fair price -- I'd love to hear it.  The margin of safety is enormous here.  You have to give when the market is pricing companies on political news that assume impossible scenarios.

Another point:  How hard can you squeeze health insurers?  Everyone calls them greedy but profit margins are less than 3% for HUM.  There's not a whole lot of fat to cut here.

 Obviously today's action is understandable... people want to be in what works today.  Which is oil services.  Problem is, I don't think oil services with OIH at 122 is going to work tomorrow.  So I'm skating where the puck is going.  But it feels like crap.

short term bad / long term good

Stupid moves of the day:

got into ERY and averaged down to 12.92 and it's still a loser

 Yes oil and oil service co's are ripping higher... except one, the one I have an oversized position in: NEP.  That's my usual luck running true.

bot HUM at 36.62 and that's a loser.

on the plus side: my oversized LPIH.ob position is ripping again and so I am killing it again simply on that position alone.

OIH topping out?

It's a ridiculously great day for OIH but look at the weekly chart.

I'm calling the top here.

Wednesday, October 7, 2009

INSM: getting closer

I'm obsessed with this ticker.  Creeped up a little more, closing on top of the 20 day MA.

 From the Yahoo board it's clear there's some odd trading going on.  Like I tried to buy 5k at .837 today, the bid went up to .8372...  I got 300 shares filled, but after hours there was a sale for about 3k at .8345 so apparently it only goes down when the higher bids disappear.  Hm.

 Meanwhile, China microcap land is burning it up.  So many runners and now Alcoa just lit yet another candle under the market's ass.

  This is an easy market to make money in.  You just have to believe and stay with your best names and basically -- stop daytrading.  The impulse to constantly being doing something is so incredibly detrimental to my own bottomline.

 That said, my stupid move of the day was trying to daytrade that RPRX and losing about $400 in a hour.  Then I bought PUDA and made back $200 -- but I shoulda kept it.  I did buy a chunk for my managed account now.

 The people I follow love PUDA, CPBY, BSPM, CSGH (a bit extended), RINO (extended now) and MYST, among a few other.  CCGY is another one that I personally don't like for some reason.  I don't just buy everything.  I mean, look, how can we possibly succeed?  90% of all traders fail.  It really seems impossible to get an edge.  But the internet is the edge.  The ability to find the ideas of the best small time, private investors and follow them has been my secret to success.  It has its risks.  People may be con artists.  The people I follow may not stick around.  (That's why I keep searching for more and more people.)

 The other part of my recent success has been holding for much longer periods of time.  People get excited when they make $500 in 5 minutes.  Sure, I guess.  In my mom's account, there are positions with $13,000 - $20,000 in paper profits.  It's been as high as $35,000 this year.  All I did was set it and forget it.  Some of them would be larger if I hadn't taken partials along the way.  Everyone can make money in a dozen different ways...   It's really all about finding the strategy that's comfortable for you and sticking to it.  I think maybe that's why people fail.  They don't find their optimal strategy in time and lose to much in the learning process.  Maybe.  I don't know.

 Well... my confidence is up today and I've really been mostly playing it safe.  I don't own many of the great names I mentioned because I sold so many too soon.  I may need to rebuy some CSGH back soon. I thought it would drop but it's such a winner... it might just run to 3 without me.

 I hope you all had a great day in the markets.  Being able to trade for a living is really a dream come true.  I'm still not 100% sure I can be consistently profitable, but this year has certainly helped keep the dream alive.   I think if INSM breaks I'll have all the confidence I need to keep me going.


I added this to the managed portfolio at 14.35  based on chart / valuation.

I've read the blogosphere comments.  I can understand the short interest.  They're products suck or something.  Revenue dropping rapidly... going obsolete.  This is the world of technology.  Innovate or die.

So I'm setting a stop around 13.50 -- about an .80 loss of it drops that low.

Furthermore, the CEO is happy to sell out at 15.50  (but they used company shares to do buyback at 20.00 plus).  Yeah - that's a dickhead move.

There's a little news today and the play here, shorts may have possibly overstepped.  SIGM is in talks to buy CopperGate -- I don't know anything about the deal.  But if this increases revenues and they don't overpay (management has shown that they suck at this) -- then SIGM might be trying to reinvent itself and this would change the dynamics overnight.

In many ways, the 35% short interest is really the positive here.  When there are 9 million share that have to be bought up at some point (out of 24 million) -- it might be wise for some of them to pay up now rather than wait for really good news.

