Wednesday, December 31, 2008

Long time, no post

Happy New Year to all two of my readers!

OK, it's hard to work full time, do the trades and think aloud in public. A lot of things kept me from writing... health and work issues.

I look at where I stood back in September and now, all those positions are gone.

Sitting here on the last evening of the year, the trading account is +26% for the year.

It's not really relevant, since I'm only writing about my trading account, but the gains don't come close to balancing out the ass-kicking my value-oriented advisors took on my behalf in a separately-managed account. The next time we sit down together, we are going to have to have a frank discussion about the value of trailing stops for winners and stop-losses for losers.

Let's fast-forward...

I went into October in pretty good shape. I was short basic materials (SMN) and gold (DZZ) over long Dow (DDM).

If you pull out a 1-year chart, gold was a head & shoulders top with the neckline at 850 that should've resolved to about 750. I had one batch on at that right shoulder in July about 950 and another batch when it broke the neckline. I put on a third batch when it pulled back to the neckline in August.

I took off the position when the physical metal hit 750, just a matter of discipline. This was a nice, tidy trade. It did just what it was supposed to do.

I had a lot of SMN on. That was my big, secular bet that the Chinese buyer's strike leading up to the Olympics wasn't going to end. If you looked at a broad range of commodity charts, you could see the world just fell off a cliff starting in early July.

It got up to 1150 shares at one point. Every day in the fall, just doing money management, I'd put what I thought were outlandish ask prices out there to take profits on the position. I'd put 100 out there asking +15, +20%... and get hit.

The problem was, as I took profits, I lost my hedges and started getting my ass kicked by the Dow longs. Should've taken them off at the same time, but I was still playing the overbought/oversold oscillator game that had worked so well for 15 months. It completely broke down in October.

I had two good trades in SDP (short utes) and EWV (short Japan).

If you pull out the utilities index XLU on a 2-year, they did a head & shoulders with a neckline about 36 and a target about 29. I couldn't figure out a thesis for it at the time, thought maybe they were predicting inflation? Of course, now we know it's because they're all debt monkeys and were going to have to pay much higher coupons for their paper. So I put on SDP in August. Same situation - as I took it off, I was left exposed on the long side.

Japan just had an ass-ugly chart. Nikkei broke longstanding support back in July. I sold this one really well into those gaps in October. Looking at it, Nikkei is trying to fill that same gap. Starting to look tasty on the short side right here.

The volatility all through late October and November was insane. At my best point, mid-late October, I was up 34% for the year at $202K, but I wound up taking off all my short-side stuff and giving back 10% of that in about a week in November.

I took a deep breath, got completely back to cash, and started playing for volatility. That worked for a week or so.

Bid on the long side -5%, ask +5; bid on the short side +5%, ask -5%, playing for lunch money. In the depths of November, I'd come in net long and get my ass kicked all over again. The newsflow seemed to be driving things. There wasn't a rational strategy you could play that didn't involve foreknowledge of events.

OK, so, where I am today...

Half cash. $95K

- After losing it once to a stop, long TBT, the double-short long bond. As manipulated as this crap is, owning TBT feels like walking up and slapping a cop. I have about $28K of this on. After yesterday, I'm basically flat.

I have no edge on what the Fed will or won't do. I'm just looking at TBT's inverse, the chart for TLT. Textbook exhaustion gaps. So I am long 800 TBT now at various points in that big floating island over the past couple of weeks.

- Long gold, watching that downtrend line very carefully, though. About $16K. Basis of 15.25 on DGP.

- Long a wee bit of gold microcaps (NXG, AGT). About $5K lottery ticket.

A few years back, I did some research on the gold bubble from '76 - 80. Until the final year, you were far better off owning physical metal than miners. The same has been generally true since 2002, due to extraction costs.

In the 70s, gold ran from 35 to 200, got cut in half to 100, then went parabolic at the end of the decade.

