I applied my trend-following system (affectionately known as “Fuzzy”) to the John McCain to win 2008 US Presidential Election contract to see exactly when it would’ve gotten short. The answer: September 29, 2008. When did he pick Palin as VP?

UPDATE: Here’s the Obama contract, by popular demand:

Related: Obama.com More Than Doubles in Four Trading Days, January 7, 2008

As I expected last week, the XLU whipsawed me for about a $1 loss. Trading a system is tough for an old discretionary dog, but in the long run Fuzzy’s decisions are better than mine.

James Areddy wrote a good article in today’s WSJ called “China’s Stock Rally Stirs
Investor Appetite for Data.”

Traditionally wary of independent prognosticators, the ruling Communist Party has discouraged stock-market predictions since trading began in China 16 years ago. As a result, brokerage analysts and mutual-fund managers peddle bland advice unlikely to cause ripples — or damage their reputations.

Interpreting market events is tough for China’s investors. Personal finance columns in the tightly controlled media are often unsigned views on single stocks, while on-the-air commentators duck the specifics on the big trends by referring instead to historic charts, public opinion polls and financial news from overseas.

“We don’t encourage predictions,” says Dai Biao, a spokesman for the China Securities Regulatory Commission. Fuzzy warnings in the country’s Securities Law outline fines for anyone “fabricating and disseminating false information that affects securities trading.”

Regulators are set to allow investors to “day trade” and use borrowed money to buy stocks starting July 1.

Wall Street experts aren’t much use in China because few have licenses to dispense retail investment advice.

Increasingly seduced by this year’s gains, individual Chinese are once again crowding into smoky brokerage halls like the Shanghai Securities outlet. With plastic chairs set in front of massive electronic boards that flash red for rising stocks and green for falling ones, the brokerages are set up like off-track-betting parlors for horse races and don’t offer clients much research. Instead, investors, who applied for 200,000 new accounts in April, stand two and three deep at terminals that allow them to chart stock movement, swap advice and input trades themselves.

For individuals tempted to jump in now, people like 67-year-old Tao Liangui seem like the best diviners of trends. Mr. Tao sits most trading sessions near the busy new-client desk at an outlet of Shanghai Securities Ltd., and — for no fee — shows novice investors how to read stock charts and make smart picks.

Amateur analysts like Mr. Tao can be found in many such brokerage halls around China, which number in the thousands. His latest trading strategy isn’t scientific. Mr. Tao puts faith in a glossy calendar torn from an investment magazine last year that he keeps folded in his waist-belt. Certain dates are marked as “pivot points” for China’s markets, though the publisher left it up to investors to guess whether the expected market move is up or down. In the current trend, Mr. Tao figures the next one is a likely bullish move. “There will be a good month followed by three falling months,” he says.

His guess is as good as the next guy’s!

Thanks to everyone who participated in the chat. Here’s the lightly-edited transcript:

6thworld: I just realized that there is a bubble of real estate bubble bloggers, lol

CMaoxian: how’s the weather in NJ?

6thworld: blue skies, nice temp

Bill: It’s hot and muggy in IL

CMaoxian: blue skies in Beijing, which is unusual

CMaoxian: had a bad sandstorm the other night

6thworld: i read about that

CMaoxian: going outside… it was like one of those post-apocalyptic scenes

6thworld: Mad Mao and the Thunderdome

CMaoxian: scary stuff

6thworld: whaddya think about XLE, breakout of its old high?

CMaoxian: it’s bullish

6thworld: trend is up

6thworld: must be ready for an upgrade, lol

CMaoxian: yeah and when i’m sitting in bumper to bumper traffic here i have a silly smile on my face

6thworld: ever read about peak oil?

CMaoxian: yeah but i dunno enough about it to say if it’s bunk

Observing: hello – came across this site this week, thanks for making it an open chat

CMaoxian: welcome Observing, thx for coming

CMaoxian: the new recent comments thing in the sidebar is nice, kicks up the interactivity of the site

CMaoxian: shoulda done it years ago but i’m a dummy

eyal: yeah it is. did u manage to get the admin side of it working?

