SD- 2021- ACTIVE MANAGEMENT FOR GREATER SUCCESS IN 2021

[sd]

I don't own FSLY, but a friend does -
FSLY- once a big momentum name, but now It is not trending well. Price is moving above and below the sideways 50 ema-So it's essentially in a rolling sideways trading range. Perhaps this is common in a topping pattern, but the chart gives the opportunity to make good trades, net good gains, and wait for a chance to make a better Reentry.
My Friend trades differently than me- I would not be comfortable to Hold a losing position for a long term- He has the fortitude to do so- and the market eventually saves the trade for a profit, rewarding his patience.
My friend's stop executed below the 50 ema. $97.50 . and then he bought the past 2 lower days . For my approach, that is a mistake to buy because Price just went lower, declining RED bars, dropping well below the 50 ema, and not finding any support at the swing low made in Jan 2021-



, but here's a chart. My friend Sold FSLY at a $97.50-stop- when the opportunity was to have captured a much higher % gain by using


Analysis to be con'td later....




months later followuo 5-12-21
As FSLY broke down in Feb and moved below the 50 ema, it becomes a textbook bull trap with what appears to be several periods of attempts to get higher -green bars and above the fast ema- but ultimately these became bull traps- a once high flying big tech name that gets caught in the tech over valuation and then the tech correction- My friend that added to his position in the Feb decline in the 80's -if he is still holding- needs a 100% gain from here to get back to break even. Lesson to be learned is to not be a buyer when it's downtrending- because you never know how far it will go to find a bottom....

[ira85]

I listened to one of the Mark Minervini youtube videos today. He sounded a lot like SD. Not the sound of the voice, but rather the rules and strategies for buying and managing the portfolio. Minervini's reasoning for his rules of trading are a lot like what SD has been talking about for the past couple of years.

If anyone is reading this, consider what a great deal you get here at DG's. Mark Minervini sells his coaching/training. SD posts his experience here and you get it for FREE! You can't beat that. -ira

[sd]

LOL IRA-I think Minervini spells it out pretty good in the Youtube videos- After listening to one of his recent you tube videos- yesterday, I ordered 2 of his books- I think the Rules are what keeps you in the Game-
That said- Futures are down BIG this Monday am 2-22-21- and you have to wonder if we are not following through on the long awaited correction.
Nas Down -187 premarket-
This will be a tough decision day- since we just reentered positions at the end of the week- The 1st 30 minutes of the market's open are not to always be trusted-so we'll see....
I'm applying a modified approach today with stops- I'm selling a number of spec positions at mkt-
On some other positions, I am selling 1/2 at mkt, 1/2 at the 4 hr psar or daily 21 ema - or just under the Thursday swing low.
I will be taking a fairly large LOSS today

Having many recently taken positions, and not knowing which ones will possibly go higher on a gap open- perhaps the commodity positions- or some of the shippers and individual stocks, I elected to split the positions- Sell 1/2 at the OPEN, and stops under the remaining 1/2.
We'll see how this fares...

From SSM- forum SDGR-trox, deck,lvs
Commodity plays and infrastructure holding up -
a sample of some of the ideas presented by SSM members- Why not take a FREE 30 day Trial - Some really good ideas presentedboth for short term trades and investment types.


Out of this list, we bought STLD,CMC-
Also Bought JETS, LVS,TROX,IWD,(value ETF) USCR (concrete) ;PAVE,ALK (Joe Terranova rec) SDGR
Adding 100 SLV- Minervini reportedly Buying


Mid afternoon- update. IN the IB account, AEYE,BDRY,MP,PLUG,VERU stopped out- MOON 1/2 stopped out- at the open, the remaining 50 shares stop at $48 is with $.30 of the present price- so it's likely that stop will be hit today-...
In the Van accounts- my sell 1/2 @ market for many positions and then a tighter stop had many executions- reducing the overweight Tech positions .as well as some semis and infrastructure names- Infrastructure gained today , and I shifted into some individual stock names and doubled my position in PAVE.
Weakness in TSLA also affects some of the ARK ETFS, and I think it's indicative of the Top in the entire EV market.-
By reducing my Tech exposure and including those areas that are showing strength- Infrastructure, commodities etc- and even Airplanes- and Retail stocks, but I don't have any individual retail names- added STLD- steel industry - other names to consider CLF, X
My emerging markets positions were all gap down lower and positions sold.

