Month: November 2012

Interesting price breakouts for Nov. 19, 2012: $ARMH $V $JPYUSD $6J_F $FXY $BIDU

Not a word on $AAPL, everyone has covered it and traded it and been hammered both ways, long and short on it. Been there, done that.

Some interesting price breaks on this very robust short covering/oversold bounce day, after last friday’s power-dive and slingshot blast upwards for $AAPL and the markets overall.

Getting a “handle” on the potential bottoming and rise in Natural Gas: $NG_F $UNG $FCG $ECA etc

It maybe just a lot of hot air, but is natural gas forming a handle to follow a 10, 11 month long “cup”/ base? I’m not confident a chartist-mapmaker, and I prefer to follow prices and wait for another breakout to new highs, sensing the “widow-maker” may have killed off all seller/bottom finders, but I wait for prices to break out above $4, give or take (hopefully not the latter from my principal) five to ten cents. Won’t be easy, but it’s straightforward.

Fake It …. until you become it, a TED talk by Amy Cuddy about body language & “power”

Interesting price breakouts as of Nov.13, 2012: $DDS $HD $KFT short $AXP $POT $WFC $ESRX

NOT many real longs in this “cash is not trash” space.

$DDS $HD $KFT

Uncle Sam’s paper is golden here:

$ZN_F $ZB_F $US_F

Sales and shorts abound:

Some serious 200 Day action here:

$MSFT $WFT $INTC $HPQ $MBI $BIDU $NTAP $OXY $DD $FTNT $MCD $DLTR $DVN $GSK $MCHP $CTXS $APA $KWK $VLY $TSL $GDP $AMSC $WCG $DNN $LOGI

And we have the headline names, with 100 Day+ movement:

$AXP $POT $ESRX $WFC

One thing that sticks out from this smattering of tickers are big old techs, big energies and some former “growthy” favorites have all been selling off.

Grains for sale, including Rough Rice, which was a hot property in 2008/9,  now not so much. (Editorial, at some point I think there’ll be some serious manic sharp elbows over farmland, but that kind of idea is not for this specific post.)

$ZR_F aka $RR_F

Coffee sales are brewing

$KC_F

Trading with inspiration from Will Smith, courtesy of @SJosephBurns

Steve Burns’ how to list of trading success is applicable outside of trading as well, but this is primarily a trading blog. He’s hit the mark and I’m posting it to help keep me on my path.

http://newtraderu.com/?p=2358

A wonderful “How to succeed as a trader” LIST BY STEVE JOSEPH BURNS AS FOLLOWS, but you can substitute “trader” with some other word for one’s dream/goal:

  • You have to love trading to do the work that takes you over the hump to winning.

  • Successful traders are not born, they are built through hard work and discipline.

  • Trading is not complicated, discipline, perseverance, risk management, passion, and a winning method that fits your personality is all you need. If you have them you will win, if you are missing one you lose.

  • Where you are currently as a trader is not where you have to stay, the right homework done with an open mind can move you into a different place.

  • Trading skill is built through work ethic.

  • You must dedicate yourself to winning at trading. Every day you improve by working at it.

  • You win by working harder than your competition.

  • How do you win at trading? One day at time making great decisions day after day.

  • There must be deep personal meaning to your trading. Financial independence, providing for your family, wealth, you must have a driving force.

  • If you want to be a successful trader you must believe 100% in yourself that you will succeed. This is the first step.

  • Traders should just plan 100% on being successful in trading a plan B just distracts the trader from success.

  • You have to believe you will end up in the 10% of winners, this has to be a solid belief you can not waver from.

  • When you decide to be a trader you have to believe that only time separates you from your goal.

  • Don’t be realistic about your trading be unrealistic and plan to win and win big.

  • Traders must guard their minds carefully, beliefs will come true.

  • Choose to be in the top 10% of traders, decide where you want to go.

  • To win at trading you must focus on it, be obsessive with your heart and creativity.

  • Let the fear of failure motivate you to do the work to succeed.