 Clicking in some really conservative numbers, the stock is worth $18 today so the margin of safety is not great.  But tech stocks can change in a heartbeat and the shorts don't have much room to maneuver with the company only trading at $2/share -- the rest in book value.  Up 3.4% on a down day is also positive.  So big picture is kind of weak, valuation is good, technical signs are good/great.

Let's see if this works.  I'm not really following anyone on this.  Mostly trusting the charts, if you can trust a chart. (You can't.)

update:  The Yahoo SIGM board is overrun with the shorties.  I hate it when the board is like that.  It's one thing if this were really a no revenue/no profit spec stock.  But they have to bash it to buyers from coming in.  Any positive news from anywhere is going to cause a squeeze I suspect.  The idea of SIGM buying CopperGate sounds like a bad idea.  They'll probably overpay.  I suppose the stock might be rising on the possibility the buyout will be voted down.  Management owns very few shares -- they probably can't control it for their benefit.  I guess I stepped into quite a mess here but the stock is holding up very well today.  When in doubt,  I always listen to the chart.

experiment with value: UNH

Just as an experiment I have bought 1000 UNH for my managed account at 24.77

I did a DCF analysis and my margin of safety is around 48% supposedly.  I know Warren Buffet owns this.  And finally, the chart says this has come around for a new swing.

So I'm just going to forget about it for 6 months and see if it pans out.   In general, it looks like a piece of crap company.  Value?  yes.   But the story is horrible, as all health insurance companies are these days.

Tuesday, October 6, 2009

Spider Sense:

I mentioned PUDA as one I didn't own that looks good.   Up huge on Monday.   After a few years of trading and observation -- most traders begin to develop a spider sense (some call it 'instincts') and they just load up on a name because they know it's going to run.

Well, one stock I do own is INSM and today I started getting that feeling.  I added more shares today.  This is one of those deep value plays I'm following my new blog-friend Jae Jun into.  I knew when I bought it the technically were pretty crapola and sure enough, it dropped almost 10% after I bought in.

But when you start to see the charts getting bullish on a deep value name -- like ROIAK recently -- it pays to get heavy and then (here's the tough part) do nothing.

INSM has the mother of all gaps to fill (see my chart).   Good luck to all, and to all a good night.

Another Day, Another Dollar (Demise)

You can't keep a good fiat currency up, can you?

Today I was in liquidation mode.  My signal came from $GS which gapped up, closed lower, my guess is there will be numerous 'bearish engulfing' candlesticks -- you can see all the print here:

My guess is there will be a lot more bearish candlestick patterns tonight.  But let's face it, the robots are in charge, and you can't fight fiat currency destruction.  The market has to go up just to stay even.

The other news that caught my eye was the weak 3-year auction.  The whole game is over if the Fed can't sell debt.  So every failed auction is another step toward the abyss.  When you're running a $1 trillion deficit, you don't want your creditors getting cold feet.  That just won't do.  If the market has to drop a bit to drum up interest in "flight to safety" toilet paper, then it'll have to drop.

 Overall, it's hard to get a read on the macro-economy.  Maybe it's better than we all think.  But more than likely, the market, always a short-term machine, has been held hostage to short term investors that keep the virtuous cycle alive.  It's all good until it's not.  But I don't want to be all in when things go fachakta.

 I sold most of my CSGH over 2.  It was a good run.
 I added more INSM
 I added a little more LPIH  (down, broke support... yikes)
 I sold most of my LLFH (3rd time I swung this for money, I own this ticker)
 I sold the PACR (lost less than $100 instead of a big $1000 stop out)

 But here's my favorite:  I bought 200 FAZ today and even though it wasn't much money -- I dumped it for 1.10 gain.  Yes, I traded FAZ for a nice profit and that my friends, is quite incredible for a guy like me.  I read the market correctly today.

 That said, I am bearish regarding tomorrow and for all I know, the market will blast higher.  I bought a big SDS position for my managed account (Mom) and also hold FAZ for her.

 Overall, today was a good day, I hold lots of cash now and I feel good about it.  I don't own any 'stupid' positions like PACR/GIGM.  Just my favorites.

  I hope everyone out there had a great day.  I'm sure you did better than me (I).  But hey, we're all in this together.

 Remember: goal of the week -- patience.

Monday, October 5, 2009

Hot Stocks from My Peeps.

The various people I follow are bullish on stocks like:


  Very often, the biggest gainers of the day are very familiar names.  Why I don't own all of them is a mystery.  Perhaps the most bullish name of the bloggers I follow is PUDA.  I don't own any.  I might buy some soon.