In the last year of its run, the best vehicle was stocks on the Toronto Venture Exchange, Canadian microcaps. It's hard to get good data from this period, but from what I've been able to piece together, the *average* junior miner on the TVE had a gain of 350% over the final year. If you could pick a single stock in the top 10% of performers, you had an average gain of 2800%.

A caveat: whether due to mergers, bankruptcy, whatever, not a single one of those tickers existed as of 2003. You have to be willing to take your profits.

So I decided on a strategy of building a basket of junior miners. They had to be cashflow-positive and have low or no debt. Any rate, I wound up with NXG from 0.65 and AGT from 0.18.

There were just some pretty, pretty setups in this group.

- Speaking of pretty setups, biggest (and best) position is long 4000 SLW from 2.73. I got interested because I'm aware of the difficulty obtaining physical silver. Watch how it behaves around that 8 resistance.

- 300 DDM, about 10K

- 300 FXP, about 10.5K.

Sunday, September 14, 2008

Very little point in strategizing

Sick the last several days... passed a kidney stone yesterday. I never trade or plan a trade when I'm sick.

Best to stand aside here. LEH is the elephant in the room at the open.

Outside of that, what I'm looking at: FXE makes an island. This is one of several indications $USD might be heading lower.

Thursday, September 11, 2008

A little snap trade yesterday

Trying to take advantage of all the intraday volatility plus the fact that LEH looks like a goner.

I got hit, surprisingly, on a lowball bid for some ITM Oct LEH puts, in at 3.30/out at 4.00.

If they're handing out hundred dollar bills at the door, might as well get in line...

Monday, September 8, 2008

Fannie Monday

My catalyst - Ike entering the GoM - was predicted by the models before the open, so I closed the trade. In, 69.50. Out 75.01.

For a while, I've been watching the $BKX. 75.09 is the 38.02 retracement off the lows of July 15th. It also falls along a one-year trendline. 80 is the bottom of a channel that runs all the way back to 1991, violated in March of this year.

You really have to take a shot at an entry like this. I didn't know an appropriate level to bid for SKF, so I tried and failed at 90. I thought someone might throw theirs away in panic near the open, but it didn't happen.

Noting that RTH cleared a triple-top going back a year. A pullback would be a good spot for a defined-risk entry. I already have a half-position on with a much lower basis, will be looking to add to it.

Got hit, 100 more at 98.16. I arrived at that entry by looking at the 5-day. This would've filled the gap from Friday.

Friday, September 5, 2008

Green banana trade for Ike

Several things were in my mind last night - this week's hedge fund redemptions, the dollar/yen cross, Hurricane Ike, Bill Gross' bitchslap.

Oil was down near important support at 100. This looked like as good a time as you'd get to put on a defined-risk trade, really, nothing but a bet with a couple of ways to win.

Sitting at 72 yesterday, DIG looked to me like 2 down and 10 up. With 70 as support and every divergence in the book, I bet on a little overshoot. I put out bids at 69.50, 69, 68.50, 68. Got hit on 250 at 69.50 early in the day.

2 PM runs of all 6 models show Ike skimming south Florida and entering the GoM as a Cat 3.

After the close, we get more Nice, Cheap Words from Treasury about a Fannie/Freddie bailout that ought to goose everything at the open on Monday. The question is whether the bounce lasts a month or an hour in the morning.

Of course, there's always that twinge for selling NLY up only 9% when it's going to pop on Monday. Never regret taking a profit, though.

Thursday, September 4, 2008

Hasty post covering the last few days

Haven't written due to vacation and lots of work-related, well, work.

One snap trade off the big nothingburger hurricane Gustav in WNR. In at 8.75, out at 10.76 for 1000.

Lost NLY to a stop. In 13.76, out 15. A little over 9%.

On the long side, considering the strength of the $HGX, liking LEN in this group as close to 10 as possible.

Many pennants in retail. GPS, KSS, even the RTH. EBHI.

Watching the reverse H&S in BA.

On the short side, lots of toppy-looking action in the transports. NSC looks like a nasty double-top with negative divergences.

