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Monthly Archives: May 2013

Can $TINY stays tiny for long?

My money says that it will not stay tiny for long.

Take a look at the daily chart below:

TINY_daily

Take a look at the weekly chart below:

TINY_Weekly

Notice that momentum indicators are turning up. and the recent downtrend may be violated by end of this week.

See link here for fundamental reason why I believe $TINY won’t stay tiny for long.  Listen to the 5/2/2013 webcast for latest update.

My 2 cents.

Disclosure: $TINY is my 3rd largest position in my portfolio.

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Taking a stab at $NFLX

Perhaps it was the Google news- Google Stock Heats Up the Video Streaming Wars;

or perhaps it has to do with the $NFLX daily chart below:

NFLX_daily

Price action looks like it could not hang on to floating prices after the gapped up.  Today drop may be a prelude to further drop back to the $180 79sma support line.

Below is the  5 min $NFLX chart that gives me the comfort to buy $NFLX June 215 put option at current price point.

NFLX_5m

The retracement comes into resistance from both the 79sma and 89xma lines. I see small risk from here since I can’t see any new catalyst from Netflix that will propel the price to shoot much higher from this point.

My 2 cents.

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Where Ego Dares #4: Power of the Mind

In the previous post on Where Ego Dares series, I postulated how our dominant natural mind can weave havoc on our trading success by interfering with our ability to see the path the price action.is trying to tell us.  Our “need-to-be-right” natural mind only sees what it wants the price “should” be instead of seeing the trend of the actual price action itself.  This can create a dilemma for trader/investor alike if the money being used for stock market investment is not meant to be tied up like long-term real-estate investment.

Don’t get me wrong, the natural mind does not get to be where it is without reaping huge benefits for society as a whole.  It is through our natural mind that we are where we are in our technology advancement.  Our “need to be right” drives us to excel in many fields of study ranged from building a better mouse-trap to finding a cure to a mutated influenza.  Thus, it is no wonder our minds are preprogrammed by our society since birth to thrive in the “need-to-be-right” mode.

As you know by now, the ego  not only exercises control over our other thought process but also thrive to exercise control over another human thought process or group of human thought process.

How can one human exert so much control over another (or a whole country)?

Oop! We are getting off the tangent here.

Let’s get back to the trading world, how can we prevent the natural mind from interfering with our trading mind?  How do we effectively train our trading mind in the present of our natural mind?

To answer the questions, we need to understand the power of the mind.

Let’s go back to the basic:

Mind = continuous thought process

Now add some juice and you get:

Power of the Mind = continuous thought process x intensity

Remember the Power of Positive Thinking?

Every day, in every way, I’m getting better and better

How ’bout The Secret (as in The secret laws and principles of the universe)?

aka The law of attraction.

The above two systems of thought require you to dial up the intensity of your thought process in order to be effective.

Are they effective?

It depends.

“Depend on what?”  you asked.

Let me give you a personal example of what the power of mind can do for you so you can understand what I mean by “depend”.

A group of us decided to hike down the Grand Canyon for a weekend trip.  I was the one responsible for bringing the tent. Hiking down the trail to the bottom of the canyon was a walk in the park since it was all downhill.  However, on the way back up after a day of rest at the bottom, the journey was one of life and death.  First, we didn’t bring enough food.  We had enough for one light meal of breakfast before our hike back to the top.  Seeing how quickly we were to hike down the trail from top to bottom, we figured it would add a few more hours to get back up to the top.

A few more hours was about right, what we neglected in our calculation was that the energy our body burned on our way up was x-times more than it burned on our way down.  Each one of our group was struggling to get to the top at our own pace without enough food; since I was the one carrying the heavy tent, I became the last one in the line of our group.

After making my way to 2/3 of the trail with 1/3 more to reach the top, my body was literally running on empty.  I couldn’t move anymore.  My stomach was craving for food where none was available.  My body felt like a puppet without a puppet master to direct its movement   I fell down and found the sandy trail a welcome comfort for a worn out body.  I closed my eyes and accepted that my life would end here in the middle of the Grand Canyon.  I wasn’t afraid of dying; in fact, I felt peace just for being able to lie down without moving.  I was drifting into a dead sleep without evening knowing it.  I did not know how long I was lying there until someone tapped my shoulder and asked if I needed water.

“I’ve water! But I need food…”

“Fella, you need to keep walking; otherwise, you will die here.” was the response I heard.  Since I wasn’t offered any food, I assumed the stranger did not have any to offer.

After the wake-up call, I began to think…

“I’m still in college, it is too young for me to die here and give up.”

From that point on, I forced myself to stand up and then I told myself to move one-step at a time.

“One step… One step… One step…”

My head was only looking at my feet.  I did not dare to look ahead for fear of thinking of the impossibility.

All my mind was focus only on making that one step and the next one step and the next one step and so on.

