PERFORMANCE
So far in March, we have a gain of $2,303.25 in our stock virtual portfolio and a gain of $570 in our options virtual portfolio.
From the March highs on the OTC through yesterday’s close the OTC comp has lost about 200 points! That’s about 7% with most stocks getting hammered twice — not to mention the emotional damage done to ones psyche. For us to be up for the month at all? That’s huge relative to what the indexes are doing. That’s what risk management is all about, that’s why we don’t chase buses, that’s why we manage our emotions and that’s why we allow stocks to come to us. All of this in one of the most uncertain times we’ve seen but because we practice risk management and keep our emotions in check, we’re able to manage it with confidence and generate positive results.
Remember success isn’t just about how you handle the good times, it’s also how you handle the bad times.
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No sooner than we send out yesterday’s mid-week newsletter and the S&P 500 decides to break the 1260 lows and the trunicated nano time frame double bottom gets thrown out the door. This is what happens in fast markets. 3 hours worth of editing charts and writing the mid-week newsletter and pow you can throw it right out the door 30 seconds after we sent it.
Still though we talked about us being in a C wave down and yep true to form they are wonders to behold. Keep in mind abcde is the same thing for us as 12345 as in waves for those who are into that sort of thing.
60-Minute frequency charts
If the markets are following the Elliott Wave script? Then the blue lines are what the script is all about, some sort of upleg as shown in blue, how far? That remains to be seen. It’s a potentiality at this point that we should at least be aware of.
Daily Frequency Charts
If we are going into a D wave, wave 4 higher call it what you will as shown on the 60 minute OTC chart in blue above this one, then that 38.2% fib level and a prior support level could get tagged before all is said and done. That won’t happen overnight barring a news driven event mind you. But we want to at least consider it as a potentiality should this D wave or whatever it is fails.
Bottom line, if the indexes are tracing out 5 waves down abcde waves down we still have more work to do to the downside before it’s all said and done. It’s also why we are more apt to lock our gains down on the long side soon too.
Yesterday we said and still stands today:
Now given all that, we are now more apt to be traders in this environment than investors. This is NOT the time to be an investor. There will be plenty of time for that down the road, but not here. We’re more apt to hit and run, get in get our gains and get out. It’s all about the total value of the virtual portfolio and right now we are positive for the month and would like to keep it that way. That’s what happens when you go slower to go faster and allow stocks to come to you vs. chasing them — a lot less stressful too.
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Lets talk a little bit about intermediate term corrections which are a normal occurrence. Eventually ALL stocks go into corrections. At the time they go into a correction what one doesn’t know is if it’s just a correction or the issue has topped. You won’t know that for months and if indeed an issue has topped? Well by then it’s too late. It’s also a reason why we don’t sit with stocks in corrections.
If indeed we are in an intermediate term correction then a fair amount of stocks will go the route of coming down to the 200 day average and try to stay above it (keep in mind this is an art and not an exact science) only to carve out new big bases. Remember the adage, The Bigger The Base The Bigger The Break? It applies as intermediate term corrections are not of the standard 6-8 week variety corrections and above the 50-day. We aren’t talking about those types. Let’s take a look at FFIV below as it’s been in a correction now for months now.
Below is what FFIV looks like now
IF this issue is in an intermediate term correction (which we feel it is) then it needs to carve out a new basing structure that it can launch higher off of. Most take 4-6 months and yes they do tend to sell off to the 200 day moving average. So what would it look like should it continue to build a bottom of a cup of a cup and handle? Take a look at the edited chart below as it’s your what to watch for in the coming weeks and months and not just with this stock as there are a lot of former leaders that are going to go this route in the coming months.
As we start to see names that are going that route based upon the components of chart pattern recognition we’ll bring them to your attention. After all 90% of this is also being prepared in advance right?.
