I give you TSE:ADV / NYSEAMEX:AXX –

30 min

Ran yesterdays lows with higher volume, bounced and now is flagging in continuation pattern. MACD looks to be turning for positive and bullish cross.

Daily

Can’t really call today a hammer, and could see more short term downside.

Weekly

With no weekly gains this would be the second consecutive weekly candle below the Bollinger Bands, which is by no means impossible, but rather improbable. It has not happened while this stock has traded, indeed there are only a handful of single weekly closes outside the Bollinger Bands. The selling volume hasn’t been high, and I am expecting a bounce.

I do not know when exactly this will happen, so I am adding small and many times. This is a personal favourite, I am happy to buy this higher or lower, as well as leaving cash allocated here if needed.

Currently long 1/4 position.

I started actively trading in mid to late 2009, and am entirely self taught. I largely have folks from the interwebs to thank for this, as the font of this knowledge. The main problem of course, is that while the internet does certainly contain resources where one can learn and genuinely improve as a trader, the majority of content is self-hype, lies and outright scams. I was, and still am, looking for ways to improve my trading system, as well as learn from the systems and knowledge of others, which required sifting through the sewer that is the internet in hopes of finding gems. What follows is what I have learned from this process to date.

1) Stock pickers are not for me.

I have great respect for people who can look at a company, the balance sheet and the business and place a dollar figure on where the price of the shares should be. It is lucrative for those that do it well, and inside The PPT there are veterans who do it on a daily basis who one could follow/learn from (notables include the commander and chief, the devil (or at least a devil), and an phenom who speaks at least three languages and don’t wait in the line at the club).
The problem is that, by in large, I cannot replicate the results. The success of the system is based on knowledge and expertise that I am trying to build, but do not have. This makes this form of trading risky for me, as I am following someone else (at which point I would rather just have my money managed) and not fully understanding the trade or the reason for it. For me, that causes extra stress, frustration, and in the past loses. It also makes it impossible to evaluate if the quality of the trade, or to evaluate when the nature of the trade or stock has changed.

2. Find those who have styles/systems/mentalities that you can understand and can be successfully incorporated into your system.

The mentality of trading is extremely difficult. When money is on the line, it was difficult for me to avoid becoming emotional as a new trader. Wins were accompanied by highs, losses by lows. This hurt my performance, my health and my trading system. It became important to find people to learn from, who had seen the emotional roller coaster and had ways to deal with it.
I do not choose these people based on their ability to earn incredible returns, but rather because their temperament is one that I would like to replicate in my own trading. The two people who stand out most for me are the people who put together the 12631 trading service Chess and the Cajun. Not only did they put together and maintain a trade room, which is a fantastic resource for self-education but they also put out content daily that is educational. By observing Rajin’ Cajuns trades I have found numerous new intraday setups I am confident trading in my system. ChessNwine has been invaluable in outlining the mentality with which a successful swing trader approaches the market with.

3. A system does not require any particular person.

I did not truly learn this until I stopped lurking in the free section of this website and jump behind the pay wall. The Fly throws out incredible calls and picks all the time (your FTK, WNR, the legendary DECK earnings call last July) but if he were to leave tomorrow and leave the servers on, The PPT would still continue to make great market timing calls and fit into my trading system the same way. I do not mean to imply that I do not benefit from watching veterans use The PPT, but the success of the system does not depend on them.

I hope this was helpful, feel free to add your own experiences in the comments.

Columbian’s Devil Breath

I missed the entry to my trade on the 16th due to the uptenth doctors appointment to examine my knee combined with the lack of conviction required to leave a order in the market while not at the computer. I will not digress for too long on the idiocy of setting an appointment for a fixed time while simultaneously running hours late. In any case, the trade should hit its first short target tomorrow, where the financials could see a bounce at the 200dma which is coincidentally also the 50% retracement of their recent up move. It is certainly a good point to lock in some of the 2+ points.

Despite my best efforts to fuck up my trading accounts via pussified bottom tick sells (edr.to today @ 7.90) The PPT continues to provide the closest thing we get to a freebie while trading. People who use the tool will know the commodity complex is still very oversold and in the processing of punishing moronic shorts who refuse to stop pushing their bets. EXK will likely continue to rip, without me, but I will not bemoan my sells and potentially missed profit as that sort of behaviour is unbecoming of a gentleman.

I have interest in coal, energy and metal stocks for a short term bounce as they are quite oversold and will yield great reward for those with the balls to catch the knife. In this chop environment I prefer to be nimble and play for mean revision.

Dated but enjoy.

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design” – Friedrich August Hayek

I will begin this post by saying I am glad to be back. I will not bore you with the details at present, as it is sufficient to say: they are none of your business. Perhaps later, once I have finished I will share my reflections on this difficult period in my life.

Now on to look at the financials, specifically the sector ETF XLF.

There are several different scenario’s, and therefore trades, that could play out given this chart and the overall state of the market.

1) Long trade: A complex, 5 point correction.
The 5th point would be on the trendline capping the upside of XLF, and a break from there could send the banks to multi-year highs. This is not a probable scenario in my view, and we would first need to see a bounce off the combination of support from early February (the red line) and the up-trend line at around 14.40. I am looking for the XLF to find some support here, however temporary, in the next day or two. It is worth noting, when considering longs that there are mixed technical indicators here. The stochastic are oversold, but the 50dma is also starting to roll over and downward sloping now.

2) Short trade: Breakdown of complex correction
This is the more likely scenario in my view given the internals of the market, and macro economic conditions. The trade is simple: short around the break of the early February support line with a target of the 200dma (which coincides with a 50% retrace of the up-move) and is about a 5%er. I would wait a day or two after a break of 14.40 to confirm the direction, as we could see a flush out followed by a bounce at these levels.

Looking at the weekly picture however, I do recognize that a short will likely be a short stay (pun intended) because it appears to my armature eye that we are still in the correction phase of a bull market and the bears have some more work to do to really rip the banks down.

Many people are no doubt confused as to why economic conditions are improving but the fed is refusing to raise rates. I propose to share an economists perspective using this simple parable.

Three men are trapped on a desert island, an engineer, a biologist and an economist. After wandering the island, starving, searching for food for several days they finally stumble upon a can of beans on the beach. The men pause, not believing their luck. Suddenly they are hit by a realization, they make eye contact, their brows furrow in deep thought. The engineer is the first to speak, “we could hit the can with a rock until it opens.” The biologist counters, “we should wrap the can in seaweed and submerge it in the ocean until erosion opens the can.” The economist gives both men a condescending look and begins, “assuming we have a can opener…”

http://www.youtube.com/watch?v=Mz-bcdRRiRo

That is all

Tickers are posted in a gallery. Covers the following: ABMD, ARO, DMND, FST, GGP, JRCC, STRI, X, ZEUS

http://tradingeh.wordpress.com/2012/01/24/charting-fix-january-23rd/

And an update on my short position: