SD's Short-term -seat-of-the-pants- swing trading

[bankedout]

Stocks like that have so much good news priced in to them. One little whiff that the future may not be as rosy as anticipated and splat.

Perhaps consider a rule such as:

Don't purchase stocks that have earnings due during my anticipated holding period.

[sd]

"Posted by bankedout on Today at 9:16am
Stocks like that have so much good news priced in to them. One little whiff that the future may not be as rosy as anticipated and splat.

Perhaps consider a rule such as:

Don't purchase stocks that have earnings due during my anticipated holding period. "

Good Point- Earnings are often well anticipated and priced in.
I knew this and several other positions were priced highly. My timing was risky to entertain taking on positions in stocks well extended-this close to earnings. Had I entered the various positions after earnings on a continuation of an uptrend, there would have likely been some opportunity to lock-in that initial gain, and get price moved to B.E.

Unfortunately, my timing was poor- to take on this wider stop approach with the market poised to make a 'normal' correction.t.
Taking today's tally, I'm left with 3.5 positions out of 11 and a stinging 5% + loss to my account.
I'm left with F, 1/2 MDRX,SWN, and AMO- the only position still positive is MDRX, so I'm likely to see some additional downside .

This account balance has dropped below the 10K level, ($9,970.00) and that is a threshold that I view as a line in the sand - and I need to rebuild the account. I couldn't stand to see another 5% down.

I'm going to lick my wounds and revise my approach. SD

[blygh]

I am staying short, sd. There is a phenomenal sector rotation going on- tech, materials, gold, are all going down - a gutsy move would be to go into pharma which has been flat for a year. I am following the pattern of last year - I recognize the January which dissipated around the 3rd week in Jan - flat to down to mid Feb - steady rise to "Go away in May" then Katy-bar-the-door - I think there will be an enormous sell off in mid April in anticipation of Go away in May.

[sd]

Hi Blygh,
A short focus may not be a bad way to go-
Tech rally has deflated sharply.
You are certainly right about sector rotation on going- difficult to trade except perhaps in a shorter time frame- Personally don't have the time evenings to scour much, and am taking a "pick a better entry" attitude.
I've got one medical type stock MDRX of which 1/2 stopped out today.
I'm tepidly putting on a buy-order for APH as ity seems to be moving upwards- in spite of a tepid market.
Presidential address tonight- Hope he says all the right things...
Holding my breath on my remaining positions, and ratcheted stops up a notch higher-
Got a touch of something of late, and will play catch-up down the road- Good Luck!SD

[sd]

It's been a few days- still holding 4 positions that are now again profitable- Some are partial positions-
AMP, F, MDRX,FCG and I added APH.

This attempt to develop longer "holds" has kind of been Baptism by Fire. Another 1-2 days of a down market would have taken me out entirely. I had raised stops to stop the bleeding, and that was a good move at the time. It's the old question of when is a stop too tight? If it takes you out and price continues lower, it was right. If it hits the stop and then price rebounds higher. there is the question of what would it have taken?
It was amazing to see gains evaporate so quickly and turn into losses Of course I was jumping in at a juncture in the market- earnings directly ahead etc.
Lesson learned- I will likely split my positions for the next group of trades with staggered stops if I feel there is potential- However, If I feel vulnerable, I will tighten those stops and plan to reenter another day.

Chart of a recent entry that was going against the trend-


The APH trade came about as the market was down and it was up- so it was defying the trend.

[sd]

1-28-2011 When I got home about 3 pm, market was down, positions were almost all in the red except for 2 whose gains were almost gone. I sold everything except FCN.
The news was all about the issue of Egypt's civil unrest and the 'fear' that it may not be simply fixed, and perhaps spread to other areas having similar issues in the East- Unemployment, Food inflation, civil unrest.
The fact that the indecision had so rattled the markets, it seemed traders took the opportunity to lock in profits and sell.
Ford failed to meet expectations in earnings and walked into this down market.
On the occaisions where I try to be a contrarian and buck the trend, the trade hasn't survived long -(TWM attempts)

I decided to go long the market volatility and bot VXX. $31.98
Oil was moving and I entered BNO $66.21 as a direct play on Oil price.
I went long GLD, 130.66
and short the emerging mkts with EEV. 15.23
I'm playing these as short term moves with very tight stops.
If everything opens back up roses on Monday, my stops will take me out.
The market late last year shook off the fear of a crash of the Euro and expected bailout of Italy, Spain, Portugal, Ireland and took it all in stride.
This middle east incident raises large fears that the developing economies - may be on thin ice combatting inflation, which somehow is linked to the QE2 policy of the Us Govt and putting these other economies in a difficult situation.

