401K: No new trades. Still holding long positions in TNA, AAPL, V.
Trading account: Still holding AAPL and MGAM entered previously and holding up okay. My only trades today were to cover the TNA short that was entered Thursday afternoon as an intraday trade, and then entered a long TNA intraday trade at 3:30 this afternoon with a stop at today's low. Only looking for a dollar or two move there using the 30-minute chart.
Market View: Market breadth was not bad today and in general still looks good. It is not encouraging to see such a big drop but the market made a good rally recently, so the fact that it was not a widespread sell off is a silver lining. My bias is still long and will buy good breakouts as they appear. I hoped to buy something else in my 401k Thursday or Friday but nothing I liked showed up, maybe next week after this pullback some stocks will have a chance to build some small bases.
Have a great weekend.
July 6, 2012
July 5, 2012
Market View and Trades Update
Market and Breadth: The market looks pretty good, although a little overbought short term. The pullback today was mild, so that is good news. The breadth indicators on MM are green, so that is good news. The 10-day ratio looks to join the 5-day ratio above the 2 level, so that is good news. But tomorrow we have the jobs report and it could render all that useless for at least 30 minutes. How the market reacts in either direction will be interesting. Will a gap down be bought? Will a gap up be sold? We shall see. I will be watching how the market reacts to whatever happens.
Today's trading activity:
401k: Exited EBAY after it went through stop of $41 again. Lost about 3% on that one. It recovered a bit intraday but that stock just wasn't working, and EBAY is not a stock like AAPL that you can wait on. Next. Still holding AAPL, V, and TNA all profitable for now. I am not as much invested as I probably should be, barely 60% right now.
Trading Account: I took some profits today as a few stocks looked like they were petering out a bit. I exited INCY with a nifty 4.5% gain, but it looked ready to pullback after not holding its highs and I don't like holding biotechs very long in any market when swing trading. On MGAM, I exited half the position with about a 8% gain. MGAM compared to INCY had a very good volume bump on its move up, so I am willing to see where that one goes up along the 4ema. Also in my trading account, I was in and out of LF on its breakout for a 1c loss, essentially break even. The stock simply gave up too much of its gains all the way back to my entry point intraday, and that is a no-no for me. I've said before, I hate that stock.
My trading account still holds AAPL and half a position in MGAM, plus a short TNA trade using an intraday method I am trying out. But first, the stocks I took money out of today are below:
MGAM had a better volume surge on its move up, and may test its 4ema soon, so I took half my profits after an 8% gain. I will ride a trailing stop on the rest at the 4ema on a closing basis. If the market weakens here, it could pull back for a bit.
LF was one that I entered this morning and got caught up in the breakout moving so quickly that I paid more that what I wanted to. The stock ran up and I had a 5-6% gain at one time, but it came all the way back to my entry and I had seen enough of the froggy one. It will probably go up but this stock is just wild. The name fits. Ended up breaking even so no harm done. Just hate the stock more now.
On another note, I am working on an intraday trading method for TNA right now, which I hope to post later this summer. It is mostly done but only lacks some live testing. I am trying it out going forward. Since it requires some discretion I will try it out on my own account for a while first. It's funny, using that intraday system, I was short TNA at the close. So I am long TNA by one method on larger time frame and short in a different account on a smaller time frame. It's like having two friends that are dating the same girl...somebody is going to be worse off the next morning.
Today's trading activity:
401k: Exited EBAY after it went through stop of $41 again. Lost about 3% on that one. It recovered a bit intraday but that stock just wasn't working, and EBAY is not a stock like AAPL that you can wait on. Next. Still holding AAPL, V, and TNA all profitable for now. I am not as much invested as I probably should be, barely 60% right now.
Trading Account: I took some profits today as a few stocks looked like they were petering out a bit. I exited INCY with a nifty 4.5% gain, but it looked ready to pullback after not holding its highs and I don't like holding biotechs very long in any market when swing trading. On MGAM, I exited half the position with about a 8% gain. MGAM compared to INCY had a very good volume bump on its move up, so I am willing to see where that one goes up along the 4ema. Also in my trading account, I was in and out of LF on its breakout for a 1c loss, essentially break even. The stock simply gave up too much of its gains all the way back to my entry point intraday, and that is a no-no for me. I've said before, I hate that stock.
