The smart people are probably already a dollar in the money on their shorts, but me, I’m a little more patient and a little more conservative now, so I’ll be joining them below 92. Let’s see if the action tomorrow morning gives a decent entry.
Archive for April, 2007
Age 33. Estimated Income: 1.5-2 billion dollars. Lives in: Houston.
Hmm, seems that the top trader in the world lives suspiciously close to Trader-X territory.
Damn, all that money and he looks like Brad Pitt. Lindsay really missed the boat.
I haven’t touched StrategyDesk in quite a few days. I’m just burned out on it; I think coding an Apple II in BASIC to do this stuff would be easier. In fact, I know it would. At least we could use the word “IF”, which is apparently too advanced for TDAmeritrade to include in StrategyDesk.
Then this evening I got an email asking about a formula for the highest close of the last “x” days, or the highest open. The PriceRangeChannels function won’t give us that, because it only gives Upper, Lower, and Mid (for whatever the hell good “Mid” is). In other words, highest high, not highest close. Big difference.
I doodled for a few minutes, and here’s what I came up with (it’s getting scary how fast I can spit this junk out now):
That will give you the highest close of the last 5 days. Do a “find and replace” on it with “open” replacing “close”, and voila, highest open of the last 5 days (much less useful than highest close, but someone may want it).
To find the highest open or close of the last 10 days, copy the above formula and follow its pattern to make a formula which is two million characters long instead of one million. Email me if you need help, or better yet, post questions in the comments to this, um, post, and we’ll hash it out with the help of all our fellow StrategyDesk
Just got back from seeing Grindhouse, and I’ve come to two conclusions: Robert Rodriguez is just plain great, and Quentin Tarantino is a great story creator and very good director, but completely annoying otherwise.
Let me say up front- if you enjoy either of these guys’ past works, ignore any critics or naysayers who try to dissuade you, and see this movie (these movies) ASAP. You will LOVE it (them).
The main reason to see Grindhouse is Rodriguez’ Planet Terror. He shows us Sin City wasn’t a fluke. He’s really that good. This classic Zombie Movie opens great, it carries you along wonderfully, and if you listen closely to the dialogue you’ll laugh your ass off, over and over. Also, it’s made me a doting fan of Rose McGowan.
If you enjoy Tarantino’s “high- schoolers- trying- to- sound- witty” dialogue, you’ll love Death Proof. Otherwise, you’ll be bored out of your head until the car scenes. The old Chryslers are beautiful. But Kurt Russell inexplicably turns from a ultra-tough, merciless killer with the cool attitude of Dirty Harry into a screaming, whining wuss once a bullet grazes him. And suddenly his Charcoal Gray General Lee Charger, which easliy ran down the girls when he was after them (questionable with them supposedly in a 440 Challenger), runs like a K-car when they are chasing him. It’s as if Tarantino didn’t think the girls could take on the tough guy without his director-deity intervention.
The “Missing Reel” gimmick works perfectly in Planet Terror, but falls flat on its face in Death Proof.
Tarantino makes you nauseous with his attempt at creative camera work during the girls’ diner scene. And he overdoes it with the fake 70’s cuts and hiccups in the reels. He ain’t no Kubrik.
The Tarantino staples are there. Watch for the Red Apple cigarettes, etc. That’s pretty cool.
Planet Terror (Rodriguez): 9 bananas
Death Proof (Tarantino): 6 bananas
How’s that for a teaser title?
In trading, our job is to read the chart to the best of our abilities, then to position so that we stand to gain significantly relative to the loss we will sustain if our initial stop (and we’ve always got to have one) is hit.
The S&P has rebounded back to the top of the Big Drop Day of 2/27/07. This puts us just into a major area of support/ resistance, and we should be prepared to see some action.
From here, of all the possible scenarios, there are three which I think stand out, and I’ve been considering how I’ll trade each of them. Let’s take a look at them.
Scenario One is where we head down from where we are now, at the bottom of the S/R band:
The diminishing volume leading up to the last close makes this setup very plausible, and it’s where I came up with the plan to add to my short position on a failure from here, moving my stop down to the top of the resistance band or even slightly into it.
Scenario Two would provide an extremely strong signal and trade opportunity. This is the setup where price climbs through the resistance, pops up above the February highs, then fails back below those highs:
Such a failure would be swift and strong, likely falling rapidly to the March lows and probably below. I’m talking, of course, about the start of a Bear Market.
