Park South Trading Journal

Banzai Akamai

2006-08-28T23:14:00.000-04:00

Akamai (AKAM) is a true bubble survivor. I can't claim to understand it precisely, but their business model is apparently firing right now. The profile on yahoo finance is gibberish, read the wikipedia page here if interested. In a moment that may still haunt some portfolio manager, the stock traded for 56 cents at the October 2002 bottom. Well, somebody got their mojo back. I couldn't help but notice the huge volume gap up after their 2q earnings release. Moves that powerful follow tend to follow thru in many cases. We had established a position only days earlier when my good friend (and insanely young MSFT/SYMC alum), Tim Johnson, called to say he was taking a job with the company. Tim knows the tech business cold and has historically hitched his wagon to winners. Alliteration aside, for my purposes, that fact nicely complements the sweet chart setup. Long AKAM

Water the "next Oil" ?

2006-08-27T23:35:00.000-04:00

This idea has been tossed about recently in investment circles... though with far less fervor than the "next Microsoft" talk of yesteryear. I'm betting that it has some merit. As I undertstand, worldwide water usability statistics are really scary. Supposedly the pollution scene in China is horrendous. Potable water will (again, supposedly) get scarcer with global warming, drought, and other climate change.. and investment in H2O infrastructure will soar. This certainly has the makings of a good investment theme. After discovering that an ETF already existed for the water theme, I assumed it would be mostly utilities. Wrong! As this breakdown shows, utes are only a quarter of the exposure.. nearly half is in infrastructure and purification companies. The chart looks like it's formed a bottom, and we got long last week. We'll bid for more soon. As for the broader market.. Well you can read 10,000 opinions on 10,000 other trading blogs, but here goes: We had a very quiet week, drifting barely lower in meaningless late summer trade. The big cap indexes are leading now, with big growth small cap stocks generally not having recovered as well. Broadly speaking, this is far from a runaway bull market. This chart of the Russell 2000 (via the IWM, as usual for me) shows some "precarious promise." The down trend is still intact for now.. that's negative. But instead of completely breaking down on the 3rd visit under $67, it has formed what could turn out to be a first higher low in any renewed up trend. Low volatility eventually begets high volatility. For now: we're all wound up, with somewhere to go. Long PHO

Tripling Down

2006-08-11T14:28:00.000-04:00

No we're not betting the farm on any single stock.. Looking through our holdings, I've now unintentionally established positions in 3 positions that only Darth Vader (or this freak) could love: Imperial Industries (IPII) Imperial Oil (IMO) Imperial Sugar (IPSU) Quite random... Long imperialism ?

Slippery Slopes

2006-08-11T13:31:00.000-04:00

The market appears to be in real trouble now. There isn't a bid under much of anything. Even the oil service index OIH is getting smacked and looks toppish. I seem to be hearing much chatter dismissing this action as "typical summer selling." Seasonality probably is playing a role, but that doesn't make the outlook any prettier. Down is down no matter what month we're living in. If you look back, the index charts bottommed out around the same areas in June & July.. so if those levels are revisited, it will be the 3rd time there.. which I've learned is often the "charm" for a level to be decisively broken. Not always, but pretty decent odds.. I'm guessing here, but 65% seems reasonable. My personal lines in the sand for defining the begginning of a Bear market are: Russell (IWM): $66.30 S&P (SPY): $122.25 DJIA: 10,700 Nasdaq: already in a Bear However I'm by no means the only guy thinking this way.. last I checked, one of my mentors, Trader Oz, is actually looking for this test to hold -- because so many like are are thinking this way -- and for a furious rally to ensue. We shall see how all this "fading the fader's fade" business works itself out. Looking at individual names... I've loosely followed this Cheniere Energy stock for a while now.. a very speculative liquid natural gas related stock.. that trades at a mere 660 times revenues! Click here to look at its "key stats" on Yahoo Finance.. While there be sure to click on the analyst estimates to see just how much revenue growth they're expecting (i'm being facetious). "Earnings" were released at 6:13pm last Friday (Herb Greenberg taught me to be skeptical of any company that releases important news late on Fridays or over weekends).. Judging by the action this week, the numbers impressed few. If this thing looks to close under $32 today I'll likely double up, making LNG the largest short position in my firm's short history. Amazon is probing this $26 area for the 3rd time now.. This short looks like it could last till the start of Christmas shopping season.. when some bottom fishers will probably emerge. We still made a few new buys so far todays. Listed below.. Long IMO, IPSU, NGPS, PWR Short AMZN, LNG

Money Where Mouth Is

2006-08-09T10:09:00.000-04:00

I have always believed that the earliest, most reliable evidence of a material slowdown in the consumer economy would come not from any government stats or guru prognostications. Because it represents the collective bets of investment managers with access to great information, the stock price action of Capital One (COF) will be my tell. This breakdown is still early, but if it gets some traction in the next week or so would suggesst an economic recession and a brutal stretch for the markets. We have a short in COF from yesterday afternoon. We are also short Corus Bank, a lender to condo developers in South Florida. 'Nuff said. Short COF, CORS

Conscious Incompetence as a Goal ?

2006-08-08T23:51:00.000-04:00

Hey, it beats the tar out of unconscious incompetence. In addition to a great charting and scanning service, my TeleChart subscription delivers a daily article/opinion/manifesto that gets selected for publishing from a horde of TeleChart clients' submissions. Many clients consider it an honor to be published, and the company even sends each "knighted" (published) client a bottle of Veuve Clicquot Ponsardin champagne. With as much other content as I devour, rarely do I make it beyond line 2 of this stuff. But today's post instantly hooked me.. and I decided to republish here. Hopefully the Worden brothers (TeleChart owners) appreciate the lip service more than they deplore the plagiarism. The smart guys may tell you they "know" where some market is going in a week, month, or year. But the really smart -- or maybe dumb? -- ones will at least have backup plans. Dear Don, I have to laugh every time I hear from somebody heralding that there is no Holy Grail for us speculators. Ho, ho. There most certainly is a Holy Grail and if your readers care to listen I'm here to tell them about it, unless they know already in which case they should read no further. But first, if need be, let's establish that man is not particularly rational. Lots of cultural anthropologists and Keynesian economists think so, but I doubt that many politicians do. Mark Twain surely didn't think so, either. Sure, we live in houses with electricity and plumbing and go to the supermarket for food while chimps poke sticks into termite mounds and live in outdoor splendor when they are not being worked on in laboratories, but if we humans were so rational would we grow fat, smoke, drink cheap whiskey on a work night, fall in love, make promises, loan money, buy more stuff than we can afford, do the road rage thing, live inside tall buildings, and so on? Anyone with a brain can look at his or her behavior and detect a smattering, or more, much more, of irrational behavior, so why do we go around all the time insisting on our being so much smarter than we really are? If we are so rational, how come we aren't all rich, having earned, saved, and invested wisely instead of being middling having earned and spent or lost our money on wine, women, and song? How come we still vote for Republicans and Democrats? We live in ignorance all day, every day. Ignorance is our common state, not rationality. Although rationality is something that may pop up now and then in our lives, it does not do so consistently and may fail us altogether at critical junctures. (As when we would rather hold a losing position to see what happens next than to close it and be done with it, thereby saving us anguish and the loss of resources, both monetary and psychic.) So what's the deal here? Should we embrace ignorance and not rationality? Humph. Why would we do that? Why? Ha. 'Tis the Holy Grail it is. If your reptilian brain can be convinced of its almighty ignorance, it may turn out to be the most rational thing it has ever acceded to. We live in ignorance. We can't know ever so many things, let alone what is going to happen to a stock's price in the next week. Ignorance is far different from stupidity. It's stupid to think you can know something that is not knowable, but it is far from stupid to recognize your own ignorance when faced with the unknowable. Indeed, knowing your own ignorance is intelligence. (I hasten now to add that I think Don is one of the most ignorant people around.) You as the "rational man" are in a losing position. Think of the energy wasted searching for justifications and reasons for doing this or that? But in contrast, you, as the ignorant man finding yourself in a losing position, do not bother yourself with constantly re-establishing the premise in your mind that you are so very smart and accomplished and good-looking. Instead, you can just act with sweet aplomb. To put it differently, if your energy is not corrupted and depleted by a continuous attempt "to be right, to be smart, to know more, and most deadly, to want to be better," then your energy for seeing reality becomes vastly increased. Facts are always in the past. There is no future fact. What is known is in the past. As speculators we are interested in the future and use the past as prologue; however, if we get caught up in thinking that we can know the future if only we are just "good enough" and can gather more facts, or the right ones, and can then take the risk out of everything we do, then we are lost because we are living a lie. On the other hand, if we labor in ignorance as a matter of course, we are not then invested in this lie at all, but only in what is going on. This is freedom. You are no longer tyrannized by a mind that is overwhelmingly concerned with appearing smart to itself. The mind will act rationally when it is does not burden itself with trying to be something it is not. We live with "I don't know." So if we don't know, what do we do? Mitigate risk is the rational thing to do. Ah, at times, when we are relaxed, we can be rational! Hooray for evolution! And so ignorance leads to brilliance, but had we started out wanting to be brilliant, all would have been lost and the Holy Grail would still be hidden from our sight. "Conduct your triumph as a funeral." Lao Tzu In gratitude, Sir Bigfoot

My Favorite Tax Reform

2006-08-07T12:11:00.000-04:00

Before discovering TradeLog software, I used to match trades manually using Excel. My Schedule D was an annual nightmare. As I toiled into the night during early April, I always wondered why virtually no brokerages provide actual tax lot accounting for their clients. They made the trade.. they have the necessary information.. and they have no excuse. Compare this shortcoming with another source of tax payments: - Your employer reports your wages to the IRS on a W-2. Employers are required to comply. Straightforward. Your tax return better match up, or you get an unwelcome phone call. - Brokerage firms only report "Total Sales Proceeds" on the 1099 that both you and the IRS receive -- not actual gains & losses. They leave those calculations to you, and predictably people tend to get it wrong either by honest mistake or by understating gains. Presumably prompted by deficits, Uncle Sam has woken up & realized he's beeen getting ripped off -- the "tax gap" is estimated in the hundreds of billions annually. Washington is finally mulling a change (Click here for the story). Voila.. one government proposal that actually makes sense!

Evening Review

2006-08-03T07:59:00.000-04:00

FWIW.. One trader whom I respect immensely, James "RevShark" DePorre, has started posting his nightly reviews of market action and index charts for free.. at least temporarily. Here's the link. There's also one other location where Rev's commentary can regularly be found.