 Invariably -- these kinds of stocks do the best.  The ones I buy that nobody likes:  PACR, GIGM, ENDP rarely do well, although ENDP had a fine day today... finally.

 Of the above names, NEP has definitely been a big fat laggard lately.  It's at support and below the recent offering, the way ATPG was... before it doubled.

 Technically, the indexes appear to be in a bind, above support, below resistance, stuck between moving averages and volume dying.  Nonetheless, some people in ROIAK had their best day of the year.  This is now a true stockpickers market.  Most people I'm sure are having the best year of their careers.  It'll take a LOT of panic to reach a tipping point that triggers panic selling.  And the fact is, the above names aren't exactly overpriced, compared to the average SPX member.

 The other laggard is EGMI which put in my favorite Dragonfly candlestick which usually denotes exhaustion in selling and sets up a potential new trend.  Watch NEP and EGMI (for you bottompickers)

 I think I'll buy some more of the above names, but I think I'll wait for the next red day on the indexes.  I'm going to be very picky now.  Mr. Market needs to show me bargains.   I'm not chasing unless I'm daytrading in which case I set tight stops and bet small.

 But ROIAK/CMLS are good examples of stocks I should have held.  The charts were very much in bull mode... it was clear the FA an TA were working together.   NEP and EGMI are not showing the same action.  Technically, I like to rebuy my ENDP if it pulls back a little.  Today's volume/movement is likely the start of a march to 30.  Or not.

 My goal this week:  Be MUCH more patient.  Observe market action... believe in my value long term holdings.   And ditch this cold.  My throat is sore.

Terrible, Horrible No Good Very Bad Trading Day

Made a few entries.

bot STEC/FEED/TA  -- for quick trades.  Sold STEC/FEED for tiny losses... STEC broke out afterward.  Dumb.

I sold the GIGM I had bought at 5 for a .30 loss or so... lost faith again.  I still hold some in my managed account with a wider stop.

The PACR I bought is showing a loss. I will be stopped out soon.

I am losing money on INSM and CHIO.

NEP is turning into a big loss.

LLFH.ob -- I am actually up a little bit on this now... the only buy the dip play working so far.

TA rose immediately after I bought it.  I will hold.

I had mentioned CMLS and ROIAK a few days ago -- I sold them both for tiny gains.  Missing out on today's huge pop.  As I said -- I follow some of the best traders around... I just don't always trust them enough.

To top it off, I sold my ENDP this morning for a nice gain, but not as nice as if I'd just done nothing.  Fortunately I still hold some in my managed portfolio.

Overall, once again, I have done horribly with most of my decision making, but perhaps I am simply not being patient enough.  ROIAK/CMLS were great buys... but you have to wait, don't you.  Patience is a virtue.

My favorite China microcap now, LPIH.ob -- is of course, down on a rally day.

On top of all of this, I am feeling sick, probably swine flu.

I think I'll move to Australia.

Sunday, October 4, 2009

Crowd Behavior

 Interesting article in latest New Yorker about the financial crisis.  It discussed how the 'insanity' of the bubble in housing prices was rational because of the short term rewards given to CEO / Mortgage Banks.

Not participating in the bubble, and having a bad quarter, would cost CEOs their job.  Portfolio Managers had no choice but to buy into rallies or fall behind.  They can't act "rationally" if it means showing no gains while those participating in the bubble pull ahead.  Besides, they get paid each year.  When the bubble collapsed, no hedge fund manager had to give back his 2/20 profit share from the year before.

So the Fed's actions this year / approved by Obama (who doesn't know any better) have essentially made "too big to fail" reality and hence, the suprising rally.  But I suppose there's nothing suprising.  The first part of the rally was probably genuine  (into perhaps July).  But somehow, enough extra tricks (cash for clunkers, new home buyer incentives) created a tipping point, a which point, once again, even portfolio managers who don't believe in the stocks they're buying, are buying them anyway simply because they can't not buy them.

So in effect, we should expect bubbles to occur, and occur regularly.  I'm amazed how long they can run, although I suppose 7 months is not that long really.  It's interesting how this latest pullback has occurred, for the second time, directly after the quarter's end.  Right before Q. end is the time for maximum risk-taking.  

