Friday, December 30, 2011

gold miner:

after gapping down --   bullish engulfing candle  with follow-through today...      good read on sentiment -- turned 100% negative at the bottom.  

Need to hold through the final plunge...     though.   

Thursday, December 29, 2011


/gc --  morning -  in freefall   down  30/oz.      /gc finally crashes to 1525 --  nice round area of support and bounces  10 pts.  --  safe to enter on downtrend break near 1528 for   5 or 6 pts.

 When trend is strongly down --   wait for washout  -- drop to 1525 was huge candle.   Exact bottom at 1525 good clue there's too much demand / covering and may see bounce.

Monday, December 12, 2011

trend down day trade:

internals  - strongly bearish...  the key was to do nothing -- and wait until 3 pm when the cover trade comes in ---  /tf moved 10 pts --   no way to fight it.  Getting long early won't work. but end of day will likely be a very easy trade with confirmation in  bonds getting weak and -- like today - the euro bottomed off an old low established on Oct.       On Twitter, permabears were covering with glee -- so it was clear the trade just needed the last half hour for the move. 

Tuesday, September 6, 2011


good choice -- strong name...

weak market required a longer waiting period after gap up -- dropped to near gap fill then bounced, higher low -- and then easy entry for 1.20 or more.  

opportunity for bounce was again at whole hour   (11 am -- a bit earlier than that). 

Thursday, August 25, 2011


identify support level.

enter trade
set stop
raise stop as trade moves green

HOLD trade for target area.  Do Not Sell unless target or stop hit.
Focus on ETFs.  do not micromanage the trade.

Tuesday, August 23, 2011


pick strong stocks in strong sectors --- on strong signals.    Don't overthink

Monday, July 18, 2011

best trades:

only watched half the market but the market was deep red and TZOO, CHKP, AAPL were up strong... so these were the ones to trade for a squeeze and indeed -- they all jumped into the close,  SINA too.

With TZOO, and CHKP --- vol. was particularly strong -- there was little risk here ... and lots of upside despite entering extended conditions.

 IWM was down big and had a feeble bounce. 

  main ideas:  1. You can't control what you'll make.  You can control how much you'll lose.   

2.  Trend trading must focus on strongest stocks always -- regardless of your feelings on value.

Wednesday, July 6, 2011


was attempting to fade the market after 3 bump set up in TZA emerged -- kept a wide stop and took bigger than normal loss.

attempted TZA again end of day --- stopped again.

Almost took SODA on breakout -- was the leading IBD name... but chickened out..  ran 2 pts. in a hour after I saw it move. 

Will need to be willing to go with strength... keep the stop tight... it'll work or it won't.  But contrarian fading is no good intraday.    failure...

Tuesday, June 21, 2011

triple sets:

some triple touches work, some don't.

 You won't know until

a) they touch
b) you connect with market action.   GDX failed a few days ago - but its plunge to the bottom corresponded exactly with a plunge in the indices.  When the indices bounced, GDX bottomed as well and went on to make a huge move 3 days later.  (GDX outperformed on the big rally day.)

These set ups often take time to form and time to push out and extend.  I need to take more positions and hold... as long as the market is doing okay -- hold on.  And wait for the touches.  The best entries are markets that are holding up well during corrective times.

Thursday, June 16, 2011

trend trade? no

GDX formed triple bottom at support - entered on upside break which failed, hit new lows...

GDX was down 2% at the time so trend was down , market was weak.  This was a contrarian play instead of an actual, bull flag or 'rest' to a new level.

 Market still weak...

 continuation patterns - easier to go with the flow.  TZA broke pullback and ran 1.40 in an hour.

1) identify 10 day trend, wait for pb, trade in direction of major trend.

Tuesday, June 14, 2011

gap up bounce

very strong bonce...   IWM , QQQs break thru top of channels   (key sign to avoid shorting today)

I shorted anyway - small loss.

AAPL and many others gapped up big to top of clear channels...  GDX.

IWM - magnet to top of 5 day range.

Clear sign:  99% IBD names green...  huge 11:1 up/down NYSE vol.   Squeeze day. 

IWM is climbing despite negative MACD signals. 

 -- set up was to buy  o/n  -- many stocks hit highs by 11 --  window of movement is very brief.  Now it's likely all churn until next stretched conditions.  

watchlist 100% green -- covering day... low vol. riser day...  lot of junk up big.

channels broken... oversold conditions gone now.

had SLV pegged -- dumped it instead of holding on for .60 gain... need to be patient with winners. 

