Ooop! I meant Bullish Hammer.
The bullish hammer candlestick bar (see below daily chart) is an encouraging sign for a possible cessation of the current downdraft. Moving cash into equities to take advantage of the current corrections of DDD and SSYS to rebuild my positions for the 3D printer hunt. I also bought some SZYM to rebuild position for this one as well. Still holding 60% cash.
Good Hunting!
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Did you see what I’m seeing in the weekly EMAN chart below?
I’m “betting” that this little guy is going to go bronco crazy and jump over the fence in no time.
I like the story behind this guy because of their introduction of the world’s highest resolution, full color microdisplay. This new gadget will be introduced at next week’s Society for Information Display (SID) conference. Hopefully, it may sparks interest by then.
Btw, what do you think of the idea of “mobile” home theater?
“I want one! I want one!”
Yes, I bought some starter position here. Oh, this is NOT an advice to buy. This little guy has small float and is thinly traded; hence the ability to jump like a madman- up OR down…
So go the SPY mid-Keltner band being tagged by today up bar. Now, will price go the other way to avoid being tag.
As of now, price action is still below the mid-Keltner line.
Below daily chart show the SDS mid-Keltner band being tagged and now price is running back to the upside. Btw, SDS is the 2x inversion of SPY. Notice that the mid-Keltner band is also close to the Fib retracement of 38.2%. To me; that is a double confirmation of support. Yes, I’m long SDS at current price action with a stop at a bit below today low.
Below is the SPY daily chart
Good Hunting!
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How many of you have a trading style you called your own?
If you have one, congratulation! If you don’t have one, you need to work on refining your trading techniques until you start making money. Once you do, you have your own style.
When you see somebody you like to read on the blog posts a stock idea, do you follow the suggestion and cross your finger and hope for the best? And when this person proclaims that he is loading up the truck on this pick he posted, do you add more based on this information? If you answer yes to both questions, then you don’t have a trading style of your own.
While there are benefits to be had in seeing other people posts their stock picks that comes with their argument and thesis, the contributors who posted their picks (either buying or shorting) usually have their own trading goals and loss limit based on their risk tolerance and the “size” of their portfolio. I said “usually” because there may be a few out there who post their pick with undying belief on the stock they love. In other words, it will be like following a blind man with nothing but “faith” that this blind man will lead you to salvation. And if you happened to win big based on this blind faith and was lucky to cash out; congratulation, you just won the lottery!
In trading, there is no short-cut. If you don’t want to spend the time to study the technical analysis (TA) and go thru the trials and errors in finding the right TA that works for your personality as well as tailor-designed to your individual strengths and weaknesses, you have a high probability of being part of the 90-95% of the people who failed in trading.
So, how do you start? By taking a first step in reading a trading book, trading video, or pay for a live seminar to learn the trading skill. You won’t become good with the TA right off the bat; but your tenacity, dedication, and persistence in “applying the TA” will carry you to eventual fruition.
It took me many years to discover my “hunting” trading style. Just because it works for me does not necessary mean it will work for you. My trading skills evolve over years of trials and errors and now they become part of my “habit”. These skills, like averaging up and dumping my position as the sound of a hiccup without a care if the stock is going to take off without me took me years to refine. Yes, sometimes, I do give up runner who ran so fast that to jump back in will be suicidal. But at the same time, I also locked in many profits that could have gone back to zero or worse. Overall, from my personal experience, the benefit outweighs the cost. But these are very personal trading skills that make me who I am now as a trader.
My point here is that you need to find your own style if you don’t already have one. You are going to pay your due regardless; then why not learn something from the expensive lesson by being more systematic in your trading execution. Trade with a plan based on what you learn from book, video, or live seminar. And from there on, you will begin to evolve as a trader by continuing the process of finding your own style using the lesson you learned from each trade you made.
Instead of saying, “Damn, I thought trader A has that pinned down. I wonder if trader A is still holding the position. I’m hurting and I don’t know what to do?”
Going forward, you want to say thing like,
“Damn, why did I not follow the signal to sell my position? What should I do to stick to the gun?”
or
“Where should I put my stop so that if the trade bombed, my loss will be limit?”
or
“This stop limit is too much for me, I’m going to pass the trade”
or
“Trader A has this pick, but from my interpretation of the chart, the volatility is too much for me. I’m gonna pass.”
or
“Trader A must be crazy, no way I’ll take that trade when it is already up so much.”
or
“Trader A pick looks good; but I will use my own stop loss and profit target for this trade.”
