Thursday, January 20, 2005

Back to the Salt Mine

Sorry for the lack in posts this week. It has been a very busy week. My mind is on other things than this blog or the current market's state. I've been trying to figure out how to code the QQQQ daily systems into an indicator.

I've made some progress the past two nights. But, still much work ahead. So, before I head back to the salt mine...wanted to wish everyone a great weekend.

Later trades.

Daily Systems

New System Triggers
  • None
Recently Closed Trades
  • Closed QQQQ (TrueRVolume) at Thursday's market open with a -2.66% loss.
Current Open Systems
Symbol System Entry Date Exit Date Profit/Loss%
QQQQ ATRBreakBB
1/5/2005 open -3.44%
ACV BreakUp
1/7/2005 open +1.62%
CB BreakUp
1/19/2005 open -3.25%
MGF Breakup
1/19/2005 open +0.00%



Total -5.07%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Wednesday, January 19, 2005

Year 2000 Behavior?

Is it just me or does the recent market behavior feel like early 2000? When companies with good earnings got slaughtered. In fact, any good news was sold and sold hard.

I guess what I'm getting at is this type of behavior feels more like a top than a bottom. So, be careful out there.

Later trades.

Daily Systems

New System Triggers
  • Closing the QQQQ (TrueRVolume) long system at Thursday's market open.
Recently Closed Trades
  • Closed QQQQ (VolSurgeDown) at Wednesday's market open with a +1.23% profit.
  • Closed QQQQ (BBLower) at Wednesday's market open with a +0.18% profit.
  • Closed WAG (Breakup) at Wednesday's market open with a +6.77% profit.
Current Open Systems
Symbol System Entry Date Exit Date Profit/Loss%
QQQQ ATRBreakBB 1/5/2005 open -1.55%
QQQQ TrueRVolume
1/5/2005 open -1.55%
ACV BreakUp
1/7/2005 open +0.61%
CB BreakUp
1/19/2005 open -1.16%
MGF Breakup
1/19/2005 open +0.15%



Total -3.50%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Tuesday, January 18, 2005

Busy as a Bee

This promises to be a busy week. Sorry for any lack in posting.

Received a new system trigger for the close-end fund, MGF for Wednesday's market open. This system trigger is from the BreakUp system. I don't like this trade selection. It's not what the system was created for...but these type of instruments have been included in my backtest. So, the BreakUp system can handle it...I'm just reluctant to trade it. I'll add it out there and most likely just track it not trade. I'll think about it more over a good night's rest.

Later Trades.

Daily Systems

New System Triggers
  • Closing the QQQQ (VolSurgeDown) long system at Wednesday's market open.
  • Closing the QQQQ (BBLower) long system at Wednesday's market open.
  • Closing the WAG (BreakUp) long system at Wednesday's market open.
  • Opening the CB (BreakUp) long system at Wednesday's market open.
  • Opening the MGF (BreakUp) long system at Wednesday's market open.

Recently Closed Profits
  • Closed the QQQQ (Tii100Low) on Tuesday's market open with a -0.88% loss.
  • Closed the QQQQ (Harami) on Tuesday's market open with a -1.03% loss.
Current Open Systems
Symbol System Entry Date Exit Date Profit/Loss%
WAG BreakUp 1/4/2005 open +6.96%
QQQQ BBLower
1/5/2005 open +0.10%
QQQQ ATRBreakBB
1/5/2005 open +0.10%
QQQQ TrueRVolume
1/5/2005 open +0.10%
ACV Breakup
1/7/2005 open +1.19%
QQQQ VolSurgeDown
1/8/2005 open +1.15%



Total +9.60%

*Note, my totals were not correct in previous posts on the daily system tables.

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Monday, January 17, 2005

3 Day Weekend Update

Stayed and played at the Kemah Boardwalk this weekend. The girls and I ate great seafood, shopped, and rode the train. It was a little cold...but still enjoyable. My daughter loved the Aquarium restaurant. Her parents did too. :)

Now, on to business. I'm thinking about changing the trading of the QQQQ systems...both the weekly and daily systems. The reason? Too much money is tied up in order to trade them. Basically, they just don't produce enough profit to warrant the tie up of capital. I have two choices: 1) Trade the underlying option contracts or 2) Convert the systems into an indicator and use to create strategies to trade stocks within the Nasdaq 100 index.

So, over the coming weeks expect changes in those systems and how they are published.

Have a great week!