My trading account still holds AAPL and half a position in MGAM, plus a short TNA trade using an intraday method I am trying out. But first, the stocks I took money out of today are below:
INCY looks pretty good on its 4ema but the
volume on this move doesn't look any higher
than the the volume during the base.
I'll take the 3-day gain and move on.
LF was one that I entered this morning and got caught up in the breakout moving so quickly that I paid more that what I wanted to. The stock ran up and I had a 5-6% gain at one time, but it came all the way back to my entry and I had seen enough of the froggy one. It will probably go up but this stock is just wild. The name fits. Ended up breaking even so no harm done. Just hate the stock more now.
On another note, I am working on an intraday trading method for TNA right now, which I hope to post later this summer. It is mostly done but only lacks some live testing. I am trying it out going forward. Since it requires some discretion I will try it out on my own account for a while first. It's funny, using that intraday system, I was short TNA at the close. So I am long TNA by one method on larger time frame and short in a different account on a smaller time frame. It's like having two friends that are dating the same girl...somebody is going to be worse off the next morning.
Look for the jobs report to gear the early trade tomorrow.
July 4, 2012
Using the 4ema to Stay In a Winner
At some point in trading, the fruits of the trader's labor will pay off and the trader will get in on a big winner early.
In the last year, I learned about the 4ema from two different traders, Dan over at http://www.patientfisherman.blogspot.com/ and Tumbler at http://www.followtumblertrades.com/. They use the 4ema on different time frames, but they got me started watching the 4ema more. After a while I gained some comfort with it. Over time, it has shown itself as a good tool to help a trader stay in a big winner by using it as a trailing stop on a closing basis as areas to take profits.
This strategy may goes against the idea of selling on strength, which I have normally used at least as an initial profit taking strategy, sometimes a sell all strategy, when trading momentum. But when you get into a stock that is about to make a big run, the 4ema can help keep a trader in the trade for most if not all of the run up. I still believe in taking profits on strength, but when a stock makes a big run after initial profit taking, the 4ema can help catch it.
I have posted two sample trades below, each making 40%+ by using the 4ema as a trailing stop. Assume selling in either 20% or 25% increments.
First is AAPL. This is an actual trade that I still hold 20% of after 4 sales of shares along the 4ema. This was a long term purchase in my 401k, so when I entered I had no plan to use the 4ema as an exit tool. But after the gap up on earnings, I began to look for exit points. I thought it may continue its run, so I used the 4ema as my selling point and held through pullbacks. The stock moved from $395 to $644, a 63% gain. Using the 4ema, I caught 44%, so more than two-thirds of the move was captured.
The second example is on a trade I entered but sold on initial strength for a quick gain. Hindsight is 20/20, but take a look for yourself what I missed after my little 7% gain. The stock was CALL, maker of the MajicJackPlus product. in mid-December, they announced that sales of the product were so good, they were cancelling a secondary offering. Sales went through the roof (I even bought it), and the stock doubled. Using the 4ema, I could have made 48% instead of 7%.
It's just one more way to skin the cat, but if you find yourself in a stock with 50% potential and it makes a big run, you can use a moving average as a trailing stop. IBD does this with the 50-day average with the volume requirement. The difference here is that using the 4ema will have you mostly out by the time stocks like this pullback to test their 50-day averages. Some traders use the 6-day, some use the 10-day or the 8-day. It's all about comfort and the trader's style of trading.
Happy 4th and happy trading.
In the last year, I learned about the 4ema from two different traders, Dan over at http://www.patientfisherman.blogspot.com/ and Tumbler at http://www.followtumblertrades.com/. They use the 4ema on different time frames, but they got me started watching the 4ema more. After a while I gained some comfort with it. Over time, it has shown itself as a good tool to help a trader stay in a big winner by using it as a trailing stop on a closing basis as areas to take profits.
This strategy may goes against the idea of selling on strength, which I have normally used at least as an initial profit taking strategy, sometimes a sell all strategy, when trading momentum. But when you get into a stock that is about to make a big run, the 4ema can help keep a trader in the trade for most if not all of the run up. I still believe in taking profits on strength, but when a stock makes a big run after initial profit taking, the 4ema can help catch it.
I have posted two sample trades below, each making 40%+ by using the 4ema as a trailing stop. Assume selling in either 20% or 25% increments.
