Market Flogging

Timing is everything

2007-05-17T09:45:00.000-07:00

I picked up PDS towards the end of the day yesterdsy, and right about at the lows. Now today it is up nicely this am. I don't often catch good timing like that, but I'll take them when they come. Of course, it means nothing at this point, but as of the close tomorrow it does. Tomorrow is moving day after all.

I also got KLAC stopped out. I haven't figured up the loss there, but it wasn't too bad. I'll try to get some charts up tonight or over the weekend.

Feast to famine

2007-05-15T21:21:00.000-07:00

I woke up to a burning hot market and a portfolio even hotter. I had it up 1% at one point this morning. Then, it all went to poo. I wound up losing a smidge and the DJW5K lost a smidge more. I guess that's a win, but it doesn't feel quite right.

I didn't have enough dry powder for a full position today, so I didn't even look for opportunities. I'll see tomorrow if proceeds from my last sale have become available.

Down day all around

2007-05-14T23:00:00.000-07:00

Still, I didn't get anything stopped out. I snagged some NUE towards the close.

Not much else. I got all my stops moved up over the weekend.

I added another cafepress business tonight. It's a giftshop with t-shirts, coffee mugs, bumper stickers, etc. It's fun designing these things and coming up with sayings, etc, but I'm not sure I'm good at it. Here it is: Giftomatica

Big reversal day

2007-05-11T13:14:00.000-07:00

I ended up recovering nearly every dollar of yesterday's huge loss. I made 1.23% today. The DJW5K was up 0.98%, so I posted a 1/4% win on the day. Pretty good all around.

The big winner today was NVDA, up over 7% on a favorable earnings report/outlook.

I got busy working on my cafepress store and forgot to scan for a buying opportunity.

How come you haven't signed up for AGLOCO yet? If there was ever a no brainer, this is it.

Friday Morning Update

2007-05-11T09:16:00.000-07:00

HIMX ended up continuing on down today, so it got stopped outat -2.24% over 16 days. And it was looking so good prior to earnings release. Oh well.

As bad as yesterday was, today so far is almost as good. If this holds, I'll have made up most of my losses from yesterday. Except now I jinxed it. crap.

Ack! Hock - ptuey

2007-05-10T21:45:00.000-07:00

That was one ugly day! The DJW5K and S&P500 both lost 1.40%. I whooped up on them both, losing only 1.38%. Woot! Strangely enough, I didn't lose any positions. I came pretty close with HIMX dumping around 5% after copping to a bad quarter. I guess.

I found some shiny bits in the rubble and picked up a load of MU. Nice tight stop under 3%, which is required especially here since it really hasn't formed much of an uptrend quite yet. It has formed a butt, though.

So why did I buy MU here? Well, for starters, it recently broke a big ugly downtrend. It has put in a higher high and a higher low since breaking out. Finally, notice the huge red volume bars in early April. Those would be blow-off type volume bars. The last of the sellers have exited and we can now enjoy a nice, orderly ride to the moon. Enjoy!

NUAN and my watch list

2007-05-09T09:58:00.000-07:00

I was running late this morning, but took half a second to check out the ol' watch list. I found NUAN making a reversal off of what I hoped was support at 15 which is roughly the hard trend line. I placed my order an dit has continued up a bit from there. It is a very good buy right now. Stop is below 15.

Others on my watch list in various states of interest:
PIR
BAM
COG
AEP
FARO
DECK
ELN
CPWR
MU
PDS
NUE
SNDA

plugging away

2007-05-08T19:24:00.000-07:00

I feel like I'm just plugging away here, nice and easy like. I managed to eak out a little gain today while the market stubbed its toe a bit. I did lose one - IVAN bit the dust for a 3%ish loss. I couldn't find anything to buy.

The story on AH, and AGLOCO

2007-05-07T18:49:00.000-07:00

Turns out AH is being acquired for $88/share. That explains things over the past few days. The news was released this morning. I punted my shares at $87.35. A nifty little 21.53% earned over 6 days. Not too terribly bad for a week:) Timed that one well. Once an acquisition is reported, seems to me the upside is limited. However, if the deal falls apart, well, I won't be around to see that!

Two new additions: FLR on Friday and SVVS today.

In completely unrelated, but very cool news, I signed up with AGLOCO today. Remember AllAdvantage from about ten years ago? That's the group that distributed the downloaded advertisement viewbar that you'd download to the bottom of your computer screen. You'd then get paid simply for surfing the 'net. Better yet, you'd also get paid for four levels of referrals. So, if somebody signs up under you, you get paid for their surfing. If somebody signs up under them, you get paid for their surfing as well. And so on. Strangely enough, it worked! I actually got paid for surfing the net and referring others to the viewbar.

Well, AllAdvantage is back under the AGLOCO name. It's basically the same exact thing, only instead of earning cash right away, you earn stock in the company when you or your referrals surf. Then, once the company becomes cash flow positive, they'll start distributing the cash to their stockholders. They folded the tent last time I think because they owed members more money than they took in. The stock method should keep them in the game indefinitely.

Don't miss out on AGLOCO. It is super simple and a no-brainer. Once you sign up, you'll be given a unique identifier you can use to refer others up under you. If you find you don't like it for whatever reason down the road, just delete the viewbar and you're done with it.

The view bar isn't out quite yet, but the release is coming soon. Get signed up and build your network of referrals now and they'll contact you via email when they're ready to go. The site (with my referral code of course:) is here: AGLOCO

What's up with AH?

2007-05-04T08:31:00.000-07:00

Yesterday, AH raced up 9%. This morning it is up another 6%. No news. Hmmmmmm....

Picked up ABT and QCOM yesterday.

Quick update on Tuesday

2007-05-02T10:24:00.000-07:00

I was unable to post last night, so just a quickie catch-up:

Yesterday was not a good day. I lost UBB and QSFT. I also picked up IVAN. IVAN is a $2 with a good looking trend.

April results

2007-04-30T19:48:00.000-07:00

April proved to be an exceptional month for the DJW5K. It was also a very good one for me. The market put in a +3.77% month, while I posted +2.64%. I think the biggest reason for my deficit was the fact that I started the month with two positions, OI and DYN. Because my work involves the big tax April 15th "deadline" (EXTENSIONS, PEOPLE!!) and I'm responsible for managing the annual audits at the same time, as well as the Q4 close, I have little time for anything other than work. I went all but one day of February and all of March without adding a single position. As a result, I missed out on a decent portion of one of the hottest market months in a long time.

Since resuming trading in my IRA on October 1, 2006, I've posted an average monthly return of 1.99% vs. 1.65% for the DJW5K.

Winners vs. losers are still running at about a 40/60 clip with winners now returning more than 10% over an average 43 days held, while losers are returning just over a 4% loss over 11 trading days. The numbers continue to improve as the strategy matures.

May your breadth be minty fresh.

Last day of April

2007-04-30T19:27:00.000-07:00

Had me some activity today! Early on, I was up a fair bit, mostly on the strength of BEAV. BEAV apparently had the kind of good earnings that make the stock go up, not down. It held on in the late day market drop to post a very nifty 5.53% gain. All told, I lost just over 3/4 of a percent, but about .16% less than the DJW5K. That served to narrow the gap a bit in April, but I still took a defeat for the month. More on that in my next post.

I lost three today - AGU this morning, IR and DYN. AGU posted a nice little 4.97% win in 20 days and DYN was a very satisfying +35.61% over 69 days. Not too shabby.

IR, on the other hand, posted a -2.24% loss over 7 days. If you're going to lose, lose as little as is reasonable as quickly as possible. IR did that. Still, given how I pumped up the chart formation, I am disappointed with its performance. Goes to show why I don't bother with different entry sizes depending on my expectations for the stock. Win some, lose some, cut the losers short and let the winners run. Done.

I bought AH at the end of the day.

Nice looking trend there. May it go on forever.

Moves for the week ended 4/27

2007-04-28T12:13:00.000-07:00

OI -7.99% SOLD
DYN +1.44%
CNW -0.26%
AGU -1.54%
ARW -5.09% SOLD
UBB -3.15%
DSTI -1.81% SOLD
MCHP +10.81%
ZMH +4.45%
NVDA +3.98%
TIVO -4.89% SOLD
BEAV +2.2%
MSFT +3.84%
CAT +2.9%
CG +1.56%
FPL +2.65%
IR +1.4%
HIMX +5.24%

I also had HLIT enter and exit the portfolio in one day for -5%.

Three new additions

2007-04-28T11:38:00.000-07:00

Picked up QSFT, KLAC and T today. All are in established uptrends, close to the trend lines. Stops are nice and tight and the risk/reward is excellent.

non-day

2007-04-26T21:15:00.000-07:00

I had a non-day. non trading done due to a very busy day at work. Well, except for my lovely HLIT sale in the morning. Because of that one, I finished dead even with the DJW5K at -.02%. The rest of the portfolio did just fine.

Tomorrow is moving day. Stops get moved after the close. I love moving day.

hole in my pocket

2007-04-26T08:27:00.000-07:00

HLIT out. Held for one day, lost 5.5%. Rotten bastard!

Big day, but a loss

2007-04-25T22:17:00.000-07:00

Got beat by the smoking hot market today. My portfolio was terrific - up .72%, but no match for the .92 put in by the DJW5K. 13K for the DOW. Yikes!

I bought HLIT today. It released earnings after the bell. It was getting smacked down below my stop already after hours. Poop.

Lost TIVO today. I am not sure what I was thinking with that one. The uptrend it is in is pretty, but it is still in an overall downtrend. Then my stop was set probably too tight, just above the trend line. Why not drop it just a bit below the uptrend line if it is that close? Oh well. It may be for the best anyway.

Another one bites the dust

2007-04-24T19:03:00.000-07:00

Lost DSTI today. Lost 5.03% over 14 days. That one was going nowhere, so I'm happy to have the dry powder. Of course, I wish it would have turned on the gas, but I didn't think that was happening.

Work was too busy to look at things today, so no new positions. With today's exits, I'll have a little room to operate in a couple days. 5% positions seems to be about the right portfolio size for this trading strategy. I want to have room almost always, but not too much. The churn is about right with 18 - 20 spots available.

I took a bit of a beating today, losing almost exactly half a percent. The market lost a bit too, but not as much. Just about even up over the past two days now.

May the trend be your friend. or something.

Tuesday morning

2007-04-24T08:16:00.000-07:00

This morning, I'm getting whacked. Down about .75% at the moment, but that can change quickly. One morning does not a retirement make.

Two positions got sold today. After 85 days, OI was sold at a 36.15% gain. I was expecting this one to bust soon as the chart was looking like a top.

After 15 days, ARW was sold at a 0.25% loss. This one is disappointing as the chart lately was looking very good. They released earnings today, and while I haven't read up on the release, the headlines look very good. Whatever.

My favorite kind of day

2007-04-23T20:09:00.000-07:00

My portfolio gained just about a quarter of a percent today, and the DJW5K took a 17% hit. I love it when a plan comes together.

It was one of those rare days where almost everything I own went green when the market was down across the board. I had 13 winners against only 5 losers.

I didn't find anything I had to own today, so quiet on that front. I have room for one full position. It is a little frightening how many charts I looked at today that were just too overextended within their uptrends. That often foreshadows a large cash position in my portfolio for a length of time.

Stops for the week

2007-04-23T19:40:00.000-07:00

I set my initial stop the day I buy a stock, and I evaluate them sometime between Friday's close and Monday's open. As a trend trader, it really isn't important, or even healthy, for me to be messing with stops more often than that. Of course, this is dependant on the type of trend being followed. Traders looking to pull the trigger on a moving average crossover or something similar need to keep closer tabs on the price action. Me, I'm simply holding a stock until it reaches a price where I don't want to hold it any longer. Most often, my stop goes just below the stock's previous low within the trend. Sometimes it will go below a moving average line that has been acting as support. Still other times, I'll use a hard drawn trend line as my stop trigger. In any case, I put in a tight stop during the weekend, and with any luck, it becomes a loose stop by Friday when I tighten it up again.

Here's where I set my stops for this week:

OI - 26.00
DYN - 9.10 - NO CHANGE
CNW - 51.00 - NO CHANGE
AGU - 40.50
ARW - 39.25
UBB - 96.00
DSTI - 5.00 - this one is dead to me. I just pushed my stop up to where it can't go down much.
MCHP - 35.50
ZMH - 85.00 - NO CHANGE
NVDA - 29.00
TIVO - 6.25
BEAV - 31.50 - NO CHANGE
MSFT - 28.20
CAT - 68.00
CG - 73.00 - NO CHANGE
FPL - 60.00 - NO CHANGE
IR - 43.50 - INITIAL STOP
HIMX - 5.50 - INITIAL STOP

I was planning on adding charts, but for the life of me I can't figure out how to place them directly within or below text using the image feature. I'm bad at the internet. And I don't want to take the time and space to host them in my Photobucket account. At some point I'll probably buy a domain of my own and do this thing right:)

A small facelift

2007-04-21T15:33:00.000-07:00

I put some new information in the margin to the right. I'll update my latest monthly results versus the Dow Jones Wilshire 5000 results, and also my average monthly results vs. the DJW5k as well. Once I book 12 months, I'll keep a running previous 12 month average monthly return as well.

I'd love to keep a total return stat since inception (or inception of record keeping), but since this is an active SEP IRA that my employer and I are adding to, that isn't practical. My contributed capital balance keeps increasing. I may calculate and publish my IRR instead.