Overall, the present account value's decline is not that substantial- about -1% across the Van accounts- and presently about a 30% cash position .

TSLA CONTINUES TO DROP- NOT a good sign for the Tech sector- i WOULD THINK IT FINDS SOME SUPPORT $650 - $600 PRIOR BASE- if that breaks, $450.00
TSLA is definitely NOT a good Buy here-



EDIT ADD 2-25- YES TSLA hit the 1st Support level the next day , moved higher and pulled back today on market weakness- Tech down hard-
The presumption is that If this 1st support level fails to hold, Price will drop into the next support level-


YES VIRGINIA, MARKET CORRECTION UNDERWAY_- TECH BITES IT HARD -341 ON THE NASDAQ- The Long discussed Rotation is perhaps underway- Higher rates affecting the 10 year -
I Sold my remaining ARK funds at the Close- I also Bought the small cap VALUE sector ETF.

[sd]

Amazingly FAST AMZN- Received "Mindset Secrets For Winning- this pm-about developing a winning mindset I think-
The other trading focused book is 4-5 days out-

I will be listening to more of Minervinis You Tube sessions- ON the SSM forum, someone posted he had tweeted he was Buying SLV today - Indeed, it has broken out higher - above $25.50- and so I also bought some- had sold it recently on a gap up and the pullback.

Today's Close was a net loss in the Port and IB- $238,308. Not too painful, but a continued slide . I hope to see it turn by shifting my allocations, reducing Tech, and adding into the infrastructure and commodity industry groups that are performing with gains- I am adding more individual stock names- primarily from the SSM forum room, identifying stocks that fit my approach . . The advantage of such a diverse group sharing ideas is there are plenty of eyes on parts of the market that may be in favor, and presenting some good potential trades- The members realize that not everyone there trades the same- Some are investors and Buy pullbacks and add to positions once they bottom - others are shorter term swing traders-like myself, looking for an upside turn from a pullback or a breakout .

A common theme among traders and investors that I also follow is to Trade WITH the trend- and not trade long when price is downtrending.
Why not? Because no one knows where the bottom lies until the stock tells us- by putting in a bottom and then a move higher.

Consider the very Simple RULES that would then apply to the following chart-.and Many others.
1- Never BUY when Price is downtrending- and is BELOW The Declining FAST ema - Pretty SIMPLE EHH?

2. You WAIT Patiently until Price makes a CLOSE above the Fast 7 ema- and realize that Often the 1st higher Close then is followed by a lower price move-
SO, You consider to only Buy at a higher price entry above that 1st attempt to Reverse the Trend down. Notice in the 3 declines on this chart,
Each time price tried to Reverse the downtrend and thus Closed Above the fast ema, that 1st initial move higher was followed by another pullback below the fast ema. This is not uncommon- This is likely typical of 50% of R.O.T (reversal of trend) trades. What to do?

3. Use a BUY-STOP entry - .5 or 1% above the High of that 1st ROT bar- to reduce the whipsaw declines- OR- only go long following a Green Elder Impulse Bar that Closes above that 1st R.O.T bar.

4. Once in the position, set a entry stop below a prior low bar. Once price moves Higher, trail a stop at the 21 or 30 ema once far enough away from the 7 ema to be clear of average price volatilty- I Often only tighten a Stop-loss and place it .5% Below the uptrending Price when the price makes a CLOSE under the fast 7 ema- It is surprising How often Price will rebound higher and continue to Trend following this 1st sign of a possible pullback If stopped out, and price continues to Trend higher- Get back in with a market BUY. If the trade is net profitable at this 1st point pullback- also consider only setting a stop-loss for 1/2 the position - to lock in a partial Gain- and allow the remaining position STOP to stay wide at the 21 or 30 ema. Do Not react intraday to a price momentarily under the fast ema- What counts is where it closes.

5. Trailing a Stop-loss- Price will often trend higher steadily above the fast ema- When Price gets big momentum and gaps far away from the fast ema like it did OCT 7,8,9, 12,13- This is a Climax Momentum move- sell 1/2 the position by trailing a stop BELOW each day's Closing Low until stopped out. and move the remaining stop up to the distant fast 7 ema.

This approach works best in Trades in Uptrends-and shallow pullbacks or sideways bases. This stock is in a sideways rolling channel- going above and below the 50 ema- (Not shown for clarity.)

