Random Rants and Market Ideas by Brandonf
- Thread starter Brandonf
- Start date
<brandon> I have talked to numerous people with 15 to 20% gains already on the year from mainstreet
<brandon> This is great
<brandon> but
<brandon> I want to caution something too
<brandon> the money has been fairly "easy"
<brandon> the market not too terribly hard to read
<brandon> when these kind of phases happen
<brandon> it is a blessing
<brandon> it does not mean you are some kind of genious
<brandon> and it doesnt mean its going to continue forever
<brandon> we have not been perfect
<brandon> but close too it
<brandon> we have nailed the moves up and the moves down consistantly
<brandon> and the profits have been very handsome for doing this
<brandon> but
<brandon> again cautious
<brandon> becaues for whatever reason
<brandon> people have this tendancy when they are up a lot
<brandon> they start to think that they put their pants on differant than the rest of the world
<brandon> and the tendancy is to get more aggressive
<brandon> to put on risk that you would not
<brandon> and should not
<brandon> but you think your damn smart
<brandon> and then what happens is people stop doing the stuff that got them the 20% gain in one month in the first place
<brandon> and they get all screwed up
<brandon> and let me tell you
<brandon> as good as getting a 15 to 20% gain in one month feels
<brandon> giving it all back in a week or two
<brandon> or even a month
<brandon> that feels 100 times worse
<brandon> and it is devistating to your emotional state
<brandon> to your confidence
<brandon> to your motivation
<brandon> to everythin g
<brandon> so
<brandon> im not saying to start to approach the game with extra caution
<brandon> that is another thing people do that is not right
<brandon> because when the getting is good you should get it
<brandon> you should be out there taking the trades that setup and that make sense to you
<brandon> but
<brandon> dont fall for the trap of thinking that you are really special
<brandon> and also realize that nothing has changed in the market
<brandon> that is
<brandon> you should not extrapolate this
<brandon> people start to say oh my gosh
<brandon> if i can just keep doing 20%
<brandon> if i take clear it every month thats 240%
<brandon> but even better
<brandon> if i COMPOUND IT
<brandon> wowzee
<brandon> I am up like 900% at the end of the year
<brandon> its nice to dream
<brandon> but it wont likely happen
<brandon> but we all like to dream
<brandon> I am just as guilty of occasional extrapolation as the next guy
<brandon> the thing here is though
<brandon> just keep on keeping on how you have been
<brandon> doing go out and try to take on the world
<brandon> the returns are going to probably revert to normal
<brandon> and thats not to take anything away from what we have done
<brandon> im very happy with it and hope you are too
<brandon> but just realize that nothing has changed in the big picture
<brandon> and you still need to be watching your Ps and Q's
<brandon> This is great
<brandon> but
<brandon> I want to caution something too
<brandon> the money has been fairly "easy"
<brandon> the market not too terribly hard to read
<brandon> when these kind of phases happen
<brandon> it is a blessing
<brandon> it does not mean you are some kind of genious
<brandon> and it doesnt mean its going to continue forever
<brandon> we have not been perfect
<brandon> but close too it
<brandon> we have nailed the moves up and the moves down consistantly
<brandon> and the profits have been very handsome for doing this
<brandon> but
<brandon> again cautious
<brandon> becaues for whatever reason
<brandon> people have this tendancy when they are up a lot
<brandon> they start to think that they put their pants on differant than the rest of the world
<brandon> and the tendancy is to get more aggressive
<brandon> to put on risk that you would not
<brandon> and should not
<brandon> but you think your damn smart
<brandon> and then what happens is people stop doing the stuff that got them the 20% gain in one month in the first place
<brandon> and they get all screwed up
<brandon> and let me tell you
<brandon> as good as getting a 15 to 20% gain in one month feels
<brandon> giving it all back in a week or two
<brandon> or even a month
<brandon> that feels 100 times worse
<brandon> and it is devistating to your emotional state
<brandon> to your confidence
<brandon> to your motivation
<brandon> to everythin g
<brandon> so
<brandon> im not saying to start to approach the game with extra caution
<brandon> that is another thing people do that is not right
<brandon> because when the getting is good you should get it
<brandon> you should be out there taking the trades that setup and that make sense to you
<brandon> but
<brandon> dont fall for the trap of thinking that you are really special
<brandon> and also realize that nothing has changed in the market
<brandon> that is
