Saturday, August 30, 2008

"My Fellow Americans"


Holiday Season and Election Farce quickly approaching and, since most of us have never had anything remotely resembling of healthy sense of humor, but we still need to be able to make "socially safe joke" occasionally - as a last resort majority of us turn to phrases from popular movies. Of course most popular "Show me the money" (we all love it - don't we? Money I mean) is not qualified as a joke (may be only among limited...hm.. most limited of us) - the good choice will be comedy.

I'd like to do selection for you - these phrases would be very funny if, as a matter of fact, they would not be so sad:

"People will believe us - we are The Presidents! ...Oh well, they won't..."

"Don't do it with the liqueur - that is so George Bush"

"'Freaking'? If you have to use an 'F' word - go for the gold"

"They did not vote for me - they can freeze now"

After memorizing aforementioned jokes you might even want to watch the movie instead of "Even complete idiot can be a case picker and make money" show, and, if you do watch that movie - play scene "conversation of Presidents with family in a car pulling a trailer" few times - that is what movie was made for...

Friday, August 29, 2008

Week in review, Week in preview

Shaky week with no sustained move in any direction.

Last day was really interesting - I think it changed quite a lot on market sectors flow.

Natural Gas confirmed intermediate bottom and today (Friday) money flow was disproportionally high compared to stale price action - hurricane or not, next week most likely will be up.

Financials - stellar performers this week, today huge distribution into the topping action (opened XLF puts position at 3:30)

Nasdaq100 - DELLusional sell action today with substantial accumulation ( opened QQQQ calls position - somehow almost at the low of the day, if was patient and yet again have not replaced original buy order - would be off only 1c instead of 3c on Sep48 calls - playing with fire here )

Speaking of QQQQ - IBB and SMH accumulation distribution pretty much in line with price action, so I assume consumer related stocks might attempt to lead Q's higher next week (Opened WFMI long call position on Thursday)

Crude oil - nothing unusual there, same goes for oil services

A lot of distribution on TSO/VLO suckers play.

DBC - some accumulation there (as oppose to stale action in soft commodities)

Homebuilder - confirmed sell as of today (took no action)

$RUT - some distribution there - if moves up Monday morning might open short position ( in spite of talking heads opinion that small cap is less dependent from rising dollar and borrowing costs - they know nothing)

Huge distribution in Dow Transport - missed that one or would be long puts all over it.

Strong accumulation on PPH - pharma back as "safe play"?

Tuesday will be "sell the open, buy 10:30" kind of day
"See" you Tuesday

Elections 2008

What a truly magnificent achievement of democracy!
We proud that Republicans finally recognized that women have the right to be in the office!
We proud that Democrats running African-American for presidents!
We proud that Republicans recognize Senior Citizen's right to have few more Golden years - for those who have not had enough!
We proud that Democratic candidate was able to overcome "Camelot Husband" legacy (Not "Kennedy or King Arthur Camelot" style indeed)
He is so tall, she is so cute, he is so German, she ...he...

I am getting really confused...is the ANY WAY IN THE WORLD that we can be proud of someone who, finally, will combine 3 essential HUMAN qualities - the one who will be Decent, Smart and Experienced? And should we really pay any attention that such candidate will have 3 eyes? [Thou ability to walk would be really nice quality to have...]

Have a great Proud Labor Day Weekend ( just don't forget to come to work on following Saturday and Sunday)

P.S. ...or we just really happy that 8 years are about to end and we prefer to dilute ourselves that "it cannot be any worse"?

Thursday, August 28, 2008

"Silver Bullet" A.K.A. (UNG)

[image from http://www.the-english-club.com/]

Sometimes I do feel like werewolf, I run almost naked in the woods behind my house and I eat animals when hungry and (UNG) is, most likely, my "silver bullet".
Avoiding temptation to revenge trade, still holding seriously bleeding UNG Oct long calls position (and, yes, some Sep calls as well - what's left of it), luckily not initially big (I know my risk tolerance ...sometimes), but nonetheless watching it all the time - as I mentioned before, we might have sustainable rally in energy sometimes mid September ( not like the quick pop after Aug12th).
Today, after 10:35 report I just could not fight it and initiated yet another UNG long calls position at the time when price was under $36 (cost $1.10- Sep40 calls) - most likely could not find open fire for my money at that time - I will sell at any price in exactly one week.
Why? Volume - 2.5x of highest volume. Price - did not break prior lowest low. Season - getting closer to seasonable favorable period. Size of position - mediocre.
First circle - June 2007 top, second - September 2007 recovery, third - June 2008 top, forth (not there yet) - will seasonal trends repeat this year? So far this year was anything, but "repeatable" if you read nonsenses like Traders Almanac - you most likely lost some money on attempts to "mirror" past events.



I closed most of "metals basket" long calls today, only have some ATI left, TIE was a huge winner - be gone. Closed XLF long calls today - all of it - $20 to $21+ produced about 35% on Sep19 calls...in 3 days - shall not complain, but might even start looking at the short side of the moon (XLF) closer to 21.70.
As of tonight - I am over 90% in cash and already performed my "Monthly ritual" - any profits made for the month in "actively traded account" go into "hard to reach places" - keeps me alert and saves from overtrading.