Developing a set of SIMPLE and BASIC Rules that doesn't try to Guess where the bottom is and employing stops and avoiding early entries will result in trading Only with a possible uptrend and will really improve one's results.
Check out this approach -and backtest it on other trades that you -the reader -have made to see if it would not have yielded better returns-
AHH YES- That does require doing some homework - What a drag...

Toss in a 21 or a 30 & a 50 day moving average and you have a basic trading system. Gopher It!
Add some Elder Impulse colored bars- subscribe to stockcharts.

THIS is as simple a chart as it gets- It illustrates both uptrends and downtrend cycles, and HOW to position yourself on the right side of the trend.
One needs to Understand that YOU do NOT but during a Decline/downtrend- because your crystal ball or Crazy 8 ball may not have guessed the right time- and because it just got cheaper does not mean it cannot get Much cheaper! Or that it is a good Buy here.
Wait for that 1st R.O.T., AND LOOK TO ENTER ABOVE THAT- It is best to Not assume you know the bottom- and don't try to get the very low- Give it a chance to prove it is trying to go higher before you give it your hard earned Money!

2-22-21 I think learning to identify price action direction by this simple example should be a great start to using charts in your analysis and trading decisions. USE this simple process, and you will succeed- Be a Buyer in a downtrend, and you suffer pain-and unnecessary Stress.
When Price is simply sideways- above and below the converging emas- WAIT- DO NOTHING- Check the performance of the larger Indexes- and if they are the same- Sit on your hands- Do Nothing- Do No Harm!

[ira85]

Rules 1- Never BUY when Price is downtrending- and is BELOW The Declining FAST ema - Pretty SIMPLE EHH?

2. You WAIT Patiently until Price makes a CLOSE above the Fast 7 ema- and realize that Often the 1st higher Close then is followed by a lower price move-


All joking aside, these rules would save me a lot of losses. I spent many years as a long term investor. Trading on short term moves was a sin. I bought mutual funds at the end-of-day price and held for monthsor years, not days or weeks. I'm trying to learn this new way of thinking and managing holdings. I need to print these rules and post them on the wall near the computer. If I don't follow them carefully it's easy to make a mistake. For example, I came in this morning planning to buy PSCT. Small cap tech. The daily chart of the past year shows it's made steady progress. Very small, brief pullbacks. Price above the 50 and 200 EMA. On Sunday it looked great. So I came in Monday morning and bought some. Of course I didn't have CNBC on. I didn't know yet what was happening in the very near term. I didn't run a fast EMA. I can see how following rules diligently, every time, would improve the odds of getting gains and cutting losses. This is good stuff. Thanks SD!! -ira

[sd]

Of Course you are welcome if you get some benefit of my rantings-
I have an appointment this am-- and Tech is having another SELL-off day - NAS futures down -200- but I'll give you my 2 bits on a chart later today-

Presently - Small cap tech position is still uptrending, with the 7 ,21,50 all sloping Up and to the right and in proper alignment-
What I presented on the FSLY chart was a simple but somewhat aggressive trading approach designed to keep one OUT of a downtrend and only Long (ideally) in an uptrend-
I'll look at the pros and cons of this Risk Adverse approach in PSCT later today-SD

Appointment and then a trip to get a truckload of wood compost for an elevated raised bed garden- took up most of the day- Bought 10 WIX on the pm recovery After 3:30 - 60 + degrees here -Blue Sky- SUNshine! And Tomorrow! Then RAIN-

Tough day- for Tech- but it's been sliding the past week+ Both the S&P and Dow Closed fractionally up in the Green @ the EOD- but the Nas Closed in the Red -.50, but up from the lows- Not a good day for Tech.
PSCT had a gap down open @ $138 after yesterday's Close $1242.41- It slid down to 135 in the 1st 30 minutes, but made a recovery attempt as the day wore on.
Technically, this was a long tail Doji - and there was good buying into the Close based on some Bullish Volume-
To be noted- this is a thinly ETF- Today was just 22.9k - The IWM small cap is 37.8M- also falling hard on the day- and also showing a recovery into the pm.
So, Let's get down to analyzing the elements of making a good entry- and we'll use just the chart and a few moving averages- 7ema, 30 sma, 50 sma.
I also find the Elder Impulse colored bars very useful that are available on stockcharts.
Let's Backtest PSCT, and then I will do my friend's trades in FSLY.

