TheStockBandit.net

Video Review of the Indexes 3-7-2010

TheStockBandit — Sun, 07 Mar 2010 21:17:24 +0000

The major averages tacked on more gains last week as they cleared the February highs and kept on cruising. The NAZ made its way to a new 52-week high, although the senior indexes have not yet followed.

The recent climb from the February lows has been a persistent one, but volume has been notably absent. While last week we did see some improvement, there still remains a lack of institutional participation (as represented by heavy volume), which points to this rally being one that may largely be fueled by short covering. Nonetheless, price has continued bouncing from the recent lows, and that certainly deserves our respect. The only question at this point is whether the NAZ is creating a bull trap with this breakout, or if instead the S&P 500 and DJIA will follow along. We should know soon enough.

As we head into a brand new week of trading, let’s examine some important levels in the indexes to keep an eye on in the days ahead. That will have the greatest influence on how individual stocks are going to move, so it’s where the trading week begins.

This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there - but in case you didn’t, I wanted to put it here on the blog for you.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

Thanks for stopping by and I’ll see you here soon with more.

Until then… Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

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Reminiscences of a Stock Operator - Annotated Edition

TheStockBandit — Wed, 24 Feb 2010 16:07:00 +0000

Trading books are among my favorite to read, and I’m always on the lookout for a good one. The ones I like the most aren’t of the how-to nature, given that I’ve been a full-time trader for so many years. Instead, I really like those that get inside the heads of great traders.

I’ve pointed out my favorite reads in this category before, and that hasn’t changed. I still re-read them each year, and I either pick up new lessons or am reminded of timeless lessons each time I go through them. It’s a good investment of my time.

Perhaps at the top of the list is Reminiscences of a Stock Operator by Edwin Lefévre. My original copy is marked up from cover to cover where I’ve underlined portions of the text and made my own notes in the margin.

It’s based on real-life trader Jesse Livermore, but technically the book is fictional. Having read several other books by and about Livermore, this one does chronicle much of his trading past in an accurate fashion. However, I’ve always wondered about the facts behind the book and have wanted to know more.

So, when I was asked if I’d be interested in receiving a copy of the new Annotated Edition by Jon Markman, I jumped at the chance. After having read through it in the past few weeks, I’m impressed with it to say the least. Here are a few of my favorite takeaways from the book:

Foreword by Paul Tudor Jones. Need I say more? A Market Wizard weighs in on why this timeless classic is among his favorites, including an in-depth Q&A in the back of the book.
How Lefévre got Livermore’s story. I had wondered how Lefévre told Livermore’s stories with such accuracy and keen insight, and it’s clear their combination created a better work than either of them could have told individually.
Explanation of Livermore’s ‘hunches.’ The book helps explain how a pro like Livermore can act boldly when he felt the urge to go big, based on pattern recognition and his experience as a tape reader.
Selected quotes by chapter. Dozens of snippets from the book which could each be taped to my monitor on any given day, such as: “Remember that stocks are never too high for you to begin buying or too low to begin selling.”
How Livermore manipulated stocks. It was interesting to see how Livermore shifted from a trader to an ‘operator.’ It’s an art form how a whale like him can accumulate and distribute large positions, and additional light was shed on how and when he made his big moves, minimizing slippage along the way.

This new Annotated Edition is filled with side notes, insights, and the historical context in which the events took place - right alongside the original text of the book. Cultural settings are explained, and economic and political circumstances are discussed. Backgrounds of key characters are highlighted, helping to further clarify each scene.

The photos and detailed descriptions of the conditions under which Livermore was trading also shine considerable light on each circumstance. As a result, I not only learned some interesting history of the market, but along the way I also gained some valuable, timeless insights to apply in today’s trading environment.

Thank you Jon for sending me a copy of the book! And in case some of you haven’t read this classic, pick up a copy of it today - I have no doubt it’ll quickly become your favorite.

Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

Sponsored By: TheStockBandit.com Take the Money and Run!

Relative Volume On Demand

TheStockBandit — Tue, 23 Feb 2010 16:01:58 +0000

I’ve long been a user of the real-time scanner and filter Trade-Ideas Pro - since 2003. It has a ton of features for locating stocks on the move during the trading day, which is huge for a full-time trader like me.

My favorite feature is a pretty simple one though, which is called Relative Volume. This compares current volume to normal volume for the same time of day, and it’s displayed as a ratio. So for example, a stock trading 5 1/2 times its normal volume would have a Relative Volume display of 5.5.

Until now, I’ve thought that to get Relative Volume readings within Trade Ideas Pro, some other specific alert would need to be triggered (new high, new low, etc.). But today, I did something weird…I asked for help!

The CEO of Trade Ideas, Dan Mirkin, gave me the work-around for getting on-demand Relative Volume, which I want to pass along to you. Here are the steps to take:

Open a New Alert Window from within the program. No alert or filter settings are needed.