There's probably more, but I'm forgetting them, whatever they are.

Saturday, August 23, 2008

Saturday chart work

Personal products group showed up again this week. On the long side, I see a couple of nice gap-ups and pennants in AVP and EL.

As a potential short, ENR making a second test of that gap near 85 level.

Builders rallid hard. If you look at it on a closing basis and squint a little, LEN has every positive divergence in the world with that first test of 10.

The week before Labor Day is usually quiet. It's going to be easy to get whipsawed.

Unless there's an announcement on Sunday about a Fannie/Freddie plan, that'll probably weigh on the open.

As tough and vicious a market as I've seen in, well, forever. It's made a believer out of me that you have to take even tiny profits when they're available.

Thursday, August 21, 2008

My Moral Hazard play

I had a lot of people asking me if it was time to buy the common in Fannie/Freddie. I couldn't recommend doing that at any price.

It sounds like the most likely outcome is for Treasury to buy a special class of preferred, wipe out holders of the common and make the bondholders whole.

A long play on this would be NLY, which borrows at margin rates to buy agency paper. There's not much to like in that chart, though. Risk capital only...

Update: got hit, 13.73 for 1000. This is over when the catalyst - F&F resolution - arrives.

Stopped out of DZZ and SMN when they broke their trendline as gold and commodities went on a tear today. 16% gain on the former, 19.2 on the latter.

Should have been more. Fuck, trading this market is a hard dollar.

Lost LULU to a stop. 5% loss.

Tuesday, August 19, 2008

Got hit... God help me

Got hit this morning on some LULU at 20.50. Defined-risk trade.

Monday, August 18, 2008

I find myself struggling to try to find things to like

Which is God's way of saying "Don't do anything."

Strong groups are apparel, retail, paper, med/pharma/biotech. Oil implosion rally in the airlines, travel and transports.

One the long side, I'm ticked at not having more retail on, when I was looking right at it. It just ran away so quickly that I never caught that perfect double-bottom in KSS. I guess I could countenance a shot at LULU a little lower, call it 21.75 just by eyeball. Double-bottom and 4 out of 5 divergences with a huge short interest in a strong group.

I like the flag in IP. Stochastics coming back to oversold here soon, might be a time to look at it. My eye keeps wanting to make something positive out of BZ, but I can't for the life of me say what it is.

On the short side, ENR has a good entry point where it's filled the gap at 85. I'd also take a shot at PCLN on the short side around 115.

Thursday, August 14, 2008

Whipsaw week

One trade today, sold 100 more of the DZZ.

In 24.65, out 34.25. I put an ask way out there today, just to see if it'd get hit and it did.

None of my other limits were hit.

I had figured on a violent commodity bounce soon, but yesterday caught me leaning the wrong way and without my stops moved. This market doesn't seem to want to stay with a thesis for more than a few days. My thinking is, if you have a quick 10% in something, don't screw around; take some profits.

The things I'm watching:

On the short side:

- Here comes FRO, just about where you want to try a short. Puts with any time in them are really expensive, which, of course, is information too.

Long side:

- Watching WTR. 18 is a very important resistance area. Water group has been strong the last couple of weeks.

- Retail/apparel has been strong on the long side the last couple of weeks too. COH is my favorite chart in this group. After its breakout, it settled right back onto that 30 support area. Still overbought right now.

Also in this group, APP would be good above resistance, call it 7.50-ish. I'd be willing to put on a half-position here.

Monday, August 11, 2008

One trade today

Sold 100 of the 700 DZZ.

Gold looked way oversold, but very sleepy at the open. I'm always wary of, like the old guys say, "being short a dull tape, " especially one that's run as much as this one.

I stuck an ask way out there this morning, never thinking it would get hit. I had no idea gold would fall off a cliff late morning. I always love selling a breakout, though.

In 24.34, out 32.78. In sell mode with the rest of the position at this point.

I put out a lowball bid on COH, never even came close to being hit because retail ran away at the open. Oh well, wait for the next bus to come along.

