Trend is my friend, now I met him

I have been on a losing streak, I know why. Because I have been getting into position pre-maturely, losing patience as I wanted to recover from my loses, but the loses keep piling up.

I noticed that I have not been able to identify the prevailing trend, I notice that I can't tell the trend is changing from price action and that is one of the reasons I lost.

Today, I found the proof. I entered 3 trades, 2 using my recent planning and 1 used MACD as a confirmation. And the last one worked.

Here is the deal, I have been too confident about my ability to tell the trend lately, but lost sight of the trend is in fact changing. The 2 lines MACD, is the one that I have been looking for, when the fast line is above zero, the trend is up and vice versa.

So, money wasted on my on arrogance.

New Price Pattern

Let's visit a couple of price patterns


Head and Shoulder, reversed, slated, on XLF, one of the dogs on the street. I broke out today off the resistance, I took the trade and stop loss at $27.82














Secondly let's see another popular pattern, cup and handle on yet another dog of the street, XRT, for the retail sector.





Broke out today, stop loss at $32.12









As for my other adventures, I lost out, I was bearish on the market, but it was a bullish day today on QQQQ, SPY and DIA. There is no trend yet but it seems to me market is bouncing back from the low on last Tuesday.

Identity Found

Fed announced another 50 basis point cut, everyone expected a big move. So I followed through with my plan, except I only have one open order for SKF in my IRA.

As for my small account, I did more study this morning and planned to trigger the trade when SPY moves 4 ATR on the 5 minutes chart and entered the order.

The Call was triggered and I watched the rally faded very quickly, so I closed the trade with $0.46 profit. It is a tiny profit but I found that it is not so hard to trade again.

My biggest wins are day trading RUT, and those are the ones I am the most comfortable with.

Beautiful Flag

Being able to admit that I made a mistake is a virtue of mine. As this case in point.

Just look at this flag of JPM, can anyone tell me this is not SHORT TERM Bullish?

Yes, there are a lot of people will tell me that. But I will tell them, hey buddy this is MY money!

the stock went from 37ish to 47ish in 6 trading days!

I asked my self now, why do you think this is bearish!



Game plan for tomorrow,
1) IRA plays:
1.1) long XLF when it breaks $29.19 after the fed announcement, stop at
1.2) long SKF when it breaks $104.86 after the fed announcement
1.3) long SPY when it breaks $136.65 after
1.4) long (again if got stopped tomorrow) SDS when it breaks $63.33


2) Option Plays, just on SPY and DIA
2.1) long SPY ATM call, when it breaks $136.65 (or tomorrow's high)
2.2) long SPY ATM put when it breaks below $134.68 (or tomorrow's low)
2.3) long DIA ATM call, when it breaks above $125.10 (or tomorrow's high)
2.4) long DIA ATM put when it breaks below $123.14 (or tomorrow's low)
2.5)stop at -$0.5 of the trigger and target +$1.00 of the trigger

Indian Food

We are going to have indian food for lunch and I looked at the chart for JPM, it is actually a bull flag. I don't fight the tide and I don't go against the trend, now the short term trend is UP. The increased in implied volatility due to tomorrow's Fed Announcement certainly helped on my exit, I only lost $0.90 on this trade.

So I closed my put on JPM and have a good lunch. Nothing more to worry about for tomorrow's Fed announcement.

There is no analysis in my part, I follow the clinche' trade what YOU see. Technically analysis is a completely subjective art/science.

Anyway, my gold are still holding up pretty well, but I longed SKF and SDS Monday, SKF already stopped out and SDS is getting there pretty soon.

Position size, position size.

Biting the bullet

Closed my SPY long position today as the doji right at Fibo retracement, does not sit too well for a COUNTER TREND trade.

My GOLD are all doing good as I put on 2 more position on gold related stocks, AEM and BVN. I also longed a put on JPM, seeming it is not too far for a major resistance at $47, my stop is at 47.5 hope this works out. I am so nervous.



Plan your trade and trade your plan, I am adjusting my rule for entries. At resistance/support with a loser stop is actually my preference.