I think this time, it won't be that the markets snap back on the uptrend quite as easily. The extended uptrend has paused at the sight of the boogeyman in the middle east, and may search for other lurkers in the room? Or at least look closer at the shadows they may cast.

I think we trade choppily going forward . Best be nimble SD

[sd]

As Friday's new entries were counter trend trades, I had entered them near the end of the day.
Having the weekend to reflect on Friday's action, I feel I still would have ventured these trades. Perhaps I should have scaled back 1/3 though. Friday's market action was based on Fear, something the markets had largely ignored until now. Soothing voices may quell the concern.....

Understanding that the market trends have changed, and a lot of sector rotation is occurring...... Players in the market are putting short term money to work staying a step ahead of the rest of the market. This is the action of the smarter money, a step ahead of those of us that are prone to react to what becomes known.

This is a type of trading environment it would likely be best to sit aside until you can discern where it's truly headed-
The recent prevailing trend was down, and this strong market reaction can easily be quelled over the weekend with soothing rhetoric.....
I'm not sure if that has occurred-
The trade for Monday - reduce my exposure and potential loss if the market does not continue it's sell-off. I'll do this with tighter staggered stops- SD

Trading is about guaging market psychology and your own.
I reacted on the entries. I think I did correctly in closing my open longs. One never knows when a sell-off will pause until it does so.
Since my entrties were later in the day, I am at the mercy of the market on the open Monday.

[sd]

1-31-2011
When I got home and saw the market had put in a positive day, I expected to find some or all of my Friday positions stopped out .

EEV was the only position that was down, and close to my first stop. The remainder were borderline to entry, with FCG posting a small gain.

I have split stops in place, price had moved considerably when I entered. Tomorrow will be the tell I expect.

My positions are varied-
emerging markets, volatility in the Vix, price of Oil, and GLD which has been decling .
SD

[sd]

Holding 5 positions-2-06-2011
I expect BNO to stop out Monday-
I jumped into BNO as I heard Brent Oil was going higher.
I disregarded the low volume, thought I saw an opportunity to get in on an oil move that appeared to be ready to move higher based on market fears.
I expected several days of upside momentum and a chance to nip some profits. What doesn't show on the daily chart is the gaps in trading that this low volume instrument actually has- Without trading liquidity, you're at the mercy of the other guy .
Look at the big -no trades at all - on the 5 minute chart. SD

Posting 2 BNO charts- The daily and then the "real story" 5 minute chart.

[sd]

Catching up- prior trades.

I had also jumped into the VXX and EEV hearing the "noise" on the news and allowing that to propel me into taking entry into an early reversal trade.

Lesson here should be reversals of trend should be played with less forgiveness than trades that expect a continuation of a trend.

[sd]

I also went long GLD earlier, and SLV on Friday.
Both had been pulling back after a nice run, and I'm expecting a bounce higher-
GLD chart not uploaded-
SLV had outperformed GLD previously.

[sd]

FCG - Nat Gas play I finally decided to go long-
Hard to argue with something as straightforward as an unbroken uptrend . Same with WY. I'm not going to squeeze the stops on this until price weakens.
SD

[dg]

sd:

two suggestions:
1) perhaps you might start new threads monthly, quarterly or yearly to avoid zillions of pages (there might be a limit).
2) if you were to insert smaller versions of your graphs, your posts would be easier to read without having to continually scroll left and right on every sentence.

feel free to ignore these comments if you disagree.

[sd]

No problem-DG
The purpose of posting is 2 fold-
Helps me focus as I mark up a chart and also
to share with other members-
so to that end I'd like to be as readable as possible.
You can likely tell me why this occurs -
I don't know why what I write as
comments sometimes rolls so wide .
I'm contained within the 'Reply" box,
and it only allows me to write a max
of 68 letters per line - about 4" in width.
When I post it auto fits-
Since the chart I post is captured in paint,
the chart picture is small compared to the
paint screen
(one line is within the parantheses
thatI amwriting on thisscreen)

Chart size- Yes, I want to see the picture within one screen.
I use a 20 inch monitor, and so a 1600 setting on stockcharts fits that nicely. Most of my posted charts I have reduced down to a 1280 screen size that I thought would suffice for smaller monitors .
I'll post 3 different stockcharts charts 900, 1080, and 1280 each with a photo that is 1680 x 1050? Let me know which one is the right size.

[dg]

1024 looks fine on my monitor and the 900 is easily readable too. 1280 makes me scroll.

Your text will fit itself to the widest image you post; so you need to start a new thread that uses only smaller format graphs in order for the text to be viewed without scrolling.

btw, you might want to print out a copy of your thread for your records in case something were to happen to storage at the website. there may be a limit to the number of stored images -- I really don't know. I know that in my previous website, past images would automatically delete after a certain number was reached.