Monday, January 21, 2008

How does it feel to be on the wrong side?

Watching the video above brought some bad memories from my previous trading period. A period which led to a year break from the stock market. A year in which I went back to basics and tried to understand where did I go wrong and what needs to be done so these mistakes wont repeat.

My heart goes to this guy and I hope he recover from the loss and find the mental strength to sit back and try to figure out what has he done wrong.

One thing that I have noticed about the guy's trading method was the lack of stop loss. In the video he mention how he thought it might gap 100 point but it went down 300 and then another 500. WHERE ARE YOUR STOPS dude?

I urge you to read Brett's response to this video

Sunday, January 20, 2008

Expand your knowledge

Open positions for January 20th

As the market goes through a healthy cleaning process the system act as expected and positions getting closed one after the other. Since the beginning of the month, 7 stocks out of the 13 stocks which I had in my portfolio have been closed. The portfolio has suffered a drawdown of 14% during that period.

In these periods I find it helpful to read any information talking about periods like the one we're now experiencing. I find that there is a common ground with all the books/blogs and it is to stay focus and remember to look at longer time frames than the current day, week or even month. As history repeat itself, even when discussing the financial markets, periods like this happened before and at the end of them the market returned to its natural direction.

As I mentioned in my previous post, we might already hit market bottom but a confirmation for this will only be available in the following week or two.

Here is the status of my current holdings:

Symbol Entry Date Entry Price Current Price Profit %
ARTG 24/09/2007 3.00 3.72 24.33
IDEV 24/09/2007 6.62 6.80 2.72
INFA 28/09/2007 15.72 15.94 1.40
LWSN 16/10/2007 10.15 9.46 -6.80
ANDW 19/10/2007 14.36 15.04 4.74
AMSG 26/10/2007 26.68 27.24 2.10
SDIX 13/11/2007 5.24 4.75 -9.28
CTGX 26/11/2007 4.93 4.95 0.41

Friday, January 18, 2008

Bulls, start your engine


Looking at the chart taken from Fusion IQ we can see that currently, only 20% of the NYSE stocks trade above their 200 MA.

Historically speaking, it usually signaled the end of the bear period and was a sign for the bulls to begin their buying spree.

So, can us bulls warm up our engines?

Technorati Tags: ,,,

Sunday, January 13, 2008

The making of a support line


If we look in the chart above we can see how a new support for the Nasdaq composite index is being created around 2440. This tells me that bears who try to lower the price find resistance by the bulls who struggle to slow the momentum and reverse its direction.

The RSI position at 32 indicates the Nasdaq is overbought. We can see that 40 which was used as a support line since August was recently broken. Breaking the support usually turns the line to a resistance and if we look at previous times, in the last couple of years, when the 40 became a resistance we can see that it took the Nasdaq between 2 to 3 weeks until the resistance became support once again. This statistics is correct in bullish periods were corrections periods last about 2 weeks. If the RSI will get back above 40 in 2 weeks I'll consider the last month as a correction or should I say one deep plunge.

Open positions for January 13

It seems we are officially in a bear market and as you can see in the table below, my positions are getting closed one by one. The system is programmed not to trade in a bear market. this is done by checking the position of the QQQQ relative to its moving average. I.e, while the QQQQ is positioned below it's moving average no buy signals will be generated. Since this is the situation for the present, I do not expect any buy signals until the trend reverses. To answer your question as to why using the QQQQ, you might want to read this post.

I'm a bit disappointed from the way last year ended for me. I had expected last year to be profitable and until two weeks ago it has, but when the Nasdaq drops nearly 11% in just two weeks, computerize systems don't have enough time to adjust. Having said that I am determined to follow the system's alerts. I found that whenever doubts starts to pervade there is nothing like watching my system's simulation results to overcome it.

Here is the status of my current holdings:

Symbol Entry Date Entry Price Current Price Profit %
ARTG 24/09/2007 3.00 3.97 32.33
IDEV 24/09/2007 6.62 6.22 -6.04
INFA 28/09/2007 15.72 15.63 -0.57
LWSN 16/10/2007 10.15 9.46 -6.80
ANDW 19/10/2007 14.36 15.04 4.74
AMSG 26/10/2007 26.68 28.66 7.42
SDIX 13/11/2007 5.24 4.75 -9.28
CTCH 19/11/2007 2.13 2.02 -12.80
TQNT 26/11/2007 5.90 5.18 -12.20
CTGX 26/11/2007 4.93 4.95 0.41

Thursday, January 10, 2008

Did the Nasdaq hit market bottom?

Nasdaq Comp

The first days of the new year hasn't being easy for us bullish advocate. The market once again used it's bearish wake up call to remind us all that rallies don't last forever and what goes up must come down.  As my trades are managed by the system, I believe my inner conflicts diminish as opposed to the average discretionary trader when it comes to close a losing position.

Looking at the chart above we can see two consecutive days were the Nasdaq made new highs. The RSI indicator's current value is 36 and is leaning to the positive direction.

The Twiggs Money Flow indicator also appears to change it's momentum direction after eight consecutive days and is heading up.

Looking at the price graph we can see Tuesday and Wednesday touched the red support line which was tested before in mid August and early in April of last year.

Lets hope that today's behavior will be the same as the last couple of days.

Monday, January 7, 2008

Open positions for January 6

Last week was very hard for bears and as the system trade only long positions it also got hit by the sharp decline the market witnessed. Three of my positions got a sell signal which I intend to execute today. Hopefully this week will compensate for last week but I say it with little hope.

Here is the status of my current holdings:

Symbol Entry Date Entry Price Current Price Profit %
ARTG 24/09/2007 3.00 4.30 43.33
IDEV 24/09/2007 6.62 6.34 -4.23
INFA 28/09/2007 15.72 17.11 8.84
LWSN 16/10/2007 10.15 9.41 -7.27
ANDW 19/10/2007 14.36 15.04 4.74
TYL 19/10/2007 14.08 12.35 -12.29
AMSG 26/10/2007 26.68 27.66 3.67
VGR 05/11/2007 21.55 19.33 -10.30
SDIX 13/11/2007 5.24 4.83 -7.75
CTCH 19/11/2007 2.13 2.02 -5.16
TQNT 26/11/2007 5.90 5.98 1.36
CTGX 26/11/2007 4.93 5.28 7.10
PEGA 03/12/2006 12.46 10.64 -14.61