The site has been put on the back burner for the last few days, and it looks like it may have to stay there for a while. I have my final "midterm" tomorrow, but with public transportation (in Southern California) and dedicating my time to trading my friend's account, I am struggling to find time for the site. While I still try to keep a journal of my trades (riding the bus is good for that and reading), I tend to crash when I get home. Naps are the fruit of the Gods.
I really need to spend some time outside as well. With my brother or with friends. I may come back, and I hope I do (I enjoy you people); and I definitely won't stop reading your sites (whether or not it's healthy, I spend quite a bit of time reading blogs). I just don't know exactly when I can update daily again, or if it is even a good idea to utilize my time that way.
I won't hold it against you if you take me off your blog lists. Actually, if I'm not back and posting within a week, I'd recommend it. I'm tired. And I think I need a long nap.
The contest finishes up on Friday. The results are below and it looks like Charlie's goal is so far achieved =). Whoever wins, send me an email with your address and I'll get your copy of Liar's Poker sent off to you. I'll still be doing the lottery for The Losing Game if anyone is interested in it (it's probably a little too gloomy, angry, and not backed up with many facts for most of you; at least for me).
As always, check out the links to the right. Those are some high quality blogs over there.
Panda cubs certainly look ugly by most standards. The same could be said of fledgling traders. But both have the potential to turn into such beautiful creatures.
Here are two, one helping the other make it up a tree, or something, perhaps to get a warm apple pie. With the help of others (or as John Lennon said, with a little help from my friends) perhaps the arduous journey can be accomplished.
But, breeders have so much difficulty with the pandas. The process of getting them to, uh-cough, mate with one another is frustrating and time consuming. Many processes are tried. For instance, the one to the left is watching pr0n.
Moral of the story: I have too much time on my hands and have begun accumulating far too many panda pictures on my hard drive.
Last week we had a good discussion on a few charts (link). I thought it would be nice to see what our volume and price analysis yielded and where one might proceed given current charts.
GDX held its own with quite a bit of strength. As I said last week, it will have trouble breaking above 37 because that is the price level where the 50 and 200 are crossing in a bearish manner. Although gold may be showing strength, or at least verbal strength among the media (we are headed towards an apocalypse, no?), gold mining companies are not the same thing and don't react the same way.
With the high volume giving a, what looks like, perfect doji on the weekly, I'd be surprised if this didn't pull back during the next week. It's a possibility, but odds point towards some downwards movement.
Last week I said, "RIMM is flirting with its 50 day moving average" and that a "break below the 50 is not a good sign" for the longs. Looks like RIMM took the flirting to the next level. I drew some possible support lines. I think it's good that the volume is picking up again, but I wouldn't consider going long until there was some serious buying. Not sure if that will happen. An interesting stock to day trade.
On the huge downward movement last week, I was worried that COH might break. It held up nicely, though--just as many predicted would happen last week (check the comments). Even with the strength I'd watch for the downward movement of the MAs and make sure the bottom in the RSI doesn't break.
Here's a perfect example of how a point and figure chart should be used (and how it can help "support" an interpretation of a candlestick chart, or vice versa). I drew a support line across the bottom, right above $13 or so. You want to watch levels like this (especially when you have three definitely rows using it as support) because the level often leads to a breakdown or a intermediate bottom. You can also use it as an excellent entry position. For example, you could purchase a share at a recent low (somewhere above $13) and place your stop below support. This creates a nice low risk entry point.
As always, take responsibility for your own trades, and take care of yourself.
After watching Jules scalp the S&P500 emini, I figured I'd give it a try. Here are some of my thoughts:
I am convinced that successful scalping, while possibly profitable with a quick trigger finger and minimal technical skill, is predicated upon the development of solid chart analysis and a healthy dose of mental discipline.
Trading is exhausting and stressful, especially in this environment. Utilizing a poor understanding of the market to execute your trades will deplete your mental stamina quickly, perhaps faster than your competition's. Without a clear, clean, crisp mental image of the market, you will find yourself wasting precious processing power on tasks that others, better disciplined, can execute more efficiently and thus more effectively.
In the short amount of time that makes up a scalp, instances of waste or conservation can make the difference between a gain and a loss. Practice with chart analysis will increase your efficiency and make you more competitive. Learning to watch your "mental" stamina will get you in the game when you're at your best and get you out when your accuracy starts to fade.
And, yes, I did fairly well today =D I'm happy and so is the owner of the fund I manage.
Looks like the market blood bath took quite a bit of the paper profits made in the last weeks. I'd be proud with my position, but it betrays my lack of participation. I traded GOOG just so that I would be listed as ~0% gain. But my position does not matter. Basically, whichever one of you manages to protect and/or grow your money the best will receive a copy of Liar's Poker in the mail*! I received a complimentary copy of a book called The Losing Game in the mail just this week and will be raffling it off to one of you as well (completely random, so any of you could win).
