Late to the party

I've decided that this market timing stuff just does not fit with my personality. I think it is easier for me to face a drawdown in my portfolio than to sit out while the market does its thing. Last week I missed out on a 10% gain for the portfolio because the indicators I watch said that we're still not out of the woods.

Maybe we aren't, but I'd be much better off right now if I had been fully invested. Maybe someday I'll have things so figured out that I can dance in and out of the market with emotionless conviction.

So, as of yesterday, I'm fully invested in my trading plan. Once again, my timing is way off and I'm losing money like crazy. But this is all part of the plan.

Stock Punk Goals for 2008

My goals this year are very similar to the ones I had last year. Here were last year's:

Goals for 2007 (In order of importance)

1) Beat the S&P 500
2) Beat the Stock Superstars Portfolio
3) Beat Charles Kirk's Yearly Return
4) Make 20% on Portfolio
5) Match or beat last year's return (62.44%)
6) Control my emotional trading and stick with the program

For 2008, my Goals are as follows:

1. Beat the S&P 500--Shouldn't be too hard, but I'm already behind on that goal thanks to my irrational trading.
2. Beat Stock Superstars and Prudent Trader Newsletters
3. Make over 20% on my portfolio--My goal is to eventually trade for a living. If I can eek out 20% each year, I'll be able to meet my goal in the next 5 years.
4. Beat last year's return--I'm not doing so hot so far this year. Last year at this time I was up 12%. I've got a ways to go.
5. Control my emotions--I'm a miserable failure so far this year. Hopefully, I'll get a grip and start doing better with this goal.

AAII's Stock Investor Pro

Members of the Kirk Report voted Stock Investor Pro their number one stock screener. I'm surprised that Zacks Research Wizard didn't make it in the top 10. I think Zacks has priced themselves out of the market when it comes to individual investors. That's too bad, because it really is a powerful screener.

StockPunk Market Meter

I'm changing the StockPunk Market Meter to neutral tonight. The Fed has whacked this market and not much is making sense. Indicators that I follow are all over the place. But I do think there is finally some opportunity to make some money (at least for a while).

Week in Review 2-1-2008

I got spanked.

This week was a mess for me and it is reflected in my account. I didn't lose anything (I gained a measly .5 percent), but when the averages looked like this (Dow +4.39%, the S&P 500 +4.87%, Nasdaq +3.75%, and the Russell 2000 +6.08%) I can't be too happy about my performance.

Here's where I went wrong (please learn from my stupidity):

• I lost focus and strayed from my plan
• I resorted to stops (and had no guidelines for how to place them)
• I paid too much attention to indicators, news, and other blogs which paralyzed my trading
• I worried too much about the broad market
• I waited for stocks to "prove" themselves and then got left behind as they rocketed upward
• I sold too soon

It has never paid off for me to market time, and yet I do it every time my account takes a hit. You'd think after years of doing this, I would learn my lesson. It just hurts so much to loose money even when you know it's all part of the game.

Now that January is over, I hope to get back to the plan and crawl out of this hole I've dug for myself.

All but one of the stock screens did very well this week. The ZZ#1 screen which filters AAII's Zweig screen with Zacks #1 ratings made 11.42% this week with it's one pick LXU. That is the first stock the screen has picked since the end of December which may be an indicator of its own (no #1 stocks--market sucks).

The Zweig Relative Strength screen made 4.05% this week but is still underwater for the year. The screen would have done much better if it wasn't for the blowup of GHM at the beginning of the week. I picked GHM up on Wednesday and have made a nice 13% on it so far which was my only good call this week. Without GHM the screen would have made over 10% this week thanks to a tidy 29% return for WSCI.

StockPunk's To The Moon screen is sucking wind and is down over 11% for the year so far.

Thrashing about . . .

Somehow I managed to make very little today despite the market's surge forward. I still feel like I can't do anything right. My good decisions are eradicated by my bad ones.

I'm happy to wipe January off my calendar and begin anew for February. I'm thinking it's time to get back to the plan rather than frantically looking for some new strategy that works in a sucky market. We'll see if I have the gumption to stick to the plan no matter what happens. I predict that I won't.

2005 all over again . . .

I feel like I did when I first started trading with my own ideas back in 2005. I basically had no clue what I was doing and I chased after stocks that I thought would do well. I went the whole year treading water as my portfolio barely moved. I'd make 10% here and there and lose 10% here and there.

That's what I've been doing lately and it's getting old. I've traded more than 10 stocks and my portfolio barely moves. Thank goodness it's still January and I still have 11 more months to get things figured out.

