The Bottom

Not to beat on the dead horse, but for the last few month I tried to communicate with my readers and people I know and care about that market is in the range, no matter how wide that range might be which signifies one and only thing - it is establishing the bottom.

Few weeks ago I set the date - options expiration week for February. As time went by I see more and more signs that we are reaching the bottom, bottom for buying solid companies at the rock bottom prices. Don't get me wrong - I am NOT talking of CitiGroup which is gone for shareholders (may be "C is a value Girl Karen Finerman still likes it - but I never cared much for her "professional" opinion or of any of CNBC clowns with hidden agendas)

I spent most of the day today talking on the phone and sending emails trying to convince my relatives, friends to buy, buy, buy. To buy solid companies in energy, commodities, semiconductors, transportation and so on fields - I hope I succeeded and they bought. At least Long/Ultra Long ETFs such as QLD, SSO, DDM, DBO, USO, UNG, OIH. (If you noticed UYG is missing from that list - for a good reason, as well as most emerging markets ETFs - except for EWZ may be)

The worst argument I can supply is that if market will continue to head lower after next week - none is going to need any money for a long long time - we don't really need money now for anything, but paying for brain dead dimwits who have plenty of free stuff now they should have never bought on the first place. I just hate to be FORCED to make charitable donation to idiots. Oh, well - I need to think "ulcers" and try not to think of how screwed all fiscally responsible people I care about are.

 

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Day Trading Chat Update - UP and RUNNING

Registering

Quite a few people reported difficulties getting into the chat room, here is the best was to fix it:

1. Register for Paltalk first

   You can do it here: http://express.paltalk.com/ (web based express works with PC and MAC and LINUX)

   Or you can download PalTalkScene (works with PC only )

2. Chat room payment is still being processed, and since it is a free room now - it is not always open, admin needs to be logged in at all time to keep room open - that will be taken care of as soon as premium subscription kicks in - room will remain open for as long as THERE IS AT LEAST ONE PERSON IN THE ROOM.
3. As of now (free room) - number of simultaneous users in passcode protected room = 10. That limitation will be lifted after "Premium status" confirmed. For now - "First come first served"

   Group address is http://chat.paltalk.com/g2/group/1232553221

   Please, register as a member of the group.

   You can upload charts, videos, create forums' topics - since chat room does not have "history" (history/scroll back starts from the moment you entered the room and it is gone the moment you left - not such a bad idea for day trading where 5 seconds is an eternity) - forums is the best place to ask "sticky question" or post persistent information.

   Chat room address is http://chat.paltalk.com/g2/paltalk/1192843448

   Password 0212

   Add room to "favorites rooms" for easier access in the future.

   There is also a free mailing list

   Once in the room (and familiar with PalTalk interface and features), PLEASE, select font "NORMAL" color "BLACK" (In order to save your settings in PalTalk MAIN window, click "File", "setup preferences" - you'll figure it out from there. Colored fonts should be used "by community approved traders" for easier references.

   Voice chat

   I am not much of a story teller, possibly in the future I might start using that option, as of now, unless it is something of utmost importance - refrain from using voice chats in the public chat room (you can always use it in "private" out of chat room conversations with other members)

   Video - same as Voice, please.

   Room allows for high level of moderation, please, try to maintain productive trading environment at all times, bans and restrictions WILL be used after fair warning. Foul language, excessive mumbling, disclosure of ANY kind of personal information of any fellow member will NOT be tolerated.

   This private chat room is being paid for by Trading to Win - please enjoy it and let others to enjoy it as well, spread the word - we always welcome fellow traders with good ideas and never reject those who are just good listeners. Trading is difficult enough as it is - "United We Stand".

Open Letter to Fellow Day Traders of 'XXX' Broker (and those of CNBC speaking "Known Universe")

Dear fellow Day Traders.

It took years of search for a lot of us to find home - one of the best brokers in the wild and unpredictable world of eternal fight for becoming a better trader, and, when we found it and made ourselves at home - "change" has come, and change is not always for the better.

As we all "anxiously await" not previously anticipated arrival of 7 millions of new 'XXX' trading platform users - we need to answer some questions, get prepared for the worse case scenario, in short - 'Plan B' is in desperate need to be created.

We have been "forewarned, therefore - forearmed" - now time is as good as ever to "arm" ourselves.

There is nothing we can do with anticipated trading volume burst, data feed problems, orders delays, customer service degradation ( My hopes are that, knowing brilliant people in charge for "XXX', a lot of questions WILL be addressed in a timely manner) - what we CAN and SHOULD do - is to preserve "online brotherhood of collective thinking/acting, maintain attitude of helping less experienced traders to achieve adequate level of performance in order to survive murky waters of trading.