The things I'm watching right now are:

- FRO on the short side as it comes back to the neckline at 60 on falling volume. Target would be 48.

- $BKX also on the short side as it approaches the 80 level.

As I mentioned last week, the .382 retrace level is about 75, the .50 is 83. There's also resistance from earlier this year at 75. If you pull the chart out to a 15 year view, you find that 80 is the lower channel.

As a vehicle for this, look at SKF around 90 (about 20 sticks lower) with the notion that it could go to the low 80s, which would mean scaling into it.

Saturday, August 9, 2008

A belated introduction

I've been trading almost my entire working life, almost 20 years. I've tried and rejected a number of approaches to reach my present state of thinking.

I started this trading blog to keep myself honest and doing only the very smartest things I can think of, transparently and honestly.

My methods... plain and simple. I reject no technical or fundamental (or, hell, astrological) arrow in my quiver. How you manage your positions is almost as important as what you pick. Dr. Elder's Trading for a Living and his subsequent works have greatly influenced me.

When picking a vehicle in a particular market, I tend to look for

a) divergences in oscillators and trend indicators in
b) stocks with a clear technical pattern in
c) groups that exhibit the same characteristics in
d) a general market likely to support the directional move I anticipate

I believe the most important rule for trading successfully is to limit losses. My elevator pitch on this goes something like this:

- In a bull market, which is 70% of the time, you must perform as well as or better than an unmanaged index. Else, there's no point in trading.

- In the 5 year bull market from 2003 through 2007, the S&P averaged 10.8% annual gains. The Dow was even better, at around 13.2%.

- In order to outperform the unmanaged S&P, you must have 60% winners with an average near 25% gains and limit the remaining 40% losers to an average of 5% or less. This performance would only allow you to have stayed *near* the Dow.

- In 2 decades, I've never encountered a trading philosophy that can consistently produce 60% winners.

- You have to make up any difference by outperforming during the 30% of the time the market is declining.

So, for me, a position risks no more than 1% of the account. 0.5% is even better. I might have a position that's 10% of the account with a 5% stop, for example. 5% stop isn't a hard rule. The tighter it can be, the better, but I'm going to put it somewhere that makes sense with respect to support/resistance.

I assume I will be stopped out fairly regularly. To prosper, I must hit lots and lots of singles with many small, winning trades.

Now, totally violating the Elder principles, specifically, the last year, I've always had a balance of long and short on between 60/40 and 40/60. When the oscillators reach a significant level of oversold, start covering shorts. When they reach a significant level of overbought, start selling longs and adding shorts. It's always a bit of daily gnome's work whittling down positions on one side and building them back on the other.

I usually use the double-long/short index products for this. DDM, DXD, SDS, etc. The way the last year has gone, the sharpest rallies always seemed to be in the things you had to hold your nose and buy the week before, for no discernible technical or fundamental reason.

I refuse to believe that anyone is that good. I think you have to try to steal a little bit of the move with index products, bought and sold by the oscillators and sentiment. And still be willing to take some pain.

About the title... I'm really not a crass person at all. It's merely a statement about avoiding distractions and focusing on making money.

I've been a regular at nearly every important internet financial site for over a decade now. Even among so-called professionals (I'm looking at YOU, RealMoney columnists), the emotionalism - cheerleading, pollyannism, apocalypticism, book-talking, what-have-you - tells you they bring an agenda to the table. I suspect it has cost many of them alpha along the way.

One thing I vow - you will never see me make a FIGJAM post ("Fuck, I'm good, just ask me.") like these assclowns. My own experience is, when I feel all warm and FIGJAMmy inside, it's time to take some money off the table.

At first, when I disagreed with someone, I'd respond with a coldly reasonable, defensible post. I realized quickly this was a waste of time. So now, whenever I think about responding to someone, I evaluate it by asking, "Will engaging in a difference of opinion help me get rich or make me more appealing to hot girls?" The answer is almost always "No."

