Month in Review 11-30-07

Yuck! That's about all I can say about November. The portfolio lost 23.52% this month. I think a lot of that loss was unnecessary and stemmed from my lack of commitment to my trading plan. I've learned a lot these last couple of months, but I think it has been a mistake to apply everything that I've learned at once. I'm trying to incorporate to many ideas into my original trading plan and it ended up hurting me this month.

Compare my returns to the Zweig Relative Strength screen that's my favorite. It MADE over 9% this month. While I fiddled and faddled with charts, screens, radio show diatribes, and news, my dumb screen made money without any brain power. I'm starting to sound like a broken record.

GHM made 55% this month. I bought it at all the wrong times because I kept trying to time things just right.

We'll see how the rest of the year pans out. The market has taught me quite a few lessons this month and I'll be doing a lot of thinking, analyzing, and reading to try to apply the lessons to my trading next year.

On the fence

I'm not quite sure how to evaluate the last couple of days. I'm hopeful that the rally will continue through Christmas. But there are a few things that have me concerned.

I was hoping to see the volume today surpass the last two days to really confirm that we were headed in the right direction. Volume was about half of what it was yesterday. I have a feeling that we might fill in the gap opening over the next week or so.

I'd also like to see the percentage of stocks in the NY exchange pop over its 20 day moving average. It's close, but we could see a bit of reversal as that gap gets filled.

So, for now, I'm cautiously putting some money to work in my trading portfolio while I let my long-term money take a break.

Yay

Apparently this was the day to do some trading. I did very little, and made a few bucks. I've got eight long positions right now in my trading account while my long term accounts sit in cash.

We'll see if this thing has legs. My gut feel is that with year-end coming up, that we'll see a pretty good move up. After that, your guess is as good as mine. My goal is to maintain my 30% gain through the end of the year.

My stupid stock trading strategy

Well, it looks like I was right about the bounce. I was just wrong about what stocks would benefit. Part of my problem is that I am chasing a 40% year end return and time is getting short. The market doesn't care about my targets and is quite happy to take money away from me when I make unwise decisions.

I'll have to admit that I've really struggled over the last month. In the past, I've experienced a week or two of slumps where things don't make sense. But it has been a long time since my struggles have been so consistent.

Making new mistakes

I thought I could ride this morning's bounce so I bought 3 stocks and put tight 2% stops on them hoping to glean 5 times my risk. If you've read this blog for any amount of time you are probably thinking to yourself, "I bet it didn't go the way he hoped it would." and you would be right. I stopped out of all of them within 30 minutes.

I guess I can chalk that up to another hard lesson learned. I'm back to cash.

Another ugly one

Sorry this is so late--I was out ringing bells for the Salvation Army. My returns in the kettle were about as anemic as my trading lately, so maybe it's just me.

I'll have to admit that even though I sound confident about staying in cash, I'm really not. This morning I was chomping at the bit as I saw many of the stocks on my watch list leaving me behind as they shot skyward. I was kicking myself for not taking a position in BIDZ last Friday, but then congratulated myself for my "discipline" as it nose dived after taking off again this morning.

Despite the general ugliness in the market, we still haven't seen the "capitulation" candle (blue circle) that we saw back in August. So even though we've reached the August lows, I would feel a lot more confident that we've seen the bottom of this downturn if we got a panicky day like that. So for now, I think it's best to wait this one out until things for sure turn for the better.

This Week with StockPunk 11-26-07

Although the stock screens I follow have done OK in the last couple of weeks, I'm still inclined to stay out of this mess for a bit longer. Despite Friday's impressive gains, I still think this market has a lot to prove before I risk some more money. This should be a very interesting week, but I'll be watching it from the sidelines. Good luck out there!

Time to quit whining

I know I've been on a downward spiral of whining and misery these last couple of weeks. And although I've been kicked in the shins repeatedly by this ugly market, I still have a lot to be thankful for during this season.

For a couple of years I celebrated Thanksgiving in Timisoara, Romania with my wife and friends. We cooked 5 anorexic chickens to feed 10 people. The heads and the feet we're included with the chickens, but we didn't cook those (there is nothing more unappetizing than chicken feet in my opinion).

