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Monthly Archives: January 2013

Going Biotech!

After $SSYS stuck its leg out for me to trip all over the muddy pile, I saw the grime on my face thru the reflection from the pocket of sewage water.


“No! Biotech!”

Without much fanfare, I dumped SSYS yesterday for causing me bruises and picked up more Biotech stocks today- mainly CLDX, ETRM, SZYM, and CRIS.

“Everything happens for a reason.”

“Indeud it is!”

My current portfolio mix is as follows:

Biotech (AMRN, SZYM, CLDX, ETRM, CRIS) 39%

Uranium (USU, CCJ, URA, DNN) 30%

Tech (LRAD, EMAN) 21%

Nat. Gas (GLOG) 10%

Today, the rising tide of my Biotech’s picks is soothing my bruises caused by the SSYS fall.

Trade well!

Ps. My MJNA position is in another account that is not part of this main portfolio.


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Up, Up and Away! And we are still only at the starting gate…

I apologize to those who think we are going down next week; and you know what, statistically speaking, there is a probability that the bear camp could be right.  However, based on the price pattern (daily and weekly SPY charts below), I’m more leaning on the probability that we will continue to go up.

Below is the daily SPY Chart:


From the look of the daily chart, you can see that price action is going up, up and away!  So, with the upward momentum you can see visually, I’ve to say the probability of the price action continuing in the same direction is very high.

Now, take a look at the weekly SPY chart below:


Did you see how the last week bar took out the Wall 3 resistance and went away from it?  From a breakout standpoint, the price action momentum to the upside has only just begun!  Again, giving the visual weekly chart, I’ve to say the price action for next week has a better probability of going up.

Giving the two positive visual outlooks of SPY price action, I’m currently 98% invested with a majority of the stocks concentrated on the energy sector (uranium and natural gas):

Uranium: USU; CCJ; URA DNN (31% of portfolio)

Natural Gas: GLOG; CHK (16% of portfolio)

Biotech: AMRN, SZYM (20% of portfolio)

Technology: LRAD, SSYS, EMAN (31% of portfolio)

Cash (2%)

The above portfolio is dynamic and is subjected to change based on price action of the stocks.

I also like to congratulate the folks at ibankcoin who are doing quite well since the beginning of the year.  The Fly, of course, is always ahead of the crowd here; but I must give Rhino a standing applause for his spectacular turnaround.  The combination of his instinct and daring execution on ISGR was quite an eye opener.  “Wow!” was my first impression.

Meanwhile, I’m ahead with a decent 5.2% YTD so far.  There are still 11 months so let’s play our cards right so we all make spectacular return for 2013!

Trade well!

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Conviction- which side are you on? Guilty as charged or The state of being convinced?

Previously, in my post on the courage of conviction I reminded everyone why the word courage was needed in the face of “your” conviction of a certain event; today, I like to talk about the degree of conviction we all have on the stocks we own.

Your conviction is a very personal matter and only you hold the key to what you want to believe is “true”; your version of “truth” that is, not the 100% fact of life happened to to your face truth. We all have our own belief of what is true based on what we know or what we “think” we know about everything and anything in our life.  As a result, we all have a tendency to step on other people toes because our version of truth doesn’t match with others.

Nevertheless, in trading, our version of truth is tested at a new dimension because our dollar is on the line.  Not only do we need to extend what we believe is the truth into the future by extrapolating what we think will happen, we are making a bet based on our conviction.  And as we all know, once you tap into the realm of the future, you are automatically tapped into the realm of uncertainty as well. Hence, courage is needed for your conviction of what you believe is the “truth” because your dollar is now at risk.

Now that I’ve gotten the introductory out of the way, let’s talk about what it takes to have conviction.


You know what I mean!  Oh yeah! You DO!

If I’ve ten stocks in my portfolio, I can only muster enough mental energy to have conviction for about 4-5 of the stocks to be considered as position trades.  The rest has to be swing trade because I can’t have 100% of my mental energy supporting the conviction for all ten stocks.  If I even attempt to do so, I will certainly going into tilt very easily (aka short fuse).  And the moment you are tilted (or blow your fuse), you lose your bearing on yourself and everything you know about exercising discipline in trading the market will go out the window.  All of a sudden, you are trading like a degenerated gambler who is secretly “hoping and wishing” the ten stocks you are holding will go up the way you expect it to do even though most of the ten stocks you are holding are tanking in front of you.

The point I’m trying to make is that you must select the few stocks you want to have conviction carefully and systematically.  In other words, you must do your due diligence (DD) to convince yourself that this is the right horse for you to believe in.  One that you can handle the drawdown because you know the prospect of a brighter future is still ahead of you.  If you don’t do your own DD and merely take on other people suggestion, then your conviction may not be strong enough to hold water.

Cases in point:

1) RIMM: Did my DD; plenty of conviction.  Took profit and jumping back in when momentum continued in the direction I was convinced it would. I had quite a good ride with RIMM since November of last year.

2) PACB: Took the trade due to other people alert of a possible breakout. No DD; therefore no conviction. Took profit but did not have the conviction to jump back in.  Missed a huge rally afterward.

Lesson #1: if you didn’t do your DD and therefore had no conviction; it is OK to miss the rally afterward since you are only going to deserve what you get bases on what you put in. You can kick yourself on the behind but don’t punch yourself in the stomach.

Lesson #2: select your stock you like and spend some time to do DD on it.  It can even be stocks you’ve picked up from others.  As long as you have done your own DD on it, you will have built up conviction to trade the stock more productively.

Lesson#3: there is only so much mental energy we each have; so don’t beat yourself up for missing a runner here and there.  Just stay focus on the stocks you have chosen to invest your time to build your conviction on.

