iBankCoin
Joined Nov 29, 2008
329 Blog Posts

The Good and the Bad / Volume + Follow-through / Happy B-day iBC!

Yesterday started with several losses (mostly from AONE) which were mitigated with one sweet trade in AIG in the afternoon. The TOL trade was peanuts. It pays to pay attention, you know. Below, I posted annotated charts with my AONE loss and my AIG win. Things to be learned from both trades. In the end, I won. Winning sure is more fun than losing, but I don’t have to tell you that.

aigaone

There are a lot of people that try to mimic my style, but it’s not for everyone. In fact, it’s probably not for most people. I never had a mentor to teach me so I found my own way all by myself. Stop copying people and go explore your own path. What I do should just be one tool in your toolbox, mostly likely the HAMMER. Go through my educational articles and find out who you are and what style best suits you.

The SPX, along with many other indices and individual sectors, formed shooting stars, black-filled candles, and all types of doji. The narrow range, again, made it difficult to trade. Know when to just stop and watch. You’re not missing anything. This lack of follow-through is killing the probabilities of even the highest probable trades, thus reducing the chances of success. I am looking for range expansion, follow-through, more volume, and other characteristics so I don’t have to deal with uncertainty.

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Beware of false breakouts and breakdowns. The tell is the volume. Here’s a little summary:

To go long:
Breakouts – bullish on high volume. Buying with pressure and conviction.
Pullbacks – bullish on low volume. Indicates healthy consolidation.

To go short:
Breakdowns – bearish on high volume. Selling with pressure and conviction.
Pullbacks – bearish on low volume. Indicates healthy consolidation.

Didn’t I write an article on this? Anyway, HAPPY BIRTHDAY to iBankCoin! Almost exactly a year ago, I got on board and enjoyed it ever since trading with some good folks and dealing with a bunch of assholes.

Have a nice day.

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Huge Intermediate-term Consolidation + Food For Thought

Yesterday’s action was amazing, however it was dull and slow. Many names that I play regularly were illiquid. Look at my trading yesterday and you will see how cautious I was. The first instance where I see a failed pattern for the day is a sign of caution. The second or third time it happens is when I make a decision to go read a book for the rest of the day vs. trade.

I was digging up some charts last night. The one that caught my eye was from 2003-2004:

spx2003-2005

Here is the SPX today:

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Let’s add some blank days in there. We are forming this broadening wedge and it fanning out.

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Here’s the DJIA – same thing.

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We are in a huge intermediate-term consolidation. That is all.

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Index Update: Neutral-Bearish

Currently neutral-bearish. My sentiment has not changed and I believe the correction may take a while, but that’s just my thoughts. What are we looking for?

SPX – The 20-day MA test continues with a possible H&S pattern developing. The criteria is that a lower high is produced on the daily which is TBD.

DJIA – Possible ascending triangle still developing.Out of all the indices, if we do continue with the rally, the DJIA should be the first to break to new highs.

COMP – Currently the most neutral out of all the indices. Between the 20/50-day MA’s. Will be neutral for several days. Possible channels are drawn out.

RUT – Still the weakest of all.Broke an ascending triangle and now flagging. The 20-day MA has crossed below the 50-day MA and may be used as future resistance. Look for further consolidation.

BKX – Weakest sector is the banking index. Forming a bear flag. The market will have difficulty if the financials do not rally. Pretty obvious, right? Watch them carefully.

All of this is where the neutral-bearish stance comes. When you trade, never forget to look for the high probability setups. I am playing them daily, and winning daily. The better the intra-day and/or daily setup, the better odds you have at success. Don’t just “play anything” or people like me will take your money.

Don’t complain about my wins. If you aren’t winning, then you’re doing something wrong. Figure out what you’re doing wrong, fix it, and start winning with me.

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Morning Thoughts (UPDATED with FSYS Trade)

Yesterday’s best trades were in WFMI and FSYS. I am nearing a 20% total portfolio gain for just this week alone and the week isn’t even over yet. If you don’t believe me, then obviously you’re a nOOb reader in the CA Trading Room. I am the one and only Chart Addict and my returns are far superior than yours. Stick around for a while and you might learn something.

Yesterday’s call on the general market was very wrong, and I don’t care. I don’t even trade the general market. It’s such a beautiful thing when your predictions are wrong, yet you still make a +6% total portfolio gain. Hope that’s a lesson in playing only the best and highest probability trades, regardless of overall direction.

I have to see how this next leg turns out. I estimate that it will be another week before a IT determination can be made. Always keep an open mind and never let your opinions get in the way of great opportunities. You are your own worst enemy. Never forget the POWER OF CHARTS.

I have no idea where we are going in the markets, but I guarantee you that I will win again today – that would make every single day of this week a win. Watch and learn, folks.

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UPDATE: Due to popular demand, I decided to spend the time to annotate my FSYS trade from yesterday. All documented here on the blog and on twitter in real-time. I will make my “trade review” a regular thing here.

fsys

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BEARISH / The TRLG Trade

Yesterday’s big trades were in TRLG for me. It wasn’t like the day before where I absolutely killed it, but nonetheless, I managed to hit TRLG twice and profit twice. The diagram of trades taken is pictured below. The green squares are short entry points and the orange squares are scaled out exit points. I “missed” two trades, but only because the volume wasn’t there and also because the 2nd “miss” was right after the FOMC decision. Execution was near perfect on this, so study it.

trlg

Moving onto the general market, I am bearish as the title of the post suggests. We formed a gravestone doji on the SPX, shooting star on the DJIA, and a dark cloud cover on the RUT. All three are bearish signals. In addition, note how the indices are “churning” at their respective MA’s. If you watch my shows on Stocktwits TV, you would know that I consider this move mostly bearish. The last chart is the IWM, the Russell 2000 iShares ETF. Note the massive sell off volume. The RUT did and will continue to lead the way.

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