solar goes crazy

What is with all these solar energy IPOs going nuts lately? TSL, FSLR, SOLF, etc. I searched today to see if there was an ETF that carried these things. I read about one coming out "soon" but didn't see anything that was exclusively solar right now. Oh well, I've got WFR and that should be a solar play.

Speaking of sector rotation, it's not looking good for the financials. The XLF is down and the XBD looks even worse. Stocks like MS, MER, LEH, etc are getting hammered. I'm still long GS from 178 and AGE which I bought back in 2000 in my IRA for 35, but I may be bailing out of both of them if they fall much further.

Interesting stocks:

• MSTR brokeout to a new high
  
• RIMM new high on big vol
  
• HURN had a powerful gap up and follow-through
  
• GEF has based for a week after breaking out to a new high
  

Today I closed out my position in CHINA. It found a little bit of support, but has been lackluster for me.

I'm also looking to get back into MFW. I may have exited it too soon.

housekeeping

I'm closing out AOB, MFW, and CBG this morning.

I will be adding some MR.

candlesticks

I've been reading a little about candlesticks after hearing Stephen Bigalow of candlestickforum on the radio. I've known about some of the basic patterns for a while, but as I was going over the 12 major ones he mentions, I noticed some of them in my stocks tonight. First, SYX had a bearish engulfing pattern as bears overwhelmed the bulls at the end of the day. Second, ICE has a doji cross at the top of a long runup. These are both bearish reversal signals. I am very seriously considering getting out of both of them at open.

However, I am torn about this because this is probably the opposite of what I should be doing. These are two of my strongest stocks. SYX has run up over 30% since I bought it 3 weeks ago, which IBD says, "If a stock runs up 20% in less than 8 weeks, it should be held the full 8 weeks."

MFW also had big issues today. But it seemed to find support at the 37.00 level and my stop on this one was 10% or 36, so I'm holding tight.

So I'm sitting, waiting. If I were daytrading, I would probably follow the candlestick signals. But I'm willing to hold each of these through a pullback. Once again, I've watched my account peak and retreat this week and I think that's scaring me.

"Throughout all my years of investing I've found that the big money was never made in the buying or the selling. The big money was made in the waiting." --Jesse Livermore

rode this week out

After options expiration day and seeing down futures this morning, I'm surprised that the market basically closed break-even today. Actually, a little better than that, as all the indices found some support and came back a little in the afternoon, though the nasdaq was on lower volume.

Some of my stocks made new highs today: ICE on slightly higher volume closed at a new high, PAY on low volume, and SHLD on avg volume. SYX was an honorable mention at 0.13 off a new high, but still up almost 3%.

I actually got up and watched the market open this morning. I don't usually do this because nothing good ever comes of it. It's too easy to get caught up in it and break your rules, and today was no exception. But I wanted to put a couple of orders in before open. I started watching and my account and the market began slipping. I was down over 1% and started to panic and looked to see which of my stocks I should liquidate to get off margin and raise cash. I looked at a couple, but they weren't technically breaking down past my sell rules. I realized (and I've never formalized this thought before) that if I let my sell rules take me out, by the time I'm 100% cash, my acct is going to be 7-8% off its highs. So, my account balance is actually just like a stock price. I've been focusing on it a lot trying to look for an indication that I'm improving. I've been getting really overjoyed when it climbed higher and bummed when it fell back down towards where I started this rally. But seeing it as just an aggregate of my stocks' actions allowed me to see that it will have fluctuations as each of my stocks do and I found that a little comforting. I've been trying to teach myself not to panic when one of my stocks has a pullback, but I've been thinking of the portfolio itself as a different animal.

I know, this seems like a very simplistic realization--obviously a portfolio reacts just as its holdings do, but it was my frame of mind that needed adjustment. This allowed me to calm down a little and realize that there was no reason to panic and, besides, my rule is not to do anything during the day, especially not first thing in the morning when I'm sleep deprived.

Oh, and my account ended up closing slightly positive on the day.

"Why, it's a bull market."

So, I'm rereading Reminisces of A Stock Market Operator. One of my favorite stories in it is about the old man who, when someone asks him why he won't take a contrary tip, only replies, "Why, it's a bull market." Livermore says this helped him understand one of the problems that he had in his early trading: cashing out too soon.

On that note, IBD today dropped a distribution day off the Nasdaq (and one earlier this week) and the S&P, giving them 1 & 2 days, respectively. There's no guarantees, but you can only see what the market has done, not what it's going to do.

AOB: don't call it a comeback

I'm not getting my hopes up yet, but AOB staged one heckuva recovery this afternoon. It was down 10% at one point and came all the way back and weathered the storm to close down only 1%. It has had 3 down days on increasing volume. If it continues to show this kind of strength, I might look to buy some more, maybe as it goes back above the 50dma.

• CSX finally broke out to a new high today on big volume.
• CROX I'm watching to see if it can hold this support it seems to have found at 52.
• VSNT is probably too extended, but it's in a strong group with good momentum. Possible overhead resistance at 25.
• TTG is a speculative play as the fundamentals are just decent. It sits at 7.45 after 3 days of big volume gains and 7.50 would make a new high (well, since 2000, anyway).

waiting

Yesterday was a big down day for my portfolio. Pretty much all my gains from last week were erased. But the most troubling thing was what to do about each of my stocks that were down? Specifically AOB, ICE, and CBG. I had a few different ideas go through my head, but the conflicting ones were "never let a winner (10% up) turn into a loser" and "don't trade scared." I was incapacitated for a while, but finally decided to sit down and look at them one by one.