I'd love to come up with more ideas to make this blog more fun and interesting and importantly, useful for readers. I need to do a better job of explaining my picks - what I'm looking at, where my stop is, etc. Also, I need to follow my picks better. Sort of narrate my thoughts during the time I hold a stock. One problem is the charting. The charts are a useful visual tool, but, at least on my screen, they are a bit hard to see. I am using Photobucket to host my chart images. I think if I upgraded my account, my images would be bigger. Maybe there is a better option than this, but I think Photobucket is a very useful and easy tool. Plus, the free space is huge - something I'll never use up at my pace. It seems I've tried the image tool on blogger and didn't like it. I'll have to give it another try.

I'm also going to do a better job of linking to sites I reference. Plus, I'll soon put links to other trading blogs and resources I use. There are some fun reads out there.

I've generally had really decent results over the years, and I'd like for people who struggle to be able to use my blog as a resource in learning how to win. Trading stocks is a ton of fun, and there is no reason to lose money doing it. For the most part, trading is a mental exercise. When I've had losing streaks, it is usually because I've gotten emotionally involved in the process. That's a death sentence to the ol' bankroll. Picking stocks is not the hard part. Having a plan and sticking to it is the hard part. Hell, my stats show that I lose around 60% of the time I enter a trade. Yep, 60% of my trades are losers. If I were to focus on wins and loses, I'd probably have to go out of my mind! Instead, I focus on making money. As long as I make more with my few winning trades than I lose with my many losing trades, I'm a winner. My wins return over 9% on average over an average 42 day holding period. My losses lose just over 4% over an average 11 day holding period.

I'm not thrilled with these stats, and they will improve over time. These are over 132 closed trades since June 1, 2006 when I started trading for myself in my IRA. I'm trading a slightly different technique than I have in the past, and it took me a while to settle in. I was horrible in the beginning, and my stats are skewed down as a result. I'm not quite sure where I'll settle in, but suffice to say, the trend is positive. No pun intended as I am a trend trader:)

Too hot to handle

2007-04-20T18:26:00.000-07:00

Well, things stayed green today, and pretty nicely too. Unfortunately, my portfolio gave up some from the morning and got whacked by the DJW5K pretty good. My junk put up just under 1/2%, which is a very good day generally. The market, however, managed .9%. Strange how I'd rather beat the DJW5K than finish green. I'd almost rather lose less than the market than win less. It all makes sense to me!

I picked up another one towards the end of trading - another little guy, HIMX.

Given the price and volume action lately, I'll put a tightish stop at about 5.40 or 5.50. This is not a perfect chart, but I like to gamble on these little guys, so there it is.

I've updated the current portfolio in the right margin. I don't keep weekly stats, so I don't know what the value change to my portfolio was, but it was positive. I need to decide what sort of information I am going to disclose here. I think I'll start a running monthly average/12-month return. I don't think I want to get into weekly returns like a lot of bloggers do. It just seems so meaningless. We'll see. Plus, I don't have much time to devote to the blog. I have to earn my food outside my house, and I have a very long commute. Once the kids are down for the night, there just isn't much time left.

I would like to do a better job of keeping tabs on what I own and why. The biggest reason for doing this is so I can look back later and see what I was thinking, what worked, what didn't, etc. Plus, it is fun to go back and look through history. I like going through all my old poker blog posts on occasion. I mostly laugh at myself how stupid I was at the beginning. What a mental game that is. Also reminds me me how soft the games were a few years ago.

I wish I would have posted more in my flying blog. I'm not flying much at all these days, so I don't update it. I wish I would have had that blog up while I was going through flight training. I have a bad memory, so I know I've lost a lot of that time. At least I wrote up a few of the more important flights.

IR - when, not if

2007-04-20T07:04:00.000-07:00

I almost bought IR yesterday. I will buy it at some point:

My favorite chart is the ascending triangle within an uptrend. This very often is an explosive continuation pattern.

Well, I just checked the chart again, and it is moving back up above the resistance line. I pulled the trigger. I'm really kicking myself for not buying it yesterday with very little risk as the stop would be very tight. Now I have a much looser stop. I could set my stop just below the resistance line as it should now act as support, assuming we close above the line. However, I've often found these charts keep trading the trend, meaning the price could dip below the line, but form a higher low. In this case, just above the trend line would be a perfectly acceptable bottom. In that case, my stop is set at 43.50 - 43.75 or so, giving me just under 5% risk on a chart that is moving at about 3.6% or so per month. Not the worst ever, but a little more spread than I like. The chart is just too good though, so I don't want to miss it. I'm willing to gamble a little here.

The market this morning is the exact opposite of yesterday's morning. Almost everything I'm looking at is green. On Fridays I usually expect a selloff of sorts towards the end of the day. No telling how we'll finish up.

All's well that ends well

2007-04-19T18:58:00.000-07:00

After a pretty bleak looking morning, my account finished at just about dead even on the day. The stinking DJW5K lost .2%, so not a disaster there either.

The charts I'm concerned about are DSTI and ZMH. DSTI is just not legging up like it is supposed to. ZMH put in an ugly bar with volume today and looks like it could break down.

Thursday morning update

2007-04-19T06:56:00.000-07:00

TER reached down briefly to my stop level yesterday and got sold. Then it turned around and spent the rest of the day climbing higher. It is up again today when everything else is getting splattered. Oh, how I hate that.

The market is looking very weak this morning, and my portfolio is looking a bit weaker than that so far. You never know with the first half hour though.

I had to open a google account to access my blog today. Then I had trouble logging in because of password issues. Seems google doesn't recognize me. This may be fun.

+ CAT, CG, FPL....- NVLS

2007-04-17T14:39:00.000-07:00

Added CAT yesterday and CG and FPL today. NVLS was stopped out today for a 2.2% loss. I took a hit of -.24% today. Most of it was NVLS before getting sold and DSTI, which shaved a nifty 4.5% of its value today. Those little guys are either very good or very bad for a day's performance.

I need to jaz this place up a bit. I think I'll try to add some stats along the left side. Maybe a current portfolio with Friday closing gain/loss information along with some total gain/loss information for the portfolio. As it is, this thing is a total mess!

Mr. Softie

2007-04-15T08:52:00.000-07:00

I bought Microsoft Friday. Take a look at the chart:

MSFT has finished retracing it's last upswing from June '06 to January '07 and is now beginning another uptrend pattern. Also note the two trend lines I've drawn on the chart are parallel lines. They don't look parallel because the chart is drawn on a log scale, but they are. Are the same uptrend forces at play again? I don't know, but the available tight stop below 28 makes this a good risk/reward trade.

Happy Trades

heh heh heh heh .....BEAV

2007-04-12T19:25:00.000-07:00

Bought BEAV today. Looking at it now, eight hours later, it doesn't look as good, but still not bad.

I have my stop set below 31. The volume the past two days leads me to believe we're ready for the next let up. However, looking at the chart now, this guy has a history of trading below previous lows in the uptrend. Just not quite as clean as I like, but I'll give it a shot.

Today's bredth was excellent. Only OI, DYN and TER finished lower today, and all just by a touch. The market still managed to out-do me by .12%. The penalty for not being fully invested. Some days it works to my advantage.

A couple new ones

2007-04-11T22:16:00.000-07:00

Picked up NVDA and TIVO today. TIVO is another sub-$10 stock. I like to have a few of these going whenever possible. Big percentage moves are easier to achieve with the little guys.

DSTI tried to begin a new let up today. It had the volume and ran up nicely, but fell back again. Hopefully it can give it another go tomorrow.

I have room for another five or six positions. That would give me 18 or 19 total.

Pluses and minuses and ACLS poops

2007-04-10T16:19:00.000-07:00

Yesterday I picked up two new positions - MCHP and NVLS. Today I added ZMH. ZMH is definitely in a more mature trend than the others, at least since a somewhat major consolidation.

I lost ACLS today -6+%. This one was looking exactly perfect. It had just broken through long-term resistance on big volume. I had it prior to the breakout in anticipation. Victory was mine! Well, yesterday some asshat at Lehman downgraded the stock. I'm sure there was a very good reason for the downgrade. I still get to be bitter and hate that guy because I can.

I wish there was some way of knowing when analysts are going to potentially pork me in the butt. Sort of like an earnings announcement. It can be roughly estimated I suppose, but I'm not in this as a second career. Upgrades and downgrades are random noise that help me and hurt me (hopefully) equally over time. Given trends, it should even net help over time. I also would like a little gadget that will tell me whether investors will care about the downgrade or not. Sometimes stocks are downgraded and nothing happens, or they go up anyway. Not so with ACLS.

Anywhoo, the net on the day was +.05% vs +.26% for the DJW5K. Most of my stocks look to me like they are ready for a leg down on the uptrend, so I may underperform for a bit.

Update

2007-04-07T11:50:00.000-07:00

I'm back! Work took over real life for a few months, but things are settling back down. I didn't totally abandon trading during this time, but I definitely slowed way down.

Here's what I currently own:

OI
DYN
CNW
AGU
ACLS
ARW
UBB
TER
DSTI

I bought OI on December 27, DYN on January 24 and the rest on April 4. Actually, DSTI was April 5. I bought a total of two ill-fated stocks on February 23 and nothing in March. That's it. OI and DYN are both up about 43% or so, and the others are too new to matter.

Here are my monthly results since November:

Decmeber -1.2% DJW5K +1.00%
January +4.38% DJW5K +1.63%
February +0.54% DJW5K -1.51%
March +0.85% DJW5K +0.96%

Since October 1, I'm averaging +1.88% per month. DJW5K is averaging 1.30%.

I cashed in my chips on the trading account. I quit the futures and started trading equity options with some success, but I got fed up with Interactive Brokers not working correctly and gave up on it. I could not update my conditional stop prices. The update just would not take. I tried on two different computers - home and work - but no dice. Support boy over there insisted it worked fine for him, which it probably did. Doesn't help me though. That whole site just drove me nuts though. It is a Java interface and it sucks. And then Java started crashing my computer because it doesn't play nice with spysweeper, etc. They do have a bunch of great products to trade and the price is right, but I'm no good at trading all that stuff anyway.

November totals

2006-12-01T19:42:00.000-08:00

Internet has been down for a couple days here in the ol' casa. Back up now.

November was shaping up to be one of the better months of my IRA's life. Then the market took a giant poop on me. It still ended up decent at +1.97%, but I was targeting 4% much of the month and had been flogging the market handily. In the end, though, the DJW5K ended up squeaking out a slim win with a 2.08% month. Bummer. I'd rather lose money and beat the market than make money and lose to the market for some reason;))

Things are not impressive in the trading account just looking at the numbers. I was down a total of 13.64%. And I needed a furious rally yesterday to be that good. My account gained almost 20% yesterday alone. Wheat, Gold and the 30 year bond were all up nicely. All three contracts are in the black, although wheat is hanging by a thread. I wonder just how high the bond can go. The face value is 100K and it is trading close to $115 right now. Rates are in the toilet. Time will tell.

So, even though the loss this month looks horrible (and it ain't great!) I feel pretty good about the trajectory. My account lost only about $1,600 as of yesterday from October 31, and I made up a couple hundred of that today. That could come quick with futures. Yesterday I improved by $1,600 in one day alone.

I need to crunch numbers, but I'm certain the loss is made up of failed daytrading goof-around trades. Those days are over! I'm sure I could learn to be good at day trading, but I have no desire. I really don't enjoy it much at all. It just doesn't fit my personality or my temprement or something.

The IRA has been seeing a lot of chop the last week or so. Positions are being cut ar a more rapid rate than I have been seeing. As (if) this continues, I would expect to see fewer and fewer opportunities out there and I'll maintain a higher cash balance as a percent of the portfolio. Of course, this could also be a choppy consolidation period prior to another move up. Either way, I'll be ready to do the right thing.

Ho Hum day

2006-11-28T20:18:00.000-08:00

Not much to report today. Down just a touch all around. It's always disappointing not to keep pace with the market, but there are those days.

I did lose two positions today. BABY exits with a 9.46% gain in 36 days and GCI leaves losing 0.73% in 15 days.

Good luck tomorrow. I need my futures to make me some money!

Whack!

2006-11-27T20:26:00.000-08:00

The market got whacked today, and I got splattered. My IRA lost over 2% today. One day can sure take care of a great month!

Three positions bit the dust - INFY, BLL and the grandfather of the portfolio finally gave it up. CXW lasted an all time best 94 trading days (actually a bit less as I don't bother adjusting for holidays) and earned 22.14%. Very well done! INFY gained 3.18% in 26 days and BLL lost 1.64% in 12 days, which happens to be the average holding period for losers. Winners are held 36 days.

The futures performed a bit better, basically breaking even on the day.

Rolling Over

2006-11-24T20:50:00.000-08:00

I rolled over my three futures positions to a later month yesterday/today. I figured trading up close to the expiration date would be fine so long as the volume and spreads stayed reasonable, but my broker required them to be rolled much earlier. No biggie.

The one thing that went awry was my wheat trade. It traded up to my stop, so I ended up turning from short to long. It is basically hovering right up barely above the downtrend channel, so hopefully it was enough of a move. We'll see.

the 30 year bond and gold did very well today. The dollar weakened considerably, which helps there. Speaking of the weakening dollar, I really missed a great opportunity to get some of my account back last night/this morning. I was looking at the EUR/USD chart and wanted to take a long position anticipating a breakout from a long consolidation pattern. I didn't. Guess what? Big breakout. Would have scored around 100 quick pips for a very nice one-day haul of $500 or $1000, depending on how much of a position I would have taken. Either way, huge chance gone. I may still try to take a position on a pullback to support, but I don't know. I'm really thinking I should just stick to futures and see what happens. Here's the chart:

Ignore the double line at the right edge. Not sure why it is on there twice.