Reader Question about Stock Investor Pro

I haven't answered a reader question on the blog for awhile and this just came in tonight:

I haven't had much time to visit your blog and apologize if you have talked about this recently and I missed it. I am a user of AAII Stock Investor Pro and although I do love it, I sometimes feel I am missing out on a few features that Zacks research wizard has. So my question is would you recommend Zacks Research Wizard over SI? Is it really worth $1400 more? I can't justify both (probably can't afford RW) and need to renew SI Pro soon.

It really depends on your style of trading. I like them both—but right now I prefer SI Pro for a few reasons:

1) Price—you can’t beat if for what it delivers

2) Built in screens (I really like the amount of data available on the included screens)

3) Familiarity—I’ve been using SI Pro since 2004 and I still like it a lot

However, I’d like to see SI Pro have some ability for testing without the cumbersome downloads of weekly data. I’d also like to be able to backtest ideas with it (AAII does it on their new stock screens so it’s not out of the question).

I like the speed and constant data updates that RW wizard has. I like the backtesting, but I am becoming less enthused about the results. It seems like whenever I pick a strategy that produces amazing returns, it quits working when I start tracking it. I really don’t know how to explain it, but it concerns me.

Another thing that I don’t like about Research Wizard backtesting is it creates way too many variables for me. I’ve developed some ideas that work, and the ability to quickly analyze other ideas too often causes me to question my own trading and really gets me off track. For me it’s best to narrow my focus and stick to my trading plan rather than trying to discover the next “golden ticket”.

So for now, I’d recommend that you save the money and stick with SI Pro.

I wish I knew what I was doing

I took a few positions today and made a few bucks. GHM blew up after gapping up 5%. It ended the day down over 18%. Fortunately, I had a 3% stop on it.

I tried buy in to WSCI with a limit order again, but it left me in the dust. It was up 12% today.

My strategy continues to buy half of my normal positions and place a tight (3%) stop after the stock is bought. With my portfolio down over 8% YTD, and with the goofiness in the market right now, I'm hoping to catch a few good moves and avoid tumbles like GHM showed today.

There's no understanding the stock market

Stocks were down heavily in the premarket but they've come back substantially right before the open. Asia once again had some huge declines. There is still no clear direction on where the market is headed from here. I only own two stocks, and my plan this week is to tread lightly until after the Fed meeting on Wednesday. After that, we'll see what happens. Be careful out there!

Week In Review 1-25-08

That was one of the craziest weeks that I've experienced so far. Chaos ruled, and it was very difficult to figure out which way things would end up. I ended up a piddly .30% for the week. My screens did much better than that.

Maybe I was overly cautious, but I'm glad I didn't put the whole portfolio to work. This is a different environment than I am used to, and I don't really feel comfortable trading in it yet. Next week will give us more clues to where we are headed short term.

In the mean time, I'm going to try and get my bearings and figure out a game plan for this difficult market. There are so many opposing viewpoints that make it incredibly difficult to make good decisions. My plan is to try and stay focused on what has worked for me during difficult times in the past.

Don't get too excited . . .

We've had two really good days, but that doesn't mean we're out of the woods quite yet. There still seems to be some insanity left in this market and some companies are still getting hammered when they probably shouldn't (AAPL).

We still don't have an "time to buy" signal yet. I'll be more convinced with a crossover like we had over a month ago (blue arrow). It looks like we've got a ways to go before that happens.

For now, I'm just goofing around with small trades with low risk. I made .50% on the portfolio yesterday with some nice trades with little risk. We'll see what today holds. Be careful out there.

Is it over yet?

Today's action really hasn't changed anything. The market was oversold and the bargain hunters went wild near the end of the day. I took some small positions with tight stops just so I could feel good about being part of a rally if it happens. I've got stops set up if things turn back around (which is very possible) in the next couple of days.

We still have more than 11 months left folks, so don't start making bad decisions because of a few good hours of trading (that's my job).

Now What?

I can't believe people seem excited by the market "only" loosing a percent today. Sure it was down much more than that at the open, but should we be happy that things are less gloomy than we originally thought? I'm thinking no.

This monthly chart of the S&P 500 is indicating that we are in a bear market. Until that price line rises above the 20 month moving average, things are going to be tough.

I have to admit, despite the carnage, I had a hard time watching some stocks come back from 10% losses and actually make 10% today. But I think this ugliness has a ways more to go, and so far this month I haven't done well when things are ugly.

My plan is to sit things out unless I absolutely have to buy a stock or two--just for my sanity. I'm going to concentrate on just a few stocks per week (5 to 10) and only buy ones if they fit some stringent criteria. It just isn't going to work for me to buy a basket of stocks and take my lumps. I'll have to wait for a turnaround to do that. It will come, but I don't think it will be very soon.

Jubak has a good article on preparing for the coming bear market.

Time to buy?

A lot of folks are counting the turn-around today as the needed "capitulation" that the bulls were hoping for. I think it happened way too quickly to truly be a signal that the bears are done. We sat at -500 points down for just a few seconds before we started to march back up again.

