trading on the road

Even I'm on the road, I just couldn't resist trading this pattern. Got back from an interview at 12:45pm ET. Turn on my laptop - the early morning news met initial rush of buyers, then market was sold off. I know I want to be short. Opportunity came at around 1:30pm ET. Did exactly what's expected. Made a double bottom, and I covered at the lows. I have no idea it's the bottom - the daily chart tells me selling is overly done. Daily and hourly both are touching lower end of volatility bands.

The market currently hangs around 38% level after a double bottom. Too uncertain for any types of trades now for the rest of the day.

trading the belief

As a trader, I must learn how to trade my belief. Having conviction in my belief can be so important. I often find myself regretting not executing my belief. I'm too hesitant to pull the trigger. Perhaps I'm not so flexible with expectations. Dealing with uncertainty is part of the game. I must learn to cope with it, through small position size and repetition, I will develop more confidence.

The pullback day after outside reversal day seemed like a golden opportunity to get short, or to buy puts. But I was not able to execute my "system". I was about to long some March IWM puts (I expect rise of volatility), but just couldn't do it. Admittedly, it's not the pattern I usually trade nor the types of trade that I do, but the opportunity called for prudent risk taking. 

IWM made a double top. Small caps showed weak relative strength.

compared to the SPY...

I was tempted to get short SPY intraday... but not able to execute (no, I don't believe using more tools will provide more confidence. It's not about tools). 

S&P has retraced 50% from the high of the last rally. A meaningful, tradable bounce is likely. But mostly I'm on the look for intraday shorts, especially if S&P break 15min down trendline. I'll play a bounce back to the trendline.

It's earnings season and I just want to shut myself from financial media. It's not about earnings. It's all about overall market environment. If Apple and Amazon had earnings today it would probably be sold off hard instead of gapping up.

ouch!

Intraday reversals are brutal. We got one today. I'm out of all positions, even tempted to get short... but managed to hold my fingers at the close.

It's not to say there had been no warning signs. Yesterday the market failed to hold the early morning gains. There seems to be a massive rising wedge in the making. Within the past few weeks, a few down days had great volume while market edged up on overall weak volume.

Today's afternoon selling makes a pretty convincing case that market is at the top. No news, just sellers. Not even a pullback in the midst of selling.

a few trades

There's definitely no lack of patterns to trade today.

A nice breakout in USO. This is a no-brainer breakout trade IMO. Energy exhibit great relative strength since the get-go. In addition, it draws huge participation. With the overall market hanging on at the highs of the day, it's a pretty good bet oil will take market a few notches higher. I missed out the earlier trades, but caught the pattern developing before 11 PST. A clean break of the triangle pattern. Exit was tough. I actually held on through the retracement, because I figure there would be a follow up. Nothing happened thereafter.

Nice break in AXP. One of the strongest patterns of the day. Bought into a fake break out around 10:15. It would have broken out if market had not been weak at that time. I held on due to such low volatility and volume. Added more shares as it broke out around 11 PST. Exit bar was obvious - the big red candle around 12:10. I actually got in again near the close for a quick scalp.

What a nice trend in SWN. Only if I've not exited too early.. It's okay. Opportunities abounds.

In hindsight, I got into X a bit early. Like AXP, I held on as it kept trending down. Eventually it came back with some force. But perhaps I shouldn't have traded it at all.

clean break of 10,000?

Great day for day trading. We have Dow breaking 10,000 first time in a while. Volume spiked as Dow surged past 10,000. The followup price action seems pretty convincing to me. We shall see tomorrow. My money is on the long side in the near term.

This is the kind of day I wish more margin is available to trade... My trade in SU got canceled due to margin. Man, only if I caught this one...

I did catch a nice breakout in GME. Thanks to multiple computer screens!!

So many stocks (especially financial, energy, and premium consumer names) are showing pretty convincing actions. Is this a great environment for breakout trades?

I went long on HRBN, BAC, SGP and VIT. We shall see. The position I'm most nervous about is BCSI. Divergence is forming. Take profit or keep running?

Choppy intraday actions

A difficult day for me as I got whipsawed on both ends (buy strength and sell weakness). One of those days, just hard to get a grip... Volume did nothing to confirm price action.

Going into today, I knew I would close some swing positions because momentum is beginning to fade. I also don't like how market leaders rose on relative weak volume. This could be a double top forming.