Nothing happened with the stocks today. I'm at just about 3.5% gain for the month of November so far after a month over 4% in October. Not bad without leverage I'd say. At some point things will slow up and I'll be hammering the market with cash:) Until then, I'm not calling a top. I'll leave that to the others.

DOW Down!!!

2006-11-22T08:26:00.000-08:00

Alright, the market is doing just fine, but DOW got sold yesterday. I figured that ticker couldn't fail, but it eventually did. I did make money on it though - about 2.6% in 32 days. Not bad.

I am now "all in" with my futures trading account.

Yesterday, I picked up two long positions: December Gold:

and the December 30 Year Treasury Bond:

It is nice to get this diversification into my overall plan.

I'm taking a day off from work today, so I'll be able to pay a little more attention how the swings are. Although today will no doubt be a very light volume day, so it really doesn't mean much I guess.

October numbers

2006-11-18T10:51:00.000-08:00

Okay, I did save my October ending balances. Here they are;

IRA +4.78%; Trading +7.22%; DJW2K +3.62%

As you can see, I pretty much crushed that particular month. The flogging has continued in November so far in my IRA, but I'm getting pretty much destroyed in my trading account. Again, that's because of a steep learning curve trading new markets and new techniques. For instance, I discovered that my day trading learning curve likely augers straight down into mother earth.

The IRA Top3 for this week:

At #3: AMZN +30.05%

At #2: CHB +30.11%

At #1: LSI +32.39%

Also doing nicely are:

ORCL +27.19%
CXW +26.15%
PCAR +21.60%
XLNX +21.21%

A new addition on Friday was COST. Now everybody go buy a six gallon tub of whipped cream and make me happy!

EMA

2006-11-16T22:15:00.000-08:00

I've decided to abandon stiff trend lines as a timing device for entries and exits. Instead, I'll be using price as it relates to exponential moving average (EMA) lines. I'll still use the rigid lines for general slope evaluation to make sure a stock is trending sharply enough to make a difference over a relatively short period of time (less than a year), but it just seems too - I don't know - 'artificial' to use as an exclusive tool. With the EMA, I don't have to try to figure out how to handle a stock that has broken up and out of its channel. Price movement in and of itself has a much more prominant roll to play now, which is the way it should be. No more locking myself into a maximum average growth rate over the time I hold a stock. They now have a chance to improve themselves.

There is no one-size-fits-all EMA to use. Different stocks (and markets) tend to follow different time periods. However, I have pretty much settled on a 23 and 30 day combo scheme for entry and exit timing. In a nutshell, if a price bar closes above or below both lines and then confirms its intent to stay on that side of the lines the next day by moving higher (above) or lower (below), I buy or sell. Before I buy, I make sure the price has a history of respecting the lines.

Why 23 and 30 EMA lines? Well, it wasn't my idea. In a book I'm reading - "Trading Commodities & Financial Futures" by George Kleinman - the author discusses these lines as being a happy medium between a short-term line and a long-term line. Basically, using an intermediate line attempts to limit the wipsaws while not giving up too much of the trend at the extreme ends. I've looked at charts of a bunch of stocks and several futures markets with several combinations of lines and, while no combinations worked all the time (duh!) the 23/30 combo really does seem to be at the top of the crop. Also, for stocks, I've noticed that prices that break through the 23/30 band too often are not trending fast enough for me to want them in my portfolio anyway. So, if a stock needs a slower band to keep from wipsawing, I don't want it anyway.

In other news, I've requested a check from Scottrade for the whole balance. I owe my IB account another $5K plus the $330 of profit I made during the short time I had Scottrade funded. So, my starting total is about $10,300 or so. I'll post the exact starting total soon and I'll disclose real dollar gains and losses in that account. My IRA will remain a mystery.

So far, I have been getting drubbed in my trading account, mostly due to short term trading disasters. However, I have a good December wheat short cooking at the moment. It has the ability to pull my butt out of the deep hole I've dug for myself. With the sort of leverage I'm playing with in the futures market, recovery (or the opposite) can happen in a hurry. I need to add up the damage in each of the types of trades I've closed so far, but I know it isn't pretty. There will be few enough trades going forward that I'll be able to post almost real time.

Right now, I have one position. I'm short December wheat at 487, which means $4.87/bushel. I failed to let my system work and locked in a few hundred dollar loss yesterday. I had a stop set and it got hit. It was a stop that shouldn't have even been in play until the following day. That's the danger of small account trading. Survival plays too large of a role. Then the price reversed and headed well below my stop price. I re-established my short close to the market close, but locked up some loss. Today, however, was a very good day for the wheat bears.

One bit of IRA news - I'm kicking butt. I'm on a streak of several days where I'm outperforming the market. Some days by a very considerable margin. My unrealized gains are significant and with the EMA band working, are much more protected than before.

I did decide to cut BER loose. Upon further review, I should not have bought that one. It is moving way to slow and cuts through the 23/30 band far too often to be of any use. I chopped it early to make way for a better position.

Equities Good.....Futures Bad

2006-11-14T13:31:00.000-08:00

An early post from work today. My computer at home is cased under a thick layer of visqueen, or however you spell it. The painting seems to be dragging along painfully and now our heater is busted, so the paint won't dry. Some dude is trying to get it fixed today, but it is a day off for the painters.

I'm dabbling in the futures arena lately, as I've stated. It is going horribly horrible. I'm very willing to put in some learning curve time, but this is ridiculous.

I tried my hand at some trend following and then swing day trading in the mornings. Horrible.

I tried my hand at trend folliwing in the FOREX market. Horrible.

I tried and am still trying my hand trend following daily charts in the commodities markets. Horrible. This one I think I'll wrestle to the ground. It's just trading with close-in stops that so far have wipsawed me to death. That happens often with equities too. It is a battle of attrition. I'll KILL those bastards! I'm done with the short term stuff though. It isn't for me. I really found I don't like it much. If I wanted a second job I'd go get one.

Equities are more than awesome lately. I'm up a bundle in my IRA in the past several weeks. Today was a monster.

I lost CAG, but picked up BER and MET.

I just realized I forgot to capture my month-end balances on October 31. At least I think I did. I plan on releasing quarterly reports instead of monthly reports anyway. I know everybody with a blog likes to blast out monthly and even weekly totals, but I find them pretty useless for my gig.

Charts! All of my stock positions

2006-11-12T13:10:00.000-08:00

Here are all of my stock positions. I've indicated purchase bars with an arrow. These are in reverse alphabetical order.

I'm evaluating moving average lines for entry and exit signals. That's why the lines are drawn on all the charts. I haven't yet gotten comfortable that I've got the proper lines, and I'm even less comfortable that I can use the same lines for all charts. However, I've long thought the rigid trend lines and channels leave a lot of efficiency on the table. I think I'm closing in on a plan.

Delving into the world of commodities

2006-11-09T21:36:00.000-08:00

I bought my first commodities contract just a bit ago. I picked up a soybean contract. I'm keeping things very small and simple as I try to get the hang of this stuff.

One of the reasons I am gradually moving my trading account to IB is because I want more diversity in my trading portfolio. Instead of just stocks, which is 100% of my IRA at the moment, I want exposure to other markets as well. Commodities fit the bill very nicely. I'll be tracking a few grains, meat, metals, financials and currencies. This weekend I'll be filling in a chart with expirations, etc. so I don't do anything stupid! They are all different and they all expire at some point and need to be rolled over into the next contract month.

As part of my education, I read a book I bought more than a year ago, but never opened. Big mistake letting it sit there. It is an excellent read, and an easy read, too. I knocked it off in two nights. It is "Hot Commodities - How Anyone Can Invest Profitably in the World's Best Market" by Jim Rogers. It is not very technical in nature; rather, it is more the "whys" instead of the "hows" of commodities trading and is an excellent introduction to the subject. It is well written and a fun read. Highly recommended. I'm a technical analyst and the author is pure fundamentals, which I thought would be a turn off for me. I was wrong. I thoroughly enjoyed the book.

I'm now reading "Trading Commodities and Financial Futures" by George Kleinman. I'm not very far into this one, but so far I think I'm going to really like it. I think it will get into the technical aspects of the trade a little deeper.

This weekend I promise to update my stock portfolio and put up a bunch of charts. It's a bit crazy around the house with the painting going on, so I haven't had much time to sit at the computer lately. Work has also been keeping me busy through lunch, so I haven't been scanning for buying opportunities mush either. Hopefully tomorrow I can get some portfolio work done.

Woot! It looks like I'm in the green already with my beans:>) Here's the chart:

Nifty trend there. Hopefully I didn't buy the top of it. These things start trading a second shift at 6:31pm Central time until 6:00 am. They then shut down for 3 1/2 hours and trade again from 9:30am to 1:15pm Central Time. I bought on the night shift. I don't know if that's bad.

Pointless Bragging

2006-11-07T07:26:00.000-08:00

Just completed my first YM daytrade for +50.74 net of commission. This is fun stuff! Unfortunately, I got a bit of an itchy trigger finger on the sale and got out just a tad before I should have and missed out on another $60.

I've only allocated $10K to this account, so one contract is all I'm comfortable trading.

Almost time to get ready for the real job.

A few new positions

2006-11-06T22:03:00.000-08:00

Way too busy the past week or so. I just can't seem to get any quality time with ticker symbols. Work is busy and home is busy Tonight was tee ball signups for the oldest kid. It's freaking NOVEMBER! I really need a shorter commute. Like from my bed to my office across the hall for example.

Anyway, I picked up three new positions in my IRA today. No charts yet as I have not yet loaded them into my charting software: TOL, ROK, AMCC. AMCC is a little guy around three bucks.

I see my new IB account is now fully operational. I think. There is going to be a learning curve on this sucker. I'm planning to do a little daytrading of the YM in the mornings before work to try and get the concept of the site down. I have a methodology all worked out. I just need to see how the order entry side works out.

Okay, off to fill out my sample ballot and head to bed. I usually vote in the morning and then I'm pretty sure my real ballot ends up floating out in the bay by late afternoon/early evening.

Better lucky than good

2006-11-01T20:54:00.000-08:00

No time for charts or much of a narrative yesterday with Halloween or tonight. I'm getting the house ready for painters coming in the morning.

The lucky - yesterday I decided to liquidate most of my holdings in my trading account prematurely. Anything that was way up above the trend line got sold, and my short got covered - CRDN. Well, this morning, it gapped way up and ran from there. I booked a nifty little gain yesterday, but would have gotten sold above my stop price this morning. Lucky!

I lost ENER out of my trading account today. That leaves me with only BABY and LUM in that one. Friday I'll request a check and fund an account at IB. It seems the one issue I had making me doubt whether I wanted to go there is about to be resolved. That's a decent P&L tracker for forex trades. Unbelievably, they don't currently have one! It's coming.

I also lost UTX out of my IRA today. There was a lot of blood in my account today, but little in the way of guts. I didn't have time to look for any positions, but I'm perfectly content to hold cash for now until we know what's going on. will it be a choppy market, a free fall, or a bounce off the uptrend lines? Only one way to find out - go to bed!

One out, two in

2006-10-30T21:40:00.000-08:00

Had a really good day in the market today. Again, my IRA rode CHB up 5%. Bredth was excellent with only a few losers.

I don't have my charts working at the moment. I'll try to post all of my charts in the next few days. Tomorrow night would be a good night except for the fact that I'll be escorting the kids around the neighborhood begging for candy. Oh, those were the days. I mean, how cool is Haloween for a kid? Nowadays I gain ten lbs thinking about all that sugar!

One loser got punted - BC. It gapped down and out for a loss. I picked up both UTX and URI in the am. Both have very tight initial stops.

As of Friday after the close, my stop loss average is now a profit of over 1%. Things have really been hopping of late. I'm riding this market until it croaks. Then I'll get off the horse.

I found a site that allows a practice forex trading account - oanda.com. Go there and open a game account, or whatever they call it, and it tracks your activity with a pretty good p&l. Not bad.

Decision made on the trading account

2006-10-29T21:58:00.000-08:00

I have decided to move my trading account, and I think I've found a home. I've been reading up quite a lot on markets other than the US equities markets, and I want to take my game to those other markets. The one I'm most interested in is the forex. I think that currency trading stuff looks like a winner for several reasons.

First, it is a huge, very liquid market. No problems getting into or out of positions. Not that I'll be trading enough contracts of anything tradeable to cause myself problems, but still, it is nice to have lots of liquidity for pricing reasons.

Second, it is basically a 'round the clock market. I can set my longer term trending positions, but still trade shorter when I have time. My real work no longer has to be the obstacle to real fun.

Third is leverage. The broker I'm looking hard at provides 50:1 leverage in the currencies markets. I think that may even be pretty low, but it is good enough for me right now. That's a real turbo charger.

Finally, in looking at the charts of the major pairs, I think I'll be able to work up a trading methodology that should work well fairly soon. I think playing breakouts and waiting for trends to develop off the breaks will be a good way to go. These things seem to like to get a little run out of their moves before giving it up. With the leverage involved, smaller moves can be big winners.

Anyway, the broker I'm probably going to use is Interactive Brokers. In my research, all the big guns had good points and bad, but IB seems to fit the bill the best for me personally.

What I'm going to do is let my trading account liquidate itself naturally and send the funds in to my new account as they become available. Well, I have to wait until I raise $5K before I send in the first traunch since that's the minimum opening deposit, but after that I'll trickle the rest in.