AOB had two big downdays in a row and was down significantly off the high of 14.19. I'm still up 40% on my remaining shares, though, and they say you have to give your winners room. So I decided that if it fell more than 30% from the high, I'll sell it. (As of today, it's continuing to approach that, down another 6%)

CHINA I have been up 10% on, so my exit point would be break even again: 9.59

CBG had 2 big downdays almost to the 50dma, but I was still up 2%. I had been up 10% so my exit would be b/e again or 34.84. This is also very close to the 50dma, so if it violates that, I'll sell. (today it's gapped up 1% and stayed there.)

ICE was the main one I was worried about because I have a large stake in it and I bought it on margin, which is a whole nother story. It rocketed up 10% in less than 2 days, but then proceeded to give it all back Fri and Monday, which you will notice is the common theme here. I was still up 1% on it, but it has had wide moves and I was afraid of it dropping right though my entry price. But when I bought it I decided that I would give it 3% down to 138. That would violate the first tenet mentioned above, but I decided my reasons for buying the stock were still valid so I'd hold it down to my original exit point. (so far today it's up 4%.)

HRT was also in the same boat, although it seemed to find some support in the 31 area on Monday. I had originally budgeted for an 8% pullback, so I'm sticking with that: right around the 29 area. (Today it has dipped to 29.14, but recovered somewhat)

In other words, I've decided to be patient and see what happens. Try not to over-trade or get scared off. Let each of my stocks tell me when to sell. That's the whole point of establishing exit criteria before you get into a stock, so you'll have something to fall back on in times like these. I can't panic at seeing red on the screen or my account falling from its highs. The number is not important, it's making the right trades. And trying to guess which way this market's going is foolish.

exiting NYX

Well, I was hoping NYX would base and break out. It moved, but the wrong way. Exiting Monday at an 8% loss.

bought ICE

I bought some ICE intraday. This is against one of my rules, but I think I may have to rethink that one, as I had already determined that I liked the support it had and knew my entry and exit prices beforehand. As it was around 143, I put a limit order to buy at 142.20 and a trade trigger to email me if it went over 144. Sell stop would be 138, or 3% risk. I noticed after a while that my order filled, so I figured support was waning. Then, I got the email: 144, 145, all the way to 148. Volume was 60% above avg, which is good.

I know I might be late to this party after the run it made in early Jan, but it looks like there have been some shakeouts and good support the last few days in the 138 range. Also, fundamentals are really strong.

I heart HRT

I still don't see things breaking down. The market had a strong close today, which is a good sign, and my stocks reflected that too. My portfolio was up 1.4%. SYX continued to run, and CHINA finally moved out of its tight range with a 5% jump. Also, I picked up HRT today. I set a buy-stop order for 31.85 (close yesterday was 30.82) and it filled early and then was down a little, before it went on to close 3% up for me and 6% up on the day.

NYX is down a little again today, but both yesterday and today have been down on very low volume.

• DWSN big move today to make a new high out of a 6wk cup
• TIE made a 6mo high, breaking out of a 2 month double bottom with a handle (at least, that's how I interpret it. As IBD said, metals are strong, but they have lead for a while and may be rolling over.
• MIDD made a new high on big volume out of a 3 week range. Impressive fundamentals.
• Got ICE on the watchlist. It broke out Friday and has found good support the last 2 days.
  

nice day

My account was up 1% today. Big gainers included AOB and SYX, each up 4%. AOB is bouncing up off this most recent base and I'm tempted to pick up some more shares.

• PTNR new high off 1 month flate base on big volume. Strong group including VIP and CHL may be pulling it up.
• ACN new high big volume off 6wk channel.
• LDSH passed the old high from last May today.
• HOLX 9month cup no handle. Same group as OMCL and CUTR, which have both also had big moves.
• AIB big bounce through the 50dma.
• SHS new high, big vol, 7wk base.
• CRM new high, big vol, double bottom with handle.
• GFIG a blast from the past. Made a new high today on what kinda looks like an 8 mo C&H with good volume dryup the past 3 weeks.

LDSH new high

LDSH is forming the right side of an 8month cup (or could it be called a double bottom base?).  I'll be watching to see how it closes and if it starts to form a handle. 

HUBG has formed a handle and is now approaching the buypoint.

XIDE and WGA, climax tops?

January 2007 Recap

At the close of this month I am down 25.5R, which is an improvement of 1.5R since the end of December.  And it's a 2.5R improvement from my low of the month, so I'm pleased.

Closed 3 positions:
TMO +1.2R on 20% gain.  That was the peak and it has drifted lower since.
GRRF -2.4R this was a big buy (more than 1R at risk) and it went against me.  I also let it go through my 7-8% loss limit on some of the shares.  But it is still lower, so it was right to close it out.
KPN -0.4R failed to breakout.

Opened 4 longs: CBG, KPN, PAY, and SYX