Thursday, July 12, 2007

Careful What You Wish For!

A rare intraday post......

I said in my post from late last night that I wish the market would break out of its consolidation and give us some direction. Well - it did - to the upside!

For the Dow Jones at least, there's no doubt about it - this is a clear breakout. I guess this market won't stop going up until every last public company has been acquired and made private. Then we can just shut the equity markets down for good.

54 comments:

JakeGint said...

RE-- your last post below. LOL, I'm glad you can be a good sport about it, and have not taken everything THAT seriously.

Also glad you held on w. one hand while typing...

toober said...

Love the new charts. They now fit entirely on my po' mans 19".

newequity said...

Time to load up on Aug calls and get your money back.

Tim Knight said...

"Love the new charts. They now fit entirely on my po' mans 19"."

Which is at least a four-hander!

beanie11111 said...

solar STP on fire!!!

Aug. 45 calls @ 2.20 (or less) have more than doubled!! Going to be a 10-bagger once the stock breaks $45.

Controlled Trader said...

Why did you do that Tim. Why? :-)

Controlled Trader said...

Yes volume is low but market is climbing Wall of Worry. Many bloggers and Worden is bearish. Low volume or No Volume, its kicking bear's rear.

robert said...

hola tim can you believe this ? totally insane but, at least the voltility's increasing ......'THEY won't be happy til THEY get all that retail short money, which could be in the near-term ....i'm looking at SIRT long , i like their chart, volume is picking up, and they just got 3 upgrades .......any comments ?

Aaron said...

Lets see how much money I can loose. I just shorted AAPL.

sam said...

I would be selling your longs into this rally. Not shorting yet. To close to target tops to risk anymore long exposure. Also, there is still alot of easy credit around, example, my friend (who has sub 600 credit score) just bought a new 40k car no money down (just a trade in allowance) at 4.9% for 60 months. Sammy.

Aaron said...

Every fiber of my body said don't short it - but I wanted to try a little irrational behavior.

cantdrive55 said...

One thing you keep forgeting is that to be an arrogant prick...you have to have done something to "deserve" to be an arrogant prick. Trust me on this...YOU HAVE NOT!Everytime we drop a couple of hundred points ,you think that is the time for you to start being an arrogant prick and try to convince everybody you just cleaned up on some huge profits and can now start a "I TOLD YOU I"M A GENIUS & TOLD YOU A BIG DECLINE WAS COMING" harangue.Well,it's way too late for that now ! The way you "SAY" you position yourself in the market would gaurantee you to be a huge loser(if you're really trading) on a 99% basis.However you get your money...it cannot be from your trading skills. You've been short for over 3000 pts straight up on the INDU.Haven't you asked yourself in the mirror...What the hell am I doing here ? Might be time for a major reality check with yourself.I think your family needs to corner you into an INTERVEVTION !

Steve Jobs CAN be an arrogant prick.

Eddie Van Halen CAN be an arrogant prick.(Even drunk...when you can play the guitar like that ...who cares ? )

Tiger Woods CAN be an arrogant prick.

You...CAN NOT be in the "arrogant prick" club.(only in your mind ) Guaranteed !

P.S.- These backpedaling ambiguous & abivalent statements after the market rallys AGAIN to new highs are not making you look any better either.

John said...

MAR short. Tim any thoughts on this one? I have been short this for a while and got clobbered on the HLT announcement last week. It has pulled in and today they are down 1.75 when the Dow is > 200+. I appreciate your thoughts. I'm wondering if this might be a reverse H&S?

philippe said...

Cuntdrive55 man, what are you smoking?

william bills said...

is this what you call a "breakout"?

On the Road said...

Is this a conciliation for the Bears?

paul

newequity said...

I bought more a few hours before close. Markets are breaking out to all time highs on vol.

Nimesh said...

What volume?

Controlled Trader said...

cantdrive55: What did you smoke after today's gain?

NewEquity: Volume is same as yesterday its not huge but alright.

william bills said...

whoa sammy hagar!?

thats over the line.

i mean i like tim, i like this blog, so what if he's a bear?

i don't think he gloats on those rare days when the dow does crack - he's still hopeful - and besides, after all the goring the bulls give him on this site - he's entitled to give a little smack back.

so what.............

newequity said...

"What volume?"

answer that yourself, I told you to buy before we moved up big in the afternoon.

beanie11111 said...

can't say you permabears weren't warned because you were. more pain for ya tomorrow and next week. do you know how many people are still short the market?