My feeling now is that the markets trend lower until about the first week of December and then miraculously start to rise into the end of the quarter.  Although perhaps reality is finally caught up and the market just crashes.  The problem with bubbles, is that the crowd behavior works in reverse.  If, indeed, a tipping point to the downside forms, now all the portfolio managers will sell, even if they fully believe in the stocks they are selling.  (With force liquidations, many don't have a choice.)  In fact, they will more than likely sell the good stocks with greater liquidity, and keep the 'toxic assets' because they can't be sold anyway.

We can see this on the charts.  In many ways, I worry because I don't really do my own research.  I keep forgetting though, that the charts can provide the answers.  If a stock is cheap, a value name, then it will only be a winning stock when more than just value players buy in.  And if that happens, the charts will always begin to show bullish signals.   I continue to try to combine both elements into my investing with mixed results.

Right now, I will be setting a stop on GIGM.  I'm getting a bad vibe and it seems to me if it starts trading below 4.40, it may stay down for a long time.  I'm better off taking a loss and reinvesting then holding on for a long time and possibly suffering greater losses.  My IRA has lost all its short term gains in the past week.  I can tell the next few weeks will be difficult times.

 This week, I will spend more times studying charts and price action and less on fundamentals.

 After all, it's clear something like AIG or even AONE is overpriced, but it is easy to participate in the names on the upside by following charts and momentum than focusing on what it SHOULD be worth.   Value investing is a lonely/patient game, and I believe firmly at the same time that Price pays.   So I will attempt more short term trading this week, focusing on charts and placing appropriate stops.

Friday, October 2, 2009

Melting, I'm Melting...

 Today was not fun.

 I'm really bad at selloffs.  I used to hold onto loser positions until they were down huge and finally sell for mega losses.

 Today was not great.  I lost less than 1.5% of my IRA but it felt much worse somehow.

 Instead of selling and getting into the safety of cash, I bought a little XIDE and more LLFH which could easily sink to 4.26 (50 day MA).  CHIO looks like it's about to fall off a cliff.  INSM looks terrible.

 My managed account dropped about $16,000 which is a lot of money to me.

 Overall, the market did exactly what I thought it would -- big huge gap down and the rest of the day was consolidation only the close was down because the new trend is now pain and more pain.  Nobody wants stocks -- and the dollar was even red.  That said -- it's pretty damn fucked (for lack of a better word) that of all things... AIG and BAC an GS and CIT were all green when these are supposed to be the problem children.  Add to that the overvalued AONE ipo which blasts 14.5% higher.   So much for value hunting.

 I actually was not around all day but got back on around 12 -- noticed some of my guys talking about YONG -- so I bought some and within 3 minutes decided to sell it (I had to go anyway) and made a fast $230.

 I'm sure I'm going to be punished more by Mr. Market but the fact is, I like almost all of the stocks I own.  I know there's a big correction coming but I just have no interest in trading every blip.

  So there are no jobs in America.  Is that the end of the world?  Maybe.

 I would like to focus more on my technical trading.  I had done no research on YONG, I bought in because I checked the chart and instinctively, I knew it was going up.  And it just went right up immediately after I bought.  I knew before I bought CHIO that the chart was terrible... and sure enough I'm down a bunch on it, even though the people I follow believe in it long term.

 So I'm going to focus on making more daytrades while holding my value plays.  I think the key is - you have to completely shift your thought process.  Value players buy cheap, traders buy trending up stocks on crazy volume.  It's hard to do both at the same time.

 I am going to add more to XIDE... I think the techincal sign will be the first up day.  It could drop 10 days in a row.  I don't want to buy it again until sellers are exhausted.

 So I'm feeling kind of nervous.  Although when I see AIG/GS/CIT all green, I have to wonder if shorts are not feeling a bit worried Bernanke's not plotting some crazy move.

  Well... it was a painful week, though not devastating.  I'm alive.  time to relax... no need to dwell on past mistakes.   If you shorted and beat Mr. Market, good for you.  The thing with these China microcaps, when they drop, they drop hard, but when they rise... they can rocket.  (see: YONG)

 Good day to you, sir.

Margin Calls?

I hear people saying the market will crash on margin calls.

Go check the 'nets.  Everyone is either short or holding 50% cash or more.

What's everyone going to do with their cash once the market drops another 200 points?  Just sit there collecting .005% interest?

Thursday, October 1, 2009

big picture: financials

I often follow individual stocks so closely... I forget to look at the big picture.

 I knew the markets were in trouble when I started shorting this week -- and let myself get stopped out instead of waiting for a clearer support pattern to emerge before buying in.

 Now it's quite obvious what's the big headline: CIT.