The contest finishes next week. Good luck!
*You will have to give me your address or a PO Box. I know, privacy. But don't worry. I won't be delivering it to your home personally, and I have no history of stalking people.
As for those of you who would want me to show up with the prize and feel somewhat disappointed, let me assure you that it would be nothing like the Publishing Clearing House give-a-ways. It'd be terribly anticlimatic.
I'm probably nowhere near done compiling the list of trading blogs that I began two days ago. Yet, it already holds 144 blogs. If you don't see yours on there, or if you have a favorite that is missing (currently updated or not), then feel free to send me a line. I know there are quite a few missing, and I will get to them soon. For now, enjoy all of the information and personal experiences given by these bloggers!
I have had and still have a lot of school work for this evening. It's going to be a long night. But I wanted to say that I have received a few emails about trading blogs to be added to the list. They've been added and I will try to add anymore that I receive as soon as I can. Feel free to send yours in; otherwise, like I said before, I'll be adding a large amount very soon. Tomorrow will be a more lenient day (well, after the early morning).
Today was exciting in the market! Hope everyone of you came out alive. Personally, while I didn't have but a half hour at most to dedicate to trading, I did get the setup I talked about a few posts ago completely working. Because the account I'm trading is still short the day trading requirement, I got the screens running futures. It's pretty sweet how IBCharts allows connection to IB's TWS over a lan.
On a continuation of a former tangent, here's a quote from an amazing book called Free Culture by Lawrence Lessig. It's about intellectual property rights, so those of you only interested in trading will may want to call it quits for the evening on this page =) Check out some of the links below or to the right. Otherwise:
"For some films, the benefit of releasing the film may well exceed these costs [lawyer fees to clear rights]. But for the vast majority of them, there is no way the benefit would outweigh the legal costs. Thus, for the vast majority of old films, Agee argued, the film will not be restored and distributed until the copyright expires.
But by the time the copyright for these films expires, the film will have expired. These films were produced on nitrate-based stock, and nitrate stock dissolves over time. They will be gone, and the metal canisters in which they are now stored will be filled with nothing more than dust."
Please stand up against the insanity that our copyright laws have become. Patents expire after 20 years, while copyrights after the 1920's go on, currently, practically indefinitely. It benefits a few large corporations who have control of old icons that still make them money, but it also destroys a good portion of the history of our culture. Copyright is supposed to encourage innovation, not destroy knowledge.
Don't let the talking heads dumb the debate down. I'm not advocating pirating or copyright infringement of new works. I'm advocating the preservation of culture and spread of knowledge that no longer needs protection, as the innovation it contributed to society has long since been compensated.
Freedom is one of my passions...take care everyone.
I will update the below; I know it's not complete. My goal is to compile a list of links to current and old trading blogs. I have a few things I have to do today, and I have already dedicated too much time to the below =) If you really want your blog added right now, send me an email (comments will be turned off). Otherwise, be assured, I will get to you soon.
I Still Haven't Found What I'm Looking For - Negativland on their album U2 (that is, the letter U and the numeral 2).
I don't know how many of you out there will appreciate the above. Probably few. But I thought I would post it anyway, given that copyrights and the laws that govern them were brought up over at Dinosaur Trader (CLICK IT, you know you want to!). The above is the main song from Negativland's (I wouldn't be surprised if you've never heard of them; they sell very few CDs) album that was sued out of existence by the corporate owners of U2's brand and discographia. Casey Kasem of American Top 40 also wasn't too happy, having several out takes with angry cursing (e.g. "These guys are from England and who gives a sh*t?") about a new band called U2, "that is the letter U and the numeral 2."
Personally, I love the track and all it represents. Much of what Negativland aims to do is comment upon and use the culture around them in order to critique and create new things. They're obviously not trying to steal U2's content. They completely reformatted anything that U2 may have ever put together. It's obvious they aren't trying to ride U2's success anymore than I am trying to ride the success of whoever created the English language. Hell, Negativland probably wouldn't have made much money if they had been allowed to sell the record, and not only that, they agreed to donate all the money to whatever charity Casey Kasem and U2's label wanted.
I don't know. My train of thought is slipping. But I do know that this is not piracy. And if it is, what do you call Disney's use of Sleeping Beauty, Cinderella, Alice in Wonderland, etc? Also, it feels like corporate America is trying to silence a group of people who have different opinions about how corporate America operates. You shouldn't be able to shut someone up just because their opinion of your actions doesn't make you look good. That goes against the first amendment. And where would we all be without being able to critize politicians and government that we don't like?
Perhaps I am wrong. But, really, if I had enough money, I bet the courts and House would rule me right. Such is, at times, the American system of law.