Taking Another Short Shot

2006-08-02T23:28:00.000-04:00

Sold Google short today on this breakdown out of a huge triangle. It "should have" bounced at the bottom of this pattern with that hammer on earnings day.. That bounce failed miserably. The stock hasn't made a new high since January, and there are lots of folks underwater on their GOOG investment (almost anyone who bought since Nov 2005) probably looking for an exit. I took a loss trying to short this thing in mid-June. This new setup is much cleaner. We'll risk about 20 points, stopping out on a move back over $390-395. Short GOOG

Critical Times

2006-08-01T12:38:00.000-04:00

Middle East troubles.. Fed decision.. Earnings season.. All this just as the markets are coiled up right at a crucial juncture that will determine whether we go test the May highs -- providing a lush trading environment for folks like me -- or whether the 2000-2002 Bear market gets resuscitated. Using Dow futures as a proxy, a close above 11,250 would mean a renewed uptrend that should last a few months. A close below the two June and July bottoms around 10,750 awakes the Bear from hibernation. Right now we're fading off the summer's downtrend line. How this pullback is treated over the next 2 weeks will make a huge difference in strategy selection going into the fall. Speaking of declines, Amazon.com is living its' own personal Bear. After a complete mauling last week on earnings news, AMZN bounced small for a few days.. just enough to relieve the oversold condition and allow a renewed selloff. We added to the short today. Still have plenty of longs though.. We reloaded our Smith & Wesson yesterday as the stock makes a little flag after the July pullback. I'm looking for the uptrend to resume & would add more on a high volume break North. We bought some IPII today, which is catching attention as a hurricane play.. they sell construction materials to rebulders/remodelers in the southern states. So that IRA accounts can participate in the indicies' current downdraft, it's possible we'll make our first trade in the Inverse ETF's later this afternoon. Long IPII, SWHC Short AMZN

Shuffling The Deck

2006-07-06T23:24:00.000-04:00

I love trading the charts because you're never married to a position. You play each stock like it's a poker hand and bet/raise/fold accordingly. Each position is equivalent to Ron Artest on a 1 year contract -- act right or you're outta here. For a generally low volume day, Teewinot's trade blotter showed above average activity. We made several types of moves today. We are out of our PWEI long. I thought this one had tons of potential, and it may again later. But the breakout I thought was imminent got smashed on Wednesday. Now it's below both the earnings close day and last week's high volume day.. I don't like the odds here now, so we exited semi-graciously on today's little bounce. Then, in a slightly unusual play for me, actually went short some PWEI late in the day. Keeping a tight leash there.. new highs and we're likely flip-flopping. :) We picked up some ITG shares today. They sell trading technology to big asset managers and broker/dealers. As a startup guy having just (manually) completed my first billing period calculations, I know how integral some nice software would be. ITG sports 50% yoy revenue growth and 100% EPS growth. The uptrend looks ready to resume and we got long in this little chop area around $50. That high volume day last week is one I will respect and literally "lean on"... giving myself free reign to bid aggressively within that price range.. and looking to exit the whole position only on a move below that day's low. Any close below that level invalidates my trade thesis regarding the importance of the high volume move. Finally, we've significantly lightened up the recent gold position. I like this for a longer term play, but think the rally into tomorrow's earnings numbers is sellable. I think gold needs to pull back before the bigger trend reasserts itself, and our bids are already in for clients in the $61 and $60 areas. The tracking stock GLD represents fractional ownership of a massive gold bullion stash held in a vault somewhere.. a bit sketchy.. but arbitrage seems to keep these ETF's in line, trading as they're meant to. GLD basically trades at 1/10 of spot gold prices. If this method of gold exposure fails, we'll move to a different vehicle. We're not actually gold bugs, but their numbers are on the rise longer-term. Gotta take advantage somehow. Long ITG, GLD Short PWEI

Game On

2006-07-06T11:45:00.000-04:00

Just picked up a few shares of GameTech, a maker of electronic bingo equipment. As I understand it, this is a hot market -- the little ole ladies in bingo halls across the country are literally becoming "high tech red necks." Following two consecutive NR7 days, we got long this morning around 9.10 using a buy stop. We'll add 50% to the position if it closes at 9.50 or better, either near the close today or with a bracket order tomorrow. Hopefully today will become my Lean On day in this nice earnings play. Only short left on the books is eBay. It is one ugly chart. Long GMTC Short EBAY

Suds Stocks

2006-06-29T13:27:00.000-04:00

I've been tracking the brewers of Samuel Adams adult beverages -- Boston Beer (SAM) -- since it popped up on a New High screen last week. Those gains held. The last 4 days of sideways chop suggests that these new prices are "accepted" now. Today the market served up a 3% move on nice volume to new All Time highs. Client accounts got long on the intraday pullback to 28.66. I'm hoping this can turn into a long term play. The booze sector seems to be attracting money. We have also grabbed liquor giant Diageo and a microcap stock with huge growth, Willamette Valley Vineyards. Muchos gracias to the developers in TradeStation forums for help designing my current set of chart indicators.. Also thanks to TradeTheMarkets.com guys for discussing the practical appliation of these tools. Long SAM, DEO, WVVI

Finally !

2006-06-27T11:27:00.000-04:00

I've been waiting for this development.. ETF's that move inverse to their underlying index have arrived. These securities give IRA's and other tax-advantaged acounts a method to to short the markets without the complexity (and time premium) of put options. They have not attracted much volume yet.. but the bid/ask spreads are very reasonable: 69.97 @ 70.01 on the ProShares Short Dow 30 (aptly symbolized, DOG). If we are in fact entering a new Bear market, these will be very handy tools to allow my Teewinot-managed retirement accounts to participate in the market's primary trend.

For now, IBM is the only short in client accounts. While anything could happen this week with the Fed meeting, it looks like IBM will follow thru on that huge volume down move of June 8th.

I'll add 50% to the position on a close below 76.75.

Short IBM

Taking Advantage Now

2006-06-15T00:12:00.000-04:00

Even casual ESPN viewers know that team USA plays for its tournament life on Saturday at 3pm against the Italians. But I've honestly watched very few minutes of this World Cup's first week of games -- partly from nonstop working, partly from ignorance of the schedule. That's about to change. I just imported every Stage 1 game into the trusty Outlook calendar, using this link. Sports with 90 minutes of play and only 2-3 scores a game make perfect background TV for the self-employed.

Growing Pains

2006-06-14T12:07:00.000-04:00

The brokerage firm that I'm using for client accounts is one you've likely never heard of: Interactive Brokers LLC. From its humble roots on options exchange floors, IB has discreetly crawled up the list of top brokerage firms. Their commissions are paltry, and they pay comparatively well on cash balances.. a great deal for the client (and also me as an Advisor who primarily profits from the appreciation of client assets). But the great pricing has a cost: only half-decent service. I won't bore you with all the issues I've encountered while setting up the first few accounts. But one painful screwup was when a rep told me IB would allow OTCBB stocks to be margined.. only after physically depositing certificates did I learn that was actually false. Grrr.. Still, so far, the benefits outweigh the service issues.

High Oil Not The Problem

2006-06-14T00:27:00.000-04:00

Back in the saddle.. While marketing will be an important part of my business going forward, I've got a few client accounts set up, I'm excited to be manning the trading turret once again. During the multi-year advance in Crude Oil, countless newspaper headlines have credited advancing oil prices for causing even the slightest weakness in this 3 year old Bull market in stocks. But overlaying Oil onto a chart of this Bull's leader -- the Russell 2000 small cap index -- shows that the advances in each market have been noticeably correlated. Now both are weakening significantly.. each down roughly 10% 2006 highs. So much for conventional wisdom and the assumption that lower Oil is good for equities. I personally believe any market strength or weakness is rarely due to the standard explanation. Usually it's something that we only learn about later. On that note, I'll chime in later this week with thoughts on the very recent (negative) fixation with the inflation/rates/Fed triad.

Moving On

2006-06-06T16:12:00.000-04:00

My recent SNTO trade obviously did not work. I sold about 2/3 at $10 and the other 1/3 at 8.80. I'm glad it never closed above that 10.75 area, because I'd have probably added some more. Like many stocks right now, this one is still staggering along. When the broad market environment improves, and if SNTO challenges those May highs, I'll get interested again. Here is one that I'm scoping out right now.. Impco (IMCO) makes engines that run off alternative fules like propane & ethanol, so its "story" has a bit of cache these days. The stock looks to have started it's "Stage 2" but I'd love to see some sideways trading as that 2 month move gets digested. The fundamentals are pretty solid too.. 1Q2006 sales were 56mm vs 25mm last year.. EPS of .10 vs loss of .12 .. None

IPO Performance Movie Re-run

2006-05-30T12:00:00.000-04:00

Last week's IPO of Vonage (symbol VG) has quickly become the biggest clunker in recent memory. But it has a precedent.. while the PALM offering in spring 2000 was priced in the hundreds of dollars per share -- versus Vonage's $17 -- early price action in both newcomers display similar patterns. But before charts, I must mention 2 things: 1. I advise reading this concise analysis of Vonage's prospects by Andy Swan of daytradeteam.com-- located just down I-64 in Louisville, KY. I totally agree with his "first mover is first loser" theme, and always appreciate this kind of fundamental analysis from 30,000 feet (ie. no ratios and no attempts at forensic accounting).

I say that with apologies to valuable mentors from my early trading life:

reporter Herb Greenberg,
professor & hedge fund manager John Griffin
the ever-controversial Manuel Asensio

Regardless, I have a different methodology now.

2. Buying an IPO at the investment bank's price with the intention to flip on Day 1 is a totally different trade than buying because you think it's a long term winner. The first usually has good odds. The latter may be good too, but a longer shot and takes far more time to pay off (or be exposed as a dud). Last Wednesday morning when it began trading, Vonage IPO buyers had about 15 minutes to sell above the $17 offering price. It was all downhill from there as this intraday chart shows.. but any individual investor still had time to exit their "flip" shares with minimal losses. Failed trades happen all the time. That's OK. As this multi-year chart of PALM shows.. sometimes they never come back. Of course some IPO's become successful. Even then, it's usually a good idea to sell at least some of your shares on the first day of trading. Under Armour (UARM) priced in the teen's, traded at $30 on it's first day, and pulled all the way back to $20 before showing its true intentions. Moral of all that: If one is a true believer in Vonage's prospects, then I guess you shouldn't worry about a 30% haircut. But if you just wanted to flip the shares yet are somehow still sitting on them, that's simply a busted trade and I'd be looking for the emergency exit.

