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Sunday, December 30, 2007

COT Numbers

The COT Report:
The latest Commitments of Traders report from the CFTC shows that Commercial Hedgers sold 18,917 S&P 500 futures contracts last week to bring their net short position to -7,222 contracts. Large traders were net short -8,394 contracts, with Small Traders net long the remaining 15,616, the so-called "weak hands". For the Nasdaq 100 futures, Commercials sold 4,564 contracts last week to bring their net long position to 2,967 contracts. Small Traders were net long 2,531 contracts in the Nasdaq. Commercial action in Dow futures saw the smart money buy 2,750 contracts to bring their net long position to 5,842 contracts.
Commercial Hedgers were better sellers in the S&P's last week, while Small Traders were better buyers, a short term bearish sign. Commercials are now net short in the all important S&P futures, and that has been an intermediate term bearish sign historically.

Saturday, December 29, 2007

For What it's Worth: Here's Byron Wien's Top Ten for 2008

http://safehaven.com/article-9112.htm

Happy New Year Fellow Traders!!!

Hopefully 2008 will be the most profitable one ever! Charge up the battery, let's get pumped up for 2008 and knock the cover off the ball! Thank you for visiting and supporting this blog. See you soon!

Last Holy Grail Setup for 2007

Monday, December 24, 2007

Sunday, December 23, 2007

Saturday, December 22, 2007

The BEST trading book

I have read tons of books on trading over a 10 year time span and i think by far the book that opened my eyes on trading has to be the "Master Swing trader" by Alan Farley. He is my idol and i really admire his insights and his approach. Check out his website at www.hardrightedge.com

Read the book, it will inspire you.

Good trading!

Thursday, December 20, 2007

Stewie Meets Wall Street

http://www.youtube.com/watch?v=iVkmr8wk9N8&feature=related

Important Market Update

This market sucks ass! Enough Said.

Tuesday, December 18, 2007

Monday, December 17, 2007

A look inside today's Internals

Advances & Declines

NYSE NASDAQ
Advances 606 (18%) 627 (20%)
Declines 2,744 (80%) 2,392 (77%)
Unchanged 68 (2%) 96 (3%)
Up Vol* 732 (20%) 205 (11%)
Down Vol* 2,801 (78%) 1,717 (88%)
Unch. Vol* 53 (1%) 22 (1%)
New Hi's 28 46
New Lo's 388 330

Sunday, December 16, 2007

Thursday, December 13, 2007

Divergences Spot the bottom today and set up a nice trade in MA for those that took it.


FSLR trade




yesterday i bot 500 FSLR in after hours after spotting this awesome looking C&H pattern. BOT 500 at 242 and sold it this morning at 246. a nice quick $2000. FSLR went on to rally 7pts from where i sold.
I usually would have been more patient with the pattern but i only got 3 hours of sleep due to my lady being sick. Seems like a shitty day to trade anyway. back to sleep.

Wednesday, December 12, 2007

Tuesday, December 11, 2007

I have a Dinner Engagement Tonight with My Lady

BUT I have quickly plowed thru some sector charts and i can tell you right now, today's action really damaged a lot of very nice chart patterns i was looking at a few days ago. I'll post a lot of them during tmrw's trading session. What a day! Thanks Ben!

Sold TNH: A swing from yesterday at $138.1 for a sweet $6 profit.

I am back to 100% cash ahead of the FED. We are very overbought and even tho we could rally after the statement. The chances are more likely that we pullback. I will buy any post-fed weakness.

Two Kinds of Markets/ Two Favorite Patterns

There are two kinds of markets, markets that trend UP/DOWN and markets that chop/go sideways. Therefore i have two kinds of strategies that I use.
Trending Markets: I use the HOLY GRAIL
Choppy Markets: I use the DOUBLE BOTTOM DIVERGENCE

If you are not familiar with any of them. Take some time and plow thru my archives and you will see detailed explanations of each. It will be worth your time.

Monday, December 10, 2007

Setup To Watch: SOHU

TNH Trade


Small Sell Signal on XBD.


Hopefully that setups a sell on the news tmrw after the FED meeting. I will be looking to buy.

Sunday, December 9, 2007

Holy Grail

http://www.lbrgroup.com/images///raschke_pt2_0304.pdf

Saturday, December 8, 2007

From Legendary Stock Market timer Bob Brinker's Newsletter

Says:

"Market Timer Stock Sentiment Index enters December with a highly favorable reading of 130 which well above its bullish threshold of 100."


"We expect the bull market to continue well into 2008 and we look for significant stock market gains, including new sp500 record highs."