Shorting is no longer a viable play (since a year ago!)

Andrew said...

Gary,
just take it easy as i have never been successful calling a top. i do not expect to put a limit order just on the top of the market, but i am sure i am reasonably right on this one. we'll see.

bear said...

after 2+ months, I made my first trade buy 5 SPY sep 2007 153 puts at 3.50, they are already down to 3.05 huh! Tim where should I put a stop on these, I am thinking 2.00.

Andrew755 said...

The one thing lacking today... is VOLUME. They put the screws to the shorts again. I was short S&P puts as of Monday and closed them Tuesday at the close.

At that point, there was heavy volume on the selloff, the index broke below its 10/20 and 50 day MA's on volume, and left a candlestick harami... regardless I know how propped the markets are right now...so I closed them.

I haven't seen action like today in a long long time....however the big names weren't up much, GOOG APPLE, AMZN...

newequity said...

How bout that strong close. We will be over 14000 DOW next week. I just read a few reports that show shorts increased their positions to a new record since last month. Keep buying calls a few months out guys.

Gary said...

Now look at all the time you people have wasted trying to bash the COT. Instead you could have been doing something constructive like testing it for yourself. You could have gotten it for free several months ago. But instead you've been to busy trying to justify your bearish bias. I see many are still trying to justify it even after today. We still have a lot of this rally left IMO. Are you going to change your behavior to something constructive or are you going to continue to follow the same patterns that have cost you so much money already.
Hey how about that SLW?
IMO all this stock market stuff will pale in comparison to the money that will be made in Silver over the next 5-10 years

Vic said...

Cant believe it - read head lines saying june sales lackluster trade deficit larger than ever and what- the market rallies big time. Go figure!!!!

JakeGint said...

Go figure, Vic. In fact, go figure how much of the S&P 500's profits come from across our borders.

Welcome to the global economy, Vic!

Winace said...

Well, I have successfully "blown out" my account by not following my own rules. Newequity's words haunted me all damn night, "Cover your shorts boys". Corny of enough line to bear truth. It'll probably take another year or two to save up to try again. Take care. I'll take my measly 20% of what's left of my account and buy some more TA educational tools, if I can find any I haven't read that is. Guess that's what you get for waiting for a pullback to exit. Good luck, and take care.

Debbie Davis said...

cantdrive55,
No one forces you to read this blog, so why don't you just go on your merry way. We all love to hear differing opinions; but when all you do is spout insults, go somewhere else. I for one enjoy reading this blog each day and enjoy Tim's analysis, comments and wit as well as those of the other bloggers. If you can't take it for what it is, or leave comments without insults, GO!!!!!!

DirtyTed said...

I just have one thing to say about today: Damn it feels good to be a gangster...

Gary said...

Winace,
Don't waste your time on TA books. Your problem is you are trading to large of a position size. Even if you consistently made the wrong calls as long as your position size is correct you won't lose that much. Of course constantly frequenting a bearish blog to reninforce your bias doesn't help when we are in a raging bull market. My suggestion: get rid of your biases and learn how to control risk by trading correct position size.

Winace said...

Gary,
I appreciate the advice. I do not mean it sarcastically either. But trading with the amount of cash I have does not allow for positioning. My rules are simple, I trade the Q's. I place an order with a .10 stop and take profits at .50-.60. I did not obey my stop. Violation of sound rules kills ya quick. Hopefully some will learn from my mistake. Plan a trade and trade your plan, no exceptions, do not rely on hope. Always have a contingency plan, set contingeant orders when you make the trade, take out the emotion out of cutting your loses. I had a goal to reach, to start full time day-trading. Thus I let it ride, I hate my day job and only make $200.00 a week after day care expenses. blah blah blah..... Sorry. But, as I stated, position sizing, for me, is not an option.

Gary said...

As long as you continue to hold onto that mentality you will never make money. I'm not kidding here either. Position sizing is the make or break principle in investing. Secondly the way you are trading you have no chance to be profitable. Your stop loss is way to tight. You are going to incur many many more losses than winners with that formula. My guess is your winning % will be somewhere around 20%. You need huge winners to offset all those losses. 50 cents ain't gonna to do it. I suggest you read my post on day trading because you have just described the behavior that puts most people in the lower 90% of short term traders and you've just described the typical outcome for 90% of short term traders.

