Tuesday Wraps

I’m still holding SYMC and WFC and both actually went up today. I managed to salvage most of my losses on ORCL this morning – I expected a small downside – not that steep drop but, as always with a mature company, the first drop is an overshoot and if you jump on board and double or triple up you can usually get out without losing your shirt – and that’s what I did. I wouldn’t do that for some no-name but I seldom play immature companies just for that reason – I really want to know how the trading community reacts to bad news or, as in this case, good news.

I jumped out on the rebound at .25 and only lost a 100 bucks in all. Considering I was a grand down at the start – not bad. I then took a solemn vow – I will never play ORCL again – this is the second time that it was traded out from under me for no good reason. It is now on my white board under the word “Never” along with 20 or 30 others that I will not play - mostly because they are empty pieces of junk that misbehave.

(start sermon)
Warning! Warning! Warning! If you try this on your next dump job and you lose don't blame me - it is not an approved method of trading. Never, never, never double up a losing position - Never! (end sermon)

In case you think I have forgotten my day trading skills I took a small position in MAMA off a new method that I have been testing. It seems to work but I’m going to tell you that the risk factor is high and you need to move quickly. I have found this to be an effective play in every time frame from 4 minutes through 15. Look at the chart below.



You can see what the new set-up is – if the first time increment encompasses all three of the EMA’s that I use then I buy it on the next open. I keep my mental stop at the EMA 21. Now I don’t know if this will work with other moving averages because I’m happy with it working with the three I use all the time. Interestingly, MAMA also had a classic set-up a bit later in the morning – but I was already in the trade.

If you don’t think this occurs very often – take a look here at WFC – also today.



And here is a counter-gap trade I wish I could have taken but I was back on the shopping detail this afternoon. I give you HANS.



Finally – I thought the markets had a good chance to go up today because the first hour PC ratio opened above yesterday’s first hour open and closed below yesterday’s first hour close. That was despite the fact that the FTSI 100 was down all day. As I mentioned yesterday - these are rules of thumb and not hard and fast "must be's".

Of course a lot of stocks did go up today – the up/down ratio is back at 45% but the new 20 day lows are still 200 more than the new 20 day highs and that is a good thing. The VIX is back at 5% below its 10 day moving average but the good news is that every major index we follow and GS finished the last hour with a strong red candle – there was a ton of selling going on. All of this leads me to believe that we will probably go up tomorrow. But as you know a good trader doesn’t care about the direction of the market because a good trader can make money regardless.

I’m giving Mr. Magic a pass for today since the market finished mixed which leaves him at 37 – 29. For tomorrow --- tails – bear in the air - - oh, who believes in magic anyway?

Wrapping Wednesday

This is as funny as it gets - here is what I said about the magic coin yesterday evening - "But for tomorrow ... landed on its edge - just kidding - tails - bear market. Dumb coin" And damn if the market didn't wind up on the edge today. Way to go coin!

I followed the plan - on the jump I sold the half position of ORCL I bought yesterday afternoon for a little gain. Then I dumped ALTR for a little loss - wash out. And this afternoon I doubled up on SYMC for tomorrow.

I spent most of the morning watching MAMA (among others) trying to find a set-up but one never came - everything I was watching stayed as flat as the rest of the market. There were some nice ones that I saw this afternoon but they weren't on my radar this A.M. Oh well - looks like we'll rest now into the week after Christmas when there will be a little rally and then about the middle of January the money will start flowing again.

Anyway the up/down ratio is neutral at 43%, there were 523 new 20 day highs (a slight increase) and 443 new 20 day lows (a slight decrease) and the VIX is 10% below its 10 day moving average. The 4 major indices (DIA, SPY, QQQQ, IWM) we follow all finished the last hour strong white and GS, the proxy for the stock market for the 22nd century, finished with a doji. And, believe it or not, but it looks like a blow-off bottom for GS. As I said earlier I'd be surprised to see much more than the same as today for tomorrow.

The magic coin gets a bye for yesterday as I don't consider that either bullish or bearish more like dovish. So it stays 36 and 27 and for tomorrow .... authoritatively a head - bull market. Might happen - we'll see.

Wrapping Tuesday

Except for the fact that I'm actually carrying a small portfolio for swing trade purposes I welcome a down day. Now despite the blah blah blah from the bobbleheads on bubblevision (I don't watch I just read the headlines) it really wasn't because of the Fed or because of Best Buy or even because Oil went up or down or the dollar went somewhere or the trade deficit which last month caused the market to collapse because it went up this month caused the market to collapse because it went down. Whew - did I get it all in? I hope so. The reason why the market has been a little weak lately is because - are you ready Chuckles? - because there isn't anything to buy and most of the buyers are on the normal - ain't gonna do nothin' between now and Christmas/Chanukha/ Festival of F'in Lights or what have you because I'm on my out of pocket vacation. I.E. I'm screwing off because that's what we do between now and January 1st. Besides its options expiration week. What do you expect?

I had to get out of CTXS today because I couldn't stand the pain any longer and that one was hurting me. I probably sold too soon and if it starts going back up anytime soon I might reacquire - although for the life of me I don't know why. Replaced it with some GLW although that is probably going to prove to be a mistake as well - we'll see. At least it didn't go down. I also doubled up on my ORCL position this afternoon at close of business. If we get a good bounce tomorrow morning I'll sell off that portion for a quick profit. If not I'll sell the original half tomorrow at COB which was my plan anyway. ALTR and SYMC didn't do much either way today which is fine.

