position trading based on fundamental/technicals

Discussion in 'Journals' started by alphav6O3q, Dec 5, 2011.

  1. I am just starting out. For the moment I am paper trading. I decided to start out with position trading in stocks. This doesnt mean that I am going to stick with it when I actually start trading.

    I choose the stocks and look at the market based on CANSLIM.

    In my opinion, the market is going to rally soon. Because of the increased volume and consolidation on Friday, I think the market will improve, but it wont be a secular rise. It will probably go through more cycles until the Eurozone is resolved, or atleast a solution is in table.

    I will be reviewing the CANSLIM 50, 3 stocks every week according to the criteria presented in the book. I like to know the numbers rather than just rely on the IBD ratings for the stock. While the ratings are helpful, without knowing the numbers and the stock itself, it is difficult to buy or sell.

    Of the three stocks I reviewed (LULU, ULTA and ALXN), I found ALXN to be the most promising. However, ALXN is not basing at the moment. However even though it is not a bull market exactly, and the stock is not basing like stated in the book, I think it is safe to buy, because of the very strong growth estimates, and the moving averages.

    Time will tell.
  2. Frida was not a follow through day. There was a 2% increase in the price averages but at significantly lower volumes compared to the average volume~-18%. Also there is a clear divergence between trend of the short interest ratio and the trend of the price indexes. The short interest ratio has been climbing since august, which probably means that the bear market hasn’t ended . So the bear market is going to continue in the long term (6-12 months). In the short term 3 months or so, the averages are going to increase. In the very short term too, I think the price averages are going to increasetoo. Another divergence is between the put/call ratio of Chicago options versus all other options. Don’t know how to interpret, but I think this means that the short term price trend (upwards) will continue.
  3. I think there is about to be a short market cycle. The put call ratio has been greater than 1 for 3 consecutive days. The short interest ratio decreased from the previous day, for the first time after a week or so. There was a very significant increase in volume on friday, however the price increased by only a small amount. Maybe this indicates that the bulls have a slight upper hand.
  4. I tend to go through the weekly issues of the IBD one at a time every weekend, without looking at the later issues. This helps me see whether my predictions have are correct or not. Last weekend I couldnt do any,so I tried to catch up. Here is the analysis following for the week of Dec 18 to Dec 24

    Till Friday 23
    I dont know how but it seems last time I wrote this I picked almost a perfect bottom. As I said last time, my conviction is still the same. Although the Indexes are rising at present, is is just another short market cycle. If you notice carefully the short interest is the highest it has been in 1 year. Until the debt crisis in Europe, inflation in asian countries and the job scenario in US improves I dont believe there will be a secular market uptrend. We will see multiple short cycles.

    I am however a bit conflicted as well. Reports show that US is doing better than most other countries in Europe and in Asia. So if something similar to the US treasuries happen, I would expect that people would pull out of Asian and European companies and invest in US companies. So the market indexes in US might go up at the cost of Asian and European indexes.

    Since I am only a weekend trader, and dont see a secular uptrend for a long time, I am thinking of going into Mutual funds based on gold, high yield junk bonds, US treasuries, and probably stocks in china(once the china index plateaus). The Canslim can be applied only in a market uptrend. Atleast at the beginning I dont plan to put all my money into trading. So keeping it in a checking account leads to its devaluation (due to inflation). When I do start trading, I will probably start with ~ 10% of my networth, but I dont see myself start for a year or so.

    As always time will tell.
  5. KBaines


    >>>Until the debt crisis in Europe, inflation in asian countries and the job scenario in US improves I dont believe there will be a secular market uptrend. We will see multiple short cycles.<<<<

    Markets run ahead of the news and if you wait for all the stars above to allign it will already have passed you by. On a somewhat related note, I am surprised more aren't talking how much the market has risen since the October bottom.