Ultimate Obscure Observation Repost

This morning I got an email from Mr. Stuart Cornfeld and it seems the producer and actor came across this older blog from August 20, 2011 where I made an ultimate obscure observation! His note really made my day and I was glad for the note. Enjoy it once again.

The Ultimate Obscure Observation
 It is only through my preternatural powers of observation that I caught something last night while watching the film "Old School" for maybe the 100th time. Are you ready for this?

At the beginning of the film, Luke Wilson's character gets into a cab. Here is the scene:

Ok, I was like "I KNOW THAT GUY!!!". Here is a still picture:

It took me a minute, but I had it!

This is the same actor that played the Pirate Restaurant boss in "Fast Times at Ridgemont High":

Ha!!!

The actor is Stuart Cornfeld.

Yes, this is probably a sign I have some issues, but I am not hurting anyone right?

If you have seen the new film "Hall Pass" then the older baseball coach from the film is the same guy that was the UPS delivery man in "Legally Blonde"! I notice everything. Bend and snap that!

Have a good night.

Taking a Shot or Giving Something a Chance

Mega Millions is going to be over $500 Million dollars Friday night. If you don't hear from me by Monday, you know what happened.

Taking a Shot or Giving Something a Chance
It's been quite a different week for 2012 as volatility and market drops have come back into the mix. In the summer of 2011 a 1% SPX drop would be a great "relief rally", in early 2012 it's a bit more scary.

My focus in 2012 has been on individual names and trading longer term swings because I have stepped back a bit from active involvement in markets to work on other things. Like my fat stomach area. Is the market topping here? Will it be sell in almost May and run away? Are we going back to the environment where all you can do is take quick pop shots at the market and run away with any gain you can grab? Maybe. I don't think that is clear right now.

And until that type of situation has arrived I am focused on giving something a chance instead of taking a shot.

What I mean is best shown by a daily and weekly chart of a current long, MBFI. In January I started to get excited by what I saw in regional banks and savings and loan firms price and volume wise (with my man @swooon). In my trading account I was waiting for some things to firm up and by early February and March I was positive on the sector and several names. The daily for MBFI (click on any chart for larger view):

I was not long for the big pop over about $21 but if I had been it would have been a spot to take profits and move on (bought on 3/20/2012). But maybe there is something more going on here. The accumulation has been strong through out uptrend and sell offs have been on depressed volume. As of today the price reacted well to the 20 MDA and has survived a market sell off while remaining above the breakout area of $21. I am down on the position (about 2%) and could cut and run here.

I selected this stock based upon a weekly chart and here it is:

I don't want to talk charts all night and point out little minutia. It's marked up on chart enough.

My point here is that I am giving this (and several others set up like it) a shot here to come to terms with some price levels that could mean substantial upside if held. If the market correction gains steam and a more serious pull back is at hand, I will take the loss (or break even on others) and move on. What I am not going to do is freak out and run away from stocks that have not broken the patterns that I selected them for out of fear or panic.

Complacency has many forms. Clearly the "buy the dip" one is easy but another related one, and one I see more often, is the "sell the dip" on an uptrend. Dropping a well structured position that has not violated any real price points or patterns is easy in an uptrend because you are still up and in the money. Seeing a position through to a logical end, be it price target to upside met (Nice!) or a failure at a key level (Sucks, and your stop), is how I treat longer term trades.

Have a good night.

Position Review

Another Monday over. The elliptical at the gym is losing the war against me, I keep getting stronger every time. Feel very good, and I think my concentration has become better.

Position Review
Anytime you are in positions you have to review where they are and if the story has changed from when you bought in. The story could be technical or fundamental. Here is my own review of my open 6 longs and with minimal comments. Click on any chart for larger view.

MBFI:

WRI:

CTXS:

PETD:

WLK:

BANR:

A mixed bag, but nothing here gives me reason to sell just yet. MBFI may be the weakest of the 6 at this point.

Have a good night.

Weekly Playbook

Been a little while since I posted, hope I remember how!

Weekly Playbook
One of the most common questions I get is an inquiry how I am able to trade when I have a full time job in the science field. The answer is simplicity and preparation.

In an up trending or even sideways market I like to think of the behavior of stocks as a loose, mildly aggressive poker table. In this kind of environment there will be plenty of players (stocks) in almost every hand and you can certainly play a wide range of hands looking to win a lot of pots. If you are at the table for a long time (as in you trade all day, maybe it is your job or work) there are benefits. Hands like 5-6 and 10-8 even have life in an active table.