"Rules 1- Never BUY when Price is downtrending- and is BELOW The Declining FAST ema - Pretty SIMPLE EHH?

2. You WAIT Patiently until Price makes a CLOSE above the Fast 7 ema- and realize that Often the 1st higher Close then is followed by a lower price move-

Better Success in trading came when I started focusing primarily on stocks/etfs that are trading higher with a market index that is Also trading higher-

As goes the index- so goes the majority of the stocks and ETFs that comprise that index- For Tech - use the QQQ S&P the SPY Dow Jones - DIA

The QQQ as the Tech large caps has been losing ground since Feb 16 Top- QQQJ also topped the same day, RYT EW Tech also peaked 2-16 and PSCT- small cap Tech Also peaked 2-16... So, Looking at the larger landscape- 1st is a good step to see the larger Environment.
So - Taking a long trade when the larger environment is not supporting an upwards move - That said- If one finds the industry group that turns the index higher, one has selected a leader - and small caps in general have indeed been that market segment outperforming-

Not all stocks conform to what i am suggesting- some stocks or indexes are more volatile , so one may want to use slower moving averages, wider spreads-For example- instead of a 5 or 7 fast ema- consider a 10 ema, and a 30 and a 50-
So- #1- 1st Check the health of the larger Environment (indexes)- If they don't support the trade directionally - in this case the QQQ's; What is the catalyst that makes your specific trade the Exception to the trend of the larger index? That selection could possibly be what turns and leads the index to go higher- but it tells you that there is weakness in the larger environment. It takes a strong Tugboat to turn a Tanker- generally more than 1.

Getting a good entry starts with NOT Buying if something is in a decline. Once an entry is made and price progresses higher, and the stop can be brought up to Break even- Then one is in good territory .
As i mentioned in a prior post- It seems that a lot of down trends have an initial attempt to move higher, that often fails to be the reversal- and price goes lower before a true bottom is made. Always be suspicious- and don't ever Buy when Price is declining below the fast ema and the moving averages are inverted and declining. It's irrational to be a buyer just because something gets "cheaper" - because no one knows when the Sale will end- Possibly Much lower.

Let's Backtest trying to make an initial entry- using the "Rules"- Once a trade goes higher and the stop-loss can be safely elevated to break-even- the stop can be set a bit wider- as long as price behaves. PSCT has trended very well for 2.5 months- For this chart study , I'll go back to Sept when price was declining. Use the 7ema ,30 sma , 50sma

nOT ENOUGH ROOM To mark up the chart- but the price action at the 2-19 Close was a move back above the Fast ema- A raised stop was generated by the prior Day's Low Close - If following this approach, Your entry Monday at the Open was Fine- but the prior low under the fast ema- approx $142 as a stop would have had you stopping out today @ $138.00 Price made a good recovery from the Lows-$135.00- For myself- I would use $135 as my stop and look to see price recover and go higher- but that's my cut-losses quick discipline - and may not be appropriate for someone with more flexibility to allow a wider stop-loss.
another viable approach is to use the pullbacks in an uptrend - (Swing Low) as a probable support level- So, the Feb 1 swing low price of $129 should not see price go below that level- Buyers should be stepping in - "IF" the uptrend continues-

This chart illustrates a very strong 3 months trending higher- just recently getting more volatile- and coming back to the 30 ema. The Question is whether the small cap element can keep this trending as the large cap tech sells off? I personally have dumped my Tech positions this week, and added a lot more infrastructure and even a "Value" etf.

[sd]

a long time Friend has shared his trades in FSLY- a Tech stock- for analysis -
I was concerned about his purchases this past week while Price was declining under the fast EMA. IMO- It is counter intuitive to be making purchases when Price is falling- particularly on an individual stock name- Dollar cost averaging as price drops assumes one has a support level where price will be stabilizing- but it seems a Risky proposition.
I also do this- I get 'Familiar' with a stock or an ETF- and that becomes my "go-to- Like that winter coat you can get comfortable with because it worked well in the past-
Let's do the Trade analysis - See what worked (3 trades) -and 3 new trades - I appreciate the willingness for the Trades to be dissected .

"

Sold FSLY with stop-loss at 97.55, but I bought it back at 86, 83 and 80 on 2/18 and 2/19. The later actions will definitely prove I was wrong.