Wednesday, August 27, 2008

Ugly Charts

Market is not convinced that it wants to go in any direction, ashamed to go down and not capable of going reasonable up. I think it'll be going on till the end of next week, whatever move might happen - I will not believe it - if nothing changes I expect market to move down in about 2-3 weeks. If that will not happen - I would be tempted to say that "we are mostly out of the woods" ( but not yet )

Below are 3 really ugly totally crazy pure insult for any smart Bull charts - I think stops may be set really tight and upside might be strong and sudden. I will not trade these stocks myself, I am mostly done for the year - just keeping myself "interested" - just like to make fun of bears who will see "bear flags", bottomless pits, stars aligned to perfection, distribution rising... there is a time stop on all of those - nothing good happen in a week time - they OUT! Of course as always in bear market these are slightly out of money options plays - money that can be afforded to lose.

In order from "most promising" to "most risky"





Tuesday, August 26, 2008

Market Sectors Forecast

Below is a lazy man's product - this is what I do for myself mostly every day

KOL weekly buy
DIG buy
BBH, IBB sell
MOO buy multi timeframes
OIH buy weekly + multi
QQQQ neutral to positive
SKF 2 days buy, but mostly worked off already
SLV 3 days buy
SLX all timeframes buy
SMH most likely buy, or qqqq will not hold neutral to positive
SRS 1 day sell, 2,3 days buy - short term homebuilders
move up 1-2%, then selloff due to 3 day sell on XHB?
UNG - all timeframes except weekly - strong buy, same for USO
UYG - 1 day buy - short lived move up?
XLE ongoing buy -target 80
SPY neutral ( energy up, financials 1-2 days up(?), then down)

Monday, August 25, 2008

Example "10 days trade portfolio"

Have decided to do "public experiment" by creating theoretical portfolio based on Blocks Scans I use for trend reversals. All candidates selected purely based on scans results without additional evaluation. All stocks traded over 500,000 shares per day within price range between $5 and $50. Any idea added to the list will be "bought" or "sold short" at next day's OPEN price and "closed" 10 trading days later with NO STOPS in place. All "trades" will be made for the same amount of money ( I don't trade "shares" in real trading as well) and final gain/loss will be weighted over the number of positions after the "close date".

Sunday, August 24, 2008

Alt Energy Stocks Update and than some...

I was long on quite a few names in Alt Energy Sector, most of those performed admirably over the course of last few weeks ( BLDP, PLUG, LDK, CLNE, ASRI, AKNS, CY and so on). Now most of above look really overextended and some - quite "tired". I'd say it is time for some consolidation and depending on Oil prices, they might even become shorts. Although I am kind of slightly bullish on oil and therefore will, most likely not initiate any short positions in Alt Energy Sector.

In ag names (MOS) looks very temping on the long side and as a "pair play" (HW) calls, for least to say, consolidation or a low risk short.

In Wind Power related, Cramer's favorite MTZ looks like a great short, not the first time his faithful will get burned and handle me their money, I could say that "Fool and his money will part", but then I will have to ask how fool got his money on the first place, but no matter what it never seize to amuse me how he calls his longs right before the major collapse and, shall he and his sheeps be less arrogant and more knowledgeable about technical analysis major disaster could have been avoided. Oh well, there always is someone who loses and it'd better not to be me...

Here is a chart of yet another recent Cramer's favorite - I love that guy, just remember that the best sign that bear market has ended will be the day when he'll disappear from TV for another 5 years - just like back in 2002.



Speaking of Cramer's Wind Index, one of the stocks, which lost over 20% after him liking it, looks pretty good long right now - (TRN)



For the "penny stocks lovers" (I would never touch any such stock with the 6 foot pole) - ASTM might have something brewing (unless it just burnt cash leftovers and going straight out of business).

Blocks layouts I use for identifying trend reversals were sent to regular contributors, I'll be able to send those to few more contributors, after that I will "freeze distribution" - it is not in my best interests for too many people to have it.

How did THAT happen?

"Patriotism is the virtue of the vicious"
Oscar Wilde

Don't get me wrong...
I am in no way a perpetual Bear, more likely I am a perpetual compulsive Bull who, during many years of successful and may be even many more years of "not-so-successful" trading learned to be REALISTIC. (it helps a lot that I came to United States from the country where "propaganda" was substitute for economy, it helps not to wear "pink glasses" all the time, but to soberly see reality)
[this is as much as this post has anything to do with the stock market - even if it had anything to do with it till this point - you better stop reading now]

Yes, America is still one of the greatest countries in the world and No, is has not been "the greatest" for a long time now.

Yes, America gave refuge to countless immigrants from all around the world, BUT in recent years if you look at official statistics, you will be unpleasantly surprised that "demographic" of this, once world wide Exodus, totally changed in a recent years, countries which fueled economic expansion of America by providing educated and willing labor force are now buying America and, once poverty stricken citizens of those countries, now "coming to America" as tourists, buying all they see (and, you...yes - YOU, stop diluting yourself attempting to attribute that phenomena to the "weak dollar" and definitely stop been HAPPY about "retail sales numbers") and, when asked: "Would you like to stay in USA?" - these, once anxious potential immigrants just impolitely laugh right into your blinders covered face.

We don't have manufacturing economy since 70th, those who say otherwise use the same numbered companies over and over again and that argument has really sour taste for a long time now. More realistic and, in a way, "economically patriotic" of us stopped paying attention to "Made in America" label - we are tired of trying to figure out - was it a paper printed in America or a lead in that toy came from US? And it does not matter that "that thing" is "cheaper" than similar one REALLY made in America, we are at the point we don't have money for either.