CMaoxian: no eyal, it’s still a blank

CMaoxian: the vaunted Ugly

eyal: hey babak, how’s it going.. still waiting on u know what

Ugly: Hello everyone

6thworld: heya Ugly

Ugly: what does “vaunted” mean?

eyal: hi ugly

CMaoxian: it means el supremo

6thworld: that’s what they put gold and valuables in

Ugly: I can’t tell if “vaunted” is a compliment or insult

CMaoxian: vaunted is a compliment

Ugly: what’s on the agenda for tonight?

CMaoxian: nice catch of the NTRI ugly

CMaoxian: NTRI is of course a Notable New High

CMaoxian: is it a top alpha dog?

Spock: CM – how’s sandstorm treating ya?

CMaoxian: spock it was miserable here for a couple of days

CMaoxian: i mean more miserable, the environment here is a catastrophe

CMaoxian: 10% GDP growth though… trade-offs

eyal: so you reckon that when the economy slows down the pollution and sand will go away?

CMaoxian: ha! eventually eyal

eyal: I wonder how they’ll take care of the desert

Spock: CM – have you stopped trading altogether to concentrate on your business ventures? Just wondering… you seem to be enjoy trading

CMaoxian: yes spock

Spock: guess the time zone doesn’t help either being in Asia

CMaoxian: yes spock, i’m getting too old to stay up past bedtime

ks: CM, FWIW i do appreciate your notable new highs

CMaoxian: thx ks

CMaoxian: i’m gonna yack about relative performance charts a bit tonight

CMaoxian: do you guys use these regularly?

CMaoxian: stockcharts has a nice intro to relative performance charting

CMaoxian: All you do is divide the price of one stock or ETF or index or whatever by another.. thus the name “ratio chart”

CMaoxian: so you can see how the one is performing relative to the other

CMaoxian: they’re often called relative strength comparisons but i avoid that term because it causes confusion with Welles Wilder’s Relative Strength Index (RSI)

CMaoxian: here’s a weekly chart of the Pharmaceutical HOLDR divided by the S&P 500 (SPY): PPH/SPY

CMaoxian:

CMaoxian: the gray line is the relative performance (PPH/SPY), the red line is a 13 week moving average, the blue line a 52 week moving average

6thworld: so what we have with PPH then is a declining performance rel to the SPY as it moves sideways

6thworld: so are we to read in this that price has stabilized and its way oversold?

CMaoxian: I don’t like the term “oversold.” Better to say Big Pharma has been “out of favor” for awhile now

6thworld: so CM, you think PPH has bottomed based on the sideways price action

CMaoxian: Until the PPH’s relative performance improves, it’s an area of the market to avoid

CMaoxian: i’m pointing out that by using the rel perf chart you can see how badly PPH has underperformed… the opportunity cost of holding it these many years has been great

Babak: ok, so what you’re saying is that if someone was long PPH they might not understand the opportunity cost they are incurring because it just goes sideways

CMaoxian: right, Babak

CMaoxian: that said, i’m a fan of Big Pharma because i see a lot of value there

CMaoxian: my wife thinks that “the rules of the game have changed” for Big Pharma but what does she know?

CMaoxian: incidentally she told me to sell all our tech stocks in March 2000 and buy real estate in China during SARS, (I refused to do either one), but what does she know?

Bill: brilliant

Spock: guess she never checks your transcript?

eyal: then u could have really retired

CMaoxian: no spock, she has more important things to do lol

Spock:

6thworld: CM, i’m with you on Big Pharma

CMaoxian: And that worries me, 6th

Babak: she was also right about digital photog ;o)

CMaoxian: here’s a chart for the MidCaps, S&P MidCap 400 divided by the S&P 500: MDY/SPY

CMaoxian:

CMaoxian: so you can see midcaps have been outperforming for a very long time

Babak: bloody missile

CMaoxian: here is the S&P SmallCap 600 compared with the S&P 500: IJR/SPY

CMaoxian:

CMaoxian: SmallCaps have been outperforming for what feels like forever

CMaoxian: the beauty of these ETFs is that they’re super-liquid

CMaoxian: here’s a chart of the Consumer Staples SPDR compared with the S&P 500: XLP/SPY

CMaoxian:

CMaoxian: you can see that during the bear market the Staples outperformed (defensive)

CMaoxian: and since the bull market began in 2003 they’ve underperformed miserably

CMaoxian: so as long as the relative performance of the Staples is trending down you don’t want to touch them

CMaoxian: ditto the Pharmaceuticals

CMaoxian: you want to follow the money, and only be in the strongest sectors (and preferably the strongest stocks within the strongest sectors)

Babak: CM, what is criteria for det. trend?