Scenario Three is the optimistic Dorothy setup where we get to go long:
On a strong thrust up and away from the Support/ Resistance area, I’ll wait patiently for the first pullback on decreasing volume, and I’ll get long with great vigor. Of course, I’ll get stopped out of my shorts first.
Why am I keeping the shorts on? Well, first, it’s been cold lately with that Canadian air making it all the way down here. Pa-dum-pump. No really, it’s that I’ve got a position I’m comfortable with and I’m waiting for a signal to add to it, or else my stop will be triggered. All I have to do is follow my plan. Second, I think that the last (long optimistic Dorothy) scenario is the least likely of the three.
I could be wrong. I often am. However, this game is not about being right all the time. It’s about how you position, and then how you manage those positions so that you lose small when you’re wrong (and you’re gonna be), and so that you gain as much as possible when you do happen to get up on your board and ride that big wave towards the shore. Shoot the tube, baby, shoot the tube!
Comment spam is like the mosquitos down here in Louisiana- even a few are a major PITA, but once they locate you (your blog has been around a while and/or gets some traffic), you can get swarmed to the point where you have to go inside and shut the door (i.e. disable comments) in order to keep from being eaten alive.
I’ve used Akismet for about 6 or 8 months now, and it’s truly a lifesaver, as it can separate “real” comments from spam with amazing accuracy, allowing real people to post on your site, and segregating the trash to be reviewed/deleted by you behind the scenes at your convenience.
However, during some of those periods where the comment spams “swarm” (hit your site by the hundreds or thousands), it becomes very difficult to review them all, and we bloggers usually end up clicking “Delete All” to be done with it. Many of us would prefer to review the spam queue, just in case a legitimate comment got tagged (very rare, but it happens).
Adding Comment Timeout reduces the overall number of trash comments by about 90%, and since I added it (so far at least), I have only a few spam comments a day to review and delete- takes all of 5 seconds or so.
The next step would be to add a verification word/number for commenters. I’ve not seen that as much of an inconvenience when commenting on others’ sites, and I wouldn’t hesitate to add it if necessary to preserve my readers’ ability to comment on mine.
But at this point, Akismet and Comment Timeout are doing the job nicely.
The market’s recent rise on diminishing volume spells setup to me:
I’m firmly convinced that there is no way out of the current economic “situation” that entails a rising stock market. However (and there always seems to be a damned however), I’ve learned my lesson a thousand times over: being right about the call is meaningless if you’re wrong about the timing. And on this scale, it’s easy to be wrong about the timing by months. There’s no way to know if this setup is leading up to the bigger, longer-term drop I’m anticipating. So I’ve gotta mind the rules, and trade the chart.
I have a small short position I’ve been carrying since early March, a position which has its stop above the February highs. On the next break (below the previous day’s low), I plan to add to that position and reset my stops lower.
If we roar on through the (2/27 and 2/22) resistance levels I’ve marked on this chart, well, c’est la vie, I’ll get stopped out.
Getting stopped would give me a great excuse to start drawing lines in the other direction, and look to get long. I’ll do it based on the chart, but I’ll do it with great caution, because my overall big macro umbrella blanket cosmic overarching opinion is that the Fed has been castrated by the combination of slowing growth and still-threatening inflation and that there’s nothing they can do to avert the coming crisis (they’ll try lowering rates and pumping in more money again, but I don’t think that’ll work this time; not enough room to lower sufficiently, inflation will flare, and the dollar will crater).
What a downer. Guess that means I’m thinking we’re near some kind of long-term top, and Goldilocks’ hair is about to fall out.
Well, hell. I guess it does.
As I was doing my run-thru of the RSS feeds and various blogs I follow (yes, I do have my eye on you), I followed a link from Ugly’s del.icio.us list and ended up watching this video from Oscar at futurestraders.com.
After discussing his S&P and Nasdaq futures plan for the next day, Oscar jumps on a soapbox and gives some of the best advice you’ll ever hear. It’s the normal things we know and write about (mind your stops, don’t average down, etc), but his energy is infectious, which drives the points home. He mentions things like:
- If the S&P runs up to its previous high and rolls over, it’s “gonna go down so big your pants are gonna fall off”
- “I say we’re going up. If your work says down, and you don’t like what I say, don’t take the trade.”
- Do your work… do your own homework!
- Don’t average (down)…
- Get out when you’re supposed to get out, and immediately. Never ride errors.
- Never expect the market to get you out of a bad trade. Get yourself out.
- “I’m a man. When I place my stops and my stops get hit, I get out.”
This is my first encounter with Oscar, but it won’t be my last. I like this guy.
Now to get Ugly to start a futures tutoring service…