IB also allows trading in just about any other market I'm even a little bit interested in, from futures to commodities. I think eventually I'd like to build up to where I'm trading trending positions across several different market. The diversification is far better than diversifying across industries in the equities market.

I'll still be trading equities in my IRA, so they won't disappear from my blog by a long shot.

What goes up....

2006-10-27T08:03:00.000-07:00

....must come down. I'm getting smacked around a bit this morning.

Lost two - ORB and HIG

I guess nobody liked the HIG earnings.

Once again, huge difference in fills. Had ORB in both Schwab and Scottrade accounts with 18.40 stops. Schwab filled at 18.40. Scottrade filled at 18.30.

A couple charts revisited

2006-10-26T20:09:00.000-07:00

I had no activity today, other than generally kicking butt. My positions in my IRA were up 2.3% and 1.84% in my trading account. Most responsible were LSI, fresh off a great earnings announcement, CHB and CHS.

I sold a position yesterday that I wasn't thrilled with losing - CVD. In looking back, I should have been thrilled to sell before something very bad happened, even before it did. I said the stock could go either way. I was wrong. Of course, it could have, but it had formed a very obvious descending triangle pattern. For some reason I haven't given them the respect I give the ascending variety. I've never been very good at short trades, at least in comparison to longs. It just seems the formations haven't held up very well for me. Well, this one did, and I'm lucky to have gotten stopped out yesterday:

I buy ascending triangles anticipating breakouts. This one would have been a good short yesterday.

Another sale just a couple days ago - CR:

This is the one I missed setting the stop on, and paid a big price yesterday. I sold about 2/3 of the way down the big black stick. Had I held, waiting for the stock to help me out and recover some of my accidental loss, I still would be below my selling price.

Tomorrow I have HIG, which reported after the close today. I thought the report looked good, but I think I've been clear on my report reading abilities. The stock was down a bit AH. We'll see what tomorrow brings.

Good Luck!

The earnings reports keep rolling in

2006-10-25T21:57:00.000-07:00

LSI reported after the close today and had a terrific quarter. The stock was up almost 8% in AH trading. I'm hoping for another runner tomorrow. AMZN played very nicely today, finishing up about 12%. It was a very nice day all around, except for my early morning non-stop.

I lost one position later in the day - CVD:

Technically speaking, I'm not too thrilled losing this one right now. The trend is clearly broken, but the stock is still fine from a technical perspective. We have a pattern that could easily break to the upside. However, it could also fall completely apart. They reported earnings after the bell that sounded pretty good to me, but as I've discussed, I don't put much faith in what I think about the reports. And I didn't read up on it too much. I do know the stock did not move AH. That might be bad, but who knows?

The difference between a real broker and a joke site? I had CVD in two different accounts with the same stop price of 65.00 on each. Schwab filled my order at 64.99. Pretty good. Scottrade filled my order at 64.86. What?! I'm searching for a new broker. I think I'll move to a direct access broker with futures trading availability. When I grow my account up some, I'm going to school on that stuff. In all the reading I've done over time, I think I've figured out that I'll enjoy it. Something that will let me place a freaking stop 15 cents below the current freaking bid would be a plus. Oh wait. That's EVERYBODY ELSE. $7/trade is good for this sort of broker, and if I didn't trade so much it would be fine, but there are better options out there.

I bought a stock I've had my eye on for a long time - ENER:

The stop is a little large at 6%, but the trend is strong, it is moving back away from the line, and the trend is 8%+/month. Hopefully I didn't kill it.

What the hell is up with this chart? All but a few month lines are missing. It bugs the crap out of me. I've seen a few charts recently on quotetracker missing every other month, which I hate, but this one is ridiculous. Are they getting mad at me for not paying up yet and not clicking 700 times on the TDAmeritrade adds? I'm either going to pay up at some point or move my trading account over to TDAmeritrade and qualify for a free ride anyway. Give me my month lines back!!!

Four days until November. I'll have a gigantic month if things don't fall apart on me now.

Well, I screwed that one up!

2006-10-25T07:28:00.000-07:00

I had a nice tight stop set on CR:

The stop was under 2%. Well, I recorded the stop price, but I somehow failed to actually send the stop order! I woke up about half an hour after the open to find I still owned this pig more than half way down the big black stick. The lesson: SET THE DAMN STOPS! The other important lesson is to sell. Don't wait for the market to correct the mistake. There may not be that magic bounce to bail me out. I sold for more than an 8% loss (sigh) and the thing just kept right on plunging. As I type, my loss would be approaching 10% had I held, hoping for some help.

As for earnings, obviously the CR numbers didn't blow anybody away. Well, except for me a little I guess. That one is down big. AMZN is up nicely as expected and CHB is up nicely, waiting for their conference call.

CR is KILLING me this morning. Oh well, it could have been a gapper with the same result. Lesson learned. Or mistake not to be repeated at least!

I almost forgot - GGC stopped out

2006-10-24T22:18:00.000-07:00

Can't keep a solid all-in portfolio of stocks for 24 hours:

My stop price was the day's low. pfffff.

AMZN - to the m00n!!

2006-10-24T21:46:00.000-07:00

AMZN up huge after hours. They "blew out" their quarter:

The spikey shadow is the after hours run. It is up over 38 AH. Will it open there and stay there tomorrow? Who knows, but it worked out for AAPL and XLNX recently:

I'd say I'm having a pretty darn good earnings season so far. I have a couple others with earnings released today - CR and CHB, but there wasn't much AH movement. We'll see what tomorrow brings. I don't pay much attention to what's in the reports since the information doesn't do me any good anyway.

I've noticed in years of watching charts that strong charts trending up tend to bring good reports and weak charts trending down tend to bring bad reports. Trends are trends for a reason. I hop on and let the price be my guide.

Hey, breakout players. Here's one for you - DOW:

Oh, how I do love these formations.

I think this weekend I'll post a chart of all my positions. At some point I'll have to figure out how to get a link up to yahoo quotes.

A couple low risk entries this morning

2006-10-24T07:34:00.000-07:00

Picked up BC and CR:

Both have stops around 2%. The BC trend is very quick over 7% and the CR is very nice over 4%.

I am now "all in". Unless I get stopped out someplace, I have nothing to do but watdch and wait.

New position this morning - INFY

2006-10-23T07:45:00.000-07:00

Picked up INFY just a bit ago:

I've been watching this one for a while. The last move up to the top of the channel was supported very nicely by volume. The stocastic stayed nice and high. It looks to me like there is more in this trend.

Almost hit a milestone this week

2006-10-21T07:55:00.000-07:00

I have almost reached "Stop Break Even" in my IRA portfolio. If all stocks were to stop out at my stop prices, I would now lose .08%. I thought I might get to a profitable situation after moving my stops this week, but not quite. Of course slippage makes the picture a bit worse. Assuming I don't have to add too many new positions next week, I should be in a profitable stop situation next weekend.

Net stop loss in my trading account is -1.92%, so pretty good there, too.

I added one new position to my IRA yesterday, GGC:

These are 1-year and 6-month charts. There is still some pressure from the long term downtrend line, but there is still room to run before we reach the line and my stop is less than 3%. Plus, the stock appears to have put in a bottoming "W" pattern in June following a huge volume three-day blowoff drop in price. We may be able to push past the downtrend line if we get that far.

AAPL came through today. XLNX tomorrow?

2006-10-19T20:13:00.000-07:00

AAPL swam today. It didn't move much off of where it ended after hours yesterday:

I'm pretty sure yesterday's long uper shadow was the after hours action.

Hopefully, XLNX will follow suit tomorrow. They released a good earnings report after the close today and increased over 8% after hours.

I lost two positions from my IRA today. SMH and FII:

I really thought I had something going with SMH. Failed breakout and failed trend. bummer.

I sold a position in my trading account - CHS:

I still hold it in my IRA as it didn't technically stop out. It sure looks like it shoule have to me, but the stop was set last Friday. Selling it in my IRA made way for a short - CRDN:

Nice stop here and it is moving down nicely after making a lower high. It is a nice quick trend.

Good luck tomorrow!

AMZN follow-up

2006-10-18T21:26:00.000-07:00

A little follow-up on my AMZN purchase from this morning. I don't have much time to write in the morning before leaving for work.

This is a more risky entry than typical for a couple reasons, but has a couple other good reasons to jump on now that I gave more weight. Here's the day-end chart:

First the bad. There was a huge gap back in late July that just filled last week. The stock retreated after filling the gap. Filling a gap and then retreating further is not uncommon, and would not be a huge surprise.

Also, the long-term downtrend the stock has been in since December of last year has not yet been broken. Notice how the gap was filled towards the top of the downtrend channel. That's a double whammy keeping the stock from going higher.

And now the good. The gap was formed by a huge volume blowoff type day. The sellers entered the market in huge numbers and puked up their shares, tired to death of watching the thing tank. I didn't look, but it is very possible a news event pushed them over the edge. Either way, this is very often a bottoming event. Lots of new blood own the stock.

Second, we have a pretty well organized young uptrend following the blowoff bottom. The trend line has been tested four different times including yesterday, with no breach. It is a young trend, but it has every chance to carry the stock through the old downtrend line. If it does, there is no telling how far it could go. This is an 8%/month trend, so it doesn't have to go too far for it to be a very successful trade.

That brings me to my third reason to buy today. The risk/reward ratio is excellent. I was able to get an initial stop loss at under 4% - less than half the monthly growth. Not bad.

Anything could happen, but I like this setup.

AAPL should be fun tomorrow

2006-10-18T19:49:00.000-07:00

I don't know if AAPL will sink or swim tomorrow, but it was up 6% at one point in after hours trading after releasing a blow-out quarter. It settled in +4.5% or so.

I lost HPOL today:

It just couldn't hang out and wait for the trend line to catch up. Very small gain here.

Some stats from trading so far. These go back to June 1st.

Winners have exited the portfolio on average after 33 days. Losers 13 days. This is the type of data I was expecting (duh), but I didn't and still don't know exactly what the spread will be after hundreds of exits. Total exits so far are: winners 20, losers 38. Again, these stats include trades from before I had much in the way of trading rules in place.

Average realized gain is a 1.85% loss. However, I have a net gain since inception including unrealized numbers. My average "stop gain" is a loss of 1.5%. This should change by a lot when I move stops Friday after the close. Many positions are currently just approaching a stop gain. It takes at least two to three weeks for the trend lines to catch up to the entry prices generally. I should have lots of small losses, quite a few small gains and a handfull of gigantic winners if all goes according to plan. So far it looks promising.

These are all IRA numbers. I'll separate my trading account results from my IRA results going forward. They really should be quite different since I can short in my trading account and I'm using margin.

Party Like It's Nineteen Ninety Nine

2006-10-18T07:15:00.000-07:00

I now own AMZN:

400 anyone?

The market opened hot again this morning. After all, it was down yesterday.

What goes up...

2006-10-17T19:56:00.000-07:00

...must come down. And I got hammered pretty hard today. Luckily, I am a trend follower, so it doesn't matter.

I had only one stopped out today. PIR:

My shopping was successful. I found AAPL.

I was looking at the internet a bit ago and found that after the close a story came out about a virus on some of their video ipods. Also they release earnings tomorrow. I could do very well right off the bat, or get punted. We'll see. I do know I'm the only living human without an ipod.

Another in the (paper) win column

2006-10-16T21:32:00.000-07:00

HPOL broke out of consolidation today:

This allows me to move the stop up just above my purchase price. Now I wait for the trend line to catch up.

Check out the day BABY had:

I like to see the faster movers creating some space. They announced an acquisition the market liked. BABY helped my portfolio gain a bit over 1% today.

No activity on the buy or sell side today. The portfolio was stable for a day! I should get some cash cleared in my IRA tomorrow - enough for one position. So, I'll be going shopping tomorrow. Everything on my watch list has been flying lately, so I don't know whether I'll find anything with a decent price tag or not.

I'm toying with the idea of moving from drawn trend lines to EMA lines to follow my trends in the future. I'd use crossovers in the lines to determine buy and sell signals. To do this, I'd probably just pick out a bunch of the most liquid stocks that tend to trend and trade them full time. I'd always be either long or short each of them.

The problems with EMAs are not small. First, I need to determine the number of days to use for each line for optimal signaling. For this, I need to backtest several combinations. The problem is, I can't seem to find a backtesting software that doesn't either break the budget or come with strings attached. Frustrating to have the entire internet at my disposal and be unable to find a tool like this that I'd actually feel good about paying for. I'm not interested in a subscription, but I'd pay for a good piece of downloadable software. Hmmm.

Second, stocks don't always trend up or down. They spend a lot of time moving generally sideways. This would cause a lot of wipsaw buys and sells. That's why I'd need to trade quite a few positions.

I don't have this all figured out yet. Just thinking out loud. I may just stick with what I'm doing.

A few charts for the weekend

2006-10-14T12:37:00.000-07:00

The new wearer of the yellow jacket this weekend is ORCL:

ORCL is sitting on a 24.6% gain.

A funny thing happened when I redrew the trend lines to conform with my trend rules - specifically not using the low from the previous downtrend as the left anchor. The current price is almost contained by the channel.

After I connect lows to form the trend line, I draw a parallel line at the high. The result is a trend channel. The significance of the upper line is really just to see when the stock is busting out of its trend.

