A. Make a gain
B. Wash
C. Stop out at a loss
This is how you frame your reality with open positions. This is how you stay centered — you know (and accept) your outcome. The moment you hit the enter button you are at the mercy of the market. Whatever happens is going to happen and you have no control except to manage your risk because at that moment you have no gains to manage so everyone is a trader at this moment in time.
You can say you are an investor and that’s fine but you still have to deal with gyrations and stops until you can actually be an investor with gains to manage in this market. One step at a time folks, it’s as simple as that.
On to the markets. Over the weekend in the 60 minute chart of the OTC comp we said:
"That pink POH line makes us say we potentially have a little bit more downside action to deal with as it’s a short term resistance level."And here we are breaking the lows of last week.
Notice off the red B during the 1st week of march that one can see 5 waves (not marked) down to where we are? Just an observation.
Notice the POSITIVE RELATIVE STRENGTH DIVERGENCE STILL showing in both of the above charts?
Here are the daily charts:
So right now the way we see it is that we are in that "90% of this is getting in the zone and 10% sweating it out while in the zone" mode. As of this posting the indexes took out their short term lows as mentioned over the weekend as a potential scenario. For you highly emotional types and perfectionists? It’s the other way around- 90% is sweating it out while in the zone and 10% is getting in the zone.
Remember for us it’s all about managing our emotions and staying centered in outcome and being flexible vs. highly emotional and rigid.
So if we end up working our way down to the 1270’s-1280’s level on the S&P 500 and the blue bar level in the OTC Comp 60 min chart of the 2675-2680 levels then yes we will experience some in flight turbulence for awhile by going under water in our positions. So be it. If we get stopped out, we get stopped out. Remember the market IS the boss, not us. All we can do is put ourselves in a position to win via taking trades in issues that have formed high quality chart patterns.
Now as far as the world of opposites goes? If those who chase extended stocks while they are going up feel good for a few days then pow to the downside, then doesn’t it stand to reason that those who buy weakness feel bad for a few days then pow to the upside? We’ll find out soon enough.
As we post we are feeling a little in flight turbulence but nothing at this moment in time for us to feel concerned about. Why? Because this is an art not an exact science and we aren’t perfectionists looking for instant gratification which over time we all know is extremely stressful and leads to heart attacks and burn out. Life can and is stressful enough — why complicate it right?
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WHAT EXACTLY DO I WANT TO ACCOMPLISH WITH MY OVERALL Virtual PORTFOLIO IN 2011 REGARDLESS OF WHAT THE MARKET DOES OR THROWS AT ME?
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SHORT SELL WATCH LIST
NONE believe it or not.
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LONG SIDE WATCH LIST
If I were to put money to work here. Where do I put it?
A lot of new names here folks!
As you scroll through these what you’ll notice for the most part is that the bulk of them have been going nowhere for the last 3 days vs the SPX and OTC comp hitting lower lows. That’s a good sign as it shows stabilization at this point. The first step before going higher is to stop going down right? And that’s what thus far the last 3 days are showing.
Remember it’s all about getting in the zone. As always it beats chasing stocks. Just ask anyone who has chased stocks two weeks ago.
RAX
Just tightening up
CVLT
Just tightening up
AAPL
One look at AAPL here makes us scratch our head as we really can see any trade set up today — the day was in the face of fear 3 days ago, that was the most optimum time. That was also about 10 points ago too.
ALTR
KLAC
FFIV
Little different animal but as you can see it has stabilization at the 200 day. Any weakness and we are fine picking some off to sit with for awhile.
As for Energy?
For weeks we’ve been saying:
"Until we see a Pullback to the 50 day average there is nothing to talk about with regards to putting new money to work. It’s all about a grand slam to the 50-day in all of them to get us interested in the long side."
CAM
NOG
XEC
XOM
CXO
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All About Options In The World According To All About Trends
NOTE: The exchanges recently started WEEKLY EXPIRATIONS of options. Going forward, make sure that you check to see which ones you are buying. Let’s stay with traditional options expirations which are the ones that expire the 3rd Saturday of every month.
Watch list
CALL OPTIONS
Keep an eye on all the energy names featured at the beginning of the update. Right now most of these names are anywhere from a point to three points off of the trap door open lows and could easily retrace some of that. If you are buying a call option that is 10 points in price and these energy retest the lows? That’s a 30% swing against you vs a not worth talking about swing in the common. Just be aware of that volatility and percentage swings when looking at the options side, in fact expect it.
WLL –The ones to look at are the APRIL 57.50 calls as they are 6 points in the money and are priced at 6.70
Keep in mind the deeper you go in the money the more they cost but the close you get to a point for point move in tandem with the stock.
