We are getting close to 880. It is hard to say if we actually get to exact 880 but we are close enough. It is time to buy here. I'll look for any stocks from my earlier list and buy the ones that have declined the least.
Here are some of my picks.
Symbol
JAZZ
STEC
FEED
SWHC
BIDU
FUQI
GNK
TNDM
SYNA
HOTT
TSL
ARE
SOHU
VPRT
ISRG
OCLS
ARST
TSRA
GMR
PCLN
CNQR
CMED
PFCB
CVLT
CHLN
AWH
DECK
HTS
HME
AMSC
PNRA
EBS
CAVM
CMG
ATHN
TDG
TSCO
CCOI
MATK
OMI
EPR
CKSW
UA
AUXL
CAST
Tuesday, June 23, 2009
Friday, June 19, 2009
Update
I haven't had a chance to update this blog for a while. Been busy due to personal commitments.
It is probably a good idea to keep the stocks that I mentioned earlier in my post on your watch list and slowly buy the ones that are holding up well here. We could see 880 before we move higher. I have been daytrading from the long side only and the last 2 weeks were not good. I may have to wait till we get to 880 or close above 950.
It is probably a good idea to keep the stocks that I mentioned earlier in my post on your watch list and slowly buy the ones that are holding up well here. We could see 880 before we move higher. I have been daytrading from the long side only and the last 2 weeks were not good. I may have to wait till we get to 880 or close above 950.
Friday, June 12, 2009
Weekly Update
950 is proving to be a strong resistance but it makes me wonder how we are still holding up so well. If we manage to close above 950, it should go higher without stopping because there are lots of stops above 950. For the last 2 weeks we have basically stayed in the range of 920-950. In my opinion this is a bullish sign. I was expecting a sharp sell-off at least to 880 but the market does not want to go down. This is just a consolidation before the next move higher starts.
Some stocks to watch
Here are some of the stocks that showed up on my scan. What you want to do is determine the weekly support and weekly resistance for these and buy at support and sell at resistance. I will post the support and resistance when I have time to go through them.
Symbol
Company Name
Last Price
BPUR
Biopure Corp
0.31
OSCI
Oscient Pharmaceuticals Corp
0.38
EPEX
Edge Petroleum Corp
0.67
CYCC
Cyclacel Pharmaceuticals Inc
0.91
KERX
Keryx Biopharmaceuticals Inc
1.21
SYMX
Synthesis Energy Systems Inc
1.25
DVAX
Dynavax Technologies Corp
1.68
FREE
FreeSeas Inc
3.23
OCLS
Oculus Innovative Sciences Inc
4.79
SEED
Origin Agritech Ltd
5.69
FEED
AgFeed Industries Inc
7.32
EXM
Excel Maritime Carriers Ltd
9.96
CLDX
Celldex Therapeutics Inc
10.47
APWR
A Power Energy Generation Systems Ltd
13.3
BCSI
Blue Coat Systems Inc
16.55
FUQI
Fuqi International Inc
17.32
STEC
STEC Inc
19.63
Symbol
Company Name
Last Price
BPUR
Biopure Corp
0.31
OSCI
Oscient Pharmaceuticals Corp
0.38
EPEX
Edge Petroleum Corp
0.67
CYCC
Cyclacel Pharmaceuticals Inc
0.91
KERX
Keryx Biopharmaceuticals Inc
1.21
SYMX
Synthesis Energy Systems Inc
1.25
DVAX
Dynavax Technologies Corp
1.68
FREE
FreeSeas Inc
3.23
OCLS
Oculus Innovative Sciences Inc
4.79
SEED
Origin Agritech Ltd
5.69
FEED
AgFeed Industries Inc
7.32
EXM
Excel Maritime Carriers Ltd
9.96
CLDX
Celldex Therapeutics Inc
10.47
APWR
A Power Energy Generation Systems Ltd
13.3
BCSI
Blue Coat Systems Inc
16.55
FUQI
Fuqi International Inc
17.32
STEC
STEC Inc
19.63
Wednesday, June 10, 2009
Wednesday's Update
I'm still bullish here....although I do not hold any long positions. I'm day-trading futures from the long side only......The market is trying to find a direction. We are seeing a lot of selling around the 950 area but every sell-off is being bought. Unless we see a close near the low, I will not be too worried. As I had suggested earlier, it might be a good idea to sell some so that you are not using margin.....Margin should be used at support only and should be decreased as markets approach resistance.
Sold SMSI
I got out of SMSI.....it wasn't moving fast enough. It felt as if I was watching the paint dry.
Sunday, June 7, 2009
Some Trading Wisdoms
Here are some good points that I received in an email today.....I do not know who wrote it but it is good and true.
