Wraps Monday

Stocks Drop on Rising Oil Prices

You betcha they did - rising oil prices and no volatility and no liquidity and nothing to buy - oh my - oh my.

Still holding AKS and GGB and one went up and the other stayed about the same. Dropped AMAT - actually it hit a very close stop that I put in place because I didn't like the action and I was correct - see I don't need to sell them - I just put my stop up under a pivot and say - this far and no further. Try it - you'll like it.

Added to ANR at the end of the day on an RSI(2) < 2 indicator which was also at a pivot point. And I put KEP in the trading portfolio for a 5 to 10 day ride (or stop out whichever comes first). KEP comes in from my new filter - LRS going up and RSI going down that I wrote about over the weekend. The other pick from that filter was TWX and I don't like Time Warner or AOL.

Day traded DNDN off a gap up, pull back, and reverse crossing formation on the 4 minute charts - I wasn't going to stay in for a buck and change but I did.


The volume increase informed the trade and the hanging man at about 1:30 said let's get out of here. In at 15.12 out at 16.79 not a bad piece of work. I used my "gap-up" filter from stockfetcher to catch it for my gap-up watch list. I like trading stocks I've traded before - I understand how the traders work with them.

The NewMoMo is reversing again (down) and that is good -


The INDU ATR is up a bit to 100.67 which suggests a continuation of the rally. The model portfolio is at 14.97% which is up a little today and the benchmark is 5.4% down a little today.

AAPL is up a couple of bucks on news (see Notable Calls) and GOOG has lost the love from last week and dropped a couple. Still don't know what anyone sees in that stock or what they are expecting from it.

Is range bound one word or two? - Oh that's right, it's one word and it's spelled MSFT.

The VIX remains in neutral and the up/down ratio prints 40%. This is probably enough to get the market up tomorrow but I don't know how far it will go.

My forecast is up -

The coin's guess is ... heads - up also.

Wonder of wonders - technical ability beat luck for a change - the score stands at Marlyn 26 - 26 and 10 and the coin is 29 - 23 and 10.

Friday Wrappers

Wow! - I've said it before I'll say it again - when the up/down ratio drops below 35 look out above.

The money just keeps rolling in - the model portfolio is up to 14.08% and the benchmark is printing 5.74%. My trading portfolio is doing very well too. It currently contains GGB, AKS, AMAT, and the new kid - ANR. I think I'm late to the dance on ANR I should have picked up on it about 6 weeks ago but we'll hold for awhile and see where it goes. I'll share the filter I'm using for this one with you over the weekend. It is interesting.

The three amigos are doing their thing as usual and it makes me nervous when the beloved of the beloved can't move out of their own way - MSFT was up 33 cents today while remaining range bound, AAPL managed to make 70 cents today for all of its loyal followers (these are not bad numbers) and GOOG dropped about half of its increase but still managed to close up by 10 bucks. I won't bore you with how much opportunity you GOOG holders missed today - you already know that story - in three part harmony.

Going to be a short post today so let's get to the forecast - the VIX remains in neutral and the up/down ratio is now 63%. And this guy says we remain oversold and vulnerable.


The fact that it bobbed up and down and back up again in the past three days doesn't really mean anything special. The only thing that matters any more is where the up/down ratio sits and that says - down Monday.

The INDU ATR is up to 96.47 and that isn't bad. It means that while we might have a down day Monday it probably won't be multiple down days.

I'm calling for a breather on Monday and then we'll see what happens after that.

The coin meanwhile calls for ... heads - up day Monday.

The score stands at Marlyn 25 - 26 and 10 and the coin is 29 - 22 and 10 - that lucky old coin ain't got nothin' to do but roll around Marlyn's desk all day.

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.

Thursday Morning

Added to AKS because it was showing an oversold condition (RSI(2) < 2) along with the SPY this morning. Eventually I'll be up to a full load on that one. I began looking at other steel companies and the ones that have reported to now are all talking high profits (which is known) and guiding higher ahead which is what causes the market to react. As a result, unless something else happens, I'm taking my chances with AKS through its announcement next Tuesday.

Knot put out an oversold reading but I'm still wary of that one and am not going to add until it gets some momentum going. GGB hit S1 and bounced like a rubber ball. It is already a quarter up on the day but I'm overweight GGB already so I'm standing pat.

Last but not least I added AMAT off a breakout scan and an oversold reading this morning. It isn't going anywhere and if it doesn't start climbing the wall I'm selling it before COB. As it is I've got a tight stop.

What caused all of this was the fact that both the SPY and the Q's reversed off their gap downs and are trying their best to close them up. Actually the Q's have already closed the gap but pulled back a bit at this moment. It appears to me at least that we are going to have a net up day or, at worst, another mixed day.

Good trading everybody.

Breakouts

Once again an idea woke me up and nothing would do except I jump out of bed all bright eyed and - well maybe not that enthusiastically - but at least I got up to pursue the dream. I don't know who said it first, it's been said so many times, but 98% of success is just showing up.

Anyway I've been talking about breakouts for about a week now and I finally figured out how to write the formula that permits me to filter for breakouts from an ascending triangle. Actually it was in the filtering software already and I just remembered that I had read about it in their help documentation some months ago. Regardless how we got there the filter produced some interesting results.

Of 74 completed trades in 77 days the win percentage was 68% which is not too shabby and fits in with some of my all time great producers. Actually I throw out any filter that produces less than 60%. Maybe some of those others had a better ROI but I think you can lose your capital and your will to live with too many losers in a row. So I try to stay on the right side of 2/3rds in this area. The ROI was 97% annualized (based on 100K starting capital). Also there was no price bias the filter is just as likely to produce winners at 15 dollars as 35 dollars. Net change over time tells the true story.

NET Change 1 day - .11%
4 days - 1.18
10 days - 2.22
20 days - 2.89
30 days - 4.71

Obviously this is not a short term filter. I'll give you the 5 top selections (of 11) of this filter from yesterday's close. These are in highest volume to lower volume order. Remember, as normal back testing results are based on the top stock in the pile as a function of volume. So if yesterday were in a back test only AMAT would have qualified.

AMAT
SCHW
NWSA
CA
CBG

Do your own DD. While I have no position in any of them at this time I might take a interest in any one or more of these stocks today.

I use stockfetcher.com for my filtering. It is an excellent company with a rapid response to any help request you might send their way. I get nothing from the endorsement - I just use it and like it.