Wednesday, March 10, 2010
Upside Levels (if we make a sustained upside break)
1230 - 61.8% retrace of entire pullback
1200 - resistance on the 3 year weekly
Tuesday, March 9, 2010
One of my theories yesterday was that we would get a 50% retrace of Friday's candle. It didn't come to fruition yesterday, but last night we did get a 50% retrace of the entire Friday/Monday move. I've been using Fibs quite a bit lately, and this is just further confirmation that Fibonacci rocks in the trading world!
Monday, March 8, 2010
Basically, I bailed out of trades early. I over-reacted to three bars (marked on the chart below), and I didn't execute trades exactly when my trading plan says I should (i.e. pshychological low points -800 or +800 on the TICK).
This graphic gives a breakdown of what happened to my morning trades:
Saturday, March 6, 2010
Thursday, March 4, 2010
1100 - big support
6 Month Chart for Near-Term Upside Levels:
1122-1125 - Current level and 76% retrace of current pullback.
1131 - resistance
1150 - breakout and continuation of bullmarket?
3 Year Weekly Chart - Levels for Dreamers!
Wednesday, March 3, 2010
Tomorrow is the day before the employment report... do we stay in this 1115 to 1122 range while we await the numbers? On the other hand, there is a lot of other data being released tomorrow.
I didn't love the way I traded today. It felt like I was chasing too much. At 2:14 EST, there was what I like to call a "NO DEMAND" bar (circled on chart below). The significant thing about this bar is that right after it, there was a large -0.75 bar confirming that there was no demand. Also, the volume histogram shows that the NO DEMAND bar occured at a very important price level. I should have nailed this trade, but I wasn't quick enough today. As a result of my hesitation, I didn't get into the selloff until 1118.50 and then again at 1119.
Tuesday, March 2, 2010
Monday, March 1, 2010
1115 is key. If we break the 3 day trendline (right shoulder of H&S patten on the 30 day chart below), then first stop is 1110. Then, 1105.
If we break and hold 1115, then 1122 is the 76% retrace of this entire pullback. There is also resistance at 1126.
Friday, February 26, 2010
Wednesday, February 24, 2010
... but this time, I'm doing it differently. With extreme discipline and I'm gunning for singles, not homeruns. Here's my trading plan:
Trading Plan for Emini Scalping
"Managing Risk and Hitting Singles"
As of February 23rd 2010, I am adding Emini scalping back into my arsenal of trading weapons. This is something I have used, on and off, throughout my trading career. I can honestly say that I have made a lot of money but have not been TRULY successful. On the other hand, I have lost a lot of money, thus, I have not been TRULY successful. So, how can I be successful while both making and losing money? I can avoid these pitfalls which I have not avoided in the past:
1. DISCIPLINE: I was not successful because I did not control my risk EVERY TIME I entered a trade by also entering a stop. Trades would occasionally get away from me and I would take the big loss wiping out all my scalping gains.
2. GREED: I was swinging for homeruns instead of consistently hitting singles. Small 1 and 2 point gains are statistically much easier to attain than 8 to 10 point gains.
3. METHODS: I was trading off of patterns only and not putting in the nightly work that it takes to identify significant price levels.
1. Control Risk AT ALL TIMES
2. Hit Consistent Singles, Not Homeruns
3. Do not trade when work takes precedence
4. 1st Month – Feb 23rd to March 23rd
a. $300 per week or 6 Emini points per week
5. 2nd Month – March 23rd to April 23rd
a. $400 per week or 8 Emini points per week
6. 3rd Month – To Be Decided – Based on performance of 1st and 2nd months
Each night, I will do the following:
1. Identify support and resistance levels on the Emini daily, 30 minute, and 5 minute charts.
a. Support/Resistance levels will be marked using the following:
i. Price/Volume Histograms
ii. “Eyeballing” obvious support levels on the charts
iii. Fibonacci retrace levels
b. On the daily SPX chart, I will use NYSE-TRIN, McClellan Oscillator, and the VIX to help determine overall market direction bias.
2. Check the economic calendar to be aware of timing of key data releases
I will not take a trade unless price action meets my criteria for a “trade setup”. I will use the following criteria that define a “trade setup”:
1. I will initiate a trade when the market displays a temporary emotional high or low. An emotional high or low occurs when the NYSE-TICK is either above 800 or below 800.
2. I will initiate a trade at a support or resistance level which I plotted out during my “preparation” period.
3. I will frequently tie #1 and #2 together.
4. I will look for divergences between price data and tick data.
5. I will look for high volume and low volume bars on the 1 minute chart which can signify turning points in Emini contract demand.
1. Whenever an order is placed, my trading software is set to immediately enter a stop order 1.5 points from my entry point. Depending on the volatility of the day (or moment), I will have leeway to modify this stop up to 2 points from my entry point, BUT NEVER MORE THEN 2 POINTS. This is the most crucial part of my trading because the act of placing a stop EVERY TIME eliminates the risk of THE BIG LOSS.
2. After a 3 point loss in a given day, I will stop trading for the day.
Managing the Trade
1. I reserve the right to exit the trade before my stop is hit. Sometimes price action is so obvious that I know my stop will be hit. I would rather take a half point loss than a 1.5 point loss. I know this will result in occasionally missing out on positive trades which wouldn’t have hit my stop before I exited, but I am okay with this.