CMaoxian: Babak, for these charts I’ve just put two moving averages on: 13 week (quarterly) and 52 week (yearly) … a simple moving average crossover system

Babak: no, I mean, how do you determine if/when trend changes

CMaoxian: just for simplicity babak i’m saying watch for the crossover of the 13 week and 52 week moving averages

Babak: ok

Ugly: does stockcharts.com show the relative performance?

CMaoxian: yes ugly

CMaoxian: here’s their intro, ugly

Ugly: is it the same as the RSI?

Babak: no ugly

CMaoxian: no ugly, don’t confuse the two!

Ugly: how do you get the relative strength?

Babak: in stockcharts.com use XX:YY (colon to mean ratio)

Babak: insert symbols for XX and YY

Ugly: okay thanks

eyal: for malaysia

CMaoxian: Here’s the chart of the Dow Jones US REIT Index divided by the S&P 500: IYR/SPY

CMaoxian:

CMaoxian: you can see that the bull run in the REITs is still going strong

CMaoxian: you can also see that during the 2000-2002 bear market the REITS were just fine

vic: Sorry to join late. Chairman, what are your thoughts on real estate and gold

CMaoxian: they’re still strong, vic

roger: C. how about using relative performance to short the weakest stock in the weakest sector

CMaoxian: yes roger, you could reverse the idea to find shorts

Ugly: check out this chart of NTRI compared with the SPY

CMaoxian: now here’s the very interesting chart of the Energy SPDR compared with the S&P 500: XLE/SPY

CMaoxian:

CMaoxian: see how the relative performance was flat for many years and then the breakout came in early 2004

eyal: CM, so are you scanning thru these to look for similar signs of breakout and outperformance?

CMaoxian: yes eyal

eyal: cool

CMaoxian: these charts are through last Thursday by the way

CMaoxian: the XLE moved to a new all-time high today but the chart doesn’t reflect that

eyal: yeah I saw it at the pump this morning

Spock: anyone think GS’s crude oil prediction of >$100 a barrel may happen this year or next?

CMaoxian: their guess is as good as mine, spock

Spock: i’m sure… but it’s at $72 now, incredible

CMaoxian: in inflation-adjusted terms, spock, it’s just so-so

CMaoxian: so personally i apply a trend following system to the relative perfomance chart for signals

6thworld: how?

eyal: do u use fuzzy for this or something else?

CMaoxian: here’s my chart where i apply the Fuzz to the relative performance chart

CMaoxian:

nsdq: CM what are your charts created in

CMaoxian: nsdq – Metastock

CMaoxian: so like all trend following things you get whipped around for awhile (sometimes years) but eventually you get a payoff (not always)

eyal: u gotta be damn tough to go through that 2002-2003 period

Babak: fuzzy=sweet

CMaoxian: yes eyal, people talk about trend-following like it’s some kind of always-wonderful thing but they’re forgetting the tough times

CMaoxian: just ask John Henry about his recent performance

Spock: some big time trend followers had some rough time this past few years – decreasing volatility, etc

CMaoxian: yes spock

Spock: JH is certainly one of them

CMaoxian: so anyway my point here is y’all should be aware of relative performance at all times

Spock: when to resume trading, CM?

CMaoxian: not sure spock

eyal: do u apply that to individual stocks vs. their sector etf as well?

CMaoxian: yes eyal

CMaoxian: the people who are crying about no opportunities in the market must still be trying to trade MSFT and CSCO and DELL and other once-great now dead-money stocks

tinter: do you see sector rotations away from energy/commodities anytime soon?

