Thanks Jeff.

Anyone else having Prophet problems - AGAIN!

I am not sure where the lesson is on LEN. I exited at its peak today. It broke through resistance and my exit. I am not sure if the exit was as bad as the entry. Since I exited, the stock has regained some of its loss. If I had waited five minutes, I would still in this trade. I entered at the close of yesterday, near my exit. I am really struggling in this market. Any thoughts...

Mark my words:

VRTX is going to be bought out in the next week.

Disclosure: Long VRTX calls.

Jeff,
Re AHS, I had it marked up on my chart looking for a break below the 21 area. When it started to rally ahead of earning instead of fall, I took it off my list. So there is no way I would have been in this trade to capture its demise today unless I would have jumped the gun and entered 2 weeks ago. Whereupon the close on Aug 1 or 2 would have kicked me out.

You once chided me for entering a put trade too early before it broke support (with volume), saying it needed to be 'an event'. I have not forgotten that lesson.

But congrats to those who took that trade!

DG- Anticipating trades can create great opportunities, as long as you manage risk.

The chiding was only to talk about the "signal" of a breakout versus a down day at support. I don't care if you hop in early to a trade... I just wanted to talk about the difference.

I hope you've forgiven me since then.

Hey Jeff-

Great to finally meet you. We know you have a family but we'd love to take you out for dinner just to say thanks.

Plus side: you get to pick the restaurant.

Downside: you would have to drive.

See you later.

Grant

Amy, I know how you feel. I've got puts on many of the home builders and some of the lenders. This is crazy action today. A lot of unrealized gain got wiped out this morning and then started to come back. Hang in there, when LEN starts to roll (and it will, maybe not today, but over the next few), hop back in.

Things will be crazy all day today. And there will probably be a counter-fed rally tomorrow.

Please fasten your seat belts and make sure your tray tables are up and your seat is in the full upright position.

Joel R.

I'm trying to vote,but won't let me. Monday's please. No tuesday's that the night the user group meets.

Sarah

Jeff,
There is nothing to forgive. Thank you for clarifying the difference between an early entry and misinterpreting a down day as a signal. Makes sense now. So hopefully you'll forgive ME for being such a dummy sometimes.

Wish I was going to Chicago to party with allayouze. sigh.

Amy,
You are not alone. Knowing when/if to exit intraday has been my biggest struggle. The best thing I have found to help me is to watch it intraday and if the trend is against me with no support/resistance near, I get out. I do this because I am making the decision at that time based on the best information available to me. If I go back at a later time and examine it, I only look for information that was available to me at that time that I might have missed. I won't beat myself up over the decision simply because later on I could see that it turned around right after I sold it.

These are the rules that are helping me do deal with this:
1. Keep your loses small.
2. Make the decision to exit with the best information available to you at the time.
3. Move on to the next trade.
4. Don't forget rule #1.

Hope that helps.

Scoot and Joel,

Thanks for your help. I have no doubt that LEN will continue its downtrend. I entered slightly early and now I am paying for not following my rules. My risk was managed, so now I have to be bold enough to jump back in if the signal is given. Thanks for your thoughts and encouragement.

Amy

DG,

Being anticipatory is where fundamentals can play an important part. We've known for a quite a while how bad the lending and home builder markets have been. Jumping out there picking up some long term, cheap, out of the money puts is a good way to play some of these break downs. For example, 3 weeks ago, I bought the Nov $30 puts on LEN for .85, while I write this they are trading at $2.75 and at one point were as high as $5. I did take half the contracts off the table to pay for the initial trade. The remaining contracts are still up 230%. I have a lot of time left in the option and anticipate this stock breaking well below $30 by November. So I will let it ride. I've played KBH and CTX the same way, with similar results.

Other stocks, like WYNN a few weeks ago. I took an anticipatory put trade and was quickly stopped out. Fundamentally, WYNN is relatively strong and the market was still moving higher. Don't I wish I had flipped around a bought some calls. Holy cow!

Unless the fed drops interest rates to 0, I don't think there is a short term fix for these stocks (home builders & lenders). They may pop for a few days, but ultimately they are going down.

Joel R.

Anu,

You asked about ALEX..

The group had been doing great. DRYS did not present me with a good enrty tht fit my style, but ALEX did. It was at a one year long term diag trendline, and yesterday morning bounced off of that and my FIBB retracement line. I got in right at what would have been very close to my exit on this stock had it tanked. Also, unlike DRYS, ALEX has earnings behind it.