Daily Systems

New System Triggers
  • Closing the following long systems at Tuesday's market open: QQQQ (Tii100Low) and QQQQ (Harami).
  • Opening the QQQQ (VolSurgeDown) long system at Tuesday's market open. I'm no longer trading the QQQQ systems but will continue to publish them until I decide upon an alternative way to trade them.

Recently Closed Profits
  • Closed the QQQQ (VolSurgeDown) on Friday's market open with a -1.11% loss.
Current Open Systems
Symbol System Entry Date Exit Date Profit/Loss%
WAG BreakUp 1/4/2005 open +3.17%
QQQQ Tii100Low 1/5/2005 open -0.65%
QQQQ BBLower 1/5/2005 open -0.65%
QQQQ ATRBreakBB 1/5/2005 open -0.65%
QQQQ TrueRVolume 1/5/2005 open -0.65%
QQQQ Harami 1/6/2005 open -0.49%
ACV BreakUp 1/7/2005 open -0.02%



Total +0.03%


Weekly Systems

New System Triggers
  • Closing the VNWK (PennyLag) long system at Tuesday's market open.
  • Opening the DDDC (PennyLag) long system at Tuesday's market open.

Current Open Systems

Symbol System Entry Date Exit Date Profit/Loss%
QQQQ SimpleUp 1/4/2005 open +1.26%
QQQQ TurtleTrader 1/5/2005 open -4.21%
AATKPennyLag1/5/2005 open-17.86%
VNWK PennyLag 1/5/2005 open +13.04%
EGHT PennyLag 1/5/2005 open -23.58%
ZICA PennyLag 1/6/2005 open +21.28%
CARN PennyLag 1/7/2005 open -5.87%
HAUP PennyLag 1/7/2005 open -14.77%



Total -30.71%


Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Thursday, January 13, 2005

TGIF

When I run my weekly system scans this weekend...I'm afraid a few sell triggers will be issued due to disaster stops. Unless we have a good day tomorrow.

Losses hurt but are a part of business. A great take on losses is from Tom Basso's interview in The New Market Wizards book:
  • "Think of each trade as one of the next one thousand trades he's going to make. If you start thinking in terms of the next one thousand trades, all of a sudden you've made any single trade seem very inconsequential."
  • "I stopped looking at losses as problems and started viewing them as opportunities to elevate myself to the next plateau."
  • "I sat there for a moment and thought about all the events and actions of the previous evening and that morning. I realized that there was not a single thing I would have done differently. Despite having just lost 15 percent in our portfolios overnight, I felt phenomonally good at that point."
Market note: The heavy-weights were back at it again today. Will they be back tomorrow? Doubt it. We should see some strength. But, watch the last hour of trading to gauge how comfortable traders are with holding over the weekend.

Everyone have a great Friday and enjoy your weekend.

Daily Systems

Sell trigger issued for QQQQ (VolSurgeDown) long system at Friday's market open. The signal issuing the sell is a time stop. Most of these QQQQ systems will be hitting time stops next week.

Current Open Systems:

Symbol System Entry Date Exit Date Profit/Loss%
WAG BreakUp 1/4/2005 open +2.30%
QQQQ Tii100Low 1/5/2005 open -1.58%
QQQQ BBLower 1/5/2005 open -1.58%
QQQQ ATRBreakBB 1/5/2005 open -1.58%
QQQQ TrueRVolume 1/5/2005 open -1.58%
QQQQ VolSurgeDown 1/6/2005 open -1.42%
QQQQ Harami 1/6/2005 open -1.42%
ACV BreakUp 1/7/2005 open -0.81%



Total -0.94%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Wednesday, January 12, 2005

Ringing the Bell

Is that what Bill Cara said he does when he makes some coin? Well, I'm ringing the bell because yesterday's post was spot on with how the market traded today. Bill, can you hear the bell? :)

Articles for the musing:
  • Another great post from the Texas Hedge Report. I do not want to agree with their analogy on the Roaring Twenties and today. But, they make a good case. If you throw the Presidential cycle into the mix...their timing might be pretty accurate. The 29 crash occured 3 October's before the 1932 election. We're currently 3 January's away from the 2008 election. If the gold and silver markets are truly in secular bull markets...they're going to have to start turning around sooner rather than later.

  • An interesting study on buying the prior year's strongest sectors. If you would have done this from 1991 thru 2004; you'd have a compounded annual return of 18.4% versus the SP-500's 9.7%. Read here.

  • Interview of Jeffrey A. Hirsch from RealWorldTrading. Take it for what you will. Read here.

