Sunday, August 31, 2008

Three is a charm? For me, four is a charm

Here are four charts that I thought looked good:

This setup tends to be bullish, especially with the stochastic in the oversold area (stoch chart).

I like this chart too. Looks like it may be overextended; volume is waning as price increases. An evening star formation is starting to form, which could lead be a bearish indicator.

With the stochastic in overbought, this engulfing candle setup looks ripe for the picking. Looks like it may find support around 44.

GT seems to be consolidating around 19/20. If it doesn't break that (and volume has been light on the pullback, suggesting it won't), then it could become a profitable trade.

Good trading and remember to take care of yourself.

Saturday, August 30, 2008

I can't do that, Dave

Exe file for the SMA generator. Python source code.

Started doing a little programming. Feel free to download the exe (it's in a zip file because boxstr doesn't upload .exe files) to install or the python file to look at the code (well commented, I assure you). The program is rather simple (oh, the puns). It will ask you to select a txt data file in the format: STOCKSYMBOL.txt (look at the included RIMM.txt file to see how it is organized)--I used NinjaTrader to generate the txt data file. Then it will ask you how far back you want to go. Enter the number of days you want to calculate. It will ask if you want to print the daily price and volume information; select yes (y) or no (n). Then watch it work its magic (if you would humor me in calling it magic).

I added to the side links a few days ago. Look there if you want to get an idea of what caused this madness.

Good trading. Do not use this program for anything important (like anyone would) without first checking it against a trustworthy source. Enjoy.

The 50 drops below the 100; price approaches 200MA

I might be beating this one into the ground, but I really want to short RIMM. On the daily, the 50day MA has fallen below the 100day; a bearish sign. The price has fallen below both the 100 and the 50 and is approaching the 200 day. I'd watch that 200 day level closely because once it breaks, things may be headed downward. Confirmation when the 200 day acts as a resistance and when the 50 and 100 move below it.

Good trading. Use stops. Take responsibility.


Up or down? I don't know, but we do know that it is resting on support. Someone linked this interesting site: Engineering Professor. He uses some sort of automated trend analyzer that indicates Tuesday will be green on the S&P, NASDAQ, AAPL, and GOOG. Definitely something I'm going to start looking through. In any case, GOOG is a good watch for Tuesday.

Right shoulder forming?

Looks like RIMM may be setting up for a long term head and shoulders. Also, heavy relative volume today on the breakdown.

Friday, August 29, 2008


Short at ~32.80

Stop around 33.12

Update (11:42) - Move stop to 32.80; break even point.

Update (11:53) - Move stop to 32.64; 0.5%

Update (11:59) - Stopped out. May have had the stop too close, but I really didn't want to allow the stock to go up to break even again.


Looks like rimm finally broke down.

Thursday, August 28, 2008


1. Pull back after black cover; fills in gap. Volume drops on the pullback signifying holding.

2. Bullish hammer--reached down to test lows; bulls pulled it back up indicating possible future price advance.

3. Huge price advance on substantial volume. Will price pull back to fill in the gap after a ~40% advance in a single day? I'd want to see it open higher tomorrow, gapping above 7.58, perhaps going on somewhat more; however, should the stock begin to form what will eventually put a black candle on the chart; I'd short. I'm guessing there will be a lot of amateur market orders to be filled at the open tomorrow, pushing the price up. More experienced swing/day traders will take money from these people, buying back at a lower price. That's my guess.

As always, follow the price; keep a stop loss; and, remember, I am not a professional.

Wednesday, August 27, 2008

Small update

Been working on my technical analysis skills while taking the bus; unfortunately, that mode of transportation is taking its toll on me. I arrive home and fall asleep. Zecco has yet to transfer my funds into my banking account, albeit my equity transactions are all taken care of. It makes me a little irritated because there are many opportunities I would like to participate in. Oh well. In time. Anyway, I added some new technical links to the side, charts and indicators that I use on a regular basis. And I plan on adding some more blog links as I read through all of the sites I have gathered in my bookmarks.

Good trading.