So for me this was a low risk entry with good upside potential. ALEX has been running up bouncing off a trendline..DRYS just shot up, so for me, a littel harder to justify an entry on DRYS..

Sarah,

Are you going to Chicago?

Christine,

You asked my thoughts on LEN...

Well, home builders have taken it hard, but at some point they must start to to stabalize and come back up, this is a given, right?

Lennar has been a great bearish trade..but...where would you look for support and a plaace to exit ir you were already in a short trade here? If you bring up the 5 year chart, $30 is a possibility, right?

You stated it was bouncing off your diag trendline...and I dont see it. (pull up a 5yr chart) If you are referring to the line along the straight drop down from 5/29 till yesterday, that is just too steep a drop, or trendline, for me to trade off of. That really does not reperesent resistance to me. The closest diag trendline that I see that makes sense as resistance starts on the top of the candle on 2/5 (one year chart now) through the top of 5/23ish...and it has yet to bounce from that again.

I always look at the 5yr chart for support and resistance lines, then go to the 1 yr. If give me a bigger picture of what is going on. That is how I picked $26.33 as a top on the $vix, that, and some other factors...

Hope this helps....

Can I go to Chicago JUST for the OA meeting???

Forget Barry Bonds...

They should test ELON for what it's on.

LOL, well I haven't seen the announcement yet but based on the streaming chart for SPY it wasn't something the market was hoping for. Market reacted at 2:16.

Warning:
Don't look at your account balance, the market is moving around. It's up, it's down, it's flat. Hopefully, it will stabilize as the news settles in.

Michelle

Brett's been running his "Happy to See Me" search again. How DO you find these things?!?

BF -- LOVE that Baby. Sweeeeet

Raimo,

I just had a 'holy hell' moment. I am looking way too short term. I bought LEN at a low, near a profit taking exit, not a 'measure my risk level' exit. OUCH!! So, here's my question...in your watchlist, do you establish support and resistance using the 5 year chart and than analyze the one year chart for entry? So, back to LEN, the entry was at the end of May? The other times the price consolidated a little and established a very short term trendline could have been places to add to a position and not a new entry?

Elevator going down ... all aboard.

Raimo

Thanks for your input - the feb. trendline makes a lot more sense. I was looking at the May 29 trendline, but I can see the other and realize now, that I must be trying to force a trade into existence. Wouldn't that be nice and have it make money. Ha Ha.

Christine

Amy,

I dont quite understand what it is you are asking..

But I will try to answer..

I search based on the 1 yr chart, but I trade on the whole picture...

As far as LEN goes, I am not sure what you are asking as far as an entry in May.....did you take one then?

Jeff,
I see that the majority of the Conference goers want to meet on Sunday, which is my preference as well. So as not to miss the 6:30 p.m. 'Welcome Reception' followed by the 'Opening General Session', I vote for a get together in the afternoon rather than evening.

--Patti

Good day, all.
I'm busy pirating some bandwidth from the Maple Leaf Lounge here at the airport and have a few minutes between flights.

I'm learning so much these past few days from all the conversation... not the least of which is that I'm starting to understand trading OTM options a bit better. I have traded some the last little while and think that I can now safely say that my brain is pretty much full. As I add new stuff... I'm finding old stuff leaking out. I don't so much mind the "spanking years" going away but some of the college stuff is leaking out and I really miss it!! I need sleep.

Thanks to everyone who's contributing lately. I haven't kept up my end of the stick... but I will contribute more starting tomorrow. Maybe even something worthwhile.

Jeff,
We are really disappointed but I haven't been able to re-organize my flying schedule around the conference. It looks like we'll be MIA. We were really, really looking forward to it. If we can do an OA meeting in a less busy season (for the airline industry) we would be up for it.

Hope you all have a blast (or at least a "pop".) Like Liz and Grant we wanted to buy you a drink (well... they wanted to buy you dinner... we're cheaper. We'd let them buy us dinner and we'd buy the drinks. How's that?) but there will be other times.

Sniff.

Chris and Catherine

Ramio,

Thanks. I see the bounce from yesterday. So if you find a stock that you would like to get into but it has moved away it seems like a good place to look for an alternative trade is in the same industry group.
I will try that.

