Reading Material

Almost Friday after first full week at the gym. Ready for the weekend!

Joshua Brown's "Backstage Wall Street" Book
I am sure you all know who Josh Brown, The Reformed Broker, is by now. I have the pleasure of writing the great Tumblr "Things Apple is Worth More Than" with Josh, and more than that he is also a good friend. It's hard to explain all the help I have received from my man over time. It is appreciated.

Josh has a new book out and I am excited to read it. Called "Backstage Wall Street" I can only imagine how raw and open the book will be about all the happenings behind the curtains of finance.

I bought three books and they arrived today:

Nice looking cover.

Why would I buy three? One is for me and two are for public education of course. This means I am giving away two free copies. I need to figure out what the criteria will be (contest, random number pick, etc) but will try to have something figured out for either Sunday or early next week. You want a free book, check back in.

Market Observations
I am not discussing Apple (AAPL).

Like a broken record all I can say is I have continued to see individual stocks perform (screened for of course!) and as long as that is alive and well, I am constructive here. I have 5 open swing longs and that's about as full a boat as I carry in my trading account.

This week saw newer position WLK make a nice move. CTXS, WRI, and PETD have all been good performers. BANR had a big day today, up over 7%:

WAIT A MINUTE!! Isn't BANR a savings and loan? A financial stock? Yes, it is and you may wonder after what I wrote on Tuesday about big bank stocks why I am not a hypocrite for buying any financial. Fair question.

BANR was eviscerated and about destroyed during the financial crisis. The company was in the TARP program and the Treasury sold shares today it still held. Hardly a big money center bank, calling the shots, and being made whole with bonus money paid out like nothing happened. And I doubt the Fed calls BANR executives and discusses policy.

Further, regional banks, savings & loans, and credit unions are one way to get credit moving without all the crap from the big banks. Not really a fine line at all but I could understand some confusion.

Have a good night.

Market Notes 3-13-2012

About 70 degrees here today, just unreal. Winter has about run out of time. I am not sad to see it go. My eye is good to go, no lasting issues.

Big Banks are a "Dirty Business"
I don't want to spend much time on this topic.

Big banks are disgusting, and their collusion and partnership with the FED is stomach churning. The "Stress Test" results being first leaked then released ahead of schedule is just another blatant abuse of the financial system. Banks and the Fed, in the words of Don Vito Corleone, are a "Dirty Business":

With thousands of stocks out there I have no idea why the rush to buy in and support such crap. Returns, money, a trade bla bla bla boring. No need, none at all.

Market Notes
Today looked and felt for a while like a sort of panic buying blow off top sort of thing. Only time will tell, but I remain open minded. Some stocks I have been in or opened Monday have moved out of nice bases that were very compressed, not just some random run up out of no where. ChessNwine has an excellent study on this in today's market recap:
Stock Market Recap 3/13/2012

Here are my open positions and notes. Click any chart for larger view.

BANR (from 2/1/2012)

WRI (from 3/1/2012)

On Sunday I discussed my new focus on longer term swings based on weekly charts and I opened up 3 new positions yesterday. All trades posted in the iBC 12631 Pelican Room as soon as I am able.

PETD

CTXS

WLK

Clearly all of these names do not sport vertical charts with no tether to reality. Solid basing, volume in weight, and then price movement. As long as I can find individual setups like these I am not all that interested in the indices overall.

Have a good night.

Longer Term Swing Structure

My eye is about 100% better, no more swelling at all. I will recheck with the doctor this week to make sure the cornea healing is complete. I have to admit, this was pretty scary.

It's my actual birthday tomorrow but I have been having a really nice birthday weekend. Tomorrow I start at the new gym! I am sure to be pretty sore after that.

Longer Term Swing Structure
In keeping with my more "hands off" stance and stepping back from markets I am looking to have trades on that take up the minimal amount of my time or monitoring. Actually this is the kind of trading I prefer for the most part. Most of the hard work is your homework and screening, a trade should be mechanical if it's well set up.

Simply put, I like strong weekly charts that are close to a 20 MDA/50 MDA cross (green lines crosses over blue in my charts)and have been under accumulation. If the daily chart is attractive on top of that, it's even better. I usually give a bit more room to longer term swings (multi week trades) as they can take time to resolve. Setting a 5-6% stop loss and letting the action happen without watching allows the patterns to go about their business without a nervous or bored eye watching them for what to do. Using the iBC PPT screener has given me my best three ideas for new swings over the next couple weeks. Here are the daily and weekly charts for the three I am considering. Click on any for larger view.

