July 2nd, 2013

Most of the broader markets began the day with modest gains, and ended the day with modest losses after stocks dipped into the negative in the afternoon session.  My watch list is very much mixed, with about half the stocks on my watch list posting gains and the other half posting losses.

In major news today, housing prices rose 2.6% from April to May of this year, and comparing May of 2013 to May of 2012, housing prices rose 12.2%.  This is very good news for the housing market, and very good news for the broader economy in general.  Housing price increases indicate housing sales, and housing sales mean a boost to the broader economy.  Even if the homes being sold are existing homes, people need to buy appliances, furniture, electronics, decorations, etc. to put in the homes they buy.  So, home sales give a nice boost to the broader economy in general.

Also today, it was reported that auto sales for June were stronger than anticipated with most major auto makers reporting meeting or beating their sales forecasts.  Auto sales account for over 10% of all retail sales in America, so a strong auto industry is a good sign for the economy in general as well.

On the whole, though, looks like trading activity is still light with it being summer time, especially with everyone gearing up for the Fourth of July in a couple of days.  Most people probably are heading to the beach instead of trading (must be nice, huh?).

Anywho maybe we'll all be in that same situation some day.  Would be nice eh?

I wanted to post a picture of AAPL's stock as well.  Looks like they're still heading up, and I marked in pink an upper resistance level and a lower support level.  Looks like the stock is coming off a lower support of around $390 and has an upper resistance of around $450.  It's currently trading at about $423 so it's got a little bit of room to run before it hits that ceiling.

QQQ Intraday 21 Minute Charts (March 2013 through June 2013)

Uploading some pictures of the intraday QQQ 21 minute charts going back to March of 2013 for my own personal reference and review.  This is just so I can look at them without necessarily being at my home desktop where I have my technical scans setup.

Since I am currently unemployed thanks to my health, I will be able to study and practice intra day QQQ plays as well, and I'll be posting my results here so I can track them wherever I go!

03-05-13 to 03-13-13

03-13-13 to 03-21-13

03-21-13 to 04-01-13

04-01-13 to 04-09-13

04-09-13 to 04-17-13

04-17-13 to 04-25-13

04-25-13 to 05-03-13

05-03-13 to 05-13-13

05-13-13 to 05-21-13

05-21-13 to 05-30-13

05-30-13 to 06-07-13

06-07-13 to 06-17-13

06-17-13 to 06-25-13

06-25-13 to 07-02-13

QQQ Intraday Rules

Posting some rules for trading the QQQ intraday that I will follow myself.

1) Use the 21 minute chart as the decision chart

2) Use the 1 minute chart as the action chart

3) Use the Nasdaq 55 minute futures chart as the trend chart

4) Purchase options either 1 strike price in the money or 1 strike price out of the money.  Only buy out of the money if it's within like 10 or 20 cents of being out of the money.

5) Buy options that expire this month only.

6) Enter the trade when the bid/ask spread is no more than 5 cents apart.

7) Place a GTC sell order 15 to 20 cents higher IMMEDIATELY after the trade has been entered.  In the example given, the 15 cents higher was enough to make a 25% profit so a 25% profit may be a more accurate goal.

July 1st, 2013

So wow over a year since a post... way to go me! lol

Decided to get back into the swing of things on daily updates to the journal. Looking at my daily charts, pretty much every stock on my watch list is moving sideways following strong upward movements. This suggests that most stocks on my list are topping out until they either move down or continue going up... for now they are "resting."

The lone exception to this on my watch list is Apple (AAPL). Apple has been clobbered for quite sometime, and actually appears that it may be at the bottom of it's decline. Of course it's too early to confirm this yet, but it's the only stock on my list that A) isn't going sideways and B) isn't at the top of an uptrend.

Anywho, the Fed has made announcements that they may reduce some of their Quantitative Easing policies which has the markets a little spooked, hence why I think they're moving sideways right now. That and it's summer time, I think everyone sold in May and went away (to use an old market adage). This also explains why a lot of the moves the last couple of months have been quick up and down with little long term sustainability. The long term (gravy!) plays should resume in the fall after labor day. Until then, probably best to stick to the 55 minute charts for trading and get in & out same-day.