Last week I said that 2009 as-reported earnings estimates for the S&P 500 would be dropping. 2008 earnings had dropped to $29.57 as I wrote the letter. They are now down to $28.60. One of my favorite analysts is David Rosenberg of Merrill Lynch. His forecast for reported earnings for 2009 is now down to $28. That puts the P/E for the S&P 500 at 30.
He also projects "operating" earnings to be $55 for 2010. And, as he writes today:
"For those looking for a silver lining, at least we are going to have a deeper bottom to bounce off. Applying a classic recession-trough multiple of 12x against a forward EPS estimate of $55 would imply an ultimate low of 666 on the S&P 500, likely by October if our estimate of the timing for the end of the official downturn is accurate."
That is a 20% drop from today's close of 829. That is not what you will hear from "sell-side" managers who want you to invest in their mutual funds and long-only management programs.
I noted the problem with the rest of the world earlier. 40% of the earnings for the S&P 500 are from outside the US. It is hard to see how those earnings are not going to be deeply affected. Let me reiterate my continued warning: this is not a market you want to buy and hold from today's level. This is just far too precarious an economic and earnings environment.
Given the probable ongoing bad news from financial and consumer stocks, plus the depressing news on bank losses coming down the road, why take the risk?
I took a picture, but I can't find the cable to put it onto my computer. While I'm looking for that, I wanted to post my developing computer setup. Interactive Brokers has a built-in API feature that allows multiple computers to connect to a single client and access the quote data without additional charge. I figured that working from multiple computers would reduce any bottleneck I might experience on the CPU side of things, especially when running multiple screens.
Anyway, here's the general setup:
- Old Athlon 1.2ghz (or so) computer with 1.25 gb of ram -- Connected to one 17" monitor.
- Apple iBook G4 1.2ghz with 768mb of ram and 12" screen. -- Updated device software to allow multiple screens. -- Connected to one 17" monitor.
- 2.4ghz Atholon X2 laptop with 3gb of ram and 17" widescreen. -- Connected to a 17" monitor.
With quotetracker or ibcharts I should be able to run all three, over the same network and connected to the same IB client. I'll post more information (and a picture or two). Maybe it will inspire some more cool setups.
The cost of this setup is relatively inexpensive. All three of the 17" monitors are at least 6 years old, if not 8; they're all CRTs. I got one for free a year ago from a friend, and I'm guessing that you could probably find someone wanting to get rid of CRTs in order to replace them with LCDs (which, I would eventually like to upgrade to). I put together the Athlon tower 6 years ago. It still works nicely, especially with the amount of ram it has; you could probably get the equivalent (or better) at Fry's for $300, new. The iBook is 4 years old and can be purchased off eBay for around $300. It serves its purpose fairly well. The dual core, 17" widescreen, laptop is the newest piece of equipment. Maybe a year or so old. It's some off brand, but works nicely. I'd say $600 or so, used.
All in all, the setup is nothing pretty to look at; but, I'm hoping it will do its job of giving me a wider view of the market.
These are just a few charts that I found interesting. I probably wouldn't do anything long term in any of them. I like the day trades. But it is kinda nice to have a long term image in your head when you pull the trigger. Resistance and support, volume trends, and moving averages can always help in determining a safe place of entry.
All of that volume on the weekly chart, contributing largely to a series of small candles could signal indecision. When coupled with the high stochastic and the descending 50 week and the nearing 200 week resistance, I'm going to say there's a chance for a pullback. Especially as it reaches 37 or so.
RIMM is flirting with its 50 day moving average after posting earnings. With so much volume on the first gap down, I'm going to say that there is a good chance it won't be able to break that day's highs. A look at the intraday would help determine the likelihood of that statement. A break below the 50 is not a good sign. Well, for the longs that is.
Looks like COH is coming up to its lows. I'd be careful, as retail sales are likely to continue sucking. But, with the declining volume over the last few days, I wouldn't be surprised to see this turn upwards. Then again, just because it hasn't gone lower, does not mean to hold onto a stock while it continues lower. Bail this shit if it break down on heavy volume. I never understood $400 purses for women who make that much, after taxes, in a week, anyway.
I'm guessing that trading was light today because traders weren't quite sure how the market would react to the bill. It was passed and the markets don't seem to be too happy. Afterhours looked fairly bad.
The above shows support at 81/80. Should that break on heavy volume, I'd look out below.
It took me a while to think of the markets in this way, but it's all they are: a great big playground for supply and demand. I don't know if the stock you are buying has any intrinsic worth. You're not able to trade it in for a spiffy office chair or a portion of Microsoft's Windows source code. While I understand that a company could eventually be bought out, thus giving you a chance for a guaranteed price on your shares, I don't see this happening very frequently at all. And should a company go bankrupt, the common shareholders tend to get diddly squat; bondholders are given first dibs on property.
