Decent Trading Day - Lesson!!

Could have made 10% on the trades I did today. Well, I did make 10% on the trades but over traded and lost $42 to commissions.

FAZ trade. Calculated entry and exit and stop in the morning. Based it upon retracement of XLF gap, how much it would retrace back, and how much it would move -- based upon XLF moves in the past couple of days.

Lessons:

ONLY TRADE THE MAJOR MOVE. THE MAJOR TREND.
Lesson: Not worth baby sitting position for moves of 1-2%. Plan for the big move. Don't worry. Go and do other stuff.

Thoughts

1. Can't trade like this. With a cash account.

2. Want to day trade futures on my days off.

3. Need R to set up Futures/ equity account.

4. Brokers - IB? Trade King? TOS?

5. TOS has best charts.

6. Want to set up a TOS account for the charts. And slowly transfer Stockcharts to TOS.


. Need to complete Citizenship Application

Want to meditate and swim.

Ideas for LT wealth - China!

FXI leaps.

BIDU leaps.

CTRP leaps.

DIRECTION up for now; 1 week; Then DOWN

FAS, GDX Puts

Market is going up then down. FAS today to make some money. In at 9. out at 10.5 or so.

Then GDX Puts.

LESSONS LEARNED

1. POSITION SIZING/ RISK MANAGEMENT. 4 Positions minimum. Play one.

2. HEDGE. long strongest; short weakest.

3. TRUST THE LT TREND.

4. WAIT. WAITING MAKES $$. Market moves against - there's always tomorrow.

5. TRADE WITHIN YOUR LIMITATIONS. Know your account size and trading limitations, and set limited, achievable goals.

6. Only use options when you are sure of Market direction. Then use firm STOPS. No same month options.

7. FIRM stops.

Lesson oF THE DAY - HEDGE!

NOT HEDGED TODAY.

NO HEDGE IS GREED.  Don't worry about making millions.  Make your daily $75.

AT MOST BULLISH HAVE 4 POSITIONS. 3 BULLISH 1 BEARISH.  

Long TBT; Watch 800

1. Watch the Indices.  Might have to stop out of yesterday's trades if we break 800. 

2. Should I stop out?  Remember, my alternative thesis is that we might get 760-800 in the next couple of days, a double bottom.  

3.  In that case, I should probably just hold tight.  Given my trading restrictions on both accounts.

4. Open a Zecco account.

5. Buy a house first, before putting more money into trading.

6. File taxes.  Get refund.

7. Looking to go short Treasuries via TBT Call Options.  March 45s or 44s.

8.  TLT trend is down.  Today Equities will give us a down open, so TLT will open up.  Nice time to short.

9. Will TLT go down even if equities.

10. TLT target is $99.  TBT target $52 or so.  Even if equities start to fall?  Yes, unless Armageddon.

11. Unless equities completely collapse -- I.T. Wave 5 down comes now -- I don't think we will hit 600 in the next month.  I currently think Wave 5 will come in Feb-March-April.  So I should be out of this trade by Feb latest.

12. My stop is 760 SPX or TLT's daily Stochs turning UP.

Indecision Time

Everyone is getting chopped.

1. Either we are going up to 950 or down to 600.

2. A-D patterns may be bullish for the next month (if we are at a bottom) or bearish if we are not.  Hard to tell.

3. Banks were hugely oversold.  They dropped huge Tuesday (FAS down 40%), bounced huge yesterday (FAS up 37%), and retraced 68% of yesterday's move today (FAS down pretty big).  That is a bullish bottoming pattern.

4. NYMO is in indecision too.

5. Obama hope is a BIG FACTOR.

6. AD Volume 5 and  10 DMA looks BULLISH.

7. SPX and NAS 30 m Stochs pointed DOWN.  We may have another chance to go long tomorrow morning.  No need to buy complete position.

8. Buying ERX tonight.  

9. Looking to buy SSO calls tomorrow.

10. SPX, DOW and NAS daily MACD forming a BEARISH CROSS.

11. SPX, DOW and NAS daily STOCHS BEARISH.

12. 5 min TICK neutral.  DAILY TICK neutral.  5MA Daily TICK pointing UP.

13. TNX very bullish, but that may be just bonds - Geithner, China comment, US $ fall; for equities maybe not so bullish.

14. TRIN hovering at 1, but I interpret as BULLISH.

15. USD looking like it might be ready to turn,

16.  USD-XJY looking BULLISH.

17.  VIX may be ready to fall.  STOCHS look BEARISH for VIX.  BULLISH for equities.

18.  XJY hitting SOME resistance around 114.

19. Set Stops.

STOPS

FAS

DXO

SSO

ERX

QLD

Stop out of all at 800 SPX.

Add LAST bit of position when up move is confirmed.  ADD in strongest sector.

Short URE 4.25 (stop 4.5), FAS (8.05) REDUX!

DON'T WORRY.  FALL HAS STARTED.  SHORT.

SHORT URE 5.25 (stop), FAS (...)

If wishes were horses... I would have been up at least 20% today.

MISTAKE: DIDN'T STAY WITH THE TREND

Unless DAILY STOCHS start to turn, STAY with the trend.  DON'T WORRY.  There will be lots of opportunities to take profits.  A trend once in place is too strong to turn quickly.

MISTAKE - FOCUSED ON THE ST TIME FRAME!!!!

