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 the Week

I'm back - didn't miss much I see. The market went up on Wednesday and Thursday and then dropped hard yesterday for most of the day. Then it recovered most of the losses before the end of the day. Nothing new there.

I wanted to show you something that I find interesting - when the market or any stock for that matter is trending it uses the 21-period EMA as its baseline. Here is the DIA for example.



You can see clearly how it dipped to touch the 21-EMA in the week of 09/05, and again in 09/16, once more in 10/30 and now again this past week. In this past week it actually closed below the 21-period EMA - once. For those who don't believe that the Dow 30 Industrial index isn't a good proxy for the stock market here is the SPY.



I'd say that without a label and a price bar you would have trouble telling one from the other. But what I find most interesting about Friday is the volume - we might be out of the Summer doldrums as far as volume is concerned. Once volume picks up can volatility be far behind?

Personally I believe we need another couple of blow off days which we might get next week after the 401K money comes in. Then a couple of normal weeks (trending up), followed by a rest the week after Christmas (low attendance in the pits) and then boom - January and full steam ahead into April.

But closer to hand we have Monday looming and the survey says --- the three sisters (DIA, SPY, QQQQ), the ugly step sister (IWM) and the proxy for the stock market of the 22nd century (GS) all finished with strong white candles in the final hour of trading. The up/down ratio is back to 34%(!) the new 20 day highs backed off to 533 and the new 20 day lows jumped ahead to 350. The VIX remains notably above its 10-day moving average but less than 10% - no matter - barring catastrophe I'm looking to an up day on Monday. This suggests that there are things to buy and a will to buy them.

The magic coin is 33 and 23 having missed Wednesday. It also took a vacation so for Monday, with a fresh outlook, it says ... tails - bear market. Well I guess if you keep calling the same thing you will eventually be correct.

Again the charts are from prophet.net an excellent charting service. You will note that I have no ads and so if you go there you go on your own. I receive nothing from the endorsement.

Friday - Itsa Wrap

Lately nothing has been able to keep the Dow Industrials down. It poked its head above the close line around 12:30 as we predicted would happen. NASDAQ was down but not by much and the Q's actually closed on yesterday's number. The Q's are still returning more (on average) than IWM by the way and I will let you know when that changes.

This morning right out of the box I took a quick shot at a newbie called ID. This was written in my notebook and I didn't know why so I took a look at about 10 to 10 and it was up strong. Given the market was sort of floundering around at the time I took a position and 15 minutes later sold it for a 30 cent profit. If everyday was like that I'd be in heaven. Unfortunately after a short break helping out the wife on a project I returned and about the time the market started turning I saw an old friend - ATHR. Now ATHR as we pointed out in an earlier post was not a particularly good set-up and I am still holding ATHR because I think the market is going to go up on Monday and take ATHR with it. So it is no longer a trade but now it has risen to swing-trade status or, an investment - too bad it doesn't pay a dividend.

The market is going up on Monday you say - how do you know - well despite the obvious (rule 1 - nobody knows nothing including me) the up/down ratio is printing 42%, there are 575 new 20 day highs which is 400+ less than yesterday and even though the new lows are weak at 214 there is a new reason for that.

When the new lows stay low when the new highs pull back it means that the market is in a consolidation mode. What you want to avoid are really low new highs coupled with really high new lows as that means the market is on its way down. I think. As with everything else you read on this site keep in mind you don't know nothing either even after you've read this stuff.

The VIX is proving to be, as usual, less useful on the bottom as it is on the top and I need to take a closer look at that. I think we can use the VIX as a measure of trader sentiment and right now that is mellow - only because I hate the word "complacent" - fact is we passed complacency weeks ago and are in some world of trading nirvana where absolutely nothing is wrong and will stay that way for a long long time. Whatever dude.

What else - oh yes the three sisters (and for those new these parts they are DIA, SPY, and the ever lovely QQQQ) all finished the last hour strong white, as did the ugly step sister (IWM) and Goldie (GS) (the proxy for the market of the 22nd century) finished with a white doji - that means "I'm sorry I went down today - please buy me and I'll print a 2 handle on Monday."

So barring some freaking catastrophe that's my take.

The magic coin returns to its winning ways and now stands at 31 and 18 and for Monday .... tails - bear - who wants to listen to a stupid magic coin anyway? Only has a 63% chance of being right. (Based on past performance and as you all know in a binary situation the actual probability of any outcome is 50% regardless of the dumbass premise behind it - or you better know that at least).

I'll be back later this weekend with some other neat stuff I've been thinking about.

Wrapping Wednesday

Market went up - what's new? Fed heads said no new interest rates. Ok - next? I actually lost $236 today. Took a late day position in HANS and it collapsed. But I turned it into an investment - you know the difference between and investment and a trade don't you? An investment is a trade that went South with no stop loss. I'll pitch it tomorrow on the morning bounce. I'm also hold a position in glass (GLW) which I plan to hold through the end of the month.