Despite having very little, our Romanian friends were the most grateful and happy people that I have ever met. I look back on those celebrations fondly as they taught me incredible lessons about what it truly means to appreciate friends, family and life.

These days my job is living with and taking care of 8 teenage girls. They come from all sorts of backgrounds, but many of them have had some pretty awful childhoods. It is quite a privilege for me and my wife to introduce a happy and reflective Thanksgiving day to many of them who can't remember a happy holiday.

Thanksgiving is a busy time for us (we're having over 35 people eat with us this year), but it is always a great time to reflect on how good I have it. Here is a short list of things that I am thankful for this year:

• A loving God who refuses to toast my innards when I act like an idiot
  
• A loyal and loving wife who allows me to risk our hard-earned money in the crazy world of stocks
• Parents who taught me well and continue to give me wisdom and advice
• Two great kids who love their mom and dad and are a lot of fun to be around
• A great career that allows me to pursue my interests and influence lives
  
• Living in a great nation that allows its citizens to be free and to pursue their dreams
• Reeses Peanut Butter Cups and pistachio nuts

I encourage everyone out there to make the most of this special holiday. Put this dumb market on the back burner and enjoy your time with your friends and family!

Benefits of blogging

One of the best things I did this year was starting this blog. Even though it gets tiresome sometimes to write (especially after an awful day), the encouragement and ideas that continually flow in keep me motivated and excited about the future.

I love it when people write me and share their own triumphs and horror stories. It's comforting to know there are people out there that are taking it on the chin when I am too. The comments that the blog receives are almost always encouraging and positive.

This has been my most productive year yet as far as learning goes. I'll be sharing some of the things I've learned in my year-end wrap up. Hopefully by then, the market will have turned around and given us all a profitable Christmas.

Thanks to all of you who take the time to enhance my dumb blog and keep it coming!!

All the wrong moves

I'm about to give this market up. Every time I make a decision lately, it turns out to be the wrong one. I can't believe how many head fakes we saw today.

I bought a stock yesterday that went up 15% today. I sold it after it had dropped back to 5% and it went on to hover just about 2%. I thought I was pretty smart to get out, and then things reversed again and on it went back up to 7%.

I just ate two chocolate chip cookies to make me feel better. Maybe I should REALLY sit this one out for a while.

Maybe this is just a really hard market to trade. If it is, that's good because it teaches how to handle future difficult markets.

Dang It!

I just can't seem to catch a break, and I'm guessing a lot of traders are feeling that way. I felt pretty good about getting some of my money back today after my stupid decisions yesterday. I looked things up after lunch and YIKES! After the S&P broke through 1425 I got a little panicky and sold most of my positions. I probably should have waited for the August lows (around 1406) but I didn't one to compound my dumb decisions of yesterday.

We'll see how things close. It looks like things are coming back a bit right now. What a confusing market.

This is good though. I am learning a lot about trading in a really volatile market that is making everyone (including me) scratch their heads.
You'll notice that the S&P is getting dangerously close to the "time to get out" indicator (where the Price line (red and black) meets the 20 month moving average (blue bar).

This indicator does a pretty good job of predicting long term trends. Note that the last time the lines intersected was mid-2003 when this bull market started. The next couple of months should give us a good idea if this bull is over for a while.

Hopefully it won't last for 3 years like the last time. Or maybe we'll have a repeat of 1998 where it bounced off and went on to new heights for the next two years. Time will tell. The important thing is to be careful out there.

A better day?

So far things look good for a bit of a rebound. I have no clue whether this is just a head fake or whether we've reached the point where the bears can no longer drive things further down.

Despite all the carnage, there are still folks out there who think things still look good.

Bullish Jim is one of them.

Charles Kirk has an enormous amount of information every day that will help you figure this thing out. I never get tired of reading his blog.

I'm an idiot

I was just fishing for good news this morning, and as little as there was, I still convinced myself to make some trades. After all, it's the week of Thanksgiving! Things always go well this week!

