Evel Knievel: 1938 - 2007

I was a HUGE fan growing up, even had an Evel Knievel lunchbox I carried to school everyday. His failed attempt to jump across the Snake River Canyon was the topic of conversation among my group of friends for weeks afterward.

And yes, we did our own versions of Evel's stunts during the summer months, only on bicycles instead of motorcycles! Instead of jumping buses, canyons and shark tanks, we would build bicycle ramps that allowed us to jumped over each other.

It was great fun.

Thanks for the thrills Superman, may you rest in peace.

UPDATE: Evel Knievel at Snake River

Trend Following System Buy: TWTC

Bought 200 shares @ $22.69.

Trend Following System Buy: TEVA

Bought 250 shares @ $43.93.

Day Trade: NQ

Bought 1 contract @ 2095
Sold 1 contract @ 2105

Net gain of 10 points x $20 per point = $200 profit

Time in trade: 25 minutes

I entered the trade after the Naz pulled back to the day's pivot point. At first, I tried buying QLD but I couldn't get the order filled for some reason, so after three attempts I switched to NQ.

By then, of course, the market was bouncing so I probably missed a few points screwing around with QLD. Either I need to find a different broker because I am having lots of trouble getting QLD orders filled thru IB, or I just need to stick with trading the NQ.

On this trade, I set my profit target at 10 points, then I used a limit order at 2105 to get me out. It worked well and I might have to start using more limit orders to instill some discipline in my selling. In the past, I have allowed profit targets to come and go only to have the trade turn into a loss because I didn't want to give up on it.

Stupid, I know, but then that is why I still have a day job!

On many trades, even when I'm up 20 points ($400), I hold on hoping for a home run rally, rather than being happy with hitting a single or double, even though the singles and doubles would provide a sufficient and comfortable income when executed consistently.

So much of this game is psychological!

Ugh.

Natty & El Nino

As a resident of northern Indiana, I have been watching the price of UNG, the natural gas ETF, with special interest, especially this time of year when my furnace is cranking away in a desperate effort to keep our drafty 100-year-old house moderately warm.

I had hoped to buy some Natty as a hedge against higher prices, but that's not working out so well since UNG keeps falling.

One reason for the price weakness was the absence of damaging hurricanes this year, which allowed natural gas wells in the Gulf of Mexico to operate all season unmolested and undamaged.

However, another natural force may be wielding some influence over Natty's price, specifically El Nino. I won't go into the science behind El Nino, NOAA does a good job of explaining what it is and how it works, but what it means for Indiana and most northern states is a warmer winter with potentially less snowfall.

For my neighborhood, NOAA is forecasting an average temperature 2.5 degrees warmer than normal, while our local weather folks are predicting about seven inches less snowfall. For predictions in your neck of the woods, click on the NOAA map below.

If the predictions hold up and El Nino delivers her usual warming trend, then demand for Natty may be lower than normal this winter, which will be good news for my wallet, but bad news for those long natural gas.

Trend Following System Buy: SBAC

Bought 150 shares @ $35.86.

The Genius of Stock Analysts

A Bank of America stock analyst has downgraded the New York Times Company from neutral to sell because the company could be hit hard by a recession.

Chalk this one up in the No Duh! category.

But seriously, did we need a stock analyst to tell us to sell NYT?

Nope, all we had to do was look at the chart. Such as this one year chart:


Or this three-year chart:


Or this five-year chart:


Maybe post recession will be a good time to buy this dog, but don't wait for the analysts to tell you when, because they'll probably miss the first 50 percent move to the upside like they have missed the last 65 percent to the downside.

Trend Following System Buy: FLEX

Bought 100 shares @ $12.15.

Eject! Eject!

Punted a couple more stocks today bringing my account to about 50 percent cash, which will probably be closer to 60 percent sometime tomorrow after I punt WFMI, Dell and yet to be determined Chinese lottery tickets.

The portfolio tracker on the right is mostly up to date, although it still contains a stock or two that were sold last week. It will be fully updated within a day or so.