  • I have a problem with simplified logic. Maybe because that's my game. ;) Regardless, the logic this investor is using to game oil and satellite radio worries me. Read here.

  • Interview with Pulte Homes CEO, Richard Dugas. A completely different perspective on the rise in real estate. Can you believe they build and sale 100 homes a day? Read here.

Daily Systems

Current Open Systems:

Symbol System Entry Date Exit Date Profit/Loss%
WAG BreakUp 1/4/2005 open +3.89%
QQQQ Tii100Low 1/5/2005 open -0.26%
QQQQ BBLower 1/5/2005 open -0.26%
QQQQ ATRBreakBB 1/5/2005 open -0.26%
QQQQ TrueRVolume 1/5/2005 open -0.26%
QQQQ VolSurgeDown 1/6/2005 open -0.10%
QQQQ Harami 1/6/2005 open -0.10%
ACV BreakUp 1/7/2005 open +0.26%



Total +0.38%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Time for the Pop?

Are the heavy-weights through selling? Will Intel's earnings be enough to pop the market up tomorrow? Or will the heavy-weights use the strength to continue their liquidation?

All good questions. And this guy has no answers. Just a warning. Everyone is now used to strength in the morning and weakness in the afternoon. Tomorrow sure looks to start out strong. If so, you can bet your hard earned dollar that retail traders will be shorting that strength hard and fast. Might lead to a nice little squeeze in the afternoon for those traders. That is if the heavy-weights are indeed through with their selling.

A side note. Has anyone been watching SBUX? I for one have never understood this stock or the company. Now, don't get me wrong...I must have my daily cup of joe like the next fella. But, c'mon. Their prices. You gotta be crazy. The local Diamond Shamrock store has a nice little coffee shop with prices more to my liking. And if you don't like that try a Dunkin Doughnuts or the many places sprouting across the country selling premium coffee for discount prices.

Can SBUX really survive long-term? At these stock prices? The recent announcement of MCD entering the premium coffee biz makes me wonder. At least the war between these two very different companies will be fun to watch. Especially with SBUX getting into the hot food business.

And if MCD isn't enough of a worry maybe KO is. With the rumor of a new coffee-flavored coke possibly hitting the market. Read here.

Of course, you've got to add the widespread ownership of SBUX to boot. There's only one exit fellas. Single file, single file.

Note: I do not have any position in SBUX, MCD, or KO at the time of this writing.

Daily Systems

Current Open Systems:

Symbol System Entry Date Exit Date Profit/Loss%
WAG BreakUp 1/4/2005 open +3.27%
QQQQ Tii100Low 1/5/2005 open -1.09%
QQQQ BBLower 1/5/2005 open -1.09%
QQQQ ATRBreakBB 1/5/2005 open -1.09%
QQQQ TrueRVolume 1/5/2005 open -1.09%
QQQQ VolSurgeDown 1/6/2005 open -0.93%
QQQQ Harami 1/6/2005 open -0.93%
ACV BreakUp 1/7/2005 open +0.02%



Total -0.33%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Monday, January 10, 2005

Weak!

The market is looking weak. You feel good about the market when you wake up in the morning, the market is down, and then spends the rest of the day trending up. Day after day of this behavior and traders get bullish.

Not this market. Wake up every morning to witness the market up, sometimes nicely, then to watch it sell-off and finish the day lower. Weak!

You can almost feel the heavy-weights allowing the market to work higher in the morning and then begin their selling into the strength...working their positions off.

During these trading environments watch what is being sold. What's getting hit, experiencing a nice pop in the morning to then experience heavy selling pressure in the afternoon. These stocks can be a lot of fun once the heavy-weights work their positions off.

How did the Five Down system work out? Not good. If you would have taken the trade you would have lost -0.08%. There were 3 trades that occurred in the year 2004. Only 1 was a loser that occurred back in March. The loss was -0.82%. What's worse is the market lost another -2.52% within seven days of the close of the system. But, the good news is the market then rallied +7.48% from the opening of the Five Down system.

Not that any of that matters. Cause you know the saying...past results are not indicitive of future performance. Ha!

Be careful out there...traders are getting comfortable with the morning rally/afternoon sell-off. They might get more agressive in selling this market.