Applying that more generally to life, I'm a lot happier after I vowed to ignore anyone who processes the world out loud through a prism of politics or religion or other mass delusion. I believe people have the right to hold whatever crazy-ass belief system they want, as long as it stays confined in the comfort and privacy of their own gray matter.

The ground rules here:

- If you trade anything based on anything I write, you're on your own.

- If I do anything with a position, there may be a lag before I write about it. I may not say anything about it at all, especially if it's something thin. I'm so paranoid I have to consider the possibility that there would arise a cottage industry in fading my picks. Realistically, though, I'm trading things with daily volume in the millions, so this won't matter much.

- I'll never write about economics or politics. If you want an econo-pollyanna, go to Kudlow's site. If you want to read about the coming apocalypse, go see Faber or Roubini. All you'll ever get here are buy points, sell points, stops, things I'm looking at.

The big hairy deal on Friday

is that the Dow and S&P triangles both resolved to the upside.

I watched it, did nothing. The book says to be long it here, though. If you got a little pullback to 11.7, S&P to 1290, it'd be compelling to give it a shot. I have problems buying a market that's been such a whipsaw lately when it's already up 200. Looks like you could get a move to 12.1, 12.2 on the Dow from here. Dow looks like it has a little more room to run than the S&P.

On a decade chart, the Dow 11750 level was very important support going all the way back to the 2000 - 2001 timeframe. This support level was only broken in June. Keep this in mind as a very important long-term pivot.

Other things I'm looking at are -

1 - $USD is in breakout mode, broke above its 200 DMA for the first time in 2 years. My look at the charts says 85 or 90 can't be ruled out. FXE, conversely, broke below support and its 200 DMA. That chart looks absolutely ripe to try to fill its gap, then trade from the short side.

2 - The strongest group of the week was the clothing and accessories index, up 14%.

Ignoring whatever convictions one might have about the state of the US consumer, divergence analysis likes COH here. There's a MACD, Money flow, RSI and Williams oscillator divergence, off a recognizable double-bottom at 25. Reviewing the 3 year chart, the same support level held earlier this year and back in the summer of 2006.

COH is really a clothing supplier, but if you take RTH as a retail proxy, there's a double-bottom in that chart around 85. You'd definitely want to wait for a pullback here. No one has any business buying something up 20% from a base.

APP could be a trendline break in this group.

3 - REITs. Put the Dow Jones US REIT index up on a 3-year weekly and you'll note how it held support running all the way back to the fall of 2005. URE would be the vehicle, but it's extended now. Also, the only divergence with its lows earlier this year is RSI. That's too thin for me to trade, but I find it interesting that several consumer discretionary stocks plus commercial real estate can be viewed as forming bases here.

4 - Dow Water Index up 11.78%. These stocks are a mixed bag; some are utilities (a group I don't like), some are industrial water processing companies, others are tied to housing. I'm watching the trendline break in WTR and SWWC.

I didn't do anything yesterday. I thought about taking down part of the DZZ (double-short gold) position when gold touched the H&S objective of $851 during the day. But looking at the GLD chart, it looks like it gapped down under important support and took out its 200 DMA. With the dollar and euro and general commodity action the last few weeks, I made a decision to let the position run. On Monday I'll tighten the stop on about 15% of the position.

So, my best candidate on the long side is COH on a pullback, as close to 25 as you can get it. Maybe a quick trading position in some DDM if it turns out not to be a headfake.

On the short side, I'm looking at the H&S in FRO. I missed this when it broke through the neckline at 60. I also missed another shot at it on Wednesday when it came back above 58. What you'd like to see on the short side is if it comes back to the neckline on decreasing volume. The downside measures to about 48.

I don't see any need to force anything right here. I'm watching cautiously and leaning toward taking off some of my commodity shorts. I'm weighing the deep oversold levels in gold and materials against their breach of important support and moving averages. You have to expect an oversold bounce - possibly violent - in these at some point. Stops go really tight on these, almost certainly insuring that something gets sold.

