Not much today. There are a lot of familiar stocks that are still doing well, including many from yesterday, but I don't see a good cup & handle. Here's some to watch though:

• LDSH volume is drying up.
• RBA building right side of 7month cup. Watch for handle or breakout.
• OKS may be forming a right side. It has found good support at the 50dma over the last month and now volume seems to be increasing.
• IMKTA wow. Too extended now, but watch for a pullback or base.

bought some SYX

I don't usually buy during the day, but I saw this one breaking out to a new high on bigger volume.  Fundamentals are pretty good, so I'm picking up a smaller lot.  Stop is a close below 19 and currently at 21.35, so that's 11%.  Sell goal will be 20% or 25.62

this is still a confirmed rally

Looks like volume in AOB might be drying up.
HRT has had a couple of downdays, but looks like it has found support at 28.50 or so. I wonder if Jeff sold his yet?
NYX is still holding on.

Interesting stocks:

• CVLT new IPO with good fundamentals and looks to be under accum.
• JLL new high on big vol off 2wk base. Not the prettiest chart, but good fundamentals.
• DLLR double bottom to set new high on big volume.
• CNH slightly above buypoint for 6mo C&H on the weekly chart.
• HMIN is still doing its thing.
• MAN strong bounce off the 50dma.
• POT broke out of a 2month channel to a new high on strong volume. Group 4 and strong fundies.
• SYK is here again with another big vol day to a new high.
• KNOT hammer on big volume. Not a great chart, but it made a new high.

I spent today in jury duty (but did not make it onto a jury). I used the opportunity to reread How to Make Money in Stocks. I tried to pay extra attention to the market tops and sell rules because I've been noticing so much bearishness. The book made me feel better. There's no point in trying to second-guess the market. As the Big Picture said, there aren't a lot of top stocks breaking down. The breakouts that I see are all in the top groups. My stocks are still performing well.

interesting week

My acct was up slightly, but less than 1%. Wednesday was such a big upday, but then Thursday gave it all back. I'm not sure I can just waive Thurs off, as IBD did, as a distro day because volume was slightly lower. If you were to count it, that would be 4 distribution days, instead of 3. But, part of being disciplined is following the rules.

I went to an IBD meetup meeting this week, and everyone there was very bearish (some said they were 100% cash). I don't know if I agree with that. We are in a confirmed rally. If you don't think that's a good time to be invested, when will you? At the beginning of the next rally? But if you're that gunshy, you might even wait it out a while after the follow-through. As a wise Mauitrader once said, listen to the market. Besides, Jeff had a good point that if everyone is that bearish, this thing might just have legs.

Anyway, I did get out of KPN this morning. It gapped down on huge volume today, but found very strong support above the 50dma. I did not follow my rule here. My rule was to sell it on a close below $14, but it wasn't even close. Basically, I got scared out of it by thinking too much about which way the market will go. I need to be careful and get out of stocks when they fail (lose 7-8%), but I'm not seeing that yet in my portfolio. OTOH, there are not a whole lot of stocks that are having runaway breakouts.

I'll have to think this weekend about where I want to be in this market. I've found quite a few nice charts today, but is this the week to be getting in? I don't know, but now earnings season is finally over.

Some things that caught my eye:

• COLM low EPS but nice high on big vol today
• VPRT saw this one a week or two ago on the movers & shakers and it's back again
• WFR formed a new high with big vol on a 7month cup w/o handle. Nice fundamentals.
• VSAT also saw this one yesterday. Nice cup&handle that started in May and just slightly above the buypoint.
• EMS breakout off 1wk flat base. Strong up/down ratio.
• SYK big vol breakout from 2 wk base.
• HMIN nice technicals and breakout. Some say the china sector has topped.

Not a bad day

My account was up 0.5%. PAY had a 2% upday--not quite a followthrough, but good action.

I found a lot of interesting stocks after close today:

• CHDX, forming a handle on big vol out of a 2 month cup and setting a new high.
• STNR, big vol new high off an 8 week flat base.
• ENR, up big on huge volume, breaking out of 3 month cup.
• PCP formed a new high on big volume off a flat base.
• USAP is looking very nice, but probably too far extended at this point.
• RIO made a new high out of a 3wk cup, but no handle and it didn't close at a highpoint.
• Big moves by the telecomms today. CHL, MBT, and MICC all made new highs breaking out of 3 week cups with nice volume, although MICC is extended. Too bad KPN couldn't catch that wave.
• COL I've been noticing recently. It's posed to make a new high if it goes up another day or two.
• LMT set a new high off a 1 week base, although it is extended.
• TAP broke out of a 1.5 year cup&handle. It's fundamentals could be a little better and that was a brutal dive into the cup.