Next wave of Imports from China

Japan and Korea already exported their drum "gigs" for a few years, and it is now China's turn.

Look at the guy's arms, they are huge! As big as my thighs.

The gals must be doing something in unison.

I reminds me of the Rive Dance fever that once had.

To close, I hate River Dance!

Hammer time

Today is a strange indeed. open low, traded low in the morning and the fortune turned in the afternoon.

The rally started for a lower high is finally happened, seems like eternity . I am still very anxious about trading on my small account as it has dwindled to 25% of it original value since last Fed announcement on Dec 12. If I blow up this account, we would not have any money to trade, my wife warned me. It was the same situation last time and I turned it around with RUT options but I don't have this fortune this time. I am just too scare.

Can't miss out on this opportunity, I longed one SPY lot.












confirmed bounce and extra long shadow, it has a lower low from yesterday and closed higher than yesterday's high. This is an extremely reliable reversal candle formation.


As for the usual suspects for puts later once the market bounce DOWN! The candidates are running away, retail bounces up off their lows and financial are also bouncing too. MER even made a higher or equal low. The trend seems to be very shaky.

If I did not follow my rules....

I ignored my rules of entering the trade at the end of the day and I deserved it.

JCP May Put 37.5, entered 2.40
Stopped out at 1.675 in 20 minutes

JCP is not bounced yet, nor is it forming a topping. Why did I entered, because I was just trigger happy.

On a side note, as we see the retail stocks: JCP, AEO, GYMB, PLCE, COST and RL, they are all showing some strength. So I need to be extra careful on buying puts on these stocks.

If there is any conciliation, my GLD and ABX are holding up very well. I guess it is always easier to trade on a large account.

Election Year Effect

Dow Future was own 500+ points yesterday, bears were everywhere and today the Fed cut 3/4 points!


Let's stop and think, how many more rate cut can they do? I don't know, but I should be looking to lock in some long term loan soon, as the rate is so low. Almost like free money.

I have been watching the futures since 6:00 am CST. It struggled up and down at the closed level of yesterday. This market can drain a lot of people's emotion. So position size your trades and on do trades that your stomach can handle.

My stomach is not so great, so I can only trade at low volatility days. Such as a few months back.

Someday the market will be nice and trending again.

crash, plunge or ready for the bounce

Well I don't know even though some people do.


Last week, I closed 1/2 of my positions on PRXL and ABAX.

Long: PRXL, ABAX and GLD (got in at the support $86.50) , CASH! (> 90%)




I longed a put on MER and another one on GYMB. The MER put stopped out at 52 in 5 hours, which is very good. I still have the GYMB put, hopefully it will go my direction.

The last few trades, I have been entering at support or resistance. I am getting more aggressive on my entry because of the volatility. got stopped out, with less a dollar lost but still worth it.

Funny Observation over the weekend, I checked on the Dow Future on Saturday, it was up 400+ points to 12,635 (for a brief period after Friday's close) and now.....Monday 1:40 pm CST, it is down 520 pts at 11,580.

Wild run in wild market

Long a put on GYMB, it is on the resistance at 33.50, stop at 34.50, target at $27.

the 1 year chart is very bearish. Hope it work out.

Choppy market it was today.

Stopped out of WMS long few days ago and CF long today, thank God.

Entered ACL, WMS (again) and LKQX all confirmed bounce on the IRA.

Out for DIA

Well my DIA Call got stopped out at 126, it was a mistake from my part because it was a counter trend trade. I should not go against my friend, TREND.

Can't believe it happened so fast, my small account hast lost over 50% of its value in a month since the Fed Announcement.

Lessons learned, always hedge my position on volatile days like that, I may as well set some contingent orders in the system so when the index falls sharply I can get into some put right away and vice versa.

Luckily, my IRA is still holding up very well.

Had I been staying with those mutual funds, I would have lost a big chunk of my retirement in the last down swing.