 They loan to small businesses and a bankrupt CIT is going to shockwave the whole economy.  Credit is going to seize up.  The markets could indeed plummet on another Bear Stearns like fiasco.  AIG has closed below its 20 day MA for the first time since the end of July !!!

 AIG is going to be the first to die here.  It's becoming clear a lot of the bailouts to banks were merely stopgap loans that delayed cash flow problems.  FNM, FRE, BAC have already keeled over.

 Now the stocks I own don't have terrible cashflow problems but they'll be punished as well.   The markets will almost certainly tank now unless.... big unless... the Fed steps in once again.  How could they not?

 Obviously this whole thing is a mess.  It seems the whole rally was just an extended period of hope that the Fed could bubble it all away.  But in the end, the Fed's action can merely delay the toxic debt from hitting critical levels.  Now CIT threatens and more money is needed.  Money the Fed doesn't have.

  Ultimately, I see this is as a great opportunity when value names drop as everyone moves to cash which won't last long.  The cash will eventually find a home again.  But most importantly, Bernanke has no intention of watching the New Depression unfold on his watch.  It's his purpose in life.   So let's see what crazy games unfold now.

   The world is watching.

GIGM support

see chart:

 I see a continuation of selling tomorrow.  I bought GIGM at 5 but now see true support is around 4.80 -- markets have memories.

 I was able to pick up 1000 at 4.90 afterhours.  Once GIGM hits 4.80 it'll complete the 3rd touch of new uptrend line.   One thing I like -- as there is a LOT of negativity regarding management on the Yahoo board... however, there is not a lot of short interest.  So not a lot of money where the mouth is. Investor now are waiting for the latest earnings report...

 My main thesis right now is the markets are going to carve out a bottom -- very fast... and then remain rangebound, much to the frustration of bulls and bears alike.  Those people shorting today may start the day feeling invincible and longs may be thinking the world is about to end... but the return of volatility will provide great opportunities for excellent traders.  Lesser traders will get their asses handed to them.

 I have evolved into a value player with a dash of technical analysis.  My intraday moves are terrible so I avoid playing that game.  And when I do, I do not take big positions.

 In general, I expect to experience quite a bit of pain now.  I'm not sure how I'll handle it.  It may get very scary.  Panicking late is a really bad idea.  So it's time to prepare mentally and accept drawdowns as a value investor.   Today was not a big loss but tomorrow might be a huge hit.  I suppose I'll have to take it one day at a time.

The SPY chart:

In retrospect, seems obvious enough.


 for a massive loss of less than 1% today.

 I always swear off shorting forever right before days like today.

 That was fun, huh?

HUM pattern

bot HUM for managed portfolio at 37.32.

This is based on a multi-day pattern I often use.  My stop is around 36.65.

It's a deep value name I haven't held for a while.  This is a swing trade.

Gut Feeling:

I want to buy cheap but my gut is saying tomorrow is going to be the knock out punch and THEN the market will settle down.

No reason to buy into a shitstorm, even when you're getting value.  I've got plenty of long positions.

I think I've seen this story before.  Two day punch -- with the market hitting a low before noon then rallying back for 2 days.

It seems to obvious to buy now -- the dip won't emerge until more people throw in the towel.  Definitely not there yet.  Too many bulls still.


A couple of people I follow like CSR.

Another China name breaking below the 20 day MA.

Now why should I buy?

 They've got a lot of debt which I hate, they have a lot of dilution which I hate more.  I don't really get all the GAAP vs. non-GAAP earnings situation.  Also -- it's pretty big - over $300m market cap.

 The best bigger cap small cap I ever bought was RINO.  It had a much better feel.  My instincts say CSR is a no-go.  So I say no go.

 Believe it or not, at this moment with the Dow -140...  my portfolio is down less than $100 and would be green had I not jumped into NEP with both feet... and promptly had my feet cut off.

So Correction...

But really, when you think about it...

what do you do when you go all cash?

Cash?  Cash just sounds like a horrible idea... I mean... cash is just going to mold and grow worthless.

I'll keep adding to NEP or something... I don't know.

I already have about 40% cash and it's just not really fun.

GIGM @ 4.98

This is a  'magic formula' stock.

I have fair value somewhere between $7 - $10 /share.

Now touching its 50 day MA.  I just bought a small amount for a long term hold.  I think I know this is a good value name so I can hold on if it drops another buck on me.    That's important.  When I buy spec. names I don't understand -- I tend to panic out.

GIGM I'm familiar with.  I like it under 5.  In fact, I like it a lot.  I'll double up my small position on further weakness.

