Market follow through

The markets actually traded normally for a bit today. What a refreshing change.

TZA long

TZA add size

Sold TZa

Short TNA

Cover TNA

Another bite from the AAPL

sold AAPL bounce

AAPL once more

Another AAPl sequence

short

add size

cover

go long

AAPL

Sure AAPL could fall much lower right now but lately there have been too many times it bounces up just when things look the worst. I'll cover now

AAPL short entry

add size

cover AAPL

I'll take that little dip in AAPL as an opportunity to cover

MCP cup and handle

Another pattern to note is called a cup and handle. Long or short it works a good percentage of the time.

Here is MCP earlier today

AAPL once more

shorting AAPL on the upswing going into the afternoon session.

cover AAPL again. keep those loses small!

I'm drawn to short AAPL again like a moth to a flame...

AAPL

I wasn't quick enough to catch that 2nd AAPL drop. I'm covering after an hour later of drifting.

It is worth watching though

Where theres smoke theres fire

Looking at AAPL this morning. Unusual drop. Somebody knows something. I'll short it on the possibility that the drop was not an accident. If I'm wrong I'll take the loss.

NFG

In light of what NFG did yesterday, I practiced a little patience and let it run. Now I'm getting out while its still rising

NFG entry

add size

NFG exit

TNA TZA sequence

TNA and TZA trade the same, only in reverse. I use them to gauge and confirm one another.


TZA sell

TZA buy

TNA short

TNA cover and

go long

TNA sell

SINA limmerick

With a buy signal so clear,

It had the potential to go far,

SINA was giving away dollars,

Faster than a drunken millionaire,

In a Las Vegas titty bar.

More timing and pullbacks

Despite its call letters NFG was anything but "No Fucking Good". It was a stellar performer.

I was late to this trade but shorted it at the top after it put in massive volume.

and covered it down here.

After playing the SVNT pop and shorting the pullback, I went long again right after and got stopped out when it fizzled. I thought to myself if I was the ones that wanted to acquire this stock I'd wait until the markets were going down in order to disguise my buying(if that was the reason for the big pop earlier). So I waited. When the markets did a feeble pop then moved down SVNT popped up. AH ha!

Soon a nice little trend developed

SVNT exit

Timing

I bankrobbed more than $1 on the rocketship up in SVNT.

Sold and shorted here

covered $1 lower, now looking for the pullback to end and the force that made it jump up before, to take over again.

Pops and pullbacks

Optimum times to enter stocks that are moving is when they pop or pullback contra or with the real trend. The risk is minimal when you can time it right. Your job is to wait for it to tell you it is time by the way they move. In each case set the stop just under the range of the previous candle.
1st chart NZ pullback after big pop

2nd chart NZ running away now, we are way ahead of the crowd

TNA popped a bit after showing much weakness

TNA resumed its downtrend

money is being made with almost no risk involved.

TZA pulled back after moving higher strongly

Stop was sniffed at but not hit, TZA lifting again. We are sitting pretty.

Game plan

Due to market conditions my game plan for the past little while has just been to scalp TNA and TZA during the day for .20 gains or whatever and then position myself for the last hour of the day low volume run up. I'm happy to do that as that is what the market is giving right now for the most part. However there are still stocks that run and present classic patterns to trade that actually follow through for multi dollar runs. Today SINA was one of those. Yesterday it was SVNT.

Watch the new highs/lows ticker and keep you eyes open for opportunities like these and set a stop so that if it doesn't follow through you can keep the loss small.

Trading is tuff these days, I wouldn't want to be a beginner trying to learn the ropes but if you can adapt and apply your system and edge successfully now then when or if the markets return to "normal" conditions it will all seem just too easy. Meanwhile bide your time and practice on the areas that need work.

1st chart SINA ascending triangle break to new highs

2nd chart SINA, sell into all the buying frenzy.

Patterns to trade by.

One of the unexpected side benefits that comes from doing this blog is when I get some thought provoking question from a reader that leads to a good blogging post.

"How to develop an edge" is always on new traders minds. Here is a way to burn high probabilities chart patterns into your mind.

I like to keep things simple and I am a visual person, not a touchy feely or over analytical type. Drawing ascending or descending triangles on charts will show you visual representation of what is happening. Ascending triangles means higher highs and higher lows, descending means the opposite. When the point of the triangle breaks through resistance or support , it means momentum and opportunity are present. Trade it. Grab it. look for more.

It's optimism and pessimism, buyers and sellers in control. Going with the flow. The patterns are not 100% guaranteed so just play the probabilities.

Print these out (black background will kill your ink though) or find the same patterns yourself and make "flash cards" out of them. Have a friend show you these one at a time in a rapid manner. Your job will be to identify what they are, what direction they are moving and decide on the probable, typical outcome within a second or less such as - ascending triangle--up--buy. Or descending triangle--down--short it. You can probably do it on computer as well but get out the scissors and make these little flash cards instead. It turns them into something tangible you can touch and makes them real.

A task like this will hurry your pattern recognition skills and decision making skills along.

An important note- I am not too picky about or debate whether a pattern is there or not or if tails are in the way. If I can see the pattern it is there. Don't debate yourself if it is not perfect.

Also if a pattern does not follow through, that gives you valuable information as well for a move opposite the probable or typical can mean an excellent and strong trade that way.

The following are some patterns from 9/9/2010 but it is not an exhaustive list:

Patterns

RIG

RIG ...wow, eh.

SNDK short fail led to great trade long

SRS break to highs

SRS ascending triangle

GG break low

GG linear drop

ABX break low

ABX continues

V descending triangles