Anu

Patti,

My sentiment was to skip the welcome dinner and party instead. How do we reconcile?

Raimo,

I didn't take the trade on LEN in May. (That would have been brilliant.) I guess what I am asking is IF you didn't take the trade in May, would have entered this trade any other time between May and now?

Jeff,

I'll have to choose whether I want leave my husband at the conference to attend the Option Addict party. He's not a regular to the blog since he works long hours so I doubt if he'd want to come with me if it means missing part of the conference.

--Patti

Raimo,
I have reread your posts several times, and I think I have the answer to my question...Let's see if I got it on my own...
When I entered LEN yesterday, support was too close. The five year chart showed that the stock only had a few points to drop before it hit a historical level of support. AND, it actually hit that level on Aug. 1st, so it could easily bounce up from there. I could have entered after the E.R. or again around July 16th and support was still several points away. The probability of a successful trade was higher than entering so close to a support level.
Did I get it?

While the bulls are back....keep youre eyes on the chart and dont be fooled....they may stay, they may go.

Addicts trade both sides, right?

Financials took it hard..so they are a bargain now, but they are only a bargain if you get in low, and they move higher. We dont know what they will do though, right?

Look at GS. Great entry yesterday for those of you that took Bretts trade. If 190 is resistance, still a great entry, may still even MAKE money. If GS closes above 190...still a good entry, right? Look at yeesterdays and todays volume....what does the picture tell you? What does the 5yr chart diag trendline tell you?

Point is, study the chart, it DOES tell you what is going on..

GS

I must have missed something here.

Why?

Why not look at this from the bear side as opposed to a bullish opinion? That 5 yr chart looks like hell, and in a downtrend, shouldn't you fade this rally?

I never understood getting bullish on this stock yesterday. Best case scenario would be not to touch it rather than buy into a head fake.

That is... if you are into that whole probability thing.

Bright light...very bright light! Thanks Raimo! The illustration was spot on. It appears that GS is at a historical level of support.
In the past few weeks, I have been too narrow minded in my trades. I need to look at the big picture.
Thanks for your help!
Amy

Patti,

I wouldn't really schedule something during the conference. That was my sarchastic personality trying to resurface from the early blog years.

Orignially I thought it could be done afterwards. However, it could be set up for earlier in the afternoon. I just might not be able to make it. I'll get another poll up soon to get more opinions.

Amy,

Close. For me, when LEN broke $40 around June 21, there was no good entry after that, not for me..

Good Job!

Watch Out for High I.V. on Housing Plays!!!!

Raimo-

What do you see in GS? I pull up a 5yr chart and see an uptrend line support break on Jul 31. The daily shows GS retracing back to that support (turned resistance?). I might argue that GS is a good shorting opportunity to as it retests that trendline.

Matt

---------Emotion Strikes Again----------

Ok, apparantly emotion has worked it's way back into my trading. Here is my proof. Today I thought I would intraday trade the SPY paper to start and then real once I "proved" to myself I was doing ok. So I made $1575 on paper and lost $300 real money. So what is up with that! I have to go have my head examined, or at the very least the trades I took.

Addicts,
Anyone ever pull this blow hard move? I set a contingent order to sell my Russel puts 760 today. I was not able to give the screen my undivided attention just for a few minutes. Well that is all it took, by the time I realized the error of my ways. Boom not only had 760 come and gone, but 775. OUCH that turned a good day into a bad one.

In TOS can I set a stop and a limit order?

Cheers,
ARTY

Jeff,

I'm flying in to Chicago Friday and out Tuesday evening. Tuesday night is no good, any other time is.

$190ish held on GS. I like the bearish side of this trade.

Joel R.

Hey Arty! Why not trade the E-mini Russel 2000 /EB7UG it trades 24.75 hrs. a day with no time decay!

This comment has been removed by the author.

Jeff, glad you chimed in on GS. I was started to think I must be seeing things because it doesn't look bullish to me on either the 1 yr or 5 yr. Looks like we wait for it to roll over and short it (or maybe one of the weaker financials instead).

SKX down over 4 after hours

Sorry /ES7UG trades 23.75 hrs.

Arty, with the new release of tos, you can set a contingent stop based on the last of the RUT and have that trigger a limit order for your options keyed off of some amount greater/less than the midpoint of the bid/ask spread of the option at the time of the trigger.