1. Know that not every trade is profitable.Since the stock market can not be predicted, every trader needs to accept that they will be wrong some of the time. What separates good traders from the rest is their ability to throw in the towel when the market proves them wrong and take the loss.Doing this allows them to maintain their financial and emotional capital. Don't leave money in a loser that is more likely to continue to be a loser, it is too deflating and expensive.
2. Know what your tolerance for risk is.Traders who are able to make smart decisions can beat the market. However, the greatest hurdle to doing so is overcoming the emotional traps that cause traders to make bad decisions.The reason we succumb to our emotions is because we are afraid of losing. It is the risk we take that creates emotion; take too much risk and you are likely to make bad decisions.Therefore, you need to know what your limits are. What dollar amount of risk causes you anxiety? If you can not make a trade with out fear then you are taking too much risk. For some, that means never trading since they simply can not handle the risk of financial loss. However, over time and with success you will begin to build up your tolerance for risk, just take it one step at a time.
3. Know who is in control of the stock you are trading.Never ever buy a stock that is going down. Stocks in downward trends are controlled by the sellers and they will continue to go down until the sellers lose control. While it is tempting to get a deal on a stock, to try and buy it at bargain prices, the actual act of doing so is very challenging. The market is not always rational and the bottom is difficult to predict because we do not know what is motivating the sellers to act.Making money is simple. Buy stocks that are going up, short stocks that are going down. If the stock chart has rising bottoms, the buyers are in control. If the tops are falling, the sellers are in control.
4. Know who is in control of the overall market or sector.A big factor in a stock's performance is the performance of the overall market or the stock's sector. If the oil industry is strong, individual oil companies will be able to do better.Any trader who has a hold time frame beyond a few days should first consider the sector and focus their attention on the sectors that are outperforming the market. Strong stocks in weak sectors are not as likely to do well as a moderate stock in a strong sector.
5. Know the price point where the market proves you wrong.If we accept that we can not be right all of the time then we need to have a plan for what we will do when we are wrong. Arbitrary stop loss orders are not effective, they must be based on past opinions of the market.Remember that the stock market's job is to put a price on fundamentals. This is difficult since fundamentals are always changing but we do find that the market is good at putting upper and lower boundaries on the fundamentals over a period of time. The lower boundary of fundamental value shows up on a stock chart as a price floor while the upper boundary will be a high price point that acts as a ceiling. Breaks through these price ceilings are caused by a change in the perception of fundamental value. So too with price floors, if a stock closes below a well established price floor then we can guess that the market has found a fundamental reason to accept lower prices.So, when you buy a stock, understand where the price floor is. Look for well established low price points and plan to exit a buy if the stock closes below that low point. The reasoning is simple; if a stock closes below a psychological floor then it is likely that investor perception of company fundamentals has changed.
6. Know what the expected value of the trade is.Good traders do not fly by the seat of their pants. They develop a set of rules and then test those rules to determine the expected value of trades using that strategy.The expected value of a trading strategy is the probability of being right times the average profitability when you are right minus the probability of being wrong times the average loss when you are wrong. Using this equation you should see that success trading is not just about whether you are right or wrong but how much you make or lose when you are right or wrong.A trader can make a lot of money only being right 10% of the time if they capture very large gains when they are right and only small losses when they are wrong. In the same way, a trader can lose money even if they are right 80% of the time if they have big losses on individual trades.
7. Know that the media knows nothing of value.While there may be entertainment value in the media, using it as an information source is doomed for a couple of reasons.First, the media tends to react rather than predict. Trading the stock market well is far more lucrative than reporting on it so it should be difficult to trust the analysis provided by financial reporters.However, to be fair, there are some financial reporters who are able to uncover valuable information that could be lucrative if only you and a few friends knew about it. The reality is that the media is speaking to a large audience which means the information that they distribute will be priced in to the stock almost immediately.It may be interesting to hear some like CNBC's David Faber report on a merger of two companies but capturing the value of the trade around that transaction will be difficult because the market will move so fast once he announces his discovery. The market is efficient, making the media's voice merely entertainment.
8. Know that the market never lies.I have met so many liars in the stock market business over the past 20 years. I think that many of them actually believe what they are saying but, the truth is, people's judgment is clouded by greed.The stock market is a giant polling mechanism allowing people to cast their opinion with their money. If you think the stock market is going up, you buy. If you are right, you make money. It is a simple and powerful machine that determines value and, since no one wants to lose money, it is very efficient at telling the truth.The truth may change from one moment to the next but one thing will not change. Arguing against the market is a fast way to lose money.