We continue losing "intellectual economy" due to the, first, "economically viable" hiring of H1 Visa holders instead of Citizens of this country or New Citizens who came here to STAY (and not to just make a handful of money and then go back to the home country and be a "King") and NO, there was NO shortage in "that" field, whatever that field was they got H1's for.
It worsened with Internet revolution and outsourcing is the name of the game for a long time now - Brazil, Russia, China, India - you name the country - any country but America, makes money on American business (and just turn TV off when yet another "Pimp" will tell you that "this is good for America and Americans" and "the only illegal immigration that poses problem for Americans is from Mexico")

We became afraid, tired and afraid - how and when did that happen?

Afraid of getting sick and not being able to answer "How are you going to pay?" question through the maze of pain and blood.

Afraid of losing our jobs and viewing "12 hours expected workday" as the only way to keep it.

Afraid of spending more time with our children at expense of carrier and then afraid of phone calls from school - it just might be that "Your kid was caught at the school yard selling drugs" call - how could that happen - we worked so hard to keep them away from that.

Afraid of getting older (in spite of being forced to watch "Ridiculously Happy Faced Viagra/Rogain/Prozak stuffed Baby Boomers" on financial companies commercials) - "Pink Haired Old Ladies" have not been anywhere in sight for many years, instead we spending our time in supermarkets waiting in register line for "That old fella to finish counting his pennies".
We don't even read that Social Security Statement anymore: "You might expect to receive $2,900 per month when you retire in yet another 20 years, it will pay for as much as $290 today and we still do not guarantee that you WILL get it". We hope that Social Security will miraculously change one day and delightfully afraid of proposals "Here is a part of what is left from your money, we were unable to handle it properly, take it and lose the rest in the Stock Market" - average American is sure to have better intellectual ability and time resources to beat the stock market than huge financial companies popping out of business at the ridiculously growing rate.

When did we became afraid of caring, how did it happen that it became exclusive business of "non for profit" milky schemes and our "four legged friends" are our best and ONLY friends?

When and why did we reach that threshold between "work to live" as oppose to "live to work"? How is that possible in prosperous society that election campaign targets people "who have more and more difficult time SURVIVING" and that class of people includes now once quite satisfied middle class?

And why do we still indulge ourselves caring for Warren Buffet's billions he managed to keep?

Yes, Americans (as people) are one of the the greatest nations of the world, its unmatched optimism helped to build what America as a country may still be proud of, but the sooner we will accept that with advent of Global Economy there will be NO "THE GREATEST COUNTRY", the sooner "THEY" will stop attempts to diverge OUR attention to "new external enemy" and, instead, will start looking at "enemy within". When and IF that happen then we will start regaining what we as a nation were once proud of.

I do not like politics and politicians, I have never been a member of ANY official party (Socialist, Republican, Communist, Democratic or Woo-Doo), I hate to waste my time and place on my site on what might be viewed as political point of view, but I am gradually losing hope that the country I've come to love for the 20 years since I denounced citizenship to my home country will ever start listening to its own citizens again and, the only "political party" I am proud to be a member of, party of "Common Sense and Decency", forever lost its battle...

[author is not responsible for content below]



P.S. Now...serious question: Where did the "dollar menu" go? Will it come back with resurrection of $3 bill?

Thursday, August 21, 2008

China Rising?


Was going through the charts and noticed what I think might develop into longer term long trade, suitable for IRAs accounts - once in profit change the stop loss order once a week...of course..."once on the green"
Here is a long term weekly chart of (FXI) iShares FTSE/Xinhua China 25 Index
Grey lines are standard deviation regression channel, red lines - trendlines outlining descending triangle, which in spite of common belief (for beginners in technical analysis or self indulging perpetual bears) of been a bearish pattern, in real life performs much better if broken to the upside.
Note how lower band of regression channel touches latest weekly close, which is sitting right on the lower side of huge triangle spanning over the period of more than a year.
Stop is clear - under 39, of course stop might be taken out if failed breakdown happen, but in this case trade might be re-entered above 39.
If I was trading it (I have NO position in FXI at the time of this writing), I would open 1/2 of intended position now, close to 39 and second half, if so happen, on penetration of upper side of triangle. This way my initial loss would be limited to whatever loss I will have on 1/2 of intended position, and if it moves up and second 1/2 is added - it gives a chance to widen up stop to slightly above of "(high price - low price)/2"

Potential "Long Financials Trade"



Above is daily (XLF) Financial Select Sector SPDR ETF chart.
Looking at the chart I tend to say that last month XLF was undergoing shaky consolidation within $19.50 and $22.60 limits on diminishing volume. It is quite possible that financials are attempting to establish "real bottom" ( I prefer to totally ignore for "bottoming purposes" light oval back in mid July as it was a "puke point", which should not be measured, explained and just "luckily" was extremely profitable traded at the time of that post. position in "consolidation box" can be viewed in my twisted mind as potential "low risk/calculated reward/highly unlikely unexpected big gain" long trade. Stop is very clear (too clear for everyone I'd say) < 19.05, unless XLF will gap down on "anticipated news of another big dropping shoe" like LEM, MS or I prefer GS due to huge commodities exposure and nicely formulated calls on "oil to $200 this year" - may be they had "a lot to dump" - I know that everyone always has a hidden agenda).
First target is 20MA=21.20 as of today's close, next = 22.60 where it just might get interesting,....but very unlikely.