I don't think the rate cut is the reason. That thing will take way too long to permeate the market before it effects anything.

Whatever it is, I still think caution should rule. I missed a couple of very good trades this morning. WSCI and WW. I followed them both with limit orders as they climbed from being down significantly at the open. As I write this WSCI is up 13%.

Oh well, there will be other opportunities.

I'm not THAT negative, am I?

I found out today that if you do a Google search of "stupid stock market" the number one return is StockPunk. I found that out because apparently a LOT of people are inquiring Google about the "stupid stock market" today, and in doing so are discovering StockPunk. I think I only called it stupid in the post after the shooting here in Omaha.

While the market upsets me at times, I still think it's a pretty cool way to make money. Managing your risk is key in this kind of market. If I hadn't been cautious lately, I'm sure I would have been down 30% or more.

Ugly posted a video today of a guy blowing up his portfolio trading futures this morning. He swears a lot.

Tomorrow could be really ugly, but if the Fed steps in tonight, who knows what might happen. I'm glad I'm watching from the sidelines, but be assured--I'll be watching.

P A N I C ! ! !

Futures aren't looking so hot this morning as overseas markets tanked big time. The market isn't even open today, but the insanity is already beginning. There was a lot of talk about a bounce on Tuesday, and there were a lot of people who bought Friday night thinking they were going to catch it. They are going to end up losing their shirts.

When the market responded tepidly to the proposed stimulus on Friday, I knew something was up. That's why I got out.

Things look pretty awful at the moment, but remember--it can't go down forever. There are going to be some great opportunities this year. It will be nice to get the insanity out of the way. It happened very quickly (this is the worst January drop EVER) so the rest of the year may be one of the best buying opportunities in history.

I don't pretend to know what's going to happen, but this isn't the time to get emotional and try and make up all that you've lost. Sit back and enjoy the drama and make plans to do some amazing trading later.

The VIX as an indicator

Another indicator that traders use is the VIX. You can read the details about the VIX here.

The VIX is a measure of market volatility. The saying goes "When the VIX is high, you buy, when the VIX is low, you go." "High" on the VIX is usually considered above 30. Low is below 20.

In general, if the VIX is above 30 the market is in panic mode and this indicates an opportunity to get in when prices are low.

If the VIX is below 20, it indicates that the market is complacent and that a sell-off may be happening soon.

Despite the recent sell off, we still aren't in a panic mode yet. I would wait until the VIX moves above 30 before getting too aggressive in this market.

Things aren't looking good, yet . . .

Many traders use these charts to determine market sentiment. I won't go in to what they measure (you can find information here on Stockcharts.com, but they are often used to determine whether the market is overbought or oversold.

I just wanted to point out that we haven't been near this oversold level since 2002 for the S&P and since before 2000 for the NY stock exchange.

I don't think that necessarily means we'll see a bounce or we'll see further declines. It does indicate that things are at extreme levels right now, and we haven't seen times like this for nearly six years (or more).

Zweig & Zacks Screen

A few of you have commented on the 0% return that the Zweig & Zacks screen has shown so far this year. There haven't been any passing stocks on this screen for several weeks.

The screen looks for any stocks in AAII's Zweig screen that have a #1 ranking from Zack's Research.

I've been wondering recently if I could use the number of passing companies in the Zweig screen and/or the number of companies that have a number 1 ranking on Zack's to get a feel for the market. The Zweig screen averages about 15 stocks each month. Lately, only about 10 have shown up on the screen. And as I said before, none of those stocks have qualified for a number 1 ranking on Zacks. Interesting.

How soon I forget . . .

After another awful week for my portfolio and for the screens I follow, I assumed that this was probably the worst four weeks in trading for me and for the screens. So I went all the way back to August 2004 (when I first started tracking performance) and discovered that this downturn wasn't unique, and it wasn't the worst.

In fact the Zweig RS 5 screen had a MUCH worse four weeks back in AUGUST 2008--just 5 months ago. It lost a whopping 26% during that downturn--compared with 19% (so far--from the beginning of December until now) during this one. Things could still get worse, but it really puts in perspective what a short-term thinker I am.

I was writing this year off as the first losing year I've ever had (since 2003) and we aren't even four weeks into the year. Last year the Zweig RS 5 screen made 46% without any sort of stop management--even with a 26% downturn more than half way through the year.

I don't think it's quite time to jump back in, but I do think that once the dust settles we have an amazing opportunity to buy a lot of good stocks for some very good prices.

I CAN'T TAKE IT ANYMORE!!

I'm back to cash.

I thought I'd take advantage of a bounce this morning, so I took a few positions in stocks that had been beaten down over the last week. Apparently, I'm an idiot, because every stock that I had tanked. And then the whole market tanked--again.

