Spydertrader's Jack Hershey Equities Trading Journal III

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I have sold out of IAAC, and I did so at 1:21 and 2:07. Here are the fills:

200 at 17.39
100 at 17.226
100 at 18.52
200 at 18.51
200 at 18.50
200 at 18.5156

The trade yielded a profit of $977.91, which is 5.7%

I sold the first 300 because I was unsure about the stock's volume continuing. Spydertrader also advised me to watch for a potential FBO and said that if that was the case, I should wash the trade out instead of taking a loss on it. I took some off to be on the safe side.

The second sell was done after the stock had progressed 20% from the low of the FTT. The price of the low is 15.36, which made the 20% target equal to 18.432. I decided to use that as my uncle point and sold in the 2:05 bar. The stock did progress up, but not before it dipped back under the $18 level.

I will be watching this equity tomorrow to see if it gives an NVEC continuation move (see the 2/23 and 2/26 bars on the daily chart).

Thanks to Spydertrader for tweaking my knowledge a little today and enabling me to take some nice profits out of this move. :D :D :D

- Huskydog
 
Quote from Jason M:

Are you saying that your current equities strategy involves perusing the 185 (or so) charts that pass your fundamental filter, looking for FTTs? You no longer make sure these stocks have Rank prior to trading them?
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I still perform the same culling activity each night in an effort to locate equities which 'make the cut' for entry into the Final Universe. However, I do not limit my selection of stocks to trade based on the Final Universe alone. Within Journal III, I have often termed these trades 'outside the box' trades or 'a few fish' when posting their symbols or charts. One need only review the charts and symbols posted (the night before) to see how these stocks from 'outside the box' have performed.

Quote from Jason M:

I just want to be clear on this since, in the past, you've made comments that led me to believe that Rank is the most important filtering criterion.
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In the past (meaning Journals I and II), I agree. I did often post on the importance of repeatability (rank) with respect to trading Jack's Methods. And while true, for Beginner Level and Intermediate Level trading, rank remains a hallmark of profitability, Advanced Level and Expert Level traders no longer require the 'safety net' trading only stocks with rank provides.

Once one moves to Advanced Level Equities Trading (FTT's and Gaussians), a trader can apply these methods to any market - not just stocks with rank. The Beginner (DU - FRV - Peak) and the Intermediate (Indicator Sequences) were designed solely for the purposes of 'getting eyes on a chart' where one could see where the real signal for change exists - at the FTT.

I hope the above post provided some clarity. If not, please let me know.

- Spydertrader
 
As we found in one of the previous incarnations of this journal, the yahoo data for float is notoriously unreliable.

Also, the institutional and insider ownership numbers are absolute, not percentages.

Tantalizingly close, but no cigar.
 
Quote from Haroki:

Live in Napa, Ca and work for a Winery. My office is at the shop location in the middle of our vineyard. And no cell phones work there either....
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Two and Four Summers ago we spent a few days in Napa during trips to the Bay Area. I might have bumped into you out there and didn't even know it. :D

- Spydertrader
 
Yesterday, there were four stocks showing up as currently in dry up:

IAAC, MED, NVEC, and SIRF.

IAAC and MED both looked liked bad bets based on daily charts. In particular, both appeared to be in definite down trends over the past three months. NVEC and SIRF had better charts, because it looked like possibly down trends had reversed.

Should trades have been entered in any of these stocks based on the Jack Hershey Method? A trade in IAAC looks like it would have been a winner. MED is a disaster. It's down 14% based on reduced earnings guidance.

NVEC a winner. SIRF a wash.
 
Quote from Retief:

Should trades have been entered in any of these stocks based on the Jack Hershey Method?
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If you follow the 'Beginner Methods,' there is a very simple way to check and see for yourself.

1. Did the stock have price improvement?

2. Did Volume reach Low Band Dry Up Volume by 10:30 AM?

3. Did MACD cross Positive on a 30 minute chart at the same time as LBDU?

4. Did Stochastics (14, 1, 3) cross above the 80 mark at the same time as well?

If you answer no to any of the above, then you did not have a signal to enter long using the 'Beginner Methods' as described in Journal I.

As to the Intermediate (Journal II) and Advanced Methods (Journal III), IAAC clearly signaled as a long at any time after Price showed an FTT on a Daily Chart. MED may have been a short candidate. I could not say as I do not have MED in my Universe.

Hope that helped.

- Spydertrader
 
Tell me what you all think of this chart of RATE. Looks like pt3 might turn into pt 1 over the next several days. With the surge in black vol, and the steady pase thereafter it leads me to believe that we have a FTT. Increasing black should follow.

- Monkman

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1387915>
 

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Thanks Spydertrader, that helps. My understanding based on what you said, is that the overall price trend based on a daily chart is not a consideration. The final determination is based on intraday action and indicators. Personally, I feel more comfortable, going long on a stock in an overall uptrend, like SNCR on Monday.

With respect to MED, the catalyst for the 14% decline was a news event. I think that is probably unpredictable. However, a brief explanation for the criteria for short candidates would be helpful.

Stocks in dry up now: CHDX, COGO, DTLK, GRRF, and SIM

CHDX: has been in a steep down trend. It may be reversing based on the MACD and stochastic.

COGO: Daily chart looks really bad.

DTLK: Price has been consolidating with inside bars. However, the volume no longer meets the Hershey criteria. Average volume over the past 65 days is only about 137K.

GRRF: Chart looks similar to CHDX. Down trend may be reversing. Earnings release schedule for Monday, March 12, 2007, BMO. You could only hold for two days to exit before the earnings release.

SIM: Chart similar to CHDX. Down trend may be reversing.

Other stocks in dry-up, but which do not and have not meet Hershey volume requirements:

BITI, SLP and JST.
 
Quote from Retief:

My understanding based on what you said, is that the overall price trend based on a daily chart is not a consideration. The final determination is based on intraday action and indicators.
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I think you missed the point of my post.

You asked if any of the stocks signaled. I provided an answer based on Beginner Methods (which look at Dry Up Stocks triggering a signal in the morning). I also explained an answer using the methods discussed in Journal III. Advanced Methods look for FTT's and Price retracing back to the RTL. IAAC provides this example. One looks for FTT's on a Daily Chart.

In addition, we learned in Journal I to evaluate a stock's position within a Price Channel prior to entering into a position, or once entered, to monitor Price within the context of a channel.

Ideally, the Jack Hershey Equities Methods seek to enter long as stocks transition from a Score of Zero or One to a Score of Seven or Six (where the retrace ends and the next up move begins).

How one determines a 'signal' for entering long depends on what 'Level' (Beginner, Intermediate or Advanced) Methods one employs.

I hope the above post clarifies things a bit more for you.

- Spydertrader
 
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