Anyhow, I was building Sep19 long calls position for the last 2 days, was quite puzzled by today's bigger than it was suppose to be time decay on premiums and chaotic action of XLF itself - something is going on.
I hope XLF will open slightly lower tomorrow (but no lower than 19.60) where I will add some more calls.

Energy/metals and everything listed here: Long XLU, SRS, SKF,DBA, IGE, EWJ short XLF, XHB, SMH, IWC, BBH, IBB as of Aug exp date trade worked out nicely, total net profit on committed capital is over 120% in just few days ( OIH, XLE calls mostly and IBB and individual biotech cos. puts ).

As of today I am mostly in cash, commodities countertrend move looks exhausted and calls for, least to say, consolidation.

P.S. I really enjoyed reading today's post on NoviceBear - you might as well.
Have a great weekend..

Tuesday, August 19, 2008

"Richard Pzena sees value in financials"

At last highly acclaimed financial professional with crystal clear uncompromising reputation stepping up to the plate and defending battered financials using clear and precise unemotionally calculated scientific arguments and, since his interview is published by great financial publication Barron's, we, ignorant amateurs, might want to listen.

Opportunity Amid the Ruins

P.S. Regular readers of my blog know my total disrespect for authority and bitter sarcastic personality. Those who are new here - pay attention to the date of an interview. I wonder if he had plastic surgery since...as well as a lot of other value players...
"Mind sees what mind wants to see.."

Monday, August 18, 2008

Metals are coming back in play

It has been a while since my Metals and laggards post, interestingly enough 3 out of 4 long ideas in that post in spite of severe selloff in commodities and related in general have been quietly consolidating, refusing to fall with the broader metallurgic sector (CPSL, AA, TIE ). Only one, STDL, behaved badly, but it does not surprise me too much - as I said in that post, I am not a big fan of long trades based on Cup&Handle (especially imaginary "ugly" one).
Now the story is changing, not only my latest "basket" (ATI, STLD, TIE, KALU, ACH) is doing quite all right, but many more stocks in that sector are poised to move up. e.g. CMC, GNA, NUE, SCHN, X. ( It is easy to find stocks in sector even if you don't have expensive subscriptions, I like using BarCharts - quick and effective, go to "sector" tab, punch any stock symbol into "sector finder" on the left and you will get multiple corresponding containing sectors).
There is no rush to get in, I think it will materialize sometimes next week, this week might present good opportunity to get aforementioned stocks at 5-8% discount to today's price.
I will be looking to add positions in metals when potential candidate will be within close proximity to lower Price Headley's Acceleration Band.

If your charting/scanning software does not include that highly usable channel (usable for staying in the trade, for getting into strongly trending momentum trade and closing out of failing position ) you may download Worden's BLOCKS ( end of day database is free ) and, if you are contributing member I will help you out with correct parameters for that channel and, for "very regular" contributors I will share my scan layouts built around DeMark Studies (very helpful for identifying reversals ). As an added benefits of Blocks you will not even have to use BarCharts - it is hard to dataset of Blocks.
Please, do NOT request layouts if you are not a regular contributor.

Speaking of stops - I was always wondering why most of the traders talk about "price stops" ONLY. I just cannot imagine that none is using "time stops" as well ( based on "research timeframe" naturally )

As for broader markets in light of today's action my short term opinion does not change: Long XLU, SRS, SKF,DBA, IGE, EWJ short XLF, XHB, SMH, IWC, BBH, IBB.
The only change I foresee is that "short term opinion" might become "longer term opinion", but ...things tend to change...

Below was suppose to be a huge screenshot of DeMark layout I am using, but Blogger yet again having regular problems with image upload - I will add it as soon as Blogger will decide to work - I am thinking of moving to WorldPress, really..

Saturday, August 16, 2008

What is this market?

Can it still be called Bear market? Not just based on -20% common definition of bear market, but based on volatile personality specific to first few phases common to the bear market? Panicky selloffs and vicious retracement rallies seams to be subsided some, amplitude of powerful swings getting smaller and smaller, "last man standing" (commodities/energy related) has fallen, sectors rotation getting more and more short lived and totally unpredictable ( not fundamentals, nor technical analysis capable of helping ) - markets are in the process of looking for new leaders.

As a last resort market is hanging onto gains in BioTechnology Sector, but based on multiple failed breakouts from current consolidation areas ( GENZ, CELG, OSIP, GILD) I think BioTech is about to be sold off as hard as Pete Najarian's "Real story" Coal.

What sector will assume leadership? Some like to think - Technology, but ( I might be wrong - I've been wrong before) Captain Gadgets stocks like AAPL and RIMM or Wireless Chip[o] QCOM - they don't look to convinced in its own power now as well.
Questions, questions...

