Summer Trading

Well... today was sure ugly... but nothing really tells me that the bull market is over. If we get penetration of the 50 DMAs in several of the indexes and some MA crossovers going, I'll abstain until I know the direction. The 20 DMAs on the indexes all got pretty messed up... support was broken on the S and P, and dow, although Daq held it. At the very least I do expect a sideways market for a little... so I'm well aware my positions may not do as well as they have for the next x amount of weeks.

Now that that is out of the way... two potential plays for tomorrow.

SNHY has some decent volume characteristics... volume is contracting here at the end, risk to reward is pretty decent, good fundamentals. Industry seems to be taking a dive, but we will see...

CLF seems like a great buy now. Fundamentals arn't that great... but its a steel company and steel is moving so I can't really argue with the market.
 

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Was going to place some limit orders yesterday but was way too tired. Missed out on some profitable swings... but in my defense... market doesn't exactly look great right now so I figured if I'm going to hold back on entries it might as well be on a crapshoot day as yesterday.

A lot of little speculative stocks (my observation) are floating to the top in industries that have been lead by bigger companies... especially in steel and iron.

Playing CLF long at a new point... was going to not keep the position but the stock is setting up with a great r/w so even in this market its worth a poke I believe.

AL is setting up as well...looks like a strong stock, looking to buy on the break of the small trading range created by last 3 days.

CMT is a short im looking at simply because of r/w. Tape looks like its gonna break... im playing the symmetrical triangle... I am pretty sure the chart says that the higher probability is to the break on the upside, but it does not meet my buying criteria. I might give it a go if it sits here for a few more days though and if market is working its way up.

Also, dumping PPD tomorrow at the market. I actually have no idea why I held it for so long or why i didn't bank half my shares at 1 x my risk when the position clearly lost momentum. Lesson learned though... and no sense in waiting for any more time for the market to tell me i'm wrong.

Lost some of the gains I have had in the early weeks of my trading. Chances are looking slim that I'm going to pass 10% this month... I'll be happy if I hang on to 5%. I won't end up negative, but it won't be a fantastic month.
 
Sold off a lot of my long positions... havn't been doing the journal thing but will start again soon.

Went short on a few stocks... distribution signal and double tops have made me a bit bearish. I still feel I may be too early, but I'm testing the waters.

Account Equity is a bit screwy but its up from 87 k to 94.5 k since opening this journal.

Shorted a lot on HLYS based on a decent price setup. The whole steel sector set up a few days ago but I missed it because I was lazy.

I dont hve too much experience in the market - I'll be the first one to admit that, so my view may be rather short sighted. I am still working on timing my buys and may switch long if I am proved wrong by a break of the double top. Until then though, I don't feel comfortable going long.
 
Really want an entry on ABT tomorrow. Did very well with my HLYS entry today.

Not doing so hot with counter-trend trades, but my size is considerably smaller on these as I havn't been successful in this feat before. The only rationale i have for taking the trades is that im attempting to get a windfall profit in case im calling the top right. Now that I think about it, this sounds absurd... but I can't be proved wrong until I lose some money. Paper lessons are just as good as money lessons to me especially since in my opinion I treat each similarly... I probably have been more careful with my paper account actually simply because of my commitment to stay disciplined.

Been reading anything I can get my hands on 2-5 hrs a day on average along with a job. Figuring that I wont have all this tme during the school year and I want as much knowledge as possible. Time to really get focused and perhaps kick up the intensity next week.
 
I know I said I would do a recap of all of my trades since going fully paper, but today is not the day. Simply too too tired. I would, however, like to reflect on some of the things I am seeing in the markets lately and some trades going forward.

I will also reread my journal for some of my own insight as I have been evolving.

Although I havn't been posting in my journal much, I have filled several pages with observations aboout the market the last several days. I would post them here, but its hardly worth it. I have already internalized the material, so no need to clutter my thread.

Moving on, I have shorted CHAP because of what I consider a very reliable signal: a topping formation, a failure to break the previous formations baseand a subsequent oncoming 20 DMA/50 DMA crossover. What's better yet is the distance of the price from the 100 DMA. Long way to fall, even just for a casual retracement. Such trades generally are not with the long term trend and I realize this, but I am a fairly short term swing trader and believe that I cannot ignore this trade. As later criteria, depending on results, I may redo my trend qualifiers and only short stocks underneath their 100 DMAs, or even 200 DMAs. Right now, though, I am testing the waters.

I know my strategy of how I play stocks long, but I just can't seem to get a similar strategy to go short. Bear markets/retracements are generally shorter especially in a secularly uptrending market, so waiting for stocks to break down below their 100 and 200 DMAs seems a bit unrealistic until nearly every stock is doing it, and then every stock is up for the chopping block as easy potential shorts.

Actually... my brain is way too fuzzy right now from too much work to do any decent analysis. It's time to take a day off of staying up late to watch the market.

I have several other positions that I am playing that I have not mentioned.

The general rule has been: in industries I still think are going up, I am going long. This is a hedge just in case I am wrong about the market turning short. I have carefully chosen to only play the strongest markets as of now for my longs. For industries already forming a topping formation with the possibility of breaking down in next few days, I am adding shorts on stocks that are setting up. As part of risk management, I would eventually like to learn how to capitalize on non-trending markets to reduce my risk further and to essentially diversify my systems.

A lot of the recent thoughts I have had are being raised by Way of the Turtle. Although I havn't heard of anyone saying this is the best book ever, its had a considerable influence on me and I believe I got a lot out of it.

Anyways, its time to stop rambling. I will reassemble tomorrow to go over all of my trades.
 
My bias is clearly short as you will see in a second.

I am feeling more and more comfortable with this style of trading as time progresses... making more and more rules and seeming to take much better trades on average. I *think* that I actually may be *decent* at what I do.

Caring less and less about fundies haha.

Trade analysis coming this weekend.
 

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