By the time I started to see sign of being at the top, I was more motivated but still extremely weak.

I reached a crossroad where I had to decide to turn left to the outhouse or straight ahead to the tram stop.

I grabbed the first person I saw and asked, “Is there food on the house to the left?”

“I’m not sure, I haven’t been inside that house.” was the answer.

I couldn’t risk wasting my last ounce of energy to reach the house that had no food; so I decided to walk to the tram stop where I knew a tram would take me to a visitor center where plenty of food would be available.

The whole point of my story was that it was my first hand experience to the power of the mind.  My body was not there but my mind was there to save me. What amazed me was that my mind knew exactly what to do.  One step at at time was the secret to keeping me alive.  If I was to attempt to walk the final third with my head up; I would have given up hope. The staving body would not be able to deal with the unknown distance to the final destination.  By looking only at my feet and moving one step at a time, my starving body could work with that.

All we need is to summon the intensity, redirect it to the thought we want to focus on, and magical thing can happen.  Magical in the sense that what we think cannot happen can actually happen.

“Man can form things in his thought, and, by impressing his thought upon formless substance, can cause the thing he thinks about to be created.” Wallace D. Wattles.

Remember, mind = continuous thought process.

Add the intensity, you have the power of the mind.

With the power of the mind in your disposal, you can impress your thought upon formless substance which, in turn, cause the thing you are thinking of to be created.

In the realm of the trading world, we call it the power of positive affirmation.

In other words, you are going to use the power of the mind to redirect your negative trading beliefs into a positive trading beliefs.

Do you know who is the perfect example in the use of power of positive affirmation here?

None other than The Fly himself.

Remember these sayings The Fly keeps on reminding us?

“The Fly” reigned supreme, magnanimous above his peers scolded and scalded them with hot wine and words that transfixed into scissors to cut off the lips of the uninvited.”

“The Art of Winning While Losing”

“I win a lot”

In summary, it is extremely important that we keep a powerful positive mental attitude in our trading mind.

One of my password to one of my computers is, “I am a disciplined trader”  Thus, every morning, I repeat to myself while I type in the password that I am a disciplined trader.

Ruth Barrons Roosevelt, J.D., whom I consider a pioneer in developing positive affirmation for trader, has the following statement in her website:

The three pillars of strength upholding your trading and investing success are:

  • first, a proven trading strategy or method;
  • second, a disciplined money management plan and practice;
  • and third and most importantly, your own individual mental and emotional trading self-mastery.

To achieve mental and emotional trading self-mastery, we need to add intensity to our thought process in order to make it stick.

In summary,

You have the power of the mind on your side.

As has proven by my Grand Canyon trip, you can call forth the intensity and harness your thought power behind the right mental attitude toward self-mastery.

Your ego respects power and will take a second seat if the intensity you call upon is focus on self-mastery.

To begin your journey, you only need to have the desire to improve and the tenacity to persist.

Good luck.

My 2 cents.

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Today Portfolio Adjustment (05-03-2013)

Today was a lucky day.

Market gapped up with job numbers and almost every stocks went along with the upside bias except for $FB that I happened to own.

Hey, fella, you’re going the wrong way!  Did you get the memo about the job numbers?

I guess not.  $FB continued to head south and when it passed thru the mid-point of yesterday up bar, I placed my stop below the intra-day low and got stopped out shortly after for a small losses.  Good riddance was what I said to $FB.

Anyway, first order of the day was for me to buy back $GLUU I sold yesterday since the earnings report from the previous day did not result in a gap down situation.  To me, if there is no gap down after earnings, it means the stock passes the test and the on going chart pattern can continue on.  I’m still positive on $GLUU as long as its long-term support at $2.75 is not breached.

$CVI opened a bit higher and I added some more.  So far, the chart looks good and is on track to test the $62 area.

$SZYM was also acting good in the morning so I added a bit more to round out my position size number.  Later on, price action began to trek down but I decided I wasn’t going to mess around daytrading this stock.  Sensing that it might come back up later in the day, I left it alone.

I wanted to invest in the LED market so I picked two of the LED related companies from The Fly’s LED list.  I chose $VECO and $CREE because they are heavy players in the field.  Indirectly, I also own stock in LED by way of $TINY.  $TINY has venture capital investment in BridgeLux that focuses on more cost efficient LED manufacturing with better lighting.  An IPO on BridgeLux (or buyout) once it has proven itself in the LED marketplace will stimulate $TINY price action in a very nice way is my 2 cents.  In the meantime, I prefer $CREE and $VECO over $RVLT and $LEDS.  One look at $LEDS and $RVLT SEC filings of Income statements and I know why $TINY’s BridgeLux will succeed.  In $LEDS, the cost of revenues was twice the size of revenues itself!  How do you make money when your cost is twice the size of your revenues?  In $RVLT’s case, cost of revenues was still larger than revenues itself but not to the extent of $LEDS.

