Thursday, October 21, 2010

Trade: Short BAC...winner


I entered BAC on Tuesday based on a retest I had been waiting for since the first breakdown. I also didn't want to get in ahead of earnings on BAC...

Last Thursday BAC broke down really hard on the hourly chart...astute traders could have gotten in Friday morning as a retest occured at the open...that was the really easy money.

However, BAC was reporting on Tuesday. I wanted to be patient and wait for the indicators to line up and I was actually hoping it would happen after earnings report...well it did retest into earnings on Monday afternoon. Lucky for me it kept having a little bit of strength into Tuesday afternoon.

Post earnings enthusiasm wasn't that great as volume wasn't strong. This is a good case of interpreting multiple timeframes to my advantage. First, the overall picture on the daily and hourly charts had confirmed any "bullish" behavior was an opportunity to get short.

The 11 AM hour showed a Doji candle...followed by a decent red bar for 12PM...Also, the DMI kiss was nearly in effect...So I watched the 15 minute chart unfold and I looked to my trusty 13 EMA on that timeframe. It closed under it right around 12:45PM I decided to take the trade figuring risk reward was decent.

I took the trade when BAC was trading at around $12.30 the top of the day was put in at $12.45...15 cents risk...not bad.

I also looked at the options chart for the Nov $14 was retesting on the bullish side.

Then I picked a target figuring the recent low of $11.74 was a decent place for this baby to go if it were to go down. So I had about $0.15 risk and $0.55 reward.

This was a very easy trade to place. I emailed Bob Lang about it and he said it wasn't good for him...overcoming that comment was probably the hardest part of the trade.

Anyway I fired off 29 contracts of Nov $14 puts for $1.78 outlay $5162

I took profits later that same day as my target of $11.74 was reached I sold 9 contracts for $2.30...$2070

Today I sold 8 more around the accounts for $2.60...gained another $2080

I have 12 contracts still riding the wave here.

Right I have recovered all but $1012...which means the 12 remaining contracts have a cost basis of $0.84.

Currently they are trading at around $2.65...which makes the position worth $3180..overall this is a 41% winner thus far. In only a few days.

On $14 puts that means I can watch BAC come all the way back to $13.15 with comfort knowing that I will not loose one dime...

It just so happens there is a tremendous amount of chart resistance at $ at the very least I think I make $180

But at the very most I make quite a bit more.

My current target for BAC is right around $11. I used Fib extensions to get me that target since no time frame is now is outside all the bands on all the charts and there is no chart support anymore. The 13 EMA on all timeframes is at or below $12 further making these worth something like $2.

BAC could very well be a shitstorm given the foreclosure/trustee loan documentation bullshit. During their conference call they said all was hunky dory with their foreclosure process. Then later that afternoon PIMCO, the NY Fed, Blackrock, and a few other decided to call their bluff and sue their asses for $47 billion in toilet paper they claim BAC has screwed the pooch on.

That is really why I have made some money on this...BAC is like BP during the early days of the oil spill...I think the easy money has been made but more money may still be there for the taking...

Those who have not yet gotten on board...tread carefully and pick decent strikes...and be patient for a retest.


15 min:

Nov $14 Put Hourly chart:

4Hr BAC chart (Look at the volume here):

Trades: Long ABT loser... and Short CTXS

OK so ABT did not work out as a winner. Despite some technical breakdowns, I hadn't hit my risk tolerance level in this so I wanted to see the earnings reaction.

The day of earnings announcement it opened down really big and so I held. This turned out to be the right thing to do because it was an overreaction to a decent report. In any case, this is one position where I didn't have autostops on and I actually have ceased to have those in place since I am on top of things most of the time anyway.

Then again my account access also prevented me from panicking on this position. Never transfer brokers with open positions on and not having the usernames and passwords to all the accounts you manages...that's the lesson of the day.

Anyway, I couldn't get into most the accounts to even get rid of this if I wanted to. I spent most of the day recovering passwords and having a shared office is really starting to fuck things up with I can't just pick up the phone and yell at TD Ameritrade when this type of shit hits the fan.

In any case I got rid of the ABT in most of the accounts (still holding in the taxable as this is the one that is being transfered at this juncture).

Sold 16 contracts today for about $1.00. Sold 12 yesterday for 0.90.
$2,200 loss...SHIZEN

And I still haven't got rid of the ones in the taxable account.

So as part of my scans and needing a short I decided to work on CTXS as a short today. And ABT retested early this morning from yesterday's I decided that was a good long to put on.

Unfortunately, I was a bit overzealous on both these plays. I chased ABT and was early on CTXS.

Across all accounts I have the following:

8 contracts of Nov $65 Puts for $9 each.