I turned a potential positive day into a big losing one--down 1.64%. I traded four stocks early and they all turned on me. Lesson learned (probably not).

This Week with Stock Punk 11-19-2007

Besides a couple of options that refuse to stop out, I'm sitting on a bunch cash. It looks like I'll be doing that the rest of this short week unless I see a couple of quick plays that I can sell before Thanksgiving.

My watch lists are pretty anemic with very few actionable indicators on the charts. If you are a mechanical investor, it doesn't matter. You just keep plugging away--buying the stocks that show up on the screen. It's going to be funny if my unemotional screens beat my own performance by the end of the year.

Week In Review 11-16-2007

Despite the sell-off of nearly every one of my positions, I still managed to lose 3.44% this week. I was able to keep myself from trading at all which is a good thing. The bad thing is that my screens all beat me, and some have overtaken my returns again.

It will be interesting to see how the year ends up. I was feeling confident that this downturn would be short lived, but now I'm not so sure. I'm looking for some bullish confirmation and I'm just not getting it.

Today I thought I'd jump in for a few quick day-trades, but I couldn't find any good setups. GRMN was the only stock in my screens that I didn't look at this morning and of course it shot up today. I'm such a dweeb.

I've been listening to Phil Grande's radio show lately. He's an angry man with many conspiracy theories about the stock market and an avid hatred for Jim Cramer. He's got some interesting ideas, but he sure makes it hard to be long in this market. Maybe he's right.

Ongoing suckiness

Things continue to struggle in this market and it looks like it might not turn for the better until after Thanksgiving.

I'm planning to wait until things bottom out again (like they did in early September) before I put money back in this market.

I'll have to admit--I really don't understand options. I've got a couple that made it through the carnage. Today the stock that my option contract follows lost 2.33% but the option gained 24.56%. I'll take it, but it confuses me.

No trust for this market

I had a few pangs yesterday as the market continued to rally. Then it got all ugly again.

I'm nearly 100% in cash, and I'm not in a hurry to get back in to this mess yet. Today is looking like another ugly one.

Just be patient. Things will come around again. This is usually a great time of year to go long, but it makes sense to let things settle.

Finally some relief

After the worst week in the market since 2002, we're seeing some buyers come in to the market. On days like these I have to fight the thought that I sold too soon. I didn't--I followed my plan and I probably would have lost more if I had held on, but those feelings always creep in when things reverse.

Looking better . . . maybe

The premarket looks better this morning. I'm not biting yet. It seems like a lot of traders think we're oversold and are looking for a bounce.

More ugliness

I sold most of my positions last week and my portfolio still managed to loose another 4% today. That doesn't make me happy. I'm glad I heeded my own advice and avoided buying anything today. When the DOW was up 80, I got a little twinge in my stomach. It's a good thing I ignored it.

• Worst recession since the '30s?

This Week with StockPunk

I'm not planning on any new purchases this week. I think there is a possibility of a continued downtrend until around options expiration this week. I'm still counting on a good run through January, but right now all indicators tell me to wait this one out for a bit. The challenge will be for me to actually do that.

An Awful Week--The week in review

That was one of the worst weekly showings that I've ever had. I lost over 10% and I'm starting to feel a lot less confident that this is a minor blip. I've been ignoring a lot of traders who are smarter than I am who have said we're in trouble. I hope that they are wrong, but for now, I'm not buying anything new.

• Another Zwieg groupie
• Phil Grande says he predicted this week back in March. He's got some interesting things to say on his radio show.
• I may have got my butt kicked, but I'm still way ahead of the geniuses at Stock Superstars and the Prudent Speculator.
  
• Point and Figure Charts explained (and explained well)
• I've learned that it's not a good idea to buy options during a down trend.

I tried to be a calming voice yesterday to friends who were calling me in a panic over the recent unpleasantness in the stock market. I used to get that way too, but having suffered through several inexplicable declines, I've started to take it all in stride.