Chat feature provided us with this option for a long time now. Unfortunately, unmoderated and overpopulated rooms as of late have been witnessing a lot of unproductive noise introduced by "not entirely trading dedicated newcomers", I myself recently got involved in savage outburst of ridiculous finger-pointing and lost my famous cool for few seconds for what I apologize sincerely.

In light of the above, I have decided to proceed with "plan B" and create premium chat room in PalTalk.

Here is a list of features Premium PalTalk room provides:

• Real time chat room (no need to "refresh" or wait)
• Voice chat (will be used in moderation by "approved" members with proven track record only)
• Video - will be blocked for now, unless at the certain point of time the need arises in "desktop sharing", but then PalTalk is not the right tool for that.
• Passcode protected - only members with "password" will be able to enter the room - this will guard against "trolls" (free room has a limit of 10 "passcode" members, premium room has no limit.
• Highly moderated room - I, myself, or any of appointed admins, will use our full power to ban even unproved members in case if they will cause much distraction to trading community.
• Always open - premium room (as oppose to free version) will always be "open" - 24x7 - come in share ideas, communicate with "likes"
• Staging area for posting charts with immediate access by all members. (Flash tutorials, software manuals, trading methodologies ideas might reside permanently in such area)
• PalTalk also provides "IM connect" tool - Yahoo, AOL and few other IM's might be connected from within PalTalk application.

Lack of one feature I am not particularly happy about - history/log is not kept - or may be I am still not aware of that or may be it is just "free room" limitation. But in fast changing trading world 5 seconds is a long time and I can see some benefit of not having long log with obsolete ideas.

Number of participants will be limited to reasonable number, probably no more than 100-200 (As of now I already have more than 40 emails with "strong expression of interest"

Having limited number of participants will have multiple benefits - one of such will be more open sharing of tested and true personal trading strategies. I, for one, will never disclose working strategies I was searching for years in front of thousand of lurking "XXX" chat traders, sorry ladies and gents - when everybody trade the same strategy - that strategy does not work.

This is not a final plan, it is still open for discussion, we still need to involve more skilled traders to participate. I, for one, would LOVE to see "DarkHouse" in "leading team", his experience, brilliant ideas and cold running way of trading is indispensable for even the most skilled of us. (ParrParr, BirdDog, T-Gunn, Lakai…and A LOT of others will be indispensible to this chat)

If created (well, it IS already created and I intend to proceed with the room at least for the benefits of -my site readers) such room will NOT be free - only for initial "introduction" period, "free" has never been appreciated (as Warren Buffet said - "money inherited never done any good to anybody") there will be a low monthly fee, let say "$N per month" ($20-30 sounds reasonable - for the price of few Starbucks Coffee Latte benefits might prove far outweighing the price tag attached), there are "monetary and time spent costs involved for me.

In order to protect personal email addresses I'd like to urge you to subscribe to mailing list for improved communications.

Feel free to communicate this idea to any traders who you think might be interested.

Those who would like to "test drive" new room are welcome to visit it at http://chat.paltalk.com/g2/paltalk/1192843448

Temporary password for the room is "0212"

This is a "free" version of the room - I is NOT open 24x7, but I will try to keep it open most of the time.

Only 10 "passcode" users can be in the current free room at a time (read bulleted list above)

If you like it - email PalTalk ID to me - I will start "building" the list.

Further details will be provided...

Thank you

DavidDT of Trading to Win

Down with BioTech

Was flipping through the charts of different sectors, then concentrated my attention on BioTech - based on variant perception that if "long awaited rally" will happen, counting on total lack of new money foolish enough to commit to this insane market - the money will have to come out of somewhere and biotech was outperforming sector for quite a while now - let's "hammer it down" my friends :-)

Here are two BioTech stocks which I think present very good risk/reward right now. (I was short REGN for few days now)

and I'll be buying March puts on them tomorrow first thing in the morning.

(ALXN)

 

(MYGN)

 

 

To have some fun I might start playing long swings at this point - (CSUN) seams to be ripe for the taking without paying options premiums :)

 

P.S. Thank you to all of you who generously ringed "donate" button after today's market insanity :)

/ES end of day update

That was a crazy day when only traders who KNOW could survive.

If you look at "Day trading /ES (S&P500 Index Futures) " pot as of 2/11 7:20PM you will see that in spite of not closing within my target range - /ES still closed precisely at 832.25 which is 23.6% Fib on that chart

Now - I need a lot of vodka - if you want  to sent me some - you know where "donate" button is.

Follow up on /ES post

I've been adding to long position, so far market is in the process of retest of ascending trendlines of higher lows (from 1/20/09) and on track to produce bullsih reversal by noon.

The "Golden Age" of Gold?

People expected gold to be safe heaven - not always working

Traders expected gold to fall - some - to rise.