Monday, June 13, 2011

today's easy trade:

IWM starting sinking but bottomed out right where it touched an extended trend line... then bounced for easy move. 

Or, entry on MACD cross and vol. would have gotten in .50 higher. 

Signals were very clear -- no reason to be early.   

QQQs touched 200 day MA and that was near the time bounce started.

Friday, June 10, 2011

Fri: Market Profile

terrible internals...

the game is skewed with downside risk...    bases form but break easily

-1100 TICK readings confirm sellers want out.

strong stocks are:  FDO, OPWV, YHOO (flatish), TSLA, LGF, UNG.  

to be CP -- must maintain the same focus on each trade...  first determining a Market Profile to determine probability. 

MACD very good indicator


need to wait until setup is crystal clear.     Early entries are losers -- always...

Need to develop market profile to determine how far to let it ride.  And then let it ride.

Tuesday, June 7, 2011

stop rule:

no need to ever risk more than $150  or under $200 with commissions/slippage

Wednesday, June 1, 2011

value traps:


Tuesday, May 31, 2011


set stop too tight on TNA -- missed 1.80 upside

PBR -- caught excellent entry....  right on established trendline -- took .10 heat.   exited too early -- gave up .20 upside for .10 profit -- total waste. 

got killed on NOK -- value trap. 

 did not enter EZPW -- showed early strength... missed 1.00 upside.   Should enter strong names.

Need to take losses and hold the winners longer.   Need to focus morning and last hour.

Friday, May 27, 2011


the basics of a set up:

market drops... it falls... settles... but no, breaks support keeps going...    now oversold... but STILL dropping... 

Then:  we see a reversal candle... a first push... but it fails... drops back... but turns again -- this time making a higher low.  now we see a base.

Next day: yep, there's a rally and it too falls back  ... marking 3rd higher low where it bases.....  and NOW:  NOW -- on the next push we often see a sustained rally, if not multi-day to top of channel and maybe beyond as sentiment shifts.      <--- goal is to enter around this area and not participate in the consolidation phase.

Thursday, May 26, 2011


UCO :  stop was TOO TIGHT -- stopped out 3 cent from lod....   ran .60 after that.

TSL - entered and sold for gain too soon -- had target which it hit (missing .35 upside)

MSFT: sold in morning... gave up .20 upside  --- at target...

     SAME STORY  -- no patience... too tight on stops.    

Wednesday, May 25, 2011


entered TNA -- set  $100 loss.

but when it ran  -- took $100  - instead of raising stop as per my plan.   Trade would have paid out over $500 with patience.  On SMALL size.    

There is only one plan that works and it involves letting go of fear.

Monday, May 23, 2011

lost on winners:

USO -- bought too early -- hit support 20 min. later -- then moved .50 -- small winner but lost.

MOS:  noticed strength -- bought it but sold for tiny gain instead of waiting -- would have had another 1.00 upside -- too much fear on one that was working. 

Both of these ideas finished higher from my entry on a weak day.  Respect you intution.  Don't cut yourself off (raise the stop instead). 

Key for the small pop was the standard 3-test touch on IWM -- a small rally fizzled but the entry would have been right on.  Confirmed within 15 min. of 3rd touch by vol. increase.

Monday, May 16, 2011


ZSL  -- on 3 bump support -- was correct.

SCO -- deep pullback  --  ran .60

IWM -- topped out after cutting above relative high (stop orders) -- reversed fast.  TZA  was correct.   All trades had less than .20 heat.

Tuesday, May 10, 2011

GDX trade:

broke downtrend... but retested to gap fill -- from there... 3 bump trendline formed and it was possible to enter with tight stop as new line held and gapped up next day.  

Key was to wait for downtrend to break AND trendline to form.  -- Once uptrend is established -- about a point above the lows from 2 days ago.

Tuesday, May 3, 2011

right trades:

MCP - heavy vol. from open -- ran multi-points... easy trade

INCY - heavy vol on ER.  Ran hard for 1.50 after consolidation.

USO - 3 bump weakness... finally tanked...   SCO ran 1.30

First two - heavily shorted names, highly extended charts.... show strength early on (gap up opens)

Monday, May 2, 2011

trendline breaks:

TSL  - broke -- ran  1.70  then faded

IWM broke line --   TZA ran a point

SLV broke trendline (set up 3 bumps descending) dropped 6% intraday.