FOCUS ON DAILY AND WEEKLY CHARTS!!!  LOOK AT THE FRIGGIN TREND, MF.  LOOK AT THE DAILY STOCHS.  NO WAY RECOVERY, JOSE!!!

RE-SHORT SRS ON MONDAY! TZA looks cool!!!

Also really like TZA.  

Current fav. Bear ETFs:

1. TZA - Small Cap 3X

2. SRS - Real Estate 2X (could quadruple)

3. FAZ - Financial 3X

4. TWM - Russell 2000, 2X

5. ERY - energy 3X

6. EEV - Emerging Markets 2X (could go 4 times) 

7. AMZN Puts.

FOR EXTRA LEVERAGE GO SHORT INVERSE AND LONG ULTRA AT THE SAME TIME.

ETF List and Favorites

DXO - Double Long Crude Oil - very cheap.

DZZ - Double Short Gold

EFU and EEV - Emerging Markets Double Short

 

FAZ - could go up 400% from these levels $37 - 38

SRS - could go up 500% 

Complete list:

http://etf.stock-encyclopedia.com/category/leveraged-etfs.html

Mistake - Shorted Bank 2X ETF

Errors:

1. Greed?  Saying I'm not making as much as I could.  I only made this much.  I could make so much more.

2. Implemented trade even though TICK was flashing contradictory signals.  ALL INDICATORS NOT PRESENT.

When to cover?

1. If TICK and TRIN are in your favor, don't cover.

2. If you think you have made big profits, relative to the market, and you won't be around, cover.  Eg. Yesterday was a 40 point break, over two days in a market that up to that point had been rising.  That's enough.  The indicators were saying "this is enough for now."   WAIT.  Go outside.  Meditate.

Thursday EOD

Wow, getting hurt on my shorts.  

Very ST Indicators:

1. 5 min TICK is very high and above SPX.  (BULLISH).

2.  TRIN is going down and below 1. Bullish.

3.  Bonds are going down.  Bearish.

4. ST trend is still down.  May be a good time to go short - if we get a bump up tomorrow.

Conclusions:

0.  IF WE GAP UP, SHORT IT.  IF WE GAP DOWN, COVER YOUR SHORTS.

1. STOP out of short FAS. 22.30 if possible.  $40 - $100 loss. 

2. Go short (long FAZ) at day high.  Then forget about it.  Or set a 940 stop.

3. Look at DXO.  Consider SHORT at $3.25 - $3.3.

4. Or Buy FAZ at $35 - 36. (BEST.)

LT Thoughts

INDICATORS

1. AD Issues line looks very bullish.  5 DMA and 10 DMA was never this high in all 2008.

2. Bullish percent index is also above 2008 highs.

3. McLellan is at 2008-2009 highs.

4. Summation index is a straight shot up.  Wow.  

5. AD Volume looks very bullish.  5 DMA and 10 DMA broke 2008 highs.

6. Weekly Stochs on all indices are up.

7. Daily Stochs on all indices are now bearish.

8. 15 minute Stochs are bearish.  30 minute Stochs are mixed.,

9. Daily Tick is headed down and BELOW SP after a while.  (SELL.) 

10. Caution: 5-min Tick is above SP now; this is a very ST buy signal, if supported by other indicators.  Watch 5 -min Tick.  IT WILL TELL YOU WHEN TO COVER.

11. TRIN looks terrible.  (5 min and daily.) STAY SHORT until it turns.

12. TNX strength is a bit worrisome, but no biggie.  KEEP an eye on it.

CONCLUSIONS

1. Long term (6 months +) trend is down, but may be changing. Weekly Stochs are up.

2.  Mid-term trend (1 week+) is changing to down.  (as seen in daily chart.)

3. ST trend (1 day) is down.

4.  Watch TRIN.  Cover shorts when TRIN falls back.   At 880-95?  

Re short at 910 - 920, depending upon market strength (TICK AND TRIN, etc.).  

Short 50% at SPX 915 or so

Will double down at 925, out at 935.

If continues down, will double position at 910.

First target 890 or so.  I don't think we'll go far beyond 880 this time. 

LT the AD line looks very bullish.  5 DMA and 10 DMA was never this high in all of 2008.

Jan 7, 2009

Covered shorts at 914, waiting to short again.

Considering shorting at 920.

Retracement levels guy wants to go long, but everything tells me otherwise.

- Will is bearish.  Has already gone long triple short ETFs.  

Will says short the rallies.  We are not really rallied yet.

If I short now, at 917 - 920, we could get a rally.  Cover at 930?

Short at 917-920 with 50% of trade.  DD at 930.  Out at 935.  

ST Top

Short SP at 929.5 or so (or, actually, long SDS, at $65.90 and $66.37).

50 shares at average price of $66.51 (including commission).

Short SSO at SPX 932 or so. (SSO at $27.8 after commission.)

Stop out at 938.

Target SP 885?

Update - 12:40 p.m.  Market has surprising strength today.  We are up to 935 now, and I shorted at 930 or so.  It looks like the market is in a slow turnover process.  Maybe a double top at 943; if so we should go down tomorrow and the day after.  I'm a bit nervous about having to cover my shorts, but I can always sell one or two shares of the longs if I get a margin call.  

STOP out at 938?  I feel pretty strongly about my shorts, though.  And there is no leverage involved.  Stop changed to 940?

The reassuring thing is that this rise is on low volume; middle of the day chop?