Friday's Wraps

Watching paint dry. I thought we'd go down and I guess after this morning's irrational exuberance we were for much of the day. To finish some in the green after that took a lot of courage on the part of the bulls. But as expected we had an up week. Next week is just as likely to be down as up. Unfortunately, the INDU ATR actually went back up today so I'm not holding my breath for next week to be up. I think we might have one or two up days but the rest will probably be down.

Added to my TRA, AKS, and GGB positions, picked up RHT and was stopped out of AMMD. No loss on that - in fact a good gain but for the past two days it went nowhere and you know I hate those low volatility stocks. It isn't anything against the stock just the feeling that I could have the money working rather than resting. And it turns out that I sold off both GRA and TIE at the wrong time - but that's how it goes.

I read a guy's Blog today and he said he's holding 60+ stocks. That's a crime - just wasting opportunity - that's a guy who doesn't know when to let them go. Not every stock is going up all the time - if after a couple of days of no activity you might consider that it is done for this cycle and start looking for something new. Or dump it and put the funds into one of your more active stocks. There is nothing that says you can't reinvest in a stock you already own.

Nothing that I had selected to watch today went anywhere and while I'm sure something was moving somewhere it wasn't on my screen - except RHT and I had wanted a position in that one for some time now. After putting on an initial position this morning I added a bit this afternoon just before COB. I picked up RHT from the BOB set-up filter. It wasn't the only one that went up today but the only one I was interested in owning.

And if you are still doubting pivot points (I know you aren't but it never hurts to see a good example) -

You see how the Q's dropped down, hit S1 around 2 P.M. and then went back up again? That was when all of my holdings went back up too. Except I had added to a couple of them when they were down at their pivot points.

Everyone who thinks that this is a healthy looking stock - well - I don't obviously -

My latest theory regarding GOOG is this - people are selling to get their profits out to buy more shares of other stocks that are on their way up. Since 2/28 GOOG is up .78%, AAPL is up 3.967% and MSFT is down 3.16%.

Some stocks are behaving like nothing happened and I guess that's pretty good. I showed you GLBL the other day and it was just rolling along without a care in the world. Unfortunately I think yesterday it printed a maximum top. I won't publish it here but you know what that looks like - a Doji on the third gap-up day - and that's exactly what happened. Went down a couple of cents today - wouldn't be surprised if it dropped more on Monday.

The VIX is back to 10% below its 10-period moving average and we all know that that is not a good sign. And although the up/down ratio went down to 50% that is dead neutral and can't be relied on to give us a hint. 3 of the 4 major indices we follow (DIA, SPY, and IWM) all printed a white/green candle in the last hour as did GS. Only the Q's didn't but still output a Doji following another large white candle.

The 20 day high/low ratio remains neutral at 1 to 1 --- so in the face of all the evidence - especially this guy -

I'm going to forecast a down day on Monday.

Meanwhile the coin says ... tails - down day too. I've got to get the wheels balanced on that thing.

I'm calling today another stupid tie. The score now stands at Marlyn 19 - 13 and 6 and the coin is 17 - 17 and 6. This has been a bad year for Mr. Marky.

Marlyn will be going on one of his many vacations Monday and Tuesday next - I doubt that I will publish while I am out. I will put a few up over the weekend though and will be back on Wednesday in time for a wrap.

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.

Wrapping Monday

Drifting - that's the only way to describe it - at the open they gapped down to S1 or S2 then reversed and went to the pivot point and then reversed back to mid-point low (between pivot and S1) and hung out there for the rest of the day until 3:30 or so and then they just collapsed down again.

I scaled up in AKS and GRA, re-acquired GGB at an initial load. I tried to day trade MAS off the ATR/RSI filter but it reversed on me soon after I bought it. My biggest loser remains TIE. But as I showed earlier in my post on pivot points it too did the S2 to pivot point run this morning. My only regret is that I wasn't day trading it at the time. I am so glad that I dumped out of XING last week - it was down another buck and a half today - I guess it's China's stocks that are going to be punished for awhile.

The model portfolio is down 3.58 and the benchmark is down 1.5. Still not looking too good for the home team but it's early yet.

This is a good chart -



That spinner today is a sign of indecision and it could mean that the down side is done for a day or two - before you get all excited just keep in mind that it doesn't mean that the correction is over - I showed you this weekend what we need to see for that to happen - the ATR rolling over and turning down.

I looked at a lot of charts today and almost every one of them had the same look about them in the ATR and RSI windows. So we are going to have a lot of company when the market finally does turn.

The good news is the NewMoMo finally turned and as I said we might get a couple of days of respite as a result. Don't go wild - it too could turn on a dime.