One thing I do know - as long as market stays "bear","bull" or just plain "traders' market" - I am happy, there will be trading opportunities to be found, as long as it is not a "STAGNANT MARKET" ( my biggest fear - I am an action junkie and I am not so good with recordkeeping for selling options, plus concept of unlimited risk does not appeal to me ), but it is highly unlikely to happen in election year - market does not like unknown ( Although - what is "unknown" in ongoing campaign? Both candidates are equally incompetent, clueless, experience-less or worse, "I will change something I have no clue what no idea how, but I will have great learning experience at your expense" or "I am totally unaware what I was doing in politics for such a long time, even if I learned something I forgot it long time ago, but you will pay to my economic advisers none ever heard about and I will ask their opinion - if I ever find Post-It with their names", some say it cannot be worse than our current Fearless Leader in the office [great find of Tim Knight] - trust me - it CAN )

Back to markets...
I still think Energy sector is poised for upside move, it made an attempt this Wednesday ( I was really "surprised" by timing - right after Tuesday's post Energy/related ready for some prime time again? - presented wonderful day trading opportunity ), I do think it will move higher within next few weeks (since biggest open interest on XLE puts was at $71 strike - it made perfect sense that XLE stayed "pinned" right under 71, as well as QQQQ right above 48 due to biggest calls open interest at $48 )
For September options congestion area for XLE is, so far, $72 on call side and $70 on puts side with puts/calls ration of 3/2 - it might be viewed, on one hand as bearish, but on another hand it might just be hedging ( I am betting on "hedging" - too many buy signals on various timescales in energy related stocks )

I turned bearish to neutral on NASDAQ100 due to bearishly looking BioTech components ( as well as big tech names).

As of now (all positions opened during last 3 days, all options)
I am long XLE, DIG, OIH, EWZ, multiple solar names,
long "metals basket" ( ATI, STLD, TIE, KALU, ACH - in order of positions sizes - totaling to 5% of trading portfolio),
slightly "suicidal long" gold miners, some silver via PAAS, OIL via USO and ... UNG ( yes, again, I am afraid it is becoming "revenge" trade for me ), BTU (hedging it with ANR puts) and CHK
short NASDAQ100
short IBB, CELG, OSIP, GILD
tempted to go short XLV into October.

And - I am watching like a hawk R2K ($RUT/IWM) - it failed to hold "new" highs - I have my finger on "short/puts" button.

All of the above are not positions built based on expectation of any prolonged meaningful trend, they are purely "trading" short term positions, all are relatively "small sized" ( as compared to "July 15th long financials" or smaller "first week of August long QQQQ/SMH" trades (those of you who will remind me of bailing out of latter for no reason other than "Trading not to lose" - will be banned from this site :-), we will have to wait 1-2 weeks for possible "trending trade" in Energy going into Fall season. And...volatility (VIX and VIX/Q) is in upper teens - time to buy options.
DavidDT

Tuesday, August 12, 2008

Energy/related ready for some prime time again?

As well as most of wildcatters, energy companies, natural gas. I will play it with most diversification possible and max potential profit on "unexpected" reversal with XLE/OIH calls (or just plain old fashioned DIG) this Thursday or Friday morning - going to be as much fun to ride it up as to watch CNBC talking heads with really long puzzled faces. As for price targets - we might expect slightly higher move up in attempt to mirror "left shoulder" from April '08 or if that is not going to happen than most likely 6-8% move.
Interestingly enough this is the very first batch of buy signals since June 23rd sell signals ( right at a time of Cramer's arrogant buy-buy-buy yelling and my "sell-sell-sell action)

DavidDT
[from not so sunny Martha's Vineyard ( and way less entertaining than spring break at Fort Lounderdale )]

Thursday, August 07, 2008

How not to make money

Enjoyed glorious sunrise at Martha's Vineyard sipping on PiƱa colada ... yes, I AM a stock market and blogging addict, therefore few thoughts...

Read "social" blogs on trading sites - you are in the business of fighting windmills and not making money, justice shall prevail - you don't care about making money for yourselves - you care about taking "unjust money" from crooked companies.

Keep asking "if you can make a living trading" - if you ask - you CAN NOT.

Instead of trying to learn - keep wiping your tears and be full of self pity.

Watch CNBC - since you don't care about your money and just want to make them money by pushing up ratings of shows conducted by people who cannot be called traders.

Keep bashing someone who occasionally makes mistake ( at a way lower rate than rock starts, old money bags or "let me tell you what I would do with your money if I was not already taking it")

Dream about getting rich fast - I am happy I work 24x7 to enjoy your dreams at a slower pace at your expense.

Complain about "unpredictable market" - of course you have to - you are too hypnotized by real time quotes in spite of the fact of not day trading.

Keep reading "Trader Mikes" and "Kirk Reports" - you are more interested in what and why already happened than in what WILL happen.

Keep buying new trading hardware - as long as you do you will never utilize your main trading tool - brains.

Continue to pay IBD - they cannot be more wrong than practical trader willing to share his knowledge for free (at expense of making less money since "educated trader" is not such an easy target anymore).

Keep getting back to timely market calls 2 weeks later and wish you were listening back then.

Please, don't change - what will become of me if you will...

Wednesday, August 06, 2008

On my way to Martha's Vineyard

While laptop battery is still alive used this time to clean up my site, removed all those annoying "affiliate buttons" - I think in 3 years of blogging I made about the same amount on affiliate programs as I give to one homeless on the street of New York ( well, I think I made WAY less ). For those with extra money to burn - there still is an unconditional PayPal button on the right side, but it is NOT expected.

Also quickly looked over the charts, I am under impression based on price/volume/timing action that NASDAQ100/QQQQ just stepped into new trading range, namely $46-$48 where it'll spend entire next week. Boring as hell, even more boring than Martha's Vineyard.
See you in a week.