Mr. Market:

good post:

Indeed:  I was a net buyer today so far.

This is the time to focus on companies, not markets.  I think NEP is a great example of a story that got better, but Mr. Market says it is worth less today than yesterday.  Don't argue with Mr. Market -- take advantage.

 Mr. Market will likely crush energy prices temporarily.  The strong dollar ensures this.  Energy stocks will suffer far more than their actual business.

  Probably my next watch list buy is XIDE.  Love to see it get hammered.  If AONE can trade where it does, then XIDE should be worth 15.

Yin and Yang

People lament down days.

But c'mon -- how are you supposed to buy a bargain if no one ever panics?

I bought NEP several times today on the acquisition news.  Now my average is 4.53 on a full-size position.  I'm happy with that.

I bought more CHIO  avg. .96

These positions are losers for now.

So was CSGH before it ran 100%

I bought back LLFH -- getting some at 5.01  today.

Market is still tanking.   Well good.  Did you know CSGH is up 8% today?   ROIAK is up 5%.  The markets movement can only provide you with bargains or extreme prices to sell out.   I admit -- I tend to panic too early.  (See how smart that was?  Did I profit from it?  No.  Ah, not that smart then.)

The Fed has some big auctions this week.  I think this is part of the game.  You have to scare people back into holding $USD otherwise you can't sell U.S. debt cheap.  Meanwhile, the companies I own are mostly making a lot of money anyway.  Except now I get them cheap.  What's not to like?

 Isn't it amazing how everything sells off when the market tanks?  There's no discrimination.  But this is the time when great traders shine and lucky traders die the death of a thousand overtrades.

red day / green stocks:

What's the bucking the trend today?

CKGT - up 2 cents.  I added a little more.  It's consolidating nicely.  And cheap.

AXPW.ob --  flat  -- might add more soon

CSGH.ob -- the king is up.  I'll wait.   I have 1/3rd my position left.

NEP  -- added back a full position today

GAXC.ob - up a penny -- at support I think here

CMLS -- flat -- not sure what I think, low vol.

ROIAK -- up  a nickel   on decent volume (for roiak)  -- might be about to trend up big time.

LLFH -- adding back my position sold around 5.85 last time.    Just got 5.35 and 5.15, bidding on 5.02.

I love how profitless AONE is up 10% today though...kind of funny.  Bodes well for XIDE which is not a bad entry at 7.70 but I'll pass for now.

Twitter Sheep

I went short a bit too early, or perhaps I set my stops too tight... but I always tend to want to short when the market is raging up.

Now Twitter Traders are shorting today -- after a two day drop and a 100 point drop this morning.

I'm tempted to find a long trade here.  Stocktwits are always following, never leading.

Well here's my play:   long PACR @  3.80   -- I'll use a close below the 50 day as a stop.  (but no stop set).

Kind of an odd bird, I know.  I like the chart a LOT more than the stock.  We shall see.  But at least I'm calling it early and not chasing some momo name.

CHIO - an idea

I like when I start to understand 'why' a stock trades like it does.

CHIO is a new 'hot pick' from my China value blogosphere.

The stock has completely died this quarter.  They have very little cash left.  They were also removed from a China Index:

And if that weren't all, the stock can not be traded online at Ameritrade OR E-Trade, you have to phone in orders.

However, if you look at their business, it looks pretty awesome.  Now, there's no way this stock is going to double anytime soon.  So many things have to happen.  But there are a lot of non-business related issues mentioned above that may be creating a heck of a bargain.  I only own a little bit.  This ticker could languish for a long time.  Is it worth adding. Or perhaps waiting for a catalyst?  Or is it a 'scam'?  (I don't think it's a scam really.)

 It's really not a name I would buy on my own.  But some guys I trust like it.  I wish I had more conviction.  If anyone has an opinion - post a comment.  (As if anyone is reading this blog, haha.)

Always Check Their Credibility

On Yahoo this morning,  in an article, Neil Hennessey says the Dow will double from here

Here's how the Hennessey Funds have been doing lately:

It should be clear:  Dumbasses like to make predictions.  It's in their nature.

Wednesday, September 30, 2009

October Cometh

Well -- this was a fine month indeed.

I doubt it will ever be quite so easy.  I traded back in 99-'00 -- the net bubble days.  I'm guessing many younger traders didn't.  It was so easy back then -- stupid easy -- like it is now.

When this bubble ends, it'll end abruptly, without warning.  It could have started today.  The Fed can't keep the game going indefinitely.