This is twice the normal position size but it is the only short I have on vs the other longs...and I am quite confident in CTXS going down down down...In the daily chart there is a gap back in July post earnings that should get filled on this fresh new downtrend. I see it going to $49 but I don't know if that happens tomorrow or the next day (or at all really).

These are 70 delta, plenty of time for that to go higher. I also chose these due to the high open interest.

38 contracts of Nov $52.50 Calls for $1.75 each...

I chased these a bit as I tried to get filled at 1.60 then at 1.65 and it kept going...until of course a little pull back happened...but nonetheless I see ABT going to $55ish and we should get a good 60% gain on these calls if that happens.
These are a 60 delta but we have lots of time so I decided it was worth the risk. I also chose these due to the high open interest.






Thursday, October 14, 2010

Applause for the NDX...New High Going back to end of 2007

Amazingly enough, nobody on the blogosphere has pointed out that yesterday the NDX (a.k.a. the Nasdaq 100) made a new high not just for this year...but going back all the way to the 1st day of trading of 2008.
The high yesterday of 2067.06 is the highest the NDX has traded at since January 2nd 2008. Also the close was the highest close since then as well.

That means the buy and holders in the NDX can safely say that they have been made whole again since the crash....(I hate it when those guys have a data point they can hang their hats on..)

This is a remarkable achievement for any stock let alone an entire index of stocks.

Given the pastel colored recovery that we have been having, it is hard to fathom the 100 companies that make up the NDX are better off today than they were at any time in 2008. Those were the salad days...sure the peak had been put just a few months prior but still...Salad days none-the-less.

I noticed this yesterday when I was drawn to look at a multi-year chart to double check that we had made a new 52 week high in the NDX (stupid hobby looking to see if there was a 104 week high made). I was really thinking that today I would wake up to a barrage of headlines about this amazing accomplishment by this index.

Yet...nothing is out there exclaiming this milestone...Crickets.

In any is an annotated weekly chart to help you all along...

Trade: Long ATPG

Took advantage of the DMI kiss/CCI/%R retest all on the hourly chart...The daily also has %R retest going on.

Decided to pick up ATPG...this came onto the radar recently as it broke out big time over the last few days on big volume.

Anyway, I am a bit hesitant on longs now since many indicators are showing up as overbought/overly bullish...However this is a strong trend and I am hoping to be proven right here.

Got into 21 Nov $14 calls at a price of $2.75 each.

Charts later..

Tuesday, October 12, 2010

Batting Average... astute reader asked me what my batting average is for trades I come up with on my own without the direct help of Bob Lang and Price Headley.

Well...its a good thing I tag posts winner and loser.

Anyway thus far (since I started chronicling things on this blog) I have 14 wins and 17 losers. So that's something like batting 0.451 (31 at bats).

Not too shabby I guess...Not too shabby at all. My goal is to get better (had I taken profits on just a few more trades the balance would have tipped in favor of the W column).

I didn't go back and calculate the total $$$$ here...but I am guessing I am barely at a profit or I am at break even...reason is because I can see the accounts and I know that it has been the Big Trends gains that have juiced the accounts thus far.

In any case, I am learning to get out when the going is good and that will improve the batting average...or I guess the Slugging percentage or whatever (not a baseball fan).

Things I might Trade



More exits from Headley

So some winners were exited today...though not without watching an ensuing rally which left some money on the table...such is life.

Anyway exited FCX for $9.30 on each contract over 9 contracts that's a $2,385 profit.

Exited ICE at $7.10 each so again over 9 contracts $450 profit...

Overall a great day in the books...not much to complain about...but both these issues rallied higher after the fill came through...that's alright.

Trade: Long CHKP...winner

Get out of CHKP calls at a price of $ continues to rally but I employed the discipline of getting out at at least 30% gain...I need to do this more often.

Since I picked these up for $2.35 each and we had 22 accross the accounts..that's a cool $2,530 in profits.

Today I am looking at TSL and it is rallying hard and I would have once more been green on that trade...but the key is that I was already green on that trade and I didn't do what I did today with CHKP...just get out...move onto another opportunity...There is no shortage of opportunities...and that's the key to the trader's mindset.

Get out when the going is good.

Then find another party to join.

Here is hoping that CHKP is the first in a long string of a new mindset for me.

First off...Got orders to enter FCX today from Headley in the Sniper service.

BOT 9 contracts of OCT $85 calls for $6.65 each..this was a good entry point as it was retesting.

Some would say going long today would be a silly thing to do...with NFP coming out tomorrow and all that risk out there...and all the overbought conditions and resistance overhead etc.

Speaking of which...After NFP comes out tomorrow morning...I will have my own persepective on the jobs situation and I can truly say that it is unique in that nobody else talks about jobs like I will tomorrow.