These are the best intraday trades to take.  

Also CCJ - ran a point,  ANR   1.50  -- all on trendline breaks.  The stop should be right under as there should be no weakness when entering.   Should take 1/2 position then add. 

Market is now broken and all swings are traps.

Thursday, March 31, 2011

intraday plays:

FNSR -- was strong at the open.. Traded heavy vol.  Could have entered midday and still gotten a point. 
Strong, story name, volume, strength

IPI - traded 2x normal vol.  Created  classic 3 bump pattern over multi-day -- 3rd bump was low of day for .80 move.  Big vol. bar hit on low of day - 5 min candle.

Key is to go with trend.
Don't be afraid to buy in.
Set stop tightly -- will not get hit if you buy right.

Saturday, March 26, 2011

recent trade notes:

GCI -- .30
SVNT:  .70

AEO: .60

TSL: 1.00
SANM: .50
TZA: too soon.  waiting for 3 bumps
SCO: too soon - needed 3 bumps.  stop too tight
F: did not enter
MSFT: .50

goal: hold positions longer/overnight
establish  3 bump entries -- when in doubt, unclear, do not enter.

accept losses.
patience on winners is a big drag. 

Thursday, March 10, 2011


The market is always giving you information.  Just not necessarily in a language you're familiar with.  Your job is to listen carefully. 

Do it long enough, and you'll start to hear what the market is saying in bits and pieces.

Wednesday, March 2, 2011

Time of Day

Once again - market began its downtrend at PRECISELY 11 AM -   then it was an easy - hold all day short.

Need to relax when trade goes my way...

goal: stay in the trade with raised stop along the way... patience with winners.  Do not be afraid.  Keep position size small.  Gain confidence.

Take it one day at a time.

Listen to the market.  Search for relative strength.

Monday, February 28, 2011


hypothetical trade:

gap down --


starts to recover, pulls back
at PRECISELY 11 AM - creates a 3rd touch on lower trendline -- possible entry with .10 stop - goes on to move 1.30 - with no pullback

key: waiting for 3rd touch, waiting for 'on the hour' moment.
also: internals were mixed -- leadership was notably weak - to support going short.  Gap up open (in IWM) exhausted buyers.

Friday, February 25, 2011


wait for whole number area to break -  then some kind of dragonfly candle - or enter later at trendline break.  Should be fast and immediate - no heat / no waiting.

Wednesday, February 23, 2011


mostly the same:

every trade must have a stop that limits losses --  my worst trades are my 'highest conviction' ideas.  I need to prevent myself from talking myself into holding for extended losses.

We are now in a correction so technicals won't work.

Must avoid holding thru these times --  fear taking over.

I have the capacity to rebuild...  must be slowly.  Must not add to losing positions.  Must see the market structure.

Learn from losses. Only way to move forward.

Friday, February 11, 2011

missed runs


why: too fearful, wasn't patient enough to wait for the big up candle.  All were acting well.

Solution: start with smaller position. Maintain stop area (break of clear support) then add as strength is seen.  Accept slightly larger drawdown. 

Must accept losses to make gains.

Saturday, February 5, 2011

twitter quote

You can't stop the waves, but you can learn to surf.

This is the essence of technical trading.  You are very much a surfer on the ocean, waiting to catch a big wave.  Sometimes you are carried far, sometimes you fall off.  Sometimes the wave dies as soon as you get on.  But you accept the (hopefully small) losses and keep trying.

The waves that will carry you far are the strong stocks with powerful volume.  Volume is key.  There are other elements like a small float and sometimes a high short interest that can create a powerful move (see SFLY).  Hot sectors can also push stocks.  ARMH sells components for iPads -- the stock trades at over 10x revenues but it won't slow down.  It will of course, slow down eventually -- but this is the nature of the ocean -- always changing.

You never get attached to these stocks.  How do you attach to a wave?  You ride the wave, you stop riding the wave, you ride the next wave.

Changing, changing, always changing.  But done right, your portfolio moves in a single direction.



except for Monday's small win, I did not accomplish my goal despite many opportunities.  I had candidates lined up each day.  High volume story stocks like  RAX, SFLY, CRUS  --- these are the kind of hot stocks that are safe to trade intraday since you can easily risk $100 to make $300 - $500 on each trade.  These trades are actually quite safe -- the strong volume is the wave of power that keeps them moving up on each breakout. 