2. I will move my stop to breakeven when price action tells me it is safe to do so.
Closing the Trade
1. In 90% of my scalps, I am looking for a gain of 1 to 2 points. The trade will be exited after this goal is met.
2. Occasionally, if the market is strongly trending, I will move my stop to breakeven and attempt to attain a 2 to 4 point gain. I realize the probability of a 2 to 4 point gain is MUCH LESS than a 1 to 2 point gain; however, it will be up to my discretion to determine when I believe the market will allow me to take larger than normal gains.
Friday, February 19, 2010
Sunday, February 7, 2010
PAL - palladium miner
HL - silver miner
SVA - biotech, possible triangle break on charts
CAGC - china agriculture stock
RIMM - like the weekly
TSL - solars have been beaten as of late
APKT - Acme Packet, very strong chart
NOG - Oil and Gas, pullback to support on weekly
SLE - Sara Lee, strong chart
PCX - coal
DV - Devry, about to break into blue sky territory
NFLX - bullflag forming
BIDU - strong, blue sky imminent?
CMG - Chipotle
TLT - iShares 20+ year bond fund if the pullback continues into a downtrend
I am 100% cash now and am looking for continued market strength before putting any positions on.
Monday, February 1, 2010
Saturday, January 30, 2010
Thursday, January 21, 2010
Wednesday, January 20, 2010
However, I couldn't help thinking that this settlement now opens up a wellspring of settlement opportunities for RMBS. The other two companies involved in patent infringement are Hynix (a South Korean Company) and Micron. Tonight, I was doing some more research when this link came across the wires. Hynix is saying that they are now "open to settlement" outside of court. Wow! So now, the question is when will Micron fall?? Will there be other settlements? If you want to read more about a gabillion other companies that are probably also infringing on RMBS patents, there are some good posts over on the RMBS board on the InvestorVillage.com web site.
I've called market tops before and been burned, so I'm not going to do that this time. I'll just sit this out for a while. If I miss a big move to the upside, so be it. The definition of a market top implies EXTREME volatility. I LOVE leveraged instruments such as options and futures and they are great for capturing quick gains during breakouts and trends. However, as someone who uses a lot of leveraged instruments, I can get crushed if my portfolio gets in too deep. If there is ANYTHING i've learned over the past 14 years of trading, it's that MARKET TOPS AND BOTTOMS CAN KILL. Minimal trading for me until the market reveals it's true self.
Wednesday, January 13, 2010
Tuesday, January 12, 2010
Monday, January 11, 2010
Like I said, it's a "tendency" and it doesn't happen every day, but keep an eye out for it! As most traders know, Gold futures are probably the single most tricky vehicle to trade so watch it!
Here's a chart of $GLD. Notice how, today, $GLD bounced off the 50% retrace of this latest 4 week pullback.
Sunday, January 10, 2010
Here is a good screen that I use on $5 to $10 stocks with great potential for growth. Notice that 5 out of the 10 stocks are Chinese.
Friday, January 8, 2010
Natural Gas – nat gas is definitely part of the near-term solution as it is VERY abundant in the U.S.
Evidence of Adoption
Town and City Bus Fleets already in conversion process
Carbon Pricing – storing and capturing CO2 emissions.
Growing Population Growth
Demands on Food, Clean Energy and Clean Water
Stimulus Money – only one quarter (as of this writing) has been spent.
Security and Protection
GSI – recently took a hit for issuing more shares. June $5 calls look good. Expects to earn 0.14 this year but S&P expects 0.90 in 2010.
LFT - #1 developer of banking software in China and #2 developer for insurance industry. Also just moved into the securities industry.
PWRD – I know the story here. Entertainment Software. Great margins and products.
Government Unwind – no one really wants to loan the U.S. gov’t money at 3.4% anymore, AND, the gov’t has been keeping rates artificially low to stimulate the housing market. This artificial stimulation should come to an end soon, thus rates should go up. Also, as demand picks up, inflation should rear its head and the gov’t will need to raise rates to combat it. TBT (ultra-short 20+ Treasury Bond) is an ETF that moves in the opposite direction of bonds by a factor of 2. So, if bond PRICES fall 1% as rates go up, then TBT should go up by 2%.
Switching From U.S. Consumer-Centric growth to multi-polar growth – Genius Mohmaed El-Erian says that this should happen over the next 5 years and things will be rocky over the transition period.
The average investor needs to look beyond the U.S. and be wary of inflation.
Gold – gold is doing what it’s doing because it’s bringing together people who are worried about all kinds of things: people worried about inflation, geopolitical risks, and the dollar.
Novartis – growing revenues at twice the clip as the industry and they just hired Jon Symonds who was at Astra-Zeneca and was very good at cutting costs. Novartis is bloated but growing revenues fast and just had 13 new drugs approved by the FDA over the last 3 years.
Ritholtz – Arch Coal; entire coal group. Gannett (GCI) and New York Times (NYT)
Big Companies with Strong Balance Sheets that have foreign sources of revenues – IBM