Sunday, April 28, 2013

Some Potential Setups for Next Week

I did not check earnings dates on these names yet so as always, please do your homework.  Market is still in a choppy and volatile range as well so it's not like we have an "all clear" sign yet.  Be careful.

All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Monday, April 22, 2013

Why I Haven't Been Writing Much Lately

Hi traders.  I've received a few emails asking about why my posts have become less frequent and figured it was a good idea to let whatever readers are out there know why.   It really comes down to two reasons.

The first reason is simply because I've been very busy with non-trading things and just haven't had as much time as I normally do.  I do have a full-time job and have just gotten through our most "stressful" time of the year so I've had some things to deal with there.   My son is now old enough to play baseball this spring so coaching is taking up some time too.  Not complaining about that - actually I'm glad to see him asking me to take him to practice hitting and don't want to discourage that in any way.  There is also the simple errands/duties that life throws at you, and springtime brings many.   I spent this weekend taking down a large tree in my backyard and cutting it up to dispose it.   Fun stuff.   In general, however, time has been at a premium.

The second reason is more market-related and is something I've talked about before - I just don't like this market right now.   My trading/results have been very poor this year.  I take responsibility for that and need to improve and adjust, but I still believe that this market has not been easy whatsoever.  That was some great breakout on the Nasdaq and the S&P on April 10, huh?  Not so much I guess.  In reality, the market has done nothing but go sideways since the beginning of March.

Nasdaq for Year
Chart from TC2000, Courtesy of Worden Brothers, Inc.

That's not to say that there haven't been opportunities.  There has certainly been some out there, particularly in the biotech stocks.  The problem for me and in my situation is that this has been a day-trading market for the past two months (and I would argue even earlier than that) and because of my job, I just can't follow the market as closely as I need to actually make some money right now.  As a trader, you have to know when the odds are better or worse for your particular style or circumstances and I know that this particular market is not one that fits me at this particular point.

Because of that, I just haven't been trading much at all.   I've made a total of five trades this month.  Part of that is simply because my confidence (always an important factor in trading) has been beaten down because of the way my year started.   Sometimes when you are in a trading funk and can't get things going, stepping away and slowing things down is a necessary tactic.  You never want to get in a situation where you go on "tilt" so to speak and try to make up gains lost in a drawdown all at once.  That usually just makes things much worse. 

I'll know when things are better for my style of trading and when they are, I'll be ready to go.  When I start seeing stocks breakout and NOT give all their gains (and more) back within a few days, I'll know that it's time to start going for some swings again.  Hopefully that time will come soon.  In another month and a half, I will have some time off work and will be able to watch the market all day long, so perhaps I can trade a little more then.  Overall, however, I stick by my belief that this is a day-trading market only and therefore will keep things very light.

I still go through my scans each night and usually do go into each session with a few names on my list, but very few trigger in a way that makes me want to dip my toes back into the water.  My market timing score has been at negative three for most of the past week, telling me that this isn't a great market to be playing longs in anyway.  I do try to update that timing number to any of those readers that are interested, so at least that part of the website is up to date. 

A few random observations to wrap this thing up.  I still don't see many traders talking specifically about their gains or trades on Twitter, which tells me something.  The few that do tweet about their great trades seem to be tweet about 2-3% gains in stocks.   I noticed a post by a very good, well-known trader last weekend (before the market took its huge dump) that showed all of the winning trades passed on to his subscribers that week.  The thing that stood out to me is that this trader was discussing trades that at best gave gains of 2-3%.   This is NOT meant to criticize this trader at all - he is very good at what he does and seems like a super nice guy.   I think from my perspective, it confirmed my thoughts about the difficulty of this market that an excellent trader was saying a "great" week was filled with 2% gains.  Unfortunately, that's what the market is presenting to us.   He wasn't wrong with saying those were good trades - it's just that 2% gains aren't much compared to what previous markets over the past few years have presented.  I know personally that I've had an extremely difficult time adjusting to this and being happy with those types of trades.  Maybe that's why my performance this year has been subpar.   It's been a real grinding market.

I've also noticed recently that of the many bloggers/traders I try to follow and read, the only ones that seem to be writing a lot and sharing their thoughts about this market are the ones who offer paid services.  Maybe I am jumping to conclusions, but I wonder if a lot of traders are losing interest in the market due to the constant interventions.  If you're selling or promoting some product, you need to constantly make it seem like this market is great so that people stay interested in your product.  If you're not, then you can do whatever you want - for instance, sit back and not say anything. I may be way off base here so you can ignore this thought if you want.

Enough of my rant and complaining.  Good luck this week if you're trading heavily right now.  I have a small watchlist of stocks that I am watching on the long side here and maybe some earnings plays will pop up soon like CREE, NFLX, and LNKD from last quarter.  Overall though,  it will take some heavy convincing from Mr. Market for me to get aggressive with anything here.  From a swing trading perspective, this seems to be a market to avoid. 

Sunday, April 7, 2013

Charts of Interest for the Week Ahead for a Frustrating Market

Gotta be honest traders - I just don't have much interest in trading this particular market right now.  Part of that is my trading results have sucked this year so far, even though I have not shorted anything except for a very few, spread-out times.  I just cannot get anything going, regardless of what the trade is.  Swings are still not working, and day-trades are even hard unless you are scalping, at least for me.  I hope others are having better luck and certainly better success than I am, but I continue to get the sense that even though most won't admit it, this market is making things difficult for many traders right now and has been for most of the year.   In a market like that, you eventually learn to just step away and not join in on all the "fun".  I think that's kind of where I am at right now.  

All of my "timing" indicators, whether it be breadth, distribution, moving average points, etc, have pointed to a market that is correcting for most of the past week.  My timing score has been negative all week, but clearly in the red the past two days based on the above factors.  Doesn't matter much though I guess, because overall the indices continue to hold up somewhat decently.

The S&P has gone nowhere for over a month now and failed to breakout early this week, but at the same time is holding an uptrend line from last November.  There always seems to be dip buyers out there (almost like someone or something is "propping" this market up...hmmm).  Shorting right now, even with a "sell" on the market timing model just doesn't seem to make sense.  Maybe breakdowns below the 50 day moving averages would be enough to get a true correction going.  I don't really know anymore.   The Nasdaq has a very similar setup - going nowhere for the past month but not really breaking down in earnest.   The beat just keeps going on - it's certainly not a market where the bulls are running wild, but the bears just can't do anything either. 

S&P 500
Charts from TC2000, Courtesy of Worden Brothers, Inc.

I am posting some of the better charts I saw in my scans this weekend below, but I am very hesitant to do much going forward here.  I just don't think there is much of an edge.  Again, maybe it's just me.  I will watch a few of these names closely but plan on using much smaller position sizes until this stupid market starts acting like it wants to reward swing trades in a more consistent manner.

All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Good luck this week and be careful.  I know personal trades may be skewing my outlook, but unless you're out there scalping trades for minutes at a time, I really believe this market is a very difficult one to make easy money.  Sometimes it's best to just chill.