sd's -Adapting in 2011

[ira85]

Congratulations on a timely move!! The markets have a lot to digest next week. I would think the moves you made today will be winners. Wish I'd made them. Good luck. -ira

[sd]

Congratulations on a timely move!! The markets have a lot to digest next week. I would think the moves you made today will be winners. Wish I'd made them. Good luck. -ira



Thank you IRA- I also hope so-Thanks for your comments.
I'm optimistic that this move will last for more than 1 or 2 days,. With the dismal jobs report and the concern about Europe- and now 17 of our financials being sued last count- Well, things certainly should continue to head in that direction for a few days .
This could likely be just the impetus for a few days down and then an 'oversold' rally will pop up as has been the case. The president and present administration & Ben will scramble and likely not wait until the president's scheduled speech Thursday to try to spin a better light on our situation.

Day Trade Recap-
Friday was an interesting day, being home during market hours and watching real-time price moves on the 1 minute and 5 minute charts.
I was determined to wait through the 1st hour, as it often changes direction - and I took some good entries as price pulled back towards the lower levels of the morning range with several picks.
I was trying for a diversified but common theme- further market weakness and issues-
-Banks short- SKF
Euro short, EUO(should have gone with EFU I think, but afraid of what the ECB can come up with in 3 days)
Russell short TWM with an add to the position once price moved higher
Emerging markets short-= EUM -if the US & Europe are recession bound, the emerging mkts will see a drop in demand from consumers.
And at the close I added SCC -a consumer short.
and also went with GLD (not UGL this time-price extended)

Ideally these will be timely entries and see a number of days of uptrend where I can trail a stop-
I also kept some free cash for one position while waiting for my UYG and xlu closed trades to clear.

My entire EOD 60 minute approach is based on price trending higher for enough days to get stops up to break even and then net some profit, trail some stops, catch a larger trend
It also limits losses by the tighter stops .
It has been mostly whipsawed- where profit taking on any weakness and tighter stops has indeed been prudent- but not successful in the overall approach- to date- Since the predominant trend is down- I'm positioned accordingly with the trend.

What Did I Do Right ?
I had a focused group of ETF's in my watchlist and charts of each on stockcharts prior to the start of trading.
I had a bias as to what would happen- but did not take the entry trades and waited that first hour- as it turned out, since almost everything gapped higher off the open, that gap higher was followed by a period of sideways consolidation-
I took several entries off the lower side of the range- and then added to the position (TWM) when the trade pushed out of the range-
I wasn't feeling rushed to take any trades or to chase Price.

What steps will I take to protect my positions?
I have stops on all trades.
I have my "entry disaster " stops in place and will look to apply 2 part stops -to each trade -
I will assess each trade's chart daily this week and adjust stops according to price action.
I will take partial profits - anticipating a market relief rally .
I may also use a bracket order with a limit sell- Possibly 20% above the present price to catch a high intraday move with a portion of the trade.
I will consider a reentry if stopped out and price goes higher-Will try to get some charts posted this weekend- SD

[sd]

After a strong initial move to the downside, the market pulled up it's britches and decided things were not all that dire after all- Dow closed down some 100 pts, after being down over 300.
Most all of my positions- except EUO showed a gap higher at the open and then decline in price during the course of the day. Euo continued to gain intraday-
The lack of follow thru further suggests the market has found a reason to believe all is not too dire.
I'm still optimistic about the trades I entered into Friday, but will reevaluate each trade- and raise stops accordingly.
I will put 1/2 the position at B.E. and look at how I will handle the remainder. I'm thinking lock-in some profits with stops at the intraday low for the other 1/2- SD

[sd]

Update-
My interpretation of the market's potentially bullish close yesterday proved to be accurate- Yesterday's recovery from the potential abyss to a modest down day morphed into a reaction bullish day today, with the Dow gaining 275 pts S&P up 33, Nas +75.
My defensive reaction was to set stops to lock in gains on 1/2 the position, and stops just at or slightly above B.E. on the other 1/2.
Nothing wrong with that strategy- But the market -instead of gradually moving up- gapped higher out of the openiong gates, and bypassed virtually all of my tight stops and even below some of my Break Even-
In net I was stopped out for a 1.2% portfolio loss of all positions except for the 1/2 that remained in EUO- and I raised that stop to above Break Even tonight.

Very frustrating to say the least-

I felt this recent group of entries was timely, and had plenty of potential upside- certainly more than 2 market days and then totally discounted by the market-

Had I been trading in real-time Tuesday, I likely would have sold a portion of any position where the hourly bar closed below the fast ema- The low of that bar is a good place to move a stop-
That's all spilt milk since i seldom get to monitor trades in real time except Fridays.

