tomorrow should be interesting

I said a few weeks back in a chatroom that maybe when one of the big banks went under, we would see some real panic hit the market. Tomorrow might be that day.

My small IRA is in GLD from 89. Spot prices spiked 3% today to 1030.

So much for a follow-through day from the fed

Even though the fed cut 50bp today after just cutting 75bp last week, it still wasn't enough to save the market. Sure, for about 30 mins the market went up and my acct was hurting, but then people read the report and realized that "hmm, things must be bad if the fed is having to cut this much."

I currently only have 2 longs, and neither of them is working well. And today I will likely add a few more shorts.

Market in Correction

Finally today IBD called the rally off.  I never really believed in this last one that was called a Follow-through on the IBD85-85, but I know it's easy to say that in hindsight.  Now things look pretty grim.  Thursday was bad and many expected an oversold bounce to drag this out another couple weeks, but it was not to be.  Friday was just brutal.  Biggest downday on the nasdaq since 2/27/07.  It gapped down firmly below the 200d, undercut the Dec lows, then dabbled with the Nov lows before closing near the low of the day to take them out.  Does it get much more bearish?

My 3 longs are still working, but my 7 shorts are killing it.

Also, it *IS* a good time to buy gold.  It could very easily hit $900 next week and then it's only a hop, skip and a jump to $1k/oz.

Banner Day

Today I think is a very good day for me.  I have a smaller trading acct that I do most of my active stuff in, as well as shorting.  In November 2007 it got down to 50% of the opening value.  That was pretty grim and discouraging.  

But this has been a very tough market.  So I kept trying.  And slowly things started to turn around.  I had a few longs start to work, but got a few shorts going.  One of them ESI worked very nicely.  Since then I've tried a long or two, but even the beautiful ones got killed.  But I kept adding more shorts.  Now I have 3 longs and 7 shorts.  

This was tough through the "santa claus rally", but only one short got covered.  And now my portfolio has really been rewarded by this week.  As of today, my account is now only down 40% from opening.  Or, a 20% gain from where it was.  I am very pleased with that and encouraged.  This is the best I have done since I started trading.

Note to Self

Self, do not buy any longs until we get a follow-through day, no matter how tempting!

quiet here

Well, I have not been posting much for the last 2 months or so. Some have written to ask me what's up. I'm fine, but I haven't been posting because I subscribed to a service recently. This is Josh's (MauiTrader from Investors Paradise) new paid site. It wouldn't be right for me to publish his stuff here, so I have been holding back from posting as I have not been doing much new research on my own. He does pick new longs (and/or shorts) and I've been sticking with what he recommends, but I mostly joined the site for guidance on market direction and remaining disciplined. He provides a great daily commentary (and also a great free weekly commentary) that really cuts through all the BS out there.

What I found in the past was that I developed the ability to find new longs on my own and discovered a lot of winners, but selling them was not so easy. And the main thing I struggled with was dealing with what kind of market we were in. This should be easy with IBD, I know--it's either rally or correction, right? And maybe this was a lack of discipline on my part because I kept buying during corrections. But I would get out or start shorting too soon. So I felt that instead of me trying to follow so many different blogs, going to meetups and investor forums, reading different periodicals and listening to radio shows and podcasts, it would be well worth the money to pay someone who I know is an expert to help me learn to see what he sees.

I knew Josh's record from when he was on IP. He did all the stuff he does now back on that site last year for free. He made me a lot of money back then as you can see in some of my archives from 2006. And he is truly an expert who follows CANSLIM and has been doing it since before 1999, so he has seen a lot more market conditions than I have and made good money through them all.

So far, I am very happy. As this rally has started to get long-in-the-tooth, I am not panicking and wondering what might happen next and trying to figure out when to start bailing on my stocks. I am letting the market and the charts of my stocks tell me what they are doing.

I will try to post more. At least to do a monthly review, maybe weekly. This is a good place for me to collect my thoughts so I can go back and look at where I've been and how I'm progressing.

follow-through

Okay, so today I am no longer feeling so cool. We'll see what the rest
of this week brings.

wait for it...

Wow, looks like the easy recovery has ended. I feel good because I
played this one right. I pissed away a lot of money trying to bottom
fish on the way down, but finally got out before the real mess hit.

Then, everything I read said that there is usually a fake-out rally
before we attempt new lows. Plus, the bottom was too V-shaped to have
high success probability.

Now we have fallen below the 200d on the Nas, SPX, and NYSE. The day
just got uglier and uglier and ended at the lows on 25% increased
volume.

I bought QID last week and pressed my position on Thursday. I was a
little too early, but I didn't sell out after Friday's big run. In 2
days I went from being down 5% to up 1.5%. I also didn't go long
anything because we never got a confirmation day.

So, I am proud of myself... for now.

Oh, and I have small short positions in IGT and CEG now.

so maybe cramer was right?

I'm sure by now everyone has seen The Cramer Video

So after all that's happened now and how bad things are looking, I wonder if Cramer is somewhat vindicated?

All I know is I love this Cramer Mix by DJ FiniFinito from the Big Picture.

this must be the bottom

As a contrarian indicator, today may be the bottom as I lightened my
portfolio quite a bit and even opened a few small short positions. I
still have QLD and am leaving with a stop of 88.25, according to my
plan. I was 95% long last week after the follow through on Monday, but
decided to trim after IBD called the rally dead on Friday.

So, I used today's positive open to sell into strength, getting out of
many of my positions right at or around breakeven. Many were near the
high for the day, it turns out. For example, I sold ILF at 207.50 for
breakeven and it closed at 203.40

I do think this is a correction (5-10% down), rather than a bear market
(20%+ down), but I also realize that what I think the market might do is
irrelevant.

As the day went on, the market couldn't hold the strong open, even with
the liquidity boosts. I shorted a few stocks at the end of the day:

ZLC had an evening star formation.

RT Also did an evening star right on the 50d last week, a shooting star
yesterday, and today a bearish engulfing pattern.

EBAY had stalled. I used to be long this, but went short at 35.51 with
a stop of today's open of 36.20.

These will be short term swing trades with stops equal to today's
opening prices.