I said fuck you there are really strong trends out there and many of them are worth a few points and that's all I am looking for now.

New philosophy is that I want only about 30% gains on these options...most of the time that is a very small move in the stocks like 3% or maybe 5%...depending on delta etc.

Anyway last night I was back onto the scans (hadn't done that in a while) in scanning I now go over a few scans...I still go over the daily scans for breakout and retest candidates based on accel bands and %R...then I do a few high volume scans as well.

Anyway, in digging I then look at things that are jiving on daily and hourly time horizons.

Enter CHKP...I liked the chart in that it had broken out was in a strong uptrend...and had a decent retest on the hourly chart already...(DMI kiss was in effect).

So this Am I waited to see the action on the 15 minute chart and my final arbiter is the 13 EMA...I like to see a close over the EMA then a confirmation close above that bar's high. We sort of got that with the last bar of yesterday closing right on the EMA...then confirmation this morning at the open. I waited for that fat green bar to pull the trigger.

BOT 22 contracts of NOV $36 Calls for $2.35...looking to exit at $3.05 ish



15 Minute:


Sunday, October 10, 2010

Things I might Trade



Friday, October 8, 2010

Trade: Long TSL...loser

A fat finger and a little help from the market reduced the overall loss on this trade. I was placing limit orders in to sell at $4 thinking the morning gap would sustain itself into a rally where I can make a decent buck on this...well it triggered a market order at $3.60...In any case I got out of some at $2.70 and some others at $2.80...

Overall total loss was $750...this doesn't sound so bad except when you think that I at one time was looking at $2250 in profits....

This was a shitty trade in only the fact that I did not get out when the going was good...

I keep saying that I learn this lesson, but it is clear that I have not yet learned this lesson.

Getting out of a good trade is an extremely difficult thing to do I have to unlearn the "let your profits run" shit that is in my head.

That discipline is something I will be employing moving forward by simply taking the profit at 30%....if you think about it most of my positions wind up being about $6000 in size (accross all the accounts)...a 30% profit is $1800...that is well within my realm of happiness...If I can keep my losses to 15% this puts me at a nice 2 for 1 risk/reward scenario on every trade...I can make that better by taking 10% losses...but volatility would create many more loosers for me with such a tight loss point.

In any case, regardless of the situation (except when its Headley and Lang calling the shots)...I will be taking 30% profits on my trades.

I must do this. I simply MUST DO THIS.

Yesterday TSL took another step towards the sun and broke out pretty heftily. It then proceeded to fade into the close. The last hour presented a %R retest. Now on the hourly this can cut both ways. You can get lucky and %R retest holds, or you can watch as CCI painfully gets retested...or DMI or whatever.

MCP was one of those situations. I got in on CCI retest thinking I was high and mighty and boom got pasted.

Anyway enough MCP. TSL is a better trade good TSL fashion it promptly gaped up this morning and has been hovering at these heights since.

The retest on %R has held ($28.84), this actually happened outside the hourly bands...a good trait for any retest. Today it retested again towards the 13 hour EMA...That green line just keep supporting or dissing stocks I love it.

Across all accounts I have 18 contracts of the October $26 calls for $3.20 each.

Let's hope this works out better than MCP..I can make up for MCP with a $2 appreciation in this one...that's like cheesecake for TSL.



Wednesday, October 6, 2010

Some more exits today

So we exited NVDA and QLGC from Grand Slam today...perhaps the first looser we have had in this service in a long time.

NVDA...BOT for $3.05 sold for $1.98...across 17 contracts that's a $1819 loss.

QLGC...BOT for $4.60 sold for $4.40...across 15 contracts that's a $300 loss.

Now I am really feeling like a stooge for not taking that profit on TSL.

I am still holding it went down again and found again support...this could become another NVDA type situation but I am thinking it wont.

The charts show some key resistance and support levels in this range it has been tackling since it retraced the breakout.

On the daily chart the %R retest low continues to hold.

So based on this information I think the supports will hold. The one thing that I don't like is that TSL didn't do much during Tuesday's festivities. Energy and oil are doing quite well lately and TSL should be following oil.

Anyway those are concerns.

The other thing is the time stop. I still have until the end of the week to see if the time-stop, my money management stop, or some of these technical stops get taken out. Next week is expy and theta will start to take its toll. So Friday is my day to get out of TSL unless something else forces me out prior to that.

One thing is clear. I should have gotten out on day 2 and called it a day. I wouldn't have to be writing all this bullshit...and I know that this already looks like me justifying staying in a that was once a winner...but I haven't broken any rules yet and trading based on shorter time aggregations has taught me that at times you need patience.

