Wrapping Monday

I mentioned earlier that I dumped out of NFI and made a nice piece of change on it. I put KNOT in the portfolio. SOHU is becoming a giant disappointment and it has tomorrow to get over 22.5 and stay or it is gone. It is profitable now but I'm wasting time and opportunity watching it yo-yo around. GGB and STD are still doing OK and I'm keeping them for a bit more.

The three amigos AAPL, GOOG, and MSFT all caught some bids today and I'm not sure what that means going forward but it is nice to see tech join in the rally. Why the market rallied I haven't a clue. But rally it did and I'm not complaining - just worrying.

The other day I posted a new method designed to catch stocks for an overnight trade (Maybe a Solution) - it didn't put any out today but it did put out ALO from Friday afternoon and ALO jumped up with the rest of them this morning and made 35 cents in a blink of an eye. It flattened out after that but held a quarter gain all day. I didn't have it but I did want to point out one thing - in the past 4 days that filter has output 9 stocks and every single one of them made some kind of money the next day. I do want to make it clear though - this filter is designed for one thing and one thing only and that is to catch a jumper the next day. I wouldn't use it any other way and it is a very dangerous way to play.

The Dow Industrials had a booming day meanwhile the ATR keeps falling and is now at 133.41. Every little bit helps.

SBUX actually made a few more cents today. It might even pull itself out of that pit that it's in and become something. GOOG, MSFT and AAPL all went up today too - it's nice to see the hardcore tech join in a rally for a change.

We're in a little bit of a bind because NewMoMo didn't descend below -0.005 but instead turned around again and went back up. This isn't unprecedented and could result in a nice run. Of course if it spikes up again we will probably have another hard day down. We'll see.



The model portfolio is at 3.63 and the benchmark is at -0.14 so we are still beating the averages handily with our distressed good stocks list from February 28th.

The VIX is back to more than 5% below its 10-day average and that isn't very good for a sustained rally. The up/down ratio tipped the scales at 60% and I think there it will be a quiet day tomorrow and we might even see some profit taking by the dippers.

So I'm forecasting tomorrow as a down day - mostly because we simply can't have two up days in a row any more.

The coin says ... heads - up day.

The score now stands at Marlyn 21 - 15 and 6 and the coin is 20 - 18 and 6.

Friday Wraps

Another boring day. I dumped out of AKS because I looked at its chart and I saw that it was probably as extended as it was going to get and I already had a steel company in GGB that has room to run. Then I added back on GGB this afternoon lower than where I sold it this morning. I kept the same level in NFI and I added to SOHU and STD.

For awhile there it looked as if SOHU would actually finish the day up (in my portfolio) but it couldn't hold the gains. I think that next week we will see a rebound. I am ready.

I base that thought on this chart - a weekly of the INDU -



That long tail on this weeks finish suggests that the buyers were coming out to play and it is possible that after today the dip buyers will be back in force next week - but that's not all - a blind man couldn't help but notice the white-red-white pattern on this chart. And given that the weeks of 2/18 and 2/26 were both red (sequentially) we are owed an up week. Of course the market never "owes" it just "does" so this is just a suggestion and not a certainty. There's a reason why I don't write this stuff during market hours - I'd hate to think someone thought that I actually knew something and acted on my say so. On the daily INDU the ATR continues to decline. Today it went down to 135.96. A long way to go but at least it is moving in the right direction.

This is one powerful indicator - it's refusal to break -0.005 yesterday kind of foretold today and it is still refusing to go down below -0.005. All it would have taken is another 47 cents down. But it didn't get it.



The VIX remains neutral (between 5 and -5%) so there is no indication one way or the other there.

The model portfolio is at 2.85 and the benchmark is -1.32. The model portfolio is doing very nicely and that proves if you buy low you will make money - but we already knew that.

GOOG dropped again mostly because of that lawsuit from Viacom - of course that's just a CNBC excuse - a billion dollar lawsuit does not shave $5 per share off GOOG so that was either an overrun or not the reason. I still think that GOOG is dead money. But that's easy for me to say - I don't own any and never plan on owning any. For every share there are just too many missed opportunities. AAPL and MSFT basically broke even on the day. But this is one scary chart -



There are a couple of things going on here - first today's candle is a real good indicator of a change in direction - similar to the one on 2/28. Maybe not instantly but eventually. Second - it is once again running away from its 21-EMA. Third - it keeps bumping up against 90 and not being able to go past it. It's taken four shots at it in the past 20 trading days. Right now we have a good base if you draw a line across the top of the last two white candles and that will be the breakout spot. Can it go up from there? I don't know but right now it's poised to fall.