They appear unstable -- and they will be -- but for the day, the only way to make money is to go with the trend when the volume is there.   Instead, I dabbled in TZA and gave away profits.  I shunned strong stocks.

This market is currently in a bubble.  The hot stocks are very very hot.  The rest are not.  Money keeps searching for a home and cash is not king.  I am probably early in being short with TZA.  I knew the first week of the month would be strong -- it always is.

The negatives are creeping up but not there yet -- the volume is light.  A few leaders are really broken like AMZN.  OIH is overextended.  The dollar has woken up.  Nonetheless, there is hot money pouring into tech, software and chips in particular.  Valuations are beside the point.  QQQQs hit a new high but AAPL peaked in mid-January.  The light volume is the issue -- all good waves require power and without more power, the danger of a fast and sudden pullback increases dramatically. 

My plan now is to remain heavily in cash and trade power stocks intraday.  I get the sense most people are happy to be long -- fear is gone... and there's plenty of stocks to play.  But I remain cautious until we see more participation from the market.  Breadth is bad which is another warning sign.  But waiting for a correction is futile.  However, I think the dangers of a pullback now have increased greatly so I will not hold positions either. 

Next week - I want to again attempt to make more money daytrading. This means:

having a short list of hot stocks that are moving with heavy volume.  Buying these stocks on trendline breaks - just like on a daily chart.  Key is:

1) Story stock in strong sector
2) tight float
4) expensive price -- will seem ridiculous in value
5) up day in market.

Tuesday, February 1, 2011

today's weakness

I bought AIG after noting a 3 bump support pattern.  I bought, set a tight stop -- waited... stock began to break out.  I grew fearful since the move took a while to materialize and didn't want to get stopped out.   The entry was correct and I gave up 1 point upside.

I bought AMSC -- based on volume / ER positive guidance.  Waited for pullback. Entry was okay.  Stock stalled and I sold before it hit my stop.  The stock did indeed pullback through my stop but eventually ran .80 from my entry.  The stop was a bit too tight and I was far too fearful of  getting stopped out.

I bought CYOU yesterday and sold too early and did not hold through strength.  Stock ran 5 points beyond entry. 

The fear and lack of confidence is costing me big gains.  Meanwhile, I patiently sit on losers.  I got out of SOL  for a gain but first took a large drawdown with no plan. 

I feel comfortable daytrading as I don't have to hold overnight.  However, I need to be able to let winners run and let go of the fear.  The plan is the plan.  My losses are always contained but I still don't want to lose.  I need to accept losing so that I can allow winning big.  

The other thought is to accept what you see.  Strength pays -- strength always pays and a trend follower must follow.  Accept what you see.  Allow the market to call direction.  Ride the wave without emotion.

Monday, January 31, 2011

CYOU later

Well -- mission accomplished.

This morning I noted that CYOU reported strong earnings and was gapping up.  I saw it had a small float and so I targeted it for a daytrade.

i waited for CYOU to attempt to fill the gap and then I got in as it began to bounce.  It dropped again and I was close to being stopped out but it recovered and it ran pretty fast.  I was trading small so I got out with an .80 gain.  Then it dropped and I bought it back about .40 lower than my exit.  It traded flat all day but near the end it picked up again and I sold it for a small .22 gain.  However-- it went on to close at the highs.  I was far too cautious -- but I correctly found an 'in play' stock -- made a decent entry -- and easily made some money.  Not much -- but you could make a living if you could do this every day.

So my goal is to hit another 'in play' stock again -- I will increase my size just slightly.   Overall - today bounced like I expected and the beginning of a new month is usually strong.   The only weak stock I saw today was SKX which lost the 20 day MA -- but on light vol. so I'm not too worried.

BIDU posted some strong numbers as well (note: CYOU is kind of in the same sector).  Oil stocks were raging and unfortunately, I have no exposure. 

I did have a winning month which is good.  And I think I beat most of the indexes as well.  Nonetheless, it could have been better.  I plan to be more cautious in Feb. and look for more in play daytrades to add to gains.  Swing trading does not seem to be working right now.

 Since the market is full of one day story stocks -- daytrading the strength seems to be a better way to manage risk.   We shall see.

Sunday, January 30, 2011

ARAY - 5 min Candlesticks

I have seen several big one-day winners in the past week and they all seem to follow the same script.  The open is always a gap open which most traders are afraid to buy.  The gap never closes and the stock runs almost the entire day, usually providing at least 2 ideal areas to add more and raise one's stop to protect against failure.  I have annotated the last story stock.  Next week, my goal is to participate in at least one big one-day runner.  Now that I know what to look for, I have a specific plan to enter and manage risk.  