In summary, if you don’t already have your own trading style or working on one, time to get busy.
Good Hunting!
Comments »Despite the muddy road today, the mule wagon (of equities) was able to gain an inch. Until the day comes when the mud disappear, I’m afraid there will be more hardship ahead trekking thru the wetland of Mt. Fifth.
Because I was giving the opportunity, I unloaded my baggage (now holding 80% cash) without injury and took to the tree to wait for sunny day. Oh you can call me anything you want; but you ain’t gonna make me walk thru the messy wetland when there is a chance of quicksand awaiting to swallow you whole.
Yes, safety comes first. Believe me, when the sunny day comes and the wetland becomes dry land with roses lining up the trail, I will be running to the top of Mt. Fifth faster. Yes, I’ll probably have to pay toll for running on sunny day but I bet I can pick up some gold nuggets along the way.
Regardless, my fellow travelers, I will see you at the top of Mt. Fifth waiting for you with ice-cream in the freezer. 🙂 And travel safe!
The weekly Dow Jones chart below shows that the Feb 2011 support still hold and the reversal green bar actually expanded a bit more!
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For those not familiar with Elliott Wave theory, the simple explanation will be that the Elliott Wave has 5 waves pattern. As you can see in the weekly Dow Jones chart below, I tried, to the best of my understanding, identify the 5 waves pattern in the trend. Also, you can see the A-B-C wave patterns right after the 5 waves patterns; these A-B-C wave patterns are the corrective patterns.
Now, as of today, my weekly chart shows that the price-action is finding support from the Feb 2011 high. This support can be significant because it can be used as an “excuse” to spring board the start of wave #5 which can end up where I put the double ?? (my extrapolation only, of course).
Now, if you don’t agree with me; that is your right. If you want to believe that the market will fall off the cliff, that is certainly your freedom to do so. Meanwhile, I’m going to see if my thesis will prove to be correct by watching if the weekly bar continues to make new higher high and higher low from here.
Regardless, I will see you at the top of wave #5. Ice cream will be on me when you get there. 🙂
Again, the above is my opinion only. Just so you know, I don’t have any “emotional” attachment to my opinion. Meaning that if the market takes a dump tomorrow; I may as well come back with another chart showing why the Dow Jones will be heading down the cliff very soon. I just need to find another “theory” out there that will support my thesis. You see, opinion is like a pin holding the onion; the darn opinion (oop! I mean onion) is just too heavy for the little pin to hold it in place!
Good Hunting!
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Based on the chart below, I’ve to conclude that enough force has stopped the continuing down motion. If price action can take out the high of yesterday doji candlestick bar, I believe we may find the bottom. I moved 20% into equities today. Still have 50% cash.
Good Hunting!
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Pardon my pessimistic view; but I believe, today, we are only entering into the “eye of the storm” for the moment.
The woe of Greece is far from over; and we have yet to feel its domino effect that will impact Spain, Italy, and the rest of the financial systems around the globe. Again, the G man may under-estimate the ramification of Greece failure the way they under-estimated the failure of Lehman Brothers. Suffice it to say that defensive strategy must be planned ahead such that it can be executed in a moment notice. If you are overloaded in illiquid position; hedging plan will be your protective shield.
For trading strategy, I will place a buy stop above each SKF daily high. In other words, if SKF continues to have a lower low and lower high, I will move my buy stop to each day high. In any event when a surprise news hit the news feed and SKF shoots up; I will get fill and be long SKF even if I’m not looking (or too slow to react).
Also, I may buy some JPM put option giving their current portfolio predicament .
But then again, I may be overly-pessimistic. Nevertheless, being prepared for the worst case scenario can never be overstated under current financial climax.
Good Hunting!
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I meant the the castle of Las Vegas Sands.
Weekly chart below shows that LVS downtrend was stopped at 61.8% level (b/w Oct 2011 Low and Apr High).
Yes, it is a Fib retracement play.
Giving the persistent downtrend for the last 5 weeks, it “may” walk back up to the $60ish level if market condition turns bullish due to 2012 being the Presidential election year…
Bought a starter position here @ $47ish.