MSFT's chart isn't much better but it stays in the range and will probably stay there until the next time the market goes down hard at which time it will find a new, and lower range.

Bullish Jim remarked this morning that SBUX jumped but I think it has to beat the high of the last Cathedral of Dead Money before it is clear - that was 6 days ago and a buck higher from where it closed today.

I was in and out of AUY so fast this morning it made my accountant spin and this too is one ugly formation -



The problem with gold miners is that they move with gold and with the market. So you can't be sure if you are going to get fair value or not. If either the market or gold goes down the miners go down - but they only go up when the market goes up. The Japanese call this candle the "evening star" which signifies sayonara Yamana-san. Actually it needs a confirmation on Monday to become an evening star - a red candle is required - but it's two-thirds of the way. I call that candle formation on 2/26 the "cross on the hill" - it is a standalone bear sign. One other neat formation on this chart is called "three gaps down." The first gap was 2/26-2/27, followed by 3/01-3/02 and then 3/02-3/03. The "three gaps down" are usually (not always, but usually) followed by an upward movement. And last, but not least is the BOB formed from 3/02 to 3/06. If the market had been in healthier shape AUY would have been in the 16's by now.

The up/down ratio is at 35% which is a good sign and about the only hope we have for Monday. I think that we are still in the woods but we need a couple of good up days so I'm calling Monday up.

The magic coin, fresh off its most recent win calls Monday ... heads - also up.

The score now stands at Marlyn 20 - 15 and 6 and the coin is 19 - 18 and 6.

One of the the things I've been watching lately is that we seem to be in a secular down trend in the markets and that is very visible on the weekly Marlyn's Curves - I'll publish this weekend with a picture of those along with a commentary as to what I think about all of that.

Thursday Wrap

Busy day - at least for posting - I overdid it a bit but didn't really have much else to do. I kept you pretty much up to date on my trading during the day - only change to add is that I added again to GGB and put SOHU in the portfolio. It now stands at AKS, GGB, STD, SOHU and NFI. I added SOHU because it was forming a BOB and the chart looks good. STD is another one from a BOB formation and a good looking chart. And it wasn't just the BOB but also the doji that formed yesterday.

Most every stock found a pivot point early this morning and sat right there. AKS stayed on R1 all day, GGB bounced off R1, spent some time at midpoint high, retreated to the pivot and bounced there twice. I bought it twice more at these places. I picked up STD just at the R1 because it never retreated. NFI I grabbed going past R2 but it backed up and finished where I bought it - I didn't add to it - maybe tomorrow. That one makes me a little nervous since it's one of those subprime mortgage lenders. I bought SOHU off of R1. Obviously those trades are in anticipation of tomorrow and days hence.

I mentioned LQDT in yesterday's post as being in a set-up formation but it didn't go anywhere today and I think I'm taking it off my radar.

As I said this morning basically a sideways day with everyone standing around scratching their butts and wondering what to do next. That's the problem with expiry week - nothing moves except paper. You can't get much more boring than today.

The market went up but I'm not sure how. GOOG went down a buck which is noise, AAPL keeps banging up against 90 as if it is some invisible barrier and MSFT continues to slide along the 27 - 28 dollar range. AAPL and MSFT lost a little today. I don't know what that says about tech except I don't think the market is buying MSFT's Vista as an engine to stimulate demand.

The model portfolio is 2.84% and the benchmark is -.66%. The megacap portfolio is -1.51% but I'm working on that one and will reconstitute it to make it a more realistic test - there are stocks in there I wouldn't buy with Jimmy Crack Corn Pone's money.

The Q's spent all day threatening R1 but never quite getting there and of course you all remember what the USDYEN picture looked like this morning. Well that's the way it look this afternoon. Sideways and flat.

NewMoMo still hasn't signaled all clear yet and it probably will take another day.



The VIX is in neutral, but the INDU ATR had a legitimate pull back today to 139.14 on an up day. That is what we want to see - green closes with the ATR pulling down. As long as that pattern continues we will dig our way out of this hole.

The four indices and GS posted mixed in the last hour - more butt scratching. A lot of traders take the days before expiry off - just not worth the effort I guess. The up/down ratio is 58% which is still neutral but leaning towards nothing to buy.