Tuesday, August 26, 2008

Go for the net

Posted this on google finance earlier (not the best place for intelligent conversation): "Triple bottom on the point and figure. Resistance at 135 or so. Triple hangman on the weekly. Dropping stochastic. MACD is starting to turn. It is resting on its 100day MA, but if it breaks that (127/126) I'd watch out. Then again, maybe it will fill the gap, and reach 140. Personally, I'd love to have a Blackberry Bold, but it looks like this stock is ready for another drop."

If RIMM can break below 127, I think it could be setup for a nice short. We'll see. Looks like QCOM and LIZ (at least after hours; unch during day) are doing okay--if you're short. UNG is up on good volume, although I don't know what to make of the candlestick pattern. Bullish harami perhaps? Possible W formation as well.

Sorry about the dearth of posts (mostly apologizing to myself, because these tend to help me improve), but the last two days have been exhaustingly unpredictable. Tomorrow, although I won't be able to watch the entire trading day, will hopefully be less...hmmm..long. More later.

Good trading. Good stops. Good risk management. And all that jazz.

PS: Read the comments in the last post for several nice looking stocks.

Monday, August 25, 2008

Small update

NVDA looks like it is holding up; QCOM looks like it may break down; and, I purchased a book on candlestick charting today. It'll be a good read.

PS: Should have more time at home tomorrow

Good trading.

Note: Phil from Phil's Gang said in his show today that he is currently looking for an entry into: AXP, AIG, DFT, CAT, and BA; I'd give those some attention. The host of the radio show is pretty good.


Looks like the SPY is slowly being dragged downward. If you shorted at 129 yesterday, things look like they are going in your direction. I'd leave the stop at 130.30 or move it up to 129.65 (the high for Friday). I'm looking for a reversal to confirm the bearish move. It may not come, but there's a strong resistance at 130/131. I'd be somewhat surprised if it were to break through 1300. Don't fight it if it does (although it's likely at some point to break down).

Here's the DJIA and it looks like a triangle is forming. This is a bearish market and therefore, it would be likely for it to break down (not sure I'd be contrarian here).

Speaking of triangles, WM is forming a nice one. I'd want to see it hold above 3.50 and, of course, start making and breaking some double tops. Safer to wait until the breakout. And probably still very profitable.

Note: Do your homework. Take responsibility for yourself. And always use stops!


Looks like LIZ is running into its 100 day MA and is venturing into overbought territory. As RTH seems to be in a downtrend, I'd be tempted to short around 15 or so.

I have a few more things to post later in the day (most likely a few hours after the close). I start a few classes this week so I won't have as much time directly in front of the computer, although I'll still be writing and researching.

In any case, good trading.

Sunday, August 24, 2008


I wish I had caught this on its downturn. But maybe I can be there should it turn up. I have posted two PnF charts, one traditional and one log. The traditional has yet to return a reversal; however, should it show a reversal, a bounce should occur, especially considering the amount of time the drop took. In any case, the log PnF still shows a bearish trend, with a false double top. It is currently forming a double bottom. If the bottom holds, this could form a reversal. Confirmation would occur if the price rose to 39 or above, and if it held above 37 or so. Askstockguru shows a good support level at 36.63, so there is a decent possibility for a reversal. RSI is still low, below 30. I wouldn't enter this trade at the moment. Wait for more confirmations. Of course, if you do choose to enter the trade, put your stop no lower than 36.

Good trading. Take responsibility for your actions (and practice good money management!)


Saturday, August 23, 2008

Success? Not needed in all departments.

Yesterday I spent quite some time trying to figure out what would be the best systematic strategy for trading several stocks at a time, limiting the losses for the unsuccessful trades, and maximizing the profits from the successful ones. I'm still in the process of developing it and would like to put it into practice to make it less theoretical and more pragmatic. I'll post the specifics (or at least a strong general design) at a later date.

I am happy to say I checked my trading records and the 2:5 ratio of successful trades to unsuccessful trades I used for my formula turned out to be a somewhat conservative figure. My overall ratio is 4:7. Anyway, I figured out a method that would allow me to make a couple decimal points higher than 1% a week, as long as two out of five stocks succeed at making approximately 3%. I worked it out to have a max loss of about 1% of the entire size of my account should none of the trades be successful, commission prices remain fixed, and all the stops trigger at maximum loss. Overall, my system is starting to develop a pleasant risk to reward ratio.

