Wednesday, November 26, 2008

James River Coal

Click chart to enlarge
Above is a chart of James River Coal (JRCC). The chart may not look familiar because it's a log chart (each vertical box is the same percentage rather than the same dollar amount). The stock just went too far too fast, and is therefore being eyed as a potential short candidate.
We don't disagree, but just to play devil's advocate, there is arguement for additional upside, if not right away, then after some consolidation or a brief pullback. The stock became way oversold recently (as did the entire market), and is now just re-entering its channel. It remains about 40% below its moving average. In this case, we used the 40dma because the stock seems to find support and resistance here.
We're not suggesting that it isn't a good short here, but are presenting an arguement for layering into the position due to the potential for the stock reaching $14.
In the interest of diversification, we looked into finding a short ETF for coal, but had no luck. If anyone knows of one, please post it. The long ETF for coal is KOL.
For the purpose of comparing their charts, other coal stocks include ACI, CNX, ICO, FCL, MEE and WLT.

84 comments:

Conorsh said...

Why use a log chart rather than a linear one? This is a difference i havent considered in a long while but a quick look at a few long term charts over both scales shows considerable difference...

To my mind i'm struggling to see an upside to using a chart with a scale that deceases the higher it goes, thus making moves from high to low appear steeper than they actually are..

Anonymous said...

china cut interest rate 1.08%, largest in 11 years.. may initiate some rally in FXI, agree?

thebat

Iconoclast421 said...

China rate cut is already priced in. I'm sure at least a thousand people with money knew about the chinese rate cut a week ago. Same thing happened with the china economic stimulus. FXP tanked before that news came out too.

Snotwheel said...

Conor,
It may not matter if a stock falls $1 for the person that bought it at $100, but for the person that bought it at $4, it's a huge percentage. The log chart accounts for this discrepency.
In most cases, the two charts look similar enough that it won't make a difference which is used. But when a stock moves a huge percentage in a short time, the two charts look very different.
We don't think that channels are all that effective on the way down, but if one were to use them to trade, then it's at least worth looking at it both ways. No one chart is correct. All the channels help you do is establish a range that is the top and bottom. If by looking at the arithmetic chart, you feel the top is at about 13, but the log chart says it's at 15, then perhaps the top of the channel is really 14 because this accounts for the technical work of a greater number of traders. Unknown to us, somewhere out there exists a concensus about where the stock will stop rallying short term. Looking at both charts helps blur the picture enough that you don't get stopped out of what could be a great trade if only your channel were drawn slightly differently.

Anonymous said...

Icon, Conorsh & hk22- what are your positions? You three have been the most negative on this board over the last few weeks so I'd like to know if you guys are putting your money where your mouth is or if you're a bunch of C.L.arkes spouting off with no skin in the game.

For the record my portfolio consists of 61% SSO at a break even price of 25.52 and 39% in cash waiting for the HIGHLY unlikely event that the S&P falls below 700.

Are you guys committed 61%+ on the short side at this very moment? Just curious.

Unknown said...

Gerald,

Lately I have been declaring my trades and positions.
As of right now I am 30% long on NCC and UYG and 70% cash.
The rest is on T-bills and actual Real Estate.
My goals are selling NCC at 2.3 and UYG at 6.
I might be negative long term but short term I see the market climbing a little higher.
I will be back shorting once the Inverse ETFS get cheaper.
Patience and cash should be your best friend.
Based on the numbers looks like there will be more collapses to come but that won't propably happen till next year when Hank and Helicopter Ben step down.

Iconoclast421 said...

I am buying FXP because FXI is sitting at 50 rsi. Buying here has been the most consistently profitable strategy for the past 2 months, and I definately dont see any reason why now should be any different. I will chase FXP down to 45 if necessary. FXI aint going past its 50sma.

Anonymous said...

Helicopter Ben won't be stepping down. No way Obama asks for his resignation.

Anonymous said...