Today was a particularly disappointing day due to the market's inability to sustain the opening gap up. After the open, I expected the market to pull back to the EMA 21 on the 15-minute chart, or the day's pivot point, then resume the climb up.

Instead, the market dropped to the S1 pivot, rallied briefly above the pivot point, then collapsed.

It was good for a quick day trade, which I caught for 13 points on one NQ contract, but not good for the overall market or my portfolio.

Adding insult to injury, the Naz closed below the EMA 200 for the second time in three days, although the volume was fairly light, so today's sell off did not have the feel or panic associated with full-scale capitulation.

I have no idea what tomorrow will bring, although if Asia is a harbinger, then Tuesday is going to suck.

So, strap yourselves in real tight and get a firm grip on that eject handle, because we may need it soon!

Duck & Cover

It has been awhile since I posted, which seems to be par for the course when the market gets ugly. I call this my duck & cover routine.

When things get ugly I start to tune out the market. I run my scans at night and follow through on the buy and sell signals, but I generally avoid following the market on a daily basis to keep myself from getting emotional and selling in a panic.

It has been my experience that my pain threshold and the market bottom are very closely correlated, which means when I sell it tends to be at the bottom. So, I've sat back this past week or so and allowed stops to be hit and waited patiently for my system to issue signals.

Yes, it sucks to watch my portfolio dwindle in size everyday, but at least I am following a plan and keeping my emotions out of it. In the meantime, I'll try to find some stock related topics to write about so the ol'blog doesn't get quite so stale.

Trend Following System Buy: MICC

Bought 70 shares @ $109.99.

Trend Following System Buy: BEAV

Bought 100 shares @ $47.60.

Stopped Out

ADBE, GENZ and EXPD were stopped out this morning.

I'm also taking it the teeth on day trades. Ouch.

Direct Hit

Yeah, I know this is completely unrelated to stock trading, unless you own shares in a defense contractor, but I thought this video of the latest ballistic missile defense test was too cool not to post.

Skip the first few seconds if you can, or at least turn down the volume. The really cool stuff is the infrared and black & white images toward the end as the seeker missiles move in for the kill.

This makes our fascination with Web 2.0 stuff look pretty tame and lame.

That Left A Mark

The portfolio took its worst hit of the year today in both percentage terms and dollars, down three percent and $3,000. Along the way, UAUA and ATVI got booted, the former tripped a sell signal from my trading system and the latter hit a stoploss mid-morning.

The bad news is I took a loss on each trade, the good news is I now have some cash to put to work in more favorable stocks when Mother Market pulls herself together.

On the day trading front, I made some money this morning in QLD and then lost it during the day by playing Catch the Falling Knife.

Actually, I was fairly pleased with my day trading because for the first time in weeks, I followed all of my buy and sell signals. Even with the market melting down, I entered NQ trades when the Naz hit pivot points, then quickly exited the trades when the pivots gave way.

Granted, I lost an extra $100 day trading, but I was executing trades according to plan with no fear, anxiety or panic. In short, my trading was completely different from my approach in August when I vaporized several thousand dollars.

Now, let's see if I can demonstrate the same level of discipline in a rising market!

Day Trade: QLD

Bought 300 shares @ $119.28
Sold 300 shares @ $119.99

Per share profit of .71 cents ($213) or .6 percent.

Time in trade: 34 minutes

I bought the opening gap, which stopped at the S1 pivot point, and then I sold when the Naz hit the day's pivot point.

The trade would have been more profitable, however, I had trouble getting my order filled. I submitted and canceled the order five times before it was finally filled. By then, QLD had bounced .40 cents. The order should have been filled in the $118.80's, which would have provided another $120 in profit.

Given the problems this morning, I may have to use the NQ futures contract on all future opening gap plays to ensure the best possible fill.

Trend Following System Sell: HOLX

Sold 125 shares @ $63.05 for a loss of $660 or eight percent.

HOLX gapped down more than $7 per share this morning, tripping my stoploss at $63.14.

