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.

Tuesday Wraps

Well that was better. This indicator - NewMoMo - seems to know what it is talking about.


Who knows maybe they'll name this one after me - Marlyn's MoMo. Wouldn't that be nice.

I bought both AMMD and ACOR but ACOR proved too volatile for my tastes and I dumped out of it soon after the purchase. I increased my position in AMMD this afternoon. I also increased positions in AKS and GGB this morning early. TIE and GRA remain the same. Although I should have played TIE a little more aggressively but of all my holdings at the moment it has the highest ATR and that still has me worried a bit even though it is falling while TIE is going up. I might put a little more on it tomorrow if the ATR continues to fall.

I picked up AMMD just as it passed through Resistance 1 at 19.73. It went right up to resistance 2 and if I were day trading it that would have been where I would have sold it for a nice quarter profit. But I'd already decided to hold on to it so I did and then I added to it when it crossed R2 again. You can play the pivots high or low - high on a gap up and low on a gap down. If you don't use them you should take the time to study them and start.

The VIX dropped way down today and that too was expected but until it drops more than 10 below it's 10-period moving average we are probably going to continue going up. The INDU ATR continues to increase and note that in order to be sure we have hit the bottom it should start decreasing. It is 174 and change today and yesterday it printed 166.29.

The model portfolio is -.30 and the benchmark is -.42 and for the first time in a week we are ahead of the benchmark - not by much but every little bit helps.

The three pals all went up today and that wasn't hard but GOOG led the way at 3.77% followed by AAPL and then MSFT. GOOG hit that flat spot from 11 to 1:30 or so and then just started climbing through the rest of the afternoon.

Now for the news - the reason why the market went up today wasn't because it was completely oversold - no sir - the reason why the markets went up today was because of investors being encouraged because the "world" markets went up today. The fact that factory orders were way down had absolutely no effect but had the market gone down - that would have been blamed. Clueless - just clueless. Absolutely no mention of the fact that the Yen is cheapening thus taking some of the edge off and certainly no mention of the fact that billions of dollars started pouring into the brokerages today in the form of 401K money - no - just encouragement because the world markets started recovering. Right.

The 4 major indices that we follow all printed red/black candles in the last hour and that is a good sign. The up/down ratio however printed 73% and that isn't so good - too much exuberance.

Regardless I think we could have another up day tomorrow surely all the dip buyers aren't gone yet.

Meanwhile the coin says .... tails - thinks it will be down.

The score now stands at Marlyn 17 - 15 and 5 and the coin is 15 - 17 and 5.

SBUX Makes Notable Calls

Notable Calls reports that JP Morgan is defending Starbucks.

I'm saying I don't like this one -


The reason is simple - even though the RSI is very low - and you might get a little pop out of it in the short term look at the ATR. The ATR seems to be saying that this is a company in distress. When nearly every other stock known to man has an ATR that is extended into the atmosphere to see one this benign is unsettling - it's like no one cares. Contrast this with one I mentioned earlier - AMMD


At any rate read Notable Calls and then make your own decision.

Two Fer Tuesday

And no it's not happy hour down at the old watering hole - just a couple of stocks I surfaced using my famous filter (well in my mind anyway) - ATR + RSI. This time I added a twist and included one more criterion - the stock's close hit a 26 week high 10 days ago. You could make it 7 or 12 days ago but I settled on 10 for a simple reason - I wanted to see what it was doing just before the collapse - in other words was it already rolling over or rebounding from the "trader's action zone". If the former I didn't want it and if the latter I do want it. Or was it continuing to make new highs when the crash came? I definitely want that kind of stock. I found several candidates but these two caught my eye

• AMMD


• ACOR

These two met the criteria perfectly and also weren't crashing immediately afterwards.

This filter modified this way is not good for day to day activities because it is tailored to this set of market conditions. In fact I probably won't use it again. But I'm pretty sure I'm going to take an initial position in both of these selections at market open and I'll give the details tonight if I do. If I do take a shot I will set my stop at 4% below the buy price.

Just remember we might or might not have an up day today but we are not out of the woods yet so don't go crazy - but it might be a good time to start trying to take advantage of this opportunity in small steps.