For tomorrow probably more of the same. As seen this morning we are starting into the Santa Claus rally period of the year. This is the time when all of the funds have to buy buy buy in order to make their numbers look swell and sweet to the hoi poloi so that more and more suckers - I mean - customers will come and buy their wares. Blah blah blah BS BS BS... anyway the three sisters, the ugly stepsister and the proxy for the 22nd century all finished the last hour in the red. I think that means we bounce tomorrow. The VIX continues to stay well below its 10 day average which is not good and the up/down ratio remains in neutral at 4154. Unfortunately 1249 stocks are now at new 20 day highs and only 150 (or half of yesterday's total) are at the low. The last time we had numbers like that the market went up the very next day and then went down for a couple of days. And the time before that and the time before that it did exactly the same thing. So I think the market is going to go up tomorrow and down on Friday - given Friday is expiration day it probably won't go anywhere.

Old magic coin is 30 and 17 having called a bear day for today. But for tomorrow he is saying ... tails again - more bear predicting.

Tuesday Wraps Up

What happened? I go out for a couple of hours and bang look out above - what is going on? Irrational exuberance that's what.

Well I had planned to sit by and watch but when they hand them to you from out of nowhere you have to make the play. The main play was CVNS off a drop that I played as if the first 15 minute candle was a dummy spot. Fact is the drop was from a news report that was totally meaningless. By the end of the day most of the 2 buck drop had been recovered. I was out of it long before that but for a nice profit anyway. I also played GLW and made a small profit, very small. I had CTXS overnight as I mentioned yesterday and for some reason or other - oh yeah because I thought the market was going to collapse today - I sold it off its spike in the first 5 minutes. That's ok, I made some pocket change after commissions.

People say you should post your losing trades - well - when I have them I post them - I'm just not making as many plays any more and I'm trying to adhere to a very successful process. (I'll publish that this weekend if I don't have anything else to say). Anyway as I was saying if I have a loss I'll let you know in the meantime these are my winners.

For tomorrow - I haven't a clue as usual. The up/down ratio sits at 51% which is neutral, the new 20 day highs went up 8 to 766 and the lows went up 9 to 301 - what all that means - your guess is as good as mine. The three sisters finished the last hour in the green. The ugly step sister (who was the first to turn around this morning) finished very strong and GS, the proxy for the 22nd century finished red.

I'm beginning to think that that signal doesn't signal anything. I have to start looking at it and trying to find a correlation somewhere. The VIX finally got into the game and stands now at 5% under its 10-day moving average. If that continues (which I doubt) we might have some trouble on the horizon.

The magic coin, Mr. Majestic, is 30 and 16 having nailed yet another day using just pure plain blind luck - I should be so lucky - for tomorrow ... tails - bear again - maybe, who knows.

Wrapping Tuesday in a Bow

Another day another round of golf- I'm glad I skipped out on today - it went up but I think it's done. Here's why -

The up/down ratio is at 49%, but there are 776 new 20 day highs and only 235 new 20 day lows, the three sisters finished the last hour in the red as did the ugly stepsister (IWM) and the 22nd century proxy for the market - GS. The VIX is so cowed it refuses to move from day to day. Tomorrow - down - down - down.

Meanwhile magic coin makes a new win going to 27 and 14 and for tomorrow - tails - bear in the air.

Fraday Warp Up

Crazy day - but I kind of predicted it this morning so you can forget what the bobbleheads on bubblevision said about oil and the blah blah blah - fact is the market needed a rest. Now IWM didn't but that's another story which we will cover later this weekend.

I made money today - I played HANS. What, you sputter, again?!? Aye, says I, I again played HANS. Why do I play the same stocks day after day? Because they set up for a play and I know how other traders will be acting given that set up. I know because I observe - you can too. Here is a picture showing HANS in both 15 and 30 minute charting modes. Note the similarities.



I'm showing it to you this way because you need to know what a blow-out bottom looks like and it doesn't necessarily have to be a white candle - it can be red. It just needs a lot of volume (one of the few times I will use volume to inform my trades) and it is a hammer-like critter regardless of the time frame. I.E. a long tail or lower shadow which is how it is referred to in polite company.

Where it says "buy here" I did and where it says "sell here" I did also. I was 6 cents early on the sale but that's ok - I picked up 48 cents overall.

For Monday we are looking at a recovery. Again the market never goes straight down - it moves in fits and starts. The interesting thing is the up/down ratio went up today to 45% or into the neutral territory. We added to the 20 day new highs brining it to 423 and we subtracted from the 20 day new lows printing 591. That can only mean one thing - what you didn't see was a market struggling to right itself. The SPY finished in the red but the Q's finished strong as did DIA. The VIX remained in neutral. Prognosis - Monday is an up day. I'll probably play HANS again.