It's time to get out and re-evaluate. I should have done that at a 6% loss, but I held on thinking that things would turn around. Maybe they will, but right now I'm making some foolish mistakes in a desperate move to make up my losses.

Maybe this time I'll wait for a real confirmation that the tide has changed. Until then, I'll just lick my wounds and try to figure out why I was so stupid.

You rubberneckers . . .

I'm like an accident on the highway. I've noticed that when the market has a particularly bad day that the number of visitors to the StockPunk website increases dramatically. I guess the idea is that if the market is bad somehow my portfolio must suffer and that's fun to watch.

Well, I wouldn't want to disappoint any of you. Despite using only half of my portfolio for trading, I ended up down 3.71% today. There's a train wreck for you.

Old habits die hard, and I revisited some of the mistakes that I made last year. I'll tell you all about them tomorrow in my week in review.

Floundering . . .

I'm just not quite sure what to do with this market. I'm usually of the persuasion that there's always money to be made despite the direction of the overall market, but I'm having a hard time incorporating that philosophy into my actual trading.

In hindsight, staying in cash would have been more prudent, and my impatience has taught me a lesson once again. I'm just not sure where to go from here. I own a few stocks that haven't stopped out and I can't figure out whether I should just dump them now or wait for a bounce (that never seems to come).

Charles Kirk has some really dreary outlooks for the market right now. I don't think I've ever seen such unpleasant sentiment market-wide. I still think there are opportunities out there and some people really seem to know how to trade in this market (Nick at My Ambitions as a Trader is having a spectacular 2008 so far). I guess I just don't know what I'm doing.

I guess it could be worse . . .

I lost .76% today. Why didn't I just stay in cash?

In the last two weeks I've lost 5% of my portfolio. That hurts, but the S & P 500 is down nearly 6% which is two percent more than it made last year.

So when I look at the big picture, things could be so much worse. In November I lost over 15% in 3 days. I think I learned a bit from my failures last year and I hope that I am trading a bit better. I just need some more patience.

Kirk has a good article on AAII screen performance. He detailed it much better than I could have.

It looks nasty out there

Looks like were in for an unpleasant day after Intel's disappointing report. This has been the most difficult market for me to trade since I started in 2003. This must have been what 2000 through 2002 was like.

If today sucks badly, it would be good to see a bit of a panic so that we can finally get that over with and move on. We still haven't seen any sort of capitulation like we did in August.

I have a maximum of 6% loss for a month before I quit trading for the rest of the month. I'm at -4.5% right now.

Thought I was all bad and stuff

I thought I'd put some money to work after lunch because I was down a piddly amount despite the market's lousy showing. So I did some aggressive (for me) trading and got kicked in the teeth. I had one do a round trip in an hour (bought it--lost 10%--sold it).

I didn't follow any plan. I just bought a bunch of stocks that were showing strength or might show some strength tomorrow. I'm dumb. Down 1.17%.

Put a little $$ to work

I bought four stocks today. All but one were duds. Up .47%.

This Week with StockPunk

I'm not anticipating that things are going to get too much better with the market this week. I might try and take a few positions, but I don't have more than a couple of candidates. Things will turn around eventually. Patience is key during crummy times like this (I need to take my own advice).

AAII Stock Screens

Most of you know that I love AAII's stock screening ideas and that I have focused on the Zweig screen since 2005. The site hasn't reported year-end numbers for the screens yet, but there are some interesting things to note for 2007.

November 2007 was one of the worst months for the AAII stock screens since they started tracking the returns in 1998. It's comforting to know that some of the difficulties we faced as traders in 2007 were felt far and wide.

Many of the screens that consistently out-perform the market struggled this year. Others that haven't really kept up over the years had banner years.

AAII provides an excellent spreadsheet that details every screen with monthly returns, turnover, average number of stock picks, and cumulative return. It is worth spending several hours on their site and soaking in some of the knowledge and experience that they offer.

Week in Review 1-11-08

That was a good week to be watching from the sidelines. For the most part, I was. I still managed to give back .42% this week despite having only 30% of my portfolio committed. By Tuesday, I was all cash and remain there today.

It's hard to know what next week will bring us. The constant see-sawing of the market is getting quite irritating, and it sure isn't easy to find a place to jump in without getting smacked.

This market is killing me . . .

I feel good about not trading at the beginning of the week, but the last couple of days have been tough as I've sat on my hands as the market churns upward. I'm really not seeing any real signs that the worst is over and the see-saws we see every day aren't doing much to convince me to get back in (even though I so desperately want to).

I was just telling my wife yesterday how it is not even two weeks into the year I'm already unhappy with how my year is going. "How will I ever make any money this year?", I lamented. She called me an impatient baby.

I missed out

I didn't participate in the late day rally today, and you know what?--that's OK. The gains I gave up today more than offset the pain I would have felt over the losses from the last few days. I still don't trust the market, and today didn't convince me that it's time to put some money to work.

