Thursday, April 19, 2007

Thursday Wraps

These are the times that try men's souls. A good morning dropping into a bad afternoon. As usual there are a couple of neat things to look at today - but first - business.

The KNOT is untied - I just became so frustrated with the fact that the traders in this stock want it to go down rather than up that I said to hell with it and dumped 'em all at cost. Lost a couple of commissions but it was well worth the cost. The time to sell, naturally, was several days ago at that huge red candle on the 16th - I, of course, was on vacation at that time and couldn't be bothered - and once again this piece of crap cost me money.

And, as normal with this bucket of dog blend, absolutely no news or anything else to cause the sell off. The traders made their money and that's it. But I'm taking a solemn vow here and now - I will KNOT trade in this stock again (until next time).

The trading portfolio now contains AKS, GGB and AMAT. As I mentioned this morning, barring some change of mind which I am capable of doing in an instant, I'm going to hold AKS through earnings.

Now for today's lesson. Here are the Q's -

Note how there was a gap down this morning, a drop below S1 and then a major rebound all in the first 15 minutes. Seeing that I thought to myself - going to go up and close the gap. And it did all the way to R1. Of course another piece of information that I have is that Thursday is the day of the week with the highest percentage of gap fills of the entire week. I won't tell you what that percentage is - you have to get the book - Mastering The Trade by John Carter to find out for yourself.

Now here is the SPY -

And if you notice any similarities between SPY and Q's you are absolutely correct. Bounce off S1 and rebound to close the gap.

Now here is AMAT -

Look familiar? That's because the major indices as replicated by the Q's and SPY don't move on their own - they move because their components move. But the point is when you see the major move you can be pretty sure that the components are moving so it is time to trade.

Finally - XLNX - another breakout stock -

This isn't rocket science or even very hard - it's just a matter of observing the market and taking what it is giving you over and over and over again.

BREAKING NEWS!!!! - GOOG beats! Up a few after hours. And that has to be troubling - 8 - 10 dollars on the huge number they reported is chump change. I don't know what people expected - there is no way this company can support its price.

Meanwhile the other two amigos, MSFT and AAPL trade in their range bound manner. AAPL dropped 13 cents and MSFT went up 9. To put that in perspective AKS, one of my holdings that I added to this morning on a drop of 39 cents went up a buck (1.39 from the low). Maybe I should sell AKS and buy MSFT.

I don't know why AKS went up a buck (there was some news of takeover rumors of other steel companies which is as dumb as it gets) and to be honest it scares me no end that it did because of earnings coming up. This stock traded a half million shares in the last 15 minutes of the day.

The model portfolio lost a little more ground to 12.76 and the benchmark dropped a tad to 4.87%.

The trend on the INDU ATR reversed and it is now printing 89 and change. That's a good sign actually because we want it to stay above 80. If history is our guide - 80 is the volatility (real volatility) break point.

Dow broke another record today but the NewMoMo started down. Remember momentum is related to pace of the market and not absolute price. And pace makes the race.

The VIX remains neutral relative to the 10-period moving average and the up/down ratio (which I thought was going to bring the market up today) is printing 30% and there is no way that the fund managers can let tomorrow go by without adding to all of their depressed holdings.

I'm calling tomorrow up.

The coin is calling tomorrow ... heads - also up.

I'm giving today to the coin because it was more down than up so the score stands at Marlyn 24 - 26 and 10 and the coin is 28 - 22 and 10.

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