I knew I was wrong, not only in the camp of technical analysis, but also in the camp of buy low and sell high. Why did I do what I did? I was temporary insane, of course! LOL

To complete your case analysis and to point out where I was in and out on your chart (use blue dot for in and purple dot for out), I provide you more details here. If it isn't too much trouble, this will imprint a lesson clearly on me.

10/22/20 Bought a position at 78.
12/2/20 Sold it at 80 made 2.56 %

12/7/20 Bought a position at 88
1/21/21 Sold it at 106.23 made 20.717%

1/8/21 Bought at 88
2/16/21 Sold at 97.55 made 10.85%

2/18/21 Bought a possiton at 86 with forgotten long-standing limit order.
2/18/21 Bought a position at 83 expecting to sell both positIons the following day.
2/18/21 Bought a position at 80
2/19/21 Bought a position at 80.87 close to bottom?



tHANKS FOR SHARING- As we learn to do Trade analysis, we improve our technique-
Let's Analyze these trades .
Entry 1 was clearly Premature - Price was downtrending Hard, and it was only 7 days later that it Bottomed and then made a 1st R.O.T. attempt-
the Better entry on this trade would have been to wait until a bottom had been made, a reversal and CLose above the Fast ema - and then Enter above that on a 2nd higher move. @ $75 11-12. The 1st R.O.T. SHOULD ALWAYS BE SUSPECT. .
Entry 1 $78 held through a further decline to a low of $62.20 - a net paper loss of -$15.8 or a further decline in price of -20% - All because the entry was taken while price was falling and below the fast ema.
The Sell captured a small 2.56% gain as price dropped below the fast ema.

Entry 2 - 12-7 was Perfect- price had recaptured the Fast ema $88 entry- It trended higher for 12 days- and then made a Close below the fast ema @ $97.00
This is where a stop could have been placed 1% below that low Close- @ $96.00 - This would have captured a +9% gain; But- instead the Trade was held and it declined to $81.00 -an -8% loss below the Entry 4 weeks later- That decline reversed higher in Jan, and was Sold Early in an Uptrend for a nice +20% gain.

ENTRY 3- Textbook the BEST Trade Entry.
This is the ideal (but early) Entry- it is a 1st R.O.T. ATTEMPT, that was followed by a pullback drop lower price below the Fast ema- and the "better or safer"entry "would have been above @ $90.00- The Entry 3 was sold @ $97.55 - for a nice gain - but IF the Stop below the Fast ema had been in place- The 8-10 low close would have suggested a stop-loss @ $108- that would have executed the next day for a +22% net gain vs 10.85%.

ENTRIES 4,5,6,7, Entry 4 was a forgotten limit order - We all get careless- It filled well below the declining fast ema- OK - an oversight- it happens .
Entries 5,6,7 however are acts of irresponsible desperation- attempting to capture a bottom and absolutely make No Sense to be second guessing where price will bottom at- It appears that Price hit a low of $69.00 today- but recovered to $$77.91.
It seems totally irrational to be Buying this Stock- as it is falling lower in price- - when the dollars spent here could be used Elsewheres in stocks that are gaining- It seems so destructive to follow this narrow impulsive approach.

This illustrates how we can become enamored with a single position we are familiar with- Somehow, we feel a 'connection' because the name is familiar-
We gravitate to this familiarity like a Moth to a Flame-

As a Tech Trade - FSLY Sucks- It was a high Flyer back months ago- In October- It has since underperformed many of the Tech stocks in the last 3 months-
Notice the chart- Price is not in an uptrend- Price is essentially moving sideways above and also below the 50 ema- and presently now well below-
So many other opportunities to allocate one's dollars towards- This is a declining trade- IMO
I would not condone the recent trades that are below the falling fast ema - They are without any rationale basis- appear to be very impulsive... simply because price is declining- This is not a logical or productive approach to add to a winning position- this is a losing position and the strategy that compels one to add into this is not a winning approach- This is just my Opinion- but this is a dangerous downward path ....SD

[sd]

2-24-21
Futures are up in the Green this am- Fed Chair Powell spoke yesterday and reasssured the markets that Rates would remain flat- That is what attributed to the reversal in Tech falling- but the rotation out of highly priced tech likely continues- Nas futures are up +32 so that looks promising-
Both PSCT and FSLY should see a bounce today, along with many tech stocks that sold off-
Heading out for a 1st Covid vaccine shot this am!
1st Shots completed! Very smooth operation- everyone stayed in their cars- pulled through the PNC arena- Mar 17 we get the final PFE vaccine booster! Looking forward to life returning to some semblance of Normal!