Last week's yellow jacket belonged to this week's second place stock. CXW is +23.7%:

Show this week is SEIC +16.8%:

This one has really been on a tear lately. It's gone through a series of breaks from support levels. The result has been a very steep 5-week trend up and out of the channel. If it sticks up there I'll have to bump up my stop and see how things develop. I figure either they form new trends up there, or become cash. Rather than just selling, I plan to set stops below reasonable support levels and see what happens.

Look at the structure on the PCAR channel:

It doesn't have the fastest trend in the world, but it is very reliable. I've decided to stick to trends at least 2%/month, so this one qualifies. Anything 2% or less will be looking for an exit and won't be bought in the future.

I still have a few positions in the portfolio from prior to my rules being clarified. One of which is UDR:

No complaints about this one, but the trend was too slow. I'd rather tie my capital up in a faster mover - above 2%/month. This one is now being played more like a swing trade, but without a sell target. I'll continue moving stops up to appropriate levels until it gets taken out.

HPOL is another legacy stock:

While it is trending just fine, I bought it on a breakout well above the trend line. It would take forever for the trend line to reach the purchase price, so I'm using stops below support until the trend line catches up to the purchase price. Then I'll let it trend normally.

Follow-up on my SMH breakout prediction:

Was it always going to happen this way, or would this market make any long-happy prediction come true? We'll never know. Either way, the break from the ascending triangle came with volume. Excellent sign of more good to come.

Nice retest of the trend line this week for SO:

That's all for now. I have a bunch of positions with very good gains at the moment, but with the market being as hot as it has been over the past two months, I should. As fast as my balance has grown over the past couple weeks, I'm just barely outperforming the market.

Friday The Thirteenth, morning update

2006-10-13T07:44:00.000-07:00

Two expected stopouts this morning - SONS and DRIV:

Picked up some OXPS:

The market is mixed one hour in. So far I've got pretty decent gains in both accounts. That won't last if the bears win going into the weekend.

The sizzle continues

2006-10-12T20:59:00.000-07:00

This market just cannot take more than a one-day break. Up nicely again today.

I got stopped out in one position - HSP:

eh. wuddya gunna do?

I picked up one that I forgot I had just a bit ago. I use askresearch.com to look at charts generally, not my quotetracker software. It's just quicker and easier for scanning charts that aren't in my watch list quickly. I found ADI and bought it:

At the time it must have looked pretty good. I have to admit, I don't like it now. It could work out fine, but I think I'd rather have the cash to pick up something that looks better tomorrow. We'll see. So, to recap, I bought it, sold the lowest day since the bottom, and bought it back higher than I bought it the first time. And I don't like the chart much. That's good trading. My blog will soon be read by the pros before they dare make a move.

However, it probably won't matter much if the market keeps doing this:

I won't even look for a short position until these things show some sign of pausing. Looking at those charts, I fully expect a portfolio renovation at some point soon. It just can't keep going line this forever. But, until it stops, I'm on the bus enjoying the ride!

Almost fully funded

2006-10-11T20:03:00.000-07:00

I have room for one more position. Usually, when I get to this point the market takes a huge dump on me and I stop out several positions. With any luck, it is the junk exiting and I'll be left with the good stuff. That's the way it is supposed to happen at least, and so far I think it is panning out that way. I have several real runners that are lining up to be the monsters that pay for the early losers. I figure I'll probably run about 2/3 losers. Just a guess there, but it makes sense that a lot of stocks moving down close to their trend lines will drop below and stop out early. Of the 1/3 winners, hopefully half or so will be big winners, paying for the losers and returning a good multiple. Time will tell the real story.

I added only one position today, DRIV:

The trend is a very good one. We'll see how it holds up.

I'll add another chart to the mix. SMH looks ready to pop:

This is my favorite pattern - an ascending triangle. During my swing trading days, these were my favorite patterns. I found them to be among the most reliable breakout patterns. I love getting into them prior to the pop. Most patterns I don't feel comfortable trading until they break resistance, but these I like to catch early. This one may or may not work, but I think getting in with a stop under the trend line would be a good idea.

I'm found!

2006-10-10T19:42:00.000-07:00

Scanning my sitemeter traffic counter data today I discovered how my blog is located from France. Seems if you go to Google France (google.fr on your world wide web apparently) and search for "flogged bottoms", you find little ol' me.

Yikes!

I have several picked bottoms on my blog, but none have quite been flogged as of yet. I'm still working on that.

And on to charts....QUICKLY!

Lost NOC today:

I moved my trend line down to capture all of the past two days since I had plenty of room, but it was not enough. I'm not sure how it finished. This chart is from about 8:20 or so Pacific time this morning.

Flogging will commence on two new bottoms. First up is BABY:

Anybody who's had a baby recently may have seen their product. It is the machine used on newborns to check hearing.

Last is PIR:

This is quite a trend if it holds up for any length of time at all.

That's it. Good luck tomorrow.

Big day in a ho-hum market

2006-10-09T20:45:00.000-07:00

Mail, bonds and banks were a no-go today, but the stock market apparently slept its way through the day. I don't watch much of it because I'm at work during the day, but from what I understand it flapped around very little on low volume today. I managed to score over 1% on my portfolio today. Nice when that happens, but I've seen the opposite far too many times to get too excited.

Hey look! Charts!

Shorts need not apply. Lost FLS today:

What can I say?

I also made an executive decision and punted PPS for a little gain.

It just isn't trending up at a fast enough clip. I decided to take it out to make room for something that has potential to bring the groceries.

Like CHS:

I'm a bit early on this guy. It recently broke its downtrend and hasn't established a reliable uptrend quite yet. The line I drew is almost 20%. While I'd love to see that one stick, I have my doubts for some reason. However, I think this is the start of something good. Time will tell.

I also picked up a couple more positions in my IRA. First up was FII:

I picked that one up at 34.99.

Last is DOW. How can you not own that ticker symbol?

I have a bunch of stocks on a watch list. Looking at that I wish I would have day traded the whole thing! I don't have the whole list with me, but I know I have TSM, FIS, DBD, SNWL and others on it. Every stinking one was up today. At some point this market will take a little break and I'll be able to pick up a few of them.

Over the stopouts?

2006-10-06T19:32:00.000-07:00

Only HCR from this morning got stopped out today. Weird, a down day for the market and I lose very little after freshening up a bunch of cash the rest of the week.

I bought two positions today. First up was HSP:

This thing has a history of gapping huge all over the place. If it gaps up above the channel, I'll sell it. If it gaps down below the channel, I'll take a bath in toilet water.

Second is CHB:

This is a little guy, but he's been much higher just recently. I seem to be finding plenty of stocks to buy that have had recent troubles.

Friday pre-work

2006-10-06T09:13:00.000-07:00

Sold HCR this morning:

A clear breakdown that has been in the works for a while now.

Energizer Bunny

2006-10-05T19:53:00.000-07:00

This market is incredible. I've got several positions that have evacuated their trend channels to the north. Hopefully they'll form new trends up there. ORCL, SEIC, IGT, UDR, MAR on an earnings report today, and HIG are all up above their channels. Who knows what will happen if the market turns, but at least I have room now to grow my trend lines up and to the right.

Alright, I'm addicted to looking at charts, so here goes:

I bought a couple positions today. First up XLNX:

Stop is about 5%. I'm looking for breakout from this consolidation in the near future.

Sometimes I wonder if I'm smart enough to wake up in the morning. I bought ORB today, two days after selling it lower.

I left my old trend lines in. They're the light ones. the dark ones are my new lines and I like them better. You see, I've noticed that the very bottom of the prior downtrend before the new uptrend isn't a very good anchor for the trend line. I knew that when I owned ORB before, but I was focused on support just below the current price. It's what the stick I bought previously broke above. Well, I failed to take into account the fact my trend line didn't fit my rules.

Had I drawn the proper line before, the anchor lines on the right would have broken the trend slightly, but not enough to stop out. This new trend channel is much more fair. The last one was far too steep to last, exactly because I used the downtrend low as the left anchor.

That's my story and I'm sticking with it!

I exited two positions since the morning post. First, another short covered - CNO:

Still well within the trend, but the strong market is making me dislike shorts that have already dropped so far it would take forever for the trend to reach the current price. So, I punted it early. I've always had a short leash with shorts. I need to work on that, but I'm comfortable with this decision.

Here's a big winner - MGRM:

I jumped my stop up to 1.70 after yesterday's close. There is no predicting this one and no logical place above 1.55 to place a stop that I know of, so I elected to protect profits. Well, the low was.......1.70. I have no regrets as this one does not fit the current portfolio plan. I'm very happy with 15%+ in three weeks.

Let's keep having fun tomorrow!

Morning activity 10/5/06

2006-10-05T07:49:00.000-07:00

I covered the HMY short:

In looking at the chart again, this was a bad play. This is a rolling stock and had just come off the bottom. This one was more likely to move higher.

I picked up SONS just a bit ago:

It's on an aggressive trend. The stop is about 5%, which is as far as I like to go.

High flyin', we are

2006-10-04T19:32:00.000-07:00

Wow! This market is on the good stuff! I had a pretty darn good day with the longs. Unfortunately, with all the stops lately, I've got a lot of cash sitting there doin' nuttin'. The shorts moved against me, but not too bad considering the market.

I lost two today. First up is ISIL:

I REALY am beginning to get tired of the gap down stop-outs. Blows my safety net completely out of the water. I'd much prefer they edge down and get taken out at or about my price. These are ugly. Not to mention it moved steadily back up into the channel. Bastards!

Here's another bastard down gap: NEU

At least it stayed out of my channel. Thanks a lot.

I added one position today. Got NOC early before the move up:

Nice stop, nice trend. Let's make it a winner!

Tomorrow I'm hoping to get some cash cleared in my IRA. I'm going to be on the lookout for pullbacks in QQQQ and DDS. Both look excellent, but pulled off their lines today.

Flogged By Market

2006-10-03T20:02:00.000-07:00

I don't know what the hell happened today. The market was up to an all time high, yet I managed to lose fairly substantially with my longs and win nicely with my shorts. Am I trading the George?

Got a bunch of stuff stopped out, too. I'm seeing significant turnover in the portfolio for some reason. Trends are just busting all over the place.

First up is KLAC:

I don't like losing them when they move back up and close above the trend line, but that's what happened. This wasn't exactly a bottom-looking single stick though. Only a small 1.56% loss.

Next is SBIB:

After 50 days a 1.39% winner. It broke the wrong way out of consolidation and would actually make a pretty decent short here for breakout players.

Next on the exit side is GLG:

Bummer this one. It was making a nice strong move off the trend line just before puking on me.

Last of the exits is in my trading account - ADI:

I bought this one above the prior low, hoping it would hold and form a new trend, but it is making a new low instead. I like these types of stocks because they are often forming a bottom and start trending back up, but not this time. This was a quick 4% loser.

I added one new position to my IRA - HIG:

Nice trend here and a nice tight stop under 3%. Skinny channel on this guy.

I'm keeping track of my "Stop Value" now and it means a bunch more to me than the fair market value of my account. Since I'm not selling at today's prices, why do I care what they are worth? I'm much more interested in what I'd sell for if my stops are hit. Only in rare circumstances like we saw with HET yesterday will I be selling above a stop. Stop Values + Cash = Stop Valuee. I'll report monthly or quarterly (haven't decided which yet) what $10K invested on October 1st with me would be worth on report date. Both FMV and SV will be reported.

Currently, my Stop Values in my IRA average just over 2% loss, while my trading account is a a predictably 4.4% loss as all positions are at their original stops.

Whew! I'm tired of this post.

Oh, one thing. I forgot yesterday to report ORB got kicked out. Small loss on that one. I need to go check and see if anything is left:)

More Monday Madness. And Charts!!

2006-10-02T21:04:00.000-07:00

I've got the charts working! Woohoo!

here's a good thing that happened today:

HET got a buyout offer. Who knows if it will stick or not, and the price came back down to the bottom of the day's range. I tossed it for a nice gain.

I lost a couple today. First up is DRYS:

It broke down yesterday and stopped out today. Bummer.

Lost WIRE today too:

Luckily I had my stop probably too tight at 34.50, but it worked out today.

Opened a couple new positions in my trading account. Short FLS and Long PPS:

Both have nice tight stops. In hindsight, I'd like for PPS to have a faster trend, but it isn't bad at all over 2%/month.

Alright, I'm using Quotetracker for my charting and portfolio monitoring. I am really liking that thing. I'm using the free version at the moment, but with the free scanning I use at clearstation combined with this, I think I'll punt TC2000 and pay the small fee for Quotetracker.

I saw on the Quotetracker front page today that TD Ameritrade has just bought the product. Hopefully they'll leave it alone/improve it. Clearstation was bought by etrade a few years ago and they've left it alone. Very useful tool.

I'm taking snapshots of the Quotetracker chart and uploading to my Photobucket account. Photobucket is another free and useful tool. It stores photos and makes it real easy to upload to sites such as this one. I believe it is the biggie for myspace users. I don't do the myspace thing (yes, I'm the one), but I understand photobucket is heavily used there. Here, too, you can pay a small fee for much more utility. I think $25/year gets you in good. Not bad.

That's all. Good luck tomorrow!

Morning Update - HET, DRYS

2006-10-02T07:21:00.000-07:00

I opened up my IRA account this morning to find it way up with a down market. Scanning through, I found HET up 18%. Seems they got a buyout offer this morning for considerably more than the Friday close. I sold my shares for a tidy 24.5% profit in under a month. A huge jump on buyout rumors is one of my sell triggers, the other being any other reason the stock jumps way out of its channel that may not signal a new, higher trend.

DRYS broke down on Friday and reached my stop today. Bummer. I was hoping it would hold in there for a while.