Note to self- keep an eyes on $RVLT and $LEDS for possible short.

$AAPL had been trying to hypnotize me to fall asleep by trading around $450 and $451 all day.  Nevertheless, the small spinning top with relatively low volume looked like a recipe for an island top reversal candlestick pattern.  Of course, it needs to be confirmed with a down day on Monday but I’m not going to chance it.  Therefore, I moved my stop close to $AAPL intra-day low and got stopped out for profit pronto.

$BCRX had a hiccup day when price trekked down below $1.90; however, I’ve since made up my mind to hold this one over the weekend.  It is a good thing that price came back up to neutral by closing bell.

Today was my lucky day because $AMRN did not trekked down to my swing trade entry point.  After an earlier false start in developing a bullish harami in the morning on the daily chart, price action weakened later and traded back down to negative territory.  If there was anything that could dull the excitement of a strong DOW day, this was it.

Yesterday, I talked about how it was so easy to mix up your swing trade do’s and don’t’s with the position trade’s on the same stock.  The fact of the matter should be how I had decided to play the swing trade.  If I decided that I would play the swing trade using only the stop to cut losses and ride the trend with the core position; then that would be my rules to go by.  I should NEVER contradict myself by suggesting that I “should have” taken profit like any swing trade position.  Sometimes, it is SO EASY to slap yourself around by applying your swing trade rule against a decision you originally made that deviated from the swing trade rules.  Having seen the light, I accept my earlier decision on my $AMRN swing trade and is now feeling good about my position.  No more feeling bad about what I “should’ve, could’ve” done with my “supposedly” profit-taking scenario.

Current holdings:

AMRN, LRAD, SZYM, TINY, VECO, CVI, BCRX, GLUU, CREE and 20% cash.

@tradingmy2cents

The trades I made in the journal were time-stamped in twitter

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Are we due for a bullish May?

Take a look at the monthly $SPY chart below:

SPY_Monthly

Did you see the three red May bars going back?  There was a green May bar four years ago. Are we due for a green May in 2013?

In the same token, after three red in a roll, what is the odd of black appearing in the next roulette spin?

Some say there is no statistical significance for the black to come out next since the roulette wheel doesn’t have memory.  How ’bout if I flip a coin with three heads in a roll? Will a tail comes out next?

Let’s try another example.  What if I rig the roulette wheel so that if I press a button, it tilts the wheel  to increase the odd of black appearing more frequently?  Isn’t that how the wild west riverboat gambling casino of the past cheated you out of your money?

How’ bout if I bend the coin in a way such that if I flip the coin certain way, it will most likely end up with head on the back of my hand?

Following the same analogy, I believe the market for 2013 is rigged to have a bullish May.

Don’t believe me?

Pay a little close attention to the past bullish May bars, did you see how each of those bullish May bar reflected a significant higher high from the previous April bar?  Now, take a look at the past three red bearish May bars (2010, 2011, and 2012), did you see that two of those red bars (2010 and 2012) had a lower high and a lower low?  The lower high is the key point here.  2011 was a mixed bar since it had an insignificant higher high but close lower than April to form a red bar.

Giving the logical patterns from the past bullish and bearish May bars, my conclusion is that the current May of 2013 has a high probability of being a bullish May bar simply because we have a higher high established today.

Take a look at the monthly $SPY chart below again.

SPY_Monthly2

Did you see that the current May bar is right above the highs of the past two bull trends?  May I remind you that that the current bull trend has a steeper angle than the other two uptrends?

What does it mean?

Like Mr. Partridge always say, “we are in a bull market…”; only this time, the bull market is on steroid.

My 2 cents.

 

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Today Portfolio Adjustment (05-02-2013)

Today was a wake-up call day.

Market opened higher and I saw $FB opened higher as well.  I’ve been watching $FB for the last few days but decide to hold off buying until earning comes out.  With good positive AD revenues increase, price action may as well begin an uptrend from here.  Giving positive price action today, I bought a starter position in the morning and added more later.

$AAPL was looking strong so I bought a starter position.  With trend continuing on the upside, I added more later.  However, by end of day, I’m back to breakeven position.  I’ll see what happen tomorrow before deciding to keep or sell.

I think I’ve a fixation on $BCRX.  Somehow, I keep thinking that this one will just blow up to the upside one day without warning; so I keep looking for reason to buy back shares I’ve sold to cut losses.  I added a few times again today ’cause price was acting like it wanted to go up all morning.  I’m still holding the positions I added today.

$GLUU gapped down and continued to go lower until it bounces off the support level at $2.75.  I bought starter position and later added more.  However, by market close, I got nervous over the earnings announcement (thanks to $MELA), I decided to unload 70% of my holdings from today purchase just to be on the safe side.