City Slicker in New England or "Having fun mowing your lawn"

Ever since I was a kid I had a very bad memory, it is not that I was not able to remember anything (except for the things I did not want to do of course), but I had difficult time memorizing subjects like history. That is when I learned to memorize things "by association" and this is why instead of promised topic of "cutting losses" I'd like to talk about yesterday, that is my yesterday.

Brief biographical data: I was born and raised in a big city ( 2.7 million people ), I always lived in big cities, loved that city living with all my heart. Then so happened that I had to move to rural New England's town with about 30,000 habitants. Nice clean wealthy place - "old money" type of.

So I had to adjust my lifestyle some ...and one of numerous adjustments I had to make was - I had to start mowing the lawn and I tried to avoid it by hiring "professional" who successfully ruined it by cutting top soil with the grass and it took significant efforts and some hefty amount of money to reanimate it.

If you want something done right... and I bought a lawn mower ( I just could not imagine myself riding a big kick .. tractor on my segmented 1.1 acre lawn.

Every single year I make the very same mistake - I keep postponing "first cut" for as long as I can. I keep ignoring fast growing grass, I keep "forgetting" about it, I try to come up with every humanly possible reason for not doing it ... and here comes the time when I cannot see my dog in the grass ( I have lovely Golden Retriever of very impressive stature - some call her "fat" - I call her using politically correct term of "big and tall".

Anyone who tried to cut 2 feet tall grass with a push mower during very rare New England's sunny days ( in between of the rains ) knows what kind of torture that is.

Every 5 yards you have to stop and empty it out, you have to use your hands to clean that mediocre discharge hole, you have to mow the same spot 2 -3 times otherwise place looks like a small Nebraska town after tornado, you have to pull the tarp with the wet grass to the woods ( I got plenty of woods, I can tell you that - with all the mosquitoes in the world living right close by ), you run out of gas and forced to take a shower and drive 20 minutes to the closest gas station and then to the next one, 'cause the first one is "closed for flu".

And of course the day when you finally cutting the damn grass happens to be the hottest, most humid day from all the days you could possibly pick for torturing yourself before that day.

Your legs hurt, you are sweating like a 200lbs pig, your eyes are itching and tearing full of pollen, you becoming a raging human flesh the only desire left is to "DO IT TODAY, ALL OF IT - it is going to rain again for the next 10 days!".
You don't see, you don't feel, you do not distinguish anymore between lawn and your wife's flower garden or UPS package laying on the driveway, your feet start to slide on the slope under insultingly grinning at you your very own lawn mower ... and here comes the moment of truth - you fall on the grass and cry and ask yourself THE question:
"Why, or why I did not do it before?
I knew I will have to do it.
I knew it will cause more pain as the days go by.
I knew it will cause a lot of pain if left growing.
I knew I will have to do it in the most inconvenient moment.
I knew I would end up killing more grass by pulling it out of the soil, that actually cutting it.
I knew I would have to cancel whatever plans I had for that day - and may be next few ones - my mood is too screwed up and I sleep on the couch.
Why did not I cut it while it was low and enjoyed the peace of mind - and while in a good mood I could come up with some new great ideas ( instead of constantly thinking how to avoid cutting "it")

WHY DID NOT I DO WHAT I KNEW I WOULD HAVE TO DO - WHY DID NOT I DO THAT ... EARLIER???

Why did not I sell that stock with 7-8% loss and let it go down 40% and ruin my portfolio and state of mind?

Oh well, the least you can do now is to take a look here and have some healthy lawn mowers laughter.

Humiliated...upset...tired?

After all time and efforts spent on market and sectors analysis, after perfect timing in positioning 20% of account in (QQQQ),(SMH), (SPY), (XLF) long calls just 4 days ago [ordered by relative position size], after experiencing minimal drowdown [relative to wild swings experienced in my trading account due to heavy options trading as of late], after all of that - I bailed out of that position with as minimal profits as humanly possible. No, none "spooked" me, none influenced my opinion, 2 days ago selloff did not confuse me [remained bullish], yesterday's rally did not affect my decision - it stood no chance - I sold long before "FED induced silly rally" - I just sold out.

I think "battle fatigue" I was referring to few days ago really took its tall on my decision making process, subconsciously I want to be in cash and take a break.

Today's action and "money not made" hurts more than "money lost", it is not often I cannot find any reason for closing entire profitable position at once, acting on momentary impulse - I scale out of profitable positions. Just tired...90% on cash, sell orders set for August options "leftovers" ...posting will resume after next Friday.

Good luck.