The VIX remains more than 5% but less than 10% below its 10 day average but the good news is that the up/down ratio is at 35%. There were 483 new 20 day highs and 506 new 20 day lows. The first time in 11 days the new lows outpaced the new highs. The 4 indices we track DIA, IWM, QQQQ, and SPY (actually the ETFs of indices) all finished the last hour strong. Only GS, off a report of extremely strong profits, finished the day down. That's normal - there is no place for GS to go now but down they've made all the money there is to make in the entire world (sarcasm off).

Put all of this together and I think there will be a small rally tomorrow and Thursday then a flat Friday (expiry day)and a weak week next week.

Old magic coin blew it today and starts the downward slide again - 36 and 27 - I smell a TV contract coming soon - isn't that how bubblevision rewards ostentatious mediocrity? But for tomorrow ... landed on its edge - just kidding - tails - bear market. Dumb coin.

Monday Wraps

It was 59 degrees today and I should have gone and played golf. I didn't. One time this afternoon I looked at my monitor and after 5 seconds or so I realized that the only thing moving was the clock on one of my windows. Things started fluttering a little after that. It was all I could do to stay awake.

I remain in my swing trades - SYMC, ORCL and ALTR and have added CTXS to the mix. I plan to hold these stocks each for at least 3 or 4 days unless they crash to their stop loss points at which time I will unload them. As bad as the day was I made some in SYMC and ORCL and didn't lose much in ALTR and CTXS. ALTR is shaping up as an interesting trade. It printed a NR7 today. The NR7 as you know is the narrowest range in the last 7 candles. The method I used to pick the swing trades was a filter - low near or through bottom Bollinger Band, MACD histogram in negative territory, one of the 4 highest volume stocks matching this filter's constraints. It back tests nicely and all I have to do is be prepared for some small losses and a couple of good size wins. I can do that.

I tried daytrading a little PFE early in the session but I didn't have it long as it turned around and I unloaded it for an $96 loss including commissions.

Just so I don't forget - KKD went up again today - I showed you the quad tweezer bottom on Friday. Remember this is just a lesson - I neither play KKD nor eat their donuts.

The market has several good things going in its favor - one is the Fed meeting that should announce an end to inflation in our time on Wednesday. And the second is that more and more stocks are finding their way to the bottom of the pile and not so many are being added at the top even though the market is going up.

Speaking of that - the up/down ratio is printing 47%, there were 610 new 20 day highs and 318 new 20 day lows. That was an increase of over 60 off Friday's number. Two of the five majors printed the last hour white so that's a mixed signal at best - the only time that signal is valid is if they are all white or all red - otherwise it's a wash.

The VIX is now 6% under its 10-day moving average and that's sliding towards the bearish side but just a little bit out of neutral territory. So we have a several mixed signals, neutral signals, and leaning bearish signals. I'm going to call tomorrow more of the same as today - waiting for the Fed to speak. Maybe a little bit down.

The magic coin is 36 and 26 because it hit today fairly well and for tomorrow it says .... heads - bull market again - maybe so.

Wrapping Friday

I'm late - but had a party last evening - a lot of that happening lately. Going to keep this short as I have several ideas burning and so I will have several more posts on the chart before the end of the weekend.

A very weak day - up certainly - but nothing to really cheer about. I took some swing trades (deliberately) which include SYMC, ORCL and ALTR (with the proviso that I can't stand any of these stocks). These trades will be completed when I hit the targets which will be exposed in a subsequent post this weekend - stay tuned.

Of the several stocks I said I would be watching, only IM and NFLX set-up well enough to take a shot at - but I passed. There were some great trades to be had, mostly in the health related sectors, but I missed all of them because I don't follow that sector at all.

For Monday the up/down ratio is back into the neutral territory as is the VIX. The only promise is that the new 20 day highs only surged forward by 11 even though the new 20 day lows retreated by 25 or so. They are now printing 581 and 248 respectively. I thought we could get all of the major indices to print red in the last hour but Goldman Sachs (the proxy for the market for the 22nd century) surged to green at end. Can't keep a good brokerage down (or a bad one either for that matter).

Those of you who visit here often know that I firmly believe that the only thing that moves the markets is having something to buy and right now it looks as if the "buy me bin" is filling up nicely for the next year. In Tuesday's wrap I mentioned that the Bollinger Band high-low numbers were 200 high and 9 low - after Friday's close that number is now 85 high and 59 low. That is goodness for the bull case and it appears as if the bear case will just continue to be weak. It could always change but a bear market always comes at the very height of irrational exuberance and this isn't it. There is nothing irrational about the current valuations regardless of what the perma-bears say - the average market PE is not too terribly high (obviously I'm too lazy to look it up or I would tell you what it is) so I think this sideways-up stuff will just continue for some time. What is happening is that some stocks are getting way over valued and others are going way under valued. The hedge funds and funds of funds have been working for years and years in an effort to identify the market at that micro level and seem to be succeeding. (Quantitative analysis). They sell off the way over valued and switch immediately into the way undervalued. Consequently one day a stock is going up and the next it is falling and no one knows why except on bubblevision where some bobblehead blames it on everything (interest rates, jobs, economy, blah blah blah) other than what is really happening which is good old fashioned horse trading. Something to buy - something to sell - that's what it is all about kids - nothing more, nothing less.

The magic coin is 35 and 26 and is improving daily with its truly miraculous calls and I'm so impressed that I'm going to let it do it again for Monday - coin says --- Crikey! - Heads! Bull market again - start buying everything in sight at the open.

Don't laugh too hard - it may happen just that way.