This window can stay minimized and just pulled up when needed. Just right-click on it and go to Configure, and then Symbol Lists. Select ‘Single Symbol’ and type in the stock you’re after.

Click ‘OK’ once done, and it’ll then display the symbol and Relative Volume for you, like this:

I understand Trade Ideas Pro is undergoing some changes to include even more features going forward. Should make an already great product even better!

Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

Sponsored By: TeleChart 2007 #1 Charting Software

Video Review of the Indexes 2-21-2010

TheStockBandit — Sun, 21 Feb 2010 18:22:47 +0000

With only 4 days of trading last week after the Monday holiday, the bulls had to make it count - and they did. They went undefeated on the week with across-the-board gains each day, reclaiming some important levels in the process. But with light volume on the way up, the rally is not without its faults.

Add to the mix the fact that the market has become somewhat short-term stretched to the upside, and the conditions are ripening for at least a short-term pullback. As with any market move, anticipation must be met with confirmation, and as of yet we don’t have that. Nonetheless, it’s a good time to exercise some added caution on the long side as the temptation to book profits becomes more powerful for the bulls in the coming days.

This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there - but in case you didn’t, I wanted to put it here on the blog for you.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

Thanks for stopping by and I’ll see you here soon with more.

Until then… Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

Sponsored By: TheStockBandit.com Take the Money and Run!

Video Review of the Indexes 2-7-2010

TheStockBandit — Sun, 07 Feb 2010 18:30:53 +0000

Last week proved to be an eventful one, although you wouldn’t know it from the net changes in the indexes from the prior week. What started out as a relief rally quickly turned into another nightmare selloff for the bulls, before a late surge Friday erased much of the damage. In the end, the market lost more ground and the correction continued.

Bounces are still getting sold, and that’s a reminder that the character of the market has changed in a big way over the past few weeks. The January highs now tower high above current prices, and we still have yet to see a meaningful bounce take place since the downside turn began. At some point it will arrive, but until then there’s still plenty of reason for caution in the current environment.

This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there - but in case you didn’t, I wanted to put it here on the blog for you.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

Thanks for stopping by and I’ll see you here soon with more.

Until then… Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

Sponsored By: TeleChart 2007 #1 Charting Software

Video Review of the Indexes 1-31-2010

TheStockBandit — Sun, 31 Jan 2010 23:06:39 +0000

Following an initial pullback from the January highs, no bounce was produced last week with the dip-buyers failing to appear. The group which has been so responsible for upside follow through since the market turned higher in March of 2009 suddenly disappeared, and stocks have been declining steadily for a couple of weeks now.

Key levels from previous months have been proving to be short-term rest stops for the indexes on the way down, offering not only some orderly price action but also a reminder to us that key levels are worth keeping an eye on.

It’s hard to argue that an important change of character is underway for this market, and the depth of this initial selloff certainly raises the likelihood of a lower high being created once a bounce kicks in. At some point, a bounce will arrive, but at the moment the short-term trend is down and that deserves our respect.

This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there - but in case you didn’t, I wanted to put it here on the blog for you.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

Thanks for stopping by and I’ll see you here soon with more.

Until then… Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

Sponsored By: TheStockBandit.com Take the Money and Run!

Video Review of the Indexes 1-24-2010

TheStockBandit — Sun, 24 Jan 2010 22:49:10 +0000

Last week we saw the market closed on Monday, making for a holiday-shortened week of trading. That certainly didn’t translate into quiet action, as traders made every day count.

Tuesday’s upside tested resistance, but without a breakout. From there, the sellers took control, raising cash more and more aggressively as the week progressed. In the end, steep selloffs made the difference with each of the indexes giving up short-term support zones with ease.

The downside reversal reminded the dip buyers who have been so persistent for 10 months that the market’s still able to move in both directions. Whether they learn their lesson this time or not remains to be seen, but it should bring continued volatility in the weeks ahead - and that’s a good thing for traders like you and me.

This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there - but in case you didn’t, I wanted to put it here on the blog for you.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

Thanks for stopping by and I’ll see you here soon with more.

Until then… Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

Sponsored By: TeleChart 2007 #1 Charting Software

Prepare for Anything

TheStockBandit — Thu, 21 Jan 2010 12:00:54 +0000

On several occasions in recent years, I’ve taken a spring trip with my dad and some friends to Arizona to play golf for a few days. I love the desert, and it’s fun to spend some time with the guys and make a few birdies (let’s not talk about the bogeys!).

Around Scottsdale, and particularly to the north of town, it’s quite common to see single-engine planes buzzing around the skies. Maybe it’s the great weather and silence of being on the golf course that made me notice them, but they seem to be everywhere. They’re pilots in training, and they’re starting small before they work their way up to something larger (like perhaps, something with more than 1 engine!). I respect that approach, and we’ll touch on that shortly.