Not only that: today I am reading a book on point and figure charting that I picked up from my local library (it was the only book they had on technical analysis). I am very happy to learn about some of the strategies presented in this book (Point and Figure Charting, Thomas J. Dorsey). I have seen point and figure charts before, but I have had little understanding about how they work and how to interpret them. These new analysis methods and strategies will help lower the likelihood of my ever hitting the 1% max loss.

Good trading.

Friday, August 22, 2008

Intc, aapl, and the wait

Intc is still in play as it didn't break above the stop I recommended yesterday--23.40. However, I should have paid closer attention to support and resistance levels. Support seems to be around 23, and I like to follow the stock a little closer throughout the day when support or resistance is so near. Take profits before they are taken from you. I haven't quite worked out exactly how I want to approach the close of a trade (or for that matter, the opening), but I definitely don't want to be too lenient. The distance between 23 and 23.40 is nearly 2% and isn't worth losing. As the stock gets closer and closer to support or resistance, and is showing slowing momentum, you should feel free to hold a closer stop and even consider mentally closing out the trade. Think of any further progress in your direction as a different trade, and add should the current level break in your favor.

Apple proved to be stronger than hoped, although it may prove to be an opportunity to enter long. I am not sure yet, but the recommended stop at 176 was hit today. That trade garnered 2.2%.

I am still waiting on the transfer of my funds from my current broker to my bank. And I will have to wait on that before I can commence trading. However, I am working out some new enter/exit strategies in the meantime. I am also formulating a practical beginners guide to trading.

In any case, good trading to all of you.

PS: Shorting SPY at ~129 looks good to me. A stop at 130.3 or so should be more than enough wiggle-room.

Thursday, August 21, 2008

Remember your stop losses

This last investment in GS reaffirmed my rule for stop losses. They are a must. The way I play the game makes them a must. I don't want to be sitting around waiting for my stock to rise to break even so that I can have my money back; or risk that not happening within the month (or at all). It locks up my funds. I'd much rather cut my losses early, realize that I made a mistake, and reassess my position. Also, I do not want to take my profits too early. I've done this recently: taking my profit when a stop loss would have protected me as well as increased my gains. My intc and apple exercise is another example of the importance of the stop loss. If I didn't use one I would probably have gotten out of Apple yesterday, missing out on the drop today. I'd move the stop down to ~176. INTC has been a little easier to follow, but I still may have been tempted to take profits today. I'd move the stop loss down to 23.40. Maintaining stop losses prevents premature covers and excessive losses. (INTC = 6.1%; AAPL = 2.2%)

As for how close to put the stop loss, I find a lot of people make it rather subjective. Personally, I like something around 1% when I start, although I'd really like to tighten that up. The reason I go with 1% is because if I can't buy in or short without setting off a 1% stop, I feel that I wasn't accurate enough with my technical analysis. I tend to buy in or short near support/resistance levels, MAs, when stochastics are turning and volume is increasing or decreasing. I really shouldn't be losing more than 1% on a trade if I read the chart and calculated its pros and cons correctly.

Once I switch to sogo, my stop loss techniques may change. With the ability to make a trade for $1.50 there is little reason to worry about commissions taking an unhealthy portion of my account. If I want to test the waters, so to say, I could even put a smaller amount of money into a stock and add as it moves in my direction or allow the stock to go against me further than 1% (my losses wouldn't be as great because the amount invested was smaller). I'd also like to invest in several stocks at once; maybe, strive to divide my account among four stocks all with a certain percentage on the stop loss. I can cut losses and focus on the successful trades, averaging out the gains and losses, the later which would be significantly less than the former (for the most part, at least). With the lower commission price, all of this will be possible for me. My account is not large enough to justify losing $4.50 ($9 both ways) trades. I'd have to make $900 for the commission to be 1% of my trade; $90 for the commission to be 10% of the trade. (And all trades are not winning; as has been made apparent from my posts). With sogo, a $300 gain would allow the commission to be 1%, and a $30 trade, 10%. Much, much better.