Thanks for getting back to me hk & Icon. I agree with you hk in that short term we are going to go up. Way up I think. When Obama gets sworn in we're going to see the mother of all "hope" rallies and I'm going to sell right into that tsunami of strength.

As far as FXP Icon, you're playing with Plutonium. Answer me this: How is it that FXI and FXP are BOTH pretty much at their 52 week lows??? LOLOLOL!!! You have NO idea, do you? It makes NO sense, does it? If FXI is at it's all time low then FXP "should" be at it's all time high, correct? Otherwise why is it called an INVERSE etf? Just look at SDS compared to SSO. THAT is what the diversity "should" look like.

FXP is rubbish through and through.

Anonymous said...

Why is FXP down 11% but FXI is only up 6%? Aren't they supposed to mirror each other?

Anonymous said...

FXP is Ultrashort, while FXI is only Long, not Ultralong.

Iconoclast421 said...

Is FXP trash? That is the question. SKF and XLF have a similar relationship. XLF is down 60% for 2008, but is SKF up 120% for 2008? Nope. It loses a lot to overhead, just like FXP. But the fact remains that buying FXP when the rsi on FXI is over 50 has been THE most consistently profitable trading strategy for the past 3+ months. Same goes with SKF. Buying SKF at its 200sma is extremely profitable. I noticed this 3 iterations ago. I wrote a precise trading strategy for SKF/FXP and posted it on my blog over a month ago. Anyone who followed it made a boatload of money. Rubbish or not, I'll take those results any day.

Yes I do know why FXP is falling. Look at the volume of FXP over the past month. Topping 6 million on some days?! People are realizing what a great cash cow it is. As the bulls disappear, we get a dilutive effect, pushing down the price. Remember, it is the bulls who pay for the surges in FXP! As more people turn bearish, those surges diminish in magnitude. (When we enter the depression, it goes to zero because there are no more bulls to suck off of. Then the short etfs will break down completely.)

As people lose their shirts from buying at 90 or 80 or 70, they say "FXP sucks" and then the volume goes down. This generally coincides with a rise in FXI to 50 rsi, precipitating a new run in FXP. With lowered volume, we get returns closer to ideal. The volume on FXP this week is lower, exactly what we need. Hopefully we can get the volume under 2 million.

Anonymous said...

So Iconoclast, are you saying that now that the market sentiment has been changing from bullish to bearish which is reason why FXP has been down?

Snotwheel said...

Food for thought:
Just spoke with someone who we consider to be among the brightest in the industry, and this is what she had to say:
Her friends in the business are depressed. There is no other word that better sums up the mood on Wall Street. They're not depressed because they've lost money, but because they don't see any way the market will improve for many years.
Her best assessment is that the real estate market drops another 30%, and that the U.S. stock market remains rangebound for the next decade. (think 1965 to 1980 type action) She does not see it going much above 10,000, and does not see it breaking 7,000. She said that your best bet is to invest overseas, because the U.S. is dead for the next decade due in part to the tax increases required to pay for getting us out of this mess.
.....
Her hedge fund is getting killed this year (down 30%), but she considers herself among the lucky.

Snotwheel said...

It may be too late for a trade now, but one of Gary's stocks, LPHI is breaking out very strongly.

Iconoclast421 said...

Yes, of course its bearish, that's why we hit a 10 year low last week. But right now, after this little rally, we've reached a key inflection point. This chart illustrates that:

http://i468.photobucket.com/albums/rr44/iconoclast421/SPX-11-26.jpg

SPX is testing multiple uptrending rsi resistance lines, and at least one downtrending resistance line. Where it goes is anyone's guess. My guess is up to that top orange line. Aside from dabbling in FXP, I'm mainly just waiting for the technical picture to clear up.

Snotwheel said...

Icon, please do not let us influence your trading, but are you concerned that FXI made a higher low when the U.S. market made a lower low last week?
This suggests that FXI is stronger than the U.S. market, and if the U.S. market rallies, FXI could potentially break out of its slump even if only for a brief spurt.
Do you think this concern has any merit?