I'm taking a mulligan

2006-09-29T22:16:00.000-07:00

I'm starting over with the record keeping starting Monday, and no, it has nothing to do with my horrible month of September. Speaking of which, I got totally crushed this month. I managed to lose a not insignificant percentage while the market was up over 1%. I don't have my records here with me, but suffice to say, it was ugly. It took me all the way down to an average loss/month of about 1/4 percent. Yuck!

The reasons for my mulligan are:

1) I now have my trading account up and running, and I want to integrate it into the mix on equal footing. This is the most important reason.

2) I purposefully spent the first few months making major shifts in strategy. That led to some major painful losses, but it was also done on purpose, as I admitted up front this was something new for me and would be a learning process for a while. It was to be sure. However, I believe I now have the major issues ironed out and I have a strategy I'm happy with. Also, the portfolio is almost fully on plan with only a handfull of leftovers from my directionless past few months, and all but a couple of those either accidentally conformed to my current plan from the beginning, or have managed to maneuver themselves into conformity over time. I don't want the taint from the "old days" going forward.

3) My accounts are both fully funded, with only one spot open in my IRA. This is a very good starting point. I hate starting from scratch with oodles of idle cash counting against me. Raising cash during play is part of the game, but starting from scratch is a handicap for sure.

4) Nobody reads or knows about my blog anyway:)

So, I'm starting from the beginning starting Monday. I'll be spending time over the weekend building the spreadsheets I'll need.

Going forward, I think I'll be able to start posting charts! I stumbled upon a damn nice utility that I've been playing with for the past couple days. I think it is going to be a real winner. I'll tell all about it once I know for sure that it works. Hint: I found it on boogster's blog. Check him out. He's a good read.

I'm also toying with the idea of starting my own site and including a blog. I have other interests I'd like to incorporate into a complete site, namely poker and flying. When I'm not scanning for stocks or chasing the kids around, I'm hopefully flying a Cessna up there somewhere or playing poker. Anyway, I just find blogger to be very difficult for me to organize. Hard to describe, but it just fits like somebody else's underwear. See?

Oh, one more thing. I described my morning activity in an entry before I left for work. Later in the day I shorted HMY at 13.75.

A flurry of activity

2006-09-29T07:20:00.000-07:00

Well, at least I have done some stuff.

First, I do not know what is wrong with blogger, but my apostrophy is working as a "shift tab" function, but my quotes work fine. It was also not posting entries last night. Problems......

Yesterday I missed ENER. I really wanted that one, but it gapped up beyond what I'm willing to pay at this time. I'll keep watching it for a better entry point.

I did pick up some positions yesterday. I bought WIRE in both accounts and SMH in my IRA. Unfortunately, I also lost DGX. It had been struggling over the past month and barely reached down to hit my stop point. I'm not too upset about that. It lost 2%.

This morning I got up with the birds and entered a few positions. My first short since funding my trading account again is CNO. It is a mature downtrend, but looks like it has more work to do before turning around. I also bought LUM and LSI in both accounts and bought KLAC in my IRA.

I'm using margin in my trading account since the account is so small at this point. I want to get into several positions for a little diversification and that's the way I'm doing it. The positions are already pretty small in some cases. Once my account grows to the point I don't need the margin, I'll use it only for overflow. It just isn't as comfortable for me as using my own money.

Good luck!

A couple adds and a minus

2006-09-28T22:37:00.000-07:00

Lost DGX today, just barely. It was struggling, so probably no big loss. It was a 2% loser.

Added WIRE to both accounts and SMH to my IRA.

Missed out of ENER. I really loved that one, but it gapped up above what I'm willing to pay right now. That's the problem with finding them when they're ready. I like to add stocks to my watch list when they look like they're headed down a good path so I can catch them. I didn't see this one until after the close yesterday. Oh well, I'll keep a watch on it for a good entry point.

Finally got my trading account up

2006-09-27T23:00:00.000-07:00

Cash cleared this morning in my trading account, so I went right to work on it as I had mapped out some good trends to follow. Most are also in my IRA.

I bought ISIL and DRYS, both in my IRA, and ADI and SO, both of which are new.

For tomorrow morning, I've got an order in for ENER in both funds and orders for WIRE and SMH in my IRA.

Going forward, I'm hoping to get some diversity between the two accounts. Being able to short in my trading account will help in that regard. That said, I couldn't find anything to short today. I don't really plan to keep a certain long/short mix. I let the market decide for me.

Had one of my better days in my IRA today. I made over 1% on my IRA portfolio, but including cash only 89%. Everybody seems to be respecting their trend lines so far.

Scottrade

2006-09-26T07:29:00.000-07:00

You know, they have low commissions at $7/trade, but I've found very little I like about them otherwise. I haven't used them for a while, but last I knew it was difficult to short anything, and the site was very slow and less intuitive than any others I've used.

Now it has been more than a week since I hand delivered a check to them. Still pending. It took them four days just to deliver the check to my bank. Pretty frustrating to watch trading opportunities come and go as they decide whether to actually start paying them or not.

Funny, when I handed the check over to the kid at the front desk, he said "you'll see it tomorrow", to which I was pretty surprised. I asked if he meant it would just show up pending, or cleared and available. He said it would be available to trade. I had my doubts, but I figured maybe they allowed a customer to trade on those funds before they were cleared in a margin account. Nope. It showed up right on time, but as pending funds and I could not use them. No different than today, 8 days later.

Added ISIL

2006-09-26T07:18:00.000-07:00

Added ISIL this morning when it dipped down in the early going. Stop is around 4%. This is a young trend line that was just confirmed yesterday.

HET got a downgrade this morning. They're not supposed to be downgrading my bottom fishies!! I doubt this one will have any effect on my grand plan. HET began the day at the very top of its trend channel. Plenty of room for a bit of a shakeout.

That'll learn me

2006-09-25T21:52:00.000-07:00

I meant to reduce my exposure to tobacco stocks once RAI got up just a bit. It turned out I had RAI and LTR, both tobacco stocks. I have known it for quite a while, but I just never did anything about it. Then RAI split 2:1 and I had my out. I was going to sell half when the stock reached just a little higher so I would have a full position left in the company. Well, it leaked and leaked and eventually, today, croaked when the latest lawsuit ruling went against them. RAI and LTR both stopped out for small wins.

That's the good news. ISIG and PWEI got stopped out for significant losses. Yuck! They both lost well more than I allow with my refined strategy. I just would not have bought them where I did if I'd had the strategy adjustments in place back on purchase day. Oh well, live and learn the hard way.

I also picked up an old stock again. NEU was a raging buy, and it did well after I bought it. It had a bottoming looking couple of days going right on its very aggressive trend line. I have a nice tight stop and if it makes it just a little while, I should pull a nice win out.

All in all, I got beat down today, taking a loss on a day the market flew. That said, the stocks I have remaining did very well. This was more of the clipping process to get things straightened out in the portfolio. The clipping now is really close to done. Not many remaining positions are horribly out of place. There are a couple of breakout plays that are a ways out from a trend break-even, but they are healthy at the moment.

Getting there

2006-09-22T23:11:00.000-07:00

Well, the portfolio is getting there. I'm closing in on being caught up with all the trends. I have 18 positions that are trending up. Six of those are "trend gains", meaning the trend support line is above my purchase price. In the next month, I will add nine more to that list, assuming they don't get stopped out. That will put 15 of 18 positions in the money. The others are further out than a month with PWEI being the longest at 7 weeks. The other positions are not trending.

My stop risk is still pretty significant with a total 3% stop loss rist currently. However, that number will drop every week until I get caught up, at which point it will turn positive and, hopefully, grow to a very large number.

The trend following trading method really renders daily gain/loss numbers meaningless. Unless the stock stops out, nothing of any consequence has really happened. That makes me happy on days like today when I lost over 1% while the market lost less than half a percent. I just have a bunch of stocks at the top of their trend channels coming down into the middle. I counted earlier, and of the 18 trenders, something like half had come from the top to the bottom half recently. That explains my rough time of it against the market lately. All my positions were overbought! No biggie. I'm convinced that by the end of the year I'll have some good numbers to put up.

The other thing trend following does is it makes individual stock reports pretty useless. I mean, what am I supposed to say? Still following the trend. Yup. Lookit it go.

I'll still continue to report FMV and unrealized gain numbers at the end of the month, even though those numbers don't mean squat to me. I need to compare apples to apples, and unrealized gain is the best way to do that when comparing my results to the market. And to other bloggers, etc.

Speaking of bloggers, I've happened upon a few that are fun to read. As soon as I get things figured out on here I'll link them.

There are other things I'd like to do here, but I don't know how easy they'll be on the blogger format. Problem is, I'm not a computer guy, so I won't be able to create anything on my own.

DRYS added, LNT lost

2006-09-21T17:37:00.000-07:00

LNT stopped out today a tiny loser. The portfolio is starting to feel like a complete unit with the cats and dogs departing. Another month and the house should be clean with trend lines catching up, etc.

I added DRYS today. I really like this one, but the trend I'm following is very aggressive. It is adding 13%/month, and that is not going to last. However, if it goes for just a short while, I'll harvest a decent winner. I have a little more trend risk than I'd like at just over 8%, but it put in a bottom-looking stick today and should stay away from the trend line long enough to make a good run at a profit. It is also hanging onto what should be a support level.

I beat the market for the second day in a row! Yea me! It has been a while.

Semi-new and improved

2006-09-20T22:22:00.000-07:00

I think I'm closing in on a good overall strategy to put, or tweak, into play. I'm hell bent on making trading easy, in the sense that I can't take a lot of time during the day to dink around with the portfolio. I don't mind researching and scanning and studying at all at night or on the weekends, but my day job requires my attention. So, quick trades where I need to stay on top of things are out. Unfortunately, quick trades are pretty much what I've always focused on in the past, and with good results.

The new game in town is trend following. I have a simple and common definition of a trend, and that is a series of rising lows, three or more of which can be connected by a straight line. There are times where I've used two lows connected by the line instead of three if it looks right.

I want to jump on the trend as close to the trend line as possible. In no case should the buy price be more than a month away from intersecting the trend line. When the stock price breaks below the trend line, I sell the stock. There are other times I may sell the stock early, such as if the price rises significantly above an established trend channel, or if an unatractive takeover is pending. I'm sure I'll find other reasons.

There are several reasons I like this strategy. Of course, I may find that the theory works a whole lot better than the practice, but that's something I'll learn along the way.

First, this is easy to manage. I find a stock that fits my definition of "trending" and I watch for a good entry price. Once I buy, I set a stop below the trend line, and move it as needed - probably about once a week or so. Done.

Second, I know what to expect. The approximate trending rate can be calculated, so I know what sort of annualized return to expect. I call this the "Trend Return". The Trend Return is simply the amount by which the trend line increases over a given period of time. Since the position will generally not be exited until the trend line is breached, the Trend Return is the only return that carries any real "end of day" significance.

Third, the stop loss is crystal clear and constantly moves up. I don't have to guess where the support and resistance lines are. I follow the trend. the stops are set just below the trend line. If I buy close to the trend line, I can manage a low risk, unlimited reward scenario.

At this point, the majority of my stocks are in trends, if only by accident. However, many of them were purchased high in their trend channels away from the supporting trend line. So, I have a ways to go before I'm generating trend gains that would translate into realized gains in many of my positions. That's fine. I really view this first year of longer-term trading as school. Hopefully when I graduate I'll have learned something!

Nice win, thoughts on strategy tweaks

2006-09-20T17:44:00.000-07:00

Boy meets stock
Boy loses stock
Boy realizes his mistake and wins stock back
Turns out stock really was crap

Such is the story of TXU. It stopped out today after plunging through its trend line. One day loss of 5%+. Laugh it up fuzballs!

Since I'm bad at learning lessons, I jumped back into PCAR today. It danced a couple days right on the trend line and moved up a bit today. Low risk play on a 3% trend.

Had a real nice day today with the portfolio rising .84%. Of course, ORCL was the star of the show, which I knew it would be today. I got up early so I could watch to make sure it didn't get too far out of hand. It didn't. I mean, 11.5% and jumping right out of the trend channel could be considered "out of hand" I suppose, but I only need 2.5 months or so for my trend line to catch up. I think it has legs from here.

Another stock that had a big day today was HET. It broke out of an ascending triangle today. I'm using the bottom of the triangle as a trend line. I'll know in the next few days if this is truly in a young trend, or if it is simply now a breakout play exiting a bottom pattern. I'd like for it to stay within itself and have a good long, stable run. We'll see.

Had a downgrade in the portfolio today. RAI was punked by one analyst. It seems they're having supplier issues and some store shelves are running out of RAI products. Apparently, smokers glob onto one brand of sweet smelling cotton shirt scents and don't move around. This analyst thinks the outages will cause some brand switching when they can't find their usual brand. Could be. Hey, if you gotta have it, you gotta have it. At any rate, the stock got pummelled pretty good and is now down around the trend line.

Yesterday, LNT flirted with a stop. It didn't do much today, so I could lose it any time now.

My concentration now is on finding nicely trending stocks, and then watching them until they reach within at most a month or so from their support line. No more spending capital and waiting two months for a break-even support line price.

The other thing I'm considering is whether to sell at the top of the trend channel or not. I mean, Why ride it down or watch it trade sideways? Why not sell at the top and buy it back again at the bottom? I could have a stable of trending stocks I trade in and out of as they bottom and top. Thinking..........

A little update on activity

2006-09-19T22:05:00.000-07:00

Yesterday TRMB got stopped out. That eyesore will not be missed.