Daily Systems

Current Open Systems:


Symbol System Entry Date Exit Date Profit/Loss%
WAG BreakUp 1/4/2005 open +3.20%
QQQQ Tii100Low 1/5/2005 open -0.39%
QQQQ BBLower 1/5/2005 open -0.39%
QQQQ ATRBreakBB 1/5/2005 open -0.39%
QQQQ TrueRVolume 1/5/2005 open -0.39%
QQQQ VolSurgeDown 1/6/2005 open -0.23%
QQQQ Harami 1/6/2005 open -0.23%
ACV BreakUp 1/7/2005 open +0.89%



Total +0.30%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Sunday, January 09, 2005

Weekend Update

Busy weekend. Need rest. Post more tomorrow.

Have a great week!

Daily System Updates

Current Open Positions:
  • WAG (BreakUp) long with current profit of +2.85%;
  • QQQQ (Tii100Low) long position with current loss of -0.34%;
  • QQQQ (BBLower) long position with current loss of -0.34%;
  • QQQQ (ATRBreakBB) long position with current loss of -0.34%;
  • QQQQ (TrueRVolume) long position with current loss of -0.34%;
  • QQQQ (VolSurgeDown) long position with current loss of -0.18%;
  • QQQQ (Harami) long position with current loss of -0.18%;
  • ACV (BreakUp) long with current profit of +0.40%.

Weekly System Updates

Closed system positions (sold at last Monday's market open):
  • SPDE (PennyLag) long with closed profit of +9.62%.
Current open system positions:
  • QQQQ (SimpleUp) long with current profit of +1.58%;
  • QQQQ (TurtleTrader) long with current loss of -3.91%;
  • AATK (PennyLag) long with current loss of -19.05%;
  • VNWK (PennyLag) long with current profit of +2.03%;
  • EGHT (PennyLag) long with current loss of -12.97%;
  • ZICA (PennyLag) long with current profit of +47.83%;
  • CARN (PennyLag) long with current loss of -2.68%.
  • HAUP (PennyLag) long with current loss of -6.17%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Thursday, January 06, 2005

5 Consecutive Closes and a System

I've been staying away from system development ideas for approximately 3 weeks now. I must have been burned out. But, an idea has been ruminating in my mind thanks to the help of a few posts on Roger Nusbaum's site. So, most likely, I'll start backtesting the idea this weekend.

I basically would like to see if there's some substance in creating a covered call trading system. I'm afraid the major problem with a system like this is the fact that too much capital would be tied up to take advantage of the system. But, my curiousity with this idea is getting the best of me.

Truth be told, I've always stayed away from options. Delta, gamma...it's all greek to me. I just figured it's hard enough to do one thing well...so why add more complexity to the task at hand. But, much like pigeons, I gotta make it harder and harder on myself. :)

One more note. The DJ-30 and SP-500 broke their consecutive lower closes today. But, the Nasdaq Composite has now gone 5 consecutive days with lower closes. Doesn't really mean anything though...or does it?

If you would have traded this phenom you would have placed 56 trades since 1990 with a win ratio of 62.50%. And an eaked out an average profit/loss of 0.71%. This assumes of course, you bought at the market the following day the 5 lower closes occurred and sold at the close two days later. Not a great record.

If you would have traded the QQQQ instead of the Nasdaq Composite...your performance would have improved slightly. 42 trades would have been placed since 1990 with a win ratio of 66.67% with an average profit/loss of 1.12%. A little better.

Now, if you just add a little tweak and a little system magic and combine the two...your results improve tremendously. If you only take trades where both the Nasdaq Composite and QQQQ place 5 consecutive lower closes in synch and use the QQQQ as your trading vehicle...you get an average win ratio of 79.17% and an average profit/loss of 2.22%. And the number of trades are reduced to 24. You get better performance and less risk from the combination. Less risk because your in the market less than half the time as when trading the vehicles seperately.

Don't get too excited. This is just a quick test...not a full system.

Are the Nasdaq Composite and QQQQ in synch this time with the 5 lower closes. Yes. So, we can conclude based on backtested results, that the QQQQ will be higher at Monday's close than tomorrow's opening...at least 79.17% of the time.

Anyway, have a great Friday and an even better weekend!

Daily System Updates

Received ACV (BreakUp) long system trigger for Friday's market open.

Current Open Positions:
  • WAG (BreakUp) long with current profit of +1.96%;
  • QQQQ (Tii100Low) long position with current loss of -0.85%;
  • QQQQ (BBLower) long position with current loss of -0.85%;
  • QQQQ (ATRBreakBB) long position with current loss of -0.85%;
  • QQQQ (TrueRVolume) long position with current loss of -0.85%;
  • QQQQ (VolSurgeDown) long position with current loss of -0.70%;
  • QQQQ (Harami) long position with current loss of -0.70%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Wednesday, January 05, 2005

Horse Races

The DJ-30 has closed lower than the prior close 6 days in a row.