ARAY - 5 min Candlesticks: "


Friday, January 28, 2011

and just gets worse

Let's just say - I"m glad it's Friday.

Thursday, January 27, 2011


I was all over the place today.  Bought weakness in CEDC and it got weaker.  And all day - I knew exactly what was going up.

Volume makes the world go round and today the volume was in CRUS and CCME -- these trades were easy but I could not get comfortable finding an entry and just watched them climb all day. 

But I can see there's something odd going on.  The market is in love with a few stocks far too much -- like NFLX and CRUS and AMZN and that usually ends in tears.  Case in point:  AMZN just reported and just got clobbered, losing all its wonderful gains for the day in 4 seconds.

Meanwhile, the gold, silver, oil names are weak and getting weaker.  The market perhaps is thinking about rate hikes in the future (as well it should).  Record food prices is not good for any economy.

Well... it's been a weird month.  I did great the first 2 weeks and then it went quickly downhill.  A lot of second-guessing myself. 

One thing I did right - sort of - is take a lot of these losses quickly.  I gave back a small piece of the gains so it's good to remember what is correct thinking and maintain that.  What I need to do more of is: Buy Strength.  That's what worked the first two weeks. 

 At the moment my best holding is PLNR and I like what SKX is doing. I added some GCI which was acting strong but I managed to pay the high of the day (one penny less) and then it dropped back. So let me be an example of what not to do as you progress to master trader status. 

The other thing I did is sell my YHOO position as it ran very fast and I made the huge mistake of buying too much.  I got out at a very small loss and now I will rebuy it but maintain a proper stop. 

So overall - it's been another week of pain.  Hope your day was better.

SKX - Daily Candlesticks

I like this company's fundamentals and the chart is now creating a bowl-pattern with the 20 day MA - I often find this pattern forms before a big move.  Either that or the bowl breaks down and it's a good time to exit.  I'll try to post more charts here.  If all goes well, SKX target is low 30s.
SKX - Daily Candlesticks: "


Wednesday, January 26, 2011

Disappointing Day Of Disappointments

There's something particularly humiliating when you lose money on a day everything is going up like gangbusters.  It was a full on Costanza day with YHOO, SKX, SVNT, AGYS all moving south as the Fed took the OIH index (index!) up 5% 

Does the market care that Yahoo has Internet holdings worth the entire market cap?  Of course not.  The purpose of the market is to remind me every day I have no idea what I'm doing.  And it does a great job of this. 

Remember my last post - i was so smart to get out of HTCH, right?  Oh, except right after gapping down on the crappy earnings report, it moved up over 10% intraday -- my $180 loss could have been a $600 gain.  It only wanted to be weak long enough to suggest it might go down -- and then it went up. 

 I did notice on Twitter that quite a few people I follow got faked out.  So perhaps I'm not alone.  I knew the market was going to be tricky here.  I just didn't think it would go ahead and rally big -- but STILL show me losses.  But of course, I will live to fight another day. 

Today pretty much erased a lot of negative technical signals.  Bernanke has promised to keep the party going and the dollar is sinking to oblivion -- and this naturally is always good for stocks, particularly metals and energy.  However, it's no time to be complacent.  AMZN finished red.  SBUX is down after-hours.  NFLX on the other hand - is ripping the faces off shorts.  So you got to be nimble and perhaps a little lucky.  I was neither today.  I was George Costanza today.  YOU HEAR ME, JERRY???

Tuesday, January 25, 2011

Losing can be winning

Today I lost about $185 on a daytrade and it was easily one of my best trades of the day.   Someone I follow likes HTCH which I did some research and I liked it as well.  I traded it a few months ago and made some money. 

I bought a little HTCH on Monday and then today, I added a little more... it was holding the 50 day moving avg. and I knew they were reporting after the close today.  However, about half an hour later, I got a bad feeling.  The stock was now trading below the 50 day MA and I realized, looking at the chart, the stock was being dumped right into the earnings report.  The more I looked, I quickly realized that someone must know the results of the upcoming earnings report and they were terrible. 

