Just when we thought taking out the Giant Wall 2 (GW2) established back in October 2007 was a done deal, we are now getting slammed with another European conundrum.  S&P500 currently is printing a 17 points down or a negative 1.1% change.  Apply this 1.1% against the SPY’s close of $155.83 last Friday and we come up with $154.12.

If you look at the chart below, you can see the projected price of $154.12  (red arrow) is directly below Giant Wall 1 resistance ($154.94).   Notice that the 38.2% fib retracement is just a bit below the red arrow; it may mean some support there.

Can the Fed remedy this correction next week?  Will there be a huge rally waiting to burst thru the GW2?  Well, can it happens or are we simply exercising a self-fulfilling prophecy of topping out at major prior resistance?  Let’s not jump the gun yet; for price can still restore back to normalcy when market opens tomorrow morning   We’ve seen it happens before.  Until then, I’m going back to reading my book…

My 2 cents.

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Let’s be real.  Taking losses when you are trading and/or investing is as normal as taking a dump.  Yes, that is right.  It is an essential part of investing and speculating.

So what is stopping most of us from taking loss when it is clear as day that our investment/trading thesis is not working?

Hope.

Oh dear!

Hope, my dear friends, is a loaded word in the stock market.  So loaded that it can blow up on your face.

We should have faith!

I have heard that one before…

ok ok…  you can’t discount faith entirely since, after all, I do have faith in my AMRN, LRAD, & SZYM investments.

However, there is one thing I also hold closer to my chest more than faith, an open mind when it comes to reviewing evidence or circumstantial facts that can debunk the faith I’ve in my investments.  Even price action, when the direction is opposite to my thesis, is a kind of fact that I’ve to take into consideration.  When you think about it, if price action collapses severely in absence of news, usually that means some big holders are unloading pronto based on  information we don’t have; otherwise, any bear program will be countered by big players waiting for an opportunity to  buy cheap at support level.

Keeping an open mind when you are deep in your hope and faith is not an easy task since you are in danger of being infatuated with the stock.  In other words, you are in danger of being possessed.  Yes, you heard me.  Possessed by a strong feeling that your stock can do no wrong.  I’ll revisit this topic in another post.

So how do we get ourselves out of this stranglehold of not being able to take loss when you know you should?

By changing your thought pattern regarding taking loss.

Instead of worrying about missing the boat by getting out to take your loss, you can focus on one (or several) of the followings:

1) get out now so you can buy back cheaper (I use this thought most of the times)

2) get out now before you spill more blood (I use this thought on my $USU position)

3) get out now so you can use the cash to buy another stock that is going up (I use this from time to time)

4) get out now to take a break from the stress (I use this one recently when I had a minor panic attack)

5) get out now because you have a planned vacation to take (don’t let this losing trade ruin your holiday)

If you can shift your thought to one or several of the above instead of focusing on your fear of missing the bounce after you are out, you are already ahead of the crowd.

Since taking loss is very much part of the trading/investing process, learn to be the one to take control of the process instead of being forced on you at your maximum pain level.  In other words, take that loss when it is still small.

If you don’t mind my using this analogy, you control when you take a dump (otherwise, it will be an ugly accident!); then why not control when you take a loss when it hurts the least?  Remember, how you hurt is personal, my small hurt may be your giant hurt or vice versa; therefore, you get to set YOUR small hurt loss-taking level.

Btw, your definition of small loss can also vary depend on whether it is a scalper, a swing trade, or a position trade.

Believe me, from my experience, once you are used to taking small losses, you will love it and will not think twice taking them as time passes.  Yes, even in the face of seeing some bounce without you on board, you won’t be faded.  You know why?  That is because you will also have witnessed multiple times how taking small losses have saved you from much bigger losses, probably more times than you see price takes off without you after you’ve sold.

My witness of the $DCTH and $USU continuing downtrend last week after I’ve taken my losses proves my point.

My 2 cents.

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Watch the video first and you will know what I mean.

Imagine the race-car driver is the trader you follow.  Can you handle his driving style (trading style) in the Camaro (type of stock)?

You see how the race-car driver spins the car so skillfully (aka cut his loss or lock in profit quickly) when he comes to an obstacle (aka consolidating price action or sudden spike up in volatility) that appear in the front?  Meanwhile, all you can do is scream, “We are going to crash!  It’s too late!  Help!” (aka “I can’t take my loss now, I want my money back! or “If I take profit now, I’ll miss the boat when the stock keeps going up!”)

That is why when you see someone throws out a few picks, you need to find one that “fits” your personal style.  Not all stocks are treated equal.  Believe it or not, stock does exhibit personality.  You just need to know its mood to decide when is the right time to buy or sell.

I will delve deeper on this topic next time.

My 2 cents.

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I am!

I’m buying and storing $TINY starting today.  This may have to be a longer term hold to give it room to flex.  Perhaps a replacement of my former $USU position trade?

Take a look at the $TINY daily chart below:

Price action has just been recovering from a correction.  Is it ready for the next leg up?

Weekly chart below shows that price action has broken out of the intermediate-term downtrend line and is consolidating currently.  I like to see the weekly price bar to stay within the Andrew Fork uptrend lines.

Monthly chart below shows that $TINY has come a long way from the top.  Is it ready to head back up?

If nanotechnology is coming back, we may be seeing a bottom here.

Btw, this is why I bought $HW also.  $HW apparently has a division that owns patents on certain nanotechnology.  $HW is one of the company that make up the composition for ETF $PXN (PowerShares Lux Nanotech Portfolio).

