Saturday, December 31, 2011

In With 2012 and Out With 2011 (Thankfully!)

Happy New Year!   It was quite the year in the stock market.   Yes, the market went nowhere overall as I'm sure you've read in many newspapers and heard about on many TV shows.  It was a year when trends disappeared (if you consider a trend something longer than a week or so) and when gaps up or down of 2% became the norm.   To be honest, it was an awful year for trading, specifically swing trading.   There were lots of false signals this year and lots of whipsaws.   It was certainly not an easy market, and if you survived and maintained most of your capital, you should feel proud.   Staying in the game is always important, and this was type of year where staying in the game was difficult if you were not disciplined.

On a personal note, I ended up having a pretty good year, although my account spun its tires the final few months of the year and finished about 10% off of its highs from mid to late October.   My main account ended up 58% for the year, and although I am very happy with that, I kind of feel a lot of it was more luck than skill.   All of my trades are listed here if you want to check them out.   My win rate was not very good at all (only 38%) but in this difficult of a market, I kind of expected that.   If I can get that up to 50% or so for 2012, I will be very happy.

If you follow my blog, you should know that I am always very quick to cut my losses (maybe too quick sometimes) and that remained true in 2011.   My average loss was about 2%, and I only had one loss over 10% (which occured on a short that gapped up after-hours on a non-earnings news item that I had no control of) so I am happy with that.   I was able to average almost 6% on my winners and this allowed me to make the overall gains on my account.  I had two 30%+ gains (MOBI and short CROX), two 20% gains, and twenty-three 10%+ gains.   Those type of gains can add up if you keep your losses short.   Some of these were very good trades that I am happy with, but my biggest gain in CROX (short) was really just luck - it gapped down 30+% after-hours the same day I entered on a earnings warning and I immediately cashed out.   That was a big gain for my overall account.



Looking back at my trades, one goal of mine for 2012 is to be a little more selective with my trades.   I think I took too many trades and with the way the market was in 2011, a better choice instead of forcing trades would have been simply staying on the sidelines.  There were times I did do this, but in hindsight, I wasn't on the sidelines enough for the type of market we had.   As you can see below, the market really went nowhere for the first seven months of the year, had a huge drop in August, and then went back to chopping around for the rest of the year with a slightly positive bias.   Nowhere in that chart (besides the August drop) do you see a nice, smooth move of more than a few weeks and that is what made 2011 so difficult.   Hopefully 2012 will bring something different.

Nasdaq 2011

Chart from TC2000, Courtesy of Worden Brothers, Inc.

So what will 2012 bring?   I have no idea and I am not really in the prediction game.   Being a swing trader, I don't care what is going to happen six months from now.   All I care about is what will happen next week.   Besides, according to the Mayans, none of us will be here to check our 2012 predictions out twelve months from now, so what's the point?    One random prediction I will make:  whenever Facebook finally does come public with its IPO, I think it will be a flop, maybe not immediately, but I think the company has no long-term future.   I was talking to two of my wife's cousins (ages 19 and 13) yesterday and both mentioned they recently closed their Facebook accounts.   In the words of the older one, "Facebook is becoming just like MySpace."    That's not good.   I asked what is taking Facebook's place and she told me Twitter, which I can understand.   Don't know when that will come public, but I will be watching.

I'll be back tomorrow or Monday with the outlook for the week ahead.   It should be an interesting start to the new year, as we have formed quite the coiling pattern on the major indices and a big move one way or the other seems poised to occur.   I hope that's what we see - I could care less what direction it is as well.   As long as we have a trend that lasts more than a few days or a few hours, making money will be easier in 2012.   That's my wish for the new year - a trending market.    Be safe tonight and best of luck to all of you as we begin another year.    Take care.

Tuesday, December 27, 2011

Lots of Potentially Nice Charts, But Most are Thin

Hi traders - today was a choppy, low-volume day and I expect the rest of the week to be similar (choppy but with a positive bias).   There were a couple of quick spike-downs intraday that stopped me out of some positions and I think I have to adjust for this thin environment over the next three days. 

I did see quite a few setups that normally would interest me greatly but so many are low volume that I may not be as aggressive if I go long any of these names.   I put together a quick video going over these names, so check it out below.   I would also pay attention to the typical, lower-float mo-mo names this week because in this environment, they can move quickly.   Good luck Wednesday.

Saturday, December 24, 2011

Stock Market Outlook - Will Santa Stick Around a Few Extra Days??? - 12/24/11

Hi, traders.   Hope everyone has a wonderful Christmas Eve and Christmas Day spent with family and friends.  If you don't celebrate Christmas, I wish you happy holidays as well. 