Right now I'm ahead of my screens by a couple of percent, but my guess is they'll catch up to me soon--they always do. I still don't have the guts to trade mechanically.

Oversold Bounce?

There's talk of an oversold bounce this morning. That may be, but right now (in my worthless opinion) there is nothing holding up this market. Until we start seeing some earnings numbers, I'm not willing to risk much.

Today should give us a lot of information about where we're headed in the next week or so. I suggest you sit back and watch the action and enjoy being a spectator.

Barchart reported this is the worst YTD performance for the market since 1930.

O.K., I'm convinced . . .

I was a bit unhappy to see the DOW climb 75 points while I sat on the sidelines, but as it rolled over in the afternoon, my angst turned to relief. This thing is ugly and now that we've taken out the August lows with out the sellers giving up like they did in August (red arrow) my guess is this thing is headed to the March lows.

It could turn around tomorrow, but there's not much in the way of news to do it.

What a mess . . .

This market doesn't seem to have any idea where it's going. We filled in the gap (blue arrows) but we still haven't seen sellers going nuts and then giving up (left red arrow). Today we had some action, but it wasn't enough to put an end to this see-saw action.

Tomorrow should be interesting.

That didn't last long

O.K., I'm back to cash again. This market ticks me off.

Still a coward

Despite my discovery that market timing hinders my performance (see earlier post), I remain a trading coward after the market has kicked me in the teeth. I've taken a position in GHM and nothing else. I would like to see some strength once again before I make any more commitments. I think the market is on the fence between a good rally and an awful downturn and I am too emotional to risk money in a downturn (I might even cry a bit).

Some day maybe I'll be able to put my money where my mouth is and trade mechanically no matter what the market conditions are.

Prudent Speculator 2007 Performance

If you had a rough year in the market, don't beat yourself up too much. One of the most respected and best performing (according to Hulbert Financial Digest) stock services over the last 20 years struggled badly this year. Most of their services lagged the market.

Charle's Kirk lamented this week that many of his members struggled to beat the market last year as well. I think this was just a really difficult year.

But as I said in the post before this, I think sometimes that we create our own problems. I know I made things way more complex than they needed to be and my portfolio suffered. Sometimes we think our plans are too simple and we modify them so much that they quit working.

I hope that in 2008 I am able to step back and re-focus my trading by simplifying the way I approach the market. I spent way too much time listening to the news, blogs, and other traders which really got me off track.

Another lesson from 2007

I always like to go back and analyze the previous year's data to see if there is something I can learn from what happened. I like to see if new information I've learned helps or hinders my trading. Most of the time, any new information causes me to perform poorly.

Last year was no exception. Although it was a pretty good year, I still didn't manage to outperform any of my screens. What that means is that all of my labor, sweat, knowledge, and effort created no advantage over a simple mechanical stock screen. I could have spent 15 minutes a week and created the same (or even better) results than I did with constant monitoring, reading, thinking and planning.

Don't get me wrong--I enjoyed every minute of all that hard work because I absolutely love what the market has to offer. I love reading about it, watching it, analyzing it and trading it. But I do think that I could spend a lot of the time that I spend on the market on other more productive things.

To give you an example, one of the things I've really studied this year is timing the market--going to cash when things suck and going crazy when things are going well. I put together several indicators that I think really capture the "underbelly" of the market and allow me to accurately predict the short-term direction of the market.

I went back and applied what I learned to my stock screens to see if I could utilize my timing models to capture the upswings and sit out the downswings. The results kind of shocked me. I expected to at least double my theoretical return. Instead, I cut it in half. For my style of trading and screening, market timing is counterproductive (at least over 2007 it was).

So, I'm back to the conclusion that I had at the end of 2006. If I stick to a mechanical plan in the good times and the bad, I have a very good chance of soundly beating the market.

Week In Review 1-4-2008

What an awful week that was. I got caught on the wrong side of this action and lost over 3% for the week. StockPunk's To the Moon screen had a good week however--if only I had invested in it.

Not much better today . . .

I made up part of the loss from yesterday, but I wanted to get rid of some stupid trades and I got greedy and put my limit orders too high. They came close to selling, but never did. So I'm stuck with them another day (or two).

Not a good start to 2008

I wish I would have followed the advice of my handy dandy Market Meter today. Instead, I held on to a few stocks from last week thinking that maybe this struggling market would come around. It didn't and I lost 1.37%.

Evil Kid Brother

My brother Mitch and I are in a constant battle for notoriety. Every time he comes over, he Googles his name just to rub it in my face that he can produce more hits than my name can. He easily wins that game--the only "Scott Carl" that shows up on Google is some lyric writer.

Now he's gone and done it again by appearing on the front page of the Omaha World Herald--with a color photo none-the-less. He's a punk. Here's the online version of the article.