Not sure what the issue is, but this recent trend following pick never really got off the ground since joining the portfolio on October 17.

Oh well. Next!

Trend Following System Sell: SMTC

Sold 100 shares @ 16.45 for a 17.5 percent profit.

Day Trade: NQ

Bought 1 contract @ 2197.75
Sold 1 contract @ 2215.00

Gain of 17.25 points x $20 per point = $345 profit

Time in trade: 29 minutes

The Naz gapped down 35 points at the open this morning and that seemed a bit overdone, so I bought one NQ contract at 9:34 a.m. The market then rallied to the day's pivot point, where I exited the trade.

MarketWatch Dusts Off The Crystal Ball

Breaking news from MarketWatch:

SAN FRANCISCO (MarketWatch) - U.S. stocks will extend their losses next week as concern over poor earnings, oil nearing $100 a barrel, and more turmoil in the banking and brokerage industries promise to rock Wall Street for a second week, with Citigroup Inc. at the center of the action on Monday after an emergency weekend board meeting.

Now, if the folks at MarketWatch are this omniscient, then why are they still working at MarketWatch? Shouldn't they be millionaires lounging away their days on the decks of luxury motor yachts?

While I agree those issues could give the market heartburn during the week, making such predictions without even attempting to attribute them to a market analyst or trader isn't journalism, it is crystal ball gazing.

No one, and I mean no one, knows what is going to happen next week, and the minute you start believing you can predict the market is when Mother Market smacks you upside the head while simultaneously draining your account.

MarketWatch should know better.

How Not To Day Trade

My trading Friday morning provided a perfect example of how not to day trade. In fact, it was such a textbook example of what not to do that I thought I would share it with you.

The Naz opened with a gap up to the day's pivot point at 2808 only to lose momentum. The Naz then dropped to the S1 pivot point at 2780, which it tested three times over the next 45 minutes. Once the market bounced off the S1 for the third time, I bought 300 shares of QLD at $118.01.

A textbook entry would have been the S1 pivot, but after Thursday's sell off I wasn't sure the S1 pivot would hold, so I waited for a bounce. No big deal and generally a smart move in a choppy market.

From there the Naz rallied strong and headed back toward the pivot point at 2808. My goal was the pivot point or $1 per share, whichever came first.

My monetary goal of $1 per share was hit at the 11 a.m. bar, but I stayed in the trade because the Naz was five points away from the day's pivot. In my mind, I figured that five points was good for another .25 to .50 cents per share, besides, given how strong the market had rallied, I was anticipating a move to the R1 pivot.

This, of course, is where greed was kicked in the face by reality.

QLD, but not the Naz, hit the pivot then wheeled around and dropped like a stone. In mere minutes, which felt like seconds, I went from plus $300 to negative $66, which is the loss I took on the trade.

To top it off, the Naz dropped to the S1 pivot again, bounced hard, then rallied over the next two hours to just shy of the the R1 pivot point.

Naturally, I watched the afternoon rally from the sidelines because I refused to buy the second encounter with the S1 pivot point believing that my attempt to chase the trade would only result in more financial grief.

The lesson from today's adventure?

Sell when your monetary goal is met. Don't get greedy, just be thankful and take the profits that Mother Market chooses to give you. Hoping for more will only result in getting less.

Sure Glad I'm.........

99.99 percent long!

Talk about impeccable timing!

Ugh.

Day Trade: NQ

Bought 1 contract @ 2230.25
Sold 1 contract @ 2227.50

Loss of 2.75 points per contract x $20 per point = Net loss of $55.

I entered on the opening bar when the Naz stopped at the S1-S2 midpoint. The trade went my way initially, but then the Naz caught up to the moving averages and reversed at 10 a.m. I exited the trade for a small loss.

My plan was to wait for the Naz to hit the S2 pivot then enter another position, however, the Naz stopped short then reversed hard and fast back to the S1 pivot. I lose money when I chase day trades -- another lesson from August -- so I let the rally go on without me.

If the Naz drops to S2 I'll try another trade. If not, I'll wait until tomorrow.