<brandon> you should not extrapolate this
<brandon> people start to say oh my gosh
<brandon> if i can just keep doing 20%
<brandon> if i take clear it every month thats 240%
<brandon> but even better
<brandon> if i COMPOUND IT
<brandon> wowzee
<brandon> I am up like 900% at the end of the year
<brandon> its nice to dream
<brandon> but it wont likely happen
<brandon> but we all like to dream
<brandon> I am just as guilty of occasional extrapolation as the next guy
<brandon> the thing here is though
<brandon> just keep on keeping on how you have been
<brandon> doing go out and try to take on the world
<brandon> the returns are going to probably revert to normal
<brandon> and thats not to take anything away from what we have done
<brandon> im very happy with it and hope you are too
<brandon> but just realize that nothing has changed in the big picture
<brandon> and you still need to be watching your Ps and Q's
IBM has been a disapointing stock in the DOW recently. It reported earnings last week that were up 8%, however it did this on revenue's that were down 26%. This is always something that makes me question a company. I know as a business person that if my revenues are down its not easy for my profits to be up. I am not saying that IBM is doing anything funny with their books, but there have been persistant questions about aggressive accounting at IBM and this type of report lends some credit to that fear. Technically IBM is in a very strong downtrend and it s basing near a nice low here. I will be shorting IBM if it trades under 80.85
Coming into the year I was fairly bullish. I am on the record as having stated that I thought we could see the major indexes up 20 to 30%. Of course I added the caviat that I did not know what I was having for dinner that evening, so any long term prognostics should be taken with that in mind.
In any event, I am starting to see things that are having me question my initial bullishness. Some of the markets leading names like GOOG and AAPL for example have broken down on heavy volume. Not only did they break down on heavy volume, but they have rallied on declining volume. Also some of the institutions favorite areas like HMOs and Insurance are no longer performing as well as they had been.
Last friday when the market got clobbered I was very incouraged to see how well the Midcaps and ESPECIALLY the small caps held up. In fact the Russell2000 simply made an inside range bar on friday and since then has shown some modest strength.
It might be that a lot of damage was done to the big indexes on friday and its just taking longer for the market to recover from that than my inpatient ass would like to give it, but I am going to start to be more careful and trade with smaller lots. So far on the year I am up just over 15%, which is the best start I have gotten off too in several years. It feels nice and I don't want to give that back.
Now all the pessimism talk aside there are still some great looking stocks out there that I own or want to own.
PACR has one of the best looking breakouts going.
PRAA
BEN
EWJ
IFN
TRLG
These are a couple examples. I'm going to be making videos of each this weekend with more in depth analysis. I will also be doing the same thing for the shorts in aapl and ibm.
Brandon
In any event, I am starting to see things that are having me question my initial bullishness. Some of the markets leading names like GOOG and AAPL for example have broken down on heavy volume. Not only did they break down on heavy volume, but they have rallied on declining volume. Also some of the institutions favorite areas like HMOs and Insurance are no longer performing as well as they had been.
Last friday when the market got clobbered I was very incouraged to see how well the Midcaps and ESPECIALLY the small caps held up. In fact the Russell2000 simply made an inside range bar on friday and since then has shown some modest strength.
It might be that a lot of damage was done to the big indexes on friday and its just taking longer for the market to recover from that than my inpatient ass would like to give it, but I am going to start to be more careful and trade with smaller lots. So far on the year I am up just over 15%, which is the best start I have gotten off too in several years. It feels nice and I don't want to give that back.
Now all the pessimism talk aside there are still some great looking stocks out there that I own or want to own.
PACR has one of the best looking breakouts going.
PRAA
BEN
EWJ
IFN
TRLG
These are a couple examples. I'm going to be making videos of each this weekend with more in depth analysis. I will also be doing the same thing for the shorts in aapl and ibm.
Brandon
[11:04] <Bliss> Question: We a stock is a 52 week high.......What do you look at to determine whether it will contiune upwards or if it will drop down....I know that volume plays a big part..although how do you use it.... How do you determine look this stock I should take profits....
