Well its been awhile since I have contributed much about trading on elite<b>trader</b> so I suppose I should do that. I know that many of you think I've dropped off the face of the earth, or simply have taken up door to door vacume cleaner sales. I can assure you neither of these is the case, however. Here is a video from a trade I took yesterday using gaps and relative strength. http://www.viddler.com/explore/bastiat29/videos/18/
How in the world can it be a struggle to make cuts in a $900billion dollar package! I felt sorry for President Obama this evening when I watched him on TV trying to defend this undefendable package. President Obama does have a mandate, he has unified the country in a way that no one since Ronald Regan has managed to do, and we should all, Democrats and Republicans, be thankful for the OPPORTUNITY that this presents. On the other hand, I think all of us, Democrats and Republicans alike should be furious at our congress. These are the only people in Washington who managed to make former President Bush look popular, and I fear that they are going to drag President Obama down with them. The polls are already starting to show his numbers fall as he becomes more and more attached to this spending package. We Americanâs have been told since October now that we face the worst crisis since the Depression, and that action must be taken yesterday. Since everything has been rushed through we have acted quickly and allowed our leadership to spend our money in questionable (at best) ways, with nothing to show for it. Now, Congress and the very liberal wing of the Democratic party see a âgolden opportunityâ to push through pet projects that would not otherwise EVER be able to pass. This bill is loaded with trash and his own party is taking advantage of President Obama in a very bad way. I think something does need to be done, but not what is now being done. When I was a little kid and I was messing up and not making any progress my dad used to always tell me to slow down, just stop and think about this. Why canât we just stop and think about this whole thing? I know that the world is âdifferent nowâ and that this particular crisis demands quick action. Fine, but it should also require some well thought out action. That doesnât mean we have to take a year to decide something, but just as stupid as taking a year is doing it in a day. This is a TRILLION DOLLARS that my kids and grandkids will be paying for, yours too. We need to seriously consider the spending before we commit too it. So now that I have that little bit out of my system. Stocks rallied on heavier volume Thursday on hopes of that Market to Market accounting rules will be changed. The NASDAQ was up just over 2%, gaining 31 points and closing at 1546. The Dow gained 106 points, closing at 8063, while the more broadly based S&P500 index gained 13 ½ points, closing at 846. As mentioned earlier volume was higher across the board, and advancing issues led decline issues by about 3 to 1 on both exchanges. Technically speaking today marks an âaccumulation dayâ in the market, and so far this week the market has traded higher each day on itâs close then it was on itâs open, generally a sign of strength. Where do we go from here? As I mentioned at the start of the week we had declined to the bottom of a trading range. In fact, while everyone else was getting ready to jump off roof tops and proclaim the start of a new bear market I advised buying the NASDAQ 100 Trust (QQQQ) when it was trading at $28.50, its now about $2.00 higher. A seven percent move in four dayâs isnât too bad considering that most portfolioâs are down about 10% already this year! Of course Iâve had some losers too, and some things that just did not do anything at all. The most important thing though is that you get rid of your winners quickly and you let your profitable trades make you some money. At this point we are nearing the top of the trading range the market has been in for the last 16 weeks. Of course as we do this others are becoming wildly bullish, you should not. Ranges tend to trade from highs to lows and then from lows back to highs again. Until this pattern breaks, you should not trade as though we are in a trend. Only during a trend do you favor buying near the tops of ranges. That is a breakout tactic, and it works very well in strong markets, but in a range bound market itâs a quick ticket to the poor house. On the chance that the market does decide to break higher though you should always have a list of top performing names to buy. Today I bought a small amount of American Italian Pasta (AICP) for example. This is a great example of a stock which conforms to a lot of the criteria William OâNeil teaches in his Canslim method. Earnings Growth has been well above 100% each of the last three quarters, while Revenue Growth has also been respectable, over 40% in each of the last three quarters. The company has a reasonable Return on Equity of 10%. There are negatives though, and thatâs why this will not be considered for any sort of long term hold. The negatives include a high Price to Earnings Ratio, way more institutional ownership then I like to see, low management ownership levels and high debt ratioâs. Again, this will NOT be something I look to put into a long term portfolio by any means, but it has shown some great relative strength versus the overall market, and acted well on good news today as well. Recent numbers and trading patterns in this stock are similar to past winners. As I look at this market I hope that this rally can hold. Iâm not any different then anyone else in that I want to see a strong America and a strong market. Thatâs good for all of us, and the fact is that itâs easier for me to make a lot of money if the market goes up. That said, Iâm not sure this particular rally has what it takes. We have very narrow leadership. Stocks like AIPC, profitable though it might be, are not the types of stocks that great bull markets are built upon. We do not have any sectors or groups of stocks outside of education really showing any solid bull market traits. On the flip side we have a lot of weakness and fear. For this reason I will be closing out the last of the QQQQ long trade from earlier this week and Iâll also be very cautious. Brandon
There is a so much uncertainty in the market right now. There are times when you should be very aggressive going and really go after the money, there are other times you should not. In my opinion this is not one of the times that there is easy money to be made in the market, and let me be clear there are times that there is easy money. That said here is my watch list. In this type of market I want to trade almost entirely on the side of the market. Longs. NVDA, PALM, YHOO, AIPC, NFLX, AMZN, APC, NOV, BTU and GNK. On the short side Iâm watching: CMCSA, PFE and ALL. The important thing, as I mentioned earlier, is to try to stay on the side of the market. If the market can break out of this range to the upside then the stocks I have listed on the long side here should keep you in good shape. On the other side, if the market can not hold up and heads lower the stocks mentioned on the short side, along with ETFs, should be able to provide some good opportunities to make some money.