Friday, December 7, 2007

Trades Taken Today: Holy Grail Setups Took Center Stage Today









I took all those trades except for LDK as i had my hands full at that point. But it was a very nice setup/trade for those that took it. Holy grail once again proved to be a very worthy trading setup for those that spotted and took the trades. Hopefully more setups like this next week.

Wednesday, December 5, 2007

RIMM bounce coming...

The Market continues to Rally even infront of BAD news

This I believe speaks volumes. Even tho there was plenty of negative news from MBIA and Ambak, the mrkt decides to hold on to the rally and even rally towards the close. This kind of news one month ago would have sent the mrkt tumbling. Bulls get READY!

Tuesday, December 4, 2007

Patience, patience, patience....

Waiting for the mrkt to setup is so hard b/c as traders we always feel that we need to be in the action all the time. There's a time to trade and there's a time to just sit tight. This is one of rare times where we need to just sit tight. Volatility will return and i will make trades again (good ones hopefully) but right now, isn't the time to trade. A lot of traders lose most of their gains from trending mrkts by trading directionless, low volume mrkts. Read a trading book, do some back testing/research etc. Good luck.

Monday, December 3, 2007

Great Video: Enjoy.

http://www.pristine.com/services/chat/ETR/videos/20071203/

An Uneasy Feeling

Even tho the charts are telling me to expect this rally off the lows to last for a while, i can't help but notice the short squeeze nature of the move, rather then real new money coming into the mrkts. I am playing it long but i am very skeptical. The recent weakness in RIMM, GOOG, AAPL, FSLR and a few other mrkt leaders has me concerned that buying power isn't powerful enough to keep this rally last too long. Chances are higher that once this rally plays out, we very well could see another dive to test the lows again. The gap left on the index charts off the recent lows needs to be filled at some point. I am back into day trading mode but expecting higher prices for December. This is only a gut feeling and could change if i see more proof otherwise. good trading.

Intra Day Setup: ANW

Thursday, November 29, 2007

Wednesday, November 28, 2007

DinosaurTrader Brings a Very Good Topic Tonight on his blog: Is Day Trading Gambling?

Here was my response to this very very good question:


That's a great question Dino.
Day trading brings out gambling habits in emotional people. The constant repetitive trading will bring out emotional sides in traders.
Small time frame traders are the most vulnerable of all traders b/c they are most likely to second guess their views b/c of the speed of the timeframe. Second guessing leads to overtrading, overtrading leads to churning of the account via commissions/slippage and the emotional aspects of trading(revenge trading, fear of missing out, fear of being wrong, stubborn/egotistical trading, catching up, frustration etc etc etc).
Trading small time frames is very risky to a trader who does not have a rock solid strategy he needs to stick with and tune out all the noise that interferes with the trader intra day.
If you are an obsessive person, then day trading is definitely not for you. trading will instigate and wake up all sorts of negative habits namely over trading which is a trading sin. That is still one of my worst traits. My brokers love me, but screw the brokers. If i set a daily limit of 3 trades everyday and after three trades i am completely done, then i'd beef up my long term PnL for sure. How many times have you made 1-2 trades and were up nicely on the day, only to piss away the nice gains by putting on 10-15 mediocre trades later in the session?
Over Trading brings out gambling like habits and makes a trader very obsessive.

HOLY GRAIL

http://www.lbrgroup.com/images///raschke_pt2_0304.pdf

Holy Grail: Day Trade on DRYS.


I miss it but this is an example of a holy grail setup.

Tuesday, November 27, 2007

Anatomy of The Double Bottom Divergence (DBD) Trades





As many of you already know i love trading Double Bottoms Divergences(DBD) but i have never really explained it. So here it is: Hopefully you'll find it useful to your trading.

I am going to be working mainly in the 5 time frame for these examples:

First Step:
A low of some sort must be in place or have has just been established. Price prints to a low and then start to move higher, therefore printing a actual low.

Second Step:
We need to see a recovery/bounce of some sort: usually they have a very reflexive/tame/weak nature to them. Then we need the bounce to start failing(this is where you roll up your sleeves, rub your hands, your eyes need to be sharpened and mind focused.


Third Step:
We need to see a RETEST(this is the KEY). This retest will setup the entry. The nice thing about buying the retest is that you are buying weakness(instead of strength, this way you avoid top-ticking) and you are buying near a previous low(step 1).
You are buying when many amatures are actually eyeing to be get short.

Note: If you want to play it safe, then wait for a confirmation of a reversal candle(such as: dojis, hammers etc) to get LONG(given step 4 in in place of course) and establish risk/reward parameters to execute the trade. Volume confirmation would be very nice.