But one thing that really caught my attention is that they actually shut off their engines - on purpose - over and over. What? It’s one thing to hop in that little thing with what sounds like a lawnmower motor on it, but hey, it’s no glider. Why would they do this intentionally?

They’re creating stall conditions and learning to recover. Learning to purposely manage a malfunction in a controlled environment (well, partially) helps them avoid panic should it ever happen unannounced. Eventually, they’ll become the kind of pilot I wouldn’t mind flying with.

From One Cockpit to Another

As a trader, sometimes that malfunction happens without warning. Sometimes right after an entry is made, the position rips right against you, perhaps even before you’ve had time to place a stop. Sometimes it’s an overnight trade which has unexpected or unscheduled news hit which causes the stock to gap against you, perhaps even beyond where you had intended to exit in the event of a failed trade. It’s painful and shocking, and more often than not, it results in panic for the untrained trader.

So how do you deal?

It’s almost impossible to mimic the emotions that go along with such a situation, but here are a few simple things you and I can do in order to avoid panic.

1. Expect it to happen. That doesn’t make us negative thinkers, mind you, but rather traders who are mentally prepared for anything - including the worst-case scenario. After all, if we’re prepared to face the worst, what could possibly cause us to panic? The point here is that through logical thinking as well as visualization, unexpected events and adverse moves can be mentally rehearsed to the point that when it does happen, we’re focused on the solution rather than the problem.

2. Keep a level head. By doing #1, we’re freed up to maintain our wits. Throwing a temper tantrum or freezing up entirely is only going to make it worse. The deer in the headlights stands motionless (at least here in south Texas), which means it’s up to the car to change course if something awful is to be avoided. Don’t be the deer - you can’t base your protection on hope that the stock will change course for you. Cooler heads will always prevail, so exercise self-control when you find yourself in a sticky situation and your mind will be available to strategize.

3. Expect to survive. Trusting that you’ll be alright in the long haul will help keep things in perspective, just as they should be. What might feel like a catastrophe to the inexperienced trader might be a little unsettling to you, which is something you can absolutely recover from. At the worst, it’s one bad trade out of your next 1000 trades, so consider it a spot on the windshield to look beyond rather than something worthy of doing more damage to you than it already has.

4. Never allow one trade to be too important. This of course takes into account position sizing and position risk, because the financial hit is the one that comes first. Putting on trades which are larger than they should be is nice when they work, but when they don’t, look out. Staring at a loss which is bigger than you’ve faced before will bring instant regret. Similarly, trading within one’s limits also means that no trade is ever emotionally too important. The aftermath which follows a big loss can be more emotional than financial, so walk the line carefully when choosing position size, and you’ll avoid a tailspin.

The market will dish out surprises from time to time, no doubt about it. Train yourself to expect it, and mentally rehearse some ways you’ll respond when it happens. You’ll ultimately feel as though you’ve been there, and your second reaction (following ‘oops’) will be a remedy rather than crippling anxiety and fear.

Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

Sponsored By: TheStockBandit.com Take the Money and Run!

ANF Looking Vulnerable

TheStockBandit — Tue, 19 Jan 2010 12:25:19 +0000

Anytime I see a stock crack support and fail to reclaim it, I pay attention. Especially when it makes no effort to rebound and merely consolidates after that key breakdown.

ANF is doing this right now. Just over a week ago, it undercut an ascending channel pattern on heavy volume, offering a decisive change of direction. Last week, not only did it fail to bounce, but it consolidated in a bear pennant pattern, indicating there may be more selling yet to come.

I’m keeping a close eye on this one, as a move down at $32 out of the short-term pennant would confirm this pattern, possibly leaving the $30 area as the next stop (given that it’s a former key level in the stock).

Here’s a closer look at the chart:

Chart courtesy of Worden

Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

Sponsored By: TeleChart 2007 #1 Charting Software

Video Review of the Indexes 1-18-2010

TheStockBandit — Mon, 18 Jan 2010 18:13:21 +0000

The bulls maintained their overall control last week, although they did allow the market to slip a little. The NAZ led the downside, but no key technical breaches occurred.

We haven’t seen a meaningful pullback in some time now, but if short-term support levels get broken, it could deliver some accelerated profit-taking. Lower highs and lower lows would have to develop before the longer-term uptrends would be disturbed, so even if we do see some downside it will be important to keep things in perspective.

This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there - but in case you didn’t, I wanted to put it here on the blog for you.

Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.

Thanks for stopping by and I’ll see you here soon with more.

Until then… Trade Like a Bandit!

Jeff White

Are you following me on Twitter yet?

Sponsored By: TheStockBandit.com Take the Money and Run!