Tuesday, August 05, 2008

Sheer Idiocy

of the last two days got me totally confused.
Market is always right, market is always wrong.
Not a big fan of Conspiracy Theory which, of course, is not a theory, but reality...it feels like markets are being totally manipulated.
Or, may be, all smart traders are out of the market now and idiots rule? ( Hmm...was I trading today?)
Closed (XLF), (QQQQ), (SMH), (SPY) long calls positions this morning, average age of positions is about 3 days old, average profit on entire position (about 20% of total portfolio value) is about 30% - shall not complain...thou...when I saw totally meaningless "FED Reaction" and started to "count turkeys" - sadness came upon me - I left AT LEAST another 15% on the table...tomorrow morning it will be way more (?) of money not made, time to say to myself: "I will never catch exact top or bottom" and "Money not made is better than money lost".
Below is an email sent to "Trading to Win Mailing list subscribers" at 2:30PM

"Aug05'08 14:15 FED Statement (Trading to Win mailing list extra )
"The worst thing you can do is to do nothing"
FED demonstrated, once again, total inability to make any kind of
decision (beside waste yours and mine money for bailing out
incompetent insolvent companies), softness is weakness.
Even more - with new and "improved language skills and usage of
present perfect tense in conjunction with "Inflation" word - they just
opened flood gate for new commodities run - I hope I am wrong... "

In light of above, I still like ETFs of commodities "heavy" coutries ( inflation or not ) like (EWC) and (EWZ) - unless they going to collapse going into the end of this week - I'll be a buyer and that will confirm the theory of "next commodities run" - sorry Jeff Macke - you are one hell of a smart fellow, but I would not care less for your way of talking and your crayons. ( Yes, yes, I am a sinner - I watch those shows once in a while - they produce pretty much of the same effect on me as "Dumb and Dumber" movie - funny as hell, but save you from doing anything they do or talk about )

I might be wrong, I am not a one handed economist, but I'll be watching markets very closely tomorrow, without opening any new positions ( I am about 90% on cash now), NASDAQ100 will attempt to overcome $46 resistance ( as a matter of fact QQQQ are trading at $46.20 after hours ), but given today's totally mediocre volume I hope tomorrow morning we'll see quick pop in the morning given (CSCO)'s good ER and CC after hours, then retreat right under $46 and I'll be very happy to see consolidation into the end of this week. Unless that is going to happen, even if resistance will be taken out - the best we can expect is quick move to $47.50 area where I might even go short. ( actually I was bidding QQQQ puts this afternoon but did not get the price I wanted - tomorrow always is another day ... never lose all your chips )

P.S. Not to be misinterpreted, consolidation or not, I think that "the best we can see from QQQQs is about $47.70)
DavidDT

Coal Colored Thought

The answer I'd like to know:
Since after timely and efficient collapse of commodities complex FED don't have any reason whatsoever to raise rates to address inflation and finally kill economy - in light of above - will commodities complex rally the moment FED announces statement and rate decision? Coal, steel and some other were hinting this scenario for few days now.

Monday, August 04, 2008

Aug 4th '08 Market Thoughts

You will have to bear with me - it is more of a "talking to myself trying to make sense of what just happened" kind of post.

Below is a snapshot of NASDAQ 100 gainers/losers


As it can be seen, the biggest hit took infrastructure play stocks ( Say "Hi" to PETE NAJARIAN A.K.A. "Coal IS A REAL STORY" and Co. for me ) http://trading-to-win.blogspot.com/2008/07/faces-to-remember.html. ), yet another biotech - VRTX, "United Idiots of the World common play (SIRI), "Cannot stir sugar myself" (HANS), few chips stocks ( wireless, mostly - "Hi Pete" ).
Overall nasty day for NASDAQ if you ask me Adv/Decl 35/62, vol 268/620, but wait - why is that Puts/Calls Ratio on declining issues = .89? Which is bullish? Is it?

Flipping through intraday charts - what do we have here?
Most of the selling took place from 9:30 till noon, non stop, rapid fire, "fire-sale" kind of selling - on EVERYTHING, after that a lot of NASDAQ100 issues managed to recover.

All righty then - let see was that selloff panicky as on huge volume?
Nope - no volume whatsoever, about 60% of average volume on most of .NDX issues up or down.

That just does not look appropriate for bearish cancellation of prior bullish pattern - faked breakout?

Could be that rumors of "some huge hedge fund forced liquidation due to blown away natural gas position" be true? It is kind of looks like "fire-sale" with no $VIX spike, no panic, but that sure confused lots of "small timers" and rat races started for the day.

We'll have to live to see another day - as of now - I am not sure we saw what we thought we saw.

Here is a chart of QQQQ I've been using for the last few months, most price levels being there for the same time, no moving around tricks.
QQQQ is stuck right above 23.60% Fib of $44.26 and that same area served as resistance/support back in February - March.
White priceline is exactly at $46 - it's been there since February.
So, QQQQ is stuck in the range, there is no catalyst to move it higher, mediocre ERs of last few week did not do the trick...well, at least QQQQ did not go down the drains after those ERs. The question I have: "Would tomorrow CSCO ER serve as such catalysts and if it will not - what else in the world can hold QQQQ above Fib/prior support? Ladies and Gentlemen - honorable CSCO will enter the room tomorrow after market close...


Or...and I did not really want to think about that...or...FED will raise rates tomorrow...
Is that what PCE deflator was telling this morning? But it is lagging and with crashing commodities prices... Is that why financials held up so well today?
So many questions...it sure will be fun to watch tomorrow...

"What I said at that time I thought was true at that time"

No, no - it was not me who said it - it was highly respected, highly paid, highly everything John Thain of Merrill Lynch ( Sounds like a real Royalty to me - "Sir John Thain of Merrill Lynch", well ... CEOs ARE The Royalties now, no "ordinary mortal" will get away with stunts they pull )

I will add this statement to my "Great quotes book" immediately, right after the statement of one of the Java programmers I was supervising back in the days, who was lazy, unprofessional, deceitful, but ...he "knew people". When everyone on the project started to get REALLY upset about him not delivering, upper management "allowed me to put some pressure on the guy". Email went out with simple question: "When are you going to deliver your part?"
Below is an answer, I think it deserves to be curved in stone:
"I anticipate to put something on the team share area sometimes within next few weeks"

Think about ingenious words used:
"anticipate", "something", "sometimes"

Well, that guy did not "anticipate" that his business insurance would run out "sometimes" long before the company he was screwing would be done with taking away most of the "something" he had.