Paid Up

2006-05-17T13:55:00.000-04:00

It now appears my lowball bid in SNTO will not get hit. At 1:50pm 170k shares have already traded on this nice move up to the $10.30 range.. putting it on pace for a big volume day for the stock and a new closing high. I cancelled my 9.50 bid and went in today at 10.28, paying up 8% over my target buy price, but don't mind a bit given the new price & volume information generated today. Both short and longer term, this stock is the best buy setup on my screens today. Now, like a good employee, it's gotta do its job.. :) Long SNTO

After Shellacking, Time to Nibble

2006-05-16T15:40:00.000-04:00

The monster growth stocks took a beating the last 3 days. Like many, I am off several percentage points from my highs. However the washout on Monday has led to a bit of recovery today in leading stocks. It's still early for a wholesale turn back up, and I would definitely not want to own the indexes right now. I've still got some QQQQ puts that I'd like to liquidate into some kind of panic tomorrow.. which could easily occur if we get a hot CPI reading when the government reports come in at 8:30am. While things get sorted out, I've taken a bit of time this week to find some big growers to stash away for a while. I recently mentioned Hansen (HANS) -- maker of the Monster energy drink, and their incredible "triple double" -- the move from $2 to $200 took only 2 years. That run didn't happen out of nowhere.. while big short term moves often happen with little explanation, no 100 bagger ever materialized without great fundies to back it up. If you want to see the company's performance that fueled the massive appreciation, visit reuters.com, punch HANS into the quote window, and then click "Financial Highlights." I personaly found it instructive to follow the quarterly sales/profit growth along with how the chart developed during the run. In hindsight, there were many many opportunities to get in as the story unfolded. And I certainly wouldn't call any tops just yet. To try and benefit from such staggering gains that I could never catch with my trading style, I'll now divide my capital into trading and investment portions.. starting with a much smaller allocation to longer term holds. 25% seems about right for my personality.. much more and I'll get trigger happy and sell out of winners too quickly because the position is too big for me to watch the wild fluctuations. Each position will represent only be 2%-3% of capital, so I can keep about 10 stocks in the long term "bin." Of course the other 75% I'll continue to use for catching shorter term moves that require less risk exposure. Anyway, I found one today that might fit the bill. After Sento Corp (SNTO) reported 16 mil in sales compared to 9 last year, and 12 cents EPS vs last year's 21 cent loss, I watched the action stabilize for a few days and have now placed some limit bids around $9.50. I will buy higher if necessary. The float is only 3.8 million shares. Since I'm swinging for the fences here, I've gotta make it a smaller position size and also give it far more room to wiggle than I do with bigger positions. With a tiny $40 million market cap company like this, I simply must be patient. Timeframe for this emerging trade will hopefully be measured in months, not days.

REVENUE
Quarters	2003	2004	2005	2006
JUN	4,223	4,155	6,567	8,761
SEP	3,486	4,085	6,169	9,863
DEC	3,953	5,200	10,047	15,155
MAR	5,834	7,956	9,008

Totals	17,496	21,396	31,791	33,779
Note: Units in Thousands of U.S. Dollars

EARNINGS PER SHARE
Quarters	2003	2004	2005	2006
JUN	-0.369	-0.250	-0.050	-0.440
SEP	-0.489	-0.210	-0.150	0.080
DEC	-0.180	-0.060	-0.080	0.170
MAR	0.030	-0.120	-0.210

Totals	-1.008	-0.640	-0.490	-0.190
Note: Units in U.S. Dollars

**(most recent figures aren't in the reuters table yet) **

Chart looks good too.. big recent upside volume as it challenges old highs means this thing is now gaining some attention. None, yet

One Step Closer

2006-05-04T17:06:00.000-04:00

Finally wrapping up revised regulatory filings, I'm getting ever closer to starting my Teewinot operation. So the marketing phase is just around the corner. Along those lines, my friend Zach created this logo: Mountain formations that simulate an uptrending stock chart... Yeah baby.

Ethanol Up in Flames.. Needs a Cool Beverage

2006-05-04T13:43:00.000-04:00

The ethanol stocks are getting schmeissed today on huge volume. ADM, ANDE, PEIX, etc.. Those have been the monster stocks of the past 2 months. Speaking of monster, following the huge runup in beverage maker Hansen Natural (HANS) -- from $2 to $140 in 3 years -- and still going -- money managers are searching for the next winner in the energy drink space. Jones Soda (JSDA) and National Beverage (FIZ) are both seeing volume pick up nicely today. I'm planning to add a few shares of each this afternoon. UPDATE: Leading Brands (LBIX) is another one I'm stalking.. a $3 cheapie with big volume increases recently. UPDATE 2: JSDA reports earnings this afternoon, so I'm out of that one for now. Long FIZ

A Decent % Month in April.. on small dollars

2006-05-04T11:53:00.000-04:00

Guess who's back? I have been trading my Roth IRA account while continuing to work on the new money management venture. Being up about 4.5% for the month of April is nice.. unfortunately I can't spend the dough 'til I'm a senior citizen! I've really got to get this Teewinot thing up & running. Here's my year to date realized P/L for the Roth IRA (which is usually close or just under total P/L since I strive to avoid holding net unrealized losses for very long). While action has been slower than usual the last few weeks, there are always pockets of momentum somewhere. One that I added Wednesday is LifeCell (LIFC).. paid $27.50 late in the day. With the big earnings-related gap up and now a continuation higher, the chart is appealing... whereas LifeCell's business -- recovering re-usable human tissue from cadavers -- is decidedly not. Long LIFC

My Acvivity Fades

2006-03-23T13:36:00.000-05:00

I apologize for my recent extended absence. Since I've last written, most of my work time has involved moving away from trading my personal accounts and taking care of the legal and operational aspects of starting my new money management firm: Teewinot Asset Management. My papers will be filed with the state soon, and I should be taking on client assets in mid-April. That said, I can't help but post a few charts I'm keeping an eye on. ERS is poised to report earnings next week.. I don't know what day, so I probably wouldn't even hold over the weekend. Still, tomorrow might make for a good day trade opportunity in this aluminum distributor stock as it busts out of the Feb-March trading range. The way breakouts are failing these days though, I wouln't let this go against me by even $1. Medical equipment stock STXS looks ready to get its groove on again. Basing near highs, with its positively huge upside volume pattern this kid could grow up thru its teenage years very quickly. I bought some for my Roth IRA today. PTIE is developing a hardcore-yet-not-addictive pain drug to try and displace destructive painkillers like OxyContin. Lord knows my home state would benefit immensely from such a development. Anyway, the stock has notched two straight NR7 days after a huge Jan/Feb breakout and following the sideways chop in March. I don't know if their drug is legit, but this thing looks strong enough that I'll be both bidding low and putting in stop-buy orders in my IRA account. Since it's a biotech, I'll keep the position size relatively low... random FDA announcments make pharma/biotech trades dicier than most. Long STXS

Rates Break Loose and Bucky Gets Lucky

2006-03-06T23:34:00.000-05:00

The stock markets finally got a little skittish about the quick spike in interest rates. The 10-year yield has gone from 4.50 to nearly 4.75 in just four days. It was last this high in June 2004. The chart shows the upside breakout from the 18-month trading range. This seems to me like a strong "impulse" move.. similar to what gold did in December and January.. the kind that tends to kick off a new Bull market. Problem is, a Bull in yields is a Bear for bonds and stocks. The good news tonight is that "Mad Man" Jim Cramer mentioned Atheros (ATHR) on his widely followed show, and the stock was up a quick $1.50 after hours. There is no skill in catching one of these wacky events.. but I'll gladly take it. Aside from my good fortune, the problem is that his reccomendation gets a lot of suckers into his stock of the day, and this usually ruins sustained upside until they get shaken out. ATHR will probably gap way up tomorrow as religious Cramer followers come storming in. I have a meeting out of the office during tomorrow's 9:30 market open, so I'll be putting a few limit sell orders out in the premarket... some close to the action -- it will be trading big volume on Instinet by 8:05 AM -- and some at truly ridiculous prices. (If not executed in the pre-market, those orders will remain live when official trading begins) I haven't caught a Cramer reccomendation in a while now, and am curious to see if my offers get snatched up. The saying goes: "When the ducks quack, feed them." Long ATHR

Two Long Setups Trigger.. Even on a Nasty Down Day

2006-03-06T17:16:00.000-05:00

Both stocks that I mentioned as low-risk buys last night showed strength in the face of broad selling. I added to my KNDL shares and started a position in ENG. Here are their intraday charts with my entry points noted. I contacted investor relations at ENG and learned that they don't report 4th quarter 2005 earnings until Monday March 27th. So I've got a full 3 weeks to play this stock until I must step aside... That's plenty of time for some good pin action to develop. Long ENG, KNDL

Bias, Be Gone

2006-03-06T13:31:00.000-05:00

12:09 PM EST "Starting With a Clean Slate: Periodically selling all your positions can be liberating." This was the headline on Rev Shark's blog from Realmoney.com.. I couldn't agree more with him on this issue.. as I detailed a month ago when I last went to 100% cash. I no longer subscribe to RealMoney, so I can't read Rev's full post to see if he is actually in full liquidation mode. But I obviously still check the front page of the site to glance at his headlines a few times a day.. :)

More Sweet Setups

2006-03-05T19:16:00.000-05:00

Although I've recently expressed concern for the general markets, I'm still finding an abundance of strong stocks offering low-risk entry points. I've also been doing a bit of programming in TradeStation.. and figured out how to place a white "7" below any daily bar that qualifies as NR7 -- meaning it made the narrowest daily range (high minus low) of the last seven days This event signifies a meaningful reduction in volatility. Because volatility comes and goes in cycles, NR7's portend resumptions of bigger price movment.. soon. I've also figured out how to place yellow arrows on the chart where I bought or sold. This KNDL chart is a beauty. - A hugely positive reaction to their earnings release - Stock holding above the close on earnings day - Four straight NR7's - Volume decreasing as volatility and interest in the stock dry up - Volume increasing on Friday with a close near the high of the week. KNDL is a competitor to SFCC -- a stock with fraud issues -- and KNDL could benefit by taking their customers. I'm long right now, and will probably add more this week. ENG is experiencing 2 months worth of range contraction.. digesting the early 2006 big volume up move. I love the mid-Feb series of NR7's.. which led to a quick spike down and nice high volume upside reversal last week. The last 2 days had tiny ranges, and I think ENG is likely to bust out of this triangle very soon. Earnings should be coming soon (last release was 12/2/05), so I'll just be waiting and watching for now. Long KNDL