OF,
thanks for the ticker and the idea. I have been waiting for a little tutorial on the e-minis. I have really been liking scalping the bigger profits on the $RUT but the losses come just as hard and fast.

I will be checking into /EB7UG.

Cheers,
ARTY

GS..

On the 5 yr.....

I have a diag trendline (not HZ)that starts at the bottom of the candle on 5/31/05. It runs up through the bottom of the candle on 7/17/06. It hits the bottom of the candle on 8/06/2007, where it bounced...

Yes, I know that on 7/31 GS broke a HZ trendline..and that that could act as resistance..but the entry yesterday off my Diag line on the 5yr was a risk worth taking...a low risk.

Now, yesterday, GS gave me a bullish engulfing at the close, at my diag support. Increasing volume. Today, it broke the $190 resistance line, on more volume. Will $190 hold...don't know.

That is the story I see.

I would not short GS even if it falls back under $190...It would have to break my Diag line first, which is my exit, which is where i bought, at support...

I got in at $177.......I am at $191...

Anyway, that is what I have, that is my picture. That does not mean this trade is not without risks, like any other trade. The only thing I DONT like about this type of trade is tht I have no target price....I am going to follow it day by day and let it tell me what to do...

Does this shed any light on why I went long??

Andrew, trade what you see, and trade it with confidence. I trade for a living and I have many reasons why I took the GS trade, and all that matters to me is that I have a nice profit in it. If my reasons for taking the trade change, then I will exit the trade. But if you get a good shorting opportunity in it, trade away.

GS...

I drew my diagonal trendline off of the PREVIOUS two lows 5/31/05 and 7/17/06, not the current low. On 7/31/07 it broke BOTH diagonal support and horizontal support at 193.

Perhaps it's just a matter of preferences in how you draw the trendlines. In either case, they tell wildly different stories which is what makes trading interesting I guess! :)

Matt

Matt,

We clearly have different charts. Mine shows me a move higher off my diag support..in fact, a perfect bounce off my trendline and a 38% fibb retracement.

Send me your e-mail address and I will happily share with you my chart, showing where it bounced off of, not broke, Diag support.

I'd like to see yours as well,..this is why this blog is so great...we can learn from each others trades and ideas.

But if you think this is a good short, then take it.

Send the chart to Bob@raimo.com, and send me your address, I'll send you mine.

Cheers!

Raimo

I had outlines almost the same setup, except I went back to 02' on the 5 yr chart. Unfortunately I whimped out the trade. I need to learn to follow the charts and play off them, henceforth, let the charts tell me the entry/exit. I know, know - I need to trust myself and pusht he @#$@&*^ button!

I needed that.

Christine

Brett and Raimo,

You guys must not use the log setting on your charts. Without the log, I see the trend bounce, but with the log setting the trend line was broken. Interesting that it matters in this case, but I see what you're looking at.

GS - wow that log setting thing really does make a difference. Now I see Raimo's support. With Log turned on (which is how I've been trading since day 1) I have a 5 year diag support coming in at around 150 and a shorter term, since May '05 being broken last week, hence the short idea.

So regarding logs...to log or not to log and what exactly is the difference?

LOG

I asked this question several months ago and got an answer from Jeff and Eric something like this:

Log puts more focus on the most current trading days like a log scale. I have seen this used on some charts that Jeff used when I was not using it so I asked and since have used log scale on my charts. The thought was that in most trades it would not make much of a difference just pick one and go with it. I noticed that it did make a difference for some of my lines.

Did I get that about right Jeff?

Jeff,

I'm sure you kept some HLYS through earnings and are loving every minute of this aftermarket slaughter.

As for logs, Jeff doesn't use them. neither do I.

Raimo.

I see exactly what you mean with GS.... but with LOG chart OFF! If you turn LOG on you can argue for a bearish break of support. If you turn LOG off, you can argue for bullish bounce off support. This is the most dramatic difference I've ever seen and can certainly mess with your analysis.

This doesn't exactly inspire much confidence in my TA skill then cause you can simply mess with the charts to say whatever you want them to say. Crazy! I'd like to hear Jeff talk about this and maybe even use this example when comparing Log/no-log chart settings.

Jeff? Care to pipe in?

Matt

Jeff,

In answer to your WWYD? With the call so far OTM and the put ATM I suspect you were close to break even or slightly profitable. Any movement after earnings other than down and you would probably get killed.