These whipsaw trades in this market has proven several things to me:
Take The smallest loss-because it is the best loss when the trade turns south.
Lock in some profits for a portion of each trade-

Even with my short term 60 minute approach, I need trades to trend for 3 days+ typically longer to make money with raised stops-after the best of early entries.

OK, got the whining out of my system for this pm.
I'm going to look at a quick trade in the most oversold sector- Financials- with UYG.
I think I won't mind that Deer Season opens this weekend-
Ity will be better for my portfolio and my Freezer! LOL!
SD

[sd]

This Sept 9 Friday- at home & made a few trades mid morning.
Market opened down, Europe news is still not promising, and the Euro short trade I have on gapped up higher.
I added to that Euo trade to a full position today.
I also took a short-europe position with EFU,
and took a day-trade with FAZ as it took a mid morning move higher after a gap open . This is strictly a day trade- shorting financials. The European banks are in crisis, and there has to be contagion fear here, along with the lack of a positive market response to the President's job report. SD

[sd]

faz stopped out for a small 2% gain as price pulled back from the morning news momentum.
I intentionally took this as a day-trade, and planned to sell on limits hit or stops hit-

[sd]

Wednesday update-vacation this week, and I've had better success with my deer hunting, than with my trading-
Yesterday I sold EUO and EFU for smaller profits, as I sold as they declined on what seemed to be bullish news in Europe and I sold without waiting for them to hit my stops. Price had rolled over on the charts-.
Ialso went long uyg, which reversed the next market day, and I went short with skf- that had a 2 day move and then reversed- and I failed to lock in gains on that expecting we'd trend lower- and stopped out for a loss. on both trades!
I didn't stay watching the trades all day long, and therefore didn't react as a gain turned to a loss with that trade.
Ultimately, one hopes the trade direction is favorable, and the allowable stop-loss is reasonable based on the continuation of the trade , and not on an excessively wide stop as a prayer to not getting taken out- This should be true on any time frame- just that the stops get progressively wider.
UYG looks like it's trying to put in a short term bottom near $38.50 as the recent low, and we're going sideways off that level.

As UYG gained market share yesterday, along with bullish European news, I took a partial position expecting a rally . The position closed yesterday down slightly, and as I listened to the European markets were closing higher this am;,made me feel that a bounce would happen today- I decided I would watch the price action through the first hour on a 5 minute chart and potentially add to the position- .Price gapped higher at the open and then proceeded to sell off.
At 10:15 there was a high volume wide range bar ,
and I added to the position there. Price rallied higher the next 3 bars, and I raised my stop to just below the low of the 3rd bar that tested the reversal. as the 4th bar opened higher.
About that time some "news" came across about the Austrian vote not ratifying the European conference caused price to trade lower and hit my stop by $.02 and then price reversed higher as the news was discounted as not being a denial of allowing the conference to convene? Regardless, I was taken out for a loss and now see shares trading higher$1 higher.
Good news in the Chip sector- so I took a partial position in TYH- a 3x technology .Will hold overnight unless it hits my 60 minute stop.
Should be news out today on Greece getting it's monies today, that should also help rally the market, preventing a "systemic" crisis- And Timothy Geithner is off to Europe today to and be further good news for the financials.
SD

[sd]

Thursday 9-15-11
Nice vacation day- up in a tree by 5:45 am- had several does come in shortly after daybreak, and I missed the 30 yard shot in the brush- To date it's Deer 3, Me 1. Weather is expected to turn cooler so that should help them get more active.
On to stocks:
Market is up modestly this am-The Eurozone has some bullish talk concerning Banks over there and that helped push our market higher.
I waited the hour, and TYH was pulling back after gapping higher at the open. I added to the position I took yesterday with a limit order $35.32 (after a $36.00 open)
I also added some DZZ- which is a leveraged Gold short. I bought that early @ 9:57 am for $4.50. Gold has not responded as a flight to safety trade recently, and perhaps has made a near term top- Supposedly the initial sell-off in Gold was based on the need to meet the more stringent margin requirements.

I had both a 1 minute and 5 minute chart up for TYH, and technically made the entry "hoping " I would get a pullback to that level, and had a limit order waiting. It was after the position filled, that it made a slight move higher for the next bar, and then sold off some more. My entry was dictated not by properly following price action itself, but on the first swing low- i didn't think it would get hit. Price in fact made several lower moves this am.
What I see after the fact, is that looking at the 1 minute chart, had I waited for a SAR buy signal, I would have entered at a lower cost $25.25- which is relatively close and immaterial for the small # of shares I'm trading per position. Sar did an excellent job of converging on price and giving timely buy and sell signals on that 1 minute chart- but I'm not intraday-trading.
I am trying to improve my position entries by getting in at slightly lower prices.
DZZ- I just took the trade because it makes sense that Gold will not rally if the Eurozone is showing a more united front. I should have considered ZSL -the silver short as a play with a larger % move.
SD

[sd]

Markets closed up today- Dzz looked weak though!