And Step Four:
(MOST IMPORTANT)
You need to spot the Divergences using RSI and MACD. As price approaches the double bottom territory, you need to keep an eye on the RSI & MACD and see if they are making higher lows as price is setting in a double bottom, that in essence tells you that the second decline is weak and hence "unsustainable" and will most likely reverse back UP!

Please note: On the 1 , 5 and 10 minute time frames, these events happen very quickly (gotta be quick to react) and a trader needs to practice and pattern recognition skills(which comes from seeing the pattern over and over again).


Please Note:
A lot of times, these Double Bottom Divergent(DBD) trades will yield quick small gains. It's up to the trader's discretion to either book profits quickly, ride for a bigger trend, or realize that the stock stalling and looks poised to break the Double Bottom and get out.


Hope you find it useful and good trading.

SRS: Putting in a Short term Top: Will be Interesting to Watch it's Progress

Day trading double bottoms. Check back later.

The Bizarro Market:

This Market is Giving So many False Signals that It makes it very hard to trust pure technical analysis. A trader needs to be very nimble and keep share size small in order to keep his sanity. Also, signals that that look like sure fire trades one day turn out to do the exact opposite the next day. Play it small or you will lose your mind.

Monday, November 26, 2007

QQQQ & VIX


Intra Day Update: Internals, Internals, Internals!

As long as they are weak, this mrkt will stay weak. I was expecting a stronger recovery of some sort to start today. Strong recoveries after brutal selloffs are very typical in bear markets(and they fail eventually) but it sure looks like it might come from lower levels. Welcome to bear land, where you to be nimble, open minded and super flexible. This is no time to be stubborn. Just trade what you see and not what you want to see. I wanted to see a rally but it's not happening, DON'T PRESS THE ISSUE. Be objective. The market is my guide. Good/safe Trading!

Wednesday, November 14, 2007

VIX: Cup and Handle?




VIX on the rise = Opportunity!

Bear Market Behavior

I am not saying that we are in a bear right now but i am definitely seeing bear mrkt action that's for sure. This is not your garden variety correction. I have traded thru bear mrkts before and everything i am seeing right now reminds of one big time.
Hard and fast merciless selloffs that go deeper than most people think yet people stay confident we are still in a bull mrkt(complacency). The selling is severe in percentage and dollar figures and individual stocks just getting demolished intra day. And the selling is very orderly and relentless.
Most importantly, is the low volume severe short covering that takes place in the premrkt futures. In bear phases, the mrkts take a beating for several days and then they gap them up BIG time in the morning and cause severe short covering episodes that rarely last more than one day. In bear phases, we see strength in the morning followed by fast high volume chinese water torture selloffs towards the close. I love trading in bear mrkt action. you get volatility and if you don;t mind shorting, then you will have a field day when stocks drop 10-30 bucks at a clip. There's money to be made in this kind of environment.
I could be totally wrong of course but as of right now, this is what i am seeing and until i see a change of character, that's my view. Good trading.

Sunday, November 11, 2007

Screen Time Does Not Always Result in More Profits by Leavitt Bros.

http://www.screencast.com/users/LeavittBrothers/folders/Default/media/54c4c589-d5c0-423c-badd-bd688b2016a1

Worst Week for Nasdaq Since April 2002

I have been very concerned for a number of days now about the recent action in the market especially when it came to how well BIDU, GOOG, RIMM, MSFT and AAPL have been supporting this market meantime the number of stocks hitting new 52 week lows has been steadily increasing. I knew, that once they started to crack, that the market would come crashing down. This mrkt has been struggling for a while now, but the hot momo stocks have been doing a very good paint job of making the mrkt look better than it really is. This type of poor breadth and poor leadership is very typical in the ending phases of a bull mrkt. Where fewer and fewer stocks carry the indexes, while under the surface tons of other sectors are literally breaking down hard. Look at the banking, Semiconductor and transportation sectors as examples. These are the three most important sectors. I expect a period of serious weakness in the indexes. I suspect we could easily see the indexes drop 20% from the highs. Now, there will be lots of rallies along the way where the bulls might think that they are out of the woods, but this will only be nothing more than wishful thinking. Markets go up and markets go down, we as traders don't care which way they go, we just need to exploit the opportunities and there will be TONS, both Long and Short. Good Trading.

Stocks Predicting a Resession




I don't like to predict too far into the future but it seems to me that the stock market is anticipating a recession sometime in 2008. It's only part of the business cycle. The economy expands and the economy contracts. And stocks react accordingly. Now, that doesn't mean that we'll see a repeat of 2000-2002 bear market but we could see a 20% drop in the indexes. This is my view, love it or hate it. Good Trading.

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