Picked up TXU again today fairly close to the trend line. I paid a bit more than I sold it for the other day. That's my time in the penalty box. Also picked up GLG today. It is a growing company and is close to it's almost year-long strong trend line.

I've funded one of my trading accounts again with a little start-up capital, so I may be shorting shares as opportunities come up. I don't have much to play with, so the shorts may be few and far between for a while. I've always been better at the long side.

Duh!

2006-09-18T17:54:00.000-07:00

This is an official “Duh!” post.

Sometimes I wonder how I manage to get through an entire day without accidentally killing myself with a bottle of water or something. Many, many stocks form trends, clearly visible when bottoms are connected by a straight line. Very often, a parallel line can be drawn along many of the tops within the trend. These trend lines serve as terrific and reliable support and resistance lines. Duh? Duh!

Why in the freaking hell did I choose to ignore that bit of bargain basement common knowledge from June 1st through September 15th?

I started June 1st deciding I was going to catch trends and ride them as far as they’d take me. I decided to come up with my own definition of trend to be a series of higher highs and lower lows. Well, not my own definition by about as many years as stuff for sale has been charted, but I decided to make it my own by ignoring everything else. All that was to matter to me was the lows are getting higher. Nothing else. A low was only a low after another high was made. It seemed logical at the time. It was not.

Stocks trade in rising ranges when they are trending (dealing with long trades here). These rising ranges are called …..everybody now….. channels! I chose to ignore these. Not consciously, I just didn’t include them in my thought process when I decided what would make up a trend. Forget that almost all of my stocks are currently riding channels, I just didn’t care apparently! The problem is, within these channels, my definition of a trend breaks down very often. Little downtrends (lower lows/lower highs) within a very strong dominant uptrend happen all the time. That’s often how stocks trade down from the upper (resistance) line to the lower (support) line. Well, I was selling stocks that were making a very normal and healthy correcting move from the top line to the bottom line. See TXU for one example. I sold it a couple trading days ago because it broke my definition of a trend. What happened? It bounced hard off the REAL trend line today. I watched it just to see what would happen after I noticed what I had done late last week when I woke up from my alternate reality. Well, it performed beautifully! In fact, I’ll buy it later this week if it is still around its support line when I get enough cash cleared.

Anyway, now that I’ve come back to my senses, it is time to get to work. I’ve made a couple decisions about how I’d like to proceed, and I have one open item remaining. I stated up front that I haven’t spent a lot of time trading longer term like I’m trying now – that all of my trading to this point has been very short term in nature. I suppose it isn’t out of the realm of possibility that a major oversight like this can happen. Well, the work in process continues, although most of the pieces are now, hopefully, in place for a long-term run at the market.

The strategy is two-fold, really. The overall strategy is to jump on these trends as close to the support line as possible and ride them until they end. I’ll move stops up as often as necessary to keep up with the support line, probably once a week or so depending on the stock and how fast it moves. The second part of the strategy is what is somewhat open ended at this point. I plan to continue trading breakout patterns in stocks that have been consolidating and are not in organized trends. These are such good money makers and very explosive and quick. I don’t want to abandon them. The problem I have is how to work this strategy into the trend following umbrella. I don’t have time during the day to be monitoring positions to see if I need to switch from a stop loss to a limit sell order and vice versa. In a perfect world, I’ll come up with some sort of stop loss strategy for the breakout that lets a trend develop if it is going to. I believe many breakout stocks are strong stocks that will trend up. I want to allow that trend to develop. I just don’t know how well this part is going to work. It seems like it may be marrying two strategies that just won’t mate.

The good news is that most of my capital is tied up in trending stocks. I think what I’ll do is let the few positions that are in breakout patterns play themselves out by keeping the stops reasonable and taking the positions off the table only if I wouldn’t want to own the stock if it trades below a certain price. For instance, I won’t let a non-trending breakout trade below its support level. It is always possible I’ll decide to abandon non-trending stocks entirely if I can’t seem to get them to assimilate.

That’s enough beating myself up over this. Lesson learned (again!). I have some reasons to believe I’m going to love this trend business a whole lot that I’ll share tomorrow. Again, nothing that isn’t commonly known, but part of the reason for blogging this stuff is so I can go back in time and see what I was thinking “back then”.

Upon further review....Trend Notes: 9/15/06

2006-09-16T22:57:00.000-07:00

Upon further review, I’ve been focusing way too much on short-term explosive chart formations, and not enough on the longer-term trending nature of the stocks I’ve been buying and, more importantly, selling.

Sure, for the short-term momentum trading I’ve done in the past, trading these explosive breakout patterns works great. And, they work well as an entry point for trending stocks, so long as they happen close to the bottom trend line. I have not, however, been paying attention to proximity to the trend line when I pull the buy lever. Often times, especially toward the top of a trend channel, these breakouts fail because the longer-term and stronger trend channel top overrides the move. Normal, stable stocks just will not stay “out of whack” for too long without correcting.

For my purposes, all that should matter is the entry point and where the stock trades in relation to the bottom trend line. Once the stock breaks below the trend line, it is a sell. Not before, no matter where the previous bottom is. So long as the trend line is steep enough to yield a generous return, there is no reason to sell above the line

The entry point is important. If a stock is trending along a line, and I buy too far above the line, it can take several weeks or even months before the trend line reaches my entry point. That means, until the line meets my entry point, I’ve got good capital sitting there doing nothing, regardless of the price action of the stock. Until the trend line gets above my entry price, I’ve made nothing. The sooner I can get the trend line above my entry price, the sooner I start making “real” gains versus fake paper gains.

So, what are these “real” gains? Well, a “real” gain is the difference between the trend line price and my entry price. Actually, it is the difference between my stop price and entry price, but the stop will always be set just below the trend line. What that means is if I have a trend that moves up at a 2% per month rate, my return is really 2% per month, regardless of the stock’s actual move during the month. If I buy on the trend line at 10 and the trend line moves to 12 while the stock moves to 20, I’ve really “made” 2, not 10. I will let the stock trade below 20, but not below 12. Of course, “real” is in quotes because it isn’t a real gain. I haven’t sold the stock, and it could certainly gap down below the trend line. In reality, it is a “trend gain”.

Now that I’ve woken up, this week’s stock report will focus on whether a stock is in a trend or not, the strength of the trend and future plans for the stock.

RAI: In a very strong trend channel about 15% wide. The trend is about 4.5%/month and is more than a year old. The price is right about in the middle of the trend now. The bottom of the trend is 60.

CXW: In a very strong trend channel almost 20% wide. The trend is about 6.25%/month and is more than a year old.. Price is in the middle of the trend. The bottom line is just under 40.

HCR: In a very strong trend channel close to 12% wide. The trend is about 3.7%/month and is about eight months old. Price is in the middle of the channel and the bottom line is 50.

LNT: In a strong trend channel about 10% wide. The trend is about 3.9%/month and is about ten months old. Price is towards the bottom of the channel and the bottom line is 36.

SBIB: In a short aggressive trend four months old. The channel is about 10% wide. The trend is 5%/month. The price is near the bottom of the channel and the bottom line is just over 20. There is a longer-term trend, but it is too shallow. I’ll sell out of this trend.

LTR: Short, aggressive trend channel closing in on four months old and about 8% wide. The trend is about 4.2% per month. The price is in the middle and the bottom line is under 38.

ORCL: I’ve badmouthed this one before for being too slow, too big, blah blah blah. However, in trend land, it is shaping up to be a very nice pick.. The three month old trend is quick and aggressive at 6.25%/month. The channel, such as it is after only three months, is around 15% wide. Price is in the mid-bottom of the channel and the lower support line is under 16.

DGX: Strong five month old trend gaining 2.4%/month. Channel is about 7% wide, so a tight one. Price is towards the middle and holding, the support line is just above 60.

SEIC: Nice looking trend at least six months old gaining 3.3%/month. The channel is about 13% wide. Price is way at the top of the channel. Support is around 49. This is a case where I wasn’t paying attention to the trend line when I bought. I have a solid month to go before the trend line will match my entry price. Only then will I be making any profits.

PWEI: My favorite stock at this time just because I’m very curious what will happen with all the short interest in this one. There is a mildly violated trend channel that started with a huge gap up ten months ago. It is a quick mover at 5.5%/month. The channel is a monster at about 35% - 40% wide. Indeed, this one moves in chunks. The price is towards the middle and support is just under 30.

TRMB: Horrible. No trend here. This was a breakout play where I elected to set the stop below the previous low instead of below support, which held about as well as the straw pig’s house. I’ve got a stop set below the previous low. I don’t know what the hell I’m still doing in this thing, but maybe I’ll get lucky and something will develop.

UDR: This guy had a short trend within a breakout pattern, but when it broke out of its pattern, it shot up through its trend. Now it looks like a continuation of the breakout is taking shape. This is a breakout play, hoping for trend development. Stop is set below 30.

ORB: Breakout play, pure and simple. Hoping for a trend to take shape. Stop is set at about 18.50. When explosiveness happens, I’m content to keep bumping up my stops until some sort of longer-term trend takes shape. When and if it does, I’ll adjust the strategy to follow the new trend.

HPOL: Little guy in a young 4+ month trend, making around 5%/month. I bought a breakout pattern within the trend. The break took it to the top of the trend (which I wasn’t focused on at the time) and it has since retraced back towards the upper middle of the pattern. I won’t make any trend profits for a very long time. In the meantime, I’ve set a more aggressive stop under the top of the consolidation pattern it broke out of.

HET: New trend exiting from a steep drop in price from May through the end of July. This young trend is making 4.5%/month and the channel is about 8% wide. Price is in the upper middle of the channel.

CVD: A wide year-old trend earning 2.7%/month. The channel is about 18% wide, price is in the middle, and support is just over 60.

MAR: The trend is very long – about three years at 2.1%/month. The channel is very wide at over 30%, but that is probably inflated by a period when the stock seems to have gotten a bit ahead of itself. Price is in the middle and support is at 35. My stop is below support of a breakout from earlier in the week. The trend won’t catch me for a very long time.

MGRM: Pure rolling play. No trend at all. Getting involved with these little guys is playing with fire, and I think I’m getting torched on Monday. The company announced after Friday’s close they are going to sell a bunch of shares to raise cash. Poop.

MS: A breakout play with no real reliable trend. That said, the way this stock behaves, I think a good trend could develop.

IGT: I bought in anticipation of a breakout, and got one the very next day. The trend is young and 3.7%/month. It should catch me in about a month. Until then, my stop is below support of the breakout.

ISIG: Tiny little guy, but it has somewhat of a trend. The breakout is what I’m playing here unless the trend proves itself reliable.

That’s it! I feel so much better about things now. I feel like I’m starting to formulate a workable, winning longer-term strategy. It will take some time for the trends to catch up to me so I can see it at work, but at least I feel less like I’m wondering around in the fog. I now know why I've been getting my ass handed to me by the market lately, and why it will happen for periods in the future. Nothing matters but the end result, and if I stick to stocks that trend faster than the market can, I'm looking good at the end of the day. And no more plans to abandon things for my old tried and true momentum trading. Not yet anyway!

Scaling back the nonsense

2006-09-14T17:25:00.000-07:00

I've decided to drop the twice weekly updates on all stocks. #1, I'm still a little sick from a mild flu bug or something, and I don't feel like writing that much today, and #2, two per week is way overkill. I'll start doing it over the weekend.

I missed reporting a little activity yesterday, and there was more today. I'll go out of order:

TXU - lost it today. It's had a rough couple days. I had it up +8% or so at one point, but it never developed a stop that was going to mean anything. It was a minute loser in the end.

CMCSA - lost this one today as well. A welcome sale to free up cash. Minute winner.

Yesterday I picked up:

MGRM - a little tiny guy that has promised to make me stinking rich. It is a roller that I picked up at the bottom of its range.

MS - A big one that moves its ass. It broke out and volume has been very good.

Today I bought:

IGT - I grabbed this one just prior to the big breakout it is going to have out of its ascending triangle formation. Tuesday of next week is when I've scheduled it for its breakout.

ISIG - A little guy that broke out on gigantic volume today.

I've decided I need to add some rocket fuel to the portfolio. Hence, the small guys I've picked up lately. I also need to evaluate my strategy of letting a stock sit there doing nothing after they've made their move. TXU could have been harvested a significant winner. When it looks over, I may just have to pull the plug rather than wait for the next run. Corrections during trends are one thing, sideways nothingness is quite another.

Trend Notes: 9/12/2006

2006-09-12T15:15:00.000-07:00

I picked up three new positions today. See them at the bottom of the list. I've decided to report on all positions on Tuesdays and Thursdays from now on, regardless of time held:

OKE (+6.86%): Caught in a month-long consolidation. Playing the waiting game.

RAI (+9.20%): Approaching a third attempt at a new high. Support has held twice at 64.

CXW (+21.86%): Broke out nicely yesterday and followed through today. History says we’ll trend sideways for a while now. The stop was moved up yesterday.

TXU (+2.72%): Not a good day today. A stop with a minimal closing gain is in play. Still, support held.

HCR (+7.99%): I was hoping for a sign this one hasn’t slipped into a downtrend, and I just may have gotten it today. It closed above the previous little move up in consolidation. Now we need to hold the bottom at 51. Of course, I’ll also gladly accept a move up to 54.

LNT (+1.03%): I really hope this one is building up for another leg up in the trend. Just holding the trend line started n late April will make this a nice trade in the end.