But if you can only sit for an hour or two your ability to be active is limited and the draw downs that come from being in so many pots may ruin any chance you have in such a small amount of time to walk away with some chips. This is most like my situation where I cannot be managing many positions during the week and constantly watching new setups emerge as the day goes on. Faced with that, you want to wait for the best hands, the strongest odds to get involved, then get involved aggressive.

So I have a wrist playbook just like an NFL quarterback:

As I am slow to adopt new technology, I do all my market homework the old school way. I write stuff down. I will be doing screens and stock charts tonight and while I use software for the charts and the iBC PPT screener for idea generation, I still write down my set up ideas in a little leather book. The one on the left (brown) is my almost full one from the last year, and my new black one which I will start tonight:

I have a simple one sheet list of my best 2-8 best ideas for the week that I take with me everyday and keep in my pocket. Depending on how I am positioned in regards to open longs I may be looking to get into anywhere from 3 to 8 names in a given week. This week I am pretty full on open longs (7 open) so maybe I only need one or two of the best setups I can find for this week.

What does this do for me?
-Cuts down the noise. On any given day you will see a hundred things that are "going" or just "went". Unless you own them already, that clutter will just eat up your attention.
-Keeps me focused on less. I cannot follow 100-200 stocks, and I doubt I could even if I was at home all day. I want to have a great feel for the small list of names I am interested in and know them in and out.
-Enforces discipline. It's easy to get lost in a sea of sectors and headlines/earnings driven stock moves.

By definition I will miss many plays by the system I am using. That's just the way it goes. By focusing on a limited list of my best ideas I increase my chances of having success that I have prepared for.

On my list the following information for any stock will be noted:
-closing price Friday
-breakout point or important price level
-what price I will pay above and below Friday's close
-stop loss price
-first possible sell target
That's all. Everything else comes from market dynamics and price. I know by heart the important index levels that I am aggressive over and where I would look to back off (I focus on SPX almost 100%).

If you are a regular person that is in markets while you work the day job consider cutting down the noise and really being prepared in a smaller number of names. If you are a pro that feels their trading has been too active or over trading has bitten you, why not step back and try a more focused approach until the "market feel" comes back.

Have a good night.

Market Notes and Win a Copy of "Backstage Wall Street"

It was just under 80 degrees here today and more tomorrow. Spring is in the air and it feels amazing. This early warm up may bump up fishing season by a week or two. Regular readers know how much I HATE the winter.

Market Notes
Another reasonable drop at the open today and then some buying came in for most of the day. After the late run last week a drop and/or sideways action was probably in order. Sometimes you will miss a run up for various reasons, but there are some things to look for that can grab you a second chance.

A week ago I highlighted the stock WLK which sported a great weekly chart and a supportive daily chart. I bought in on March 12 and have held since. After a nice run, WLK is slowing down here, and had I missed my entry before I am presented with a lower entry than the breakout day. The key here and always is to make sure the price pause or drop is on low volume! If new breakout buyers are not running for the door a longer term swing can make sense. Here is a look at WLK and note the volume dries up on this pause (click any chart for larger view):

Another shot at an entry after a breakout is a retest of the breakout area, or "throwback". I am long CTXS and here you can see it has gone back to the breakout area around $76.80:

This drop is a bit more menacing than the WLK drop and I am not going to give this too much more room.

Lastly, I added MBFI today and here is a weekly chart for the stock:

So far nothing too damaging in the market. 2012 has been kind to the long side, but things cannot go up every single day. You can often learn more about a market on down days than all oat mania up days. Just try to listen.

Win a Copy of "Backstage Wall Street"
I discussed the launch of Joshua Brown's new book "Backstage Wall Street" last week. I am sure this book is going to be great and I am starting on it tonight.

It just so happens I bought extra copies for the express purpose of giving them away. I have two copies up for grabs. I will ship the books out to the winners of a trivia contest this weekend (I hope).

First the rules:
-Submit answers to me via my email on the top right hand corner of this site. DO NOT use the comments section or Twitter.
-The order of correct answers by time submitted is how the winners are decided. Move fast, get a book.
-One submission per person.
-I will name winners later in week and then I will email you and ask for a mailing address. If you don't really want a book shipped, don't enter.

Ok, so the 4 questions:

1.) The SS Central America ship was lost in a hurricane in 1857 off the coast of the Carolinas. The ship carried about 2 million dollars in gold and the loss of this money contributed to to what financial panic?

2.) What space probe sent back images from the surface of a Saturnian moon?

3.) What is the name of the Starship in the novel "Tau Zero"?

4.) Who is credited with the invention of the polymerase chain reaction?

Good luck.

Have a good night.

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.