SD-2020 TRADING WITH THE TIDE

[ira85]

This is the time of year when we see ads for weight loss products and articles reviewing stock trading success for the year just ended. This is a guy who had a pretty spectacular run in the mid to late 90's. en.wikipedia.org/wiki/Dan_Zanger#:~:text=and%20Chartpattern.com-,Personal%20history,appreciation%2C%20gaining%20over%2029%2C000%25.

I didn't make a thorough search for more recent results. It seemed he's in a business selling technical analysis information on a subscription service, ChartPattern.com. A cursory look suggests he had some spectacular success 20+ years ago and ongoing success more on a mortal scale in recent years. - ira

[sd]

He certainly had a remarkable record in the 90's Tech boom! 2 years to get $2 M!!!! starting with 11k- He knew enough to Sell- unlike myself back then. His "Rules" on buying and stops for selling

www.chartpattern.com/golden-rules.cfm
On Youtube- a number of videos on buying breakouts- Something I Often do- I'll check out his videos
The $125/Month is pricey-but then- if it saves one hours of searching and delivers a majority of winning trades, potentially worth trying out!
Also, if one considers what one can lose in a month by taking less than ideal trades, being guided to better trade setups with defined stops- perhaps that's not too much to pay at all as the market can extract a pretty steep price for "learning"

Amazing market turn yesterday & resilience in spite of the political dramas

[ira85]

Make America Great Again. Impeach Immediately. The stock market is going up. How can all three of these things be happening at the same time. Not to mention the pandemic.

We have just been through 5 days of incredible events in Washington. At the same time many hospitals were strained to the breaking point due to the pandemic. I thought the market hated uncertainty. But the market has gone up during this 5 days of unsettling news.

It seems lots of people on TV are speaking in one voice, condemning the insurrection and President Trump. The calls for impeachment were immediate. It seemed like everyone was in favor of impeachment. Then someone woke up and realized the President's supporters are going to keep on supporting him and what he stands for. The same people who were chanting, ”Hang Mike Pence” will also vigorously oppose those who support impeachment. The Make America Great Again movement has grown bigger and stronger over the past 4 years. Its not going to disappear in a week. If you are a Republican and want to run for President in 2024 you can't afford to alienate millions of Trump supporters. But those would be candidates for President likewise can't appear to support rioting and violence as a legitimate form of political expression.

Or can they? President Trump had the vigorous support of evangelical Christians even though he had a history of marital infidelity. The President had seemingly congenial relations with people who were comfortable with some white supremacist ideas. If the President came within a hair of winning the popular vote, then maybe having some of these beliefs is not an automatic dis-qualifier for President. In the first 50 years after the Civil War the KKK had millions of supporters and many people accepted the Klan as defenders of traditional values and societal norms. If the Make America Great Again movement can succeed in being seen as defenders of traditional American values the Trump legacy may be a force to be reconned with for years to come.

What does this mean for the stock market? Nothing. In the past ten months the market has advanced no matter what. With more stimulus a possibility and mass-immunization greatly reducing the impacts of the pandemic the future looks like it will lean to the growth/recovery side. If something big and unexpected happens then all bets are off. Say there is a new mutation that makes the virus much more deadly and resistant to immunization. That would be very, very bad and unexpected. If the earth's population went from 5.5 billion to 2 billion in one year it would be a game changer. Production and transportation of food, for example, would be disrupted to some extent. Lots of very, very bad things could happen that money and politicians couldn't fix. But as long as we stay with mortal sized issues like the political implications of the insurrection and a pandemic that will be controlled by vaccination we'll be fine and the stock market will too. -ira

[sd]

Amazing lack of concern -I agree- I like your assessment. The vast number of Trump supporters have common sense beliefs and are grounded - and are not represented by the radical mob- but that was very dangerous, as was the President's urging the crowd to do what they did- WRONG- He Lost my support when he did that-I now believe his ego supercedes what should be actions in the best interest of the Country- acknowledge the election results as a win by Biden-and allow the Country to move on. As I listened to Beck earlier- he points out that the 2nd amendment will indeed be in jeopardy if armed protestors show up at the State's capitols to "protest" as undoubtedly the odds of someone getting injured or killed will fan the flames to those opposed to gun ownership.
It may be intentional to do just that by those with the bigger agenda- of influencing politicians towards allowing more government control to "Protect the People"...... Chess anyone? I am sure it will be found out that many of those inciting violence within that group of protestors have alternative motives towards pushing that provocative crowd incitement. Trump blew it -that day....Jmho. He reiterated an unfounded conspiracy of election fraud- Agitated the crowd- instead, he should have been "Presidential" and taken the high road. His lack of judgement on what would result is astounding, and -after, when he tried to "condemn" that which he promoted.... sorry, can't drink that cool-aid.
The markets are forward looking- beyond Covid, beyond the political election, regulation, higher taxes-
i think we see the makings of a Global recovery throughout 2021- Yes, things will reprice-this is obviously a momentum market- and some valuations will get stretched- and then come back to realistic valuations- I'm learning a bit as I go down this newly retired path, enjoying the process of watching, investing, raising stops! Have you put a toe back in ?

