1,000 Club

Lol!  This is for fun… I just noticed I hit the 1,000 followers club.  The cool thing about it is that I’d say about 95% of them are traders.  Anyway, since this is sort of a milestone (and an inside joke to the other +1k stock twitterers) I thought I’d take this time to run some tweet-stats.  It’s kind of neat actually, it tells you a little about yourself and what goes on in your mind.

Here’s some interesting data on the days and times I tweet.  I joined Twitter this past November with Fly as my only follower, and hopped aboard the StockTwits bandwagon thanks to Lindzon’s recommending me to post my trades.  The time is in Hawaii time, so I’m usually tweeting during the middle of the market on the hourly.  According to the daily tweet stats, it looks like I talk a lot on Tuesday and Friday.

Why hello there Danny!

Here’s my tweet cloud.  My top 5 words tweeted are:  VIX, short, market, day, lol.  …it kind of tells you what kind of person I am, no?  I guess I like to “short the market during the day using the VIX while laughing at myself.” I think its safe to say no one tweets the word “VIX” more than me.  The cloud also shows you the type of stocks I trade intraday, like $FAS and $FAZ.  The funny thing about tweeting, is that since I am “thehawaiitrader”, I get a lot of Hawaii people trying to follow me, but when they realize I tweet 50 times in the morning about stocks, they immediately unfollow me. Lol!

http://tweetstats.com/graphs/thehawaiitrader

Finally, congrats to Lindzon for that nice read on Investors Business Daily.

Well, thanks to all 1,000 of you for watching me make a fool of myself.  Come check the rest of the iBC team while you’re at it:

iBankCoin

Danny_iBC

WeeklyTA

Woodshedder

thehawaiitrader

RaginCajun

alphadawgg

The_Real_Fly

See you on the streets!

-gio-

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…  both are Preludes to Stupidity.

The market is all about fear and greed.  Hope and regret.  Discomfort and and tranquility.  Every piece of emotion that moves the market, moves it to a place where it doesn’t belong.  Always.  Knowing this is at the heart of every contrarian.

Here are 3 VIX charts to give you an idea of where I stand (click charts to enlarge, then click again to focus it).  We’ve seen all the technical trader’s point of view, well this is a sentiment-trader perspective- short, medium, and long term.

VIX 1-day (3/10/09 rally day) – use for day-trading entry points.  Market rallied a little further than it should; notice the flattening pattern in the VIX while market spiked up, this is an improper rally.  This, however, doesn’t mean we can’t melt-up in a nonsensical way.

VIX-Medium Term (1-month)–  has every sentiment trader a bit confused.  We’ve been stuck in a 5-point and 10-point channel for sometime, and only yesterday did that weekly wedge pattern break to the downside.  The closer VIX gets to the breakdown point, the better the entry for swing longs.  I have yet to see a “double-spike” (remember that study? ) to signal an extreme level.

VIX Longterm (3-month with 6-month displayed):  Remember that VIX breakdown in the 60s?  Well, since then we had to “re-set our charts,” meaning we have to come up with new greed/fear extremes.   It’s been difficult to get new data points, but after this multi-month channel pattern, we have something to work with.   Some things to keep in mind is that too much panic (selling) begets fear (of buying), and too much complacency is a prelude to greed.  When we start hitting those extremes, then its time to think like a contrarian.  Currently, our market is moving toward the complacency levels despite market being oversold.  This is an interesting anamoly which even I am trying to decipher.  Hence, my resent and often references to “hesitation and delay.”  Either the VIX catches up to the market, or the market moves up to catch the VIX.  Just remember, let the market be complacent, you however must question it each and everyday until things make sense.

Take the emotion out of YOUR trade.  Use THEIR emotion to guide you.

-gio-

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A quick scan of the front page, looks like iBC owned today’s tape. I did my damage over on StockTwits… retracements, Vix breakdowns, rallies right on cue!

Here’s a day-trader’s analysis of how to trade relief rallies. Study this, and file it for another relief-rally day:

• Rally
• Hesitate- bulls not sure if we go higher
• Delay- bulls test day highs but delay the breakout
• Shakeout – weak bulls get shaken out.  We hold.
• Rally!

I had VIX < 44.58 as rally point since that was the pattern thus far.  It was a little conservative, but I got it.  There was one pretty big shakeout (see chart), but when that bottomed, the rally began.  Note though, that the VIX works much differently in “Relief Rally Tapes”.  A relief-rally tape is tantamount to bear-panic-buying, hence, even if the VIX moved up a little, as long as it kept its downtrend, then the likelihood of another market spike would be there.  In other words, whenever you have these relief-rallies, fixate in your mind that the market is going up until the close.

