Friday, January 30, 2009

Trading Wisdom Not Heard Often

  • Buy from the scared, sell to the greedy.
  • Buy their pain, not their gain.
  • Successful traders are quick to change their minds and have little pride of opinion.
  • I made my money because I always got out too soon. (Bernard Baruch)
  • Don't try to buy at the bottom and sell at the top. It can't be done except by liars. (Bernard Baruch)
  • Throughout all my years of investing I've found that the big money was never made in the buying or the selling. The big money was made in the waiting. (Jesse Livermore)
  • The faster a stock has climbed, the quicker it will fall.
  • The more certain the crowd is, the surer it is to be wrong. (Menschel)
  • Bear markets begin in good times. Bull markets begin in bad times
  • Never confuse genius with a bull market.
  • Always sell what shows you a loss and keep what shows you a profit

Wednesday, January 28, 2009

Tuesday, January 27, 2009

Alan Farley On Why The "Lack Of Liquidity in 2009"

Liquidity.This is a big one -- have you noticed how daily volume has been lower than average across the broad market even though January should yield the heaviest participation levels of the year? Where are all the 401k contributions, value investors, speculators and other folks trying their hands at the market casino?

Of course, most RealMoney readers already know the answer to that deceptively simple question. So much wealth was destroyed in the 2008 crash that surviving mutual and hedge funds, as well as individual investors, no longer have the deep pockets needed to play the financial markets with the same intensity as in prior years.

Leverage has also taken a major hit in this bear market, contributing to an illiquid environment that might characterize the tape for the next five years or even longer. Add in municipalities that can't afford to buy stocks anymore and we have the makings for ultra-wide bid-ask spreads and support/resistance levels that fail to attract buyers or sellers.

NR7/Inside Bars Printed Today. Expect Range Expansion Soon

Monday, January 26, 2009

Bear Flags Closing Updates

Lots of these flags i posted yesterday look to have tested the upper resistance levels and now look more and more ripe to break down soon. I would not rule out another 'fake out' move higher tho. anything is possible in this market, even a complete failure of the flag patterns so always be ready to react and never get married to one trade and stubbornly hold into something that you feel isn't right.

SKF Case Study: Trading The Open and The Close

Here's a 10 min. chart of SKF. Very volatile, very liquid and always offering opportunities.
I want you to notice how SKF paints a pretty good picture of what i have been discussing the past few weeks about open and closes and how that's where either trends get stronger or reversals take shape. Time your entry right and hopefully get a few good trades out of this sucker.

good trading.

Bear Flag Updates


Friday, January 23, 2009

Another Trade Taken Today

Circling around highly shorted stocks and having conviction in market direction made me take this trade. once i was 'convinced' the market would recover off the lows and start to head higher, i positioned into highly shorted VNO and went long on a break of the falling wedge.

Trading The Opening Reversal

Trade taken today.

Also, check out FCX, OIH and X, excellent examples there.

Possible Bear Flags

It's hard to trust the pre market index charts in this market because it is purely a news driven market and over night news changes in minutes and many times news changes during the trading session. Basically my style has transformed into a scalper using 1 min time frames & trading trend acceleration or reversals off the open/close in order to adapt to this market.

Tuesday, January 20, 2009

Short Setups

here are some decent short setups but my strategy will continue to be shorting financials or longing SKF/FAZ on weakness. Seems like the low hanging fruit is to short this sector. High momo to boot.

Financial Mess: Chart Updates

Thursday, January 15, 2009

Today's Reversals Look Feable

But it was a smart and logical spot for the shorts to cover their positions and reload from higher levels. We might see some strength for a day or two but i think there's more selling coming soon.