We had a fairly typical Santa Claus rally this week in that it came on low volume and besides Tuesday, the sessions were slow and griding.   Monday proved to be the curveball as the selling was nasty, but then (as I discussed last week), the market screwed the bears and took off Tuesday.   The key is now to figure out where we go after Christmas - will Santa stick around or will he take off back to the North Pole at first chance?
S&P 500
Nasdaq
Charts from TC2000, Courtesy of Worden Brothers, Inc.

The S&P was able to get above the key 200 day moving average level that has been so much trouble for the past two months, and Friday's move also took it out of this 2-3 month coiling pattern.   Hopefully, we can see further upside from here and get a nice little trend going into the new year.   The Nasdaq, however, continues to lag the S&P and still has some work to do, with several levels of resistance ahead.   Honestly, I am open to anything here - I have setups ready on both sides.  Typically, the week after Christmas is bullish and since I get the sense that many people are going to be expecting a pullback after four straight positive sessions, I guess I'm leaning bullish this week.  If the S&P tanks Monday, however, I'll be looking to short.   This remains a market where loyalty to one side or the other will get you hurt big-time.

I made two short videos for the week ahead - one looking at long candidates and one looking at potential shorts.  I am actually seeing more short candidates right now in my scans, which is another reason I am leaning slightly bullish this week.   Yes, that makes no logical sense, but with this market, doing the opposite of whatever makes sense seems to be the best game plan.   Regardless, I repeat - be ready with both short AND long candidates and you should be OK.

Long Candidates
Short Candidates


Best of luck this week and again, have a very merry Christmas and happy holidays to all!  In Pittsburgh, this video is sort of a tradition with our Steelers.   If you want to see an NFL Hall of Famer and well-respected coach recite The Night Before Christmas, check this out.   Pretty cool.   Take care everyone.

Thursday, December 22, 2011

S&P at Key Resistance - Big Breakout or More Chop???

Tomorrow should be interesting as the S&P is bumping right into key resistance levels.  A move above the trendline shown below would also likely be enough to take the 200 day MA back and trigger a lot of short covering.   Maybe we'll see a decent move into the end of the year.   Of course, maybe we'll see a breakout reversal that would frustrate everyone, as that is what this market is best at - remember that.   We're not real oversold here but another day or two up would get us there so remain careful - you don't have any other option in this market.
S&P 500

Some names I am watching long are below.   Right now I am in two longs and took profits on my BZ position from a few days ago.  
CSOD
NTSP
STMP
VHC
VNET

I did see some interesting potential short setups in my scans tonight and have those ready to go if the market fails here.   Check those out below.  

BIDU
GMCR
IRBT
SPRD
TVIX

Bottom-line here is keep your options open.  I am leaning long but won't hesistate to get to cash or go short tomorrow if the S&P shows it can't get over that key resistance level it is at now.   Hopefully we can get a breakout and a nice little year-end rally but the way this year has been, I somehow have my doubts.   Good luck Friday.

Wednesday, December 21, 2011

Rough Start, Good Ending - Still Somewhat Bullish

I wasn't watching the market much today due to commitments at work, but after some heavy early selling, the afternoon bounce back was at least nice to see.   I was stopped early on two of my three longs from yesterday - it happens (a lot in this market).   I went into a few small positions today as I still expect the market to attempt to rally a bit more from here.   We're getting to some interesting levels that (if broken) could lead to some nice year-end action.
Nasdaq
Russell 2000
 S&P 500

A few names I am watching here are shown below.   I am not being very aggressive with anything here as the market remains too volatile to be aggressive, but it's worth keeping a watchlist ready now because you just never know when the market will end this miserable chop and get a bit of a trend going.   Not saying that it's going to be now, but you always want to be prepared.

CMC
DLTR
GPI
VHC
VNET

Sunday, December 18, 2011

All Signs Look Bearish, Which Means We'll Rally Big-Time, Right???

If you watched last week's video summary, you'll know that most all signs pointed to a market that looked like it wanted to rally.   There were quite a few bullish chart setups on individual stocks.   After pulling back to the 50 day moving averages, stocks bounced hard two Fridays ago and the S&P and Nasdaq looked like they were done with a slight, normal pullback.   So what did we get this past week???


You guessed it.   In hindsight, I should have known the ball was going to pulled out again by this market.   That is what it is best at right now - tricking and confusing all traders, bulls and bears alike.   It has done it so many times now that we should all be expecting it.  Trading it however is a lot easier said than done because what we see with our eyes is certainly telling us one thing, whereas the market seems to just keep throwing curveballs at us that our eyes can't judge correctly.