I understand that CNBC is going to cover the open of the Asian markets and isn't that a waste of time. This chart tells you everything you need to know and it is continuously active 24 hours a day. Between now and 8 P.M. it shouldn't do much and then it will start coming alive again.



For those of you who are chart watchers you saw this pattern today in the US markets - imagine that. Of course you won't see this on CNBC because they are clueless.

The three technicators (GOOG, MSFT, AAPL) had a mixed day - AAPL was up the most but it too reversed after its initial run. GOOG was up about twice as much and closed mid-range. MSFT dropped another 20 cents or so. This is going to be a slow death I'm thinking. I read today where AAPL is actually starting to capture desktop and laptop market share. It's about time.

Oil and gold fell today - I don't know about you but I need some gold every time I pull up to the pump around here. Folks who know are saying that oil should stabilize around an average price of 70 dollars a barrel this year. I don't know - I don't follow it very often and I haven't a clue what the dynamic is. All I do know is that the world will run out of it eventually and even though I'll be long gone by then I'm pretty sure it will come as a surprise to our political class.

The VIX remains in an oversold configuration and the up/down ratio plunged to 18%. These two things coupled with the last hour meltdown in all the indices and GS means an up day tomorrow.

So once again I'm forecasting an up day - one of these days I'll get it right.

Mr. Magic Coin also says heads - up day tomorrow.

Well we missed another one and it could have been a slam dunk for one of us at least but - whatever - the score is now - Marlyn 16 - 15 and 5 and the coin is 14 - 17 and 5. We are back to just a tad better than luck.

Friday Finally Wraps

Oh wow! - The only thing I made money on today was the day trade I took this morning, STRL, and also on AKS. I took STRL off R1 as it passed it from the pivot and rode it past R2. When it turned around I sold it and pocketed 39 cents. My RSI(2) < 5 filter output STRL plus many others. I put the top 10 in a Quote Tracker portfolio then watched for movement.

I sold AKS early to lock in the profits and then re-acquired this afternoon as a result of a 15-minute BOB. I was stopped out of GRA this morning but bought it back again this afternoon at the S1 pivot point as it looked as if it were going to rally there. It went down some more and then turned around. Despite the drop, TIE remained above the stop loss so I still hold it. That leaves AKS, GRA and TIE in the trading portfolio the rest either stopped out, or, as in the case of XING, sold off.

Costly day all told but if it weren't for stop losses and the two profitable trades I took it would have been worse.

The market is seriously oversold but the dip buyers should be out next week as it is time for the 401K money again. The three friends (GOOG, MSFT, and AAPL) all lost with MSFT being the winner as it only dropped 11 cents. GOOG continues going down and someplace down here it has to hit a rally spot.



It could be trying to close the gap between 420 and 460 and maybe 420 is the rally point. It is, after all, still 100 points higher than it was a year ago so there is no need to panic just yet. It also has dropped though the EMA 90 and the last time it did that it hurried back up and passed through it again. Next week the 401K money hits and if GOOG is going to move it will move then.

I'm still not certain what happened to gold and silver this week - generally in a market decline you would expect to see them become more valuable because that's what the gold bugs want to have happen (you can tell that I'm joking - right?). If the gold bugs really knew what they were talking about gold would be over $2000 an ounce right now. Obviously a lot of people who have huge sums of money don't believe that gold or silver are viable investments and would rather put their money into something with real value. Today that was CAPS -



Just 1 among 1788 other stocks that went up in value today - of course none of them was in my portfolio. That makes the up/down ratio 22% - that is deep in oversold territory.

This morning I ridiculed Jimmy Crack CP once more and showed you FRO and DGX. After I put them up they both flattened out and pretty much stayed right where they were for the rest of the day. Still the stock he "nixes" is the one going up while the triple buy is going down - I feel sorry for the DGX buyers - especially those who bought because he said buy, buy, buy.

The model portfolio is down 2.04% and the benchmark is down 1.03%. Not a good showing. But Monday will be better.

Here's some good news - at the end of the day the Q's RSI(2) was 1.26, the DIA was 2.35, and the SPY was 2.02. Most of the stocks in my model portfolio are under 5. Earlier this week we talked about setting a filter that only keyed off of stocks that were RSI(2) < 5 when the SPY was also RSI(2) < 5. Well - guess what - we have a real time filter beginning Monday. This ought to be pretty good.

This indicator is really, really, really oversold now - this is lower than it was back in the summer last year. Not by much but enough.