Wednesday, January 14, 2009

Shutting Off Distractions

To all my friends i have met thru Wallstreak . As many of you have probably noticed that i am no longer posting on Wallstreak. I have decided to take Fearngreed advice of cutting off all distractions during trading hours. As a result i will no longer be chatting on wallstreak and I also shut off CNBC completely. I love wallstreak and i am huge believer in it and i have grown as a trader because of it. I have met many great friends on it and had the privilege of watching many great traders come thru it. Also, watched many new traders grow on it and that has been very inspirational. UGLY deserves a gold medal of this. But i need to take this step in order for me to become the trader i want to be. I do update my blog intra day often and will always be posting charts and hopefully help you make money while navigating this wild market.

I recently got engaged with my beautiful girlfriend of 3 years(Jamelah) and have been busy with that. I also have been working on starting a business soon.

Best of luck to each and every one of you.

Much love!

The Bleeding Continues

Breakdown from the highlighted wedges gaining strength and a full retest of the Nov lows looks very likely now.

Sunday, January 11, 2009

Potential Breakdowns and Rising Wedges :Hoping For Volume Now

Maybe that's why volume has been lacking the past few weeks. This whole move up has been a counter trend rally with very little participation and perhaps once we start to see lower prices and selling pressure we will attract more volume. work in progress......

Thursday, January 8, 2009

DIG: Setup

How Do You Live Your Life?

Gut Feeling

My trading gut says buy weakness into the employment figures tomorrow.

Bo Yoder Newsletter

Bo Yoder aka 'The Pioneer' in my opinion. very unrated guy but dude packs trading knowledge rivaled by none.


Primary Bear Market

Stage 1. Distribution

Just as accumulation is the hallmark of the first stage of a primary bull market, distribution marks the beginning of a bear market. As the "smart money" begins to realise that business conditions are not quite as good as once thought, and thus they begin to sell stock. There is little in the headlines to indicate a bear market is at hand and general business conditions remain good. However stocks begin to lose their lustre and the decline begins to take hand. After a moderate decline, there is a reaction rally that retraces a portion of the decline. Hamilton noted that reaction rallies during a bear market were quite swift and sharp . This quick and sudden movement would invigorate the bulls to proclaim the bull market alive and well. However the reaction high of the secondary move would form and be lower than the previous high. After making a lower high, a break below the previous low, would confirm that this was the second stage of a bear market.

Stage 2. Movement With Strength

As with the primary bull market stage two of a primary bear market provides the largest move. This is when the trend has been identified as down and business conditions begin to deteriorate. Earnings estimates are reduced, shortfalls occur, profit margins shrink and revenues fall.

Stage 3. Despair

At the final stage of a bear market all hope is lost and stocks are frowned upon. Valuations are low, but the selling continues as participants seek to sell no matter what. The news from corporate America is bad, the economic outlook is bleak and no buyers are to be found. The market will continue to decline until all the bad news is fully priced into the stocks. Once stocks fully reflect the worst possible outcome, the cycle begins again.

Falling Wedge Update: Starting To Shape Nicely Now.

action overall looks very weak and sloppy.

Stingy Market?

Is it me or has this market been very Stingy? I am not seeing the kind of easy 'low hanging fruit' trades i was seeing a few weeks ago. Two months ago i would NOT have been satisfied if i made $700 on the day. i was shooting for at least $5000 everyday. But now, I am really struggling to find good stuff to trade after the opening hour. Everything just seems to die down and chop.
This week is almost out and i only made 3 trades. 2 winners and 1 loser and i am up $1400 on the week. This is lame but unfortunately i cannot force trades, i must take them as they manifest themselves. I think the main reason why this market has been stingy is because of the lack of volume. No volume begets choppy markets and over trading choppy markets is suicidal. Need the volume to come back!

Wedge/Backtest Update: Mild Boune Off The Falling Wedge

Trade Taken Today

Trading the open reversal. There were much better trades to take but VNO caught my eye. Check out the 5 min charts at the open in FCX and BXP. These were sweet reversals there. If you do enough of those, you'll score some nice reversals eventually.

good luck.

Wednesday, January 7, 2009

Advance Decline Chart For Lelio

This chart is courtesy of another trader buddy. hope it helps you.

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