I was stopped out of my $$RBCN today for small losses.

$SZYM was acting very strong near the end of the day and I bought more when price went over $9.00.  This stock is now my third largest position in the portfolio.

After reviewing the smart money top pick list, I found $CVI to be an attractive buy; therefore, I bought a starter position to see if price can climb back up to the $60 area.  I’ll add more if price action continue to climb.

$AMRN was the big elephant today.  Practically, the gain for the last three days was completely removed today.  Pretty soon, I will have to face the prospect of selling out my swing trade position.  What I had forgotten was that while I bought the swing trade position at the $6.4x area, I didn’t sell the swing trade position for profit when price action started to turn from $7.5x..  There is always the danger of mixing the swing trade with long-term position trade. I tend to get a bit more “greedy” to ride the swing trade beyond the proper swing trade protocol.  Looking back, if I never have any position trade, I’ll be doing really good for the year.  But then, I won’t be hitting any big win anytime soon either.  It is so easy for my mind(s) to play the doubting game; thus it is important that I write down all my thought here so that I can see what is going on here.

Anyway, the focus is on what I need to do when $AMRN continues to head lower.  I need to protect myself by getting out of my swing trade when my stops are hit.  This is the wake-up call.

Current holdings:

AMRN, LRAD, SZYM, TINY, AAPL, FB, BCRX, CVI, GLUU and 26% cash.

@tradingmy2cents

The trades I made in the journal were time-stamped in twitter

 

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Time to follow the Smart Money?

Awhile ago, I did an analysis of The Fly’s Smart Money Top Pick list and one of the stock was $CVI.

This morning $CVI announced positive earning result and price zoomed up accordingly.  By the time I checked the chart later in the day, I was missed the run-up.  Nevertheless, after analyzing the chart a bit more, it is my contention that today is just the beginning of an uptrend.  I believe $CVI will test the previous high of $62.50 in the near future if general market continues to rally.

Take a look at the $CVI daily chart below:

CVI_daily

Today solid green bar is a good mojo sign and there is also a bullish divergence in the momentum indicator below. LBR indicator reflects a favorable turning the corner with the fast line getting ready to breakout of the mid-line.

I bought a starter position and will add if price continues to advance in the near future.

My 2 cents.

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Memo is out- The Hanging Man will not be hanged after all

Today price action negates the hanging man bearish pattern confirmation bar yesterday by not continuing on the down trend; instead, it is forming a bullish harami instead.

Take a look at the daily $SPY chart below:

SPY_Daily

The bull seems to be still in complete control so far…

My 2 cents.

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Bouncing off Support

$GLUU has a gift for me today.  After I sold to cut losses yesterday for small losses, it gapped down this morning and continued to head to the support line pronto.  Seeing that it bounced off the support line (see yellow line on chart below), I started to build my position.

Below is the daily $GLUU chart:

GLUU daily chart

See how the yellow line tracked all the way back to the support in Feb and how prices reacted to the yellow lines since then?  It was almost like a magic line.  My action on $GLUU is further proof that cutting losses quickly can result in opportunity to buy back the stock cheaper.

However, nothing is guarantee, my stop will be below the yellow line.

My 2 cents.

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Today Portfolio Adjustment (05-01-2013)

Today was a puke out day.

Market opened down and everything else followed thru.

First order of the day, I checked $MELA to see if there were support to drive the price backup from a gap down.  After a few minutes, I decided there were not enough buyers to push it up; so I sold my shares for losses.  Again, I picked the wrong horse so I had to accept this as part of the loss.  This loss was not a small losses like the normal quick losses I took since I was holding it thru the earning play.  Nevertheless, it was still an acceptable loss that I could put it behind me easily.  It was a good thing I sold 50% of the position before close yesterday.

Next, I sold $GLUU and $CERS since their price action was horrible in the morning.

$BCRX was also not acting well and I was way overloaded from the breakout above $2 yesterday.  Thus, I’ve no choice but to reduce my position size to cut losses and minimize exposure.  I’m still keeping  1/3 of the original position size on this one.

$SZYM proved me wrong again for jumping back in two days ago.  Oh well, I need to accept my own responsibility for being “impatient and greedy”; so I dumped 85% of my position early in the morning to cut losses and minimize exposure.  Later on when price stabilized, I bought some back to maintain a mid-size position on this one.

$AAPL was strong at first but it couldn’t handle the overall bearish sentiment; after looking at the chart, I decided to take my profit and run for now.

$RBCN looked very attractive at $6.9x level and price seemed stabilized around there; I decided to take this opportunity to jump back in for a starter position.  So far, I’m still in the green.

Current holdings:

AMRN, LRAD, SZYM, TINY, RBCN, BCRX and 42% cash.

@tradingmy2cents

The trades I made in the journal were time-stamped in twitter

 

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