So what do we mean by components? Simple. Let’s talk cup and handles for a moment. Before you can have a cup you need the left side of the cup (downswing and correcting). After the left side of a cup you enter into the bottom of a cup right? We mean after all you can not have a "Coming Up The Right Side " of a cup till you have a bottom of one. By the way on the upside crossover of the bottom of a cup and entering into the "Coming Up The Right Side" that is when we want to buy. It’s one of those alternative entry points we talk a lot about around here.
Our point is that you must know the components of chart patterns to be able to hone in on names with potential so as to be prepared in advance.
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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 and rightfully so! The OTC comp alone off the March highs only a few weeks back has fallen 7% or 200 points as of yesterdays close. Why on earth would you want to short AFTER THE FACT and after the damage is already done. There will be a time and soon enough we’ll be shorting names again but seeing as how they just knocked over the pins? Let’s let the market set up some pins first, then we can go bowling again.
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LONG SIDE WATCH LIST
If I were to put money to work here. Where do I put it?
SLV
NEW NAME
31ish looks like a decent level to allow it to come to you. It’s also near the 50-day average at that point too.
RAX
Still playing Thomas The "I think I can I think I can" yet hasn’t been able to thus far.
CVLT
Still playing Thomas The "I think I can I think I can" yet hasnt been able to thus far.
ALTR
Well there you have it, another triggered POH trade. We don’t see ourselves trade triggering this one either so it’s probably going to go the route of getting deleted from the watch list.
KLAC
Not too exciting here, no follow through thus far and we doubt we will be considering this issue for our virtual portfolio so we’ll delete it.
Note about deletions to our watch lists. For our do it yourselfers around here who trade to the beat of their own drum, if you own any of the names on our watch list and we delete them let us know because then we will put them in the featured but not trade triggered by us section.
NOG
XOM
As you can see for the most part most of these names are looking pretty decent still, relative to what we are seeing in the indexes? Hey we’ll take it. Still though we for the most part are in no hurry to add to what we have and are more interested in managing what we do have here.
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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.
CALL OPTIONS
Current Holdings
DECK We are now long 1 April 70.00 Call at 14.80 as we post they are currently trading at 11.80 last
CVX — We are now long 1 April 90 call at 9.85 as we post they are currently trading at 12.30
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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)
At or near a retest of the highs and we’d consider ringing the register.
DECK (We are now LONG 200 shares at 83.55)
Out of all of our holdings this and AAPL are really the only names that are not playing nice here, although AAPL is trying today.
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)
So far so good. Just remember from 26.56 to 28.56 is worth $650.00 for those who use the "Just get me my 500 a week, week in week out month in month out" Come to think of it, that type of thinking also applies to WLL above.
AAPL (We are now LONG 50 shares at 341.25)
Sure enough, right after we sent the mid-week newsletter AAPL decides to tag MAJOR SUPPORT of course it was in the face of fear and you had about 30 seconds to buy the stock in the 327 major support level. To those of you we heard from who just happened to be there not blinking? Nice job you got dang near 10 points under your belt all compliments of Credit Suisse today.
To Sum It All Up
Here we are in bounce mode. Of course we have to get through the "into the close" and the end of the week with it being options expiration too mind you. If you look at all of our holdings we are firing on all cylinders for the most part! This is exactly the action you want to see! That also said though? We have some really nice gains starting to show all in a matter of letting our stocks tell us what to do vs. getting emotional and watching what this guy says or what that guy says and the rest of the so called experts.
This means that we want to protect them and will use any further strength to consider locking down gains, but that’s us. What you choose to do is up to you. We have a great month going here as mentioned above and would prefer to keep it that way vs. shooting for the fences. After all Babe Ruth wasn’t just the home run king you know, he was also the strike out king too.
SHORT SIDE POSITIONS
NONE and rightfully so! The OTC comp alone off the March highs only a few weeks back has fallen 7% or 200 points as of yesterdays close. Why on earth would you want to short AFTER THE FACT and after the damage is already done. There will be a time and soon enough we’ll be shorting names again but seeing as how they just knocked over the pins? Let’s let the market set up some pins first, then we can go bowling again.
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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.