Buying Pullbacks Again

2006-03-02T13:45:00.000-05:00

Already having a profitable position in SIRF, a chipmaker for GPS devices, I was waiting for some trigger to get me into GPS device manufacturer GRMN also. It came today. After it ran to new All Time highs early today at 71.75, I stuck a bid in at 70.42. My bid got hit during the 12:00 hour on some random shakeout spike down. Long GRMN

Cautious on the S&P.. Playing Both Sides

2006-03-02T12:30:00.000-05:00

I am troubled by this market. First, this weekly chart of the S&P 500 shows that we keep hanging around the Northern area of the very legit uptrend channel. (actually its the S&P tracking stock, SPY or "spyders"). That channel has dictated the bounds of this market since January 2004... over 2 years running. Add in: - Recent DJIA outperformance.. big caps usually move last - Alternating (and volatile) up/down days for the past week.. index volatility increases around turning points. - Ten Year Treasury yields breaking out.. higher. This is my biggest concern now.. we've all become accustomed to insanely low rates across the board, and I think a big jump in yields would "shock the world." That said, there are still lots of good looking individual stock charts. I'm long 15 names right now. Most of them are trading above the close on their earnings announcement day. Check out the chart of BUCY here.. a big mining equipment maker. The close on the day earnings were announced is marked with an "E".. and a horizontal line is drawn at that price. Trading above that price means the big boys like this stock even better now than on the day they announced solid earnings news.. a very bullish scenario. On the other hand, IBM can't get out of its own way. After it struggled along near the $80 area for most of 2006, this little break down from the recent Bear Flag has me thinking it's about time to get paid for my patience. I added to the IBM short today. Long BUCY Short IBM

New Highs Again

2006-03-01T14:36:00.000-05:00

Not for the Dow, S&P, or Nasdaq.. but for the Russell 2000.. as well as my accounts. And for me, that includes taking a needless lick on a position (DCI) that I accidentally held thru earnings. I'm investigating a service (www.theflyonthewall.com) that should help me avoid being blindsided by such events. ATHR is my best performer today, as it exploded out of this little sideways chop that followed a huge multi-month rally. That's how a "bull flag" is supposed to work out. I am still not 100% sold that the indicies are are going up big from here, but there is plenty of buying activity in individual stocks beneath the surface. We are doing well, but I need to focus on more buy ideas tonight. You make hay when the sun shines, right? Long ATHR

Battling My Fear of Heights

2006-02-21T14:58:00.000-05:00

Like most folks, I appreciate a bargain. I regularly buy pullbacks in strong stocks. On the flipside, I love nothing more than selling a stock I bought at a low-risk entry point into a 3-day 15% straight up rally. But one of my personal worst trading habits is to close out a winning trade with just a small gain.. early in the move.. usually with intentions to reload the shares at a slightly better price. That can work later in a move, but usually not when the stock is just leaving the launchpad. And even if I want to trade around some of a stock's natural volatility before it's launched, I've gotta do it with only a portion of the shares. After I sold it at 31.50 last week, leaving 8% on the table, GOL has now traded sideways for 2 days (while the market sold off).. so this time it "waited" for me. Typically I don't get that lucky.

For Most, Earnings Game is Un-Gameable

2006-02-21T14:55:00.000-05:00

GPS-device maker Garmin (GRMN) has a sweetheart of a chart setup. A little cup & handle pattern, as the stock gets ready to try for new highs after banging on those levels several times. In a news vacuum, I'd take this setup every time. I bought in on the pullback last week, but today realized GRMN was reporting quarterly earnings tomorrow morning. I never enjoy holding stocks thru these events. When I do, it's almost always because (A) I failed to realize the event was scheduled or (B) I was in some sort of gambling mood. "B" was the case in my most recent YHOO trade. Neither of these mistakes will be made with GRMN, as I sold out today for a scratch. This Volcom (VLCM) is one I had owned but sold before earnings. I sidestepped the hit my account would have taken. Score: Me 1, Other guys 0. Then, I was short Outback Steakhouse (OSI).. but as usual covered it before earnings. I think I made ten cents on the trade. Boom, earnings hit. Yes I'd have loved to have been short. But remember VLCM above? They certainly don't all go your way, and I had no rationale to play either earnings report. Score: 1-1. I am 100% convinced that unless you have superior, well-funded research capabilities (or illegal inside information), gaming stock moves based on earnings annoucements has horrible odds. Maybe at best, it's a 50/50 coin toss. If I wanted those odds, I'd go to Vegas to play (correct) Blackjack all night -- net winning only with all the good times & free drinks w/ friends.

As Pullback Scares 'Em Out, I'm Lying in Wait

2006-02-21T14:49:00.000-05:00

This morning's Leading Economic Indicator index came in strong.. and that set the tone for the day. For now, any good economic data is bad for stocks -- because more than anything the big money players just want the Fed to quit hiking rates. And it will take decidedly negative data for Bernanke to veer from his inherited "measured pace" mantra. With the Nasdaq 100 Tracking Stock (QQQQ) closing down 1.2%, I sense a little panic out there now. The Nazz hasn't made new highs since January 11th, and I can promise you those fleeting moments have been completely forgotten by the momentum chasers. Still, the QQQQ index remains confined in this little wedge.. and now sits at support levels. Textbook technical analysis would classify this as a Descending Triangle.. a bearish pattern. But for me that's just too obvious to the trading masses. A good reversal day very soon would set this market up to really punish the late short-sellers who saw this pattern "confirming" itself. As for the DJIA? Today's little 46 point decline is meaningless. The senior citizen of indicies is just hanging around.. above the 11,000 level that held it back so many times in the last 4 months. Nothing bearish about today's action there. The primary red flag here is the supreme outperformance of the Dow during February that is so evident in the two charts (Just look, it's blatant). The mega-caps that make up the Dow tend to rally very late in the overall up move... as people who missed out on all the huge small-cap gains latch onto anything that hasn't moved yet. If the Nadaq and S&P 500 can't catch up to the Dow, we could have some trouble. That's a distinct possibility seeing that the S&P is overweight Energy stocks and that the Nazz is overly influenced by lumbering behemoths like CSCO, INTC, ORCL. These type of crosswinds are why I prefer to take it (nearly) one day at a time. My tentatively bullish comments do not mean I'm in there buying hand-over-fist. I will not heavily commit to this market until we get some kind of intraday washout and then evidence of a turn upwards. My halfhearted guess: That turn is likely to occur this week. Current portfolio stats: .36 Leverage.. amount invested.. (longs+shorts)/equity 31% Long.. net stock exposure.. (longs-shorts)/equity That tells more about my opinions than any words I could write.

Yeah Baby

2006-02-16T14:57:00.000-05:00

I made fresh All-Time Highs in my accounts' values this afternoon. This is one of the first times that I've actually beaten an uptrending index to that status.. Note how the Russell 2000 and S&P 500 have not yet formed new highs. I used to lag such moves.. This change is evidence that I'm improving as a trader. Trade-wise today... I sold my SPIL and some precious metals stocks, covered a little IBM short, bought back PVH, and bought ITRI and BTUI. My 2 largest positions are DCI and TKC, which I mentioned yesterday. They are both doing their jobs now. Long DCI, TKC, ITRI, BTUI, PVH Short IBM

"What Kind of Stocks Do You Trade" ??

2006-02-15T16:24:00.000-05:00

That's what some friends asked this weekend at last Saturday's surprise 30th birthday party for my homeboys Brandon and Larry. My answer: "It basically doesn't matter." Just today.. - Sold my Shanghai Petrochemical (SHI). Their business and location is self-explanatory. - Also sold my PW Eagle (PWEI).. they are in Oregon and sell PVC pipe, of all things. - Bought some Canon (CAJ) -- and am ironically shopping for an upscale digital camera at this moment. - Shorted Pilgrims Pride (PPC) and Sanderson Farms (SAFM).. 2 chicken farm stocks. - Sold my GOL -- the "Southwest Airlines" of Brazil and South America --and would like to add it back soon. - Bought back SPIL.. a semiconductor company in Taiwan. - Covered my 1-day short of Novatel (NVTL), a San Diego-based wireless communications equipment company. Again, it really doesn't matter.. the stock charts all speak the same language.

Pressing a Bet

2006-02-15T14:37:00.000-05:00

I'm adding significantly (for me) to my TKC position on this intraday pullback.. after the move to new 52-week Highs this morning. The afternoon action will be informative here.. a close over 17.80 or so is huge, while a reversal and close down in the low 17's will spell trouble. I'll add more shares later if it appears we'll close strong. Long TKC

Oil Flames Out

2006-02-15T13:53:00.000-05:00

I use 2 real-time Scanners for new daily Highs & Lows. They are helpful for guaging "what's going on" intraday.. and for seeing if any stocks on my watchlists are moving big. (It's all free thru www.trade-ideas.com, but they have a more in-depth paid service also) The New Lows scan could not be more full of Oil and Energy stocks today. Looks like Energy stocks are riding off into the sunset. And for the first time in a while, I have no Energy-related stocks in the portfolio. I sold my recent Tenaris (TS) buy for a loss.. they sell pipes for oil drilling. I attempted a long play in oil major Total (TOT) a few hours ago after it had sold off sharply into an earnings announcement.. but took a really quick (and small) loss as the bottom was apparently not in after all. There's gotta be lots of overhead supply in those stocks... the (supremely) latecomers are looking to get out whole now. My little losses in stocks like Nabors (NBR) up in the low 80's and Edge (EPEX) in the low 30's now look OK compared to their current $68 and $27 price tags. The Oil Service ETF (OIH) has seen massive distribution and is now below its 50 day moving avg. Even the monster stock MIND can't catch a bid. What a reversal of fortunes. Doh.. just saw TOT and NBR go off again on the New Lows scanner. None, and staying away for now

Market Held Hostage to Bernanke & NYC Blizzard

2006-02-13T23:08:00.000-05:00

This was one of the most boring 1% down days (in the Nasdaq Composite, anyway) that I've ever sat thru. For both the NYSE and Nasdaq, it was the lowest volume day of 2006. There are exactly six 65-minute periods in each trading day.. Each of these bars represents Nasdaq trading volume during that period. Pretty skimpy. With many NYC folks snowed in and new FOMC Chairman Bernanke set to speak to Congress on Wednesday, today's uninspiring action is not a surprise. With volatility being cyclical, the recent pause will probably give way to some fireworks later this week. Shorting strong stocks right off their highs is not my game.. and doing just that in the Energy and Commodity stocks has been the only real way to make much money in February. I didnt short them, but didn't own them either. My accounts are about 1% off their highs.. although I've taken a few hits, I'm feeling OK about my positioning.. and glad I don't have a bunch of losses to make up before taking the accounts to new high levels. I added to my Silver stocks into today's nastiness in that sector, and nibbled on two foreign stocks.. TKC (Turkish cellphone co) and GOL (the "Southwest Airlines" of Brazil). None of those are at "full" position size yet. Still nursing IBM short.. it's my biggest position at 2x "full". Long GOL, TKC, PAAS, SSRI Short IBM

One Reason For Weakness

2006-02-12T13:21:00.000-05:00

	COUPON	MATURITY DATE	CURRENT PRICE/YIELD
2-Year	4.375	01/31/2008	99-13¾/4.68
3-Year	4.500	02/15/2009	99-18+/4.66
5-Year	4.250	01/15/2011	98-16+/4.59
10-Year	4.500	02/15/2016	99-09+/4.59
30-Year	4.500	02/15/2036	99-04½/4.55

Macroeconomic concerns seem to be the primary reason for the market's recent struggles. This week the yield curve finally (inevitably?) inverted, with the 2-year Treasury now trading almost ten basis points above the 10-year. Bernanke speaks to Congress in the middle of this week.. his first appearance as Greenspan's successor. I'm glad, because we might possibly get some kind of clarity on the Fed rate hike issue. The next FOMC meeting isn't until late March, and that's a long time for traders to deal w/ constant banter and opinion about the issue.