I called him this morning and he said that it was one of his new year's resolutions to get on the front page of our paper. Two days in to the year and he's done, he bragged.

Honestly, I'm very proud of him and his accomplishments, and I've benefited from his expertise during our scuba trips together. He deserves the acclaim.

Changes to StockPunk for 2008

In the next couple of weeks, I'll be detailing changes that I'll be making to the site over the next year.

Here are a couple--

Weekly Stock Screens--
During 2007 I posted stocks that passed my screens on a weekly basis. I did this to allow folks to follow the screens and to show that the screens can produce real returns.

This year I will only post stocks that I come up with on my own. I will still post the returns of some of my favorite screens, but I will not post the actual stocks that show up each week. If you are interested in finding out which stocks qualify, you'll need to use AAII's Stock Investor Pro and/or Zack's Rankings.

StockPunk's Market Meter--
During 2007, I learned a lot about determining the overall direction of the market as a whole. I plan to use StockPunk's Market Meter to allow StockPunk readers to see my opinion on market direction on a daily basis.

2007--The Year in Review

Year in Review--Part One

Last January I listed six goals for my trading during 2007. Even though the last few months have thrown me for a loop, I still managed to accomplish most of my goals. Here they are:

Beat the S&P 500—The S&P 500 made around 4.24% this year. With a half day of trading left, I think I beat it—by 9 times.

Beat the Stock Superstars Portfolio—I’ve already mentioned that Stock Superstars made (6.1%) this year.

Beat Charles Kirk's Yearly Return—Charles hasn’t reported the return he earned this year, but by tracking the trades he made on his members only site, I think I’ve got him beat.

Make 20% on Portfolio—Doubled it at 40.38%.

Match or beat last year's return (62.44%)—Nope. I think I could have made this goal if I had managed my account better and if I had used some market monitors to let me know when to back off of trading. I was up 52.62% on October 31^st and if I had gotten out there and waited until things turned around a bit, I think I could have beat this goal.

Control my emotional trading and stick with the program—Much better this year, but I still have a long way to go. I learned to manage my risk much better this year and that helped a lot with the emotions of trading. I still allowed too many outside influences to affect my trading.

Another Goal Met . . .

Another goal I had this year was to beat the Stock Superstars service which is a investing newsletter provided (for a fee) by The American Association of Individual Investors (AAII).

I followed the newsletter's advice in 2004 as a new trader and learned a lot about investing and fundamental stock picking.

The service is run by some very smart and seasoned investors who are very transparent in their strategies and performance (a rare combination).

So far this year, the service has made 6.8%--another confirmation that this was a very difficult year to be an investor.

One goal met . . .

The Prudent Speculator is one of the stock newsletters that I've followed for a few years. They have a very "Buffetish" take on the market and do very well year to year holding their stocks an average of five years. I've often considered using their recommendations for my long term portfolio.

Usually, they post their performance on a weekly basis, but since September it has been a lot more sporadic. I haven't seen an explanation, but I assume it might be because things haven't gone very well this year.

Here is their last performance chart that was posted nearly a month ago.

One of my goals this year was to beat the Prudent Speculator's return this year. It appears that I've done that and that is swell. In the next couple of weeks, I plan to detail all of my goals for this year and discuss what I accomplished and what I didn't.

I can't believe how worked up I got over the couple of trades I made today. That's probably not a good sign. I think I felt weird because most of my indicators say that it is still best to stay out of this market.

Overall, this was a good day. I have an option on GLDN that I've had for a month and haven't been able to sell at the price I want. For some reason it blew up today. The stock went up 3% and the option lost 53%! If there is anybody out there that knows why let me know. I'm an idiot.

Dipping my toe . . .

I just can't stay out any more. I've taken a couple positions in MS and XLF. I think the financials have bottomed out and could have a good pop in the next couple of weeks. We'll see. I'm not risking too much and this may help with my constant chomping at the bit. If they go south even more, it will teach me to be more patient.

'Tis the Season

This is me and my swell family. I'm the geek with the stupid Mennonite beard.

I'm very thankful for such a terrific family. My wife is not only beautiful (what was she thinking?), but she is also incredibly smart (again, what was she thinking?). She has been very supportive when I've risked our hard-earned money on my untested stock market ideas.

My kids are great and a lot of fun. They have put up with their parents' crazy careers without complaint.

This is a great time of year to appreciate all we have in our lives. We are spoiled as Americans, and it is easy to lose sight of that and become cynical and unappreciative. I encourage all 3 of you StockPunk readers to take some time out this season to appreciate all that you have!

Not much going on

There's not much happening today in the market. Looks like another good day to get some stuff done.

Short-term indicators aren't looking so hot anymore. Moving averages are flat and there's no real reason to get excited about buying stock.

