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.