Current Holdings
CAT — We are now long 1 April 110 put to open at 9.00 as we post they are currently trading at 10.15
Over the weekend we said:
Given the amount of positive long side structure we are seeing in our long side watch list we want to focus upon those. Should we see opening weakness in the markets Monday morning we will most likely cut and run on these put options.
We never got any weakness and here we are washing on the trade, we told you it was a wicked one. For now we st.
DECK We are now long 1 April 70.00 Call at 14.80 as we post they are currently trading at 13.80
CVX — We are now long 1 April 90 call at 9.85 as we post they are currently trading at 10.35
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CURRENT POSITIONS
"Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
WLL (We are now LONG 200 shares at 62.57)
DECK (We are now LONG 200 shares at 83.55)
CVX (We are now LONG 150 shares at 99.24)
COP (We are now LONG 200 shares at 75.44)
NXPI (We are now LONG 325 shares at 26.56)
SHORT SIDE POSITIONS
Over the weekend we said:
Given the amount of positive long side structure we are seeing in our long side watch list we want to focus upon those. Should we see opening weakness in the markets Monday morning we will most likely cut and run on both of our short sells below.
We never got any weakness and here we are washing on the trade, we told you it was a wicked one. For now we sit.
CAT (We are SHORT 125 shares at 102.12)
Below is a zoomed in view of what we are talking about in the daily chart.
WCC (We are SHORT 200 shares at 58.14)
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To our NEW SUBSCRIBERS
What we’ve tried to do is break our watch list down into chart pattern recognition structure from a visual standpoint. Learn the patterns and the components of patterns and you’ll blow those Wall Street MBAs away. You don’t need a $3,000 software program either. All you need is a BURNING DESIRE to be the best that you can be and we’re here to help.
We have a lot of new folks here and we thank you! We want you to take it easy, get to know how the routine works around here for awhile and to feel comfortable.
We hope you all aren’t here because you are chasing performance. For us it’s more about educating and making you the best you that you can be first (that’s what we focus upon!). Like many of our long time subscribers they have all found out that they have no use for traditional Wall Street (and we don’t blame them) and it’s our hope that over time you’ll have acquired enough knowledge from us to say the same with conviction.
One of the most important things we want to stress is that of RISK MANAGEMENT via POSITION SIZING. You don’t need to stack your account with just a few big positions as we’ve seen it time and time again that those who get into trouble are the ones who take large positions and do not employ any risk management system IE shoot for the fences. Those are the people who live on the fringes of extremes and yes ultimately get burned.
As a guideline a good initial system is that of the following example.
Let’s say you have a $100,000 virtual portfolio and let’s say that as a guide you never place more than 10% ($10,000) into any one position. Now let’s say that one day a news driven event hits (over which you have no control over anyway) and one of the positions tanks 20%. On its own that position is sporting a $2,000 loss, while that may seem devastating on its own its really no big deal overall.
Why? Simple its all about risk management being properly employed. What is the impact of a $2,000 loss to the TOTAL VALUE of the virtual portfolio in this example.
Answer: A whopping 2% LOSS. Now you know why we say no big deal.
We can also tell you new people here that you will get stopped out of names and you will take hits. There is nobody on the planet living that has ever hit 18 holes in one and there never will be. We’d rather get you grounded in reality right away vs talking about pie in the sky all the time like a lot of other sites. In so doing your head is screwed on straight from the start and when those days happen (and they will) mentally it won’t mean a thing to you. To us that’s what’s most important is YOUR state of mind as it’s your most important asset. We hope you appreciate our honesty.
We have a very good retention rate here at All About Trends and a lot of great outstanding people here. We like to think that a part of that is being upfront about what can happen (in both directions). Verses those up 500%, I turned $50,000 into $3 million or some other absurd number to get you to bite. That’s not who we are.
WELCOME ABOARD!
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Lastly with regards to taking any trade:
Remember the moment you take a trade you are at the mercy of the market and have no control except when to sell. If you are not willing to take the risk and are not willing to pay that price do not take the trade. We are willing to take that risk knowing full well the end result could be a loss. That said make sure that virtual portfolio management trade size is used accordingly. With any position you may take make sure that should something go awry the amount of total impact to your account does not devastate your acct. Try to stick to a 5% position That’s the key to virtual portfolio management, not biting off more than you can chew.
Remember the mechanics of reality with regards to the stock market states a stock can only do one of three things: Up, Down, Nowhere. The moment you hit the enter button you are at the mercy of the market therefore the only control you have is when to sell/cover. You can’t manage your gains as you have none to manage initially. Knowing this in advance it allows you to stay in outcome, that being you will either:
1. Make a gain
2. Wash
3. Get stopped out at a loss
Remember the market IS the boss. IT is going to do what IT wants to do.
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SUBSCRIBER ONLY WEB SITE
Don’t forget you can view updates in the middle and the end of each trading day complete with current charts, along with our current performance at our subscriber only web site.