Vic said...

Winace ,actually you should make good money with the r-r ratio you are using. My mama allways said discipline, disciploine , discipline. It sounds like you have a good plan maybe you should put it in writing and hang it near your trading screen were you can see it and hopefully keep your trading demons at bay. DOnt give up. Trade on paper till you build up your pot again, the market aint a goin anyweres.

Gary said...

And if you listen to Vic you will get the same result you got this time. BTW don't waste your time paper trading you won't make the same decisions when there is no money at risk. If you go ask every trader on the NYSE they will tell you the same thing I just told you. The key to making money is position sizing. Having a profitable system and the disipline to stick with it. Right now you don't appear to have any of these. You can still make your money back even if you only have 20% left but you have to change your method. BTW I think there is big money to be made in the coming months not only on the long side but the short side also.

yuri said...

Let's get back to some TA - hasn't anybody noticed in the midst of this tech rally the last few days, that GOOG, the tech leader, has just made 4 consecutive dojis. It is also scraping along the top of it's upper trendline - all this one week before earnings. Something doesn't seem right - maybe it is resting. Volume has been low, and ditto for AAPL.
By the way, Sept. corn futures, which had been dropping for a month, found support then has been heading up this week. Corn is great to trade. I bought 21 contracts, then sold 7 after each 5-6 ticks. Translation = $8,400 in the bank, 7 contracts remaining that are up $5,0000 with a tight stop.
If you like trading pure technicals - futures and currency is where it's at. You start small, trade in 1/3's - you take take some off the table with every 1-2 ticks if you want. Futures requirement on 3 contracts of corn is about $4,000. The suckers trade in more rational ways, in you asked me - whether the softs, metals, oil, whatever. They seem to have fairly predictable cycles. With grains, you have weather & crop yield uncertainty starting to creep into peoples psyche right about now - that could lead to some great moves.
Don't have to worry about some analyst screwing you over, or earnings reports. I'm sold on the concept and will continue to pick my spots carefully and keep studying the charts.

bt said...

Gary you are not a trader. Why are you preaching on a trader's website? There are many thousands of people that make good money trading everyday (intraday to short swing). Many more thousands attempt to do it but don't become successful. However anyone that has found success will tell you the sweat to get there was worth it. Trading by the COT method does not give the same alpha that shorter-term trading methods give.

Gary said...

bt,
Whether you trade short term or long the principles are the same. Position size is the most important. There is no arguing this point. You also must have a profitable system and you must have the disipline to follow it. A very small % of people can consistently be profitable day trading. You can argue all you want but history and the statistics will back me up on this. After commissions very few traders will consistently make money over the long haul by short term trading. Some of you may be making money this year or even for a few years but when the market changes unless you are good enough to change with it you will probably end up over the long haul losing money. I know you will disagree and unless you are one of the small minority you will eventually find out the hard way. I suspect all the day traders from 99 found this out the hard way in the bear market.

Robert said...

The key is learning how to shift Bull V. Bear.

The day traders of '99 had this problem. Long Only.

Sun Tzu is instructive in this regard. Strike Emptiness with Fullness. Much like the internet stocks of 99. Unfortunately, we are not there yet. The Great BEAR shall come (and I will welcome him), but it is a losing endeavor to get on board beforehand.

Robert said...

Tim,

You have yet to post about risk control. Though I read your stocktickr interview regarding same to learn your position. Regardless, your readers need same.

Please post 2-NITE.

Leisa said...

Toshi--I came into today with a largish position in DXD which thank goodness (I like that Jesus on a biscuit thing). Thank Jesus's sweet face on that biscuit that I dispatched that position to the Netherworld.

What a rally is all I can say: an "ether" rally. Ether retail sales are goodn' or either retail sales are badn'. (sorry too much wine!).
Retail sales were badn' but bettern' what "they" thought.

My SEED seems to be breaking out today.

Doji Girl said...

Yuri,
Do you have a source for future's charts that is free? I'm interested in silver and orange juice in particular. Juice is cheap now and we are one hurricane warning away from a big rally.

Gary,
Good advice on position sizing.

Cantdrive,
What Debbie said.

Vic said...

