So you want to be a “trader”.

You see an eTarde (sic) commercial with that cool middle-aged guy, lounging in his loft “trading turret”, calmly placing trades in his business casual attire in front of his 3 panoramic widescreen monitors.  He pumps his fist after using their awesome “screening tools” to crush another trade and you think: “I can do this”.

Suddenly reality strikes: the familiar disappointed/incredulous look on your wife’s face flashes before your eyes.  Resigned to a life of mediocrity, you utter the following words to soothe the pain left by an unfulfilled yearning: “Shit, I already have a job, benefits, a family and consistent income.”

But the desire to trade is too strong with this one.

Sure, it seems bleak.  You hold fast to those dreams of waking up at noon, “being your own boss”, retiring at a young age, sitting in (separate) matching hot tubs with your partner and watching the sun sink into the horizon.

Fear not aspiring-office worker-trader-guy, all is not lost.  I am here to help you live the dream…the dream of working, getting paid to do that work all while spending the majority of your time on that which you are destined for…after all, this trading shit is EASY, anyway.

If you read my blog you recognize that I am clearly not an expert in very many things.  However; I have acquired certain skills that have suited me quite well.  Over these many “wonderful” years working in an office setting, I continue to try and perfect the art of ‘looking like’ a valuable and productive employee.  The key is managing that facade while spending the bulk of my time doing what I really want to be doing: namely, trying to figure out how to beat the stock market.

After practicing in a few different environments, I have the experience to be your guide through the murky waters of successfully managing the balance between work and trading.  Follow along with me as I address the topic (via a series of posts) and in no time your employer will be under the impression that you are the “hard-working, quiet” guy.

Look, anyone can sit at a desk, be a dick, and do whatever the fuck they want…but there is no beauty in that kind of behavior, there is no artful deception being employed.

The superficial goal is quite simple: optimize peer and superior opinion.  This is accomplished by doing enough…but not doing ‘too much’.  This is really a nuanced kind of thing that is dependent on your particular situation, therefore I intend to delve into this individual topic in a future post.

In the meantime, I want this post to instill hope in all those out there who think they have to give up the dream of someday trading from their bachelor pad loft (you traded the wife in for a younger more “open-minded” model after your 10th million).  Don’t sell your long sleeve white polo or your pleated khaki chinos on $EBAY just yet.

Looking ahead, the second installment in the series will focus on optimizing your office ‘atmosphere’.

Until then, my best to you all.

-EM

I don’t know if I have ever been to a Kohl’s.  I have been around a Kohl’s, but I’m not even sure what Kohl’s sells.  Ah, evidently here is what they do:

Kohl’s Corporation operates department stores in the United States. Its stores offer private, exclusive, and national branded apparel, footwear, and accessories for women, men, and children; soft home products, such as sheets and pillows; and housewares targeted to middle-income customers.

How about that.

You have to love how they dress up that description “private, exclusive…middle-income”.  Being a vagrant from coal country, I am well aware that nothing says “private” and “exclusive” like some shit you purchase from a big box store.  Just make sure you pick up that 20 oz. Mountain Dew at the vending machine right next to the check-out line to quench your thirst prior to leaving to complete the ambiance.

Why am I rambling on about this stupid store?  Good question.  I highlighted $KSS in a post I wrote the other day regarding stocks that The PPT was flagging as OVERSOLD.  Let’s take a peek at $KSS on three different time frames and see if there is something of value we can parse out of this.

$KSS Daily

$KSS Weekly

$KSS Monthly

What is clear is that for almost 14 years. the pricing area between 40 and 45 holds some pretty significant value as an area of congestion.  First as resistance, and then, repeatedly (other than in 2008) has served as a place where buyers would defend the price.

Why is this of interest to us?  Well, $KSS clearly got slammed on 11/29 (shitty same-store sales)…that sucks if you were a shareholder prior, but it has created a situation where we can potentially slowly leg into a position with the expectation that buyers will step in to keep prices buoyed above 42.

This would certainly fall under the umbrella of a “long term” trade (i.e. 6 month hold minimum) for me.