Conorsh said...

Hey Gerald,
I happen to agree with you on FXP. Sure, it is volatile and in theory you can trade it and make a packet, but its too unpredictable for my liking and this negates its use as a hedge..
On my own positions,i put my cash in sure enough. I shorted AiG, Citi and JP Morgan in Febuary and only closed out the last of it a few weeks ago when citi hit $12 (A tad early it turns out). I then bet on an obama rally two weeks before the election and went 100% long on solar. Sadly i didnt sell on time and so i'm still there today. I'm still bearish lonterm but short term i am expecting a big rally and so im holding. Besides, how could you go short after the drop we have just had in the last few weeks? Just asking for trouble...

Anonymous said...

Follow hot sectors, you will make more money, the hot sectors are heavy construction, cement, and solar energy.
The above sectors are good play in next two years because of Obama's plan.

I made more than 50% in five days.

BTW, I sold mtl @$5.79 yesterday because it's up more than 50% in two days. I bought pcr today. I am still holding flr, cx and ldk.

one week ago I predicated"fxp will be $50 in one month"

Anonymous said...

Icon, it sounds like you're convinced of FXP's viability enough to buy it, but damn...China's stimulus package, China's Central Bank lowering interest rates every other week, China's government willing and able to step in and dictate production levels and prices (i.e.; ACH for instance on the former, SNP for the latter) would keep me far away from that one. Of course the US market is manipulated as well, but certainly not to the blatant degree that China's is.

I wish you well, but I think that FXP will be fighting the tide and just continually be getting "readjusted" to lower and lower levels over the next few months. Maybe when FXP breaks under 20 it'll be a buy.

We'll see who's right soon enough. Let us know when you bail and switch to the long side! :)

GLTA & Happy Thanksgiving!

Iconoclast421 said...

Every time China announces some big govt intervention, going back to May, it causes FXP to fall in the gutter. But it never reverses the trend in FXI. The only way China can truly stimulate its own consumer economy is to cash in so many T-bills that it would collapse the US and destroy even more of its own exports. That's why China keeps going down. I dont see any change in that trend. FXI might go up another 10%, but its going to bounce hard off of 27. At that point, it will have rallied 50% off its low.

Anonymous said...

Snot, you should write Powershares and tell them to get on making a Short Coal ETF. I found PKOL so shouldn't there be a "SKOL" or something? What a fab ticker that would be!

Conorsh- did you ever find the book "Secrets to Profiting in Bull & Bear Markets" by Stan Weinstein on that book site? That would be helpful.

Thanks.

RoCoach said...

LPHI - still too risky. You can't really call it a break-out unless the volume's there too.

Iconoclast421 said...

LPHI is the perfect example of where rsi trendlines tell the story, especially when the rsi intersects converging trendlines such as the case with this chart:

http://i468.photobucket.com/albums/rr44/iconoclast421/LPHI.jpg

When we get all sorts of charts that have this same type of setup all at the same time, the market as a whole rallies hard, as it did friday. That's why it takes time for crashes to occur. These rallies, based mainly on computer aided TA algorithms, prevents the market from falling all at once.

Anonymous said...

Dow will close around 8760 today... and may be the last rally for this month...

Anonymous said...

And then again it MAY only be the start of a rally that MAY last all month long...

Way to go out on a limb Anon.

Anonymous said...

anon:

Dow is very health right now, it will retrace a little everyday. then it's up again.

I predicated "Dow will hit 8900 within one week." also I reminded you" don't make second mistake when dow was 7500.

btw I just sold cx because it's up more than 50% in three days.

Anonymous said...

Have any of you been in a situation where you almost lost everything, then sold out at the bottom and then watch it bring it back up? This is what's happening right now!

a;lkajsdfl;kjasdfl;kjasdflkjasdfj

Anonymous said...

You see Fxp is below $50 now.

Frankly, I put 100% money and 30% margin when dow was 7500 because I knew 7500 was 100% bottom at that time.