PETD
Weekly

Daily

CTXS
Weekly (Has not crossed yet, but may early in week)

Daily

WLK
Weekly (Also has not yet made cross)

Daily

Again, not in any rush here. PETD is most advanced setup of the three and this week should give a clearer picture on CTXS and WLK.

Have a good night.

Vintage Cartoons

Not a usual Friday around here, but I had this post already rolling around in the mind attic so here it goes.

Vintage Cartoons
I was an 80's child and I loved all the classic cartoons. Clearly "The Transformers" was my favorite, but there were so many others. Here is a selection from that era, maybe you will know some of them.

M.A.S.K
The Mobile Armored Strike Kommand cartoon featured pretty wild vehicles that morphed into attack craft as well as pilot that would put on masks which themselves had special powers! This one was so cool:

Vintage IROC Camaro toy with pilot:

M.A.S.K battled V.E.N.O.M (Vicious Evil Network of Mayhem) and it was a fun show.

Silverhawks
Bionic fighters against whatever evil comes along in the show, the Silverhawks were reasonably entertaining. Led by Quicksilver and flanked by such interesting bionic hawks as Col. Bluegrass who played a sonic guitar and sported a cowboy hat. Picture:

Vintage Quicksilver toy:

Too funny.

Centurions
One of my favorite growing up! The Centurions were based out in space at their own station and were transported anywhere needed to fight Doc Terror and his plans on Earth. The three centurions, featuring Ace McCloud, had a huge array of weapons and systems they could call upon to use. Old picture:

Ace McCloud toy with equipment:

Nice.

Grendizer
My personal all time favorite, Grendizer was the ultimate in Japanese mecha anime. Great story, great music, and bad ass robots. What else could you want?:

"Grendizer GOOOO!"

Oh, the memories.

Have a good night.

Reduction Sauce

It's always something.

It is my birthday weekend (it's on Monday, but Monday's are not fun days!) and of course, OF COURSE, I get something in my left eye driving home yesterday and it was really bothering me. I went out to dinner and I was getting more and more concerned as whatever it was had not worked itself fee.

When I got home I flushed it out with some saline drops and still no progress. Looking at it in the mirror I saw a black speck right over where the green of my eye is. It was chilling. The speck would not flush out nor move and I was getting more alarmed. I went for the emergency room visit. The nurse practitioner was excellent and checked for everything. I had that fluorescein dye put in and before he did anything he said there were not abrasions on the cornea. He did see the speck of dirt/dust/debris and gave me lidocaine to numb the eye. The speck was removed with a fine Q-tip thing but after the fluorescein dye showed a small abrasion where the debris had been. Must have really been jammed in there. The eye felt better.

This morning my left eyelid was about swollen shut from all the abuse and I had to take a day off from work. I have to go to an opthamologist next week for follow up care. I was sitting on the couch today and thinking about my job, my trading, my writing, and my body and it hit me.

I am pushing things too hard.

Up at 5am and a full day at a real job where I am a scientist. Long commute home and then I am doing a full evening effort on house things like dinner, clean up, and taking care of the dog and cat. Then it's writing this blog and putting a market hat on, often well into the night. Then it's all done over and over again. The real pros of the market devote their full time effort to a full on day of work, and now I know why they are the pros. It takes a lot.

The cornea abrasion is a random event, but not some other health related things I have been going through. I don't sleep enough. I have gained 10 pounds in about 6 months. I get sick easier and while I have loads of mental energy, physically I am feeling a bit spent. I have a wonderful wife whom has supported my efforts, but has been mostly only able to spend time with me mainly on weekends. I go on vacation in late April into May for a long Bahamas stay and I don't like how I look at all. At all.

And I have had enough.

I am implementing the "Less is More" plan:

I am proud of my work here on this site. Over the past 12 months readership has exploded and I have met so many great people here and on Twitter. I like to count so many as my real friends and not just blurbs on a blog or hollow interaction in other forums. The support and help I have had cannot be bought nor asked for, only given freely. I am so thankful.

I have joined a gym, and have a plan going forward to do things I have missed out on. Fishing (it's almost Spring!), back to charcoal smoking food, vacation, and plenty of other things.

I am not falling off the face of the Earth. I am looking to do maybe 2 posts a week for the near future and they will be more macro based observation posts. I am about a 5X better longer term trader than a short term one and I would love to really devote all my market time to that kind of trading (investing?) going forward. I will be scaling way back my Twitter time as well. My email at the top right is always available and I answer every single one, non scam related. My good friends can always count on me and find me no problem.

While I am excited to do things I really want to do for a better me, writing this post is making me really sad. It's not a goodbye, but it almost feels that way. I give a lot of myself here and I hope I helped and made a difference.

