journaling

How do you know where you're going if you don't know where you've been?
My trading buddy doesn't keep records about his stock transactions. Not
what he traded or when or why. To me, this is a mistake, and I've heard
a couple of differnt people on podcasts saying as much lately.

One speaker said they keep track of their account balance every day.
This forces them to confront their losses and stay focused on not losing
money. I do this on weekends, so that I have a record of my account
balances.

Another speaker I heard (Toni Turner, I believe) said she keeps a
journal by keeping charts of the stocks she trades with entries & exits
marked on them. I have done something similar to this. Earlier this
summer, I went back and printed charts for all my trades and marked them
up. I need to go back and do it for trades I put on in June & July.

I currently keep a spreadsheet of all my trades. I try to put on there
why I got in and why I got out, but there are so many columns on there
that my text is cut off and it's not easy to read the full reason. I
think I may switch to keeping a notebook of chart printouts. Then I can
have more room to write on there what my reasoning is for exits/entries,
as well as draw my potential stops and profit targets. This might be
some duplicate effort, as I will still keep the spreadsheet for
statistical and tax purposes.

you hear what you wanna hear

Right now, I don't have much at risk in this market. I would like to
see it go down more to make a more powerful rally in the future. On the
other hand, I'd like to see it rebound soon and keep going up, also.

I've found that my head has been clearer the last month or two because I
haven't been reading as many different opinions. Too many just confuses
things. Plus, I've found that if I keep searching for new articles, I'm
basically looking for similar opinions to mine or confirmation of my
beliefs.

The fact is that nobody knows what the market will do. All you
need to focus on is what it's doing now. It's going one of 3 ways: up,
down, or sideways.

KYPH up 24%

So, I bought KYPH back on July 5th as it broke out from a cup and
handle. I put my stop in and forgot about it. I did notice early this
week that it was one of my few stocks that wasn't getting destroyed on
some of the first downdays and that it had huge volume on Tuesday. As
this week went on, it was the only stock I have from last week that
hadn't sold off.

I didn't even notice during the day today, but when I was reading The
Big Picture on IBD, it was one of the Stocks Up on Big Volume mentioned.
I went to look, and it's up 24%! Turns out they are being bought out.
Sweet!

The only problem is I bought it in my izone account, which is my small
one, so to only risk 1% of that account, I bought just a few shares and
was only up a few hundred bucks today on the deal. But that was 5% of
that account, so I'll take it.

anybody else buying here?

Until the next breakout sector emerges and I hopefully identify it, I'm
nibbling on QLD here, establishing a position. Bought some at 99 and
some more at 96. I will do one more buy if the market goes lower down
around 92. Then I'll use my avg share price to figure my stop based on
the amount I'm risking. For example, if my last buy is 92, that would
put my stop at 88, which is below the support levels from May and June.

This might be the wrong move, but I'm going on the theory that this is a
panic short-term move and not the beginning of a long term correction.
That is based on the VIX spiking to higher levels than 2/27 and after
today even higher than June 06 and also the % of stocks below their
50dmas being very low already. Also, QLD/QID are having record volumes
being sold/bought. But really, nothing has changed in the fundamentals.
The market knew that housing was going down the tubes--yesterday's
numbers couldn't have surprised any of the big players.

From this viewpoint, the selloff at the end today was good to see. The
recovery at the end of yesterday I think eased some minds and there
wasn't the air of panic after watching things come back a percent or two
in the last hour. The open up and then recovery mid afternoon today
also helped reassure longs. But then watching things slide right off
into the close maybe struck a little fear into a few hearts. Panic and
fear will shake the weak holders out and allow this uptrend to continue.
Might take a couple weeks, so I'm going to try to be patient.

Of course, this is all IMHO, and we could keep slipping til Labor Day.
Who knows.

what is the next sector?

Over the next few weeks, there will most likely be a bottom put in. Out
of that bottom will come the new leaders. It most likely will not be
the leaders from this past rally. We've shifted from solar to chemicals
to shippers and now it will be something new. The key will be figuring
out what that is and getting in quickly. I'm not really sure how to
figure that out at this point. For now I'm going to be following the
"stocks on the move" very closely.

This was an interesting experiment in panic. I've been messing with
tdameritrade's level 2 stuff over the last 2 days. I've never sat and
watched the orders go through before, but this morning that's pretty
much all I did. I watched FXI, AAPL, and QQQQ.

I've been watching my stocks that got stopped out. So far VDSI looks
good. HURN has put up a tough fight and if it makes a strong move off
the 50d here I'll be interested.

bought ILF, AAPL

Bought some ILF back at 212.50 at open.

Just got filled on AAPL at 146.05.

Right now the market is still falling, so these are both looking not
very smart, but we'll see how she closes.

crunching the numbers

Well, I just added up every position I closed in June & July in my accounts. At this point I'm pretty much stopped out of all but a few positions, so I've been updating my records and playing with spreadsheets.

$2702.19 gross
commissions 600
net $2,102.19

22 unique stocks traded, some with many entries, sells, reentries:

2 were breakeven

12 losers for -$3000
5 were "total losses" of 1% of the acct.

8 winners for $6400. Only 4 of those were significant
AAPL 1900
ILF 1400
MTOX 1250
BGC 950
which add up to 5500 of my 6400 profits.