I didn't hesistate.  I quickly sold my shares and took a loss.  About 5 minutes later HTCH was trading even lower.  The stock was weak all day and finally, after hours, the results were released.  A total miss.  HTCH gapped down almost 10% from my sell price - saving me at least $600 in losses.  This was a good read.  I was looking at the HTCH  yahoo! board where one poster said he added more because it was now a lot cheaper.  I used to do that too.  Adding to losers is a natural instinct but it rarely pays.  The earnings report stunk.  So why should the stock move up any time soon.  

Being impatient with losers requires practice.  And a willingness to admit you were wrong.  It's okay to be wrong.  As long as you don't end up really wrong, you can survive to fight the next day.


I sometimes like to trade surprises.   Today I bought some SVNT when it was announced they have a new CEO.  The CEO used to work for Lilly and may be a good guy to help sell the company.  SVNT chart is very weak -- so it's not pretty.  I'm already losing money...   However, volume is strong today so I'm going to hold on -- assuming some bigger institutions are going to get interested.  SVNT has a huge short position -- so they may be forced to cover.  Either way, I have set a stop to limit my losses.  I thought LGF was a great buy when an insider bought over $5 million worth at 6.50  -- LGF now trades for 6.10.

If you assume things are going to go wrong every time, you'll likely minimize the loss when they do go wrong.  SVNT seems like a great idea -- down at the bottom, with a surprise CEO and shorts trapped.  And yet... don't ever assume the market will do something.  It's built to fool expectations.  So always expect the worst.  Then you can never be disappointed.

Monday, January 24, 2011

chop day:

Mostly took this day to reduce risk.  Took losses in ARAY, LGF and MLNK.  Made a little in AMED, CEDC, and GCI.

I added to PLNR which closed at the lows on low volume.  I can live with that for now.

The market was very mixed.  I became concerned when I noticed the steep fall in AGO -- suggesting there's some distress in municipal bonds but there was no news.

YHOO started out weak and finished strong.  They report tomorrow.  I still think there's a lot of value there, regardless of earnings. 

With the Dow so close to 12,000 -- chances are it crosses the threshold, but then what?  Based on the people I follow, caution is warranted.  I'm getting some confusing signals so it's not as if the market is about to correct but it's not necessarily strong. 

When in doubt, protecting profits is top priority.  I also took a loss in LGF which had insider buying.... but it closed even lower.  As much as I like fundamentals... I find I do better to listen to charts then fundamentals.  So with all my sells -- I got rid of several weak names and no longer have to spend time worrying about them.  Having this psychological burden of holding losers is very helpful -- allows me to focus on the next winner.

Sunday, January 23, 2011

Value buys:

Two recent buys -- BBND and TNDM are both owned by ValueAct.  I have a little BBND to start at 2.63 -- ValueAct bought a lot at 2.80 and higher back in June 2010.  These kinds of value plays usually take a long time to work out but can often be very rewarding when they finally pan out.  BBND in particularly is one of those companies that looks terrible and has weak management.   TNDM chart is much stronger and may be in play soon.   So BBND is more of a tuck it away for later. 

I'm still not sure what the market will do here... it should drop but then again.  GE and AXP look good, REITs look good.  JNK (corporate debt) is very healthy.  The tech names are very pricey and deserve a correction but this may not cause a major selloff.   Breadth has been weak for a few days but this can turn on a dime.  The McClellan Oscillator is nearing major lows at -50.    In June, Aug. and Nov. of 2010 -- the market bounced when $NAMO (McClellan Oscillator for Nasdaq stocks) hit around -58 give or take two points. 

Many technical traders I follow have gone to 40% to 100% cash levels and have 'sell' warnings on.  So there's plenty of cash out there that is waiting for a home.  So it's a little unclear what's coming.  But more importantly, it doesn't matter what's coming as long as you're prepared when what's coming comes along. The issue I have with pure technical traders is, they never ever get to buy really cheap stocks when they selloff sharply because other technical traders are selling. 

Perhaps I'm wrong.  But for example, I am holding the technically weak YHOO because I think the Street is not fully appreciating the balance sheet and that can change quickly.  But understandably, cash is a very good position to have right now.  Ultimately though, traders must embrace risk in some form.  The main problem is how do we protect against large losses that devastate an account.  As I've posted before, holding a loss until it becomes huge simply to avoid admitting a mistake can be devastating.  I think men, in general, tend to be terrible at admitting mistakes.  If you have trouble admitting you are wrong, to yourself, or your spouse, or in general, it would be good to keep this in mind and perhaps seek to let go of this fear.  Once you let go, I doubt very much you'll be any worse off.  Quite the contrary.   Fear is a big big issue for traders -- in all its permutations.  I've been thinking about fears a lot and how to overcome them.  Perhaps I'll post some more on this later.