The # 1 trader breaker is not honoring your predetermined stops. Position size is important -sizing rule of thumb is not to risk more than 2% off capital.(risk is difference between buy or sell price and price were your bet is proven wrong). If you consistantly adhere to your position size rules but do not honor your stop loss you willsignificantly shorten your trading life expectancy, more so than if you do not adhere to prudent position sizing but you honor your stops. There is a great trader and teacher ( Brian Shannon @ blogspot .com ) who uses tight stops with large position sizing and I am 100% sure he does very very well. THe saving mantra that resonates accross all trading styles is- HONOR YOUR STOPS!

Winace said...

Gary,
Sorry man, but the more you talk, the more that comes out your ass. My winning trade ratio is at 55%. I make my spread and commisions on .03. My problem, or error, was not sticking to my .10 stop. You think that is too tight? I can usually catch intra-day reversals to 2 or 3 cents. A dime is quite large. I'll go up to a .15 stop if my delta is appoaching .70ish. Believe me, my trading strategy works, if stuck to. I was profitable when my successfull trade ratio was 35%. I trade 10 contracts at >.95 delta. A tight stop is neccessary. You are basically day trading 1000 shares. Where else can you get that leverage with a $1,500.00 and a .03 break even point? Profit 500 to 600 or lose 136 at 55%. It's a winning strategy. The Q's have enormous volume and behaves predictably to mass human psychiology. And $1.00 strikes is advantageous, you can taylor any spread or complex strategy you like. IWM (Ishare Russell 2000) is showing relatively weaker compared to the Q's. I'll take what's left and attempt to recoupe my losses. Believe it or not, I do have a bearish outlook yet. I am no permabear, by no means. Tim uses good, solid, information to base his opinions. I know, 95% of the time I have already come to the same conclusion he does. So, I'll trade more Delta neutral and place a bear put spread (volatility skew don't look too bad either) on IWM tomorrow. It has hit it's top internal channel with a $1.00 travel to the next channel of resistance.

yuri said...

Dojigirl,
I keep a small account at OptionsXpress and they have some great tools for futures, including paper trading and prophet charts. Unfortunately, for equities and options their commissions are much too high - I continue with them because I use many of the free tools they offer, including a very neat options tool that lets you quickly derive a projected future price of the whole options string based on what you input for price of the underlying & volatility. I use Interactive
Brokers for my regular trading - dirt cheap commissions and decent execution, but futures is an additional monthly charge.

Winace said...

And again. I trade a very small account. Risking 2% on a single trade would allow me to trade about $40.00 a trade. I'd need 100% to break even after commisions. I do see your logic and reasoning. You all have great advise, just not applicable in MY current situation. Also, to note, I typically adjust my stop to the break-even after I gain .23 cents if I don't feel like watching the chart all day. Have a good day and good night.

Winace said...

Gary,
"Whether you trade short term or long the principles are the same."

No. Not really.

Vic,
Hanging in on my monitor is a good idea, but tatooing it on my forhead backwards with a high gloss monitor is better!

Winace said...

Newequity,
Damn it, you did it again!!!

Gary said...

If your position size wasn't the problem then how in the hell did you blow out your account. And don't tell me it was because you didn't honor your stops. To blow out your account by not honoring a 2% stop you would have to let it go like 70% against you. Did you sit there while the market moved up 275 points? Today was a perfect example of why you have to trade correct position size. I could have had my whole account short the Dow today and still only lost a little over 2%. You got taught a very important lesson today about position size however it appears you are going to refuse to learn from it. So I'm guessing you will just make the same mistake again. sigh If you don't learn this lesson you will never succeed at investing. I guarantee what's his name on the blog will blow out his account also if he's trading huge positions. Its too bad we must pay such a steep price to learn these lessons and believe me I've paid the price just like you did today.

Gary said...

Winace,
The best traders in the world can't even make a consistent 20% a year over the long haul. Do you really think you are going to outperform the best in the world. As a matter of fact I think I told you some time back that you were undercapitalized and your trading habits would guarantee that you would blow out your account. Today you just confirmed that prediction. I'm not trying to be hard on you but I'm not kidding when I say that position size is the most important rule every trader has to learn.

Vic said...

Gee Gary I guess we should all pack it in and put our money in a Vanguard index fund. Not

DirtyTed said...

OK winace ive gotta jump in and say something. Your trading the QQQQ futures contracts for day trading leverage?! That is such a huge spread for short term trading, you could be consistently right and still lose money. Get enough money to trade the stock itself or don't do it. Those stock futures contracts are for suckers short term.