CMaoxian: not at the moment tinter

CMaoxian: not with the XLE XLB all trading at new highs

CMaoxian: GLD DBC PBW the list goes on and on

6thworld: well i really found this topic useful tonight

CMaoxian: follow the money and go where the action is

Ugly: yes this was great, thanks

Ugly: I never knew about those stockcharts.com perfcharts – those are cool

CMaoxian: yes ugly, they’re very cool

CMaoxian: ugly did you use a Dummy technique to enter NTRI?

Ugly: yes, I trade dummy style

CMaoxian: send me a check!

eyal: I’ve been doing the dummy style as well, NTRI didn’t show up but lots of other nice ones have

eyal: CM, I never get anything above 1:4 risk reward. do you think the markets may have changed since you last used the dummy method?

Ugly: the computers are taking over

CMaoxian: yes the computers are making execution a lot harder anyway

Spock: eyal… i think 1:2 is real good if you can do it consistently

Spock: is 1:4 too ambitious a goal ?

eyal: Spock, I have a 40-45% win ratio, it’s real slow progress with 1:2

eyal: Spock, I mean out of the past 100 trades or so the highest was 1:4 (or thereabouts) it’s not something I’m expecting every day

Ugly: I got 7R with NTRI today

eyal: that’s really nice..

Observing: what do you mean by 1:2 or 1:4 – does this involve risk/reward ?

CMaoxian: right, the number of times your initial risk, e.g. initial risk $0.50, eventual reward $1.00 gives a R/R of 1:2

Spock: eyal, i do noticed there are less momo these days… but perhaps if you can increase # of trades if you have a good hit ratio

CMaoxian: i like to say reward/risk instead of risk/reward, just a quirk

eyal: Spock, possibly, I haven’t been around that long to tell how it’s changed

Srini: what is dummy method?

CMaoxian: these are the dummy lessons

Ugly: hey maoxian – you should put the dummy link right on your front page

Srini: Thanks CM

CMaoxian: yes ugly, but i dunno where to put it

Ugly: just put it at the top

CMaoxian: i’ll get around to it one day

Ugly: it is very good – too good to hide away

Babak: you know, there are other ways to use ratios

Babak: I wrote a recent entry about the use of ratios, similar to tonight’s presentation on RS

tinter: do u worry about catching the top?

CMaoxian: good question tinter… the later you enter things, the more risk you’re taking on

Bill: what makes a good starting point for relative perf charts? It seems like depending on the relative starting point, your chart could look very different

CMaoxian: good point Bill, i try to do the comparisons from the same starting date, usually 1/1/2000

CMaoxian: with many ETFs they haven’t been around that long so….

roger: does anyone scalp or day trade any more?

CMaoxian: yes, ugly does roger

roger: thx C

Ugly: roger, check out my website www.uglychart.com – you can email me from there

roger: Ugly..thx for the link

Bill: CM thanks for the review of the robot toy bug – we found them at a local store this week, kids had a great time this weekend trying to put it together.

CMaoxian: how old Bill?

Bill: i have six under 9. 9 & 7 helped build it, the rest of them chased it around

CMaoxian: Six!

CMaoxian: how many over 9?

Bill: busy house

Bill: It’s fun

CMaoxian: Bill, check out all tamiya’s toys, they’re great

Bill: thanks – will do

smoo: oh yeah, CM. I just started at an Ibank and noticed something about newspapers. I haven’t seen anyone reading a paper on my floor in my 2 weeks so far

CMaoxian: if you have a Bloomberg you don’t need a paper, smoo

smoo: that’s true

smoo: if you have the Internet, you don’t need a paper actually

CMaoxian: right, smoo

6thworld: hey ugly, what’s with the $50 sponsor pixel thingy?

Ugly: it’s based on the idea of http://www.milliondollarhomepage.com/

roger: Ugly..that’s a lot of eye candy

smoo: on milliondollarhomepage? there’s eye candy?

Ugly: a million $ worth

CMaoxian: did someone actually paypal ya something, ugly?

Ugly: yes, two people so far

CMaoxian: OK guys, I have to run

vic: CM, have a good day

Babak: thanks CM – as always, beautiful charts

eyal: thanks CM!

6thworld: actually i learned a lot tonight

CMaoxian: thanks to everyone for coming

I noticed that CTDC was halted shortly after the close last Friday. This stock is up about 350% year-to-date.