9. Know the difference between pullbacks and reversals.The profit is in the patience. Very few stocks go up day after day after day; with all strong trends there are pull backs against the trend. These pull backs are important because they shake out weak hands and recharge buyer interest. So long as the pull back is not an indication of a change in the perception of fundamentals.Stocks do not go up forever; there will come a time when the trend must reverse as money moves out of the stock. Learning to know the difference between a pull back and a trend reversal is important if you want to maximize your overall profitability.Generally a reversal comes when a trend line or important area of support is broken. Allow for the short pullbacks so long as the primary trend remains intact.
10. Know yourself.If you do not know yourself you can not know success as a trader. Trading well is a matter of mastery over emotion. While very simple, trading is hard because our emotions get in the way and we succumb to fear and greed. If you know what motivates you and understand how you react to risk and reward you can begin to succeed as a trader.
1. Know that not every trade is profitable.Since the stock market can not be predicted, every trader needs to accept that they will be wrong some of the time. What separates good traders from the rest is their ability to throw in the towel when the market proves them wrong and take the loss.Doing this allows them to maintain their financial and emotional capital. Don't leave money in a loser that is more likely to continue to be a loser, it is too deflating and expensive.
2. Know what your tolerance for risk is.Traders who are able to make smart decisions can beat the market. However, the greatest hurdle to doing so is overcoming the emotional traps that cause traders to make bad decisions.The reason we succumb to our emotions is because we are afraid of losing. It is the risk we take that creates emotion; take too much risk and you are likely to make bad decisions.Therefore, you need to know what your limits are. What dollar amount of risk causes you anxiety? If you can not make a trade with out fear then you are taking too much risk. For some, that means never trading since they simply can not handle the risk of financial loss. However, over time and with success you will begin to build up your tolerance for risk, just take it one step at a time.
3. Know who is in control of the stock you are trading.Never ever buy a stock that is going down. Stocks in downward trends are controlled by the sellers and they will continue to go down until the sellers lose control. While it is tempting to get a deal on a stock, to try and buy it at bargain prices, the actual act of doing so is very challenging. The market is not always rational and the bottom is difficult to predict because we do not know what is motivating the sellers to act.Making money is simple. Buy stocks that are going up, short stocks that are going down. If the stock chart has rising bottoms, the buyers are in control. If the tops are falling, the sellers are in control.
4. Know who is in control of the overall market or sector.A big factor in a stock's performance is the performance of the overall market or the stock's sector. If the oil industry is strong, individual oil companies will be able to do better.Any trader who has a hold time frame beyond a few days should first consider the sector and focus their attention on the sectors that are outperforming the market. Strong stocks in weak sectors are not as likely to do well as a moderate stock in a strong sector.
5. Know the price point where the market proves you wrong.If we accept that we can not be right all of the time then we need to have a plan for what we will do when we are wrong. Arbitrary stop loss orders are not effective, they must be based on past opinions of the market.Remember that the stock market's job is to put a price on fundamentals. This is difficult since fundamentals are always changing but we do find that the market is good at putting upper and lower boundaries on the fundamentals over a period of time. The lower boundary of fundamental value shows up on a stock chart as a price floor while the upper boundary will be a high price point that acts as a ceiling. Breaks through these price ceilings are caused by a change in the perception of fundamental value. So too with price floors, if a stock closes below a well established price floor then we can guess that the market has found a fundamental reason to accept lower prices.So, when you buy a stock, understand where the price floor is. Look for well established low price points and plan to exit a buy if the stock closes below that low point. The reasoning is simple; if a stock closes below a psychological floor then it is likely that investor perception of company fundamentals has changed.
6. Know what the expected value of the trade is.Good traders do not fly by the seat of their pants. They develop a set of rules and then test those rules to determine the expected value of trades using that strategy.The expected value of a trading strategy is the probability of being right times the average profitability when you are right minus the probability of being wrong times the average loss when you are wrong. Using this equation you should see that success trading is not just about whether you are right or wrong but how much you make or lose when you are right or wrong.A trader can make a lot of money only being right 10% of the time if they capture very large gains when they are right and only small losses when they are wrong. In the same way, a trader can lose money even if they are right 80% of the time if they have big losses on individual trades.
7. Know that the media knows nothing of value.While there may be entertainment value in the media, using it as an information source is doomed for a couple of reasons.First, the media tends to react rather than predict. Trading the stock market well is far more lucrative than reporting on it so it should be difficult to trust the analysis provided by financial reporters.However, to be fair, there are some financial reporters who are able to uncover valuable information that could be lucrative if only you and a few friends knew about it. The reality is that the media is speaking to a large audience which means the information that they distribute will be priced in to the stock almost immediately.It may be interesting to hear some like CNBC's David Faber report on a merger of two companies but capturing the value of the trade around that transaction will be difficult because the market will move so fast once he announces his discovery. The market is efficient, making the media's voice merely entertainment.
