Tuesday Wraps

Oh wow let me count the ways - none - now that was another boring day. Of course stocks went up and stocks went down but down was kind of the key to understanding the day.

The fund managers now have one day left to get their act together - Wednesday - because everything settles on Friday and counts in this quarter. Because of that I think tomorrow will be an up day and then we fail into April or fall into April - take your pick. Fortunately because the end of March is so weak April is setting up to be one hell of a month. But first the news -

I mentioned this morning that I lost CRVL to a stop and replaced it with MDRX based on the fact that MDRX was going up when the rest of the market was going down - and that's what happened MDRX went up and stopped and went sideways the rest of the day. Along with everything else. I added to my OI position this afternoon because that was another stock going up against the flow.

The model portfolio lost a little and sits at 7.39% which isn't too bad for 20 days. The Benchmark is at 1.70% which is awful.

GOOG caught a bid at the end of the afternoon which cut the loss a bit - MSFT didn't disappoint - at least not those of us who are calling it a "range-bound pig" (not to its face of course). From 1:30 yesterday afternoon to 4 P.M. today it went - nowhere - but round-tripped 60 cents in the effort. What a piece of crap. AAPL lost a few cents today and I still think it sees 90 again before it hits 100.

My FOREX friends - I hope you kept records on this morning's Con Con effect which was disappointing low. This should suggest some pressure on the Fed to lower rates and the various spots acted exactly as they should have if the Fed lowers rates on the buck - they became stronger against the dollar getting weaker. So now you have Con Con in your book.

The INDU ATR is way down this afternoon to 115.75 - that suggests that the exuberance for selling is waning and it's possible that it will support a boost tomorrow.

The VIX has already pulled back into the neutral zone and the up/down ratio sits at 27.86% and that is oversold to a capital "O".

This guy keeps sinking which is good -



So I'll repeat my forecast for an up day tomorrow.

The coin meanwhile, having another winner today calls tomorrow ... heads - up day also.

That makes the score Marlyn 23 - 19 and 8 and the coin is 24 - 18 and 8. The coin is all of a sudden doing better than Marlyn - imagine that.

Wrapping Monday

Did anybody see what happened today?



After I saw the Yen become stronger against the dollar this morning I wrote a post "Forex Alert" and said - this won't last long. I was right.



I don't know about you but it looks to me like the USDYEN is almost a dead ringer for the QQQQ - still.

But the neat thing about the Q's is that they rebound from Support 4! and went all the way to Resistance 1. This was poetry in motion folks. See the tweezer bottom at Support 1? Then there's a tweezer again with a BOB a little while later. I love days when the market dips quick and then starts coming back - doesn't do my trading portfolio (swing trades) so good but for day trading it is the best.

Unfortunately I missed it - I was at the hospital taking a test - no problem - I passed - but I sure wish I had been here for the show.

Lost STD to the stop loss - added RSH, IN, and CRVL in place of WEN and STD. Added some to OI on a tweezer bottom near Support 1.

So you want to day trade with the big boys -



Two points off Support 2 and turns around and goes to Resistance 1. AAPL was about the same - MSFT went up but more slowly.

This guy started its move down - still overbought but moving in the right direction -



And that is a good thing. The up/down ratio stayed at 50% and the VIX moved closer to 10 under MA 10. The INDU ATR moved back up again today to 131.28. Not too much but every point higher means more delay on the recovery. We are still overbought and there just isn't any way out of that so I'm forecasting another down day tomorrow.

I'm calling today an up day because two out of the three major indices went up.

The coin, in celebration, calls tomorrow ... tails - down.

That makes the score Marlyn 22 - 19 and 8 and the coin is 23 - 18 and 8.

Using BOB as a Day Trade Starter

When I began day trading one of the more difficult problems to solve was finding stocks to trade. I used gap-up and gap-down screens right after market open and these work well but sometimes some of the best trades are neither gap up or gap down.

So I think that that I have solved that problem for good by using the BOB set-up filter to find potential day trades. And had I been at my station Friday instead of beating a white ball around I would have had a beauty – IN.

The BOB set-up filter finds the first two candles of the set-up and then relies on you to find the third candle.

Here is how IN looked on Thursday with the BOB set-up – you can see how the set-up converted to a full BOB on Friday – it opened and went up – i.e. the low of the day Friday was above the low of Thursday. And that is key and critical to a BOB set-up.


The 15-minute chart looked like this so if you didn’t want to take the crossover entry off the BOB set-up you could have taken one of the returns to 4.


Here is how those looked with the pivot points in place. I used the extended pivot points to illustrate this trade.


This chart also has a couple of other interesting features – one is the dummy spot on Thursday coupled with the RSI(2) < 2 and the other, not annotated, is the last three 15-minute candles on Thursday have a BOB, an RSI(2) < 2 and a tweezer bottom all in the same three candle set-up. I never recommend starting a day trade overnight on something like that but it would have lent credence to the next day’s action. And as soon as you saw the crossover you could have taken the trade with confidence.