Wise quote

according to a very smart man, Telecom is not going to be too rosy

and the smart man is yours truly

For the record Mike Huckabee is my man

Confirmed Bounce(d)

Got stopped out on my X put, and I amended my rules to get out on a confirmed hammer intra-day.

so I exited AZO put. lucky me.

Still lagging is the AYE call, hope it will come around.

DIA, first time ever trade DIA option.

As for IRA, here are my picks

WFR stop at $72.50

because the sytem does not allow me to enter a stop more than 5 dollars away from the current trading price.








ABAX, stop at $30.99

WMS stop at 31.75

Early self portriat

Markkus' early self portriat, taken on Jan 2008.

He was very proud of himself. I was proud of him too.

Friday

Forgot about Friday, I got stopped out on most of my OIL related stocks, I now only have CAM in my IRA.

Note: volatile stocks: more risk, more reward such as oil stocks lately

Getting back to action

I did not get good night sleep on Sunday and I felt pretty dismal on Monday. Looking at the chart of the 4 sisters, I was expecting a bounce. So I closed all 3 of my trades and all of them were Puts.

On the contrary, I longed PRXL on the confirmed bounce yesterday and I longed AYE today on the confirmed bounce.

AZO, CLF, MS

As the market open up high, I was glad and looking for bullish opportunities. But the bullish does not have enough legs. the market took a dive in the final hours.


I entered




AZO, Put
stop at 112, option: $2.4
Target at 107
















X, Put
stop at $103, option stop at $4.00
target at $9.6













AYE, Call
stop as shown,
Option stop at $1.2
option target at $3.8

Shopping Spree

at the end of today, I got into 6 positions. It was very painful to use the web interface provided by Chase.

POT and MON went hand in hand, MON went up $9 after earning, I got it very late and got only 50 shares, too risky. I got POT at noon, since then it was very tired and ran down hill for a while.

The others are pretty much Oil stocks, SLB, NOV, CAM. Those are my favorites before. Hope they start running again as the crude oil future hit $100.

As for CF, I don't know what they do, but it is pretty explosive. Again position size means small size.


Market is choppy, so they said, I think market is trending down with big range days, so the best way is to enter trades at the end of the day.






CAM












NOV









SLB









Here is an interesting trade on AZO put


first entry on the green oval, exited yesterday, today it starts to fill the gap, and I enter again, it worked!

It is almost filled the gap it had after earning. I made good on this one, now there is one more tricks I have.

Still in the trade, my first target is at $110, my next target is at $107




Entered POT Call at lunch, against my rules for bounce trades, and got stopped out at 2:00 pm. I deserved it.

Double Calendar

• Under 33% volatility, stocks with high volatility go wild
• $70+ stocks, (<$70 for single calendar) or ETF
  
• Max loss 25%
• Start taking profit at 20%, 1/3 at a time
  
• start around 40 days (30 days for single calendar), stay in the trade for 14 to 20 days
  
• 1> first 20 days --> adjustment between the short strikes and half way of break even at expiration, if the stock goes up to this adjustment point, move half of the puts up to the strike closest to the adjustment point.
  
• 2> second 20 days --> adjustment between halfway to break even and break even
• -->as it gets close the adjustment, take half off to the stock price (if the stock moves up, move the upper strike price calendar to at the money)
  
  
• To see the profit potential, move the months to front months on the trade tab
  
• use analysis tab for break even point 30 days from now.
  

Volatility: lower 1/3 of 1 year range, you want Volatility to go up, front month (selling) has a higher vol than the back front (buying)
Industry: don't want wecko
Price: $70+ or use ETF,5% last week, 10% last month, or 15% last 3 months
Earning: stay away from Earnings
Skew: day chart, week chart, month chart, must be less than 1 std-dev



Single Calendar:
Non directional, selling time and selling volatilities.
roll 5-15 days before the front month expires.
Never Adjust.

Patient is the virtue

Patient is an essential quality for traders, and I don't have enough.

the DE trade was very risky because I had my target retrace to $89 and I entered at 93.5. A quick market action today dropped the stock below $90 in a jiffy and I got stopped out.




Not too bad, because my puts are doing alright today,