8. Know that the market never lies.I have met so many liars in the stock market business over the past 20 years. I think that many of them actually believe what they are saying but, the truth is, people's judgment is clouded by greed.The stock market is a giant polling mechanism allowing people to cast their opinion with their money. If you think the stock market is going up, you buy. If you are right, you make money. It is a simple and powerful machine that determines value and, since no one wants to lose money, it is very efficient at telling the truth.The truth may change from one moment to the next but one thing will not change. Arguing against the market is a fast way to lose money.
9. Know the difference between pullbacks and reversals.The profit is in the patience. Very few stocks go up day after day after day; with all strong trends there are pull backs against the trend. These pull backs are important because they shake out weak hands and recharge buyer interest. So long as the pull back is not an indication of a change in the perception of fundamentals.Stocks do not go up forever; there will come a time when the trend must reverse as money moves out of the stock. Learning to know the difference between a pull back and a trend reversal is important if you want to maximize your overall profitability.Generally a reversal comes when a trend line or important area of support is broken. Allow for the short pullbacks so long as the primary trend remains intact.
10. Know yourself.If you do not know yourself you can not know success as a trader. Trading well is a matter of mastery over emotion. While very simple, trading is hard because our emotions get in the way and we succumb to fear and greed. If you know what motivates you and understand how you react to risk and reward you can begin to succeed as a trader.
Next week
I did not get a chance to look at the scan due to other commitments. I will not have any picks for this week.....
Friday, June 5, 2009
Friday's Update
Futures rallied in the morning after the employment numbers but sold off. Market did attempt to rally after the initial sell-off. USD had a nice rally and if this continues this will drive down the prices of gold and oil stocks. Gold stocks will take a bigger hit than oil stocks. At this point I recommend that people reduce their risks especially if you are buying stocks on margin.
I'm long SMSI which closed at $10.60 today and plan on holding those.
Out of all the stocks that I recommended last week ARQL, HEAT, EGO and GFI came down to the buy price. EGO and GFI sold off as all gold stocks. There is a small loss on HEAT and ARQL is doing great.
I will run the scan later this week and post the picks.
I'm long SMSI which closed at $10.60 today and plan on holding those.
Out of all the stocks that I recommended last week ARQL, HEAT, EGO and GFI came down to the buy price. EGO and GFI sold off as all gold stocks. There is a small loss on HEAT and ARQL is doing great.
I will run the scan later this week and post the picks.
Non-Farm Payrolls
The job loss was less than expected although unemployment rate increased. We are getting close to 960 in SP futures which was my target. The main question is can we close above 960 today....if we do we could see 1040 otherwise we will likely retest 880.
Thursday, June 4, 2009
Friday's Employment Numbers
Friday should be a huge day because of the employment numbers. I believe that no matter what type of numbers we get we should see a rally. If the numbers are bad we'll have a relief rally (about 1%) and if the numbers are good then about 3%.
Eight more hours till the markets are open.
Eight more hours till the markets are open.
Wednesday, June 3, 2009
The right time to buy
One of the questions that we all have is when is the right time to buy. Many times as soon as we buy the market starts going down and as soon as we sell the market starts going up. This happened to me with SNS today. I exited out of SNS at the very low of the day and I have bought few stocks at the very high tick too.
When the market is uptrending, it makes sense to buy at the previous 52-week high after it has made a new high. The previous 52-week high should have been made about 3 months ago.
If you look at the weekly chart of SMSI, it made a new 52-week high on the last week of Mayand closed above $8.5. The previous 52-week high was made in the 3rd week of September and was $8.5, so in this case the ideal time to buy is at $8.5.
SNS made a new high in the 3rd week of April and it closed above $10.5. The previosu high was $9.8 and was on the 3rd week of September. I should have waited for the price to come to $9.8 instead of buying at 10.4....I exited out of this position today because I was disappointed at myself for not following my own rules.
When the market is uptrending, it makes sense to buy at the previous 52-week high after it has made a new high. The previous 52-week high should have been made about 3 months ago.
If you look at the weekly chart of SMSI, it made a new 52-week high on the last week of Mayand closed above $8.5. The previous 52-week high was made in the 3rd week of September and was $8.5, so in this case the ideal time to buy is at $8.5.
SNS made a new high in the 3rd week of April and it closed above $10.5. The previosu high was $9.8 and was on the 3rd week of September. I should have waited for the price to come to $9.8 instead of buying at 10.4....I exited out of this position today because I was disappointed at myself for not following my own rules.
Monday, June 1, 2009
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