Friday, January 21, 2011

a real post:

from the Yahoo! MLNK board:

During the tek bubble about ten years ago.
(couldn't get out at the time)
As this turd evolved into its present MLNK many promisses were made when a reverse stock split was pumped to where we are know.
Its taken a long time to get to this point with this and other investments.
I will use the sale of this LOOSER to cancel out my other gains this year.

FYI-The sale of this LOOSER will represent a loss of ~150K. Lesson Learned ! 

Imagine holding onto a stock for a $150,000 loss. And the thing is: This happens all the time. This is a natural instinct -- avoid pain by not selling and "taking the loss".  This investor has been taking the loss for years.  Imagine what that investment could have been had he taken say, a $5000 hit and reinvested somewhere else.  Being patient with losers (aka LOOSERS) is how the average investor behaves.  Don't be average.

new trades:

added GCI  -- on strength - bounce off 50 day MA, value -- stop will limit losses well

added MLNK and AGYS - old favorites on big dips -- may take lots of heat
LGF and YHOO -- down badly holding value names (rejected buyouts)
added TNDM - strong 20 day MA hold - wider stop
added GRS - at 50 day MA weak (tight stop)
most confidence in: TNDM, GCI 

edit: sold GRS for loss.  Holding others.  GCI and TNDM finished the best.  PLNR which I'm holding also finished well.  In fact, I think I should add to PLNR immediately.     MLNK and AGYS are the  absolute worst (technically) and I'm thinking I should take the loss and rebuy later.  LGF also finished terribly on strong volume.  Fundamentally I love them all but fundamentals rarely helps with technical trading.  They all have problems and the Street does not like these last three.  And there's no catalysts to turn them around.  So stick to what's strong and that's PLNR and possibly TNDM going forward.

Thursday, January 20, 2011


I took profits on many names once I saw the weakness in major indexes.  I ended up starting new positions in YHOO and LGF -- both co's that rejected buyout offers and are much lower.  My strategy here is to take a lot more heat because I know the value is there.     One stock I took a beating on is LTON -- another value name that I let slide and I ended up taking far too big a loss because I thought it was cheap.   Big mistake.   I had bought ERY as well and ended up selling it far too quickly, giving up over 1.30 in upside instead of letting it go.  The key was that it went green immediately and that's always the first sign the trade is going to be successful.  My sale of OPWV at the first hint of trouble was the best loss I took so far -- saving over a grand and a lot of heartache.

Taking the quick loss is a very important strategy.  To hold on is to fail.  Always remember to bail on the first sign of trouble.  You will be happier.

Saturday, January 15, 2011

What's working:

Finding high volume plays like CPE and SANM --  also some daytrades likes ALXA, BPAX for small easy gains.

What's not:  Selling partials on winners like SANM instead of adding even more.  Buying weak names on pullbacks like GRS (although remains to be seen if this plays out).    Still being too cautious.   Still hanging on to missed entries.  Let them go -- the market will always provide, providing you are prepared.   Focusing on strong stocks in strong sectors with strong vol. tends to lead to instant profits... very effortless once the correct thinking is in place. 

Do not be complacent.  Do not become excited.  Trading is not supposed to be entertainment.  It should be hard work that is rewarding because it's done well.  Exciting/speculative ideas are bad ideas.  I want big movers, instant movers. 

Another thing I did right was take a loss on a strong vol gainer that turned into a big vol. loser the next day.  I simply took the loss and it was small and easily wiped out with a few of the quick daytrades.  

My motto for 2011 is  "If they want it, I want it."   I feel like I have simplified a lot of my trading process as well and that's a good thing. 

Also want to remember to take it one step at a time.  I am on pace right now to be profitable and sustainable -- no need to go for homeruns if this can be replicated month after month. 

Thursday, January 13, 2011

things to work on:

searching for volume.  Holding strong volume stocks longer.

Taking less  weak stock trades... waiting for fatter pitch.

Taking more size in  high volume / strong set ups.

Doing well:  Identifying strong stocks/set ups a little better.  Entries are not bad.   (Exits too quick)  Exiting losing positions quickly though -- definitely not sticking around on weakness.

Tuesday, January 11, 2011

mistakes were made

took a big loss in NEWN today - far bigger than I should.

What did I learn?