It Happens That Fast

2006-02-10T10:55:00.000-05:00

Yesterday saw an attempt to push up out of this 2-week down trend. I got short the IWM up at 72.15 as a trendline/channel play. Sadly, I covered the short on the first thrust down.. at 71.87.. only to watch the market sell off violently into the close. We've now duplicated (in time and magnitude) that afternoon selloff again this morning.. and are already down to the lower price channel. So it's basically too late to short on a swing basis.. at least in the small-cap index. And I caught only 1/5 of that sweet down move. I was using a 10-minute chart.. that was part of my problem.. getting too caught up in the tiny back & forth index moves.. and eventually letting a little burst of volatility shake me out. Here's the 30-minute chart. For trades expected to last a day or two, this is probably a better tool than the smaller intraday timeframes (10, 5 min). Frustrating. Just gotta keep on plugging. None

Pushing Chips On The Table

2006-02-06T10:29:00.000-05:00

As expected, IBM showed more weakness today. The break of the Up Trend Channel since last May now looks very ominous. Even more so if you consider the longer term price action -- IBM has not made a new All Time High since 1999.. and we are now in territory below the 2004 Lows. I sold short today at 79.40.. initially thinking I'll accept about 3 points of risk to the upside. Short IBM

All Cash and a Clear Mind

2006-02-04T17:23:00.000-05:00

Last Monday, I liquidated all positions so that I could enjoy my last day of skiing and the 3-day road trip back to Kentucky without worrying about stock positions going awry. The risk/return of my timing seemed good at the time too.. After a post-FOMC mini rally on Wednesday, the wheels fell off on Thursday and Friday. I won't delve into the anecdotal evidence of recent over-enthusiasm (but fellow blogger Barry Ritholtz will). Still, I've definitely noticed a stench of greed in the market's air recently.. as I discreetly "left the building." Of course one can always have done it better.. and hindsight is 20/20.. In the same few hours when I sold all my longs, I also covered my index short sales.. for 1-2% losses.. right before this recent selloff. I didn't feel comfortable with any position going into a Tuesday that held an FOMC decision and Google earnings. As I survey the market landscape today, I'm enjoying the mental clarity afforded by the "clean slate" status of my accounts. Index charts suggest this is merely the beginning of a bigger, broader decline. I'm not sure I'd see that as clearly if I had a psycological bias due to pre-existing long positions. I'll be back before Monday with more concrete thoughts and trading ideas. While the past 3 months have been very upside-oriented, there are bound to be good trades on both sides of the market now. IBM is one of the top shorts on my radar right now. Check out its chart, and I'll expound later. Long 1 clear head

Freight Train Market

2006-01-27T11:58:00.000-05:00

My recent "less bullish" inclination has been proven wrong. Hope that the fourth quarter's small 1.1% GDP growth will convince the Fed to stop rate hikes has sparked a buying frenzy. Bears are really getting slaughtered. The NYSE Composite and (of course) the Russell 2000 are hitting new All Time highs once again. Recent QQQQ and DIA shorts are dragging down my personal performance today.. but at 25% net long invested, I'm still having a decent day... new All Time highs in the trading accounts. BTUI and XRTX are doing the heavy lifting today. I reloaded MIND this morning. I took my medicine in the RKH short.. after drilling down to the component bank stocks in that index (using TeleChart), I realize most of the charts actually look great. Covered at ~ $142 avg. Microsoft's 4.5% advance is powering the mainstream indices. I'm nursing my index shorts.. and for now, maintaining them. Long BTUI, MIND, XRTX Short DIA, QQQ

Not Banking on the Banks

2006-01-25T11:00:00.000-05:00

The indices are still holding up OK.. It now appears we're going to have a low volatility "standoff" kind of day. I feel a little better about skipping out early. :) ADTN stopped out of 1/2 my position for a 20 cent loss. I like this bank ETF chart better (for a short) anyway. Just doubled up. Also scalped out some SSRI - then added it back at $15.90-ish.. and added to the ENGlobal (ENG) position this morning. Long ENG, SSRI Short ADTN, RKH

'Bout That Time

2006-01-25T10:33:00.000-05:00

I think this morning's strength marks the end of the little 2 1/2 day recovery. Still got a bunch of longs, but gonna tighten some stops before heading out to Grand Targhee to ski the cowboy pow. To match my portfolio to my market view, I shorted some Diamonds (DIA) this morning at 107.24 and Adtran (ADTN) at 28.05 Short ADTN, DIA

Trimming on the Bounce

2006-01-24T11:00:00.000-05:00

This bounce from Friday's drubbing is now in it's 2nd day. I've trimmed a few positions and added some shorts into the rebound as I plan for the likelihood of renewed selling pressure very soon. Tenaris (TS) is one that I dumped in the last 2 days. Avg sell price $154. That Doji candlestick yesterday is a bit ominous, but this one is so strong that I'll try to reload if it sets up again -- hopefully down in the $130's. Other trades include adding a bunch of Matrix (MTRX), shorting Quest (DGX) & the bank index (RKH), selling my SPIL & CMCO, and taking a loss trying to short Google (GOOG). Long MTRX Short DGX, RKH

Momentum U-Turn

2006-01-20T13:09:00.000-05:00

The senior indicies are getting hammered here. Google down 28 points and slicing thru its 50 day moving average is not helping. Citigroup is leading the 140 point selloff in the DJIA. Energy is about the only sector working. However.. While the QQQQ, Dow, and S&P 500 are getting shallacked.. the real leading indexes of this market -- Russell 2k and NYSE Composite -- have not even decisively broken yesterday's lows. Put/Call is running 1.12. There is an odor of fear out there, and bears are probably licking their chops right now. But I'm sitting tight here. Accounts are slightly down on the day, and we sit 41% invested.

No Time Like The Present

2006-01-20T11:47:00.000-05:00

Well, Tenaris (TS) did not wait around to make new all-time highs.. I thought this would take a lot longer. Sold out this morning and just added back 1/2 at 147.25. I'll add the other 1/2 back if it closes in the green today. Long TS

Me No Comprende

2006-01-19T14:52:00.000-05:00

Mark Cuban recently posted on a topic that has always baffled me.. how Donald Trump can possibly be considered a business succcess. Mark's thoughts are very entertaining, and as a multibillionaire he of course has more of a leg to stand on with his insults. All I can think is Trump is one hell of a salesman. Selling his seemingly lacking business talent to the public, that is. Trump has gone bankrupt so many times, I've lost count. TRMP is the stock symbol of the newest casino enterprise (most recently out of BK) that bears his name. I actually might rent some junky TRMP stock for a quick trade.. if the chart continues to develop the way it is now. Thanks for the idea, Mark !

Big Mo In The House

2006-01-19T14:10:00.000-05:00

Small cap stocks are really rocking. The IWM was even up yesterday as the senior indices got worked by YHOO, INTC, IBM earnings debacles. Today it is not playing around.. up 2+% !! Although lagging in performance today, my accounts are at new all-time highs.. and I've been shaken out of most short positions, most for barely modest gains. This is a bear-killer market, and I think the rest of January will continue to serve up sweet long side trades. It'll be like a popcorn machine.. they don't all pop at one time. My job is to find those kernels that are about to explode. To be honest I've not been trading very well.. or even putting in much effort. It's hard to when you ski cowboy powder all day and then indulge in the evening. Add the 2 hour time difference and it's a recipe for sub-par performance. Now the sun is out and I'm going to leave the market an hour early.. gotta get some pics while the blue sky makes a temporary appearance. PVH is one I just reloaded on a Range Contraction pullback. In at 34.86. That huge volume up day last week suggests the run in this apparel maker (calvin klein, etc) is just getting started. Long PVH

Taking a Shot

2006-01-17T11:17:00.000-05:00

Today I plan to go against my usual strategy of avoiding stocks as they announce earnings. The Internet search advertising space has be so hot.. I think the prospect of a downside surprise in Yahoo's earnings is a low probability event. More importantly, the stock has sold off sharply in the last week.. so it's hard to make the case that expectations are really high. The chart setup suggests an upside move almost regardless of what YHOO says in their earnings report after the bell today. I sold out at $43.20 early last week during that gap up rally.. which was based on an announcement of some kind of wireless initiative for both GOOG and YHOO. It seemed like an odd reason for a big move, and the R/R for a long up there was pretty weak. I added back 1/2 a position on Friday at $40.16 and am sitting tight. Long YHOO

Remote Trading OK So Far

2006-01-17T10:05:00.000-05:00

Good morning from Jackson, Wyoming. This is my first trading day in the Mountain Time Zone since my rookie year in the business. I had forgotten how nice it really is to start the trading day 2 hours earlier. Early start, then plenty of time for fun in the afternoon. It's snowing here in the valley right now, so hopefully I'll get outta here about an hour early at 1pm Mountain Time and complete the day with some nice liesurely ski runs. It appears that tomorrow will be a big powder day, and it's also Randall's day off.. gotta save these aching legs a little bit.. Using a laptop and one 20" panel, this is less screen real estate than I'm used to at home. Still not bad though. We've made a few trades today... scalping out of TRLG (again) and HAWK, buying TOMO & DPTR, covering some PPC and SINA short, taking some loss in CMT, and getting about a point out of a CMED long daytrade. Even with reduced equipment, I guess I'm pretty close to full speed. :) This TS is one of my faves right now. I think new highs - and then some - by Feb/March. Long CMT, DPTR, TOMO, TS Short SINA