It also means that in 2 months I'm up 3.3% net. I guess that's okay. If you were to extrapolate it out that would be around 20% annual. It's better than I used to do. In the past I've lost $1k on PG or TM in my IRA. Those two losses were as much as I just cleared in 2 months.

Or worse, $1k on BTJ in my $10k izone acct, or $500 on NWRE in there. Ugh.

So, what does it all mean? There's definitely something to the "you
make all your money on a few good stocks" theory. And the keep your
losses small one, as well.

June was pretty much flat for me, I think most of my gains came in July. If the kind of upward market we saw those first two weeks of July can keep going remains to be seen.

Sold 4 stocks today

• ARGN - 15% trailing stop for 7% gain on remaining half, first half sold for 20% gain
  
• TBSI - was a chandelier stop, 3 * ATR(14) from the most recent high
• ICE - sold right above my entry price. never take a loss after being up 10%. it fell way below the 50dma
• SIMO - 3 * ATR from entry price. Touched 50d and rebounded.

Yesterday I also sold my MVIS. Today they announced a deal with MOT and were up 12%.

This was a pretty big downday, but I'm not panicking. I have stops under everything. If stuff sells out, I'll have cash.

IBD did say to cut your laggards and take profits on stuff that's up slightly but didn't run quickly up to 20% after you bought it. So I'm about selling VIP, which is up less than 1% after going up 10% for me, and HURN, up 3% after 1 month.

TBSI, FTO

Wow, the shipping group is afuego lately. I've been watching DSX, but it ran away from may. Pretty much the same pattern is DRYS. Today, TBSI and SSW are breaking out. I bought TBSI at 35.13

I also bought FTO at a pullback to the 20d. I've been looking to get a refiner for a while. The two on my list were FTO and HOC.

MTOX got trounced

I never did hear what was so devastating in their announcement, but MTOX got destroyed today and closed down 18%. Obviously, I'm glad I closed my position yesterday. Yes, there's the chance that it might have rocketed up instead of down today, but I'm okay with missing something like that. I'd rather miss a good move than be part of a down one.

There is always another stock!

SPX double bottom

Looks like $SPX broke out of a double bottom and now might be forming a handle. Volume is drying up.

MTOX, totally screwed the pooch

Wow, wild ride. I bought another 1/4 of my original stake in MTOX back today as it was at 29.50. That turned out to be almost the high for the day and it reversed to down to 27. I wasn't sure what to do, should I hold to see how it closes or get out before it sank further? Surely, I would end up selling at the low of the day. Ugh. I decided that I wasn't able to be unemotional about it, so I just closed it all out. If you don't know what to do, just get out!

I lost $160 on that little experiment. I still am ahead over $1100 on MTOX as a whole, but I really let at least that much get away.

This is a case where selling 6% off the closing high might have been a good idea.

MTOX, SIMO

Wow, interesting day so far. My 20% trailing stop on MTOX hit and I got all the way out of it. Then later it recovered strong through the 50d and I bought back 1/4 of it.

I also bought some SIMO at 27.19 today. I wish it had more volume, but it has a strong rebound from the 8dma.

Double bottoms

Some very double-bottoms popped up today:

• SIMO
• TEX
• DSX

Another nice one is ATN, but not a double-bottom. 3 of those in one day is unusual for me to see. I think this is a Good Thing, even though the market overall didn't do much today.

I did sell half my BGC position on a spike for a 20% gain. I didn't even realize it had happened, just noticed more cash in the acct and realized that my stop I had put in way back when hit. Later in the day, it retraced and was down on the day.

Recent acquistions that I haven't posted about yet have been more AAPL at 125, ICE, KYPH, and VDSI.

NYX bottoming?

This thing looks like it may finally be putting in some kind of bottom
(much to Cramer's delight). You saw big volume spikes on the way down
around 6/21. Then it churned through some volatile days and put in a
couple of dojis on low volume last week. Indecision.

Then on Friday it bust out 3% with volume 5% above avg. It has great
EPS and SMR ratings in IBD, but of course the RS and Acc/Dis ratings are
pathetic. Also, it's below the 50d, and the 50d is below the 200d.

Still, this might be a low-risk entry with a stop at Friday's open
price.

Is this a rally, yet?

Wow, this may have been a low-volume holiday shortened week, but it was a good one. The Nasdaq was up 4 out of 4 days, made a new 6yr high a couple of times, and gained 2.4% on the week. Even better were the leading stocks:

For the week, the IBD 100 vaulted 5.2%. That marked its biggest weekly gain in just over a year, dating back to June 30, 2006.

Isn't this exactly what you want to see in a bull market? The Nasdaq leading the other indices and the best stocks rocketing? I feel good because my account is actually doing well. Usually after we have some big move, I'll be at a meeting and someone will ask "So who made money this fall?" and in the past I haven't. But for June my account has shaken off the spanking I got the first week and is now at all-time highs again. It's been lead by further gains in AAPL and MTOX mostly, but also good performances by ARGN, BGC, and ILF.

All through May and the first week of June I kept reading the "Sell in May and go away," mantra being repeated. June was pretty much a wash, but you know what, it kept finding support. There were a couple of times when it could have gotten ugly, but the buyers are out there. If they are there in June, that bodes well for the following months. Last year's rally started by putting in a bottom in July.