Seems like closing the trade would be safest. I suspect there is a better answer but I can't puzzle out what it would be. Anything else seems to add considerable risk.

MikeH

Jeff

We just finished the class I'm not sure if you got our post from earlier about inviting you out for dinner or maybe just a beer, but the offer is still there.

Either way no big deal, well try to find you tomorrow and get some pics with or OA gear and the head cheese.;)

Later man
Grant and Liz


P.S What's up option addicts we miss the banter and the worlds best trading partners.

Andrew,
Thanks for the heads up. I looked through my transaction log over the last 4 months and I have made $1900 in mistakes trying to manage the spread. My better two thirds, Teresa told me early on "the spread is not worth your mistakes". I think she is right.

I must admit I made $600 back entering a sell order twice on the top of Crox a few months back and made money going up and coming back down (didn't mean to coming down). I guess I need to go make a mistake to clear the slate.

When is the new version coming out?

Cheers,
ARTY

Brett,
I thankfully held HLYS too through earnings for no other reason than I was kicking my self in the ass for my RUT blunder today.

Thanks god I have rubber gloves. Lease with an option to buy.

Cheers,
ARTY

So now I'm experimenting with log on/log off and I'm finding some interesting stuff. Like PCU which I had decided had broken its trend is now suddenly sitting right on a diag. support line and looking mighty tasty again.

DG,
I was looking at PCU earlier today.
A lot of good stocks already moved off support today, so too late to enter. Anybody got any good stocks sitting close to support?

NOV, PCP, DE all made a move today, so too late on those.

Michelle

Arty-

Maybe you need a refresher course..HEEEYYYYY!!

Once again Brett, you are on with that......it's so simple.

Long: Ball Bearings

ARTY

DG,
To answer your question about the difference when you have the log box checked--when you do, it actually represents the price change in terms of percentages rather than just dollar value. Therefore, a change in price from 10 to 20 will appear slightly more than a change from 40 to 50 (when looking at the distance between prices), even though both are 10 point moves. As for whether or not you should use it, I don't know.... I always have but not for any particular reason!

The punch line to one of my favourite lines as a juvenile delinquent was "If the log rolls over we'll all be dead." I think this applies here. "Log on" skews the real trends. It's like looking at the world through those glasses that ol' What's His Name from Trailer Park Boys wears. You'll trip and fall before you make it accross the yard.

The whole GS thing has been fascinating. Thank you all for adding your two cents worth... I have learned a lot. Not the most of which is that I won't take the trade, but I'll put it in my little book and keep my hairy eyeball on it.

PCP has done unbelievably well during this last bumpy time. I added to my position yesterday and am considering selling the house, buying PCP with it all, and living in a shoebox, in a wagon rut, on a dirt road.

Bob (and Pam) the emotion thing is really hard to wrestle to the ground. I came close to succumbing yesterday, but caught myself. It may not have been the right move but I sold all my positions except for a select few, and pared those ones down to just a couple of contracts... while I was going to be away from the computer. Anyway, I'm now looking forward to watching the market and finding those new "sure things" that I know are out there. All the money I've lost this past two weeks was unrealized gains. Makes me think that being a trend trading major, with a minor in swinging could be the answer right now.

Rambo, your input has been phenominal these past couple of days. Thanks for all your sharing.

Arty,

The version of tos that allows for contingent orders and limits based on the mid is already out. It came out a couple weeks ago.

Incidentally... my paper trade on GS is to wait for it to go back to it's strong support at $200, and then take a low risk put entry. $205 I'm out, but I see $150 as it's next support level.

If the log rolls over we'll all be dead.

Log v. No Log

I'm interested in opinions on which to use. Here's what Tim Knight says on the subject:

"To be more direct about it, there is no reason you ever need to use an arithmetic graph when looking at a stock chart. It can badly misrepresent the movement of a financial instrument (be it a stock, a future or a mutual fund), because it treats all price movements as identical, even if they are not."

Tim's logic in favor of log makes sense to me, but I'm interested in the rationale of others that think otherwise and don't use log.