Lately, I've found Stockbee's Market Monitor to be a very good indicator of market direction. I like using it in tandem with some of my indicators. I think it's a lot better than flying blind and I think I've become a much better trader since I started tracking the overall health of the market.

Not very convincing

Even though we ended up positive for the day, it was still pretty ugly out there. With six real trading days left in the year, I'll need a lot of convincing to get back in and days like this aren't gonna do it.

With a break from school and work next week, I hope to get into the pile of books I've accumulated over the last couple of months. This is also a great time of year to figure out how to give back.

Gap at the open

It looks like the market is going to gap up this morning. I'm still planning to stay out. That gap up in November (blue arrow) still bothers me because the market often "fills the gap" meaning it drops back down and covers the hole that the gap created.

There is the possibility that the bears are done and the Christmas rally will finally take hold. Things are very oversold right now, but there still doesn't seem to be a real catalyst to move the market higher for more than a few days. Until there is, I'm going to watch from afar.

The Nastiness Continues

It is a rare sensation for me to be watching the market from the sidelines. Since 2003, this is the longest period of time that I've avoided trading or investing. I'll have to say that as things continue to decline, it feels pretty good to not have those helpless feelings of "Why am I losing money with everybody else?"

Now that 1460 has been broken through in the S&P 500, I'm not very confident that we won't see more selling through the end of the year. I'm becoming much more secure in my decision to be happy with my returns and regroup after Christmas.

Week In Review 12-14-07

That was one mess of a week and I'm glad I got out on Monday. I'd have to say it was one of the better decisions I've made in the last six months. For the week the portfolio was up 6.5%.

I was a bit shaky on my decision to stay in cash because there were a few indicators that I thought showed that we could be at the beginning of a bull run for a bit. Those indicators have all turned the other direction, so I'll be staying in cash next week as well. That's swell. I'll have to admit on days like today I kind of delight in the market sucking.

That was ugly

I hope none of you bought anything this morning. It looked tempting, but that rally wasn't real. There's a lot of manipulation out there. This isn't a good time to be taking chances with your money. Remember, CASH is a position.

Fortunately for folks still in the market, support held (barely). You still have time to get out of this silliness and enjoy the holiday.

So THAT's what happened

I had trouble figuring out what drove the insane rally this morning after a bizarre day yesterday. Apparently the Fed can't let the market have a few bad hours without getting involved AGAIN.

Frankly, I don't like it. Fed decisions shouldn't control the market like they have recently. Earnings haven't been all that great. Inflation is a real issue for the everyday consumer (I'm sure the big boys on Wall Street have no idea how much a gallon of milk costs). Lower home values are taxing consumers. There really isn't a reason out there right now for things to move higher.

I just don't think the Fed can continue to prop this market up. Things have to return to equilibrium and I'm afraid that just might be the February lows. It's tempting to jump in when things are this wild. But I think it's a fools game right now until things get straightened out.

I highly recommend that you read Charles Kirk's blog every couple of hours. I think he is doing an excellent job of painting a realistic picture of what is happening right now. He may have been a bit conservative throughout the year, but when you're sitting on a million large you can do whatever the flip you want in my opinion.

Keeping my eye on the chart

I'm watching a couple of points on the S&P 500. Watch the support at 1460 (solid blue line). I think that's a key number and if we break through it, we might plummet down to the February low of 1377 (red dotted line).

The most recent correction didn't give us that capitulation that we saw in August (blue arrow) and I have a feeling (after seeing the reaction to the rate cut) that we could see some really rough times if we break through that support.

Look at how goofy this market has been since July. Compare it to the nice smooth ride up from March to June. This thing has been a real pain in the buttocks and if we break though 1460 look out below!

Must . . . Resist . . . Temptation

I got that "trader's twinge" in my stomach this morning as the radio was announcing that the pre-market was trading "sharply higher". Should I get back in? Will the bulls take control today? Am I missing out?

Emotions can destroy a good trading plan. I made a good decision on Monday and it would be silly of me to get greedy and jump back in based on the pre-market reaction. OK, I've talked myself into holding tight.

Holy crud! I was right!

It doesn't happen very often, but I called this one right. But, I didn't expect that kind of reaction to a 25 basis point cut. I thought that was already priced into the market. Where do we go from here? Charles Kirk includes several interesting quotes about what happened today on his site.

So far so good

It's nice to see some profit taking ahead of the Fed announcement. It feels very good to be on the sidelines while I watch this action. I expect a jump once the announcement comes, but if it is just a .25 % cut, I think things will pull back to where they were at the open by tomorrow evening. Who knows, but it doesn't really matter when I've got nothing invested.

Time to get some homework completed . . . I hate homework.