Pre-Vacation Positioning

2006-01-10T15:11:00.000-05:00

Most of my positions are pared down to 1/2 size or less now. Gotta keep my mind at ease as we traverse the wild wonderful midwestern states tomorrow. Just shorted SINA.. somewhat of a competitor to NTES. With SINA is probing 3 months lows at the same time NTES is rocking, something is likely to be seriously wrong w/ the stock. I got on this one later than I like to.. 23.30. But at 3:10pm it appears SINA will close way down here.. opening the door for a quick butt-whooping. Huge downside volume the past 5 days also. On another note.. I had gotten "bored" in my SIGM long today.. and sold out at $15.10 to basically break even.. then about 2pm it broke 15.50 with big volume supporting the move. So we're back in again.. with a slightly worse cost basis. OK by me. Long SIGM Short SINA

A Raging River of Selling, Por Favor

2006-01-10T15:01:00.000-05:00

Amazon.com is about to close below its 50 day moving avg ("50ma" is what I'll call this in the future)... on big volume. Other 'Net stalwarts EBAY & YHOO are also stumbling. Even with a few days on the road, I feel pretty comfortable with my new AMZN short at $45.60. PS. We're bidding in the low $41's to buy back the YHOO shares that we scalped out of yesterday in the $43's. Short AMZN

Opinion vs Experience

2006-01-10T14:44:00.000-05:00

I'm glad there's no rule in the market that says you have to marry any of your forecasts. NTES was mentioned here as a possible short if it broke down thru the $56 area. Not only did it not break those lows, NTES exploded higher. If you're looking for an explanation, search Yahoo Fianance or Google because I don't know or care why. Even if I had the inclination to short it before it started to break down.. and I do that often.. I'd have stopped myself out for about a $2 loss when it broke $60. Committed (ie stubborn) shorts would be sitting on another $8 worth of losses. I think it's wiser to play stocks like a poker game and fold a losing hand... well before you are praying for your card on the river.

Psst...

2006-01-09T13:32:00.000-05:00

I was just on the CFA Institute website searching for other CFA charterholders in the Lexington area, when I stumbled across this survey . Seeing that 79% of the respondents are from the buy side, it's good to see a healthy skepticism of the big investment banks' behavior. I would have been in the 1/3 of folks who say it's a fact of life. It's my job to catch rallies no matter who is bidding something up.

Logic Does Not Apply

2006-01-09T13:23:00.000-05:00

You would think that a company that had government-sanctioned monopoly status and could mark up it's product by 50% would be a great performing stock. Lexington's gas company Columbia Gas is owned by NiSource (NI), and as I recently noted they have a huge spread between the market price of natural gas and what the local gov't allows them to charge us. Something like $14.50 vs. $9.50.. and I would assume they have similar arrangements in the rest of their locations. You can see on the long term chart that believing in these apparently positive fundamentals hasn't made anyone a dime for a long time. And recent action has been even worse than average.

Managing the Melt-Up and Questionable Timing

2006-01-09T11:28:00.000-05:00

We are having another outstanding day here, solidly higher from positions in NDSN, ENG, PAY, etc. Of my 29 longs, 24 are up and 5 down. This is getting to the point that I'm doing "so well" that a 100% liquidation has crosssed my mind several times this morning. The problem with that thought is we are in pure melt-up mode. So many folks are looking for this market to pull back that it will likely frustrate them and continue to scale the wall of worry. Mix in some performance anxiety among big fund managers, and you have very sturdy support behind this move. Rev preaches that these moves nearly always go farther than seems reasonable. "It is one of the great paradoxes of the stock market that what seems too high usually goes higher and what seems too low usually goes lower." - William O'Neil However, counting the big upside reversal in the first session of the year, this is the 5th day up. It feels like walking a highwire, but I'm trying very hard to resist hitting my sell buttons prematurely. I'm going to do a few partial sells (primarily to make me fell better) and tighten up stops on other positions. Any new buys will be in stocks with range contraction pullbacks, not the more extended charts. Tomorrow is my last day of work before a 1600 mile road trip out to Jackson Hole, WY with my Dad and our dogs. Going to visit my brother the pro skier and spend time with family & friends.. and of course enjoy the ski mountain's unusually huge level of snow. Save some powder for me, bro. It will take enough discipline just to stay on top of the market and continue my asset management business startup.. so my posts here will be sporadic at best. Hope you've had a nice start to the year. 90% invested long

It's a Start

2006-01-08T21:17:00.000-05:00

This news out of China is hopefully a harbinger of things to come. Such changes would benefit both that country's future and foreign companies doing business there. If you're interested in Chinese investing, Pacific Epoch is one of many good sources of information. Many Chinese stocks trade here in the US.. most on Nasdaq. I'm looking at several of them right now for low risk entry points. Some are getting close to breaking multi-month downtrends.. others are stronger and are basing near highs. I lean toward the latter, but am keeping an eye on the former for a "first higher high" to form. In order of how well I like the chart today: CTRP (already long) TOMO SNP (already long) CMED PTR KONG CAAS ACH CEO GSH CNTF XING NCTY On the other hand NTES has now formed a huge "island" pattern. I'd love to short this one if it breaks recent lows. Competitor SINA looks terrible also. ASIA looks like it's on a beeline to $0. Long CTRP, SNP

Amidst The Rally, More Shorts Emerge

2006-01-06T15:10:00.000-05:00

I almost can't believe that I'm advertising my short positions when the market is rocking like it is now. Still, the market isn't a monolitic beast and everything doesn't go up or down together. I covered the MRGE short today, thinking it was toast.. took about a 50 cent profit and thought it was ripe for a reversal. That still could be true, but when it broke $24 I simply had to re-short it. 1.5x the previous size. A close down here spells real trouble for these guys. Though still heavily long, I have liquidated a few positions. One was this TRLG that I picked up on Wednesday in the 16.65 area. Out today at an average price of 20.10. (this chart is from yesterday, I meant to post it then) I'd love a big 2-3 point pullback so this thing could set up again. Short MRGE

What Goes Up...

2006-01-06T14:56:00.000-05:00

Must come down. Eventually, anyway. One of my biggest winners from 2004 is now on my mind as a short. Mississippi-based chicken company Sanderson Farms (SAFM) produced 40-50% gains for me a while back. Now it's completely breaking down, as are competitors Tyson (TSN), Pilgrim's Pride (PPC), and others. I caught several points on the short side this week. Out now, but would love to reload on a bounce. Actually, if at about 3:45 SAFM looks like it will close below $27.50 (yesterday's close), I'm going to reload short right then. PPC is next, it's on day 3 of a little mini-bounce.. They have much more work to do on the downside. No positions, yet

Crash & Burn

2006-01-06T10:20:00.000-05:00

That's what Natural Gas has done in the past few weeks. Too bad my local gas company still charges Lexington residents in the high $14's. Long some Oil & Gas stocks

A Better Way to Buy Pullbacks

2006-01-05T14:40:00.000-05:00

Most Losers chase extended stocks. Most Winners wait for some kind of price retracement before buying. By waiting for pullbacks in strong stocks to make your purchase, you increse your odds of a winning trade significantly. But there are a lot of ways to do it. While I haven't been a "chaser" for over a year now, I have a bad habit of buying a stock into the weakness.. before any stabilization is evident. These trade entries often show a small loss at the end of the day. Waiting for the thing to actually stop going down and start back up with a little vigor is probably a better way. I'm going to try to do more of the latter in 2006. To me, it's a probability and risk/return tradeoff: - Buying into weakness is a lower probability trade, with higher risk/return numbers. You are trying to pick bottoms, kind of "trying to be a hero." - Waiting for the turn back up to become (at least a little bit) evident means you'll pay a higher price.. and that will be further from whatever your stop price is. Thus you "pay" for a higher probability trade with a worse risk/reward profile. On SIGM, I doubled up on Thursday in the $15.10 and $15.30 areas as it turned back up. After breaking yesterday's high, SIGM now qualifies as a "1234 Pullback" entry.. meaning it made 3 consecutive lower highs and then busted thru the lowest of those on the 4th day. I waited for it to turn up before loading the boat. Now only time will tell if this up move gains any traction. UPDATE: I just realized it's not quite a 1234.. more like a 234.. good enough for me.

Cleaning Up

2006-01-04T12:52:00.000-05:00

I have posted many stock trading opinions and personal stories on this Blog since April 2005. It's now time to separate the two. Hopefully, those who want to read market commentary will find this site more useful. Likewise, readers who frequent this Blog primarily for personal notes, smack talk, and dry humor will probably not miss the trading-related banter. Buck Smack is my new (appropriately named) outlet for non-trading posts . The address is bucksmack.blogspot.com.

Par For the Course

2006-01-04T12:31:00.000-05:00

The reversal of last year's seasonality illustrates the market's devious method of hurting and confusing the most possible participants. 2004's big late-year rally lasted all the way thru the New Year.. then ended abruptly about 1 whole hour into 2005's first trading session. The January effect -- which even many short-oriented hedge fund managers anticipated -- failed miserably. Even talented traders such as RevShark gave the long side too much "benefit of the doubt" at this time last year. So what about this go-round? Well, we traded sideways for all of December 2005. Folks like me kept waiting for others to get a rally going, and the poker game ended in a standoff. In the last few days of 2005, stocks sold off hard as traders recalled the previous January's bloodletting and headed for the hills. Now the much anticipated rally is finally underway.. those recent sellers have to be feeling the pressure to reload or be left out. Thus the strong momentum we're seeing now. I find this psychological warfare to be an extremely challenging task. That's why I love the markets so much. Long big time, but cautious as usual

Let The Good Times Roll

2006-01-04T11:21:00.000-05:00

Although yesterday afternoon's frantic pace has calmed, we still have positive market action today. That's great and all since I'm very (90%-ish) long.. but it cuts both ways. Ideally, the indicies chop sideways for a day or three.. continuing straight up will likely mean a less powerful, less lasting rally. Even with sideways action overall.. there are enough pockets of strength to easily keep one's capital occupied. If this keeps up, our biggest "problem" will be turning down one good looking chart in favor of another. Some recent winners - Oils and Gold - are taking a rest.. though Oil Drillers and Service companies are making another run. I gotta do some shopping in that group.. Nabors (NBR) is the only one we own right now. I know that one of my readers will be pleased to hear the positive prognosis for this stock. :) Decent volume today, and looks like it's gonna make new highs soon. Long NBR

You Were Always On My MIND

2006-01-04T10:32:00.000-05:00

Remember the wild action in Mitcham Industries (MIND) on their big earnings announcement on 12/13? It has traded sideways for about 3 weeks now.. enough time to prove that there likely are not enough sellers in the house to knock this thing back to earth. "Sideways" is good if it follows "Big Up". I expect an uptrend resumtion, and bought a few minutes ago at $17.66. Long MIND

Improving Each Year

2006-01-03T15:11:00.000-05:00

Click here to read Charles Kirk's "Happy New Year" post. We think a lot alike on this topic.