The World's Shortest Book Someone suggested to me that it might be the "Complete Guide to French Milatary Victories". They claim it contains only one page: And it's blank. But I decided to investigate further. How to Pleasure a Woman - by Mike Tyson Word's I Never Mispernounced - by George W. Bush Pacifist's Guide to Wold Domination -by Cindy Sheehan Things I've NEVER Lied About -by Bill Clinton Prudent Shotgun Handling -by Dick Cheney Why America Is Just THE BEST -by Osama bin Ladin Things I Love About George W. Bush -by Michael Moore Ok, I admit to having made these up These "world's shortest books" I found on the 'Net My Strategy for Finding The Real Killer -by OJ Simpson Book of Baby Names -by George Foreman To All the Men We've Loved Before -by Ellen DeGeneres &Rosie O'Donnell Our Industry also has a "world's shortest book" of it's own. It's called the "Directory of VERIFIED Overnight Short Term Trading Millionares" A documented listing of all the traders who REALLY DID get rich immediatly after reading a book, taking a course or attending the latest, greatest seminar on "How to become a Gazillionare Trader" My guess is that book is even shorter than "The Amish Guide to Computer Maintenance" I guess I could be wrong here. Maybe there is a lucky genius somewhere who really did strike it right instantly and without effort in this business. One thing I know for sure though: It sure as heck wasn't me or anyone that I know. What it really takes to excel in this business. Every trader, hedge fund manager and CPO that I know has worked his or her butt to the bone to enjoy the success they have today. Not one of them thought it below them to start small. Some took minimum wage jobs on the floor as clerks and runners back "in the day" when the pits were still strong. Others started off as an assistant to a successful trader. Others, such as myself, took the harder road. We opened an account and had to get a second job to support ourselves. When I started trading I worked at Jay Patel's Sinclair gas station in Iowa City. I'd get up at 6:30am to watch the market, trade from 830 until 3 (I'm in the centeral time zone). and then at 430 I'd get to the gas station and work until midnight. I'd come home and scan for a couple hours and start the whole thing over again. It's no wonder the University of Iowa kindly asked me to leave. I'll bet you that most other successful traders could also tell you similar stories. What the Get-Rich-Quacks don't want you to know So why is it that folks are so quick to believe hypsters who paint a picture of fast and easy, even instant, riches in the stock market? Could it be that their mother's never taught them what my Mom taught me? Nothing worth having comes easy Winners never quit, quitters never win Failure is the down payment on success I suppose it could be a cultural thing as well. The cradle to the grave political mindset championed by the news media and by Hollywood seems to have infected the brains of many, and convinced them that the world does, in fact, owe them a living based upon the simple fact that they are alive. Of course that really means the federal government does, which really means you and me. On top of that I also suspect that the fast-food mentality that has permeated our society, delayed gratification is evil - instant gratification is your constitutional right!) has probably convinced a lot of folks that they deserve to get the living the world obviously owes them WITHOUT DELAY. This sets them up to be the pocket-picked patsies to anyone who promises instant riches, especially instant riches that require little or no work from them. I'm proud to say that my subscribers are smarter than the average bear (especially you!) Just in case you print this out to read it later..and just in case it falls into the hands of a stranger, let's make sure HE understands what the Get Rick Quacks will never tell him -The world does not owe you or anyone else a living. And it especially does not owe you riches, quick, slow or otherwise -Nobody but you can make you rich. Your going to have to do this all by yourself. -There is no gauranteed fast or effortless way to do this. Realizing that a big dream like yours will take intense study, laser like focus, buckets of skull-sweat, the persistence of a buzzing housefly, the patience of Job, the enteral optimism of Forest Gump and unlimited uncompensated overtime. -Do it anyway. It's worth it, in spades. And getting there is more then half the fun. How firm is YOUR foundation for success? I've been a hard worker all of my life, and even though I've had more then my fair share of set backs, I've also enjoyed a lot of success in trading and as an online entrepreneur. Neither has come easy, both have had more setbacks then I expected when I started, but the rewards in both have been well worth it.
From my point of view it went ok. I ended up not taking as many people as I'd hoped to be able to, and I also did not cover as much material as I'd wanted to at the time since I was still pretty sick when I did it. I'm sure if I was to do it again (which is not likely) the result would be better since I'm now, for the most part, healthy again. I have an archive of the material which I'll probably post at some point, and when I do that then you can probably judge for yourself if the content was worthwhile or not. Brandon
APIC was an awesome example of a stock showing strong relative strength patterns as well as decent (though not great) fundamentals in the company as well. I purchased it on 2/5 for $25.80 per share, which I mentioned several times on stocktwits, and I'm now closing it at $30.15 per share, for a profit of $4.35. Brandon