Coming soon… trading videos

April 12, 2011

As I am on a temporary lull between work (I’m a freelancer in the entertainment industry) I am now working on a series of trading videos that will visualize what I have in the “learn” section and perhaps make it easier to comprehend.

Check back soon!

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I have readers?

March 22, 2011

I admit it… it’s been a while.  My last post was in September.  I have since returned to the world of entertainment and switched my strategy to longer term holdings… Which I think suit me better.  I got an intense job working for a Saturday Night Live special and neglected both this blog and my trading.  Of course that is just the time the market had a very nice rally just to punish me for my neglect (of course I’m probably just being an egomaniac).

I felt no guilt for leaving this blog as it was for I never got a comment or a message from any of you.  I come back now 6 months later and low and behold some of you appear to still frequent the blog.   I am both pleased and surprised.  My guess is that it’s the learning series I began that perhaps are getting people to come.  Well for those who are coming for this, I have some good news.  I have since acquired some skills in some advanced media programs and will be starting a video series to impart my trading philosophies… so stay tuned!

In the mean time I have a good position in $LUK, this stock stood strong through the Japanese earthquake and built up some pressure which seems to be moving.  My longer term trading means that I am looking at Monthly, Weekly, and Daily charts or Weekly, Daily, and 30 minutes.  My holding time is around 2 weeks to as long as it keeps going.  Looking at $LUK it appears it could be entering a third impulse wave on the monthly charts, a fifth wave on the weekly and what looks like could be a third wave on the Daily chart.  (pardon my lack of specific cycle terminology it escapes me at the moment).  What does this mean?  Could be a further push to 39-40 ish area optimally and then brace for a healthy pullback (which should be a medium term buying opportunity).

Other than that $VRX looks to be setting up for potentially explosive movements.  It could possibly be about to enter a fifth wave on the weekly charts.  It has just closed above a descending triangle line.  Though the volume is a little low for a breakout, it doesn’t worry me too much.  The volume for this rally on the monthly chart he been phenomenal, though it appears to be waning which could indicate the need for a sell off.  This will probably come at the completion of this fifth wave on the weekly chart.  The pullback would probably go down to 38, though it could even be possible for it to go down to the lower half of the 20s depending on the shape it takes on the monthly chart.   This would make for a great long term entry.  Getting in now is a little bit of playing with fire, but I still believe it’s a good risk/reward situation though I might go in with a slightly reduced size.

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besides that here is my short watch list of stocks:

CMG
TPX
HAS
EWBC
BEXP
CPX
XEC
BGC
REDF
GLW
PQ
ATML
AZPN
LTD
ROK
ABC
BMO
DST
PVX
ROST
WU

As usual, remember to do your own research on everything I discuss in this blog because in the end it’s your money and your responsibility.

If you like what you read here, please drop a comment. (that’s right I’m reduced to begging)

Happy trading!

– Applenickel

 


Quick note

September 23, 2010

I’m still studying Elliot Wave theory, so my counts are amateur level at best.  I’m still ambivalent about the current situation in the markets.  We obviously broke above the rising channel that was formed in the SPY but it remains to be seen whether it’s a blow off top and we have quick movement to the downside or if this is an impulse wave and the beginning of a new rally.

Must be prepared for every scenario, only way to win.


Two Elliot counts in this SPY triangle

September 16, 2010

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Here is my bullish count for the current situation in the SPY.  We are completing the D wave of a corrective barrier triangle.  This would indicate a pullback to 106-106.50 area before we head up for a longer term rally.

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This is my bearish Elliot count.  Here we are completing the E wave of a corrective contracting triangle which would be bearish and possible send us in a series of impulse waves downwards.  I certainly hope this isn’t the case, as it would be nice for the overall economy and state of things to have a nice rally going into the end of the year.

Either way it looks like some downward movement is due from these levels from my point of view.  I’m into some bearish positions but am keeping my positions small.  I would go full short on a pullback in a downward movement.  At this point it’s too early to be sure about any of it.


Taking a short break

September 8, 2010

I’m taking a short break from my regular postings on this blog.  I’m currently in the midst of studying Elliot Wave theory and taking in a new perspective with some fundamental analysis.  I might post some ideas and I will try to keep the bullish and bearish lists updated.

When I come back I will resume building the learn section, and will start posting specific ideas of upcoming stock movements.


What to do when price gaps beyond entry on the open

September 1, 2010

Today forced me to look into strategies dealing with price gaping up or down beyond the planned entry price.

In my search I found this site.  Morpheus Trading Group – a financial website offering information on technical trading including picks, and an educational section.  Digging around the site I found this article pertaining Gap trading.

In a nut shell it states:

  • If the price gaps up or down 1% past the intended entry price put the buy on hold until an appropriate low risk entry is formed (I.E: a pullback).
  • If the price gaps up or down less than 1% past the intended entry price, buy on open with a market order.

Another notable advice deals with trading ETFs.  They talk about a five minute rule, whereas on the open if a price would immediately trigger an entry, they advise to wait until 9:35 AM to enter the trade in order to avoid rogue trading action.   Furthermore, they say that if a price is beyond the trigger price and then it pulls back behind it then they enter the trade at the original target.

Finally they discuss the scenario where the price gaps beyond an intended stop price on the opening.  They advise to set a new stop 15 cents beyond the new low of the first 5 minutes of trading.  If after 5 minutes the price is trading beyond 1% of the original stop price, they set a stop 15 cents below the low of the first 20 minutes.

All of this goes along with my personal strategy, except that I usually use 10 minutes instead of 5, and I also apply it to stocks.  I find that the opening action is usually an aberrant in regards to the rest of the day’s action.  It’s very easy to be shaken out by the whipsaw action of the first 5 to 10 minutes.  Also I tend to use a stop that changes depending on the price levels of the stock that I’m trading.  15 cents is a lot for a $6 stock but insignificant for a $300 stock.  I simply multiply the level by 0.0025 and subtract the result to it to determine my stop.  For example if my stop is 81.92 it would be (81.92 * 0.0025) – 81.92 =  – 81.72.  So a 20 cent stop to 81.72 would be in order.  The same calculation applied to a lower priced stock at 9.75 would be (9.75 * 0.0025) – 9.75 = – 9.73.  A 3 cent stop here.  This accounts for the different volatility at various price levels.  More on this in a separate article in the future.

Another site – Nyse-Trade suggests to place a new entry if the price breaks out of the range formed in the first 30 minutes.  This is a more conventional gap trading strategy where most traders using such use either the first 30 or 60 minutes of trading to establish a range.

Entry size must be adjusted to compensate with the added risk when using these strategies.  Also depending on the technique and time frame I would use a trailing stop until a proper level is established.


Morning reflections 9/1/10

September 1, 2010

A big gap up this morning in response to the ISM Mfg Index at 10:00 AM.  Stocks are green across the board as bottom picking buyers are vindicated and late comers are still getting in.  There is some other negative news making the headlines but investors hungry for profits are discounting them for the moment.  For one it is estimated 10,000 jobs were cut in August and construction spending is down.

Regardless, the short term outlook is confirmed bullish with the midterm becoming neutral – bullish.  This means that long side day trades are in order and I’m getting ready for some overnight long swing trades as well.