Win's Way: August 2011

Lessons

1. If VIX is under 26, buy the dip. If VIX is over 26, sell the rip.

2. Always trade in the direction of the larger trend. Find the strongest trend in your time period.

3. Nothing as bearish as a failed breakout. Nothing as bullish as a failed break down.

4. Don't worry about the last dollar. Take your money and go to the beach!

5. No more than four positions at a time. Preferably 2-4. Scope out others. Pick the strongest.

6. Buy the strongest; sell (short) the weakest.

7. Nothing is guaranteed. Nothing.

Thursday, August 18, 2011

Outlook

1. Hammer on the 10 year note:

http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=1&mn=0&dy=0&id=p71267183058&a=235052232

2. At all time lows (December 2008) on the weekly.

http://stockcharts.com/h-sc/ui?s=$TNX&p=W&yr=4&mn=5&dy=0&id=p44608524031&a=234623991

3. Hong Kong (HSI) at 38.2 retrace of entire bull market and good support. HSI is a leading indicator, IMO.

http://stockcharts.com/h-sc/ui?s=$HSI&p=D&b=1&g=0&id=p68835916138&a=241970015

4. SSEC shows positive divergence with SPX.

5. /ES bounced off 61.8% retrace of 1100 - 1206 move.

6. $COMP at double bottom levels.

I think possible bounce hereabouts - to SPX 1220-1250.

Then, in September, a lower a low in equities and a higher low in bonds and HSI. Similar to October 2008 - March 2009 divergences.

If not, double bottom around 1090-1100 and bounce to 1190-1200.

Just my 2 c.

New Trades

Bought TZA at 47

Sold TZA 52.5

Bought TQQQ at 57.31 (/NQ 2094) - This is probably a ST trade, but not sure.

Wednesday, August 10, 2011

This is how I'm playing it

/NQ goes to 2260.

/ES to 1220-1225.

DNDN to 20.3 (about 90% gains from here). First stop 16.40.

Edit: Reconsidering DNDN now.

Tuesday, August 9, 2011

Lessons from this crash

1. Rely on my own analysis.

2. Meditate.

3. Be comfortable with not doing anything.

Thursday, August 4, 2011

I think the fed will wait out the panic tomorrow. Then when things have stabilized (next Tuesday?), and the bounce has started, the Fed will kick in with news about QE 3. That's when it will be most effective.

Tomorrow we see 1180 or so on the /ES.

Then over the next 30 days, we're going to get a monster bounce. Within a month or so, we'll be at 1320 or so on the ES. Then we drop. And wait and see.

Tuesday, August 2, 2011

ST ES (S&P E-mini) Roadmap

1264 (today/tomorrow August 2/3) -
1280 (tomorrow/Thursday)-
1220 (August 15) -
1250 (August 30) -
1150 (September 15).

Quotes to Live By

Write down the premise for the trade. Plain language. Nothing an 11 year old couldn't understand. TA should provide guidelines and tests for your premise... so simpy "MCP is going up" is not going to cut it... "MCP will find support along 30-31 and turn back up from there towards its 200 day" works. Now you have a written statement of validity for putting on your trade. No chance for equivication when buying or to say "well, it's broken 30 but maybe it will come back". If the premise becomes invalid, you must close your trade, even if you still think "It's going up".

- Jonny O on bluechipbulldog.blogspot.com

"Your time is limited, so don’t waste it living someone else’s life." -Steve Jobs

Those who expect to reap the blessings of freedom, must, like men, undergo the fatigue of supporting it.
~Thomas Paine

"There is a 100% chance you will be wrong at some point, and if you are 1000% invested each time, your expected future value is zero."

-- Will Rahal (The Man)

"It's my nature to 'overthink' winners and cut them loose too early, so trailing profit stops almost always kicks me out with far better profits than I otherwise would have taken. Our perception of 'what should be' in the market very often differs from 'what is so' and the difference is always money."
-- dowoper8r

We tend to understand success as a certain monetary or career achievement. Just as lasting, fulfilling satisfaction (happiness) can ultimately only come through service to others, so is success an internal state of being within immediate reach. I define it as honoring yourself and others.

So why not now already come into possession of the joy and confidence you believe will come through achievement? Then, your life will become not about striving for “success,” but expressing the success you already have."

-George Rahal

More rules/Things I have learned

1. Always meditate.

2. Use the daily charts first, then all others.

3. Always have a Plan B.

4. ALWAYS STOP OUT WITH A LOSS. -10% IS BETTER THAN -90%.

5. Time is your biggest resource. Take profits. Take losses. Get outside!

6. With futures, a bird in hand is almost always better than two in the bush. With options, wait for your target.

7. If you're anxious, you're early. If you're afraid, you probably shouldn't be in.

8. When trading equities, always sell the morning excitement! When trading anything, always sell the excitement spike!

9. Always follow your fundamental knowledge, then your charts.

10. 1 hour on; 15 minutes off.

11. When trading futures, never double down. Firm stops.

12. In Gold, watch the London trend -- 5 a.m. to 6:30 a.m. EST.

Win's Way