Take it all together and it spells up on Monday. Of course I'll be going against all the wimpy traders who passed around a rumor all afternoon that the market was going to collapse on Monday. But as always - if you aren't fearless you don't belong in this business. And, needless to say I'm not perfect either - but either way the market goes you have tools to take advantage of it - so do so.

Meanwhile the coin says ... heads - also looking for a bull market.

Having missed today by more than a little the score is now Marlyn 16 - 14 and 5 and the coin is 14 - 16 and 5.

Going to have some great posts this weekend so come back often. I'm also going to start looking into RSS for the site - I'm sure many of you would prefer that to atom - whatever that is.

Thursday Wraps

What a mean, miserable day. The market players couldn't make up their minds whether they wanted it up or down. This is standard procedure after the beating Tuesday - every body is playing scared. As a result stocks are round tripping and we spend all day long bumping against the pivot point on the Q's -



Five times in six hours it hit the pivot (black line on the chart) - each time to rebound strongly. But as you can see yesterday was the same thing - inability to move through the pivot point. That suggests a difficult day for today.

I bought PAAS this morning and watched it go up and then it round tripped on me and I sold it off for a small loss this afternoon. That was the very first and very last time that I will buy a silver mining stock - I've always considered them to be a waste and I think this one is the biggest waste of all.

I bought TRA this afternoon and GRA and I may scale into DLX and RYI tomorrow. All I will do now is add to the portfolio on dips and let it run for awhile. Tomorrow I think I'll go back to day trading. TIE pretty much round tripped on the day too and if it doesn't get some steam tomorrow I'm going to dump it. I'd rather put the money into winners like AKS or RIO. XING came all the way back to where I bought it but I'm going to hold on to this one for awhile but I won't add to it. It has to prove itself and it couldn't even get to the pivot point today.

The model portfolio is now returning 1.23% and the SPY is returning 1.01% since inception.

The three guys (MSFT, GOOG, and AAPL) went their separate ways today. AAPL did real well, up 2.45, MSFT recovered from being down early and GOOG stayed down. I'll reiterate my message from the past couple of days in various posts - AAPL is going up, MSFT is range bound and will be forever, and GOOG is done. It had huge volume today and went nowhere.

The small caps are back - IWM made it into the green today.



That isn't unexpected the small caps have been taking the brunt of the beat-down because they have been so far ahead of everything else. But once again the pivot point was the line of demarcation. We need a break over the pivot point tomorrow and then we'll see what happens next.

The INDU ATR is above 144 which is always a good sign. I use the ATR as a proxy for volatility. When it is below 80 for the INDU the Dow 30 goes down and when it is above 120 the DOW 30 goes up. Not immediately but within days.

This indicator, NewMoMo is behaving normally - it is now officially really far down -



Any upward movement in the market tomorrow will spin this around on a dime and give 9 cents change.

The up/down ratio retreated to 33% which is violently oversold and the VIX remains more than 10% over its 10-period moving average. It must go back.

I'm calling tomorrow up. Although to be honest I prefer days like today for day trading.

The magic coin meanwhile, fresh off its success in calling today's market, calls tomorrow ... heads - bull market.

The score is now Marlyn 16 - 13 and 5 and the coin is 14 - 15 and 5.

Look at WLT Go

My biggest problem and I've written about this before is my impatience. I could have had some serious profit in WLT if I had just held on to it. It is up .84% today! Sometimes it just doesn't pay to sell.

Of course the people who listened to Jimmy Crack Corn Pone a couple of weeks ago about BHP are looking at this now -



I have a feeling that they are cursing their patience.

I added to my TIE and RIO positions and bought PAAS off the tweezer bottom this morning and XING too. I've been thinking about TRA but I'm going to wait until the DIA breaks through it's pivot point - 35 cents from where it is this minute (10:43 EST). The DIA bounced off its Support 2 this morning after about 20 minutes and is now going sideways up. It would have been an excellent pivot trade.



It looks like it is done for the moment - from here it is setting up to go down or up so if you did buy earlier you might want to set your stop real close.

Wednesday Wraps

As dumb as it gets. Bernake, in an effort to appear a lot smarter than he is, said, "there is no one cause for yesterday's meltdown" and the market responded nicely and went up a hundred points to finish up 52 or so. Marlyn, in an effort to keep from blowing the coffee that he just drank out of his nose, gargled out a strangled, "Bull Snot"! Which caused his Bride to ask if he were OK. Marlyn then attempted to explain what an idiot Bernake is and his Bride just patted him on the head and said, there, there dear - go make us some money. Leave it to the Bride to keep things in perspective - that's why I love her so.

Girls and boys I hope you were all elbows deep today - I know I was - this was truly amazing especially the last hour or so. Everything just turned glorious and life doesn't get any better than this.