Below is the weekly chart
Below is the daily chart. Notice that stochastic is turning up at this point.
In the game of trading, the hunter (aka trader) is always looking out for runner. To do that, I like to observe the following:
1) Look for catalyst that may kick-start a runner
2) Find out the story behind the catalyst and see if a fire exists to fuel the runner
3) Find out which direction the runner is going.
4) Track the runner in the same direction it is going.
5) Let’s the runner leads you. Do NOT try to jump the gun on the runner.
6) Always be mindful that the runner can change direction abruptly and collide with you head-on. This can be dangerous to your health.
7) Due to number 6 above, one needs to know when to let go of the runner.
Last week, I spotted the catalyst (Pt #1) that kick-started my interest in SKF. JPM $2 billion losses was a great catalyst. The story (Pt #2) has a strong scent that reeked of blood and fear. A strong combination to move a runner. On top of that, the looming European woes, especially from Greece, added another dimension to support the thesis in establishing SKF as a runner.
Obviously, since SKF is an ETF (ProShares 2x UltraShort Financials); the direction I expect it to run is up (Pt #3). Thus, a campaign to go long SKF was in order (Pt #4).
So far, we have covered point 1 to 4.
Point number 5 needs a bit more narrative. Knowing the story and the potential behind a runner is not enough. I need to see proof. I need to see price action supporting the thesis that SKF is a runner. If you see a deer running fast by you; you see a runner. There is no doubt the deer is running. Not only that, you know exactly which direction the deer is running to. Now, if you see a deer meandering here and there; do you see a runner? Of course not. And if you try to jump the gun on the deer by guessing the direction it will run (if it even run at all); you can be caught by surprise if the deer run (or walk) the opposite direction than the one you picked.
From the beginning of last week, I needed to see SKF makes consistent higher high and higher low to confirm that it was running. Noticed that I was quick to get out or reduce position because I wasn’t sure if SKF would run or continue to run. From my daily comment; on May 15th (day 2 after I bought) I got stopped out because the morning price action looked like it was going back down and actually went below the half-way point of May 14th where I had my stop. Nevertheless, after I was stopped out; SKF made a higher high by taking out May 14th high. This was the proof I needed to see. Without hesitation, I bought back what I sold for the hunt.
The rest of my daily comment for the week displayed my actions and the thought behind them. Several times I reduced position ’cause I was always keenly aware that SKF could make a sudden dash back to the downside (point #6). And each time after I sold, I also bought back at higher price, ’cause price action continued to make higher high- more proof that SKF was still running.
By May 18th (Friday), after 6 days of higher high and higher low, I knew I needed to let the runner go since it could get tired and was due for a correction (Pt #7). And let go I did; I sold my entire position (from averaging up during the week on the way up). My greed would tell me to hold on for next week since more financial Armageddon over the weekend could stir up a bigger fire to boost SKF even higher. But on the other hands, a general solution (e.g. from G8 meeting this weekend) could also be created to calm the mass and the bank-run; thus fuel a potential gap down correction on SKF. If I’ve to choose b/w the two before the weekend, I always choose safety and sure profit. Sure, I may miss the bigger rocket launch on SKF come Monday; but there will always be another day for me to find another runner with sure cash in my pocket. On the other hand, if I chose to hold SKF over the weekend and SKF corrects violently, I will give back all my gain and end up with nothing to show for my effort last week. That would be a complete waste of my time.
You might have noticed that I followed the same game plan when I hunted DDD and SSYS. The sudden proliferation of news on the 3D printers technology sparked great interest in these two stocks. Not only that, after I bought in, more news from DDD’s acquisition and SSYS merging news with Objet also created fresh catalysts and fueled the fire even stronger. If you read my past posts regarding DDD & SSYS, I continued to add to my position (at higher prices) when I read news from DDD and SSYS. The full coverage on the science of 3D printer technology from The Economists could not come in a better time! More fire!
By the time price started to cool off around May 2nd in the $30ish for DDD and $50ish for SSYS, I winded down my position to lock in profit.
Btw, as a hunter, I prefer to focus on a very few runners at a time. I don’t like to hold too many different stocks at the same time ’cause they distract my attention easily. I would do well on a few stocks but neglected others; as a result, the ones I neglected usually came back to bite me.
Good Hunting!
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