Basically, If I were to start a position, I would wait to see if and/or when the stock trades back down to the post 11/29 lows for use as a barometer.  There is no need to be overly aggressive here, as there is plenty of room for upside.  I am of the belief that it is best to let things play out for a while, slowly leg in with some small nibbles (all while trying to lock in a decent cost-basis).

The lows from June 2012 are at 42.7, the September 2011 lows are at 42.1.  If price breaks (and remains) below the latter of those levels I would become increasingly skeptical about the possibility of a move back into the 50’s anytime soon.

$KSS just started paying a dividend last year, and gave shareholders at .07/share raise (to $0.32) in the March 2012 quarter.  If things go well this year, I wouldn’t be surprised to see another raise next March.  Trading at 44, $KSS pays 2.9%…so at these levels you can lock in a much better yield than you could have a month ago.

I’ll be returning here periodically to check on how this progresses and provide any updates I have regarding my positioning in the stock.

My best to you all.

-EM

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.

Thanks again.

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.

-EM

Yesterday, prior to lunch, I made note of $APKT:

A little later, I reinforced my stance on $APKT (with a caveat)

Why was I so confident?  Well, the pattern shown below on the daily is why.  It had all the makings of a stock that wanted to bounce.  This is a 2-5 day trade.  I have seen enough of these over the years to give me a lot of confidence in the validity of the price action when it has ‘that look’.

Today $APKT is currently +2.63%.

My best to you all.

-EM

Last evening, instead of embarking on some last minute campaigning in states that I was bound to lose anyway, I was required to report to my local sleep study center to determine if, in fact, I am saddled with sleep apnea.  Mind you, I am not overweight, but from time to time I do get these ridiculous headaches that my doctor suspected were linked to a sleep disorder.

Well, I come to you this morning bearing some good news.  From all indications, I am sleep apnea free.  Unfortunately, the bad news is that the cause of my hideous head pain continues to be a mystery.

Nevertheless, lying in a foreign bed with wires hooked up to all parts of my body is not how I envisioned spending my iBC Tabbed Blogger Election eve…but, you gotta do what you gotta do.

On to more pressing matters.

In his incredibly informative daily “What The PPT is Saying” posts in The PPT blog, “The Fly” indicated that short squeezes and momentum are the flavor of the day, as compared to stocks registering OVERSOLD.  Now, this is completely contrary to what my thoughts were on this matter just yesterday.  After seeing some of my picks from yesterday fall flat on their face, I absolutely concur with this sentiment.

With this thought in mind, I have curated a short list of stocks that I believe could be ripe for some momentum into Santy Clause Day.  Some parameters: below 200 day MA, above 20 day EMA and 63 day (quarterly) EMA, breaking higher.

I’ll save the commentary and just post some visuals…make of it what you want.

$CLS

$LUFK

$MT

$SWY

$WM

Be sure to vote.

My best to you all.

-EM

I love The PPT.

The only complaint that I have with The PPT is sometimes I feel overwhelmed by the amount of information that I am able to glean from the tool.  Every day I’m tweaking old screens, building new screens…there are essentially an infinite number of ways to use this thing…sometimes I discover new nuggets…sometimes I end running around in a circle.

Nevertheless, there are certain tried-and-true screens that I return to to find trades that best fit my style.  One such screen (actually it’s two screens) I use is to find stocks that are “flagging” OVERSOLD on the 3, 6 and 12 month PPT algorithms.  I have discussed how I use these screens at length in these posts (I and II)…instead of rehashing old territory, you can refer back to those to delve into the nuts and bolts of what I’m doing here.

After running my screens this AM, there were an above-average number of ‘records’.

(737…which could be suggesting that many individual stocks are becoming oversold even though the market is holding up relatively well.  To digress for a moment…honestly, since the November 16th bottom, this market has been extremely vexing to me.  I NEVER would have thought we would blast higher in the “V”-shape manner in which we did.  I got burned trying to short that move, even though retesting the lows made sense to me at the time…hey, what can you do?  You learn from it and move on.)

From that group, the following stocks have caught my eye as (historically) high probability OVERSOLD plays that have well defined risk “barriers”:

$LL

There is a lot of ‘congestion’ in the area defined above that could provide decent support.  I use risk to determine my position sizing…in this case I would use the 50.85 as my “worst case scenario loss”.