Thinking about NYX

...for a possible bounce off the 50dma, where it looks like it has found support.  Also, AOB looks like if found good support today at the 12.50 level.

I did just buy some NYX for my IRA account.

Buying more, but smaller stakes

Recently I've been reading Tharp's Trade Your Way to Financial Freedom and thinking about position sizing again.  I had decided that I had too many stocks and was going to have fewer, bigger stakes.  That might have been okay, except that it exposes you to a larger capital risk on one stock.  

So now, I'm writing down my stock purchases with a sell rule for the up and downside.

For example yesterday morning I bought some PAY at $37.98  My loss limit would be at the 50dma of $34.46, which is about 9%.  1R of my current portfolio is $75, so 75/0.09 is $822.  (Losing 9% of 822 is $75 lost.)  Divide that by the shareprice and I bought 20 shares, just to have a round number.

This can change the amount of your position size, depending on how much risk there is in the stock.  For example, other recent buys at the end of last week were CBG and KPN.  CBG had a breakout to a new high.  I bought it with a loss limit of 8.5% (close below 50dma) and got $860 worth.  KPN had a high volume upday and I bought it at 14.76 with a sell rule of 14, or 5% and bought $1460.  If you look at both loss limits, it's for the same dollar amount, but CBG is risking a larger percent, so it's for less total stake of my portfolio.

Sold TMO

Well, my 20% sell stop kicked in today on TMO.  It bounced off its 50dma and has had 3 big updays in a row.  I sold my entire position, as it was a relatively small buy.  This move was so strong that I may regret not letting it ride more, but 20% is still a good gain for me at this point.

2006 in review

Well, my trading account, which I opened in March 2006 is down 27R. I traded
over 100 stocks in that time! Commissions were 8.7R and the remaining
18R were the following bonehead moves:

NWRE lost 5R by not adhering to a sell rule.
CTRN lost 2R by averaging down.
BTJ lost 11R by both averaging down and not adhering to sell rules.

Without those 3 trades, my acct would pretty much be even right now
(minus commissions). That's not great, but it wouldn't be bad.

The other mistake I made was trading too much and trading in a sideways
or down market. The problem there was trading for trading's sake. I
couldn't sit by and wait for conditions to improve. Instead, I kept
testing the waters and bleeding money.

Here's another common theme: the stocks I made good money on, like IFO,
FTEK, AP, AOB, I made money on quick. Generally within 2 weeks they'd
be up 20%. I might hold part of it longer, but I don't really have any
good winners that were just held for a long time and then sold.

Also, as of the start of the New Year, I'm on my own picking stocks
again. I spent a lot of time over at Investor's Paradise under Josh's
tutelage, but they have gone pay for play. I wish them luck and think
it's certainly worth the money, but I just can't spend that much on it
right now. I certainly learned a lot there and think I have grown as a
trader from being exposed to Josh and the rest of the folks I met there.

Here's a quote from Josh that is invaluable to a beginning trader:

14:03:38 [MauiTrader] it is so weird
14:03:42 [MauiTrader] how once you make rules
14:03:45 [MauiTrader] and stick to them
14:03:48 [MauiTrader] if you do lose money
14:03:54 [MauiTrader] you notice you lose a LOT less
14:04:11 [MauiTrader] and then when you get a couple of winners you
start to see drastic changes in the account number
14:04:30 [MauiTrader] i will never forget the moment I realized my
account was never going to take a huge hit again
14:04:34 [MauiTrader] it was a great feeling

I hope to know that feeling soon. Aloha to the end of one year and the beginning of another.

December recap

Well, December was up and down. After week 2 I was up 7R, but fell to
finish up only 1R. That's a little disappointing, but the market trend
was definitely down the 3rd week, which erased most of my gains.

Closed
TCHC breakeven.
MIKR 1/4 at +1.8R
MIKR 1/4 at -0.4R
AOB cashed 1/4 out at 40% gain +1.6R
UCTT -0.6R
NSTC -2R

Opened the following positions:
GRRF, AB, CHINA