[sd]

Recapping this past week- Rambling on....

It's been interesting watching the open with real time charts on 1 , 5, minute charts up and referring to the slower 30 & 60.

I had several good trades this week- Exited the EUO trade as price started to decline earlier in the week- Repurchased lower yesterday as it came off the Thursday low.

As I realized the market was really trying to rally, I jumped into the 3x tech TYH and held until yesterday where I sold because I didn't want to hold it over the weekend- It's been a while since we've seen 5 up days in a row for the market.
Gold hadn,t reacted as a flight to safety in the previous week, and that reinforced my conviction that it's topped and will pullback further- particularly in the face of a bullish week where money was going into equities.
Based on that bit of insight,I took 2 DZZ trades this week Was I mistaken-! Golleeee as Gomer PYle would say. No surprise there!
Gold did indeed put in a rally of sorts Friday, after gapping lower Thursday. Technically, it has still rolled over price wise and is still below the downturning 10, ema on the daily. I closed the trades with small losses.
Also Made a little with the EFU trade-Exited as the market rallied.
Easier to focus on the winning trades of course, but my gains were also cancelled with some losers-particularly got flipped off with UYG and SKF early in the week.Got whipsawed both ways there.
It's back to work on Monday- We finally got a computer set up in the construction office trailer so I'll have the opp to view the market open at break and then again at lunch-The construction industry has not been doing well or seeing a recovery here in NC- Things generally don't look promising for
much of a recovery here near term, nor for the rest of the country.
Fortunate to have a job still, many don't, and what will push us higher in this -almost declared recession -market? Better sharpen my trading skills!
And my archery skills could use some improvement as well!
I digress....

What did I learn from my "day trading" seat?
Don't trust the open-
Mediocre news can affect the market as it gets digested-

My best gains have come from holding while the trend is ongoing. This market has been tough to position one'sself for much of a trend. I started this week thinking there would be ample opportunities to continue the short focus and tried to move with the swing in the market.

I confess I have become a LTBH with one position- AAPL.
I decided to jump in with 3 whole shares @ $397 on Friday.
I will allow this position plenty of leeway, and not use the 60 minute chart as the buy/sell.

Rambling a bit this afternoon- almost time to get up a tree for the pm . Will try to get some charts up.
SD

[sd]

Where are we heading? Recession, double dip? or are we going to possibly have a rally in spite of the concerns-
My belief is that things are not looking favorable, and we 'deserve' to see the market go lower. That market rallies are likely short term - but my belief is often wrong- The "V" rally in 2009 left me waiting for a further decline-that did not occur. Markets "climb a wall of worry" ahead of the actual economy turn- months ahead.
When one's belief about what should occur is in conflict with what is happening- and causing a trade to lose money, The belief is clouding the judgement of what is actually happening at the present time-If we are value investing- that is one thing-
Swing trading is another.
They say a volatile market is where a trader makes his money- but by golly, they must be talking about the machine trading that can nimbly take advantage of these whipsaw 3 day directional moves. They simply chop me up. Finally, This week's price action gave upside direction for consecutive days- for the balance of the week. What a change!

The EUO (Euro short) trade last week took advantage of the fear of Europe going into multiple defaults, and the spread to the US financial markets. The EUO and EPV trade was based on following that fear until it changed.
That fear dissipated this week , and the Euro trade rolled over hitting my trailing stop using Sar as a guide. That exit caught the early part of the down turn, as did EPV.
Had I been using a daily chart, I wouldn't have closed those positions as soon, seen a profit turn into a loss..
On Friday- despite the markets closing Higher and Geitner going to Europe, the Euo did not trend lower, but moved back up and I took a reentry on the price action.Holding that over the weekend . This entry may be just a premature fluctuation, but it suggests the market is not happy with the progress suggested by the prior days this week in the Eurozone-
Why take this trade? It fits my bias -what I think the market "should do" by discovering the flaw's in this week's market rally based on some unified approach-
This last entry was early- and as much a trade as it is trying to interpret what next week's news will bring satisfying a solution in Europe. The directional bet is that there will be dissatisfaction in the resolutions -or lack of- achieved over this weekend.
We'll see how it actually turns out - This trade has a relatively tight reentry stop-loss.
SD

[sd]

Was pleased today with moves up in EUO, EPV and AAPL breaking $400-gaining 3%- Go tech! I took entries in all 3 Friday-
The market was down, and yet Tech TYH closed higher after a gap down open (I'm STILL pleased I sold Friday)
Gold was down, the dollar higher?
Are we getting ready to rally? to discount the worries in Euroland?
Just heard that Italy just got downgraded 7pm on Kudlow-- and that should push the markets lower for a few days. It should see continued moves higher in the EUO and EPV trades tomorrow-.
The price action Friday- on both of those stocks- was higher- and that was why I entered- Our market was up, but these were foretelling that all was not well with talks in Euroland.
Let me interject here that Gold is Not behaving as a flight to Safety trade here-and that is how it is commonly perceived.
One needs to look beyond the perception to view the actual price action and how it truly responds.