Anonymous said...

Wrong! That just because uncle SAM get involve in bail out for short term but longer term I think stock will retrace to low and trade sidewide for YEAR. This is just the hype for short term that why I call trader market...No stock go straight up or straight down...Enjoy why you can...Sentiments is still bad out there. I feel like this is just bear trap...So I sold out all, stay cash and wait to short...

Iconoclast421 said...

We are now very close to the "top line" I've been referencing on most of my charts for over a week now:

http://i468.photobucket.com/albums/rr44/iconoclast421/SPX-bear-rally-test.jpg

If we decisively break that downtrending orange line, it will signal a bear market rally, the first true bear market rally we've had since March-May. The break could happen friday, with a close above 920.

Or, we could close at ~900 on friday and then begin the long trek downwards. I'm betting we go down from 900. If I'm wrong I'll lose everything I've gained over the past couple months, putting me in the same spot as most everyone else. But on the bright side, we all know we wont get past the 200 day moving average, even if we do break through this lesser barrier. That will be a surefire opportunity to make my money back. So what is there to lose? lol. I'm putting a lot on the line here.

Anonymous said...

Commercial loans and credit cards debt are the next bubble will burst. That why I will predict DOW will be below 7000 this year...Happy trading...

Anonymous said...

If the S&P closes above 920 you lose everything you've made over the last few months Iconoclast421? Ouch. Better kiss that money goodbye then.

S&P's next stop is 1,000 or higher before it meets any type of resistance at all. Most likely the 100dma, maybe 1,050 by the time it gets there will be where real overhead resistance comes back into play.

Then I'm with you...short the S&P again for the sweet ride back down. But as for right now you're doing nothing but swimming against the stream. Good luck with that.

Iconoclast421 said...

On what technical basis are you calling for 100sma or 1050? SPX doesnt respond to that line. It best responds to the 30sma, which it will hit at 900. Beyond that it seems to respond to the 200sma, which it failed to break back in May.

Anonymous said...

I JUST figured out who Iconoclast421 is! C.L.arke!!!!!!!

Just to let the rest of you in on who C.L.arke is- he's a college kid with zero experience trading in any bear market but this one, and who has barely any trading experience PERIOD, yet he has a stock blog!!!

Priceless.

Anyone following this over enthusiastic under experienced kid is going to get clobbered.

PS- he got his nickname "C.L.arke" because he used to use the name clarke and since he was ALWAYS proclaiming that the sky is falling every other day last summer by incessantly calling the bottom he became C(hicken)L(ittle)arke. Very appropriate nic for him. And now look at him...he's on the exact opposite side over-calling the top.

Anonymous said...

anon said: "Wrong! That just because uncle SAM get involve in bail out for short term but longer term I think stock will retrace to low and trade sidewide for YEAR. This is just the hype for short term that why I call trader market...No stock go straight up or straight down...Enjoy why you can...Sentiments is still bad out there. I feel like this is just bear trap...So I sold out all, stay cash and wait to short..."

1. Please use your Name/URL if you believe yourself.
2. MM's always punish experienced small investors unless you have very very high level experience. Do you know why MM's dumped the Dow broke the support and until the dow was 7500, (and many small investors lost all their money, even someone wanted to commit suicide.) then dow was up very steady in recently?
3. 80% small investors knew TA and FA, how can MM's make money on this market? think about it.
4. You have to make money yesterday, today, and tomorrow, I don't care dow will be 5000 next year. of course somedays dow will be closed in red, however, Dow will be hit 8900, then it will hit 9300 within two months.
5. please review my post, then you know I am 90% right.

My native language is not English, Maybe some grammar or spelling are wrong, and some sentences are too open, sorry about that.

Btw thank you snot! you provide the blog and some good strategy.

Have nice holiday ! everybody.

Anonymous said...

Predicting the future is useless. It's just a waste of time. Dow 7000 or Dow 9000, SP500 600 or SP500 1100, it's just gambling.
Trade what you SEE, not what you think.