 NEWN has no institutional support, so I never should have bought to begin with.  Today the stock broke down on heavy volume... but my position was too large so the loss was bad.  It closed near the lows.   Also - it's a China name and those stocks are just too full of dubious people to be safe.   Otherwise, it really wasn't a bad day. 

Monday, January 10, 2011

can't stop this market:

It's difficult to stay long in this market but it's difficult to short too. 

Far too much strength.  The CCME gapped up today but closed much lower -- always good to take profits on choppy names.

I need to develop the patience necessary to wait for the right set up.   The solar sector has finally caught fire.  I bought AEIS to participate.

Friday, January 7, 2011

ups and downs


 there was good and bad today.  My best idea, CCME paid off and I decided to take all the profits and raise cash as the markets began to tank.  The close was much stronger than I thought... but then -- that's nothing new.

  I decided to listen to the indexes and play defense... raising cash on the extended market.  The last 3 candles are identical to the April highs.  So that was what really got me defensive.  If it plays out the same way, it'll be a brilliant call.  Most ppl are not defensive yet..  So front-running a panic may save the day.  Either way - I can daytrade strength.  I just don't want to hold much here until we get a correction.

Thursday, January 6, 2011


fear is a nemesis.

I make the right trade...  but taking profits too early is a big drag on performance.  Patience with winners is critical.

Yesterday the market started weak but immediately turned very bullish.  No reason to sell when risk is properly managed.  Sometimes there will be a drawdown.  If it's managed, it's managed.  Trust your research and yourself a little more in 2011.  The market speaks in price action and volume.  Listen to the markets, not your feelings.

Tuesday, January 4, 2011


Attempted a few daytrades to no avail.  The market was very weak and I did not pick up it fast enough as the open slipped quickly to red.

A trade in TSL was entered too early -- and it was 2 cents from stop out but I managed to exit for slight gain.  SKX was traded twice - ended up losing $20 overall.

When the market is weak... it pays to be very patient.  Two positions were stopped out as well.  I guess that's how it goes.  I decided to bottomfish WDC and that worked for managed account.

I should have focused on obvious runner SHZ or MCP -- the vol. was strong and both had big runs after setting up.  I do not like the names but that's just me being judgemental.  The market likes what it likes.  And there's a reason drek rises.  Value names SKX and WDC were punished.  It's not a just market... it's just doing what it does.  For a  daytrade, MCP was strong and SKX was weak.  That's all you can say.  Whether you accept it or not, this is what is.    I did fortunately sell one position on the gap up so I had some gains for the day but paper losses overall.

Monday, January 3, 2011

Good Start

A lot of stocks I've been holding began breaking out today.

I'm glad I've been patient.  I sold a few stocks that ripped that I felt were extended.  I probably should have just held.  Now I'm out of them.  However, the ones I sold mostly finished lower.  It's okay to take profits.

 I bought a few new positions and I feel good in that I kept the positions small and I know exactly how much is at risk.  I won't let them spin out of control.   The market is extended but the action is strong in many individual names. 

 I made a few daytrades in TZA which were pointless.  Shorting is not my strength.  Or rather, the market was way too strong... and that ticker is very tricky -- so avoid because the swings are too volatile.  Make the easy trade always or do nothing.

Sunday, January 2, 2011

four strategies for 2011

1. 20 day MA bowl:  This is an entry as the 20 day MA carves out a bowl pattern, often in a value play.  The bowl represents a basing/accumulation period that will lead to a long swing or a quick stop as the 20 day MA is broken.  These require a lot of patience.

2. Trendline entry.  When a clear trendline develops (3 touches), buy on the trendline, especially if volume is light.  Looking for candlestick confirmation.  Exit is top of the channel -- since chances are this stock is not ready to break out.  Trendline is often not connected with moving averages, usually below them).

3. Breakout of trendline. Simply entering on a breakout.  Must occur with HIGH VOLUME.  Good for daytrades.  Stock should have news/catalyst and/or be in strong sector.  Works best with high institutional participation. These stocks can and often will be 'expensive'.  Ignore valuation. Price action only.

 4. Intraday / short term swing 3 bump pattern.  Often a strong stock having a bad day - or taken down by shorts.  The entry will occur after 2 higher lows have formed.  Entry on the 3rd swing -- hopefully the 3rd higher low.  Stops will usually be no more than .20 from entry.  Position size can be large for daytrade, smaller if holding overnight.  Works best if pattern forms near previous support area.