Now a lot of traders throwing out a towel after, what they think of a "breakout from widening descending wedge which theoretically thought of as "bullish". But the fact is - it is bullish  in about 52% of breakout and, on another hand - busted breakout produces spectacular fall.

Lets look at the chart

Weekly...breakout did not happen this week - it really happened 3 weeks ago and based on moving about "risk zone" it might have 3-4 week more to go up. Not so bearish...so far

Lets look at the daily chart.

the last accumulation day was 1/26 (Don't ask me how I know - I've been trading for so long that even if I knew - I forgot already)

Up until today - there was clear distribution into the top which reached culmination on failed breakout above prior highs (yellow line) on huge volume (no - it is NOT breakout on huge volume - it is a failure, busted, finito, tutta kaputo, konetc..)

Depending on tomorrow's action which might just confirm busted breakout, I will be opening short position in /ZG (That would be an addition to today's highly speculative Feb/March GLD puts position.

To add to the point - gold miners are about to collapse, no matter where commodities will be going...just throw a dart

 

Day trading /ES (S&P500 Index Futures)

Quite a few readers asked me lately why I have not been posting swing trade ideas for quite a while.

The answer is simple - with this range bound market as of late there is not much "juice" in swing trades and precise timing of such trades is extremely difficult (at least for me)

So I was day trading /ES for the last 2 months (not scalping , no "200 1 tick trades" - from 5-10 minutes to few hours or even days, well one may say that I am still "swing trading" and in  way it is true)

When I day trade I use (just like for swing trades) set of not widely know/understood indicators heavily sprayed with my personal interpretation.

Below is a chart of /ES (5 days 30 min displayed) with Fibonacci Retracements. Those of you who use Fibs will question righteousness of not using extreme highs/lows for placing Fibs on the chart. Exactly - I do not care for true high/lows, but rather I try to find points where significant "market mood" change took place. How I find those? One of the ways - I use open/close/mid day candles to start with. What then? Then it gets really complicated. not to mention some woo doo I practice, so I'd rather not to go there.

The bottom line - I believe tomorrow /ES will end the day between 841.50 and 850 levels. (Of course double retest of the lows of symmetrical triangle on hourly chart from 1/21/09 helps to identify direction - in my mind it will be up, not even mention the end of yet another round of Congressional Witch Hunt to please John Q. Public)

Later tonight I will try to post my thought on Gold - you heard on the street(s) that it broke out of widening descending wedge on weekly charts and everyone closed their short positions. Not me - I loaded up GLD Feb/March PUTs today when GLD was at 92.90sh.

Save the live...puppies anyone?

Just received an email from my friend Brandt From Trade Guild.

 

"If anyone is interested in a lab/mix pup, email me ( BT24_7@yahoo.com ) and I'll hook you up with Merissa. She lives in GA, but may travel to meet anyone half way.
Brandt
Note: forwarded message attached."

 

"Scott (my friend) rescued 6 black lab (mix) puppies out of the middle of the road on Saturday.
PLEASE help me find them homes - otherwise, it's Animal Control - which means they only have 5 days.
We've bathed them, sprayed them for fleas and wormed them....but we can't keep them.
They are currently in a kennel in my basement since I don't have a fence.
I've lost count of the number of rescue groups that I've contacted, only to be turned down due to no room.
Please check with every dog person you know to see if they need a puppy"

 

ANYBODY OUT THERE???

Where will the mighty Mr.. Market be on Feb28th?

 Bulls, don't worry, be happy.

End of post...

 

 

No, that would not be funny and not fair at all - so here I go...again

Look at SPY monthly - that line in the sand that has been there (on this particular chart) for many months (even before November 2008 was put in place) - SPY still is  above 825 area - and I believe it will stay there for a while - and it will finish February 2009 @960 area.

Why? You all know old adage "The left side of the chart is science, the right one is an art" - this is what I think will happen - time will tell if I was right.

It is difficult to see bull scenario behind insane moves as of last 2 weeks, but look better.

Last 2 weeks - every new bottom is a higher bottom (ascending red line)

After 1/28 top - 2/2 bottom wave down, next move up retraced precisely 61.8% (Blue Fibs)

After 2/2 bottom - to today's (2/4) top another retrace of 61.8% - that was a fast one (red Fibs )

Where /Es is now? You guessed back in the 825 area.

CSCO reported, guided (well, provided full absence of guidance to be precise) - we  LOVE Chamber's talking - for some reasons dimwits from CNBC use his opinion to project on the financial markets and they wrong every single time....

Sorry Elliot Wave fans, no matter how you recalculate your curls - this will not be so highly sought after by the bears of united new world order "wave 3 down" (or whatever the hell its name is in your highly subjective world), but it is a beginning of "wave up" with completed pullback (you give it a good name and let me know)