Iconoclast421 said...

Hey now NFB, no need to resort to innuendo. I dont have a stock blog, I have a political blog.
On that blog I have made only one post with stock recommendations, and that was 5 weeks ago. And that was just a comment. In that comment, I recommended DTO. Then I posted my SKF trading strategy. DTO went up 50%, and my SKF trading strategy, even if executed by a chimp, was worth 50% as well. Potentially much more. But that is the only time I've discussed trading on my blog.

It comes down to one thing. I am short. You are apparently long. Somebody is right, somebody is wrong. I've stated my reasons for being short as clearly as I could. No one should be "following" me, they should be doing their own DD.

Anonymous said...

Today's rally was technical. I guess the true movers and shakers were on vacation today so the computers traded technical. The SPY was stuck between the flat 20-sma above and the rising 5-sma below. By noon time it had to make a decision to either break up or break down. Computers collectively decided on breaking up. I think it is simple as that.

I was the one who first pointed out that hedging with FXP might be a bad idea, and suggested SRS (SKF was losing steam at that time due to TARP). I took a look at FXP after I came home and read this blog. What a beating it took lately. I bought a bit in afterhours following ICON for a trade. Since I am all long (trader turned investor, bought one week too early) I figured maybe FXP at historical low could help.

Thanks to Conor for the books. They are great! I was travelling then and the books made the airplane ride all the more enjoyable.

Anonymous said...

Question for the technical chart readers who uses moving averages and channels for predicting the market's next move. Aren't you completely assuming no intervention from the global governments? So much actions are going on there which your technique disregards. Perhaps Obama will have more of a calming effect on the economy than many people realized.

-268

Conorsh said...

Hey Pullo,
Sorry couldnt get that book you wanted. Any other come to mind though feel free to shout and ill see what i can do...

Anonymous said...

Pullo,

You can get the book from here:
http://depositfiles.com/en/files/884076

or here:

http://rapidshare.com/files/32128045/stock_books_046.rar


LeBlanc

agd21 said...

Article about increasing defaults coming in commercial real estate:

“Meltdown far from over, new mortgage crisis looms”

http://biz.yahoo.com/ap/081127/meltdown_coming_soon.html

Time to buy SRS?

- agd21

Anonymous said...

I downloaded the book from depositfiles.com but I have to have a password to extract the file :S

Anonymous said...

Password is static


LeBlanc

Anonymous said...

More bail out will be bad in the future generation. We are american that just know how to spend and don't know how to save for the raining day...We have lowest saving rate in the world...The money that gov't pay for total bail out is about 8 trillion dollar...that enough to pay off all 60%-70% of mortgage in this country. What's a shame...

Anonymous said...

What do you think?
http://3.bp.blogspot.com/_YxiD39ubq-8/SSu7MQicDkI/AAAAAAAAAsY/zvbsJVFHmx4/s1600-h/f

Anonymous said...

S&P has strong resistence at 900. Will see on Monday regular trading day. Today will not count. Traders still eating left over turkey... People seem to think the Bear market is over because we rally the last 4 days...Happy shopping day!

Anonymous said...

I sold flr and pcr and made 22% in two-three days. Today dow is neutral, maybe it will be down 100-150 points, if it happens, I will buy again.

imho.

Anonymous said...

fyi-
i tried to submit a short sale on jrcc. ameritrade would not take the order, reason stated: no shares available. then i put in an order to short KOL. ameritrade took the order, with a limit sale at 17.00. i don't see the need for a short coal etf when the same thing can be accomplished by shorting KOL, the long coal etf.

my other trade is C, bought monday @5.88. plan to ride it til it sp=BAC sp. i also have been layering into skf, srs, fxp.
888888s

Anonymous said...

I bought a few uso shares at $41.52

Anonymous said...

Buy DIG and C target 8.65 then depend on GM bail out.

Unknown said...