$SHW

After breaking out on 11/19, $SHW has fallen on hard times.  FWIW, I LOVE buying pullbacks from breakouts…it’s probably my favorite pattern.  A stock that had the momentum, then stalled and has retreated back to an area of prior support?  Sign me up.  My risk is into the mid-147’s (147.43 to be exact).

$KSS

$KSS could be ripe for an oversold bounce now that it has (quite literally) crashed back into prior support.  I hate trying to play these, but there is a well defined area of support down to about 42.70, thus (barring any pre/post market carnage) you know your risk and can act accordingly.

Lastly, $HFC

Here we have a stock that is coiling right at all-time highs and is also oversold…sign me up for that as well.  44 is about as far as I would let this one get away from me to the downside.  There is a lot of clean air above so this one could potentially pop in the coming days.

Chew on those for a while.

My best to you all.

-EM

As “The Fly” rests comfortably by hearth’s edge, I gather my campaign team ’round the trash burning in my 55 gallon drum smoking homegrown tabackky out of  a corncob pipe and ponder the 2012 iBC Tabbed Blogger Election.

What has become crystal clear to us is that there is now a clear front runner.  I am not ceding my candidacy, but, as I said in regard to a different topic last evening: “the writing is on the wall”.

My vote is still undecided, but only because my choice was coming down to either this candidate or one other that I greatly respect.  This (former) person genuinely works his ass off and absolutely deserves what awaits him.

Fuck, he was my first follower on Twitter and was the first to really tell me that they appreciated the experiences I was sharing on here.  I tell you what dude, I really appreciated that.  It feels good to put some passion into something and have someone provide constructive feedback.

If shit were ever to go down, for real, I want to be on whatever side he is on.

In the likely event that he is elected, I have no doubt that he will be a great addition to the iBC team.

Now, should there be more than one available tab, as I said, I am not ceding my candidacy.  What I can say for certain is that I have treated the opportunity to write here with the respect and dignity that it rightfully deserves.  I’m a nobody; therefore I have approached my blog with the primary intention of gaining the respect of my readers.  If you have followed me, you know what you are going to get: frank and  honest commentary (with good grammar) regarding my experiences in and around the stock market and a touch of some good music.

Lastly, if any staff writers have read my work and would like to (either publicly or privately) offer their backing, having earned your respect, I would be much obliged.

You may enjoy what I write.  If not, well…until “The Fly” instructs me to leave the premises, you can go fuck yourself.

My best to you all.

-EM

After rereading my post from last evening, I feel the need to clarify a comment I made.

In making an objective assessment of my trading performance (with almost a decade of data to analyze), I came to the conclusion that I am (currently) and “average trader”.  Now, I have high expectations for myself, so my “average” may be your “spectacular”, “shitty” or, well, “average”.

Please do not misconstrue this comment as a personal malaise or a lack of interest toward trading.  Other than my family and my favorite sports teams, there is nothing that I am more passionate about.

Let me be clear: my statement was not a resignation to being average.  It is where I am.  I’m never going to be Paul Tudor Jones or Ed Seykota or Uncle Warren or “The Fly”…that boat has sailed.  I suppose that what I was getting at was the ability to honestly analyze one’s performance is a key component to not only staying in the game, but also discovering ways to break through and improve as a trader.

My ‘real’ career (as a Traffic Engineer) has started to take shape and I’m pretty happy with the way things are headed.  Even with this, the stock market provides me with an all-encompassing quest for learning and improvement.

How can I say this with certainty?

I don’t trade for a living, therefore, this is more of a “hobby” than an “occupation” (however; please keep in mind that I do not approach trading as a hobby…I’m looking to make money, not spend it…which is what hobbies typically constitute).  Even with that, I undoubtedly spend a good portion of my free-time running screens, scanning charts, trying to hone old methods and trying to find new ways to extract coin from the stock market.

Sure there is the immediate gratification of “winning”, but I have little practical use for the money that I make or lose in trading.

(As an aside, I have 70% of my investment capital in dividend stocks, an index ETF and other illiquid investments…so it’s not like I’m counting on my trading whims to retire on or anything.  Right now the best case scenario is that I’ll be able to retire early and comfortably live out my golden years farming a little plot of land, fishing and building furniture in my home shop.  Basically, I have little use for material possessions.)