Now ... market... it is becoming really scary now ... I'll be closing most of my long positions when I can, will take a loss of over 5% of total port value on UNG/USO trade and will take time to revalue what is happening.

But I will be keeping my "Metals Bucket long calls"(TIE,ACH,KALU,ATI,CRS) I bought today because (SLX) at $79 looks like a good risk/reward trade and with energy prices down aluminum /composites will benefit. And, for some really unexplainable reason I added CHK calls, don't ask why... )

A lot of bullish patterns did not break out in the time allotted therefore they lost its significance and market will be on a bumpy directionless ( so far it looks like there is a direction - down ) ride.

Sunday, August 03, 2008

Working Hard and Hardly Working

Ever since catching a bottom and an astonishing "pop" of about 40% in financials on July 16th I've been trading small positions, feeling uncertain where the next major market move is going to happen.
There is no doubts that market is in the process of vicious and short lived sector rotation in search of new leadership.

Somehow former "Titans" fell out of favor all in a sudden, just short of a blink of an eye. Oil and Nat Gas, Metals and Oil Services, Countries benefiting from Basic Materials/Fuels Hysterical New Big Thing.

Is not it amazing how easily "Former Number Ones" after just one occasional misstep lose all its psychotic speculative and academic fans and proponents?
Was that really REAL STORY and everyone truly believed it or was it just a deceitful Pump&Dump blown out of proportions by crooks anxious to take YOUR money?

It is never "different" it always ends the same way - suckers lose all their money.
It is a bear market,well...it is MARKET and it does what it does best - takes everyone's money.
Bulls lose money, bears lose money.

But...not yet...
I think lots of unfaithful are up for a very big surprise.
(USO), (UNG), (SLX), (EWZ),(EWC) quite possible will reverse sometimes next week with (XLE) and (OIH) to join later on.

I am currently "moderately long (QQQQ)/(SMH), but I am always up for a "good game of surprise" and I will be all over potential reversal candidates the moment the bell sounds.

P.S. One thing I don't understand ( well, I don't understand a lot of things ) is how Japan (EWJ) fits into "reversal to the upside" picture

P.P.S.
This is truly amazing and a great illustration of real "shortage of low sulfur crude in USA" - now that public sobered and realized that there never was one - crooks have to artificially create it.
"SnowMan" from TradeKing blogs wrote (quoted below):

The banks did a # on Oil but is congress going to stop them from manipulating the market with limits. No. They are busy handing the PPT 800 billion dollars to play with. So now that oil is no longer needed in the U.S. we have to ship ultra low sulfur crude to Asia. While Iran sits on 11 super tankers of oil no one will buy. Sounds like a really big shortage to me. What kills me there is no outcry from the public.
Article: http://www.hellenicshippingnews.com/index.php?option=com_content&task=view&id=12870&Itemid=45

Friday, August 01, 2008

Think outside (ELN)/NYSE and (BIIB)/NASDAQ box

Very neutral day if you ask me, with plenty accumulation going into next week FED meeting.

TRIN/Q and TRIN spiked enough for me to go counter to the presumable negative market trend this morning.

(ELN) for NYSE and (BIIB) for NASDAQ 100 affected mood in the very morning, otherwise it would be a truly uneventful day.
Up/Down volume and Adv/Decl are negative ( for NASDAQ100) to neutral (for NYSE)

Opened (TIE), (V), (SOLF), (QQQQ), (SMH) long calls positions added (UNG) Sep calls ( will sacrifise time decay over weekend - I am soooo fine with that, I don't trade for nickel and dimes )

Tempted to add to (SGP) calls and open (ELN) position, but will refrain from second due to crazy IV.

If market starting to react to truly mediocre news like today's GDP/Jobs reports in this muted way - we are up for something really big and unusual for summertime.
Have a great weekend everybody...and stop worry yourselves out of profits ( V.Tharp) by watching CNBC.

(SMH) or picking up the laggards in semis

My moderately bullish stance on NASDAQ 100 is being known for few days now.
I do trade around (QQQQ) moves with long calls/long puts, but it does not change my "slightly" bullish bias.
("extra" emails from yesterday's close indicated me opening PUTS positions on (XLF)/(QQQQ) and this morning's email indicated closing of puts XLF/QQQQ positions at about 10AM and opening long calls positions in QQQQ/SMH )

(SMH)...it has not gathered enough attention from bulls, not after "stellar" underperformance recently, but I think it is about to change, in spite of all fundamental and historical reasons not to perform well in the regularly not so good for technology August.

I love history, it is repeatable, but none has an answer WHEN it will repeat itself.
I'm placing my bets on the "long" side for technology, semis in particular ( short term least to say - from few weeks to few months, until all that meaningless and non-beneficial for once great country election noise starts. I don't care who is going to win, but I recently sent proposal to Senate to ad "VOTE AGAINST EVERYBODY" button on the ballots, still waiting for an answer )
DavidDT