Which is the reason why I am in the middle of moving my account. I have to allow several days (three or so) until all of my equity trades are cleared; another three days or so to transfer my money to my bank, and another few days to send the money to sogo. It should ultimately be worth it. This will definitely make it feasible for me to achieve a 1% overall weekly gain, and reasonable for me to set a goal somewhat higher. I'm thinking that after I can prove to myself that I can maintain an average of 1% over a two month period, I can push for a 1.5% or 2% average weekly gain. With my smallish account, that shouldn't be extraordinary of a goal. But, as with everything, we'll see.

Further notes: I'd continue to hold off on the NVDA trade. If it can break through the 50 day and hold, it should be a good position to have. If it can't (and it hasn't) I'd wait patiently. It has potential, but don't rush it.

Update: If Apple can't break 171 tomorrow, I'd strongly consider moving the stop even lower, perhaps even taking profits around 1-2 above the low of today (i.e. 173 or lower). Then again, I tend to have a bullish bias towards Apple. It tends to feel strong to me, despite its oscillations.

Wednesday, August 20, 2008

Some new links...

Added several new links and will continue to add some more interesting sites (mostly blogs) that I come across. AC-Investor posted this tip:

If it can break above the 50-day MA it may fill that gap.

Good trading.


I held onto my position in GS. It has decent volume compared to the last four days. The stochastic is ever so slightly turning upwards. I'd be a little worried if it broke today's lows, unless it gapped down and started to climb. It did close slightly up from yesterday as well. I'd like to say the target price is somewhere between 180 and 190, but I'm thinking something around 170 is more reasonable, especially given the max pain data.

Although I am not trading Apple or Intel, I'd like to continue practicing on them: I would continue to modify their stops as needed. Looks like Apple is gaining some of its strength back. It'd probably be okay to leave the stop at 177 and move it down to 175 should the stock go below that point. With intc I'd probably bump it down to 23.80, although I'm tempted to go with something closer to 23.50. Every stock needs a little breathing room and I'd hate to cover this stock early, as its not showing the signs of strength some of the other stocks I've followed have. If it fails to get above 23.50/.80 tomorrow I'd lower the top again. The MACD fast line is about to cross over, beginning its way toward the center line. If the trade closes out at 23.50, things didn't turn out too poorly. That's a 4.08% gain. If you closed out Apple at 177 you'd get around 1.7%; not quite as good, but decent. If you are able to comfortably move your stop down to 175 tomorrow, you'll be set for a nice ~2.8% gain.

Good trading.

Switching brokers

I need to switch brokers so that my commissions aren't so high. I'm thinking about sogotrade; but, I'm dreading the amount of time it is going to take to get my money from my zecco account, into the bank, and then into sogo.


I'm being hard on myself. My stop was triggered, and I bought GS at 160. I'm trying my best not to lose faith in myself.

Hoping for a brick.

Shorted rimm at ~127. Went up to 127.70 right after I shorted; but, I still think I have the weight behind me. I put in a stop at the high for today, 128.50.

Tuesday, August 19, 2008

RIMM or net?

Looks like RIMM is breaking down (not that it is hard to find stocks that are breaking down). It has closed below its most recent support, daily stochastic is falling from the overbought area, MACD is nearing a possible bearish crossover, parabolic SAR is saying sell, and the 50 day is moving under the 100 day (sign of a bearish trend occurring). Perhaps things could turn around for this company, and things could definitely look worse; however, I don't think this stock will be soaring anytime soon. I guess the iPhone is throwing some solid punches.

note: chart from


Stoch is turning over from overbought. Couldn't hold above 130-128. Bearish flag formation. Next support is 125, followed by 120.

What happens after it hits the fan?

Things are going to shit. But that was expected, no? I mean, there is only so much you can do to make the credit crunch look rosy. Anyway, it may be a while before it is a good time to go long. Looks like the spy had formed a bearish flag and is breaking down below its support level. I think it may break down to 120 again. In any case, it's going to have a terrible time getting above 1300. Askstockguru places a support at 124 and 120. Be careful.


I wouldn't buy in. Volume is so light and things keep trending downward. I would really like some higher volume. Anyway, intc looks like it is doing well. And apple isn't doing too bad. I'd move the stops up on both of those. 24 on intc and 177 or so on aapl.

Good trading.

Monday, August 18, 2008

Blinded, slightly

I don't know if I am too biased to be in anf anymore. I want it to go up--probably too badly. There was some good volume on Friday and it ended up where it began. Today there was very low volume and it declined. There's a support at 51.26 or so. If it breaks that I definitely don't want to get in until $50 or so. But I still want to get in.