There is just something about the markets that “scratches me where I itch”.  It provides me with a daily challenge, one where I will never know what is going to happen.  There will always be a challenge lying around the next turn…unless you decided to cash out and bury your money on your property, there will always be surprises.  There will be incredible wins and (likely) horrific losses and a lot of stuff in between.  The goal is to maximize the wins, minimize the losses and find ways to come out on top in the rest of the wash.

I found it as fascinating in 1998 as I do today and as long as that fire is burning I’m going to work hard to learn from my mistakes and improve.  Based on my experience, that is typically a formula for success.

My best to you all.

-EM

Here is what you can expect from me as a “tabbed blogger”:

I will continue to use and expand upon how I have been using my blog thusfar.

If you want technical analysis, you can find that from some of the esteemed bloggers here and about 6 million other sites on the internet.  If you want fundamental research, you can find that elsewhere.  Sure, I use technical analysis in my trading (mostly because my mind cannot concentrate for more than 1 paragraph of analyst “literature”.  I know it’s probably to my detriment, but my time is valuable, and I need to pick and choose my battles.  Let’s face it, I’m never, ever going to slog through a 1500 word report.  Hell, one of the main reasons why I subscribe to The PPT is so I can have my fundamental data quantified in “score” format.), but my usage (of TA) is limited and is tailored to what I have observed throughout the years, basically it is of little value to anyone but me.

With the honor and glory of becoming a tabbed blogger, I will use this as a platform to hone my writing craft and expand upon my many experiences trading the market (with a little slice of real-life mixed in for good measure).

One area of particular interest that I look forward to expanding upon is performance psychology.  I am of the belief that the mental approach to trading is far more important than any technical indicators or financial data.

One of the most fascinating parts of this occupation is that no matter how good you think you are, you are only a few hubris-laden trades from blowing up your account.  Unlike other performance skills/sports, you can play this game until an old age, and still perform at a high level.

Anyway, I digress…if you are interested in a sampling of what I would bring to iBC, here are some of my favorite and/or most popular posts since I have started writing here in the Blogger Network:

Early ranting

Armageddon

The difficulty with change

Seasonality Strategy (currently on hold)

Potpourri (including some trading and experiences with lawn care)

More psych, this time regarding confidence

Bemoaning my experiences during the first term of Barak Obama

An update to that story with a much more optimistic slant

One way I use The PPT, (Part I) (Part II)

 My absolutely ATROCIOUS 2012 Week 1 NFL Picks, which forced my handicapping ‘career’ into an indefinite hiatus

So there is a slice of what I consider to be some of my best work here at iBC.

If you want stock tips, don’t vote for me.

If you want market analysis, read chessNwine…he does it better than anyone.

There comes a point where you need to be honest with yourself…and here it is: I am an average trader.  I can beat the benchmarks most years, but I’m never going to be one of the great ones.  Nevertheless, my story is one that I think a lot of other traders can relate to…self-taught, does stupid shit more often than he/she should, sells too early, takes stupid losses 1-2x per year…you know, pretty standard stuff.

Lastly (and most importantly), to the “powers that be” at iBC: I pledge that I will continue to bring my A-game, I will continue to hone my craft (writing) to make the Nations of iBankCoin proud.  I will be one of the best fucking teammates you will ever have.  I know my place: I will grind when I am required to grind and I will lead when I am required to lead.

Now let us continue to lay waste to the rest of the financial blogging universe.

My best to you all.

-EM

There aren’t many of them in the world of investing, but there is one…and that is Unilever ($UN) will trade up in the month of December.  You don’t believe me?  Fine, check out these stats (courtesy of The PPT):

That’s right.  26 for 26.

One could suggest that eventually the streak must come to an end (just like a 15 game home winning streak at the hands of an almost-38-year-old-third-string quarterback), but I’m not going to bet against it.  One could also say that “seasonality” is akin to astrology and other sorts of “suchness”…to that I say: “nonsense”.  I threw a small sum of money at this today, and I will be sure to collect my profit at the end of the month, thankyouverymuch.

Trade accordingly.

-EM