Spydertrader's Jack Hershey Equities Journal

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I think you have to use a little judgement with this system - for goodness sake Jack is said to have just "eyeballed" volume.

I did not take the SNDA trade, and I'm glad I did not - my reasons were: 1) I did not like the initial action in the SNDA today and while I was observing it I noticed there did not seem to be enough volume churn to propel it to the average dry-up volume by 11:00am, and in fact there was not (sorry, didn't record the exact number. ) Stochastics were trundling back and forth over the 80 line and price was not holding. Then it collapsed at 10:30, recovered briefly, but after 11 it was all downhill. 2) The score notwithstanding, the stock is clearly trying to work off an overbought condition - not in a dip.
 
2005-06-04, Saturday - BCSI Comments

By now, most of you have seen the BCSI Earnings News from Thursday afternoon and watched as shares of BCSI significantly increased in price on Friday (See Attached Chart Below). Following our rule to "Never hold shares during Earnings Announcements," I sold all shares of BCSI prior to the announcement. Before anyone starts calculating the amount of money I "could have made" by holding onto those BCSI shares a few more days, I need to remind everyone that it could have just as easily gone the other way. BCSI could have missed their numbers, and as a result, shown a significant gap down on Friday morning.

While we spend out rime in the pursuit of profits, we must remain mindful of the potential losses as well. Reducing overall risk allows us to strike a balance between those potential profits and potential losses. Holding shares during an Earnings Release (irrespective of the BCSI outcome) carries with it significant risk. I encourage you to maintain the discipline required to avoid the temptation to hold during Earnings Releases simply because of what happened with BCSI. Sometimes the better trade requires us to do nothing and sit on the sidelines.

Enjoy the weekend!

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=762124>
 

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Quote from Capablanca:

I just want to ask again about your stop loss. On SNDA you determined this to be at the 37.30 level. How did you determine it?
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I think I erred in my subtraction. My initial stoploss should have been at 5%. Obviously $37.30 does not match up. I have been playing with setting the initial stop loss at 2% (vs. 5% of the entry price as I do now) on a few tests recently that appear to have positive results.

- Spydertrader
 
Stochastics were trundling back and forth over the 80 line and price was not holding. Then it collapsed at 10:30, recovered briefly, but after 11 it was all downhill. 2) The score notwithstanding, the stock is clearly trying to work off an overbought condition - not in a dip. [/B]
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Dont forget the most important fact. Market was also down 100 points that didnt help... 70-80% of all stocks ended poorly for the day.
 
Quote from Trend Fader:

Dont forget the most important fact. Market was also down 100 points that didnt help... 70-80% of all stocks ended poorly for the day.
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With all due respect to Trend Fader, the overall direction of the broader market has little to do with our system. The broader market does however play a part in risk assessment, as it would in any system. The following URL points to a post made on another such day when the market basically went into the toilet, but our system triggered two profitable trades.

http://www.elitetrader.com/vb/showthread.php?s=&postid=745806#post745806

In addition, on this same day to which Trend Fader refers, BCSI gapped up in a huge way after beating earnings estimates the night before (See BCSI chart two posts prior to this one). The lesson: stocks fall during rising markets and stocks go up in declining markets.

- Spydertrader
 
2005-06-06, Monday - Lists

Hershey Wealth-Lab Chartscript Culling Methodology
Hershey Chartscript Scans / Qcharts Culling / Stocktables.com Sort

Hot List

FORD JUPM MCRI

Dry Up Stocks

JUPM MFLX TASR USG

Hot List Stocks Scores

FORD - 7
JUPM - 0
MCRI - 2

Dry Up Stocks Scores

JUPM - 0
MFLX - 5
TASR - 0
USG - 2

Keep an Eye on These Stocks

FORD (Attached)

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=762915>
 

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2005-06-06, Monday - Update

This morning I monitored one list of stocks (4 total equities): Those equities from our daily Hot List and from our Final Universe List finding themselves "In Dry Up."

Dry Up Stocks

JUPM MFLX TASR USG

Our system generated one possible trade signal from the list of 4 Dry Up Stocks when actual volume exceeded calculated "Low Band" Dry Up Volume prior to 11:30 AM.

Dry Up Stocks Triggering Signal

TASR

Dry Up Stocks NOT Triggering Signal

JUPM MFLX USG

TASR showed price improvement at time of signal generation (10:07 AM). In addition, both MACD and Stochastics fell within desired parameters. The particulars for TASR were as follows:

TASR

Time: 10:07 AM
Price: $11.58
MACD: +.0414
Stoch: 80.0012
Score: 0
FRV: 8,451,252 shares

Although TASR appeared to meet our criteria for entering into a long position, once again, we see several large block trades with TASR occurring right at time of signal generation. As a result of these block trades (100,000 to 200,000 shares), I took no action with respect to TASR today.

- Spydertrader
 
2005-06-06, Monday - Update

None of our Dry Up Stocks made it to FRV levels (including TASR) by EOD. As a result, I once again took no action with respect to trading any of our Dry Up Stocks.

- Spydertrader
 
2005-06-07, Tuesday - Lists

Hershey Wealth-Lab Chartscript Culling Methodology
Hershey Chartscript Scans / Qcharts Culling / Stocktables.com Sort

Hot List

FORD JUPM MCRI SNDA XXIA

Dry Up Stocks

EZPW JUPM MFLX SIGM TASR USG

Hot List Stocks Scores

FORD - 7
JUPM - 7
MCRI - 7
SNDA - 7
XXIA - 1

Dry Up Stocks Scores

EZPW - 0
JUPM - 7
MFLX - 7
SIGM - 0
TASR - 7
USG - 5

Keep an Eye on These Stocks

EZPW (Attached)

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=763705>
 

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