Sold Ncc today at 2.01 and UYG the other day at 6.02

As of right now sitting on 100% cash. Looking for a re-entry on the short side - looks like beginning of next week or end of day-Monday.
SMN at 67 and FAZ at 50-52 sound
pretty cheap.

Till then enjoy the weekend.

Anonymous said...

What's happen? uso is up $2 AH. my action is right !

Anonymous said...

I just sold 1/2 uso shares and made 8% in 3 hours.

Anonymous said...

What else do you buy BIGBOY.?

Anonymous said...

I am holding LDK, USO, and some dia calls now. I sold 2/3 dia calls today, it's very very good but I don't want to post it on this blog (now I am 72% in cash , I have no any short position since dow was 7500 ) however, maybe it's too late for you in near term.

Btw I sold stp and sol on Nov. 14, I didn't post them on this blog. In fact I bought back MTL @$4.71, $4.56, and $4.57 again on Wed. sold it @$5.37, $5.7, and $5.99 today( I sold mtl too early today because I thought dow would retraced 100-150 points at 3:30--4:00 pm and I didn't know the market would be closed at 1:00 pm. )

I am a day trader, swing trader, short term holder, and option player.

Anonymous said...

Would you post some buy here next time...

Snotwheel said...

This has been one of the busiest Black Friday's we can remember. Flat screen televisions were FLYING off the shelves here in NY. Consumer electronics ETF anyone?
In more tragic news, not sure if this made national news or not, but in our neck of the woods, a Walmart employee was trampled to death by shoppers upon opening the doors on Black Friday...
http://www.foxnews.com/story/0,2933,458744,00.html

Anonymous said...

Snot
We may have a bit more upside in the main indexes this week. Of course nobody knows for sure. But after last weeks amazing run-up, I'm going to go ahead and buy QID, SKF and DXD. Once again, it appears as though I'm possibly going against the grain, but doggone it, I think this was another one of those temporary downward breathers. Shopping may be good in your area, but as a whole I don't buy it.

Snotwheel said...

sbb, we'd like to get short also, but each time we wait for a rally on which to sell the longs and go short, the market turns down too early. At some point, we'll get a rally with legs and come within striking distance of the averages. At that point, we'll make the transition. Maybe this is the rally, maybe not. We haven't sold any of the longs yet. A rally with legs is long overdue.
No doubt everyone is eyeing which ETF's and stocks they want to short, and choosing their trigger prices. We haven't even begun looking for them yet, but will do so this week. SKF makes a lot of sense. It would be a good idea to chart its major components and buy it when they reach their averages. It can give you an early indication of when SKF will bottom out.

Unknown said...

One thing to keep in mind is that a lot of hedge/mutual funds
have had to liquidate their long profitable positions. For them not too get a huge tax bill next year they might have to sell the losers also. And they have a month to do so. I have been in Chicago this weekend and of course the stores were packed. (with Tourists tho),
And the discounts were unbelievable.
To keep the sales going a lot of stores at to give huge discounts.
Thats no good.

Anonymous said...

Snot
I'm more concerned with the magnitude of the recent rally than its potential length. A rally absent of any tangible support for it has me questioning its staying power. Or call it a correction, or a return to its descending channel or moving average. I think the only thing that's keeping it going is sentiment. When that starts to ebb, look out.

Anonymous said...

They offer deep deep discount and shoppers is only chose item onsale. Retailers margin will cut and they will file BK laters. Nothing has changed since the melt down. Do we have magical pill to cure the recession in couple of days. Just look at the number of housing data, job loss, loss...With 8.5 trillion dollar bail out. I just don't believe this rally will last. I will buy some SKF, QID, EEV tomorrow at open..

Anonymous said...

I can't wait to read all the "I told you so" bear posts today. Of course after the BEST GAINS SINCE 1933 there will be a little backing and filling, so go ahead and LOAD UP on the inverse ETFs. I will enjoy watching you struggle, post more blather about why YOU are right and the market is wrong until you finally capitulate, take more losses and watch us bulls clean up and end 2008 in the black.