Raimo,
ALEX. To me, this is one of those stocks that I have a hard time getting in to. It has moved a grand total of $15 the past 12 months, and $5 the past 4 months. I don't see the reward potential as being so good. DRYS on the other hand is up 300% in the past year (from $13 to $57... or $44) and $20 in the last month. It has consolidated for a while now and is nearing my diagonal support line. I agree that earnings are an issue here. I've got 1 contract left after taking profits yesterday, and I think I'll hold the darn thing over earnings, unless everything comes unglued in the next two weeks.

Just my penny thoughts.

Andrew,
I can sound just as definative by saying

"To be more direct about it, there is no reason you ever need to use an algorithmic graph when looking at a stock chart. It can badly misrepresent the movement of a financial instrument (be it a stock, a future or a mutual fund), because it treats all price movements as different, even if they are not."

Every circumstance is different and to me it seems that tampering with the pure numbers muddles the results. Judging from what's been said on the blog, it doesn't make a lot of difference, usually. I think that like everything else in this business, you've got to use what works for you and run with it.

I did take the bite and purchased a few contracts of the NOV Sept 115 Calls and am pleased. If I could go back in time, Aug 115 jumped more, but that was too short term for me. Now I have to figure out where to lock in. 30-day MA with support is 112.50, only other support I see is around 110.

Thanks, Raimo,
I think you were the one that brought up the log thing. What an eye-opener. I had it on, too. Didn't know it made a difference.
Sometimes it does, sometimes it doesn't. But I took it off to look at some stocks. Also started looking at five-year charts first and drawing some lines, then looking at one year. Have a good evening.

Michelle

Andrew,

Let's remember that Tim invented a charting system that only works 3 out of the 5 trading days of the week. Sorry, I had to get that shot in there.

There really is no definitive way to answer your question. What really matters isn't which type of chart YOU use, but which type of chart the other traders use that move the stock. Therefore, it probably makes sense to view the chart in both log and arithmetic formats to get a better sense of where the pitfalls may lie in your analysis. Similar, I suppose, to using many moving averages to see if one sticks more than the others (I also try to avoid using them at all if I can help it, but hey, sometimes they really do work).

In many cases, a stock may appear to be hitting a trendline in one format, but still may be above it in the other. That might cause you to perhaps get in a bit too early.

I used to use log scale, but since switching to arithmetic, i've enjoyed that one much better. You can't go wrong though either way...that's why it's an option on the charts!

C2, I really did find it amazing how much emotion changed my success today. Tim, thanks for the futures outline. As you outline it I am not ready. And Brett why has it taken me so long in my education to understand it is what other people see/do that moves the stock that is important. If someone told me that, I forgot it and had to learn it the hard way. Brett that one should be in stone somewhere.

Hey, just wanted you to know that I am moving on up - in the world. Yep, I am a two monitor man now! Did anyone hear the Shadow Trader talking about 5 monitors and training your eyes to look different directions in the mirror. Ok I am not that extreme but after I found this old monitor in the neighbors trash and cleaned it up a bit I am in business. I think they may have an hamsters living in it but if you do not mind the smell (it is really only bad once it heats up) and I am even getting used to the pink paint and the fuzzy foot sticker. Oh and after awhile that hummm...do you hear it? Ok, you get the idea I found my old monitor and hooked it up. Big time right? Now I just have to "find" three more.

Ok, I did have one glass of wine tonight.

Brett, thanks for your comments. I have the same feelings about the "reliability" of profit charts.

Jeff, I just listened to your pattern session from this morning and I sure did like seeing how you used the prophet patterns as we have not used it yet. Also thanks for continuing to reinforce that this market is trying to get those that are still playing the bull game. I am new enough to go Oooo a rally lets buy. Tonight you stopped me from doing that.

I liked a couple of those pattern trades once they confirm - Thanks.

Jeff,
nice call out on the 756 we heard it.

RUT to 756.

Cheers ARTY

Wow,
Incredibly great commentary today.

Love the Log vs no-log.

I remember hearing a TOS talk a while back stating something in the line of just use the Log setting and don't worry about it.

Interesting, I agree with C2, play with it, find what you like and stick to it.

I never can get my charts to quite match up to Jeff's, perhaps this is the reason?

Anyway, thanks for all of the great input! Hopefully I will have something worthy of adding soon.

Jeff, I do need to officially add myself to the community. I will work on that. Mind you this tech stuff kills me and if their is anyway to make it difficult I will , hence the intrepidation. At the moment I have a phone that will get me on the internet but will not answer a f*#@#*!! phone call!