Many of the stocks I rode to glory like CSGH.ob are massively overextended and put in terribly bearish candlesticks today.  I sold about half my CSGH.ob the past two days but I really don't want to hold through a 30% draw down.  I might though.  It's a long term holding.

BSPM.ob had a massively bullish candlestick though.  I sold some but now regret it.  But everything looks toppy.

Some great traders I follow really seem to be more about "instinct" over some kind of formalized trading strategy.  They're good at sensing things and pouncing.  Or reversing course.  Some of the good traders I follow have recently raised cash levels significantly.  So have I.   They are sensing the volatility.  Today was a good example...  lots of whipsaw and a red day -- back to back.  

Look at the $VIX chart:$VIX&p=D&yr=0&mn=9&dy=0&id=p83158616956

If that were a stock -- I'd buy it -- it's right on the cusp of a huge breakout.  I tried shorting on Monday and it was a disaster but once again -- I was merely one day early.  I usually just panic too early.

All in all, I'm kind of exhausted today.  I feel like taking a day off.  The volatility is making me edgy.  I feel like every stock is a big trap waiting to suck me in.

I still would like to make one big day trade this week.  But maybe I shouldn't push my luck.  I will just be patient, that's all.  I don't need to be trading.

Some names I like for long term at nice levels:  EGMI.ob     I will buy more if it tanks.  Great story.  But right now -- I'll just be patient and see if the market provides any slam dunk set ups I can take for a short term trade.

Daily Charts

 Lately it seems, all the big volume days are down days.

 Definitely feeling cautious here.  Although I expect a decent enough finish on last day of quarter.  But today is a real failure for bulls.  There are lots of sellers out there today.  I doubt they go away tomorrow.

Get Cautious

Not a great day -- I made several very dumb moves again -- fortunately for minimal losses.

I've had several great days in a row.  It's very easy to feel 'blessed' and go out and buy any old sack of shit stock and assume it will rise like recent winners.  That never happens.

Market is bouncy and unpredictable lately.  My take on short term moves has been perfect, as long as you did the exact opposite of my calls.

My 'pump' screen is very red here.  Today is not a good sign -- the dollar is down hard but the markets still can't rally.

For the most part, though, I do best when I mostly ignore the markets and focus on my stocks.

ENDP on my own

I really have not found anyone that like ENDP on the web.

It's a big position in my managed account.  It looks cheap.  I do know a little bit about them.  I know Percodan and Percoset are big sellers but might lose patent in a few years.  I know Lectec is suing them and JNJ for patent infringement on some kind of patches.

This is one of those value names that stays very low I suppose because the growth is limited.  HITK seems to be the 'expensive' looking name that is outperforming.  I liked SEPR at 17 too -- even though I couldn't find anyone anywhere that liked it too.  Eventually SEPR got the buyout at 23.  I'll trust myself on ENDP.  It's one of the only ideas that came purely from my own research/screening procedure.  My target is around $30/share.

still going

BSPM.ob  did a little hop.

My people's pick me a winner once again.  I know very little about BSPM.ob   Basically what I know is: they are a drug company in China.  But once again, the power of the net provides another big win.

My Favorite Favorites...

The stocks I own list is ordered, more or less, by the names I like the best to 'worst'.  The last few names are stocks that I still love -- but may only be short term holds so they may not be on the list long.

If by chance someone were to buy based on my holdings, I recommend you do some research first obviously and as usual: I make no recommendations.  You could lose everything.

I've already made over 100% on CSGH.ob.  It's definitely much more risky now.

And INSM is definitely very risky.  Perhaps I'll list my purchase prices so people can see when I got in.

Tuesday, September 29, 2009

The Power of the Net

I doubt there's anyone even reading this blog.  But if there is, you should.  Look, there are very few super gurus out there and those that are super are probably not blogging and if they are, they're probably charging $50/month.  What's up with that?

What I do is browse through about 20 different sites each day.  I keep track of about 30 or 40 good investors that post on various sites.  Then I do my own research and select what I think are the best ideas.  Right now, the smartest people I follow very much like Chinese value microcaps.  In general, I think value investing offers the most reward with the least amount of stress so I like to stick with value.  I also like to trade but my trading tends to get me into trouble.  However, the next group of really successful investors I follow are active investors.  So I tend to allocate the bulk of my money to value stocks and play around with the rest.

Today I sold my CPQQ.ob in my trading portfolio for over $900 profit.  I held it for less than a week so I met my goal for the week.  I made a lot more of course in my longer term holdings.  My mom's portfolio had a monster day today, despite being 50% in cash and the indexes down.  Those China microcap names were huge.

