MA & V, Momentum Cashflow

MA broke below the neckline today, closing below it. Looks like a good entry to the downside.

V is still trading in its wedge. No entry yet for swing traders.

I don't have time to go through all the following, but from my scan which looks at stocks that have a lot of momentum and cashflow (negative & positive), here are the ones I like:

Note: all these stocks are above $100.

NEGATIVE (DOWNSIDE) - most negative to least negative cashflow:
- RIMM (would be nice to see go to 93)
- AAPL (less clear at a quick glance)
- PCLN (lots of room to the downside)
- MOS (compression, can't tell which direction it really wants to go)
- MA (broke the H&S neckline going down)
- MON (looks like a "shrug", where the shoulders are higher than the head, bearish as it broke the neckline)
- CF (looks interesting; Friday had huge buying volume. Not sure why. Still looks bearish)
- ICE (looks maybe it could bounce here - possible support?)
- X (165, 147 seem likely targets to the downside)
- STRA (bearish engulfing, but selling volume doesn't match, so we have to wait and see)
- CME (looks at support, bounce?)
- GOOG (bounce here or go to fill the gap? Filling the gap would be nice as that's 60+ points down)

POSITIVE (UPSIDE) - most positive to least positive cashflow:
- CLF (trading in a channel, so be careful to the upside)
- FSLR (maybe be attempting to form H&S)
- RTP (if it breaks through today's high, 513, 557 are targets to the upside, otherwise, it could turn from where it's at now)
- SLB (at resistance)
- ATW (way in overbought territory)
- BG (116 is 50% retracement, which it may do this as it's had 5 days near the same lows -- putting on the brakes)

I don't see any more upside plays. We are at a pivotable point on the S&P. If it breaks where it is going down, that's VERY BEARISH (closing below 1270). Go bears!!!

Happy Trading.

Oh, as a side note, today as long as I strictly adhered to my trading strategy, I did fairly well. I was about 80-90% profitable on trades and costing trades were very small. When I deviated, costs were HUGE. Stick to the trading strategy and have it explicitly spelled out!!!

Get your trading plan together and adhere to it. However, you have to have a good trading plan with good trading strategies -- proven strategies that can make you money.

NOW Happy Trading!!!

Why Do You Trade?

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V & MA

Visa (V) is in a compression pattern (wedge), both in the price chart as well as RSI. When it breaks out of here, it would be a good entry for me.

On an intraday basis, some days are a bit boring, but there are some nice intraday plays. It has an ATR (Average True Range) of $2.87, which is nice for a stock within this range. That's about a 3.75% move intraday. MA (Mastercard) has about a 4.6% move intraday. Both are very nice.

V (@ $82.60):
Jul80C = $4.20 ($1.60 time value)
Jul85P = $5.00 ($2.60 time value)

MA (@ $271.72):
Jul270C = $11.90 ($10+ time value)
Jul280P = $15.20 (~$7 time value)

We can see for MA, we can see a very classic head & shoulders (H&S) pattern. If it breaks below where it's at on the daily chart, it is a bearish move for MA. We're right at that pivotable point. We've had 2 days where the lows are nearly the same with a $1 difference. Close enough for a stock that is nearly $300.
To fill the gap, would be $242.50. That would be a $29+ move to the downside. In 6 trading days it moved $43 from its high. The last 9 days, it's moved down $32, with one outlier day. Not sure what happened there. MA's ATR is 12.61 for the last 20 days. It could go to fill the gap in 2-3 days.
MA has not filled every single one of its daily gaps since it began in 2006, however, it's filled most of them. It would be nice to see it fill this gap and perhaps make another run for $325 range. But, always remain neutral.
As a daytrader, this is less important for me, but I don't daytrade every account, only 1 at a time. Sometimes with some of MA's H&S patterns, it's not really followed through to the bearish side, so that may explain why the options are priced the way they are. And, if I chose the ATM for MA, it would be nearly what the 270C are, just a tad bit higher.
RSI for V is about near the 50 mark, which is pretty darned neutral. There seems to be a little more "fear factor" priced in the Puts. Remain neutral and set one's brackets. And play the breakout to whichever direction it takes.

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My trading coach gave some of the things that people do to self-sabotage their trading success:
  • Chase trades
  • Too many strategies
  • Using strategies that are not proven to work
  • Unfocused (not clear mind), too many distractions
  • Psychological baggage
  • Not trading the plan
  • Does not have a detailed, written trading plan
  • Wrong or incomplete knowledge
  • Tinkering too much
  • Do not get down to business
  • Not committed
  • Not persevering

Where do I fall? Truth be told, at one point or another, I've experienced all of these. Sort of embarrassing to admit that, but it's true.

Where am I now?

  • Unfocused, too many distractions
  • Not trading my written plan, which results in sometimes chasing trades
  • Psychological baggage (at this point, not really sure what this is)

I'm still working on my trading plan, as it's quite lengthy, but I do have a detailed, written trading strategy that works for volatile and non-volatile markets for bearish and bullish plays. It can also work for BUPS and BCS.

It was a bit of a challenge to hear my trading coach say this. He said a skilled trader with the correct knowledge, discipline, strategies and execution can take a $2000 account to well over a million in a year. It seems almost unfathomable, but if you take the power of doubling, this CAN be done.

Expiration Week

This week is expiration week and there are some really great deals out there if you play it right -- either in the spreads or buying arena. For the buying, daytrading is best, IMHO. Even within the day, time value is being sucked out, but it depends upon what is happening, too. Higher volatility can keep the time value of the option still up for a time, which if you're in spreads, not desirable.

I'm back to focusing on trading again. Kids are in camp, and minus taking them daily to camp, my days are now able to spend mainly on trading. Yay!!! Keeping my positions few (1-2) and small (1 contract), until I consistently am profitable again.

The stocks I'm looking at are: AAPL, X, FSLR, POT, BIDU

Others are: MA, CME, GOOG, MON, MOS

I know, the list looks all too familiar, right?

Where Is She?

I know some of my readers are probably thinking, "What the heck kind of trading blog is this?"

Well, it's the kind of trading blog that one who is in the middle of a divorce with young kids, single parenting, managing business, etc. is going.

I just haven't had time to really keep up with this blog right now as there are more pressing matters, so check back periodically. I have not been doing any funded trading, just periodic real time unfunded trades as well as backtesting.

Right now, I'm mainly working on the psychological aspects of trading and how to better assimilate real life into my trading and not let it negatively impact my trading and profitability. Setup and execution are really important. It is taking weeks, months. I am in this for the long haul.

There was a time I was grasping at straws and slipping on unstable ground. So, now I am working to establish that solid ground to keep my footing, and to work on creating a good core, so that I can effectively use those stabilizer muscles to help me keep my footing. There is a lot of stuff going on and it is my learning that many people do not set themselves up properly for success in trading. They think they can just jump right in and do well. Maybe in the short-term you can gain success, but I'm learning for the long haul, you have to establish the right things to take off.

I've been working on better managing the business aspect of trading such as legalities and soon will be delving into the accounting and taxation part more, as these are critical.

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