When you see a stock priced at a certain value, remember it is at that value because people are willing to pay for it at that value. At the moment, yes, it may have some intrinsic worth. You own a part of the company and, depending on the stock, you may even get a portion of their earnings. But what happens to that share in time? I would argue that every company submits to entropy.
In any case, if you were to learn any one thing, I would suggest you learn how to trade based on supply and demand. That means, basically, trading through charts. If there's buying pushing the stock up, ride it up until the buying begins to dwindle.
Today I was watching bid and ask sizes. Bid sizes indicate how much of a stock the buyers want. From what I have seen (and from my intuitive understanding of supply and demand) if this size is bigger than the ask sizes, then the price eventually goes up. Same thing works in reverse.
Don't get me wrong, fundamentals are necessary. Who's going to buy a company that has no growth possibilities and doesn't sell anything? Just remember that the price is determined by what people are willing to pay and willing to accept. And if you're trading, understanding this will get you onto the right side of the market.
I haven't been able to compile my words like I would like this evening. I figured it'd be best to bring up a quote from one of my favorite philosophers, Nietzsche (On a side note: I love the saying, "Nietzsche took a sh*t, and that sh*t turned out to be Ayn Rand." But that's probably not appropriate...oh well.)
"Without music, life would be a mistake.... I would only believe in a God who knew how to dance." - Nietzsche.
I'm back, back into the world of 0's and 1's. As DT (please click my sponsor!) said, you'll feel a hell of a lot better after a break. Unfortunately, I'm not as much of a communist as him. He took off an entire month (remember that when someone tells you that commies don't have it better; they do).
I started trading today. My account is setup and I have access to my friend's funds. It's short the day trading requirement, but we're going to try to boost it up to it. I put in a few practice trades today because the IB software takes a little getting used to. It's much better than browser based trading like Zecco or Sogo, but it leaves something to be desired. Perhaps, I should read the manual. Unfortunately, I stubbornly refuse to read manuals.
Both trades (only two because I wanted to save my third for Friday, when I have the day off) were positive, despite my difficulty with the program. On a side note, I enjoyed using ToS's software. I'm thinking about suggesting some new software for my friend to purchase. He's actually been bugging me about doing it.
Hmmm. There's not much to say today. Looks like the market finished up; but, it's a sad finish on low volume. Beware of today's low. Further downside may be imminent.
I love that word. Hiatus. It makes me sound all intellectual and sophisticated, even a bit artistic.
It's what I am going on. I need a short break, a defined one week break in order to put things back together.
I got an offer from one of my brother's friends to manage his IB account, which is just $5k short of $25 (he lost $8k using 4x the margin for each one of his trades). I'm excited. I get 10% and can put some money into the account myself. I don't have much, but if I skimp here and there I might be able to muster together a few bucks.
I also need to get some things together at school. I did get guaranteed admission to UC Berkeley, whenever I want to go. Yes, like this Fall or next Spring or the following Fall. Whenever. I'm somewhat stoked, but stressed out too.
Which is why I need a break. And a defined one so that I don't spend all my time feeling guilty that I haven't updated. Now I can feel guilty when I think about updating: "You should be focusing on other things right now," is what I'll say.
The contest is still running. Check out this post for the signup info, and this post for a list of the prizes.
You may think that it is a little peculiar, a fear of success, that is. But it is what I have. For the last week or two, I have been intensely anxious when I write or comment on my site, or anyone else's for that matter.
I still have an intense fear of failure, even though I had to fight it in order to trade. I don't like failing. It feels invalidating. But it comes with the territory. You have to be able to say, "I was wrong," and let go in order to succeed at trading.
But fear of success, that's outlandish. Why have a fear of succeeding? There is literature on it. I probably would have never figured it out myself if someone wiser and more perceptive in the psychological realm hadn't told me. It seems so counter-intuitive. Who could fear being good at something?
I suppose it's not the fear of being good at something. It's the fear of the consequences. The hatred, the height, the unpleasant reactions of others. The bullying, the guilt. And, quite possibly the worst, feeling like you have succeeded only to be called an idiot for having ever tried. Having your success undermined and disparaged.
What goes into making this site must first overcome those feelings. I struggle to keep posting, to keep my thoughts positive and encouraging. I can't even believe that so many people who I admire have linked to me. It's overwhelming. It makes me happy.
But it also scares the living shit out of me.
And it's not only online that I have these feelings. I experience them frequently in other parts of my life.
Here are the results of the first day of trading. Looks like everyone is managing their risk well. If you haven't put in a trade yet, you won't be listed above. I tried to get a trade in, but am suffering a head cold and had obligations to get to throughout the day. I feel like a terrible contest host! But I am still here.
Congratulations to Rob of Stock Insight. He's kicking all your butts (including mine) right now! Remember this is a competition! AND that I like exclamation marks!
Let's get some good trades in before the benefits of his surgery fully kick in*.