Off to a Great Start in 2006

2006-01-03T14:56:00.000-05:00

Today has been wild: - A morning gap up that got sold hard (like many Monday morning gaps up) - Fresh lows for this congestion phase. At 10:30am, IWM hit its lowest point since November 17th. - A huge rally at 2pm after the minutes from last month's Fed meeting were published.. and contained language saying future tightenings "probably would not be large." And that's just the action in the major indices! This candlestick chart of IWM shows the big upside reversal and how it fits in with the action of the last 2 months. My take? We are ready to move up & out very soon. With the XAU index up a rock solid 7.5% (that's an index!), Gold stocks are obviously kickin'. So are my energy, techs and Indian stocks. With the DJIA up 110 and NYSE breadth running 2400/900, it's no shocker that only 6 of my 32 holdings are negative on the day. This is the best session I've had in a long time, with all accounts up over 2% on the day.

Work All Day, What Do You Get ? ...

2005-12-27T17:03:00.000-05:00

The markets sold off basically all day, probably because some traders bailed out in anticipation of a repeat of last January -- where we sold off very hard for the first half of that usually strong month. Owning a big batch of small caps and several oil & gas stocks, I did not have a good day. My performance mirrored the Russell 2000.. down about 1%. Adding further insult, my shorts didn't do their job, mostly escaping today's beat down. It was just "one of those days".. As you can see, I have been digging thru some old pictures recently. This one was from my summer job in 1995 at a blacktop plant. I got to be really good friends with my shovel and hammer during those 15 hour days. Woo hoo, overtime pay! Despite my portfolio's struggle today, I'm still ecstatic about my career choice. And unsure why I am smiling in that picture.

Sports Analogies Persist

2005-12-27T03:52:00.000-05:00

First it was play-by-play coverage of insane Thanksgiving+1 shopping.. Now the media is proclaiming Monday to be "Round 2" of the Christmas shopping season, as Americans knock out their record 18.6 billion dollars worth of gift cards. I still believe the retail excecs are smarter than the average shopper.. they "see 'em coming"... & price accordingly. If these most obvious times are truly ideal times for bargain shoppers, then this retail scene has absolutely nothing in common with the stock market. Patience, folks.. those cards don't expire for a looong time !

Winners & Losers

2005-12-23T15:21:00.000-05:00

To offset my INFY & CTSH longs, I doubled up on my KBAY short today.. it's in the same sector, but has an awful looking chart. While the 2 strong stocks are making new highs, this thing languishes near lows. Not good. I think KBAY is ready for a new leg down, and have positioned myself accordingly. Short KBAY

Christmas Comes Early

2005-12-23T14:41:00.000-05:00

The mailman just dropped off a big envelope.. That contained a vintage copy of the 1999 college basketball preview edition of Sports Illustrated ! The most legendary Swamp Dog of them all, Auburn's Chris Porter graces the cover with his huge smiling mug. Thank you, Remmy !

I'm All In

2005-12-23T13:56:00.000-05:00

Verifone (PAY) is flat gettin' it done. It's about time to assault the $27 level.. volume is way above normal. At 5% of the portfolio, this is one of the bigger positions I've ever had. Long PAY

RevShark is a Genuine Guy

2005-12-23T13:27:00.000-05:00

I recently emailed some of RevShark's (always insightful) scribblings to my friends and family.. he's been a great mentor for me on my trading journey, and he doesn't even know it. I'm going to email the Rev today to thank him personally. Here's his latest post.. Taking a Moment to Reflect 12/23/2005 1:08 PM EST It definitely is slow going out there. We are holding steady, and that is about it. There are a few small pockets of activity, but it's mostly small-caps being pushed around by traders looking for action.

I imagine quite a few folks will be cutting out early today, so I want to wish you all a Merry Christmas, Happy Hanukkah and a joyous winter solstice.

This is the holiday where we try to take time to appreciate our friends and family, and I definitely consider the folks at RealMoney and the readers out there to be exactly that. Sometimes I want to beat some of them up just like I do my little brothers, but that's inevitable with people you care about. When I share my thoughts here, I like to think that I'm talking directly to just one special reader: you. I hope that I provide some useful insights in our daily market battles.

It gives me a good feeling to know that the market will always be here for us and that we are in this battle together. It won't ever be an easy journey, but if we encourage each other and succeed, that makes it even better.

Enjoy the holidays.

-- Rev, you're the man. Merry Christmas!

In Redneck Parlance... "Dots, Not Feathers"

2005-12-23T12:35:00.000-05:00

Notable trades this week include picking up some Infosys (INFY) and Cognizant (CTSH). Both are tech support companies in India. And both moved to new All Time Highs on significant volume.. I can't help but be super bullish on them. We own a third company in that sector, Wipro (WIT).. but will probably unload some of that one today as it is stalling at previous Highs. We have further exposure to India via yesterday's investment in the India Fund (IFN), based on that sweet looking chart. Long CTSH, IFN, INFY, WIT

Missed One.. But No Worries

2005-12-23T11:57:00.000-05:00

I missed a decent entry point on Under Armour (UARM) in the 26 area. I'm honestly just not that good at trading recent IPO's.. there's so little price history on the chart to base decisions. There are always areas where I can improve, and this is one of them. Still, my accounts are hitting new all-time highs today. Is there a more important measure of investing success/failure than that? The S&P index (represented by the Spyder ETF) has not recovered to new recent highs. My equity took a dip earlier this week along with the S&P.. but now.. I feel even more sure that I own some strong stocks... considering my accounts' performance versus this index. 92% invested, mostly Long

Plenty of Opportunity

2005-12-23T11:38:00.000-05:00

Things are poppin, baby. But you wouldn't know it with a casual look at the Dow Jones Industrial Average (DJIA).. it's doing jack, down 5 measly points. However, a look under the surface reveals plenty of stocks either already in upward motion or (presumably) fueling up for their next move In motion now: This one took off today on its 4th try at the $25 level. I doubled up on Verifone (PAY) today around $25.60, and this is my biggest position now. Volume is running huge, and I'd be surprised if this isn't the start of a new leg up. I think this thing is going to be a monster, and am looking for at least a double in the next 6-12 months. On the launchpad: Norsdon (NDSN) announced big earnings last week.. and the market obviously like it. But since the stock didn't trade up right into earnings, that tells me the big numbers weren't really anticipated by many.. making the reaction more powerful. I bought some on that big up day, got stopped out of a portion of it for a tiny loss, and have added some back on this pullback. Now it's creeping up and the range is narrowing. I'm ready to nearly double this position also.. on a move thru $42.20. Long NDSN, PAY (and 32 others)

Hammered

2005-12-23T03:44:00.000-05:00

While that word certainly describes my behavior at frat parties in the late 90's.. I'm talking about stocks this time around. This NGS chart shows the rise & fall of a quick winner on Wall Street. It shows (yet another) shot to the ribs of the "buy and hope" investment mantra. Many big winning stocks have longer lasting uptrends.. and I thought this one had a chance for further glory way back in late October. We bought the pullback to the 26ish area... right at the 50 day moving avg. The trade obviously did not go in our favor. And we were out of it very quickly. Buh-bye, loser. My mentor Oz always preached "you are what you hold." (ie. winners or losers) Are you up or down on your recent trades? If down, then fix it!

I'm Still Here

2005-12-22T12:44:00.000-05:00

Howdy. I must apologize for not posting regularly for the past week. No excuses will be foisted upon my readers. In this time, my accounts took a nice little dip along with the major indicies. My trading was a bit below average.. I didn't do enough profit-taking in my longs when the buyers were tripping over themselves to grab stocks at extended prices. However, my accounts are now again making all-time highs... while the indicies just inch back upward (the Dow is up a mighty 15 points as I write). We are now 82% invested.. mostly long. I have a few shorts on the books: APOL, ARO, SAFM. I shorted APOL last week.. and covered for about 5 points gain yesterday. I anticipated a bounce from this recent shallacking.. but wasn't going to let the thing get flushed down the toilet without me being short. I ended up re-shorting at a slightly worse price, but don't mind a bit. Shorting retailers seems dicey around the holidays. But with Aeropostale (ARO), I could not resist. I certainly know little about teenage fashion (some would say adult fashion too).. but I can easily see that ARO has broken down from the range that it traded in from May 2004 to August 2005. Basically, anyone who bought the stock in that time frame is underwater and probably would love to "break even." I anticipate the $26 area will be a ceiling for these shares. We're way net long right now. Don't think these 2 shorts represent my view of the entire market. Like now, my opinions are typically very stock-specific. Short APOL, ARO

Psychology Trumps News

2005-12-13T13:27:00.000-05:00

Successful technical trading is all about using price patterns to get into the minds of other traders.. and using estimates of their emotions -- fear, greed, boredome, excitement -- to profit. Usually, a sharp move in a stock in the days just before a relevant news event means traders are pricing in a certain expectation. Typically, even if the expectation is met in the direction those traders have already moved the stock .. it's Reversal time. Those that bought/sold in advance will hand their shares to the folks rushing in after the news. Buying good news and selling poor news is one of the biggest sucker's games around. This chart shows Intel selling off in advance of its mid-quarter update. The exact news really didn't matter much. The bottom was in about 15 minutes after the news hit. Here's one that had the opposite setup going into today.. a 50% run right into earnings. Mitcham, a seismic data equipment company that sells into the oil/gas discovery business, posted huge earnings this morning -- the type that folks were obviously expecting. The stock opened at its highs at 18.80, & sold off straight to 16.30. It's recovered some, but taking gains on a gap up after big earnings is almost always prudent.. so that you don't end up panic selling when the thing is 15% off the highs of the day! (this chart doesn't include today's action) I unfortunately have not traded this stock. The indicies have traded sideways for 8 days now. I'm curious to find out what the heck that means we're pricing in as to today's Fed decision. The answers will start flowing in 30 minutes.