Thursday, August 7, 2008

Watching, not acting

S&P and Dow are still in a triangle. Nothing to do here until it resolves itself one way or another.

Starting to watch the $BKX. On a 3-month, it's doing a beautiful bear wedge off the 7/15 lows. The .382 retrace is about 75, the .50 is 83.

Now, pull it out for the ultra-long view and you find that 80 is the lower channel on a chart going back over 15 years.

The fact that charts in all kinds of timeframes concur increases my confidence in the thesis that $BKX around 80 would be a good place to start putting on some SKF.

Of course, just as I was looking at it, the financials melted on this sleepy Thursday afternoon. It may be awhile before it gets there.

Other than watching and thinking, I didn't do a thing today.

Gold's H&S measures to about 851. Low today was in the 855s, so time to reset stops on DZZ. $USD did a breakout today, which aided this position.

Tuesday, August 5, 2008

Today's action

Short-term, you want to watch Dow 11.7, S&P 1290. A close above those levels would be very bullish.

S&P 1250 is key on the downside. It's the first higher low, a bull doesn't want to see it get breached. If it does, I'd expect a retest of the July 15th lows.

Got hit for 200 SDP today. Looking at the 10-day hourly, I eyeballed an entry of 62.55, never expected to get hit, but it did during some post-Fed weirdness.

I judge the target for the H&S by the XLU, which I see at about 30-31, Alternately, I eyeball the DJU at about 405.

Monday, August 4, 2008

Things I'm thinking about today

The things I'm thinking about...

- A big two-year H&S in utilities has just broken its neckline and also a long trendline. SDP is the vehicle. Tried to get some today, but didn't quite come back to what I wanted to pay.

- H&S in gold. Already have DZZ on. The H&S objective here is right around 851 gold.

I'll leave it to the philosophers to explain how both a recessionary and an inflationary vehicle can both be going down at the same time.

- Tried and failed to put on some BBH short today. It made it up to 198.16. I wanted 199.05.

- Support didn't hold in EWJ. Forget that one. EWT still has a chance at 13.

- Left KMB alone even though it got to where I wanted. It looked like the recessionary thesis took hold today. Consumer discretionary/recession stuff ran hard. Except, anomalously, the utes. I can't decide if I like the medical devices, stuff like LMNX.

So, let's see what tomorrow brings for BBH and SDP.

Saturday, August 2, 2008

Just like every Saturday morning... a big pot of coffee and review the markets. The only difference this time is, my inner monologue is going onto virtual paper.

1. Start as I always do, with the general markets, represented by DIA, SPY, QQQQ. All of them look completely meh to me, just hanging out here in the middle of nowhere.

I'd call both SPY and DIA 3 up and 5 down, but slightly oversold by most of the oscillators. Interesting how both failed at the January and March resistance levels.

I see nothing that compels action. The levels to watch are S&P 1200, Dow 10832 for support; 1290 and 11600 for resistance.

For country-specific charts, I still have Japan and Taiwan on the watch list from last week. Watch both EWJ and EWT for island bottoms. Some pretty good positive divergences setting up here.

2. Moving to industry groups. With no clear signal on the general markets, a group signal will have to be especially clear. Where I start is with the BigCharts industry groups, moving from the 1 month to the 1 week performers.

a) One-month groups (industry name and percent change):

  • DJ US Airlines Index 40.87%
  • DJ US Paper Index 23.89%
  • DJ US Forestry & Paper Index 23.89%
  • DJ US Banks Index 21.41%
  • DJ US Railroads Index 15.40%
  • DJ US Biotechnology Index 13.52%
  • DJ US Industrial Suppliers Index 12.75%
  • DJ US Recreational Services Index 12.14%
  • DJ US Recreational Products Index 11.79%
  • DJ US Durable Household Products In... 11.39%
Airlines (UAUA, LCC, NWA, DAL) all pretty much look the same to me. V-shaped move, presumably on the thesis that oil is coming down hard. These things are trading as a second-order inverse derivative of oil. So why not trade oil instead?

