Congrats to the Pittsburg Steelers for having played a great game and being the world champions. One of the great side stories to the game was that last year rookie quaterback Ben Roethlisberger made a promise to vertran running back Jerome Bettis: He would get him into the Super Bowl in his home town of Detroit of "The Bus" would stay in Pittsburg and play for one more year. It was a long, hard road and it did not always look like Ben was going to be able to keep his promise, but in the end Bettis got to play the last game of his career in the SuperBowl at Ford Field, a dream come true for him. So what does this have to do with trading stocks? A lot actually. When I first read Ari Kiev's excellent book "Trading To Win" one of the key aspects he talks about is a making a promise. He suggests that traders should make a promise to someone that they will be successful as traders, to be specific and promise something great. It is a scary void to put yourself in, because no one wants to break a promise and achieving it is not something that is by any means easy. However, an amazing thing happens when you make a promise. It is a strong commitment and you will move heaven and earth to live up to it. For myself making a promise to my Grandmother about my trading turned out to be a key turning point in my career, and since making that promise I have been successful beyond what I ever dreamed I would do. So take the leap, live in the void and see what happens: You will be thrilled with the end result. Now we move on to the market. The US Equity markets had a lot of information to take in this week, not all of which was seen as good. The key thing that happened was the Federal Reserve Policy meeting on Tuesday. Doctor Bernanke and the Fed raised rates another quarter point, which is not newsworthy, however they did not take further rate hikes off the table, and that is. The market has priced in as fact that the Fed would be done raising rates after this meeting or the next one. Unfortunatly though the Fed still sees inflation and has said that they are prepaired to fight it with continued rate hikes and are willing to continue their long tradition of going too far for too long. Equities have sold off sharply on stronger volume than we would like to see since. This is a sign that Wall Street was caught off gaurd and is now pricing in further increases. At the start of the year I came out very bullish, that has for the time being changed though and I am not more neutral. I have a heavy cash position and a wait and see approach to the market. January was a great month, my own accounts scored gains in excess of 10% for the month. The most important thing to having long term success in the market is not only in producing above average gains, but holding onto your gains. There are times when "all the stars align" and you and profits can be pulled out with relative ease. Other times though the market gets a lot trickier and it is not easy by any means to score a profit. During these times the prudent course of action is to stand aside and let things sort out. Unfortunatly most traders feel the itch to always be in the market, so they churn and give back hard earned profits during these times. I think that one of the things I am best at though as a trader and money manager is holding onto the gains I have. I am fairly conservative and rarely hit the ball out of the park, but I am very good at holding onto the gains I have produced. Currently there are few stocks that are standing out to me as worthy of capital commitment. One the long side PACR has pulled back nicely after a breakout from a nice monthly base and may be worth putting some money to work in. Starbux (SBUX) also stands out as one with potential to move higher. One the short side some of the Dow Industreals look nice, for example MMM, and INTC (Both of which I have open positions in). I also feel that IBM is worth consideration given the weak chart pattern and suspect earnings report they came out with two weeks ago. Aside from that now is not the time to be really busy buying and selling stocks. Use this time to research, make your lists, review your journals and things like that. Brandon
The market is in a pretty interesting place here. Yesterday for the first time small caps and mid caps really got hit hard with the rest of the market. I want to sit back and let the market digest this so I know if the divergance has finally been sorted out and we are going to head lower, or was the market just flushing the toilet and getting rid of the crap? At any rate caution is the order of the moment. RADS looks nice to me on a break above 14, Im going to use an intraday setup on it to see if I can transition that into a low risk swingtrade. Other than that not a lot happening. Brandon
[09:14] <brandon> This weekend as I was scanning not a lot of sectors really stood out to me [09:15] <brandon> but one thing I did notice is that big cap stocks are staring to put in bottoming patterns and emerge as possible leaders [09:15] <brandon> and small caps are not as attractive [09:15] <brandon> names like PG, NSC, DIA, FSL, ESRX, MRK I think have great setups [09:15] <brandon> so we will see what happens with them [09:16] <brandon> also fsl
Big cap stocks look to me as though they are about to take the lead. As I looked at sectors this weekend the best looking ones were Rails, Commercial Services, Life Insurance, Movies, Office Suppliers, Variety Stores, Truckers and Wireless Telecomm. On the short side Utilities, Major Retailers and Real Estate Developers stood out as worth looking at. A few names I like include ARBA, PACR, DIA, NSC, CAT (needs more rest) Brandon PS. I should be about back to full form here real soon. I had my spinal tap last week and that went well, but the puncture has not healed, so I am leaking spinal fluid which is causing a lot of pain. I am having a blood patch done on Weds which is supposed to fix that. After that "I'll be back" as the governator says. This weekend I will be in NYC for the traders expo, Toni is speaking for real tick.
In books, on CDs at seminars etc you always hear people tell you that one of the most important things to do is to combine timeframes. Look at the weekly chart and make sure that there is room to move up there before you take your swingtrade based on the daily chart, or look at the daily before you take your scalp based on a five minute chart. This is sound advice and it definatly helps you to avoid buying stocks near important resistance levels and then wondering why it did not work out. Another area of combining timeframes is entry, and this is one that I have not heard many people talk about. If you combine timeframes for an entry you are looking for a five minute chart setup to get into your daily chart triggered swingtrade. By doing this you can dramatically increase your risk to reward levels. How: Because you enter the trade as a daytrade, with the small stop associated with a daytrade, but you have the upside potential of the larger timeframe trade. The following is a video I did this morning using Brightpoint (CELL) as an example of combining timeframes. You will have to forgive my verbal meandering at certain points as I did the video about 15 minutes after I got out of bed. Brandon www.position4profit.com/cd/CELL.html