Added to the small cap IWM in the Van IRA and then added to OUSM, started new positions in EFAS, EFV- value & dividend funds.
added back MP,, New EL, IRM,SOI Giving Tech room to settle down-



added KRE -regional banks- steady uptrend...
I added a number of positions the last hour as markets incl Nas rallied into the Close-
Back into Gm. F, TDV,PBW,added more JETS, XSD,PSI,IYT,More CMRE

I'm overweighting positions - Including more % into individual stock trades and ETFs- with the goal of reducing the number of positions .
Spoke with my financial advisor today- who is going to shift my account allocations that his firm manages to a higher growth strategy -also higher Risk.

[sd]

With today's market's closing higher-
reviewing the PSCT and FSLY charts. To Drill down further, we'll look at the 1 hour charts-
PSCT had gapped down yesterday 139 open, declined to 135 in the 1st 30 minutes, and then made a recovery attempt -almost closing back at the opening price.
Today, it opened @ 138.62 -went sideways for 1.5 hrs, and then moved higher as strength came back into small caps and tech. It Closed @ $143.24- presenting a nice recovery.
Notice that the low volume results in gap moves between the price levels. The good recovery and higher Close bodes well for a follow thru higher Thursday.
The drag on this particular etf is it's technology allocation.
Compare another small cap - the IWD, the Russel Value ETF- The shift towards Value has been going on for a few weeks in the market rotation- small caps (IWM) have been under pressure- and declining- perhaps overdone- But the "Value" theme seems to have held up well -IWD- notice the difference in the slope of the charts. Also notice how smooth the price bars are and not "gappy"- This is because the IWD index has considerable Volume- 3.9M shares exchanged-



Small caps have been outperforming large caps for quite some time- but perhaps that trend has lost some momentum-
The Russel 2000 small caps IWM chart. It's choppy, and has been declining since Feb 10- possibly making a recovery with today's Close @ 227 a higher Close on the week-
Keep in mind, the Russel Value had been basing sideways, and made a breakout to the upside today- so the market is being more selective in where it invests.





LOOKING AT FSLY:
FSLY appears to be making a Bottom here.
The 1 Hr chart is instructive- Notice that Feb 23 - Price dropped to a Low of $68.75 in the opening 30 minutes! It recovered back to $74.00 by 10 am. and went on to Close the Day on it's high $77.92. Today it Failed to go higher, lost 2.76% from the higher Close yesterday, but essentially went sideways in a basing action- This is promising , but the primary trend is still in a Downtrend, with the fast ema declining and still below the slower ema. When Price does make a higher move- it will be evident here 1st on the 1 hr charts, followed later by the daily charts. A positive sign is that the Green Buying volume is higher than average, and the sell volume is diminished.
The "Lesson" to be taken here is to not jump into a downtrending position because the price today is less than it was last week- It can potentially get a lot cheaper-
The patient buyer stalks his trade, and waits to capture a position only when Price indicates a bottom is being made- and an upturn is about to occur- -I would wait for that upturn- but today's price action- sideways basing looks like a bottom is potentially forming . A lower Price is lower for a reason-IF The Market does Not think it is a Value at $xxx dollars, and price then declines lower- don't try to outthink what the Market is telling you with Price continuing to downtrend.

[ira85]

02-22 Sold 40 SPY @ 387.03 15,481.00
02-22 Bought 50 PSCT @ 143.81 7,190.34
02-22 Sold 75 QQQJ @ 33.96 2,546.56
02-23 Bought 300 DBA @ 17.34 5,201.97
02-24 Bought 30 VIOV @ 169.89 5,096.70

I sold out SPY. The four positions I hold now were all up a little today, +1.32%. All four have been pretty steady gainers. Low volatility. Good upward trends. I wanted to avoid the superstars that have been bid up. This week those have been correcting. I picked PSCT because its small tech. Small has been good lately and this tech hasn't seen much correction. (While proof reading I found I left out the fact I still have 25 shares of QQQJ. But its late and I need to get some sleep. I'll follow the strategy of the lady in Gone with the Wind, “Tomorrow is another day.”)