Nothing Doing

2005-12-12T22:53:00.000-05:00

Aside from a morning buying panic in Gold -- that morphed into a nasty reversal by 4pm -- it was a slow day in the markets as we await the Fed announcement at 2:15 tomorrow. Realmoney.com is reporting that QQQQ had it's lowest volume day since December 31st, 2004 !! For brevity, just read Charles Kirk's 2-line account of the day. I frequent his Blog.. Charles is great about scanning morning news items and posting a 1-2 line summary of each. 54% Long

Rock Bottom

2005-12-08T20:06:00.000-05:00

This afternoon, my UVa friends spouted off some lively email discussion regarding our team's upcoming Music City Bowl game against Minnesota on December 30. (Since this is a family-friendly site, I'll do no cutting nor pasting) This article in the Minneapolis newspaper belittling Virginia was the catalyst for the 30 or so emails we bounced around the internet today. Several of us also emailed the journalist -- some more civil than others -- after reading this quote: "As a program, Virginia is like the change between the cushions of a couch: It's always there, but unless you look, you wouldn't really see it." Ouch. We know our team didn't have the best season possible. At 6-5 the 'Hoos barely qualified for any bowl. Ironically, after berating this yankee journalist for a while, the discussion turned toward bashing Virginia ourselves. I had to remind them that I've been back in Kentucky for 4 1/2 years now. I've attended a few UK football games and many a tailgate. No matter how bad my boys think UVa has it on the gridiron, we are a smashing success compared with the home team here in Lexington. Please note the level to which the face value on some UK football tickets has plummeted. Case closed.

An Old Friend

2005-12-08T15:50:00.000-05:00

No, not one of the many great old friends that I've met back up with this year.. this friend is just a junky Amex stock that I'm "renting." This isn't the first time I've gotten involved in these shares. But this time I've caught a move closer to $3 than $1. Letting it ride for now. In from 7.75 and added a little more yesterday at 9.15. Long GGR

Paring Positions and Patience

2005-12-08T15:22:00.000-05:00

As the market deteriorates a little more, I'm down to 37% long. Though we're at the low end of this week's range, this is the 3rd trip down there (Monday, Wednesday, today).. and often the 3rd time is the charm as far as breaking thru a support/resistance level. I've pared some positions, like ARXX, EXPE and PAY, by more than half. Others like BAP, VAS, PIXR I've sold completely. My positions are listed below, by size (dollars, not shares) Long FWLT, HDB, ARXX, PAAS, IBN, CIB, BGC, EXPE, GGR, PAY, HAWK, TXCO, AMLN, SOSA, MTRX, PETS, BEXP, WLT, SNP, PRFT

Thank You Sir, May I Have Another

2005-12-05T15:17:00.000-05:00

Here's one more I just found.. similar pattern, nice volume, and in an Energy sector that's acting - well - energetic. Long TXCO

Still Like The Pattern

2005-12-05T13:32:00.000-05:00

The failed CTRP trade doesn't sway my belief in the awesome risk/reward potential in these trend change patterns that I bring up so often. We're now in another stock with a similar chart setup. (instead of sitting around hoping CTRP comes back) Long BEXP, an oil stock

Taking Lumps

2005-12-05T13:12:00.000-05:00

With my Expedia shares doing well, I thought the time might be right to own their Chinese counterpart, CTRP. This daily chart shows the potential trend change that I based my purchase on.. those late November (55-ish) lows could easily have been the 1st set of higher lows. Thursday's big up day appeared to prove me right, so I added to the position. Friday's action completely negated my hypothesis when the stock traded below my (pretty ideal) entry price of $58.10. I got out for about a $1 loss. The stock is down another $1.50 as of 1pm today.. my loss would have more than doubled had I been stubborn about it. Though the trade was a money loser, I chalk it up in the Win column because I stuck to my strategy and did not let the trade go so far as to impair my capital. Here's an unrelated stock.. but the lesson is the same. "S**t Happens" if you have no risk mangement plan. Long EXPE

Thursday's Action Bodes Well

2005-12-02T13:07:00.000-05:00

Yesterday produced the hottest & heaviest upside action in a long time. The market began the day with a "professional gap" up.. look at the IWM chart below to see how that morning gap never even considered filling. The strong buying continued all day long. Stocks rising 50 cents or more numbered about 1000.. about 50 were down that amount.. Very lopsided. Volume came in huge at 2 billion shares on the Nasdaq and 1.8 bil on the NYSE.. well above average. In my opinion, this "accumulation" day is going to be pivotal going forward. I see few scenarios in which this upside move dies any time soon. This 65' chart of IWM shows the smallcap index pulling back a bit today, but stabilizing at last week's highs. Following yesterday's move to a new All Time High in that index, this is still enormously bullish action. (For reference, the Nasdaq remains 56% from its All Time high.. obviously small caps have outperformed in a major way since 2000) I had a feeling we were due for some upside.. because on Wednesday, with the Dow down 70, the underlying action was much stronger than that, and my positions were flat on the day. The market then produced one of my best days ever on Thursday. Doing more buying today. 49% Long, zero Shorts

Days of Pain Refresh & Renew

2005-11-30T09:29:00.000-05:00

The post-Thanksgiving selloff that I expected has been sharp & swift. Recent big winners took an inordinate share of the selling... that fact has me believing this is simply a bout of profit taking, not the start of a bigger move down. Also, as this 15' chart of the Nasdaq shows, this little downtrend has taken us right back near last week's highs.. which should serve as support for the next few weeks. If this area holds, previously extended stocks that have pulled back sharply will form nice risk/reward setups again. I have mixed feelings about my performance this week. I did a bit of trimming at really sweet prices, set moderately tight stops on some positions (which worked out well), but allowed myself to give back too much profit in others. Accounts are off their highs, but not drastically. My work continues. Recent sells include MXRE, TWGP, MU, ILSE. I'd like to add some of these back later on. PAY & GGR are recent purchases. Long PAY, GGR

Big Stories (& The End of an Era?)

2005-11-28T02:00:00.000-05:00

There were several great NFL games yesterday. The decidely worst storyline was Jay Feely's 3 consecutive missed field goals in the Giants' stunning loss. Unquestionably, the best story came from the Rams' 3rd string rookie QB Ryan Fitzpatrick.. a Harvard graduate who had never taken a snap in the NFL. I even won't attempt to give this story justice. If you missed Chris Berman & Tom Jackson's entertaining account of that game on NFL PrimeTime last night, you gotta check out the story via St. Louis Mercury News . Feel-good things aside.. In a development I can't stomach, Berman & Jackson's wildly popular show is apparently finished after this season. NBC signed a huge 5-year deal with the NFL that includes Sunday night football, among other things. I certainly hope it turns out better than the unworthy Nascar productions they brought us this season. I don't understand exactly how this cuts out ESPN's rights to air PrimeTime, but hey, media deals aren't my forte. A lot of folks -- including yours truly -- will dearly miss Chris & Tom. Huge.

3 Final Notes

2005-11-25T14:00:00.000-05:00

1. Rev Shark's summation of today's trading action is spot-on:

"We knew it was going to be slow today, but I didn't think it would be so completely uneventful."

Unfortunately there were somber real life events. 2. Pat Morito -- aka Mr. Miyagi -- died today at 73. 3. Another loss today.. a guy I'd not heard of, but apparently the best soccer player England has ever known.. George Best died today. Here are 2 quotes attributed to him:

"I've spent a fortune on booze, birds, and fast cars. The rest I just squandered."
"If you'd given me the choice of going out and beating four men and smashing a goal in from thirty yards against Liverpool or going to bed with Miss World, it would have been a difficult choice. Luckily, I had both."

Insanity and Old Age

2005-11-25T13:30:00.000-05:00

Just heard a lady on CNN say about early Christmas shopping that "panic is in the air." This continuous play-by-play coverage of idiots shopping -- as if it's a horse race -- is getting kind of scary. Please do not be a contributor to this scene. I just heard that "75% off mens shirts" is causing much of the uproar (I'm serious). Guess I'll be hunting down more textile stocks next week. AIN is one I'm already long, and it got a nice shakeout this morning.. the time to increase that position is near. Today is my 29th birthday.. Only 1 tick away from the Big One! I'd be a fool not to give huge Thanks for the life I've enjoyed so far. Much love to all yall. Have a wonderful holiday weekend.

Appropriate Stock for Post-Thanksgiving

2005-11-25T13:20:00.000-05:00

I sold my shares in ELOS -- a cosmetic surgery laser company (think cellulite) -- just over $42 last week. I could not resist adding those shares back on this tiny range day. Two inside days in a row.. I'm in at 39.75. Support is likely at that horizontal line.. the 20ma right there doesn't hurt either. The 6.3.3 Stochastic couldn't be more beautimous. That shakeout on Tuesday is nice to see also. "Get dem suckas out!" Did a similar deal on IBN today. I'd like to add to both positions if they go my way next week. Long ELOS, IBN

Easy Listening

2005-11-25T12:25:00.000-05:00

Listening to some soothing music would probably benefit those manic 6am shopaholics. "Put your hands up, and Step away from the Tickle me Elmo shelf.." Here's the playlist for a "feelgood" CD I recorded a few days ago. Several genres, but all songs that make me smile and relax. You like or not?

You Have a Month..

2005-11-25T12:05:00.000-05:00

So what's the rush? This scene is easily the worst way spend your morning after Thanksgiving. Do these folks really think they're getting some "steal of a deal" by showing up at 6am? I believe that the retail executives are smarter than these peeps.. and set prices accordingly. CNBC is showing footage of people getting trampled as the Wal-Mart in Grand Rapids, Michigan, opens its doors at dawn. A riot/melee occurred at another Wally-World in Maryland.. over "dibs" on Xbox video game machines. When it comes to punches being thrown, it really is better to give than to receive. Happy Holidays !

Fearless Buyers

2005-11-23T13:20:00.000-05:00

This market just won't quit. This is the 5th consecutive up day. We're at multi-year highs on the major indicies. It's a seasonally strong time for stocks. There are lots of good ones around, but many look temporarily extended to the upside. I'm being picky about waiting for pullbacks and range contraction setups. Under Armour, the sports clothing company, came public last Friday around $13.. then opened at $30! It was the biggest 1-day IPO gain since 2000. Now the weak hands in that huge buying herd need to be shaken out. If and when UARM gets some kind of flushout/reversal day, I want to be all over it. No positions in stocks mentioned

Nice Trade

2005-11-23T12:51:00.000-05:00

Glad I took Steve Miller's advice on this one.. "Go on, take the money and run".. Entered CMED in the tight 2-day range contraction last week.. in the high $29's.. Sold 1/3 in the mid $30's, and the rest yesterday at $39.50. It was the fourth consecutive big up day, so about time to lock up those windfall profits. CMED went as high as $42.60 in the next 2 hours after my sale. But with all of the 4 day (35%) move erased just 24 hours later, I can't beat myself up too badly. Best trade this month. Update: Trader Mike explains how he caught a nice short on this vicious selloff.