To be perfectly honest, this market sucks but there is nothing we can do about it except accept it and try to not let it affect our returns too much in a negative way.   That's easier said than done, which is one reason I really didn't follow the market at all the past three days.   I thought it was better to just step away as I didn't see any edge at all.   After doing my scans today and looking at a bunch of charts, things do look pretty clear (just like they did last week.)
Nasdaq
 SP-500

If you look at the S&P and Nasdaq above, you see a LOT of bearish action.  We had the 50 day MA broken to the downside on both indices this week.   The past two days have produced a weak bounce back into the short-term moving averages (9 and 20 day EMA).   If you look very closely, you'll notice that although there were gains both Thursday and Friday, there was also possible distribution under the surface as both days the market finished near its lows for the session and well off of its highs.   What we have now are the beginnings of what look like textbook bear flags.  

Normally, I would get my list of short setups ready and share them here.   After the past few months, however, I am officially saying "screw it" and going the other way.   I hate to use the word "think" to describe what may happen this week because there isn't much logic to it, but a rally seems to be in the cards based on how stupid this market has acted the past few weeks/months.   Every time we've seen this situation (a big breakdown followed by a very weak bounce forming bear flags), the market has then had a big up day and proceeded to grind its way higher from there for a few more days, screwing over the bears.   I can see the same thing happening this week.    The bulls got screwed early this past week - isn't it the bears turn?

If we get above Friday's highs on the Nasdaq, I may put a buy order in on some ETFs and see what happens.   Here are some names that came up in my scans today that could rally a bit if the market decides to fool everyone again.

AEIS
CBOU
CSOD
HSTM
STMP
VNET
WAIR
All Charts from TC2000, Courtesy of Worden Brothers, Inc.

It is going to be a thin week volume-wise with the holiday coming up but traditionally these are bullish weeks on Wall Street.   Who knows though?  This is as unpredictable a market that I can remember (although my memory only goes back six or so years).   I will either be in cash this week or some small long positions to see if the "do the opposite of what seems obvious" really will work.  This outlook makes no sense, but neither does this market.  Good luck this week - we all need it.

Sunday, December 11, 2011

Stock Market Video - "Hoping For A Bullish Move Into Year End" - 12/11/11

Hi, traders - here's the video for the week ahead.  We're in a position that a nice bullish breakout could occur soon and lead us into a year-end rally (which I discuss in the video) but the way this year has gone, nothing is a given.   In the video, I go over key levels to watch as well as some long setups that should be on your radar for the week ahead.

I do apologize for not writing much recently, but to be honest, I just haven't felt the desire to do so with the way the market has been.   With so much news out there, analyzing what could happen tomorrow has seemed pointless at times because an unpredictable 2-3% gap up or down seems to occur every other day these days.   If we can get some smoother action that is more conducive to swing trading, I will post more.  Unfortunately, we haven't had that type of market for quite a while now.   It's been a real grind and actually feel fortunate my account is only off about 6% from its all time high earlier this year.

I hope you find the video helpful and informative.   As always, feel free to email me with questions or comments - I enjoy hearing from my readers.  If you like the videos, please take a moment to leave a review on Investimonials and feel free to retweet the links to your friends.  I would appreciate it.  You can also review my Twitter feed here.


Sunday, December 4, 2011

Not Much to Do Here (and Not Much to Comment On)

No video this weekend - if any of you were looking forward to it, I do apologize.   I've been working on some home improvement projects the past four to five days (flooring) and am absolutely beat.  One more room and probably another two days or so of work so my focus may remain on other things rather than the market.  I just now took a look at my charts and really, this is not the time to be making any new moves in my opinion.   My breath signal is on a buy so I have a really hard time getting short here, but based on Friday's action, the market is very tired (it has reason to be) and needs some rest.   If that happens early this week, then I will look to get long again as setups appear.   I did try a few longs Thursday and Friday but none worked out.  Even a day or two of sideways action would be great for the longer-term outlook of this potential rally.  We have to see what they can do - the only time we tend to see sideways action anymore is intraday after a huge gap up or gap down. 

As I said a week or so ago, a big part of me still believes the best the bulls can do over the next month or so is some sideways chop, and if that happens...boy, it would suck.   This market remains extremely difficult to swing trade as gaps are now seemingly the norm and predicting what will happen from day to day is very hard.   Europe is not going away no matter what the central banks do, so longer-term I remain bearish.   Nothing surprises me however anymore.  

Good luck early this week if you're trading, but I just don't see much edge at this particular spot.  Depending on how the next few days go, I think some potentially nice setups will emerge.   I'll share those as they come up.   Take care.