VIX got to 25.58 yesterday, Tuesday, a high for the week so far. Today, Wednesday, VIX went down steadily all day, closing at 21.34. Advancing volume was about 3x declining volume. There were about twice as many advancing than declining, NYSE. There seemed to be no sign of panic selling. Just orderly selling in the morning and buying in the afternoon. The correction on Monday and Tuesday kinda looks like a buy the dips opportunity as of Wednesday afternoon. -ira

[sd]

Good Choices -Both are trending well and in favor - I also bought MOO- DBA has the better momentum recently - AG theme. I don't know the difference in holdings-

Comparing momentum over the past 10 days :


VIOV - SMALL CAP VALUE-

Comparing momentum - Small caps vs Smallcap Value- 10 days doesn't show any gain in the IWM- had to go to a 13 day lookback between IWM,VIOV


QQQJ- should outperform the QQQ's as we move forward- Presently they are tracking in lockstep in the past weeks- Prior to that, QQQJ was the clear outperformer.
Both tested down to the 50 day ma this week , QQQJ recovering higher. Moving forward, I think it will also outperform the large caps QQQ. Tech is under pressure with the market rotation-

i.imgur.com/ulQAbSS.png[/img]

QQQJ is a recent offering- Perf chart goes back just 92 days


[/font]

[sd]

REVIEWING GE- Friends position.
ENTRY $11.38- When to take profits?
The Stock Market Mentor approach is to take partial profits once above a 10-15%- net gain, and then to move the trailing stop up to Break even and ride the trend as long as it lasts- That approach would sell 1/2 at the yesterday's bullish up move- locking in a +15% gain- - Since we do not know how high the upmove may go, I would trail a stop at the 30 ema unless price makes a break lower and a Close below the Fast 7 ema-
In this example, the 30 ema is already above the $11.38 entry price- and well below the present price action- A +15% gain on 1/2 the position would average out to an +7% gain if Price was to reverse immediately and hit the stop loss. The Goal there with the wider stop trailing is to allow price some room to pause, go sideways, and then continue to potentially go even higher- Keep in mind- my recommendation to wait to tighten a stop from the 30 ema only After price makes a Close that penetrates below the fast ema-
I would set that Stop loss about -.5% below the low of that day, and not raise it - unless Price resumes the uptrend , goes higher, and then again makes a Close below the fast 7 ema. This potentially would allow price to base in a sideways manner for a number of days, but not allow price to go below that 1st warning bar low. I've used this approach and it has allowed me to stay in trades for a longer period- most recently, the CNBS trade- went sideways for weeks. That stop below the price low was not repeated while the Base was being built sideways- and my patience was rewarded. _

One can vary the parameters- For example- If the position is large enough - sell 1/3 at a +10- +15 move, set 1/3 stop at the 30 ema, and prepare the final 1/3 to take profits on a gap higher move..



BRUTAL MARKET SELL_OFF-The only positions I have in the green are some commodity positions. Seeing stops hit -
Bad day to spend outside moving mulch , only to come in for lunch.and see this blood in the markets! Raising stops on those that did not sell yet.

I had used unsettled funds to Buy MSFT and F yesterday, and I cannot set a stop under those until the Trade clears-
Rising Bond yield rates prompted the selling- the 10 year rates moving higher.

The Value ETFs, The infrastructure names- and commodity positions are holding up better than the other trades- But in essence, I don't know if this price weakness will not snowball tomorrow. As a defensive reaction- I tightened stops to today's earlier intraday low- even on those positions that are still holding up- I had gone back All-in in the Van IRA, but hadn't added all back in in the Roth- and the IB Roth had stopped out of all positions Wed, and so has all cash yesterday and today-
Will this be a 1 day move? Will Powell or Yellen come out and make a speech to reassure the markets?



At the CLOSE, a tough day for TECH and Small CAPS- both down over -3.5%



A Tough day indeed! As i elevated stops on virtually All positions, I also bailed out on stocks I had just bought this AM- particularly a positon with size in AIA on what had looked like a recovery at the open. And KWEB. My tightened stops mid day resulted in 50% of my positions stopping out-

I don't think that tomorrow is the day to Buy the Dips-at least Not in TECH. Indeed, i think it is time for the value, infrastructure, and commodity plays, and being more cautious. After listening to Fast money, and talk about how rapidly the bond rates have risen, I think we are in for further volatility, and a repricing of the Tech and High momentum names.