In any case, I'm hoping there is a lot of volume in GS tomorrow. If there is and it drops below 160 (I'd like a little bit of capitulation) I think I'm going to bite. The financials were shaky today and will probably be somewhat volatile tomorrow. GS still has downgrades hanging over its head, but I doubt it'll stay below 160 for too long; although, I'd rather not be holding it should the stock retrace to 152. (It couldn't go lower, could it? ...140 does sound like a nice price though.)

As for aapl. I'd say wait for it to fall. It's tipping over the top, and should be headed downward soon. I'd like to get into it around 165 or so. Although, the potential for gain doesn't seem as good as with GS and AnF, I'd be happy with it.

INTC is looking good. I'm not in it, but I'd lower the stop to about 24.25 or so. Maybe that's too tight, but I'd at least put it to the high of today. I don't like ignoring stops too much. I always lose too much money when I do.


I got stopped out after 1%. I'm getting the feeling that tomorrow will be a good day to buy. I'm looking into picking up AnF again, and GS. More later.

Saturday, August 16, 2008

First rule of Stock Club...

1. Don't speak when those more knowledgeable than you are speaking.
2. Don't speak when those more knowledgeable than you are speaking.
3. Always have a plan.
4. Use technicals to develop your plan.
5. Cut loses before they cut you.
6. Take profits when resistance to future profits grows.
7. The market does not breath. It does not love. It does not hate.
8. Discipline comes first.
9. Do not fear. Do not idealize. Aim to see clearly.

Sachs of Gold, Man.

~159 is the 200MA on the weekly. Now at 163, or later should it fall some more, is a good buy. It will have trouble going through the 159 level for any length of time; it has not closed below it for a long time. There will be some bounce too, as the daily stochastic is bottoming, and the weekly is below the mid-level.

Study your stocks for an hour each night...

What does Cramer really think about fundamentals?

Enjoy the sound clip or watch the whole thing here.

In the clouds...

Looks like "W" formation. Let's see if it can push through, or if it will be dragged down by all the volume at the 55 level.

Stock: ANF

Financial Strength?

Short around 200 day MA. Buy around 160? Things are getting somewhat frightening, given the GS downgrades; though, with care, money can be made.

Friday, August 15, 2008


I read a snippet about the benefits of being contrarian when it comes to put call ratios. If it leans in the put direction, expect the stock to rise. If it leans in the call direction, expect the opposite. I've added the maxpain calculator link to the side, which helps determine where most institutions would benefit from the put and calls they have written. From what I have heard, and the little I have seen, stocks tend to move towards the Max Pain area. In any case, Max Pain for AnF is around 52.50 (it closed near there) and the put/call ratio is extremely low, meaning there are far more calls than puts. Because of that, hedge funds may push it down (there was a lot of decline on low volume). However, I think the stock is severely oversold on the weekly chart. I'm looking for a rebound. But I also have my stops in.

Update: $60 maxpain for November. Can't get October to work. 52.50 for Sept. Still believing there will be a run up before then. As always, prepare for different scenarios.

Loud Music.

Looks like the Apple setup is working as predicted. The S&P and DOW are holding above support. IntC and WM are doing well too. Today, however, I have invested in AnF. They just released their earnings and they weren't as bad as expected. I got a little excited around 54 (the green crosses show my buyin points) and jumped the gun, only to be stopped out after about 1%. I saw it coming right after I submitted the buy. For one, AnF has shown resistance at 55 and would require some volume to get through that. Second, the trend was bearish. Don't buy in until the thing makes higher lows, and eases up to break previous highs. Throwing that aside will get you in trouble. The blue going down shows the lower highs that I should have heeded--if a stock is strong buying into it with greater certainty is worth the difference in price. Oh well, stops are your friends.

There are some other things in the chart that should have stuck out too, though. The volume near 54-54.5 is large. If there is large volume followed by a drop in price, avoid the stock for the moment. Especially if the volume continues to drop off. The drastic upticks at the beginning of the day are also something to look out for. Such drastic jumps are normally followed by a drop or a plateau, either of which don't cause loss if immediate action is not taken. The crossover in the MACD at 54.5 is not good, nor is the extremely oversold condition taking place around 55.