I grabbed up a couple of stocks I've been waiting for a pullback to buy - RIO and AKS first thing out of the box this morning. I got into RIO a little early but AKS came along just fine. Both in the green in my account now but it was touch and go for awhile there with RIO. I didn't mind since I'm pretty sure it is going to continue to climb for the next whatever. I'm planning on holding these two for awhile - if they continue to go up.

Also picked up GGB and that was just because it was on my list of 12 candidates. At the end of the day I added TIE to my trading portfolio.

The model portfolio that I spoke about in this morning's post gained 3.18% and SPY (the benchmark) gained 1.48%.

I didn't do any day trading today although it would have been a perfect day for it. I wanted to concentrate on getting some things in place going forward - this kind of opportunity doesn't happen only so often (according to Dr. Brett 5 times going back to '98) and you have to take advantage of the good fortune when you stumble on to it or it stumbles on to you.

I did watch the market though and I tried to learn everything I could about the day after chaos that was possible to learn. That's how you stay prepared learn something new every day. Another thing I did was to build a Proshares inverse ETF list for use in Quote Tracker. Next time the market starts to fall I'll bring that out and watch those charts for day trades.

The three pals (GOOG, MSFT, AAPL) all went up, of course, but GOOG only made 68 cents. If that doesn't throw some warning signs up I don't know what will. AAPL was only a cent behind at 67 cents and MSFT did the best of all with 30 cents (based on percentage gained). I'm not sure if I were holding GOOG that I'd wait much longer for it to hit 520. It probably will but you wasted a lot of trading capital today on a stock that may or may not go anywhere. Now that's not a recommendation to sell GOOG just something to consider when you are making your decision.

I saw a bunch of this today -



That little DOJI suggests caution. And after the smack down yesterday one would expect traders to be a bit cautious. Of course I also saw a lot of this -



- which reader's of this BLOG will quickly identify as a BOB!. The part I like about this BOB is the volume. That suggests some conviction in the move. So we have caution and conviction - I wonder which way it's going to go tomorrow.

The four indices that we follow - DIA, IWM, SPY, and Q's all printed a black/red candle in the last hour. GS printed a DOJI. That is good - shows traders taking a breath. Of course the VIX began its trek back to low-number-land but remains more than 10% greater than its 10-period moving average. And this indicator continues to go down.



That's expected of course because all indicators based on price take a little while to work - if the market goes up again tomorrow - and I don't know why it wouldn't - we will see it turn at that time. And that will be the major indicator to begin buying stocks.

Of course the up/down ratio recovered too and output a 54% or neutral reading.

Given all of the positives I'm calling tomorrow for the bulls - an up day.

The coin meanwhile, fresh off an amazing win today calls tomorrow ... tails - bear coming. Dumb coin, bad coin, stupid coin.

Having nailed today, and who couldn't, the score now stands at Marlyn 16 - 12 and 5 and the coin is 13 - 15 and 5.

I think this is the last post for February - I just noticed that it will be number 113. There are entire BLOGs out there that don't have 113 posts in their entire existence. At any rate that is a record for me and it is unintentional I just have a lot to say. But as long as I continue to enjoy doing this I will continue to attempt to amuse, confuse, but never abuse, you my dear readers. See ya's tomorrow.

The Edge

Let's say that the fundamental nature of most of the stocks that were crushed yesterday had nothing to do with their crushing - just that when a beat-down happens during a riot everything gets beat and names are taken afterward.

Let's also posit that the crushing was a bit overdone - as seems to be the sober consensus this morning.

And even though Europe and Asia are still being crushed - Europe is looping back up and the futures are massive green. What does that leave us?

Well let's say that you were to write a filter and what you would look for were stocks that up until Monday had appreciated more than 25% in the past 66 days and dropped more than 5% yesterday. (All of these numbers are totally arbitrary). And if you did that what do you think you would find? A long list of stocks that up until yesterday most every body wanted to own.

Then let's say you then went through these stocks looking for ones with smooth, ever-rising closing prices for the past 6 months or so in the range of 15 to 35 dollars with high average volume and ones that you'd want to own too or maybe even ones you'd owned once in the past - what do you think you'd get out of that? About 30 matches among which we find -

AKS, RIO, TIE, TRA, GGB, PAAS, SINA, RYI, GRA, SSRI, ICON, DLX

And I'm calling this short list "my recovery portfolio" and let's see where it goes.

And if you think I am the only person who is doing this at this time of the morning (4:30 A.M. EST) you are nuts. There are 8500 fund managers out there who have ordered their minions to do the same thing - because we are all after the same thing - the edge.