[ira85]

Have you put a toe back in ? Not yet. It seems like nothing much has happened since I sold 8 days ago. I'd love to have the ARK funds a year ago. I'm a bit afraid of them now. The more I read about bitcoin the more clear it seems to me it will eventually fail. Competitors will be created and some will become popular creating an environment of limitless supply. If the market could support a dozen cryptos, or 500, then more and more would be created until all were hurting from over-supply. Bitcoin may be a viable speculation for gamblers, but it doesn't seem to have much chance of growth and survival over the long haul. I guess that exact warning could be stamped on many common stocks.

Seeking Alpha is going to a paid subscription. My free trial has run out. I'm planning to switch my reading to other forums. I think my time could be better used studying technical analysis issues and building skills. It strikes me my own written market commentaries are similar to SA articles, possibly interesting, but not of much practical value. They don't make me a better trader / investor. -ira

[sd]

"It seems like nothing much has happened since I sold 8 days ago. I'd love to have the ARK funds a year ago. I'm a bit afraid of them now. The more I read about bitcoin the more clear it seems to me it will eventually fail. Competitors will be created and some will become popular creating an environment of limitless supply. If the market could support a dozen cryptos, or 500, then more and more would be created until all were hurting from over-supply. Bitcoin may be a viable speculation for gamblers, but it doesn't seem to have much chance of growth and survival over the long haul. I guess that exact warning could be stamped on many common stocks"..

I confess to also not understanding the Bitcoin mania- but some savvy people seem to be embracing it- including some institutional investors-including SQ. I have steered away from it other than a 15 share position - 300 dollars RIOT risk just to have it as a tracking vehicle- I cannot determine what causes Bitcoin to surge in price other than the present mania- I think it dropped 25% this past week from it's recent highs- So many people are declaring it will go to 100k, then 300k - perhaps they are right and I may put a bit in it vs buying the lottery ticket-Of course , believers always think they can sell it higher to the next believer- until there is no one with their hand out -
The ARK funds are indeed very extended- I wrote about this in the 2021 thread, but it's worth repeating- All of that extra investment money chasing performance will only dilute the future results as ARK ends up proportionately buying more of each position they own- causing the share prices to rise- or they will have to expand and purchase additional companies- But, that inflow of money chasing performance is what draws traders- and investors to keep buying- until there comes a day when there are fewer buyers and smart money starts to trim shares- and then perhaps some large institutional sellers- reduce their positions- I think the present momentum is definitely All retail -and the ARK funds will return to above average performance at a a much reduced valuation in the future- as they did in 2019 . But how far out in the future that day is will be anyone's guess. Cathy Wood's expectations (a month ago) for 2021 is that the market will have a "Doozy" of a correction and nothing wrong with taking some profits to have "dry powder" to be a buyer when that occurs. and she only expects ARK to have a 20% YOY performance over the next 5 years.
Worth listening to if you have the time :
www.youtube.com/watch?v=kfhgbZBWgBE
My approach dictates that I continue to use stops, and if the position goes higher, progressively raise those stops- There has actually been a wider market run up since the beginning of the year- I've left my stops rest at the Dec levels in the ARK positions-since the beginning of the year the Ark funds are all just a tad bit higher-5%-18%. in 7 days. Decent gains in a relatively short time frame.

It strikes me my own written market commentaries are similar to SA articles, possibly interesting, but not of much practical value. They don't make me a better trader / investor.Seeking Alpha is going to a paid subscription. My free trial has run out. I'm planning to switch my reading to other forums
I've enjoyed your insightful commentaries- You could share in a much larger forum, and many would benefit or find informative- . I've a subscription to SA that I started in the Fall to learn more about diversified investing- It has become very commercialized with many of the contributors offering their own subscription advisory services. I have learned I don't want to be a holder of stocks for their dividend IF the principal value declines substantially!

I think my time could be better used studying technical analysis issues and building skills.
Studying TA can/is a long ongoing journey-but worthwhile Imo. But I think it is most effective to combine that learning with real world application.
I would suggest that in these days of no commission charges- One could practice, but with real dollars - Real dollars -even in small amounts -at Risk brings some skin in the game and is necessary to do as part of the learning curve. One would not be buying AMZN or TSLA or Bitcoin - but perhaps put $1,000 in an account, find 10 different stocks -all under $100 and above $5 - and trade them . as a learning exercise-it's like playing chess against yourself because the biggest opponent is one's self. In some of my readings, and watching some training videos, it is noted that professionals in their work careers often get frustrated in the world of trading-because of too high expectations...
One way to compress the TA price action learning is to view some day traders-you tube videos- because that intraday charting in one day can duplicate the a weeks price action on a daily chart- simply on a minute or 5 minute or 15 minute scale.
One professional firm- SMB shares the process of what their trainees go through to develop a trader's mindset- and also the trade preparation-
I'm not advocating one become a day trader- far from it- but the methodology-the discipline- and the study of Price Action, buyers and sellers is evident on the smaller time frames. Also worth a look IMO- as it compresses many possible trade executions in one day .
Note that SMB is a trading firm and also sells education to would be day traders- and also views the Level2 offers in their interpretation of Price action.
www.youtube.com/watch?v=1v2A1OKS10o&inf_contact_key=dc759fde890466f5b728c2a10e46b1ced18a532c4142cb79caf2b269de1401fa

[sd]

I should also mention- if you haven't read them- Uncommon Returns- David Swenson & The Ivy Portfolio by Mebane Faber-
Good reading.
ON TA- Start here -https://school.stockcharts.com/doku.php?id=overview:ta_101