December's gonna be a great month for the longs!!

Anonymous said...

>December's gonna be a great month >for the longs!!

Sorry, not this year...

Anonymous said...

The minute by minute chart of SSO is the prettiest swan dive you ever could see.

Unknown said...

Still holding 100% cash/

SKF and FAZ still need to get cheaper.
I'm not buying into today's fall.
We still have GM's Bailout drug injection to go thru for the year.

Iconoclast421 said...

I'm not seeing any support for SPX until it drops to about 815. I'll be scaling out of my remaining short position as we approach that point. Sold most of it already, since I was very heavy into FXP as it went below 50. But thanks to Hu Jintao's big mouth, FXP didnt stay under 50 for long. lol.

Still havent decided how much FXP and BGZ to hold onto if/when we do get to 815. I guess that depends on how fast we get there.

Anonymous said...

I hope Obama will speak every day from now!

Anonymous said...

add some uso shares

Anonymous said...

Watch BAC and MER. If stock holders don't approve this deal, market will TANK big time.

Ahh said...

Too bad there were no shares to short James River. Chose CMG instead. Covered already for 8% gain.

Iconoclast421 said...

ERY is up 30% in 2 days. I cant think of a more effective or convenient way to short coal.

Anonymous said...

Paulson and Berna speak today are very good for the market!

Anonymous said...

What a depressing market.

Anonymous said...

anyone going long during this last few minutes?

thebat

Anonymous said...

I'm short. Bought some SRS - it's up 36% today.

Anonymous said...

I said buy SKF, QID, EEV at open but 'ME-NO-SPEAK' said: DO NOT BUY then he/she got burn big time today! This is what ME_NO said "go ahead and LOAD UP on the inverse ETFs. I will enjoy watching you struggle" I did struggle with the big 30% gain for SKF, 15% for QID and 20% for SMN...BURN U...

Iconoclast421 said...

What a day! When I said SPX needed to go to 815 to find support, I didnt mean it had to do it in one day! Oh fliggyflap.

As for my targets of 900 and 815, the real question is: am I pulling these numbers out of thin air and just getting lucky, or is there something to it? I wont have the time to post any more charts like I've been doing. But hopefully someone else will post their charts based on the rules I outlined. I will try to comment on any such charts I see. If you do decide to use my "rsi trading" TA on a chart to share, I hope you'll use this link to create your chart: (so there is some consistency)

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=1&mn=0&dy=0&id=p40506022975

Unknown said...

Snot,
What do you think?

Heading higher or lower from now.
Lots of pesimistic sellers today taking their 5-day profit.
Much more than I thoght tho.
Tomorrow is going to dictate the direction.
They better put that TARP money in use if they don't want to witness a premature collapse.


And how bout a new topic?

Unknown said...

And I made the mistake of buying some FAS at the end of the day (but it wasnt the end of the day yet. :-( [3:45pm]
Showld have known better.

If we head dowm tomorrow I will just take the loss and switch to FAZ.
But I know very well that I never have any luck with casinos :-)

gdub24 said...

Icon - I've been investing for a few years but would like to get into trading/charting. You seem to be pretty spot on with your trades. Any advice on how/where to get started.

Iconoclast421 said...

Snot's general advice is spot on. Patience, and dry powder are the two most important things to have. Patience prevents you from selling for a loss when holding for a little longer would have yielded gains. It also helps with stress. I had the patience to wait all through thanksgiving, being thousands of dollars in the red on my trade, and it didnt phase me. I would not have had that kind of patience a year ago, or even 6 months ago.

I had a major problem with "having" to buy something, as if the money was "burning a hole in my pixels". It took a long time to learn how to sit on cash. That has been the source of most of my losses.

But by far the most important thing is patience. There will always be opportunities to buy where you are more certain where the market is going. Right now is not such a time imo, after a drop like today. But within a few weeks there will be another shot.