Rene

Jeff,

As far as Chicago; I am open. I'm their Sat til Wed morning and am looking forward to meeting a few fellow OA's!!

Rene

Bob (and Pam),
What did Jeff say (in summary) about the false bull market? I need to start doing some of those trading rooms, if I still can get them. And how do you get Shadow Trader? When I click on it, it doesn't work. Do you have to subscribe to it?

Michelle

Jeff,

so THAT'S why you thought I was crazy to exit my IWM puts at the very bottom and then go LONG! You called further downside on the RUT yesterday morning???

Anyway, I'm long the IWM at $74.70. There may be resistance right here but i see a retest of 800 coming. If I'm wrong, I can still exit with a profit. But if I'm right...

Michelle-

Please take my advice on this: Jeff and Eric are veteran traders. They know more than all of us, maybe even combined. But do NOT take their word as gospel when it comes to individual trades or market direction. They have been wrong too. You need to develop a methodology where you can block out what you hear from everyone and trade what you see. This includes the media, CNBC, INVESTools instructors, etc. Whenever I've done this, ESPECIALLY in the last 2 weeks, I've done extremely well.

If your eyes tell you that this isn't a false bull market, but you allow yourself to be swayed because Jeff said this is a sucker rally, you may miss out on enough profits to make your year. You may even wind up with losses. Jeff is nimble enough to fix his mistakes if he is wrong. You may not be. I'm not saying that Jeff is wrong here. In fact, his comments raise my caution flag, for sure. However, I don't necessarily agree with him, so I'm trading my own plan with one eye out for danger signs.

I would definitely listen to everything Jeff says. I personally find each comment to be a gift to all of us. Despite how far I've come, I still learn something from him each week. I enjoy the lessons on investor psychology, situational trading ideas, money management, etc. But when it comes to his market analysis and stock picks, I add his thoughts as a single element to my own analysis and nothing more.

Perhaps as a beginner, what you should do is do your own analysis, estimate your level of confidence in your analysis, and then listen to the marketcast and see if they agree with you.

And I'll bet if you asked Jeff himself, he'd agree with me.

Brett,
I see you're bullish on GS and bearish on IWM, and yet to me, they're almost identical patterns. IWM has bounced off some support at 75 and you're thinking it'll keep heading down, while GS has bounced off some support at 190 (ish) and you think it'll go up. The one year charts are so similar that if they were a signature they'd be a match. Even on the 5 yr chart... the angle's a bit different but the pattern's very similar. With "log off" they both look like they've broken diagonal support and are headed lower after a short retracement here. Enlighten me.

Brett,
Ooops... pardon me all to heck. My hairy eyeballs are obviously not working this morning. I see you bullish on both IWM and GS. There you go... consistancy is the road to riches. Interesting that I see them both the oposite.

Sigh. It hurts to be wrong twice. I'll watch these with a lot of interest.

Chris

OH

MY

GOD!!!

I just re-read all the stuff on how to turn log on and off... and realized I've been "Log On" for ever. Now I see why I've been disagreeing with Brett and Bob R. Two year diagonal support on both GS and IWM is still intact.

As my daughters would say... "halelluja to the squid!!!" (It's a long story, but it involves riding the monorail at Disney world at 12:00 AM after arriving at the park at 7:00 AM)

This just proves you should read this blog with a clear mind. Do not operate heavy machinery while reading the blog. Other than WMs no mind altering substance should be used while reading the blog... (other than the blog itself... it really CAN be a mind altering experience.)

OOooooo. I feel empowered to head into today's trading with new knowledge.

Hey, I got out of GRMN the just before earnings to lock in my profits. Didn't trust it to hold up under such a bizarre market. Brilliant, huh?

Brett,
Thank you. I sometimes doubt myself. I find I make the most mistakes and lose the most dollars when I take trades others are touting without feeling compelled to trade them from my own analysis. I have been wrong a lot. But one example was when everyone was telling me CME, no, no, no, and I saw it moving up. I held on, and it did just what I saw. But I will take into account what the pros say, too. They have been doing this longer. I bought some relative strength stocks and all but one of my puts I either took profits or they hit stops. I think the key for me is small positions and diversification until I get better. Thanks for all your help. We DO appreciate all your input. Even if I don't always see what you see, I learn from watching what you do.
Thanks.