The Nasdaq Composite and SP-500 have closed lower than the prior close 4 days in a row.

I have a few systems that trade these types of actions...one is kicking off on Thursday's open. But, I think this type of action is a blip. Not to mean it doesn't have some significance. Just mean to say, we need a few weeks to figure out what's going on in the longer term.

I read people everywhere rushing to form conclusions about this sell-off and what it means for 2005. It's too early to tell. This horse has just got out of the gate...and too many people are already picking winners and losers.

Last I checked, it took more than 3 trading days to make a year.

Daily System Updates

Received 2 more QQQQ long triggers for Thursday's market open from the following systems: VolSurgeDown & Harami. I've talked about the Harami system before. But, the VolSurgeDown system is a new one. It's based on three consecutive days where the close is lower than the prior close.

VolSurgeDown:
Win Ratio: 80.30%
Average Profit/Loss: +1.24%
Average Days Held: 3.30

Harami:
Win Ratio: 82.76%
Average Profit/Loss: +2.41%
Average Days Held: 6.72

Closed Positions at Wednesday's Market Open:
  • QQQQ (TrueRange) long position closed with a loss of -2.54%.
Current Open Positions:
  • WAG (BreakUp) long with current profit of +1.91%;
  • QQQQ (Tii100Low) long position with current loss of -0.36%;
  • QQQQ (BBLower) long position with current loss of -0.36%;
  • QQQQ (ATRBreakBB) long position with current loss of -0.36%;
  • QQQQ (TrueRVolume) long position with current loss of -0.36%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Tuesday, January 04, 2005

Range Expansion Day

What a slaughter today. The market blew chunks as the heavyweights found the path of least resistance.

Gary B. Smith used to joke to his readers to sell the market whenever he made his way to New York for the Bulls & Bear show. Maybe I need to warn everyone to sell the market when I post my annual performance. Ha!

Looked at a house today. The house is a foreclosure. The house is nice but has an odd configuration. I guess, not really odd...evolved is a better word. The original house is your basic traditional style...but small. So, they added an office/playroom/bathroom onto the house and enclosed the deck. These are all nice additions...but are afterthoughts to the original house plan. As a result, the house doesn't flow as nicely as it should.

We'll probably put in a lowball offer hoping they'll come down a bit. For the right price and a little money...it could work. And hey, it would make a great rental someday.

Daily System Updates

The QQQQ (TrueRange) will have to be closed at Wednesday's market open due to the disaster stop being hit. But, then due to today's range expansion...I received 4 new QQQQ triggers at Wednesday's market open. So, the TrueRange system will be closed with a loss...but my actual QQQQ position will remain open due to the new system triggers.

The 4 new QQQQ system triggers are the Tii100Low, BBLower, ATRBreakBB, and the TrueRVolume. I've posted the backtested results on the Tii100Low and BBLower before. Here's a breakdown on the other two:

ATRBreakBB:
Win Ratio: 85.71%
Average Profit/Loss: +2.67%
Average Days Held: 6.79

TrueRVolume:
Win Ratio: 83.33%
Average Profit/Loss: +3.03%
Average Days Held: 8.38

Current Open Positions:
  • QQQQ (TrueRange) long with current loss of -2.29%;
  • WAG (BreakUp) long with current loss of -0.64%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Blind Media and Studies

James Altucher beat me to it. I've been trying to clear space to test this same idea the media is bantering around all over the place. Blindly blabbering the study without really knowing it's validity.

So, kudos to James for demistifying the Five Days In January Effect. Read here.

You can see from his posting that the first five days in January are no different than any other five day period. But, there are some points to ponder for the month of January as James points out.

There are many studies, notions, and generalities about the market that when the pencil hits the pad are proven wrong, invalid, or just flat out stupid. Other studies might have been true at one time...but change as market participants take advantage of the inefficiency.

Take for instance the buying of the Dogs of the Dow. Typically you buy the first trading day in January. But, over time, people figured out you could buy the underperformers earlier...sometimes as far back as October to supercharge your gains. So, the strategy changes or shifts. And sometimes it comes back full circle.

That's the problem with date or time specific trading strategies.

Monday, January 03, 2005

2004 Annual Review

Time to tackle the annual performance review. Why, when I type that, do I picture me sitting in some obfuscated conference room undergoing a checklist of what I did and didn't accomplish for the prior year? Then receive my performance bonus or lack thereof. Ha!

