Thursday, March 08, 2007

Wrapping Thursday

Market went up and then came back down again. As I said I don't think we're out of the woods yet and until I see some real movement on INDU ATR I'll keep saying - watch your step.

I sold off GRA and TIE - I made money on both trades but they were going nowhere as far as I was concerned - at least GRA wasn't. TIE was starting to move but it is too volatile - and if we do get a drop tomorrow (which I expect) it would have been the loss leader. I dumped it off at the high of the day (coincidental not planned). It would have been around R3 if QT produced that level which is doesn't. It came back down and squatted on R2 for the rest of the day. I added to and subtracted from AKS - I just didn't like the way it was behaving and I don't like having a lot of money tied up in a misbehaving stock. I did add to GGB though and now have it up to half strength. Every time GGB's RSI(2) dropped below 2 today I added some more. TRA was another one that just gapped up to R2 and stayed there all day. AMMD gapped up to R1 and sat on that line for most of the day.

I took a day trade in BRKR - one of Dogwood's new core adds. I hit it the first time on its pass of R1 and then when it went through R2 and came back to R1 again I doubled up. It went back up another 20 cents and I dumped out for a nice profit. It sat there for most of the rest of the day and then came back in a bit.

I watched LEND almost all day and then missed the BOB this afternoon. Oh well - what can I say. A reader took me to task for saying in my Having Trouble post that you should only have about 10 charts up - said he wanted action. Missed the point - that post was for people who needed a couple of solid wins to get their mojo back and not a lot of action. But then I got to thinking about it - I make money nearly every day and seldom have more than 6 or 8 charts up and another 5 to 10 stocks on the watch list. But that's what this filtering stuff is really all about. Finding likely candidates to watch. It's the same as hunting or fishing. You explore during the off season and find the most likely spots - then you go to those spots when it is time to catch something. A little bit of skill, a little bit of luck and next thing you know your bag is filled. Same with trading - a little bit of skill, a little bit of luck and next thing you know your trading account is filled.

The model portfolio is at 2.23% and the benchmark is .25%. I'm still kicking myself for not grabbing RYI when it was cheap. Still waiting for the aftershock - sometimes it's bigger than the initial shake. I will grab some on the next good chance that I get.

Of the three pals only AAPL managed to get some green today - MSFT and GOOG were both down. I don't know what is going on with GOOG - I will guess that there is just too many good stocks available right now and people just don't believe in the BS any more. It concerns me greatly that it is not participating in this mini-rally and that probably means that it is no longer everyone's darling. And besides this is one ugly looking chart - no wonder no one is buying it.

Of course if you look at MSFT's chart you will see a piece of toast - it is so done it's a cinder. I think people probably laughed at me when I started saying that 6 months ago - they aren't laughing any more.

The INDU ATR is down 34 cents from its peak a couple of days ago. Which means it is down 19 cents more than yesterday. Does this remind you of paint drying? One big drop and it is back to where it was and then some. I'm planning a post on this later, maybe this weekend, to explain exactly why you should be more interested in the ATR than the VIX.

The VIX of course no longer has any fear premium at all and is more than 5% below its 10-day moving average again. That took all of 9 days to accomplish and that is absolutely incredible and absolutely wrong. Keep in mind the accident of the calendar - this is the 401K-money-into-the-market week. To be honest I think that is about ended by now and that we are going down a bit tomorrow. I believe we'll finish the week on a green candle - we usually do after a large drop but not as high as it is today.

This indicator is again in over bought territory.

And pretty high at that. The up/down ratio is at 61% which is part two of the equation and the new 20 day high/low ratio is about 1 to 1. And 4 out of the 5 market indicators that we watch finished the final hour with white/green candles. That is never a good sign.

My forecast for tomorrow and one of the reasons why I sold out of TIE and GRA today is for a down day. I may reacquire both of those tomorrow because I still think they are good companies to own but we'll see then.

The coin, having waited patiently through all of the above crap for its chance to shine says tomorrow is a ... tails - down day - I'm going to start flipping this thing before I write my call.

The score now stands at Marlyn 19 - 15 and 5 and the coin is 17 - 17 and 5 which makes the coin exactly that - a lucky coin.

Have a good day trading tomorrow - and yes, I know I still owe a post on ATR comparisons. I've got the data I just need to write it up.


Anonymous said...

is it possible that the decreasing ATR is indicating that last weeks slide was merely a temporary shake out in this uptrend? Do you find the pace of the falling ATR troubling? If yes can you explain why.


Dogwood said...

QT calculates S3, S4, R3 & R4, but you have to add Pivot Point Extras or something like that, its right below the Pivot Point option under indicators.

Select the extras, click edit, then check the two boxes in the lower left corner, that should give you S1-4, Pivot, and R1-4 on your intraday charts.

Marlyn Trades said...

Thanks Dogwood - I saw that but was too busy to investigate.

Anon - I want the ATR to decrease - I also believe that this is just a temporary shake out in the uptrend but I don't think it shook enough.

I'll be writing another post on the ATR in the next couple of days.


Great way to put it.