Rails: CP is a laggard in a strong group. NSC is strong, has a gap to fill. I already own a chunk of that in a separately managed account, so I won't be buying any more.

Biotech. This week, you could summarize the move as DNA earnings, IMCL buyout, BIIB blowup. I have no edge on these fundamentally, but what I do see is that BBH made an island top and looks like a short close to 199.

b) One-week groups:

  • DJ US Paper Index 19.06%
  • DJ US Forestry & Paper Index 19.06%
  • DJ US Travel & Tourism Index 9.38%
  • DJ US Personal Products Index 7.97%
  • DJ US Banks Index 6.90%
  • DJ US Reinsurance Index 5.11%
  • DJ US Specialty Finance Index 4.85%
  • DJ US Airlines Index 4.55%
  • DJ US Property & Casualty Insurance... 4.50%
  • DJ US Personal Goods Index 4.37%
Paper - IP, UFS look like potential reversals to me.

Personal products: There were a lot of big moves in this group last week. REV, AVP, ACV, CL. Most of the charts still look like mush to me. REV looks dangerous, but I won't mess with a 1.20 stock.

AVP looks like a nice gap up and starting a pennant. CL gapped on a nice quarter. One clear thing is that KMB is trying to fill a gap, 59.50 looks like a good short entry here with a stop up around 63.

All the financial groups - banks, reinsurance, P&C insurers - look like dead cat bounces to me. Long or short them, you could look silly in an instant. Why try to pick up nickels on a battlefield?

3. Now we drive it down to specific stocks. I'm not seeing anything that compels action this instant, so all these are for the watch list.

a) On the short side, we have these candidates:
  1. KMB - We want to let this guy try to fill the gap. 59.50 would be a good entry. Stop around 63. That risks a little more than the 5% I like, so we'll have to keep the position size really small. Maybe something like the September 60 puts. I'll look at it when/if it gets there.
  2. BBH - Looking at the hourly for 10 days, which spans this island top, it looks like it wants to try to fill that gap. I'd want to short this guy about the 199 level, stop at 206, risking about 3.5%. 7 up/20 down.
  3. IP, but I'm not really interested in playing for 2 up/4 down.

b) On the long side:
  1. EWJ, EWC could be nice long setups.
  2. Also, in the pharma group, I like how PFE took out the 18.50 resistance area and seems to be wedging back to it on decreasng volume. I'd try to steal some in the 18.30s, 18.40s.
  3. AVP... want to see him try to fill that gap, but he's not that compelling to me.

Friday, August 1, 2008

Here's where we start...

Here's my baseline and what my sheets look like right now.

Nothing that came before matters. There's only tomorrow. Well, not in this case, since it's Friday night.

Current account value (08/01/2008): $171,339.05
Starting value (01/01/2008): $150,675.55

So that would be about a 13% return this year so far. I have a longstanding tendency to have a big first half then spend the second half of the year giving back a lot of my gains. At least now I'm aware of the tendency and actively guarding against it.

By lot, I have 53 winners and 21 losers so far this year. By symbol, I have 16 winners and 5 losers.

Biggest winners this year were FXP, twice and ABK puts. The biggest loser was CRZO.

My current positions (symbol, number of shares, current dollar value as of today's close)

- SMN (1000), 34720.00. Put this position on in mid-late June between 26 and 28.

- GSK (600), 27804.00. Bought it off the island it made. A lot of the drug charts started looking like they'd bottomed.

- DZZ (700) 19523.00. I started building this position when gold broke his trendline around 950-ish.

- RTH (100) 8725.00. Chart and several constituents look double-bottomy. I only have a little on because I wanted it closer to the 85 level.

- MO (800) 16720.00. All put on at 20.05 on a double-bottom with divergences. Scared the crap out of me yesterday.

- PFE (700) 13020.00. Gapped up above resistance, wedging back.

- WLP (300) 15471.00. Island bottom in this and several of the managed care stocks.