As I look at my EUO and EPV positions- both opened sharply higher but progressively lost ground as the market tried to make a comeback off a wider open I assume. That initial gap was the built in momentum overnight, and it lost momentum the remainder of the day.

Dealing with limited information other than the price action of my trades- , it suggests that these trades would trend lower tomorrow- Since the politics of the European situation affects these trades, will the 'breaking news" about Italy being downgraded give an additional boost tomorrow?
Our financials have also been adversely affected by the European overhang.- and this downgrade of Italy should continue to push the financials lower. Contagion fears.

Do we have a different market tone? It seems that often the market could/would ignore negative input and keep on truckin' . Today the market seems vulnerable to any input.
In the immediate term, I interpret that the late breaking news should propel my 2 trades higher tomorrow, despite the loss of momentum intraday.
I see the technology sector advancing today in spite of a down market as the go-to- sector lead in a rally mode market.
AAPL breaking the $400 barrier today when the other markets are down? That suggests underlying strength!
while breaking news may push the market down, the tech sector should be watched.
Iwill raise stops with the 60 minute Sar levels- SD

[sd]

Seeing the futures this am , I broke my 1 hr rule and bot TYH @ 9:35 am at morning break. That proved to be the right thing to do, and TYH rallied higher until Noon, and then the market rolled over on Europe fears. At lunch, I debated where I should adjust my stop with what was a decent stop- a 15 minute or 60 minute Sar level-, I comprimised- and TYH rolled over and I sold for a small gain $.31 @ 14:41 and perhaps should have just went with the top of the price action- and gained $1 on the trade or 4% or so $37.50 entry, $37.81 sell $36.64 close-=
This type of market- When price rolls over, take the gain!
At least everything closed in the green with some profit vs loss!

The entire market rolled over I guess on European/Greek concerns,. I sold EPV - the Europe short after watching it pullback from yesterday's nice pop- My best trade would have been to have sold the POP! Perhaps I should put in that limit sell say at 10% pop for 1/2 the position.....
Today I was defensive with the carryover trades, and am glad I was- Locked in some profit on EPV , still have the EUO trade with a stop just above Entry.

Gold was up some today, but it is still technically downtrending- possibly printed a double bottom today, but I would not jump back in until I see a real reversal of trend- With UGL, that would be price closing above 111. with a stop @ 108.--

I was enthused by being positioned right , and yet this market can turn in an hour- and go South in a hurry-
Trading here has to be tactical and chart based- Not one's Bias -
SD

[sd]

Tried to upload a chart, issues with photobucket tonight-
Everyone was waiting for the Fed to speak today. and I was unable to catch the response- I did see EPV move above the Sar level and put in a limit buy @ $60 which got filled later in the afternoon. Price had moved higher, but came back & hit my limit , closed up.
The EUO position stopped out for a just above entry gain and then closed up a bit higher-
Markets closed down today, apparently displeased with what the interpretation of the Fed speak was.,?
I will look to add some trades tomorrow- likely continuing a short theme.
SD

[sd]

WOW- Market tanked today-
I added to my short positions intraday, but the gain was only if you had bought yesterday across most sectors.
My added positions- SKF,EFU, twm all closed just below my mid day entry.
This feels like it's the real move down- but this market can uincannily rally .
I will continue tracking the trades with a tighter stop approach/ 60 minute charts.
I expect the market to put in a near term oversold rally within a day or two- and that rally to be suspect of course.

Just think about this as you sit at the computer screen this evening- Or tomorrow's evening......Or the one after that.....
You assimilate the news that affected the market's action.
This market has a history of short term volatility, like the wild roller coaster ride. Up for 3 seconds, down for the next 2 , and then level off... Until the next hill climb.
We appear to be ready to break to the downside lower levels. Futures tonight up slightly- Rally should be suspect .
I am 50% in cash with unwinding trades.
Added SKF, efu,twm at midday, but the market closed slighly higher this pm.
We trade our beliefs about m market sentiment/direction.

Some of us will be right in the final analysis as to market direction.
Still, we can fail to maximise the gain when the market does as we anticipate and moves in our direction.
We tend to move and adjust our beliefs belatedly- and acquiese (sp) as we leave our profits behind in trades left open and not closed.
We'll see how this time the market digests the price action-
SD