A Trade A Day

Wasn’t it Livermore who said, “it isn’t your thinking that makes you money, it’s your sitting”.

Something to that effect, but I think I didn’t get it quite right. The point is that the big money is made in the big move. Not necessarily trading in and out all the time. I’m sure some readers of this blog can attest to the fact that big money can be made trading frequently. If that’s your strategy, then all the best to you, but I can tell you, that I have made more money by trading less.

This may sound a bit hypocritical considering the name of this site is A Trade A Day, but what I meant when I named this blog was something deeper than trading each day. I use to say in my about me page that A Trade A Day was about showing up and about doing your best.

I’m at my desk every day. I do my research every night, like clockwork. It’s the only way to operate in my opinion. I strive to do my best everyday. To get just a quarter percent better at research, at execution, and now at blogging

The markets look like they have commenced a move lower. It’s time to sit and let my shorts play out.

BTW, when I say “my shorts” does anyone think underwear. Is it just me?

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I have to say that I am as pessimistic as they get about this market. There have been some spectacular drops(CSC comes to mind) that have made some lucky trader a lot of money. I welcome this consolidation we’re seeing in the major indexes. The Bears could use a rest. The shorts I am looking at are just starting to consolidate. I’d like to see a few more days of sideways or tepid up movement before selling resumes. Here are a few stocks that I will be trading should they move lower.

DIS is trading close to a 52 week low. I expect the symmetrical triangle will resolve to the downside.

Here’s another stock close to a 52 week low. I really like the descending triangle. I’d like it to rest a few more days.

Another stock getting sent to a 52 week low. SYY is also in need of some rest.

There are those aberrations. Those stocks that could care less about overall market direction. Those stocks that are poised to move higher. As a trader, I’m prepared to take what the market gives. It has been very challenging, personally, to swallow my emotions on a daily basis. I have a bias for shorts, but there are some beautiful long setups that I cannot ignore. Here are two:

Jaso is resting close to a 52 week high. I like it past the 77 area.

I wish I had caught this one intraday on 1/7. It’s a bit of a speculative play considering that the move on the 7th and 8th was a little overblown, but I’m slapping this one on my watchlist to see how it behaves over 29.

See you tomorrow!

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Hola Amigos,

Time to get back in the saddle. It’s been a few days since I’ve written. I’ve been recovering from a cold, but I need to get going. Over the past few weeks, quite a bit has happened in the market. I’m pretty disappointed in myself because a ton of opportunity has passed.

I have always taken some time off around Christmas to do a review of my accomplishments and to plan for next year. That means giving up trading for a few weeks to focus on family, what I’m doing, and where I’m going.

Unfortunately for me, I missed a significant break in the market. I had a handful of setups that I flat missed because I wasn’t around. Oh, well. It’s hard to not to beat myself up, but complaining won’t make any money.

Let’s look at where we are and review some ideas for the weeks ahead. Let’s check the overall market.

Taking a look at the weekly chart of the Dow Jones Industrial, we can clearly see a neckline break. The down trend is confirmed in the weekly chart several other indexes:

The NASDAQ:

The S&P 500:

So, it’s apparent to me that we’re in a downtrend, and if it’s apparent to me that means it’s time to go the other way. I’m too late to the game to catch the initial downside breaks. I’m going to have to catch some points off consolidation. I’m also going to be selectivley going long, but let me make a special disclaimer. My historical winning percentage is much lower when going against the trend and I always trade smaller. Let’s take a look at a few ideas:

Who wants to take a shot at this high flier? I am anticipating a drop here. FSLR has show some resilience in the current downtrend. This consolidation may just be a pause before a move higher. But if FSLR breaks below 208 I’ll be pouncing on it.

I’m more positive on EDU than I have in the past. I think this triangle is going to resolve to the upside, but considering that it is symmetrical and the general direction of the market, it could go either way.

I like the weekly pattern and I like BZP’s daily base on base. Anything to do with oil and gas has my attention. Combined with a tradeable pattern and I’m in there.

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Just recovering from a cold. Should be back next week. Not dead yet!

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I was going to craft a post about how awesome my 2008 Trading Ideas have become. I mean look at the Dow. It’s headed for oblivion, but then the Mrs. reminded me of my Top Trading Ideas for 12/18 post and how each one of those stocks rebounded off their lows. “Sure, but some headed lower”, I replied. “Ah, but the 1-2-3’s never setup so your trading ideas never worked”, she reminded me.

My wife has learned a bit about trading from looking over my shoulder, but she does a good job at teaching me to be humble.

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