Second guessing--Another best day ever

Today I scored my best day ever dollar-wise--I made nearly 5%. The last time that happened was November 6th. November 7th was my worst day ever. My plan today was to sell into strength since this is something I've never done and I've always regretted not doing so as I watched my gains slip away.

But as I look over things tonight I wonder if I made the right decision. I was expecting the Fed's decision to be more of a let down, but folks are starting to talk about a 50 basis point cut or more. My indicators are telling me that we're headed out of a bottom. Stockbee's Market Monitor is in rally mode. Phil Grande is saying "go to cash, now". Kirk went to cash today too. Cramer says expect a 1,000 point rally by Christmas for the DOW. I'm so confused.

Stupid Jim Cramer

No sooner had I sold off all of my positions then I seen this on the Kirk Report. Whatever Cramer. The good thing is if he is right (and I doubt that he is or that the fed will cut rates .50 percent) then I'll just jump back in for a quick ride up through Christmas. Look at me, it hasn't even been a few hours and I'm whining about getting back in. I'm pathetic.

Taking my gains

One of the biggest problems I have is hanging on too long and refusing to sell when the market is showing a lot of strength. I'm trying to change that today by selling into this Pre-Fed rally. I really don't think we can continue rolling on these rate cuts. People will look to earnings when the smoke clears and I'm guessing we'll see a decline again. That's just my guess, but some of the other bloggers I respect seem to see things that way too.

I had hoped to end the year up 30% and I just topped 40% today. I'm happy with that and during this busy time of year (in school, work and at home), I'd like to focus on the more important stuff the rest of the year. The challenging thing for me will be to sit idly if the market storms forward. We'll see how this "experiment" works.

This Week with StockPunk

Looks like this will be a "sit tight" week. Not much changing on the screens, so I'm planning on letting things ride until something dramatic happens. Hope everybody does swell this week!

Week in Review -- December 7th, 2007

This was a pretty good week for me financially. The portfolio was up over 4% and it looks like were at the beginning of a tradable rally into Christmas. My indicators for putting money back in have just gone positive, but I had a feeling last week that things would hang together and we'd be able to make some money going into Christmas. Sometimes my feelings are right.

My plan is to stay fully invested through the holidays and re-evaluate come the first week in January. I'm looking forward to posting my first year-in-review at the end of the month. So far my screens are kicking my tail so it should be pretty interesting when put this last year in perspective.

Is it safe?

It looks like it may be time to go long again. The averages seem to have bottomed out and money is moving back into the market.

This may be short-lived, but with the end of the year window dressing going on, I'm hoping to make up some of my November losses. I'm hoping we see a September-like rally. That would be swell.

More important than the stupid stock market

The last two days have kept me away from trading and they've been awful. I can't discuss what happened yesterday, but today is national news. I grew up two miles from the Westroads Mall in Omaha where 8 innocent people lost their lives today. We have a friend who works at Von Maur and she was there today. She left the store to visit a nearby store when the shootings started. Thankfully, she called us to let us know she was OK.

So right now the market is not the most important thing on my mind. This is a good time for me to be thankful for a healthy and safe family.

Back to the Basics

These last couple of months I've allowed myself to get a bit off track. I subscribed to the Wall Street Journal, I started listening to stock radio shows, and I began participating in a trading forum online. I think I began to get overly confident in the "knowledge" I was gaining and I tried to cram all of that information into a new trading strategy.

I started using some market indicators that supposedly told me when to be aggressive and when to run to the sidelines, and I began using a spreadsheet that calculated the best time to get out of a stock to lock in gains or to avoid big losses. I went to all cash for a couple of weeks and avoided trading (boy that was hard).

With all of that fantastic use of my brilliant trading mind, I managed to loose 25% of my YTD returns by the end of November. When I compared that to my Zweig Relative Strength top 5 screen I was a bit shocked and more than a bit angry at myself. If I would have ignored everything that was going on and just plugged money into that screen, I would have MADE 4% during the month of November. That's a 29% difference between my returns and the returns of an unemotional and completely computer-selected screen.

So, I think that it would be wise of me to quit trying to outsmart what I know works. It's never a bad idea to continue to learn new things and to try to improve on a system that works. But it was obviously a bad idea for me to charge ahead with unproven methods. I got a little cocky and I made a lot of money. The market has a way of humbling me EVERY TIME I get over-confident.

Judging from my e-mails, I wasn't the only one to get humbled in the last couple of months. I hope that we all use this as an opportunity to get back to what we know works and get back to the basic ideas that make money in the market.

Today I made 1.01%. Back to the basics.

This Week with StockPunk 12-3-2007

This should be an interesting week. We'll see if the bulls can remain in control this week. I'm putting more money to work as I'm hoping to catch some of the Christmas rally that typically happens this time of year.

I really did a terrible job trading when things went sour last month. I hope to get back to my trading basics this month and make up for some of my losses.

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.