I hate to say it but it looks like we are going to have yet another day like today tomorrow. Up but barely.

The coin disagrees - the coin says tails - bear market tomorrow.

We both got today right so - - the score now stands at Marlyn 20 - 14 and 6 and the coin is 18 - 18 and 6.

My Kind of Day

Slow and pointless. Good thing I have an appointment this afternoon - I'd hate to think I got out of bed for this. Isn't it interesting that the Q's are sliding sideways just like the Yen did all night? Well I find it interesting even if you don't.

I picked up some NFI and dumped TRA, CBK and DLX. TRA because it was going nowhere and I didn't want to have to wait another two weeks while it climbed back up 40 cents besides its chart was starting to look wrecked. DLX because it just opened and while everything else went up it didn't and I hate stocks like that - I want them to move - up down I don't care just move. Sitting around is for old people. And CBK because I just didn't really have my heart in that stock and as it turned out I managed to sell it at the high of the day. I made car fare off TRA and a happy meal off DLX and broke even (including commissions) on CBK so that's OK - just a waste of time and opportunity.

I've been watching NFI for two weeks and every time I say I'll buy this on its next dip it doesn't so I decided to put in a small position to entice it to dip so I could fill up later. If not today maybe tomorrow. Right now it keeps hitting R2 and I keep waiting for it to go back to R1 so I can get some more.

I'm watching STD and if I ever had to pick a symbol for a stock trust me - that ain't it - but I make take a small position at COB today. We'll see.

Currently I'm holding RHT, AKS, GGB and NFI. All are profitable and I will probably add to all of them before the end of the week.

Day Trading with the Pivots

This post is going to knock off a couple of questions that some readers have posed.

Question 1 - Do you find the Pivot Points contained in Quotetracker to be useless relative to stocks whose opening price gaps-up? Short answer - no - I've used pivot points for a number of years (although I've gotten better with them in the past year than I was before - practice practice practice) and have no issues with the ones generated by Quote Tracker even on a gap-up stock. There are two ways to play gap-ups with pivots - first - wait for the stock to return to the pivot point (i.e. close the gap) and play from there on the rebound or second - play between R1 and R2 or mid-point high (which you can estimate using the EMA 4 or 8). If a stock gaps much beyond R2 I generally don't play it because I've learned that most of those have already blown it for the day.

Question 2 - Have you ever tried Camarilla Pivots? Are they any better/worse than normal pivots? My quick answer was I hadn't but I would look into them. The two figures below show some of the variances using a real trade that I took this morning.

I was out at the open at an appointment and didn't get back to the screens until about 11 A.M. I got my initial screens set-up and the NFI chart came up because I was using it to demonstrate something for Dogwood. I noticed that the price was coming back to the pivot point (I had it on a 4-minute frequency - I changed it to make it less cluttered for this demo). I said to myself - if it bounces off the pivot I'll take a trade - it did and I did. A little before 1 P.M. I closed the trade - right after it went over the R1.



Ordinarily I wouldn't have taken this trade except that it was there and I didn't have anything else set-up at the time. As it turns out I didn't have to sell it off when I did - it went back up through R3 and in fact I expected it too - but I had planned to sell it at that time and so I took the profit and ran. So that's a good example of how to play the pivots on a gap-up. You wait till it hits resistance and comes back. As far as gap-ups coming back - they don't always do they just mostly do. We call those Return to 4 or Return to 8. This one went a bit farther than that but you can see that the EMAs 4 and 8 are both about mid-way between pivot and R1. Imagine that - I don't make this stuff up folks - I really trade.

Here is how this trade looks using Camarilla pivots.



You can see the variances - first the pivot point is exactly the same - but H3 is just 4 cents away (on this chart - sometimes you can't even find it). But the variance between pivot point and H4 is closer than the normal pivot point and R1. I find that consistently from chart to chart and I don't like it. Here is why - most traders who are using pivot points are using the same old fashioned sets that I am - therefore they are watching the same old targets that I am. You should too - that's where the action is.

Now it could be that Quote Tracker doesn't have a correct formula for converting to Camarilla pivots but I doubt that. Either way I think I'm going to stick with what I know and understand - it seems to work - don't you think?

Thanks to Habben - he gave me a reference to Woodies club - and I guess the inventor of Woodies pivots is now making a living teaching others to trade - and that's good for him.