  • Don’t ever let some one tell you that you can’t succeed, guard your dreams.

  • Do not stop until you win and win BIG.

Interesting Price Breakouts as of Nov. 7, 2012: $SPY $CL_F $AAPL

This is about mostly price breakdowns. It was just twenty-four hours ago, during Election Day, that the markets went promptly bananas and “bullish”, where crude oil futures went to “plaid”, zooming upwards of $4+USD / barrel during the day and then collapsing overnight, creating a new low as of this posting. Apple, AAPL, continued its decline as well, along with many other leaders and momentum stocks. The “softs” also went softer, and sugar, SB_F continued its decline, along with cotton, etc.

But it has been a nutty trading season, filled manic sessions, de rigueur for a market riddled with a bipolarity founded upon a persistent developed world sovereign debt crisis, HFT meddling and central-bank arrogance. (Apologies for the micro-editorial.)

On watch will be precious metals, although many commentators observed that the gold miners have been percolating (just like coal and financial issues), but a “baby  out with the bathwater” distribution scenario has emerged, and the most liquid issues are being sold off, and the volumes are there to establish this is a time for a lot of profit taking, cash raising.

Despite all that, there are still hot issues, in homebuilders and financials, but in a general distribution/liquidation, there’s time. Cash is not trash, and it doesn’t hurt to have ammunition to make new attractive buys when appropriate, during hysteria and/or the within the midst of apathy (hello Japan?).

Charts below.

Trend Trader Richard D. Donchian’s 20 Rules (October 1978, Commodities) by Barbara S. Dixon

Barbara S. Dixon,  a protege of trend trading pioneer Richard D. Donchian, wrote an article, revisiting Richard Donchian’s 1934 “Twenty Trading Guides” for stock market traders. Donchian had started a “Trend Timing” letter at age 25 in 1930 for Shearson (which was one of many firms gobbled up by Sanford Weill, during his empire building phase, which culminated in Citigroup). Donchian, revisited and reviewed these rules in 1966, and found they applied to commodities as well. I am transcribing these notes for myself from that article.

Donchian revisited these rules 34 years after the 1934 publication, and it seems they still resonate for traders, 34 years after Barbara S. Dixon’s 1978 article.

General Guides:

(1) Beware of acting immediately on widespread public opinion. Even if correct, it will usually delay the move.

(2) From a period of dullness and inactivity, watch for and prepare to follow a move in the direction in which volume increases.

*(3) LIMIT LOSSES, ride profits – irrespective of all other rules.

(4) Light commitments are advisable when a market position is not certain. Clearly defined moves are signaled frequently enough to make life interesting, and concentration on these moves to the virtual exclusion of others will prevent unprofitable “whipsawing.”

(5) Seldom take a position in the direction of an immediately preceding three-day move. Wait for a one-day reversal.

(6) Judicious use of stop orders is a valuable aid to profitable trading. Stops may be used to protect profits, to limit losses and to take positions from certain formations such as triangular foci. Stop orders are apt to be more valuable and less treacherous if used in proper relation to the chart formation.

(7) In a market in which upswings are likely to equal or exceed downswings, a heavier position should be taken for the upswings for percentage reasons – a decline from 50 to 25 will net only 50% profit, whereas an advance from 25 to 50 will net 100%.

(8) In taking a position, price orders are allowable. In closing a position, use “market” orders.

(9) Buy strong acting, strong background commodities and sell weak ones, subject to all other rules.

(10) Moves in which rails (now the Transportation Index) lead or participate strongly are usually worth following more than moves in which rails lag.

(11) A study of the capitalization of a company, the degree of activity of an issue ( a varying factor), and whether an issue is a lethargic truck horse…or a volatile race horse … is fully as important as a study of statistical reports.

TECHNICAL GUIDES:

(12) A move followed by a sideways range often precedes another move of almost equal extent in the same direction as the original move. Generally, when the second move from the sideways range has run its course a counter-move approaching the sideways range may be expected.