What does the daily chart on $PXN look like below? My guess is that it is ready to take out the resistance line soon.

My 2 cents.

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Seeing that price action did not continue to the south side like $DCTH, I’m going back into $PACB.

Today bounce may mean the selling is over from whoever has been trying to get out.  The chart below shows that the general uptrend is still intact with price action still trading over the 79 sma and 89 xma.

The way I see it, it is a low risk trade if I put my stop below the 79 & 89 ma.

My 2 cents.

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Breaking news from ZENews… directly from location, Sally Comegetme, our correspondent, is interviewing concerned investors and excited traders alike regarding the breaching of the Giant Wall 2 which has been out of sight and out of mind for the last 6 years.

Sally grabbed the 1st concerned investor who looked like he was about to pee on his pant.

“Sir, what are your thought on this Giant wall 2 being breached?”

“We can’t breach the wall!  It is sacred!  The white walker is on the other side!”

“Sir, White walker?” Sally obviously did not have cableTV.

“Hey, party girl! Wanna watch the wall breaching with me?” the excited trader jumped in front of Sally, “I’m long big time!  I’m long!” the excited trader winked at Sally.

Ignoring the trader, Sally grabbed the 2nd concerned investor.

“Do you think the Giant Wall 2 can be breached?”

“We are at the TOP!  We gonna fall!  Oh my God!” Sally could not believe her eyes when the concerned investor ran off like his ass was on fire.

“The 3rd time is the CHARM!” an excited trader sang to Sally while putting his arm around her waist, “we are going over and we will make history together…”  Sally removed the hand of the trader and gave him a stern look.

Turning back to the cameraman, Sally gave her brief commentary:

“There seems to be a lot of excitement about the wall being breached.  Based on what I’ve seen so far, we have some people who do not believe the wall can be breached or that the wall should be breached; on the other hand, I’ve some very excited and naughty people who are ready to party all night to witness the wall breaking event.  The excitement is palpable.  By the look of it, and my being so near the wall, my 2 cents is that the wall will be fully breached by end-of-day tomorrow.  There seems to be so much energy behind the wall and I just don’t see how the wall can hold any longer. I’m going to stay here to witness the milestone event.  Back to you, Zen.”

“Thank you Sally.”

Well, there it is.  If you will look at the monthly chart below, you can see price action is practically touching the wall.  This is truly an event of the Century.  Stay tune and we will bring you back the funny news from Sally Comegetme when the wall is finally breached.  Zen out.

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I bought $CDXS today because the chart looks good.  Take a look.

I also like the recent news here: Codexis Announces Next Generation CodeXyme® Cellulase Enzymes with Leading Performance

Why do I say this is $SZYM’s sister?  Please read the news above and connect the dot…

My 2 cents.

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The way I see it, if you hear or see something that tickle your interest, you are being present an opportunity to do something about that “info” you’ve heard or seen.

Recently, Tpain from the Blogger Network asked me about $IMUC.  I take a look at it and like the look of the chart and have told Tpain my analysis (see below):

“Hello T, I didn’t see your comment until now. By looking at the chart, the price has been on an uptrend since mid-Nov of last year. And it is now in the ascending triangle formation. The way I see it, your breakeven point is right at the long-term trend line from mid-Nov. If that line is taken out, you could still get out at breakeven.

In summary, I can’t tell you if there is a future in your stock; but you seem to be in a good position to ride this out and still get out at breakeven when the long-term trend line is violated.”

At the time, price looks like it may break out to the downside by violating the short-term uptrend line.  However, after a few days of price action, I’m convince this stock may have leg to breakout of the ascending triangle.

Take a look at the daily $IMUC chart below:

Thus, I’m willing to put my money down for this one.  Anyone looking at it has to say the price is heading higher, no?

A big Thank You to Tpain from the Blogger Network for bringing this to my attention   Bravo!

Btw, I dumped my losers stock $PACB & $DCTH to cut loss and piled some of the money into $IMUC.  Let’s see if it will work.

My 2 cents.

 

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Well, it’s a good thing I didn’t average down when it tracked down from my entry point.   I believe the talk of reverse split and the possibility of dilution next year is what causes the panic selling.

But enough is enough!  There is a real possibility that they may wipe this company clean of existing shareholders by restructuring through bankruptcy.  In that case, I get zero money back.  At least now, I’m getting 60% of the money back from my investment in $USU.

This 60% of the $USU money can gain me back x times more if I play the right high-beta stock next time.

There are winners and there are losers; unfortunately for me, I’ve to accept the loser when I see one.  Now, if $USU shoots back up in the future, I’ll have to analyze it like a brand new investment- is it worth the risk?

So far this year, I’ve two big losers ($ETRM & $USU) and one big win ($MJNA).  Basically, I’m being set back on my annual gain of 2013.  However, I still have nine months ahead of me to get back on my feet and come out swinging for the year.

Interesting enough, I don’t feel much pain or sad for this loss since I’m prepared for this eventual resolution giving the way it has been trading for awhile.    Today big drop is simply a wake-up call and I intend to heed its calling.

My 2 cents.

 

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Simply because the chart says it is stabilizing.

Don’t believe me?

Look at the 3m chart below:

Did you see how price action climbed back up above the 89 xma and 79 sma lines?

Now, look at the daily $DCTH chart.

Do you see a long-tail underneath that tadpole?  Geez!  Did I just say tadpole?  Anyway, you see my point.  The bull has taken back the force and, as a result, leave a long tail below.  I’ll add more if today high is taking out tomorrow.

My 2 cents.

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