NEW YORK, Feb 3 (Reuters) – The Nasdaq Stock Market said on Friday it halted trading in shares of China Technology Development Group Corp. at 4:09 p.m. Eastern Time, for “additional information requested” from the company.

Nasdaq said the stock, which last traded at $9.64, will remain halted until the company satisfies its request.

© Reuters 2006

I was wondering if Dummies or intraday trend-followers would be stuck in this stock. It turns out that Dummies would have been quickly stopped out in the morning, and trend followers would also be out: those playing off the 5-minute chart would have exited in the morning and folks watching the 15-minute chart would have sold out in the last hour. This is what is known as “dodging a bullet.”

(TraderMike wrote an excellent post recapping several of his day trades from last week.)

Many thanks to those who came to the chat last night. We concluded that the real estate-related stocks have definitely maybe put in The Top. We also reviewed a couple of day trades for kicks. Here’s the complete transcript:

Zoomie: Hi all

james: sup zoom

Zoomie: not much, yerself?

jfra: howdy all…

Zoomie: hi

james: chillin

james: mao – i guess your a celebrity – dont worry – your secret is safe with me

james: WTG brother

CMaoxian: celebrity?

james: modesty has always been yer hallmark

Zoomie: lol

CMaoxian: are there an unusual number of for sale signs in your neighborhoods?

james: no

SALLY: YES

james: its been pretty steady down south

james: cant really gauge a drop off yet

CMaoxian: i keep getting reports from friends on the coasts that they can’t go three feet without running into a for sale sign

CMaoxian: where do you live, sally?

SALLY: houston, tx

nickm: good evening traders!

james: well mao – thats been the case in NC for the past year

jfra: james, lots of houses for sale in NC?

james: yes

CMaoxian: are they selling or just standing there?

james: they’re eatin em up like they’re eatin at the wafflehouse

jfra: hmm…

SALLY: they are standing where i live.

james: they are selling – depends on location – as always

CMaoxian: well the Housing Index doesn’t have an ETF, so there’s not an easy way you can play them as a group

CMaoxian: so we’ll look at a REIT ETF (commercial) and a handful of homebuilders (residential)

CMaoxian: here’s a weekly chart of the IYR (Dow Jones US Real Estate ETF), let’s review the state of commercial real estate before moving on to look at the homebuilders

CMaoxian:

CMaoxian: you can see that since 2004, there have been three separate times "technicians" have called a Top

CMaoxian: welcome sara

james: 38% fib study has a bottom around 56, weekly, 02 bottom

Sara: ty

CMaoxian: so maybe calling a top here will prove to be premature once again

CMaoxian: drilling down to the daily chart, let’s look at this last break in the IYR

CMaoxian:

CMaoxian: you can see how violent the break was this last time

Zoomie: a classic hole in the wall

james: no trend just crashes – theres always late comers

james: im not sayin further highs

james: but there will be support

CMaoxian: i agree james, that’s why i’m not sure if "The Top" is here yet

CMaoxian: you can also see how price broke down out of the little bear flag that formed recently

CMaoxian: so this sucker bears close watching at the very least (pun intended)

james: im with you – been waitin for a phat panic to get long these builders

james: but thats me

CMaoxian: speaking of the homebuilders….

nickm: what is "phat panic"?

james: blood in the streets

Zoomie: when my mother in law is late for dinner

nickm: you mean when you are late

jfra: lol

CMaoxian: here’s Hovnanian’s chart, the hardest hit among them:

CMaoxian:

james: 55 – im all in

james: even if its for 3 pts

jfra: nice chart CM

CMaoxian: HOV has broken hard, all the way back down to the highs earlier this year which are acting as "support"

jfra: i see 55 gap

james: subdivision where i live close to

james: for the past 10 years they’ve sellin lots

james: now – now

james: they have a "closeout"

james: the builders know

CMaoxian: next is DR Horton, builders of the Prairie Palace

CMaoxian:

CMaoxian: all the homebuilders charts are similar of course, i’m just featuring the hardest hit

jfra: curious to fib #’s on these

james: fibs are alway subjective

CMaoxian: the weekly trend on all these puppies remains UP at the moment, despite all of the daily trends having turned down

james: i was lookin for a panic in these today

james: no dice

CMaoxian: next up is Centex:

CMaoxian:

chud: how do you define the trend, cm?