PS..I see that head and shoulders top looking thing in the hourly I thought that we were retesting the neckline and going back down...then the key support 28.20 this is probably a minor consolidation and I think the daily chart prevails...But Friday is the drop dead it better prevail soon.




Tuesday, October 5, 2010

Il Mercato...

First off.. today we had some quick trades from Grand Slam..

Yesterday got long JNPR calls, today sold'em for a 30%'em for $3.95...sold'em for $5.45...across 14 contracts $1,800 this is in one

Also got out of RIG calls for a small but decent profit...bought them for $6.10 sold'em for $6.65...across 9 contracts that's $495...not shabby for about 1 week holding

I am still holding TSL...though at some point I had similar action as that JNPR trade. It is currently at a minor loss...but I have limited confidence in it unless something major heats up on solar...nonetheless I have a few more weeks and theta isn't a factor I hold... Some technical breakdowns have occurred, but not the money management I hold.

I know I just said "so I hold" twice...but this is important. I have seen many positions get better if I hold through one of the 2 loss prevention programs...some I have sold prior to money management stops being violated (i.e. my defined max risk not being triggered) due to technical breaks...others i have sold due to money management but without technical this case I should have managed position size better...

In any case, TSL is a hold right now it has found some support at $28ish and my money management rules have not been triggered yet...its just painful knowing I could have taken a nice profit on this just last week...I was hoping TSL was going to make up for MCP...

Anyway TSL has retested on the daily time frame and it is back above the 13hr EMA...also found support at the 20 period SMA for the 4 hr chart...

As for the market. Bullish day, bullish internals, volume. Slight uptrend in VIX was crushed today with lower low and lower closing low...However, caution is warranted as a major short squeeze is on...witness the commercial hedger on the NDX....Also it appears that rallying in the off season (vis-a-vis earnings) means the on-season will fizzle.

Regardless, a breakout like today has to be respected. So least until earnings season or even election day.

Sunday, October 3, 2010

chart of the day

Go Here then read his explanation here

a few things worth reading

First is the Matt Taibi piece about the Tea Party and its shortcommings. One key sentence (and I am only through the first page) about how every grass roots movement gets coopted by the big duopoly. Nothing can be truer. I used to have a political blog, and it was my avenue for countering the Bush criminal regime. You can go read some of my stupid shit here. Anyway back in those days Daily kos and Atrios rules the blogosphere if you were a leftist crazy commie. Like me. But godforsake whothefuck would have possibly mentioned the words Ralph far as thes partisans were concerned that mother fuker caused the whole Iraq Afghansitan, and every war that we will get into from here on in. He also caused the TARP and financial crisis.. Because had it not been for that motherfucker and his stupid commie bastard followers, Al Gore would have been president and the twin towers would still be standing and we would all have solar panels on our roofs and cars...but noooooo...Ralph fucking Nader had to get his nose up in a bunch and try to start a 3rd know left of Democrats since he saw them as beholden to the same interests as the republicans...go figure...

Anyway...I digress. Nader was right. Had Al decided to count all the votes in Florida instead of cherry picking certain counties...We would have all had solar panels on our roofs and would have all been driving electric vehicles...but alas Uncle Al decided only some votes were worth recounting...

Anyway...the point is...every grass roots movement in this country is backed by big money...and in the end they dont want a third party. They want the same party system but they want to mobilize voters and vote getters to go out there and get people to vote for their candidates.  Same thing happened with certain primaries when "bloggers" had control of the democratic party. Honestly they never had control of anything, and I remember disticntly being told that political rallys were a waste of everyone's time because the media didn't cover it and there was no effect from it...Obvioulsy Glenn Beck's bullshit rally didn't count.

Lefty Bloggers thought they could have a virtual revolution where everyone would simply read their blogs and get excited and vote Bush out of office. Then John Kerry came along...and we all know how that turned out...anyway

Now were are dealing with the tea party and the same interests are involved but they are basically batting for the republicans...regardless of wether or not those republicans emobdy their ideals..because most of them dont but the tea party is so entrenched in changing the world as we knjow it that they dont know any better...

poor bastards...

and while the main reason i stopped my political blog was because of my job blocking most blogs and sources of my content....another thing that really woke me up was Katrina and the fact that everyone failed at every level...that turned me into a serios cinic and to this day I remain that way...

one thing I have learned is that you cannot start a revolution from your couch...despite what Markos asshat Moulitas says...real live body demonstrations are very much a key part of any revolution.

Anyway the key take home here is that the Tea Party is operating under the same auspices as the blogger left was working under when Bush was in office....There isn't much to say except if they are succesfull I expect Markos to write  a new book. If they are not then lets just all give up our voting cards and jump off a cliff.

Fact is this country's duopoly will continue to make the rich richer and the poor call whatever party you want a party....but for now there isn't anyone really stopping this shit from happening.