SBIB (+4.78%): Excellent job holding support the past few days and bouncing off today. More volume is needed to push it up above resistance at 21.

CMCSA (+2.40%): Should be starting a leg up to at least 36. Short leash on this one.

LTR (+2.82%): Has begun the next leg up in the trend. Each leg has added about 5% of value.

ORCL (+6.54%): Has traded to the top of the channel. It is difficult to see this one going crazy to the upside any time soon. Short leash, but a stop now yields only just over 1% gain.

DGX (+0.10%): I figured I’d find support about 62 – 63, and so far I’m right. Hopefully, volume will arrive to push it up above 65 soon.

SEIC (+5.03%): Clocked by an analyst downgrade a couple days ago, gapped lower, but recovered and brushed the downgrade aside. Today marks a new high, and volume has been fantastic.

PWEI (+2.91%): Stalling out a bit towards the bottom of its current range. I’m wishing horrible things for all those shorts!

TRMB (-6.07%): This dude needs to turn around right here. A further move down is bad news.

UDR (+4.07%): A little more mustard on the hotdog tomorrow and I can move the stop up into a profitable position.

ORB (+1.98%): Best move since I bought the breakout on the first of the month. I figure a rocket company has to be a good investment, right?

HPOL (+0.01): Bought yesterday on a huge breakout move on huge volume. It held the top today on even larger volume. Lots of churn going on here. It is small, so if it catches fire, it should be very much fun!

HET (+0.67): New to the portfolio today. HET arrested a nasty downtrend begun in May, and now appears to be forming an ascending triangle. I love these formations. I’m trying to work a little more bottom fishing into the portfolio.

CVD (-0.45%): New to the portfolio today. Nice breakout play on good volume. Stop is set below support.

MAR (-0.12%): New to the portfolio today. Nice breakout today on good volume. Stop is below support.

I'm trying to find some bottoms to stick in the portfolio. This has never been a focus of mine, having always been a momentum trader. However, with my focus now on longer trends, starting at the bottom seems like a good idea at least some of the time. I won't ignore breaks to new highs, as when they're good, they're very good.

One problem with holding for longer periods of time at the top is the downgrade issue. I lost two stocks with great charts after they fell hard on a downgrade. I managed to escape a third this week when SEIC flipped its downgrade the bird. There should be more upgrades than downgrades at the bottom.

The main reason I've never liked bottoms is all the resistance levels the stock has to punch through on the way up. But, over the longer haul, they do punch through if they're good.

The good, the bad and the ugly

2006-09-11T22:15:00.000-07:00

Lost two today for large losses. EME lost 8.47% and NEU lost 12.12%. I knew going in that both had a lot of risk, but I liked the way they set up. The big mistake may have been setting the stops below the previous low instead of below support, like in the "old days".

Also bought HPOL today. It's a cheap one that looks really good. Nice breakout today.

As hoped, CXW put in a big breakout day. This is the biggest mover so far at just under 20% gain at today's close.

Trend Notes: 9/7/2006, and PWEI Special Report

2006-09-07T14:09:00.000-07:00

Let's get straight to the position reports:

OKE: Has formed a resistance level just over 39. May be gathering energy for a breakout attempt.

RAI: We're stuck in a range. I'm hoping for a bounce off 64 and a breakout run towards 66.

CXW: It has been a while since this one showed signs of having a clear direction in mind, but that's sort of how this one operates. With any luck it will follow the pattern and we'll get a decisive move up soon.

TXU: Directionless for a month, but it has improved a bit over the past two bad market days.

HCR: I'm hopeful a foundation is being laid, but it is also possible a downtrend is forming. The leash is short.

LNT: The jury is out - way out. It is still within its uptrend.

SBIB: Either we'll get a double bottom and support at 20, or we'll get stopped out.

CMCSA: Slow mover, but the trend is up.

LTR: Looking for support at the trend line. Time for a leg up.

ORCL: Nice day today. Just managed to break off the trend line to a new high on very nice volume.

DGX: It sure looks like a round bottom is forming. A case could be made for support being established at this level in the middle of August.

SEIC: Volume is picking up on the upleg. The last upleg was very sharp exiting resistance, so we may need two or more attempts at a new high.

Special Report - PWEI:

I'm less than a month into this one, but it is a very interesting stock. I can't wait to see what happens with this one. It just looks for all the world to me like it should really go big.

First, it has a low float (8+ million shares), and it really moves nicely. Second, it recently broke from a long period of consolidation, so it should want to get someplace now. Third, the YOY quarterly growth is huge at 630%. Finally, the short interest is nothing short of amazing at 5.6 million shares. That's 46.5% of shares outstanding and over half the entire float! Either the shorts are right and I'm about to take a bath, or they're wrong and 5.6 million shares will have to be bought to cover. Average volume is only 500K/day! Something has to give. Stay tuned.......

There appear to be some stocks missing from the report. Well, there are some stocks missing from my portfolio!

LH: So much for silver linings, eh! I took a 9.25% gain over 66 days.

PLCM: Huge range today without much progress either direction, but it stopped me out in the process. -4.65% over 17 days.

DRIV: I may have goofed here. I bumped the stop way up based on a pretty iffy move a few days ago. Had I kept my original - and likely proper - stop, I'd still own it. Today was lower, but not a lot lower and it recovered from a deep retreat early in the day. That's not unusual for it. Lesson learned, but it may or may not cost me money.

That's it for today. I have a ton of capital to put to work. I should have cleared funds about Monday.

It's a Maaaad Houseeeee!

2006-09-06T17:14:00.000-07:00

Has there ever been an actor better at over-acting than Charlton Heston? I think not.

Anyway, today's market was a mad house for me. I fell over backwards into cactus covered with fire ants. Ouch! The DJW5K lost 1.14% and still managed to beat me by .12%. That's a bad day. And I've had a rotten run the past few weeks. Well, it's times like these I start looking real hard for a silver lining. I think I may have found a few.

Let's take a gander at LH. I almost lost this one today. It's the old man of my current portfolio. It got downgraded to "market perform" by one analyst today, and the market sucked poopoo. That's a recipe for disaster. However, good ol' LH may have fooled 'em all today. It gapped down a bit and put in a deep hammer below the two-week old sideways consolidation, and did it on huge volume, closing four pennies from the open and high of the day. It may have blown out all the sellers and made ready for a continued trip. Hey, I'm searching for good news today!

Overall, the portfolio took a hit today. No doubt about it. That said, in looking through the stocks that survived the day, I don't see a whole lot wrong out there. Most stocks held up their end of the bargain and maintained their charts just fine. They mostly had down days, but within the framework.

One notable exception: LNT didn't come through today. Yesterday's breakout is busted. Volume was low, but not tiny. I'll need to see goodness from this pig soon. I've got a tight stop in here.

Today marked the end of the road for four different positions.

ECL: This is the one I'm disappointed with. That downgrade yesterday just killed a good thing. As expected, it traded lower in the morning, and I took a 6.2% gain away.

The other three were all on my "trim" list with very aggressive stops. None of these really quite fit my adjusted strategy.

XOM: After 31 days, I harvested a whopping 0.12% gain.
GIS: After 21 days I harvested a whopping 0.86% gain.
BUD: After 16 days I harvested a whopping 0.36% loss.

These just were not movers and shakers. I'll attempt to put the new capital to good use when it frees up next week.

Trend Notes: 9/5/2006

2006-09-05T16:31:00.000-07:00

Today's action was pretty much killed by a downgrade of ECL from "buy" to "hold" by one analyst. That was enough to cause a big dump and some dancing on my stop price. I'm not sure the price recovered enough by the close to keep it in my portfolio tomorrow. I may get stopped out. It would be a shame - I was really liking how things were setting up with this one.

I picked up two new positions today: DRIV and NEU. Both are in solid uptrends and broke through resistance with volume today.

On to the stock reports:

LH: Sideways sliding consolidation continues

ECL: As stated, an analyst pooped in my Cheerios.

OKE: Upleg is continuing nicely.

RAI: An extended sideways move would not surprise me.

CXW: I keep hoping to start the next leg up. The bottom is officially flat.

TXU: The slope is generally up. I'm hoping not to see 63 again.

HCR: Not a good day today. This one may be falling apart.

LNT: Today is what I've been waiting for! The breakout pattern completed. Now we need to see some follow through.

SBIB: I sense a breakout coming. The volume/price action looks explosive to me.

XOM: The price confirmed a bottom, but volume needs to pick up.

CMCSA: I have a tight stop and would not hate to raise capital here. I'm just not sure there is much upside. I am almost positive it will be slow in arriving if there is.

LTR: Volume is decreasing on the sideways consolidation move. We're in good shape here.

GIS: Way more room down than up. The stop is very tight.

Activity Report - 9/1/06

2006-09-01T13:35:00.000-07:00

Bought ORB today at 18.75. I'm not thrilled with the stick, but volume breakouts are always fun. I don't expect this to be an immediate "shoot to the moon", but I feel there is significant room for it to grow in the near future.

I really tightened up the stops on the big floaters that don't fit into my revamped model portfolio. They are: XOM, CMCSA, GIS, ORCL and BUD. It they hit my stops, I'll take the cash. If they don't, so much the better.

With ORB, I started investing a percentage of my fund value vs. an even number of shares with a cost cap. I'll be putting roughly 4% of total value into each position, or 25 equal cost positions. The percentage will shrink and the total positions will grow as the value of my account (hopefully!) grows.

Short week next week!

Trend Notes: 8/31/2006

2006-08-31T16:14:00.000-07:00

It's recording day! August sucked! Woohoo!

I finished the month up 1.18%, which is not bad until........DJW5K and S&P500 both posted 2.13% gains. Booooooooooo! Actually, my results are a bit deflated because of the giant special dividend removed from the value of my account that will be returned next month, but even with that I was thumped fairly handily. One month does not a lifetime make, unless you're a housefly or something.

Going forward, I'm going to shake things up just a bit. First, I need to stick to my "sale plans" and not get impatient. I dumped CNST and FE before they stopped out, and I have a bad feeling it was the wrong move. CNST made a powerful move over the past two days - the first two days I was not a holder - out of a sideways consolidation pattern. That's a healthy pattern and I should have held. Granted, I got spooked by the huge spreads, and those will continue. But, having an explosive little guy around could be a portfolio maker. The book is open on FE. It may or may not turn out to be a good sale, although sticking with the rules would have been best no matter what. I should have pushed the stop up aggressively instead of just selling.

Second, I'm going to apply a few simple fundamental tests before pulling the trigger on new positions:

Rule #1: I want to avoid sluggish big old companies with huge floats. I think I'll skip companies with floats over 500 million shares unless they've proven they can really move when necessary. I need companies that can really run if I'm going to put a hurting on the market.

Rule #2: Profitability and growth. I need companies that make money and that are growing. I'll look for profitable companies with 20%+ quarterly year-over-year net income growth.

Rule #3: Institutional ownership. I want to see 70%+ of the shares owned by institutions.

Hopefully I can get mostly quality, explosive companies in the portfolio as some of the sluggos exit. This longer-term stuff is a work in progress, so I'll likely find ways to adjust in October, too.

Here's the report on individual stocks held:

LH: The run may be over. I'll set an aggressive stop. 68 is looking like it might be an area of support. Bulls make money. Bears make money. Pigs get slaughtered. I have almost 12% of gain built up in this one in less than three months.

ECL: The past two days haven't been wonderful from a price perspective, but the volume leads me to believe we may be setting up for another upleg.

OKE: Strong stick today. The stock is oversold and volume has been slowly picking up the past few days.

RAI: Volume is back on the upleg.

CXW: Another whose run may or may not be over. It tends, though, to trend sideways and then jump all at once.

TXU: Spent the entire month of August in a flat, narrow consolidation pattern. We'll need some volume poppage very soon.

HCR: If it bounces off 52 again, Ill call it support and move the stop up.

LNT: Nice price action lately, but volume is not encouraging. This one is getting long in the tooth. If it doesn't break out soon, I'll set an aggressive stop. 36 should be a decent support level.

SBIB: Winding up to pop again.

XOM: I fear we're 2/3 through a head and shoulders pattern. There is now a lot of red to fight through.

CMCSA: I'm hoping it is carving out a bottom and a nice steady uptrend will develop.

LTR: Slow, steady move up should be consolidated. It should not need long to turn ownership over enough to continue moving. A new stop around 38 would make me happy.

GIS: I'll start adding this one now. It is near the top of the channel. I'm expecting sideways/down action for a bit.

Stats @ August 31, 2006. My August was +1.18%, Monthly average since 6/1/06 +.46%. DJW%K August +2.13%, with monthly average of .71%.

Bleh.

Here's to a better September!

A little action today, and thought changes

2006-08-30T13:31:00.000-07:00

I ended up punting FE late today, and ALJ did get stopped. FE was a small 1.6% gain and ALJ, net of the pending dividend, was a loss of almost 3%.

I believe I am in need of a "youth movement". In looking through my portfolio and paying special attention to the slower movers, it appears I have a large number of huge companies with slow growth and very large floats. There is not likely to be a huge, quick gain to be had with these. If I am going to beat the market, I need stocks that could potentially return 20%+ over a 12-month period. Some will do worse, some will do better, but I need to at least give myself the opportunity to average 20% annualized growth. I have a number of stocks that are unlikely to do that: XOM, CMCSA, GIS, ORCL, BUD are some that are on my watch list. I'll let them run their course so long as they don't get too comfortable. In the future, I'll try to take care to get into positions with smaller floats and more Quarterly YOY growth. 7% growth over at BUD probably isn't going to cut it.