First is AAPL. This is an actual trade that I still hold 20% of after 4 sales of shares along the 4ema. This was a long term purchase in my 401k, so when I entered I had no plan to use the 4ema as an exit tool. But after the gap up on earnings, I began to look for exit points. I thought it may continue its run, so I used the 4ema as my selling point and held through pullbacks. The stock moved from $395 to $644, a 63% gain. Using the 4ema, I caught 44%, so more than two-thirds of the move was captured.
The second example is on a trade I entered but sold on initial strength for a quick gain. Hindsight is 20/20, but take a look for yourself what I missed after my little 7% gain. The stock was CALL, maker of the MajicJackPlus product. in mid-December, they announced that sales of the product were so good, they were cancelling a secondary offering. Sales went through the roof (I even bought it), and the stock doubled. Using the 4ema, I could have made 48% instead of 7%.
It's just one more way to skin the cat, but if you find yourself in a stock with 50% potential and it makes a big run, you can use a moving average as a trailing stop. IBD does this with the 50-day average with the volume requirement. The difference here is that using the 4ema will have you mostly out by the time stocks like this pullback to test their 50-day averages. Some traders use the 6-day, some use the 10-day or the 8-day. It's all about comfort and the trader's style of trading.
Happy 4th and happy trading.
July 2, 2012
Trades update
Trading Account: Sold LF, Bought INCY
401k: Bought V in a.m.
In my trading account, I dumped LF this morning due to bad behavior, before it faked yet another move up. Hate that stock. I replaced it with INCY mid day and luckily INCY ran into the close. My AAPL, MGAM, and NTSP trades all look good right now but that can change quickly so looking to take at least partial profits if we see much more strength. All stops have been moved up to entry points.
I bought V as it was breaking toward new highs this morningIn my 401k, it looks good right now but follow through is always a question. Also in my 401k I still hold 20% of my original position in AAPL that I bought at $395 in December. I may add to that position in the morning with a target at the old highs. My 401k also holds TNA on the Friday signal.
The one I am miffed at is EBAY, which is also in my 401k. The stock looked great on its breakout and then fell back hard and didn't recover very much. I may need to let that one go and put that capital into something that is working, or I can see what it does going into earnings. If I find a good candidate to buy in the morning I will look to replace EBAY.
Overall not a bad day today. The market did not offer much in the way of follow through but some stocks that broke out Friday followed through on their breakouts. We'll see if this lasts days or weeks. At some point we need some follow through on the 600+ breadth day we had last Friday. With a holiday in the middle of the week this week, volume is sure to be low and markets could be a bit choppy or volatile. This may be an ideal spot for a pullback or drift sideways on low volume. With the 5-day ratio on MM above 2 and the 10-day ratio approaching the same, I have to be long and fully invested, especially coming out of a correction.
I'll be monitoring things closely tomorrow possibly to replace EBAY. I will also be looking to take some partial profits on anything showing unusual strength.
Cheers and Happy Birthday USA!!!
401k: Bought V in a.m.
In my trading account, I dumped LF this morning due to bad behavior, before it faked yet another move up. Hate that stock. I replaced it with INCY mid day and luckily INCY ran into the close. My AAPL, MGAM, and NTSP trades all look good right now but that can change quickly so looking to take at least partial profits if we see much more strength. All stops have been moved up to entry points.
I bought V as it was breaking toward new highs this morningIn my 401k, it looks good right now but follow through is always a question. Also in my 401k I still hold 20% of my original position in AAPL that I bought at $395 in December. I may add to that position in the morning with a target at the old highs. My 401k also holds TNA on the Friday signal.
The one I am miffed at is EBAY, which is also in my 401k. The stock looked great on its breakout and then fell back hard and didn't recover very much. I may need to let that one go and put that capital into something that is working, or I can see what it does going into earnings. If I find a good candidate to buy in the morning I will look to replace EBAY.
Overall not a bad day today. The market did not offer much in the way of follow through but some stocks that broke out Friday followed through on their breakouts. We'll see if this lasts days or weeks. At some point we need some follow through on the 600+ breadth day we had last Friday. With a holiday in the middle of the week this week, volume is sure to be low and markets could be a bit choppy or volatile. This may be an ideal spot for a pullback or drift sideways on low volume. With the 5-day ratio on MM above 2 and the 10-day ratio approaching the same, I have to be long and fully invested, especially coming out of a correction.
I'll be monitoring things closely tomorrow possibly to replace EBAY. I will also be looking to take some partial profits on anything showing unusual strength.
Cheers and Happy Birthday USA!!!
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