Thursday, February 26, 2009

Update

For those wondering why I haven't posted much lately, I've been ill and have spent little time on the computer.

I am holding SSO and GOOG, was recently stopped out of MOS and took profits in USO.

Sunday, February 22, 2009

Current Positions

I made three trades on Friday:

I entered 400 shares of SSO at $18.55. See chart above for analysis.

I also entered 300 shares of MOS at $40.11. See chart below.

I entered 75 shares of GOOG at $339. See chart below.

I am still holding 200 shares of USO (entry at $23.88, current $24.35)

Thursday, February 19, 2009

Tuesday, February 17, 2009

Trades: VLO, USO and STLD

Here is the intra-day trade alert I sent to my subcribers (this is not a regular feature of the Trade Report, but I do send trade alerts from time to time):

The gap down this morning blew past the entry and stop points I had set for SSO and QLD. Also, most of the stocks listed in the report last night also gapped below entries and stops. Obviously I made no entries in these setups.

Two stocks holding up above support are VLO and STLD. They did gap down, which is a violation of my "orderly pullback" rule. However, they still provide low risk so I decided to enter with small positions.

200 shares VLO @22.94. Stop 21.90. Target 24.90. Risk: 2:1

200 shares STLD @11.56. Stop 10.90. Target 13.90. Risk: 4:1

Due to the nature of the market and the gap downs, these are *not* high probability trades. Those that are looking for wins and can't take losses should not make these trades. Since there is a possibility of multiple are gains, I am willing to take these trades, with the expectation of loss.

I also made a *speculative* energy trade. USO is extremely oversold (stochastics at 11).

200 shares USO @ 23.88. Stop at $22.90. Unsure of target.

The idea behind these trades is they will only give me small losses and have the possibility (not probability) of multiple R gains.

Again, do not piggyback these trades unless you have done your own analysis and realize that they are not high probability trades.

Wednesday, February 11, 2009

Quick Update

I've been waiting for SPY to bounce to $85 in order to get short, but no luck so far. As noted in the report last night, I'd like to enter at $85 with a stop above the 50 day moving average and an initial target of $80. Yesterday's high volume drop, while not doing any damage to the trading range, did negate the positive accumulation pattern that had been building.

Sunday, February 08, 2009

Energy Looks Good: PBR

Energy stocks are showing good accumulation patterns while coming off bottom price patterns. Of the energies that I monitor, PBR is showing the best relative strength compared to the sector. It is at 30 day highs.  I'd like to enter on pullback to support.

Saturday, February 07, 2009

Elite Traders Are Not Afraid to Fail

I have started group and private chats with subscribers, and one thing that keeps coming up is how afraid many are of taking small losses. This makes them gun shy when a low risk trade is there for the taking.

Here is a previous post that encapsulated my thoughts on taking losses and not being afraid to fail:

I just had an IM chat with a trading buddy. After listening to me whine about my two losing trades this week, he asked me a question: How many times did Babe Ruth stike out? Then he signed off.

Well, I had to look it up. The answer is one thousand, three hundred thirty times. I'll say it again, one thousand, three hundred thirty times. That's what it took the Babe to hit 714 home runs and drive in over 2200 runs. Interesting. How about some other sports?

Michael Jordan made 12,192 shots, including some of the most clutch shots in the history of the NBA. Guess what? He missed even more, 12,361 to be precise.

My all-time favorite quarterback, Joe Montana threw 1,982 incomplete passes and 139 interceptions. He also completed 3,409 passes, 273 of which were touchdown passes.

What did I learn from this little exercise?

1. Elite players/traders fall down and get back up. The cliche is very true.
2. Elite players/traders are not afraid to fail.
3. Elite players/traders manage risk.
4. Elite players/traders love crunch time.
5. Elite players/traders learn from their mistakes
6. Elite players/traders control their emotions (Montana was often called Joe Cool).

I don't remember many of Montana's interceptions or Jordan's air balls, but these two plays are forever etched in my mind:



Thursday, February 05, 2009

Market Still Within Trading Range

Until I see a move towards one of the extremes of the trading range, I won't be trading the S&P 500 and will focus on individual stocks setups.

Wednesday, February 04, 2009

Today's Trades: CBI and PNRA

CBI: 200 shares at $11.00

This stock, as with most of my trades, was mentioned in the Trade Report last night. It's holding above both the well formed trading range and the 50 day moving average, providing a low risk, easily managed traded. Stochastics are oversold and turning up.

Risk: My stop is under the 50 day moving average (10.50) and my intitial target is near the recent high in the 13-14 range. This gives me a 5:1 reward to risk ratio.



I also went short 200 shares of PNRA at $47.83. I will post a chart later today.

Breakout Setup: MCK

MCK has formed a nice traidng range post breakout. I'd like to enter at the bottom of the range, with a stop just under support and the upper end of the range as my initial target.

Trade Setup: USO

As noted yesterday, I entered USO at $28.32.

Setup: Oversold bounce, possible bottom formation. Stochastics are extremely oversold, which has provided for quick counter trend trades with this stock.

Risk: My stop is under price support around $26.50, with the 50 day moving average providing the initial target at $33.50. This gives me a 3:1 reward to risk ratio.

Monday, February 02, 2009

Quick Trade Update: USO

I entered USO minutes ago at $28.31. I'll have more details on the trade setup later today.