Mr. Magic missed today making him 26 and 13. For Monday he says tails - bear in the air - Sir, I disagree!

See you later this weekend with some more tripe and trivia.

Wednesday Wraps Dallas

As I wrote this morning - Wednesday morning coming down. I played HANS and made some on it off a dip caused by Cramer bless his heart. He isn't the sharpest tool in the chest but he sure is entertaining.

It was an old fashioned "what is this stock doing way down here" buy and it worked out. The morning of course was a whole lot different from the afternoon which turned out to be a shortists wet dream.

Tomorrow is simple enough up - up - and away. Why? The up/down ratio is 29%; for the first time in over 29 days the new 20 day lows out number the new 20 day highs (585 to 357); and the VIX is actually 5% greater than its 10 day moving average. All three sisters finished in the white in the last hour of trading. There is nothing more to say - there are stocks to buy and the money is going to be coming in from the IRA and 401K crowd.

Mr. Majestic is 25 and 12 having nailed today perfectly and for tomorrow ... tails again - I can not agree.

Tuesday Wraps Fish

What a stinky day. As I mentioned this morning the markets looked like they were going to go boom but instead they fizzled. Fortunately I ended my SAI trade at the high of the day which occurred in the first 15 minutes of trading. I then took a more normal hammer trade in VRSN which made exactly 2 cents or enough to cover commissions with enough left over to buy me an order of fries with my hamburger off the dollar menu. I'm flat going into tomorrow and that is just as well.

Note that when I follow my process (engineered trading) I don't lost lots of money - I may not make a lot some days but today was better than a loss anytime and I had a large position almost all day.

My post this morning is more meaningful (to me now even if it isn't to you) because I once again visited that trading chat room and was called "stupid" (in an indirect manner) because I prefer the long side of trading. The young moron who called me stupid had no skin of his own in the game which is why I have no compunction about calling him a "moron" but I didn't do that to his face (so to speak) because my rule is wait 24 hours and if it still matters tomorrow - I'll give him a piece of my mind. Trust me - he's going to get it.

Speaking of tomorrow - the up/down ratio remains neutral at 45%, the three sisters finished the last hour in the green and the VIX hardly budged. The new 20 day highs actually added some today (about 50) to 621 and added about 25 new lows to 275. That is goodness in that new lows give people things to buy.

As you know the only reason the market goes up is because there are things to buy and the only reason it comes down is that there is nothing left to buy. That is known as supply and demand - or at a certain price things will be bought and at another certain price they will be sold and generally those prices are low and high respectively.

I'm calling it a draw for the magic coin again so it remains at 24 and 12 and for tomorrow it says --- tails - bear in the air.

Tuesday Wrap Up

Oh boy I wish I had passed on today - but nooooo I had to play GLW (Corning Glass). I took a position and watched it drop a bit - I doubled up and watched it drop some more - I said no matter it is bottoming and will come back - well it did - but only after the specialist running the book ran my stop and about a thousand others - in the space of 3 minutes he round tripped 3 million shares taking out a whole bunch of stops including yours truly - end of the day - GLW finished in what would have been for me a profitable area. I wish I had passed but more importantly I am a fool for using a stop on a volatile stock - but GLW is not a volatile stock - today was its most volatile day in about two years. I'd say a bad word but it wouldn't help.

GLW has bottomed and tomorrow it will go to the sky - I'll be there - and this time no ill timed stop sweep will catch me out.

Tomorrow we can expect more of the same - except that earnings this evening are coming in strong and righteous and I think we might even go higher - the three sisters all finished the last hour in the green - the up/down ratio is neutral at 42% the new 20 day lows actually added to their anemic total and are up to 272 while the highs are backing down to 731. The VIX came back into neutral territory and the magic coin - 23 and 10 having picked today correctly - says for tomorrow - tails - the bear is about.

We'll see.

Rainy Days and Tuesdays Always Get Me Down

Rained today and not only outside but also in my account. I said this morning how I should trade, I described it clearly and then proceeded to not trade that way. This is a dummy spot -



Does anyone see anything that even partially looks like that in this???



No? Are you sure? Ferris? Ferris? No? Me neither - so guess which one I bought and if you guess NVLS you are just being a smartass. I did the bad thing three times - not being satisfied with just one - fortunately I managed to escape with only minimal damage but damage all the same.

I guessed right today as far as market direction - down - but that was easy. Tomorrow is shaping up as a buy the dip day - the up/down ratio is 32% and the new highs pulled way back to 665 and the new lows increased to 140. The VIX is back in the neutral zone and the only fly in the ointment is that the three sisters all finished the last hour in the red.

I still think it is buy the dip and up up and away.

The magic coin is 19 and 9 having called today correctly and for tomorrow --- tails - bear market again.