[11:09] <brandon> well the great thing about trading is that you dont know anything ever
[11:09] <brandon> so when you are buying a 52 week high
[11:09] <brandon> or a 52 week low for that matter
[11:09] <brandon> there is nothing to say it will go higher
[11:09] <brandon> in fact
[11:09] <brandon> if you look at the research that larry connors has done
[11:10] <brandon> and he has done a lot and i respect his work a lot
[11:10] <brandon> his research says that a 52 week high is the worst time to buy the average stock
[11:10] <brandon> but the key thing to note there is average
[11:11] <brandon> if you are buying stocks that are not extended when they come to the 52 week high
[11:11] <brandon> that is key
[11:11] <brandon> a lot of stocks
[11:11] <brandon> by the time they get to that 52 week hight
[11:11] <brandon> they have already been up 3 or 4 or 5 days
[11:11] <brandon> sometimes even more
[11:11] <brandon> and they are already very extended
[11:11] <brandon> so you want to look at where they are in relation to the last last major base
[11:11] <brandon> how well reseted is that stock
[11:11] <brandon> thats a very important point
[11:11] <brandon> also what kind of name is it
[11:12] <brandon> is it a speculative momentum name
[11:12] <brandon> or is it a "solid" kind of stock
[11:12] <brandon> a name like a GE, IBM, MMM, CAT
[11:12] <brandon> whatever
[11:12] <brandon> they will act a bit differently
[11:12] <brandon> what kind of underlying fundamentals are there in a company
[11:12] <brandon> what is the reason for it hitting the 52 week high in the first place
[11:13] <brandon> maybe it got an upgrade by Merril and all their brokers are pounding the phones and getting retail buyers
[11:13] <brandon> if thats it
[11:13] <brandon> so the hell what
[11:14] <brandon> but maybe it got a strong buy at Soleil
[11:14] <brandon> which is a firm that a lot of big players follow and is well respected
[11:14] <brandon> thats a totally different animal IMHO
[11:14] <brandon> then aslo as you noted the price and volume patterns are key as well
[11:14] <brandon> but there are as you can see many other things that go into it
[11:14] <brandon> thank you for the question
[11:15] <brandon> hopefully it can stir a discussion
[11:15] <brandon> it was a great one
[11:09] <brandon> well the great thing about trading is that you dont know anything ever
[11:09] <brandon> so when you are buying a 52 week high
[11:09] <brandon> or a 52 week low for that matter
[11:09] <brandon> there is nothing to say it will go higher
[11:09] <brandon> in fact
[11:09] <brandon> if you look at the research that larry connors has done
[11:10] <brandon> and he has done a lot and i respect his work a lot
[11:10] <brandon> his research says that a 52 week high is the worst time to buy the average stock
[11:10] <brandon> but the key thing to note there is average
[11:11] <brandon> if you are buying stocks that are not extended when they come to the 52 week high
[11:11] <brandon> that is key
[11:11] <brandon> a lot of stocks
[11:11] <brandon> by the time they get to that 52 week hight
[11:11] <brandon> they have already been up 3 or 4 or 5 days
[11:11] <brandon> sometimes even more
[11:11] <brandon> and they are already very extended
[11:11] <brandon> so you want to look at where they are in relation to the last last major base
[11:11] <brandon> how well reseted is that stock
[11:11] <brandon> thats a very important point
[11:11] <brandon> also what kind of name is it
[11:12] <brandon> is it a speculative momentum name
[11:12] <brandon> or is it a "solid" kind of stock
[11:12] <brandon> a name like a GE, IBM, MMM, CAT
[11:12] <brandon> whatever
[11:12] <brandon> they will act a bit differently
[11:12] <brandon> what kind of underlying fundamentals are there in a company
[11:12] <brandon> what is the reason for it hitting the 52 week high in the first place
[11:13] <brandon> maybe it got an upgrade by Merril and all their brokers are pounding the phones and getting retail buyers
[11:13] <brandon> if thats it
[11:13] <brandon> so the hell what
[11:14] <brandon> but maybe it got a strong buy at Soleil
[11:14] <brandon> which is a firm that a lot of big players follow and is well respected
[11:14] <brandon> thats a totally different animal IMHO
[11:14] <brandon> then aslo as you noted the price and volume patterns are key as well
[11:14] <brandon> but there are as you can see many other things that go into it
[11:14] <brandon> thank you for the question
[11:15] <brandon> hopefully it can stir a discussion
[11:15] <brandon> it was a great one
Quote from Brandonf:
My timing remains perfect. I get a little cautious, not so bullish the market just took off. Its a great signal
Currently I have a number of open positions long
IWM
BEN
PAAS
TRLG
PRAA
INSU
EWJ
IFN
TRID
On the short side I am holding the beamer.
Im going to go back to cash now. I will have my short in the beamer and that is it. Will start to build back into positions later, but I feel we are in for a pullback here. Very nice profits.