Saturday, April 19, 2014

You might be a Trader if …. 4/19/14

The only cable channel number you know is CNBC

You might be a trader if you know that Head and Shoulders isn’t referring to a shampoo

You start referring to companies by their ticker symbol

If you know who Jim Cramer is

If you start seeing charts in your dreams

Last thing you look up before falling asleep is what the Asian markets are doing

You know who Fibonacci is

You celebrate your 61.8th birthday

You know the difference between a Stochastic and a MACD

Your trading room has more monitors than your TV room.

You know what an iron condor is

You run to the nearest Starbucks or Panera Bread to close out your day trade when you lose power at your home

Only your charts know the market direction and you don’t

You know that an Elliott wave has nothing to do with Physics

Your best friends are from Mcubed….

You know what a Put/Call ratio is and you have forgotten Poisson’s ratio

You look at a mountain range and only see highs and lows

You bought two hundred shares of a company but you have no idea what it does

You trade what you see and not what you think

And finally a few serious words of wisdom if you are a trader wannabe…


"The key to successful trading is consistency and discipline. Almost anybody can make up a list of rules that are 80% as good as what we taught. What they can't do is give (people) the confidence to stick to those rules even when things are going bad." Richard Dennis, on Turtle Trading

Sunday, April 13, 2014

Where is the Exit? 4/13/14

My last down signal capitulates and joins the other three that I posted last week… my ICE trading system on SPY (S&P500) fired off an exit long signal after Friday’s close. This is translated as a down signal in this system. That means I need to exit my mutual funds in my 401K with the exception of any that actually have an inverse relationship to the S&P500. The chart on Dow Jones 30 had already given a down signal and so had the chart on the Nasdaq 100 QQQ much earlier as well as my faster system on SPY.

I am headed for the door.







Monday, April 7, 2014

3 Down Signals with One exception 4/7/14

My regular trading systems on DIA and SPY both gave down signals tonight after the second consecutive steep down day. These systems tend to whipsaw me at times. There have been two signal changes within a week. Still, these down signals currently align DIA and SPY with QQQ - all in the down signal mode. 

The only remaining upward signal is my ICE system on SPY. The weight of signals is certainly burdening downwards now and I need to go into a more cautious mode. Still I will remain vested in my 401K in the long direction till ICE flips me although I will take a closer look at individual fund charts.
Here is a chart on the Q's - this one has been the first to show weakness... and last two data points show increasing volume. In certain cases after a sustained down move could signal a climax to a downward move but I don't think so in this case... Caution ahead!




Saturday, April 5, 2014

401K Monthly Analysis – Confirming Signal 4/5/14

It is time for my monthly 401K analysis. The backdrop is very interesting. I see a second confirming up signal from my ICE trading system on SPY (S&P500). Since this is the system I use to decide whether to stay long in my 401K or not, I am invested in 401K although not at a 100% level due to my conservative nature…During the week, DIA (represents a tradable fund for Dow Jones 30) showed an up signal and Friday on the pullback I received a minor up signal. On the other hand recency data from Friday says the market turned down in an ugly manner particularly the Nasdaq 100 tech sector (QQQ). As I pointed out in a previous post, the Qs are showing a down signal and continue to move downwards. This is interesting as SPY and DIA are still up while the QQQs are tugging the market downwards. Unfortunately no one can really predict which side will win this tug-of-war. All I need to do is follow my rules and not over think this conundrum..




In my current employer’s 401K the top choices are Fidelity Large Cap, Spartan 500 Index, Fidelity Eq Income, while WFA SPL Midcap VL has been showing some recent strength again and is a good pick.

In my previous employer’s choices I see Domini Soc Eq, Vanguard Inst Index and Spartan Ext MKT as the top picks. Lazard Emerging Mkt is showing recent strength and is also a possible pick. However it is far more volatile and can go up or down much faster than the market.


Beyond these choices, Ford stock has given me a buy signal. Interestingly it has broken its downtrend line and MACT is also rising. I bought a position into it and will consider adding on a pullback. My call options on SU are doing well as SU has been on a fast track upwards since my buy signal on 3/25/14 and break upwards from the down trend line.... see chart below. Of course this cannot go on forever and a sharp pullback is in order. My thoughts are to sell half my call options now and buy back more on a pullback.