Michelle

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Michelle,

I've been there too. As Jeff will attest, just a year and a half ago I used to take his price patterns class just to hear his picks. Then I would trade them, but as I said before, anyone can find a good setup if you look hard enough. The probelm is, you can't successfully manage a trade unless you know what you saw to begin with. If someone talks you into a setup that you didn't necessarily see, then you're not a trader, you're just a pigeon.

If you saw CME moving up, you should have taken it down. I did. In fact, I did a few times. Someone has to take the other side of your trades, so people NECESSARILY have to disagree with you. Don't allow your analysis to be shaken by someone (even someone you respect) telling you you're wrong.

I leave you with this lesson: You will become a trader far faster if you leave the 'nest' and make your own mistakes. Take trades you see. Learn why you failed and why you succeeded. Make mistakes and learn from them. The only thing you learn by taking someone else's ideas is whether or not THAT person's instincts are correct. You learn nothing about yourself.

Make mistakes, don't take mistakes.

Brett
Love that last comment...
"Make mistakes, don't take mistakes."

Brilliant.

Chicago…

Jeff, what is the “welcome reception” all about? It obviously isn’t a “must see” if you are willing to ditch it to go party. On the other hand, I can’t think of much that would be a must do over a party… Another question is what value would you place on the welcome reception out of the $1,000 registration fee? If it is less than $100, because the real value is in the breakout sessions, I say we catch a few cocktails and go party! Saturday, Sunday or Monday night is good for me as I will be leaving Tuesday.

If anyone is going from Portland Oregon, when are you leaving?

I just sold half my HLYS at 490%!

Good morning everyone!

Michelle, You asked about Shadow Trader. I hear him and see his charts on my ThinkorSwim desktop trading platform. I don't know how else you can do it. I just know he says you can't get see his charts through the paper trading account. His commentary is great.

--Patti

C2,

LOL....you were saying about ALEX?

I hate it when I'm right, but I exit a trade before it moves. I saw a cup and handle on GLDN. I exited two days ago. Look at that baby go.


Michelle

Brett,
Concur completely.

Michelle,
I am not really a trader yet. I still consider myself a student. The reason is, even as many mistakes as I have made already, I have many more to go. (and I go to work most days) The most important thing I am learning for the Brett and Rambo brothers is the mistakes have to be mine. The set up, the entry, the duration, the exit.......whatever.

You have a good eye. Own YOUR trades.

Is that horse dead yet or should I give it another kick.

Well if I didn't own my own trades I would be in BPHX right now.

Go get em Michelle.

Cheers,
ARTY

Michelle,

Why would you exit two days ago at support, and when did you go long on it??

Brett,

Just had time to catch up on the posts form yesterday. Your posts yesterday just really struck home. Thanks for your time and effort. It has made so much of a difference I cannot begin to tell you.

Anu

It stopped out. I had support at 60. It was one of those days when the market was moving all over the place. Well, at least I was right (for whatever that's worth.)

Michelle

I see a head and shoulders on VCP. It is testing the resistance today. If it holds, we'll see if it heads down.


Michelle

Clean Cups. Plus Jeff weighs in on GS and Log/No Log

Rambo,
I see your ALEX and raise you DRYS an extra $1.50 today.

I'd just like to take a moment (quiet please, everyone) to thank Brett, Jeff, and Rambo for their guidance these past few days (in particular.) I know there have been lots of other great idea givers, too, but these three are all at a level above us in that they're doing it for a living. They have all given a tremendous amount of time and guidance to us all over the bumpy past days, and I, for one, owe them a huge debt of gratitude. The only way I can pay them back is to follow their sterling examples when I'm trading full time.

If we ever get the "OA get together" under way, I want to buy them all dinner. Yes... I said dinner. Not just drinks. What the heck... burgers AND fries. OK... time to get off my pedistal.

Thank you for your attention

Brett,
Congrats, your GS is going to town.


I'm gonna have to shop around for puts. All of them have either been closed out taking profits or got stopped out in the last couple of days.
Bull plays:
CVC
RIMM
POT
AAPL
BA
GRMN
CAM
PCP
PCU
GLDN

Michelle

Oops. CVD. Most of them have already made their move, so not good entry points now.

Michelle

Guess I should proofread before I post. BA and AAPL are at support. Everything else had made a move.


Michelle