 

Consistent market theme

I'm very impressed by consistency of the story of which Mr. Market is telling me:

The past week is a temporary pullback/consolidation. We are approaching to a very important buy signal if the momentum of selling continues to dissipate. And some no-brainer trades.

I tell myself to be ready to own stocks, especially ones that demand high valuation. Sectors don't really matter as leisure, energy, technology, biotech, mining, and industrials all look quite strong. Recently we've seen out-performance of premium/growth names and lagging of discount/value names. I expect the theme to continue into November. Risk appetite in equities seems to be back on. Expect expansion of P/E.

Nice looking charts are abundant. Here are some examples:

day trading

Completely lost my voice this morning as I've slipped into recovery mode from trip to Boston over the weekend. This morning I woke up late for the NY open (which I regret every time).

The day got a bit brighter as some great intraday patterns began to form midday. Volume pick-up was somewhat unusual around 10am. Perhaps managers are chasing the market. By 10am, we held on to the level of yesterday's close, and we even made a fresh new highs in the morning.

I got into AXP on retrace. This tend to be the best patterns early in the morning, but I traded it anyway since the breakout occurs with great volume minutes prior, and a new high was made. It's very likely there will be a fresh new high with follow through.

Here's an intraday chart of AXP


a similar trade in X

Appetite for risk

I tend to turn away from the market at the worst of times. Last week was no exception. I find myself closing out long positions at the lows of the week, and have missed the rally last few days.

It was just another reminder the amount of patience successful trading requires. Funny that I find myself most successful after events like this. Knowing that I've missed out, it forces me to concentrate more on the tape and dig out those promising opportunities.

Today is a very convincing day as we had an outside breakout day. Appetite for risk seems to have come back. In almost every sector, we see high premium growth stocks surging and safety names lagging. Compiled a long list of promising stocks for swing trades. I tell myself to keep a close eye on them.

Went long on BTU today. Looking to go long on some energy names, premium retailers, and small cap tech on a pullback.

Currently hold (date of entry): MR (7/13), CSL (7/28), CAVM (7/30), DRYS(8/27), FCX (9/8), RIMM(9/8), BTU (9/14)

post labor day surge

I'd expect to see some actions post labor day and we got a few typical correlation plays this morning, particularly the weakness of dollar and strength of commodities.

The dollar broke out to new lows, and made a perfect 38.2% retracement shortly after NY open. Equities rallied after a brief selloff. Shortly after 7am there are some good trades based on relative strength. Entire energy space is incredibly bullish. Nat gas coming off the lows of last week. HES was among good candidates. It broke out of a falling wedge pattern, albeit on low volume. However it sets up for a few intraday plays. Tape rolled over midday, but caught on a few trades on the long side. (I always hesitate to fade gaps)

AUD/USD fib retracement

HES breaking outHES intraday RS pullback trades

first post

Totally random at 2am, here I am, starting a blog for fun but more importantly to satisfy my curiosity, enhance my objectivity, engage conversations, and perhaps build trading/life discipline.

Food for thoughts on my first post. I've been thinking about the two contrasting points of view on success. Featured on last month's issue of Stocks and Commodities was an interview with Kevin Haygreen, the 25 year old trader in London, it was asked "Why do you think you became a successful trader?", he replied (what I think a quintessential response):

I believe I’ve become a successful trader because I wanted it badly enough, and I believed in myself. The way I see life is that it doesn’t matter what hand you get dealt, you play the cards you have. The only thing that separates the winners and the losers is one person wanted it more than the other. If you want something bad enough, then you’ll get it because you’ll do what you have to do to get where you want to be. For me, I spent a couple of years surviving day by day with only what was in my pocket and eating mashed potatoes every night for dinner so I could pay for my charting and datafeeds, and watch the markets every day. I had moments where I wanted to give up, but I kept going and I learned that for every low there’s a high, and eventually it all paid off.

Another view taken by Malcolm Gladwell in his book "Outliers", however suggests that:

Chance of success comes from our time, not just from our own efforts or talent.

In his "Fooled by Randomness" Mr Taleb seems to agree:

The great generals of the past, took considerable risk, along with thousands of others, and happened to win. Heroes won and lost battles in a manner that was totally independent of their own valor; their fate depended upon totally external forces. Heroes are heroes because they are heroic in behavior, not because they won or lost.

When we are investigating the causes of something, there is so much that goes into it. Our observations are obviously biased with benefits of hindsight. Where do we draw more objective conclusions from. Is there a better way to investigate?