First thing is first…an enormous debt of gratitude goes out to The Fly, Chess, RC, Wood, Jake, Scott, Mr. Cain, Jeremy and everyone else who has been through these hallowed halls since I arrived in December 2008.
I lurked for 3.5 years, waiting for an opening to try and hone my craft. When I started my blog here in May I didn’t really know what I was going to do with it. I love to write, I love the stock market…so I figured to run with that and try to meld the two and come up with something of literary and (hopefully) educational value.
You see, I view the staff here at iBC beyond their unique ability to analyze reports/numbers and/or lines on a graph and turn that into profit. There are a few decent websites out there, but none, and I mean NONE combine stock market analysis with such an eloquent delivery. To me, iBC is THE literary standard for financial blogging. I continue to be honored to have the opportunity to share my thoughts alongside some of the legends.
So, once again, I thank all of you for that opportunity.
I also want to thank the Summer 2012 Blogger Network gang: Rhino, Raul, Redman, Noodle, Zenhunter, Heisenberg, Schadenfreude, Yogi (though I know you were a veteran of iBC) (if I missed anyone, I apologize)…you guys/gals(?) have always brought such good material and feedback which has absolutely inspired me to become a better trader and writer. Again, thanks for that.
No matter what happens next Thursday, I am here to work and produce the best material that I can.
While driving home from work this evening, I was thinking about some of the posts I had written earlier this week. In my pondering, I realized how easy it was to make some suggestions about “stocks to follow”, only to let them get stale as the post date drifts further and further into the past without any sort of objective review given to the initial thought. The conclusion was reached that spending the time researching and recommending stocks only to discontinue monitoring their progression is kind of disingenuous to my readers.
That’s about to change.
$LL has found support in the area of the lower Bollinger Band and the quarterly (63) EMA the past two days.
I started a position at the open on Wednesday looking to play the oversold condition that had been flagged in The PPT. The stock KNIFED lower…and quickly. I left my office to discuss a project and when I returned the stock had cratered to well below my “mental” stop-loss.
Lucky for me, I was able to close out the trade JUST above the bottom tick of the day at 50.25…for a real 7-iron-to-the-shin loss.
Imagine my relief when I watched the stock immediately rally back to 51 within what seemed like minutes.
This was a tough spot, on one hand the fucking floor just dropped out of the price (with a +3 ATR(25) move on the hourly chart…i.e. extreme) and I’m left holding shares that were rapidly depreciating in value. On the other, I made a rule a number of years ago to wait until the end of the trading to see how things shape up…FOR THIS VERY REASON.
I cut this one out because I have been ice cold and didn’t want to watch a loser become a bigger loser. I’ll chalk it up to risk management.
Coincidentally, I think the stock has reached a much more favorable area for a buying opportunity. The long “wicks” on those candles means that buyers are stepping in to keep prices in the upper range of that congestion area marked on the chart. Risk is much lower, reward is higher (if it goes, it will likely get to 55 in short order) than it was on Wednesday.
$SHW is sporting a very similar looking price pattern (though the Bollinger Bands are not nearly as compressed as with $LL) with support coming in right where I thought it would (the highlighted area). Again, the price action from the past two days is providing a pretty good indication of where buyers are stepping in to keep shares afloat.
As I mentioned the other day, this pullback is from all-time highs.
(Aside: What sort of macro information can be gleaned from a paint company making all-time highs? Thoughts?)
This stock was ready to go…making a new high the first day of the Turkey/”Sugarplum Fairy” rally (11/19). While other stocks were just coming out of an extended decline, $SHW was showing some impressive momentum.
Shouldn’t we consider it a gift that this stock (one which has demonstrated tremendous relative strength [prior to the last two weeks at least]) has declined in price and is now in a favorable buying area with a well defined region of support? With that in mind, this would be easy to manage. If I put this trade on, I’m going to know within 2 days whether or not it is going to work.
Again, thank you to everyone here at iBC…it’s has been, is and will be an honor working with you.
My best to you all.