CMaoxian: Fuzzy defines it for me, which is of course proprietary, lol

CMaoxian: but you can use something like price being above or below both the 20 day and 50 day exponential moving averages, which is about as simple as it gets

chud: i’m gonna have to get fuzzy drunk one of these days and try to get some secrets outta him

james: hey chud – i’ll buy

james: what are the odds of a break of that previous high? – thats a buy – short term

CMaoxian: hi foo

foofighter: hi CM

CMaoxian: last homebuilder chart to consider is my favorite, Toll Brothers:

CMaoxian:

james: i love TOL

james: trading it anyway

CMaoxian: you can see that TOL has broken fairly hard too, but hasn’t yet returned to the highs set earlier this year

CMaoxian: frankly that daily chart looks ugly, but i look at their numbers and think, hrm, they have a great business

james: way more down to go – jeff mathews had a great post a few weeks ago bout it

james: spot market playin and all

james: ty mao for the link

CMaoxian: that was a good post by Matthews about TOL, lemme find the link

chud: Playing the Spot Market for Houses, by Jeff Matthews

CMaoxian: thx chud

CMaoxian: one stat that i love to throw out is that most of TOL’s buyers have household income above 100K so they’re not a skittish bunch

CMaoxian: if you read that letter by Gary Shilling that i posted excerpts of, you may have noticed this

CMaoxian: paraphrasing Shilling: the recent leap in the share of income is going to the top 20% of Americans while the other four quintiles’ shares keep slipping.

CMaoxian: that top quintile is buying TOL homes

chud: TOL has fallen right to it’s 20 week MA. maybe holy grail?

CMaoxian: you can give the grail a shot, chud, and if it fails then you know there’s more down to come

CMaoxian: i was going to mention that, chud: the weekly grail is something to watch, for its *failure*

chud: then maybe try the 20 month

chud: one of the holy grails HAS to work

CMaoxian: not necessarily, price can slice and dice the holiest of grails

james: the thing about the builders – for me is – how can you short them now – after a break that hasnt happend in years

james: maybe that is a signal

james: k – i get it

james: need another rally for me to sell – cant sell down here

CMaoxian: so the bottom line is, is this "The Top" for the homebuilders and REITs and the answer is a decisive maybe

nickm: keep in mind that tuesday/wednesday THIS WEEK are home sale #, which can move these either way

CMaoxian: thx nick, i always think the market has anticipated those numbers by now

Zoomie: Bill Cara has an interesting chart on mortgage cashouts

Zoomie: Mortgage Cashouts

james: and they aint done

CMaoxian: frankly i don’t know anyone who has cashed out

CMaoxian: i think it’s still a minor phenomenon, but what do i know.

james: mao – you missed a royale rumble with matthews and ceo of OSTK last week

james: laughed my arse off

CMaoxian: i saw it james, a friend sent it over

james: WTF?

james: was that for real?

james: thats the question i kept asking myself

jfra: gotta see Mark Cuban’s blog request..can anyone show me how to naked short OSTK..unbelieveable

james: oh yeah

james: Mao – you heard about PIMCO squeezing the shorts in the Tbond pits?

CMaoxian: you sent me the article james, yes

james: now thats a lesson in trading

james: tout TV (CNBC) has been all over it

james: CME has a new mag out

james: GANN, LIVERMORE< BARUCH – the legends of BOSOX owner!

CMaoxian: anyone have any day trades of note we can review?

chud: i dont know about the "of note" part

Zoomie: sure

Zoomie: ADSK on the 19th

james: SNDA – 38.05 on that phat candle day – round 2:30

CMaoxian: i’ll grab some data zoomie, and take a look

CMaoxian: we’ll look at ADSK first and then SNDA

TraderMike: sup

CMaoxian: hi mike

TraderMike: so what’s the verdict on housing? a top?

CMaoxian: it’s a definite maybe, mike

TraderMike: I knew you’d say that

Zoomie: might not do this trade again….:)

james: nice post today TM

TraderMike: thanks james

chud: looked like a nice suspect, zoomie

CMaoxian: ok where’d you enter, zoom?