(13) Reversal or resistance to a move is likely to be encountered (a) on reaching levels at which the commodity has fluctuated for a considerable length of time within a narrow range in the past, or (b) on approaching previous highs or lows.

(14) Watch for good buying or selling opportunities when trend lines are approached, especially on medium or dull volume. Be sure such a line has not been hugged or hit too frequently (see Rule No. 4).

*(15) Watch for “crawling along” or repeated bumping of minor or major trend lines and prepare to see such trend lines broken.

*(16) Breaking of minor trend lines counter to the major trend gives most other important position-taking signals. Positions can be taken or reversed on stops at such places. (This is possibly the most important of all the technical guides).

(17) Triangles of either slope may mean either accumulation or distribution, depending on other considerations, although triangles are usually broken on the flat side.

(18) Watch for volume climax, especially after a long move.

(19) Don’t count on gaps being closed unless you can distinguish between breakaway gaps, normal gaps and exhaustion gaps.

*(20) During a move, take or increase positions in the direction of the move at the market the morning following any one-day reversal, however slight the reversal may be, especially if volume declines on the reversal. (This has proved to be a very valuable guide.)

According to Dixon, Donchian observed that the rules I’ve footnoted with a  “*” (rules 3, 15, 16, 20) were most helpful.

Some explanations of Donchian’s definition and usage of “counter-trend”:

Counter-trend:  A sequence of at least 4 days. Traders entry could be on a stop as the price crossed the extreme of the fourth day or on a stop at the extreme of the move. Stops would be placed just under the low of the bottom day or just above the high of the top day.

IF the counter-trend was steep, the price sequence would require more than 4 days.

Even if a steep four-day counter-trend emerged in the direction of an existing trend, it might prove a warning that the rate of price change might be slowing.

Longer counter-trend sequences could provide useful market signals. When longer counter-trends or consolidations are followed, they should be monitored IF the speed of the correction proves inferior to the prior leg of the major move.

Volume: Watch for low volume on “corrections” and for high volume and fast momentum on breakouts. These observations support the notion that the major trend continues.

Interesting Price Breakouts as of October 31, 2012: $AUY $URI $WYNN $USG

Interesting Price Breakouts as October 31, 2012

Long side/Breakout:

$KFT $NFLX $HOC $AUY $LVS RMYL $SO $URI $ADBE $DFS $TSN $SLM $WYNN $EXPE $QID RFII $CRUS $USG $LNG $EOT $CSTR $CTRP $MWA $CBL $PSQ $BECN $WHR $MCO $DDD $KMX $AEM $BG $SRE

The big surprise is Netflix $NFLX, but you can thank Carl Icahn for that one.

I notice infrastructure and housing plays in the mix, as well as big miners.

twinkling of future longs?

$AUDUSD $6A_F $NZDUSD $6N_F $ZW_F $ZM_F

Sell/Short side/Breakdown:

$GE $PFE $CSCO $WFC $DIS $HPQ $XLK $SD $RVBD $AAPL $TLM $PBR $AA $XLB $STX $VRSN $NTAP $HAL $WFT $OXY $XLV $JCI $BHI $ESRX $CLF $SLB $EWT $DD $CA $NOV $NBR $IVV $DRYS $RSX $OIH $DNDN $EPI $WCG $RDC $UNG $MMM $MOS $UMC $CELG $ALXN $DECK $CTXS $EWW $MON $DVN $NYT $QLD $ABB $ONB $HSY $SINA $JAG $RRC $RHT $FNSR $ASNA $DKS $IBB $IBN $REGN $LULU $BUD $FMX $IHS $SWI $EQIX $CVBF $EGN $DEM $SAVE $WWWW $SPIL $DISCK $XPH

Basically, the kitchen sink. It’s liquidation and consolidation time. Many recent leaders and high flyers of the O’Neill/IBD/momentum school have broken and are selling off. And the softs are selling off.

twinkling of more sells?

$6M_F MXPUSD $CT_F $BAL $KC_F $OJ_F $NQ_F $QQQQ $QQQ