[sd]

Following up- TSLA did hit the 1st lower support level charted on 2-22- I added the follow up chart from today-
While it may seem preposterous- Should TSLA break through the $600-$650 level, it likely drops back to the $400-$450 level.

FSLY Trade actually did not decline today below the prior low bar- so that offers the idea that it perhaps has bottomed and will be making a base- and potentially turning higher. Let's view this on a shorter duration, 2 hr chart- considering the major Tech sell-off, FSLY held up pretty decently.


GE : The recommendation on having a +15% gain was to Sell 1/2 at todays open ($13.10) and to move the remaining stop up to the 30 ema- on the daily chart, which is above the entry. $11.68. GE held up well in today's selling . a more aggressive-tighter- stop could be at the 21 ema.
When Price eventually makes a Close below the fast 7 ema, set a stop loss -1% below that Close lowpoint. If that stop is hit, you've locked in the gain on the entire position- If the Price recaptures and closes higher above the fast ema in the following days, Reenter the position at the higher price-


The Small cap space - VALUE Small Cap - VIOV held up well, still Closing above the fast ema.
Compare that to the performance of the small cap 20000 IWM -

[ira85]

The action on Thursday Feb 25 was notably opposite of Wednesday. Wednesday had selling mostly in the morning, not all day. But today it was selling all morning and most of the afternoon. There was a rally attempt 1pm to 2:30. But it failed. The selling resumed and eased a bit before the close. VIX went up almost all day. Eased a little the last few minutes of the day. The high for VIX today was 28.89 at 2:30. That's the highest VIX since January 27 when it got to 37.21. The advance decline line on the NYSE showed way more selling than buying:
Advances 424
Declines 2,859
Advancing volume 181,254,348
Declining volume 1,052,510,690
Is this selling the start of something bigger?

Historical perspective. The broad market hit a high in August 1987. The PBS TV show Wall Street Week with Louis Rukeyser was on every Friday and I watched as usual on Friday, October 16. Regular guest Marty Zweig expressed his concerns about the health of the market and risk. He said he was concerned we might have a crash. I don't recall if he said crash or some other word. But he had just made a convincing argument about the high risk in the market. Monday morning the markets opened and were flooded with sell orders. The crash broke records. The market in 1987 hit a high in August and the market made it for about 3 months before the crash.

Our markets had new highs February 16, ten days ago. Is it too soon to have another crash? I'm sure some would say look how fast things unraveled in March 2020. I certainly don't know how much risk we are in today. But with sufficient unexpected stress, I think we could get into trouble pretty quickly. I don't see signs of panic selling. Rising interest rates seem to be a matter of discussion but not panic. Since the crash in March 2020 every pullback like this current one has ended quickly and has rewarded those who bought the dip. Should we seek shelter or keep dippin? Let's hope we have a better day Friday. -ira

I got curious about the prediction of the 1987 market crash on a TV show. Here's some info for those interested. www.businessinsider.com/martin-zweig-1987-crash-call-2014-10

[sd]

Good Prescient timing on Zweig's disclosure- I wasn't trading then- But, I did listen to Gartman and Battaglia in Early October 2007-
Of course, Someone, somewheres is always talking a doomsday scenario- Don't know what shakes out here- doubt if it undercuts all of the positives the market is expecting in the recovery this year- but a -10% pullback is more common than not.
I'm taking a wait and see-approach- Nas Futures are up premarket., so there are some market orders to Buy yesterday's dip, but I think we are seeing a revaluation of generally overpriced Tech- so 1 large sell-off day may see a bounce- but my bias side is flashing caution here...
We also had the Asian mkts down -3.5% , so I'm focusing to stay in the infrastructure, recovery theme- but also keeping a higher% in cash.
The metals-commodities all sold yesterday, Value ETF held it's own,
Jets, GUNR,EFAS,PAVE,EFV,OUSM,TDV, ABBV,HRI,USCR, all fell in value, but did not hit stops-
As I realign and shift my allocations, I think getting back into the metals,infrastructure, semiconductors, regional bank ETF KRE; DE, CAT, PAVE,MP,FCX,RIO,STLD, CLF- all could be reentry plays- LOLO is still holding GE and DE- recent positions she took, stops didn't hit-
The motor that fell off that BA plane was made by a sub company to GE.... Don't know if that will affect the stock...
Either way, I'll see how the markets behave until after 10 am- before making any decisions- I have some cleared cash in the Roth account- -