In fact, I usually feel kind of sick to my stomach after making so much money so fast.  I feel like I'm doing something illegal.  I also feel like tomorrow my entire portfolio is going to drop 50%.  I don't have the right psychology to press my gains.  I sold a chunk of CSGH today to lock in the gains.  It's still a big position.

But the point I want to make is that all my success is owed to other people.  By following so many small time traders, I become a much more effective investor.  The whole Internet works for me.  And I work for you.  All you have to do is read my ideas.  It's really that simple.  The synergy of the net is awesome. Twitter is the best tool for traders the 'net has ever created and what's so great is that all of it is free.  Wall Street is run by thieves who screw their clients over, chisel everyone for fees, pay themselves big bonuses, and cry for bailouts when they fail.

Fuck Wall Street.

Together, us little guys with $5 grand or $100 grand or $1 million can outperform every year.  We don't have to pay those fuckers a dime.  And the more we work together, anonymous bloggers or friends or whatever, the more we can win.

I'm never going to start charging (like anyone would pay).  I'm not even going to set up those stupid advertisements on this page.  This is just a personal journal in a public space.  Despite making a half dozen mistakes already in public, I can already feel myself thinking a little clearer.  Maybe you can too.

Anyways, I'm rambling.  Tomorrow I'm going to spend most of the day with my kid so I'm just letting things go.  Not surprisingly, my portfolio often does even better when I'm not around to place stupid bullshit trades like SDS and QID.  (Never again!)  Good luck to you too.  Let's finish this year with a blast of fresh profits.

sold TTES

Hey, I made about $150 bucks -- so I bonafide daytrade for real profits.   Woot!

Still holding CMLS which is also up.  Woot!

INSM flat
HOGS - down further than my exit earlier

 I am smoking this market like a big fat doobie.  And no, I do not smoke doobie.  But seriously, I am friggin' SMOKIN' today.  I owe it to all the people I follow on Twitter/yahoo/i-hub -- whether they know it or not (they don't know it).

Compliance Plays?

A guy I respect on Twitter suggests buying names off Nasdaq Compliance tickers names like AXL and BZ and many others that have jumped several hundred percent since receiving notice.

I must admit I had bought CRDC then sold for a small loss -- at 1.20  -- it was in danger of delisting.  Then 2 days ago they receive a PP  and the stock has jumped 50% from where I sold it.  All happened in about two days.

I checked the list of non-compliant names and it just so happens I own two already that are on the list:  INSM and ROIAK.

 ROIAK received its letter last October but INSM's notice is only about 2 weeks old.  I added more INSM to my managed portfolio.  I'm very intrigued about INSM.

update: checked out a few charts, quite a few tickers popped strongly the very day the Compliance Note came out.  So perhaps quite a few people are playing this game.  It's clearly no slam dunk.  Some issues stay down for months and lose another 50% before finally rising.  I'm sure quite a few go BK and aren't on the list anymore.  Something to think about for sure...

Next Favorite:

 CSGH.ob was my favorite stock and largest holding (still is)

 But now that it's run a bit, my favorite holding is LPIH.ob -- because it has a much longer way to go.  But it will require some time, as all good value microcaps do.  I have no fear about this one.

TTES to go

entered TTES at 19.65 with a rather tight stop.  Oversold value play.  I get fair value around $30 assuming very low growth.  Of course, my version of DD is very cursory and not rooted in what you might call... education.

Still, this might be one that PMs want to show in their bag for the quarter.  It's already traded 96k shares today which is a lot for this microcap and it's a little green, which is more than I can say for the markets.

 Obviously, it appears I should not have dumped HOGS, but again, I must warn you that my short term trading is incredibly bad.

 On my list of short term plays is HITK which I never bought... now up a buck from the open (naturally I never bought this one), ROIAK, and CMLS (which I bought and am up a small amount).

 The CSGH.ob though -- lordy -- is a monster.

 Markets down but RTH, C, BAC, AIG green -- shorts need a lot more selling if this is going to stick during portfolio dressing season.

Schizo Markets?

A lot of people are seeing divergences in stock prices versus bond prices.

The market seems schizo.

Does it?

Question:  Will there be a lot of deflation or inflation in the future?

If I were a popular blogger, the comment section would be filled with dozens of comments -- all arguing both sides.  This question has believers on both sides.

Thus: a schizo market makes perfect sense right now.