Anyway, something that I like look for are steep advances or declines. They seem to indicate a change in perspective. I waited until after the one in red and bought in at 52.38 but a good buyin would have been 51.90, as indicated by the drop, with a stop at around 51.38 (about 1%).

The daily chart is interesting. The red lines are support/resistance. I'd look for significant resistance at the 50, 100, and 200 day MAs. I'd like to see it get to 65 or so, based on the advances that other stocks in the retail/discretionary spending sector have taken.

The stochastic is low on the weekly chart, while a higher low has been formed. The new low would be the new support. Should it be broken, which seems unlikely given the decent earnings report, watch out.

As always, do your own research and take responsibility for your own trades.

Thursday, August 14, 2008

Diamonds are forever; well, that's the motto at least

This chart is very similar to the spyders. I'd think that a pull back in volume to the ~10million level would be a sign of greater weakening (and eventual collapse). While the stochastic is in overbought range, it looks like a drop from overbought to oversold is the indication to look for. Once that happens, the intra-top has been reached and its time to vacate, setup some shorts, and wait for some more good deals. Anyway, we have some resistance points to watch for on the way up, and some support levels to watch on the way down. Good trading, and remember, I am in no way legally responsible for how you choose to trade. The stock market involves risk and I do not have enough experience to handle your finances.

Intel(ligence) Brings in the Money

I'm getting a little too excited about these charts. Anyways, here's Intel. Looks like it may be headed for a pull back. Stoch shows overbought conditions. It is coming up to resistance and it is already starting to retreat. I'd short around 24 and follow with a stop. I bet it could get down to ~23.50 (or lower) if it cannot maintain 24.50 and after that 25. I'd be surprised if it could sustain 25 without some more volume; however, the weekly chart shows a stochastic that is yet to be overbought. It's nearing it. And the weekly candle is still rising. The MACD for the daily chart is hitting the levels that it did before the last drop. But, as always keep good stops.

I am not a professional financial adviser by any definition of the term. Please do your own analysis before buying or selling anything in the market.

Beware the web they weave

I figured that I would do a chart on the S&P's mirror, the SPDR. It recently broke its 128 resistance and rose to ~131. Yesterday it fell but bounced off its ~128 support and headed back up today. From mid-July to now it has been making higher lows. I'd watch for that to continue. And I would definitely watch the 128 level. If it breaks below that level we could see the SPY retest the 120 level. Looks like it may hit 135 before that happens though. Some who I respect even say 140. Anyway, realize that these large daily changes show uncertainty and weakness in the market. Keep some nice stops.

The volume is nicer than it was in May and June, although it is down from its high of ~500million. Waning volume is not a good sign. The stochastic is pushing up to the overbought region. Not sure how much affect that will have considering the market manipulation that seems to be occurring; however, should a negative divergence start to appear, we will probably be headed for a pullback.

Good trading. And: this post is for the growth of knowledge only.

WaMu - perhaps its the name that's the problem

I come back to this stock a lot. Probably because it was the first stock I lost money on. Or because I liked telling my grandpa that his bank was trading around $4. In any case, WM looks like it is setting up to continue its higher lows. Buying in around $4 would be nice, although I would really like to see some more volume come in. Perhaps that will happen once it gets a little closer to $5.

Stoch is heading down (oversold a little), and so is volume. Be careful, the low price can hurt should a drop occur. Stops are your friend.

This post is for intellectual pursuits only.

Fruit ripe for the picking

I was looking at Apple earlier this morning. Looks like it may be setting up for a possible pullback and a decent short. As you can see from the picture that is attached to this post, Apple has used 180 for both support and resistance in the past few months. When it went up through it before it was on large average volume and when it finally broke through the 180 level it did so on heavy volume. Currently it has much lighter volume and a series of white candles (much smaller at the time) that will probably work against it. The slow stochastic is also in the overbought range.

I may try to short aapl at 180 and set a stop at 181. I think it could hit 165-170 before bouncing back up a little, probably forming a W before it tries 180 again. We'll see. The new iPhones and its store are doing well. So do not forget a stop. This is a good company.

I am not currently long or short on Apple and have made this post for intellectual purposes only.