Chris Perruna has an excellent article (with charts!) that says it better than I can. The bottom line is to hang in there. Learn from what is happening and make yourself a better trader.

I HATE YOU, MR. MARKET

Actually, I don't hate the market. I hate all the wimps who panic and sell with every little bit of news that comes out.

If you read this blog at all, you know that just about every time my portfolio makes a yearly high, I end up giving a bunch back. I get a knot in my stomach whenever I start to make money, because I know I'm about to get my butt kicked. The last couple of days are a prime example. Tuesday I was up 53%. Today (so far) I'm at 42%.

Whenever I get the wind knocked out of me, it causes me to rethink what I am doing. So, I probably learn a lot more from losing than I do from winning.

One of the mantras of traders is to never trade against the tape--meaning the broad market really controls everything. It's hard to make money when no one else is.

The problem is, you never know if things are headed higher, or if they're about to crumble. But there are indicators out there that are extremely helpful in determining what's going on behind the scenes.

Here is a simple chart that helps give me an idea about what's going on. I first saw this kind of chart on Pitbull Investor which is an awesome site that offers some really great tools for very little money.
The chart uses simple moving averages but it gives me a nice picture of the market. If I would have used this chart in making buying decisions over the last 3 months, I would be a lot better off today than I am. If I wouldn't have made any buys after October 22nd, I'd be sitting on about 50% instead of near 40%. I could have avoided a 20% drawdown in August if I would have quit buying around August 1st.

Part of my problem over the past 4 years has been my inability to be patient and wait for the productive times while sitting out the nasty ones. Maybe this thrashing will slap me around enough to create a change in my trading. We'll see.

There are amazing tools out there for free that would have costs thousands of dollars a few years ago. I need to use them better.

My worst day ever

Down 4.86%! Sometimes I hate the market. My unbridled arrogance has given way to fearful humility. OK, not really, but I really got sand kicked in my face today. The good news is I took a bigger hit percent-wise just a couple of months ago. So this isn't as devastating as it seems, but I lost more money than I have since I started trading in 2003.

I guess the silver lining is that I'm still up 46% and I was up 43% when the DOW hit 14,200. So if things recover by the end of the year (and I think they will) were looking at some decent gains before all is said and done.

Another crummy one coming

Invariably after a really good day, I usually have a really cruddy one. Today looks to continue that tradition. Sometimes I wish I was a day-trader. My goal is to avoid watching the market today and let the positions handle themselves. I'll let you know how I did tonight.

My best day ever

Dollar-wise today was the best day in my trading history. It was my best day percentage-wise since August of 2006--up 3.98%.

This is one of the reasons that I tend to stay fully invested at all times. You never know when your train is going to come in and sometimes it happens when you least expect it.

I enjoyed re-reading Nicolas Darvas' book How I Made $2,000,000 in The Stock Market during my vacation. Even though it is a bit light on usable information, it does show the power of ignoring the crowd, the news, and the chatter and following your program without wavering. He lost a lot of money when he started listening to other traders and the media.

Even though I enjoy reading what other traders think about the market, I think I would never make a trade if I didn't follow my own program. No matter how good things are, there are always folks out there saying it's about to get bad.

So, I guess my advice for everyone out there is--Ignore everything and follow your program.

Week In Review 11-2-2007

A wacky week that rarely made much sense to me. The portfolio gained a wimpy .80% this week while most of my screens did pretty well despite the overall markets tanking at the end of the week. I was up nearly 53% for the year until Thursday--my dreams of riches were dashed. I guess I'll have to wait until next week.

Jittery Market

I wasn't really expecting things to go the way they did today. I thought that there might be a slight pullback, but nothing like the way it did by the end of the day. I was only down a half percent until things dropped the last hour. I ended up losing nearly 3% overall.

Fortunately, I gained about that yesterday, so I ended up with sort of a wash.

Days like this used to make me sick. But I have confidence that what I am doing is working and today presents an opportunity for further growth. I still think things are headed higher by the end of the year, so don't let one day (or even several) spook you out of this market. There is money to be made out there and you can't get to it if you are wimpy and stand on the sidelines.