TraderMike: what ticker?

CMaoxian: ADSK

Zoomie: I liked the volume, broke out to 52 week highs, but I didn’t wait for proper retracement

nickm: any chance to post the chart CM? so we all look at the same

CMaoxian: yes nick, as soon as zoomie gives me a lil more info

chud: what do you mean by proper retracement?

Zoomie: went long on 4th 15 min candle, kinda a doji

Zoomie: stopped out soon after

TraderMike: hard to avoid that with the action in the indices today

chud: TM: this trade was on friday

TraderMike: ah

Zoomie: market was strong at time, then tanked

james: wild reversal

james: even in the oils

james: considering earl didnt have that bad a day

CMaoxian: that’s not a dummy bar, zoom

Zoomie: yes, I see

TraderMike: I would have been concerned about it being pinned to 40 for options expiration on Friday

Zoomie: no real retracement

Zoomie: k

TraderMike: which is why I take those days off

Zoomie: anyhow, entered 40.89, exit 40.55

CMaoxian:

Zoomie: thanks TM, I follow your blog, not close enough I guess;)

james: thats about how i play it zoom

james: that might not be what you want to hear – but

james: thats my max R

Zoomie: lesson I guess is it was not my trade plan

Zoomie: jumped the gun

james: its hard not to scratch that itch

CMaoxian: yeah that’s jumping the gun zoom

CMaoxian: the good part is you stuck to your stop and took a small loss

james: word

james: thats kept myself afloat

CMaoxian: hi lurch

james: it is hard though

lurker: Hi, Chairman!

chud: it’s kept my blowout slow and painful

james: i hate it

james: i’ve started scaling – into and out of positions

CMaoxian: the tone was kind of lacklustre last Friday, so that didn’t help either zoom

chud: anybody trade PPCO today by chance?

james: ADSK – MAO – what clues would you look for "at that time" – cause, in the moment – that bar looks strong

james: just set a stop and play it?

CMaoxian: i like to see a retracement, james, or at least some real hesitation; i don’t want to be getting long above up bars

CMaoxian: ideally you have a swing low to place your protective stop beneath

james: word – i hear ya – you like those tiny bars – and then get long above those?

CMaoxian: i like orderly retracements, clearly defined swing lows, and yes, narrow range bars are ideal to get long above

CMaoxian: let’s look at this SNDA

CMaoxian: what are the details?

CMaoxian: SNDA – date entry exit etc?

CMaoxian: i’m looking at SNDA and trying to figure out when it was a suspect

CMaoxian: back on the 10th or 11th?

chud: TM: does eSignal track number of trades or trade rate?

TraderMike: not that I know of

james: TM & MAO – what do you scan for – on a real time basis, during trading, – new highs/ new lows or unusual volumer?

TraderMike: volume & big % movers:

CMaoxian: i look at both, james… what are the details of your SNDA trade

james: so – do you buy highs and sell lows – cause when i get em on my screen – thats where they are

chud: there must be somethng to hide about that SNDA trade

CMaoxian: chud did you do anything in the past week

chud: mostly stop outs.

chud: stopped out of PPCO today

CMaoxian: ok we’ll look at PPCO and call it a night

chud: entered above the 11:00 down bar

nickm: any chance to discuss for a while how to screen for candidates? what people use, tools and criteria?

chud: entry above that 3rd inside bar would’ve been better but i missed it

CMaoxian: yowza, what was driving this puppy?

CMaoxian:

chud: some kinda drug results

chud: it’s a pharma

CMaoxian: it had quite a little run before 11 AM chud

chud: yea, should that have scared me away?

CMaoxian: well the 10:15 inside bar was bettah, as you noted

CMaoxian: did you lose 30 cents on it?

chud: just lost 20. i tightened the stop up a bit when the tone started to turn south. shoulda closed it out for a scratch in retrospect.

chud: would you have held the position or closed with a sharp tone change like today?

Zoomie: seems like they run the stops at lunch

Zoomie: when the volume is low

chud: seems like it zoomie

james: im out – thanks again CM & TM

jam