Not a whole lot of news today beyond a couple of manufacturing reports that spun a positive outlook on things. The ISM reported at 50.9% when it was forecast to be 50.5% (a 0.4% positive surprise) and construction spending met it's forecast of 0.5%, a nice increase from the prior reading of 0.1%.

The only other noteable news item was that Zynga's CEO stepped down, and was replaced by the former head of Microsoft's Xbox division Don Mattrick. Mattrick is the one who famously quoted in regard to Xbox One's originally "always on DRM" that "if anyone wants to play games without internet, they should get an Xbox 360." Basically, all the bad ideas at this year's E3 that were on display when Microsoft announced the Xbox One were his fault. If I were Microsoft I'd say good riddance. The man's ideas managed to alienate and undermine almost a decade's worth of work that Microsoft has performed to etch out a market for the Xbox brand. And actually this works out well for Zynga since Zynga revolves around free-to-play web based games that earn most of their money from micro transactions.

March 12th, 2012

So both my practice trade on Yahoo and GE have flopped... miserably.  I went back to using the "Christmas Cross" workspace and found that the Christmas Cross showed clearly that I should NOT trade.

I believe I will begin doing fundamental analysis to find stocks to trade (and in what direction) and then I will rely on the Christmas Cross from now on to determine when to pull the trigger.  The downside to trading without the Christmas Cross is that other forms of technical analysis are fine for trading stocks, but the Christmas Cross has the precision and timing to trade options effectively.

I believe I may use the older methods when I begin trading just stocks, but for now I need to use the Christmas Cross.

On the flip side, I would have exited both trades with a small gain (around 10% GP) if I had used a trailing stop system to limit how much I could lose.  Perhaps using the following approach would be most prudent:

1) Do fundamental analysis to find stocks and determine which overall direction they'll take
2) Determine the trend of the stock
3) Use the Christmas Cross for a trading decision
4) Use a trailing stop to let your winners run so that you can take profits quickly if the trade reverses

GE Put Option Play

GE has been in stage 3 since January, and as the market as a whole is set for a downturn, and as GE itself is due for a downturn, the timing here seems good considering GE just broke its resistance level.

Their most recent earnings release was January 20th where they beat earnings by $0.01 per share.  Their next earnings release will be on April 20th, so there should be no earnings surprises to give us trouble here.

I want something in the money that will also expire next month, so we'll be going with the April $19 Put options.  The current bid/ask spread is $0.90/$0.92 and my beginning position size is $1,000 or less.

I will buy 10 contracts for a total position size of $920.  My ideal profit is 35%.  The commissions to buy & sell 10 contracts will be $45.  My cost basis will be $965.  Divide $965 by the inverse of 0.35 which is 0.65, and my target position size is $1,484.62.  Therefore the bid price will have to reach $1.49 for me to hit this goal.

I will place a limit order to buy 10 contracts of the April $19 Put options, and then simultaneously place a GTC sell order to sell those at the bid price of $1.49 per share per contract.

March 6th, 2012

AMD
AMD has had a breakout to the downside.  It's a hammer candle though, I don't believe I fully trust it.  The smart thing to do here is to wait for some kind of pullback, see if it tries to re-enter the support level on the chart.  If it attempts to re-enter the support level and fails (ie: the support level becomes a resistance level) I will take this as confirmation.

BAC
BAC is currently working through stage 3.  It is testing its support level now.

BBY
BBY is still building in an upside triangle formation, attempting to break the ceiling of resistance.  I would be leery of this one simply because the market as a whole is poised to turn over and head to the downside, so any trade to the upside here would be going against the general market.

F
F appears to have broken through its support level at $12.20.  I would like to see it pullback and retest an entry above this level before thinking of it as a trade confirmation.  If it retests an entry, and the support has become a resistance, then I will consider it confirmed.

GE
GE has very clearly broken through its support level.  I will consider this confirmation as it has clearly broken its support.  My next post will have a practice trade for GE.