In conclusion, let me ask you this, “are you guilty of beating yourself up for watching a trade takes off without you because you did not have the fortitude to hold on to your trade?”

If you answer yes, then do yourself a favor by telling yourself to do some more DD next time to build up some conviction first.  Meanwhile, give yourself a break because you are only getting what you put in.

Trade well!

Oh, btw, I’m only speaking from the perspective of a swing trader/position trader.  There are many out there who do plenty of DD with enough conviction to invest 100% of their investment dollar into their position trades without any swing trade being involved.

Oh, btw #2, even though I talk about position trade and the conviction to withstand drawdown, exercising trading discipline such as setting maximum loss trigger point still applies.


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Getting ready to take out Wall Two resistance

Well, SPY took out Wall One resistance last Thursday and is now facing Wall Two resistance.  Take a look at the SPY daily chart below:


It seems to me that Wall Two may either be a walk in the park or present a much stronger resistance for the SPY to break through.  On both Thursday and Friday last week, price actions were butting head to head against Wall Two resistance and were unable to break through.  Perhaps a rest over the weekend will accumulate enough bull power to simply walk right through the Wall Two resistance.

The good news is that price action last Thursday took out the high of the consolidation range which also happened to be the Wall One resistance.  Once price action walks pass the Wall Two resistance, Wall Three becomes the next hurdle for SPY to crack.

Wall Three may be a much harder wall to break out since it has to take out a four year high of SPY; however, if there is enough momentum to break through Wall Three, the next major resistance  is the high of March 2000 which is $154.94.

I’ve a feeling that we will have a kick ass earning week starting Monday.  Just my two cents anyway.

Trade Well.


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Uranium in a Cup & Handle breakout mode

DNN starts the ball rolling by breaking out of its own cup & handle pattern.  Take a look at the daily chart below:


URA follows the ball with its own breakout today.  See below:


Then CCJ is on the verge of doing the same.  See below:


My money is that the breakout will take place tomorrow.

I’m fully loaded on all three as of now.

As posted by other ibankcoin contributors, I believe 2013 may be the year of uranium.

Trade well!

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Consolidation period with bias to the upside

There is no doubt we are in the consolidation period.  Take a look at the daily SPY chart below:


Look at the boxed area (light green shaded), price is trading in a range with today price sitting on the middle line of the Andrew Fork pattern.  In other words, the trend is still up because the Andrew Fork line is pointing up.

Giving my own analysis, I’m now 95% invested.


Trade well!

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The Courage of Conviction

Why is there a “courage” in front of “conviction”?

Good question!

Just because you have conviction (aka as your strong belief) doesn’t mean your conviction may come true.  Hence, you need to have courage to carry your conviction through the uncertainty period until the event(s) you are convinced will happen actually happens.

In my case, I’ve strong belief in the following:

1) AMRN will prosper with its fish-oil drug.  I believe millions of people will benefit due to our over-eating population around the globe.  RISK: Amarin bungles on its execution and the patent is sold for a song.

2) USU will prosper because the United States must have its own uranium enrichment facility to be considered truly energy self-sufficient. RISK: GE comes out with a much better uranium enrichment technology even though it will take many years to establish.

3) LRAD will stock the military and police department around the globe with its long-range acoustic devices. RISK: competitors (or copycat) come out to steal market share.

4) EMAN will change the face of our entertainment industry by providing a unique way to watch movie & TV shows and play video games in the form of a display goggle that provides a panoramic view that no movie theater or TV can give you. RISK: delay or change in company priority in designing the display goggle for the consumer electronic industry (in other words, the focus is more on military use)

In the case of The Fly:

1) VHC will prevail in court cases against AAPL, CSCO, and others with generous punitive damages and future licensing revenues stream. RISK: reward is not as generous as expected by the market.

As you can see, the RISK emphasizes the uncertainty and creates the necessity to have courage to stand behind your beliefs.

IMPORTANT REMINDER:  Courage means you have the audacity to face the LOSS you WILL incur when your conviction is blown to pieces (aka being wrong).

And this is the very reason why I don’t like to average down on my position trade when I’m going through drawdown.  You MUST determine a specific amount of money you are willing to lose in any position trade in case your conviction turns out to be wrong.  Once you set your target loss amount, you have a much steady hand in maintaining your courage until judgement day.

However, the moment you start to average down while you are going through drawdown, you are INCREASING your loss amount to a level that you may not have the courage to withstand.  In other words, averaging down while price action is going against you can weaken your courage and resolve.  And if you have blind courage, averaging down can destroy you.

On the other hand, when price action starts to bounce back from the downdraft and exhibiting sign of a bull trend, I do not have an issue of taking a swing trade on top of my position trade.  Remember, I’m taking a swing trade and therefore I must also adhere to the swing trade rule- taking my loss quickly if the swing trade doesn’t work out as planned.  Thus, if the swing trade is successful, I may be riding the swing trade position along with the position trade together.

The way I see it, successful swing trade help pays your bill and earns a decent living; but it is the successful position trades that buy you your yacht so to speak.

The courage of conviction, if you look at all the millionaires and billionaires out there, is the backbone of any successful venture out there.  Just don’t forget that courage is needed because you can literally be injured if you are wrong.

Trade Well!

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The Walls of Resistance

Take a look at the daily SPY chart below, I see three walls of resistance waiting for the bullish price action to tackle.

No wonder price action is taking a breather today.

With the debt ceiling crisis looming over us in a couple of months, will the bull has the firework and the will to break through the three walls?

Giving today lackluster price action, I liquidated all my swing trade position and is sitting on 59% cash.

Yes, I’m taking a breather today as well.

My current holding is all position trades (AMRN, LRAD, USU, & EMAN)

Trade well!

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