Have a good night.

Extent of the Damage

It is going to be over 60 degrees here over the next two days. It was 7 degrees last night. Wild weather indeed!

Extent of the Damage
A day or so ago J.C. Parets of All Star Charts asked on Twitter what would be the least expected market action going forward. I offered two:
1.) A slow grind higher for another 10% on the SPX
2.) A fast 10% collapse over a few days on the SPX

What is most expected right here is a 3-5% pull back (depends where you start the measuring) in the broad indices and then a resumption of buyer interest and the primary uptrend. As this is 2012 and not 2011 I do prefer that to hold true.

Looking over charts tonight I see plenty of substantial damage to many names. What's even more dangerous is some names and sectors are showing tempting hammer prints right now, just daring you to take a shot on a rebound. Silver miner EXK is one and there are many names in the metals sector looking the same (click for larger view):

A gap up tomorrow would result in the rare "abandoned baby" candle pattern and could, I repeat COULD, be a huge bottom signal. To be fair, this could just keep flying lower as well.

A name I like to track because it runs fairly predictable within some set ranges is TPC. After today this stock is set to go into the lower range once again:

A turnaround would set a 3rd higher low for TPC, and thus it's worth watching.

In short I am defensive here and will be looking for confirmation of some reversal prints and for battered names to firm up. The very expected dip has now arrived. It's not my trading style or really an option for me to watch movement all during the day to then pounce so I will not be trying to grab a bottom here. Should things settle out and buyers return there will be plenty of time to get back aggressive. If things get worse then I will be limited in exposure. It's a muddled picture right now so clearly my feelings on the market are muddled.

Today I closed my WFM trade for -0.8% to have a larger cash position. I still hold BANR and WRI.

Have a good night.

Green Stocks on Red Days

Monday. Enough said.

Trading Account Update
No changes in trading positions. BANR was actually green all day today as was WRI. WFM is still holding up well. This morning's selling was a bit more nasty than usual for 2012, but buyers came back in and bought stocks for the second half of the day.

There was plenty of grumbling today about a possible China slow down as well as the Fed coming out via their favorite channel, WSJ's John Hilsenrath, and hinted maybe they are holding off on more stimulus. Not a very friendly mix at all. For now it pays to view market action rather than try and over think what may come of these two important new stories. Keep in mind that money managers have been putting cash into stocks (as noted by The Reformed Broker) and that is unlikely to go full reverse without clear data a slowdown is at hand.

Green Stocks on Red Days

Over the past couple of weeks there have actually been some down days with plenty of red showing in stocks. Down days need not be hated or feared though, sometimes they actually can help you see a new direction.

First off, some disclaimers. This post pertains to a generally up trending market or one that is set in a range sideways. Down trend markets get a few more layers of complication and I am leaving that out for now. Green stocks on red days is not usually a one day event that you can pin a whole trading plan around, but more of a weight of evidence sort of thing. With that said, here we go.

On down days I know I tend to focus most on any names I am long. That's natural and makes sense. Second up for most will be the big "tell" stocks or commodities like AAPL, SLV, or maybe copper and oil. Again, this makes sense and is intuitive.

But on down days, or even better, a string of them the market may hint or whisper where the action may turn up next.

You can skip over any ETF short like a PSQ or a TZA. Funny thing but on a down day I will read how the short funds are "working". Really? I kind of hope so. Also any stock that has had positive earnings news or positive news headlines will merit a question mark as that could be a one day pop sort of thing and may not apply to a general market move. Also keep in mind "safe" plays like bonds, utilities, tobacco, or staples will act more like a weigh station for money and not a new push into those sectors for a longer move.

On "dip" days money will want to get in to names they have missed or names they want to rotate into. I like to think of runs in the market as waves of the ocean, as the power of fund flows pours out on the beach, another wave is right behind riding in the next move:

The easiest way to mine for this is some kind of screening tool. iBC's ChessNwine shows how the PPT tools allow for easy screening of stocks gaining ground (I am a subscriber).

It pays to make sure on down days you are keeping track of green stocks. If buyers want in even on pull backs it is a clear statement of the desire and direction of money flow. Taken over days should that happen, it is one of the more powerful signals I know of rotation and can point you in a new profitable direction.

For the ultra nerdy you may try to plot buy volume with price over time in something called a Gantt Chart. Used in the professional world this type of layout tracks changes and progress over time. There is no reason why one cannot apply this chart to show sector rotation and stock run lifetime in a cycle over time:

I actually used to make these but have been a touch too busy to keep them up. I need to get back to it.

Have a good night.