On my trades I went long SRS on the “delay” period, knowing very well we would re-test and break that double top.  Then shorted SRS during the shakeout period.  Its cool though, I didn’t get shook out, although that shakeout (see chart) was a bit bigger than I thought.

Market breaks the double top, and we head to highs, SRS to lows.  Ta da!  😉

Laterz,

gio

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This post will be made with 5 fingers since I’m icing the other hand. Anyway, I’m just amazed at how some of our recent leaderhip stocks have gotten derailed.  As usual, I’m here to play the panic and not call a bottom.  I usually wait for the heavy selling volume to come before I buy the panic.  I wish I could get confirmation with the overall market, but we’ve been selling off on complacency… very very odd.  Just remember, these buys are really short term, then when I’m done with the relief rally I position for a longer term short.  Wave/momentum trading basics.

Previous leadership stocks that just got nuked:

FSYS- panic sell. close to a relief rally. Check out those nasty red bars. http://ppt.ibankcoin.com/analytic_engine.php?symbol=fsys&submit=Submit

 

AVAV – getting destroyed. keep this on the watch list.  I will post chart after the open.

AFAM – near 52-low. Probably goes lower, but watching the short interest ratio. what a shame.

… this list keeps growing.  IBD index is hurting.

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Today’s tape was strange.  It almost seemed like it was broken.  Kind of like my fingers (fell on my face yesterday on the court).  More divergence in market to inverse ETFs.  We had market trend down, but fading it wasn’t so easy.  Take a look at FAZ and SRS today.  Both in the red, despite Dow -100 / SPX -1%.  Not good for bears, nor is it that great for bulls… we had financials rallying, like BAC, and the big ugly GE was up too.  I’ll score this one for the bulls, only because the close gave me 673 on SPX for an attempt at support.

Here’s FAZ vs SRS to demonstrate the “broken tape”.  Notice both were idiots today, but FAZ did better.  I shorted SRS about three times, and went long FAZ a couple of times.  No sense analyzing them, since the market was just broken.  What does this all mean?  Usually its either 1) a topping pattern which signals you can start averaging in longs, or 2) a shake-out on weak holders.  I’m keeping 673 this week on SPX as a key support this week to help me play.  For now, continue to keep swing positions light (both long/short) while day-trading the top and bottom of channels of FAZ and SRS (see chart).  I like to short SRS on market rally attempts, and long FAZ on the fade.

Anyway, it was pretty much messed up for me today- my internet was slow on all computers, the one I trade on was lagging (had to re-set 2 times), and worst of all, I had to trade stocks with 6 fingers!  Only my thumb on my right hand works, oh, so does my pinky but that’s useless anyway.

One more thing… we had day light savings adjustment, so make sure you adjust too.  Unfortunately, that means the market opens even earlier in Hawaii. T_T

Okay, enough typing.  Gotta go ice my hand. March Madness is here! Be sure to check out Ragin’s competition.  You can win a signed Monster soda by the Fly… which makes me wonder, will he sign “Fly” or “Broker A” …LOL.

aloha,
-gio-

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Don’t even try to read today’s intraday pattern.  All that happened was 2 things… HESITATE and DELAY.

• Melt down on low volume, as bulls cannot push market higher (hesitate)
• Profit-taking for bears near the close (rally delayed)

That’s it… that’s all you need to know.

Technicals reveal:   we are near the lows, we are at oversold levels, $VIX is flat yet market melt-off on LOW volume (market never rallies on a gap up day w/o volume).  Volume picks up at the close and market gaps up to green.

Conceptually we define it:  Market moves up on low volume to suck in all the “Friday we rally” callers.  It doesn’t happen, volume not there, hence we head lower.  Near the close volume picks up because bears don’t want to hold shorts into the weekend (classic pre-weekend cover squeeze).

All this nonsense happens because volume was light all day.

As I’ve stated before, the game has changed a bit since mid-February… I know because I’m in the market watching the tape (I prefer not to, but I do because these are epic times), and I can tell you its much much different.  Lighten up on your trades and adapt to the new face of this market.  Go long and short, yes both, and plan on losing on at least one of them.  Don’t let that loss turn against you, but view the loss as the price to pay to adapt to the market.   If you can’t understand that, go all cash. This tape has been so deceptive, its almost like you have to be in the market to understand it.  Almost all of the tabbed-bloggers are unanimous that the market is acting very strange, as if we are ready to either crash or rally, and I’m trying to stay IN the market (long/short) just so that I can keep sharp and ready for it.

Have a good one,

-gio-

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