Here we go. I posted a 26% gain for the year. This marks the 4th consecutive year of gaining 25% or more on the market. Most of the returns came from my systems. The account being measured does not use margin and does not trade options. All positions taken for the year were U.S. Stocks and the QQQQ. The overwhelming majority of those stocks are listed on the Nasdaq Stock Exchange.

Here's the breakdown:

Three losing months for the year. Two of those occurred back to back. The worst month was a -0.77% loss in July. Second worst month was a -0.68% loss in April.

Nine profitable months for the year. Five of those occurred back to back. My best month was a +6.14% gain in October. Second best month was a +3.79% gain in December.

Overall, a really good year. But, thanks to the big intuition mistake I made back in November...it cost me about 8% in overall equity gains. In other words, I posted a gain of +2.61% in November...if I wouldn't have liquidated my system positions and sat out that one week...my gain for November would have been 10% or more. What a difference a week makes.

On a lighter note...

My year was made when I found out my performance topped Rusty's. Maybe I will get that bonus after all. :)

Daily System Updates

One long trigger for QQQQ at Tuesday's market open. The TrueRange system generated this trade. This system has a 78.43% win ratio with an average profit of 3.67% and an average loss of -2.22%. This system is based on an expansion of the average true range. Not one of my favorites since the average profit isn't much larger than the average loss.

One long trigger for WAG at Tuesday's market open. The BreakUp system generated this trade. I'm sorry, but do not have the performance statistics available for this system tonight. Too tired...going to bed. :)

Closed the following positions today at market open:
  • Closed 1 QQQQ (BBLower) long with profit of +1.24%;
  • Closed 1 QQQQ (Tii100Low) long with profit of +1.73%.
Sorry, previous posts had the system's profit percentages reversed with each other.

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Sunday, January 02, 2005

Weekend Update

Sorry, I've been lazy today. Snacking on all the X-mas candy and watching plenty of TV. I think I'm movie'd out and candy'd out. Actually, ready for the work week to begin. Ha!

If you're looking for a sweet movie to see with your significant other...check out Raising Helen. Pretty good...for a chick-flick. :)

I've installed the XM Satellite radio. Gotta say...it's another Tivo experience. Don't know if I can go back to normal radio again. It's that good. It will definitely improve the daily commute.

Trying to compile a list of the different trends that I believe will play out over the next few years. It's been harder than I thought to get my thoughts down into a semi-readable format.

It will be interesting to see how this market starts out trading for 2005. With everyone back...will the heavyweights start selling into this market? Or buying? I'm not smart enough to know. But, I'd be careful for the first couple of days until the market finds its new groove.

Have a great week!

Daily System Updates

Closing the QQQQ (BBLower & Tii100Low) positions at Monday's market open. These sell triggers are due to system time limits.
  • 1 QQQQ (BBLower) long with current profit of +1.32%;
  • 1 QQQQ (Tii100Low) long with current profit of +0.83%.

Weekly System Updates

Closing the SPDE (PennyLag) long position at Monday's market open. This sell trigger is due to the position not being profitable enough to warrant further holding.

Current open system positions:
  • 1 QQQQ (SimpleUp) long with current profit of +5.16%;
  • 1 QQQQ (TurtleTrader) long with current loss of -0.52%;
  • SPDE (PennyLag) long with current profit of +10.00%;
  • AATK (PennyLag) long with current loss of -12.70%;
  • VNWK (PennyLag) long with current profit of +0.87%;
  • EGHT (PennyLag) long with current loss of -4.01%;
  • ZICA (PennyLag) long with current profit of +65.90%;
  • CARN (PennyLag) long with current profit of +2.85%.
  • HAUP (PennyLag) long with current loss of -0.49%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Saturday, January 01, 2005

Election Year Review

Wanted to post a close to the election rally effect posted back in November. You can read the first post on the study here. And a follow-up on the study here.

For those who don't remember, this study assumes you would have invested at the close of the last day in October and sold at the close on the last day of December of the same year within an election year. Here are the results of the study encompassing prior election years:

S&P 500
Time Period: 1964 - 2000
Total Elections: 10
Total Win%: 70.00%
Total Losing%: 30.00%
Average Profit: 3.85%
Average Loss: -2.74%
Largest Gain: 6.50%
Largest Loss: -7.63%

DJ-30
Time Period: 1916 - 2000
Total Elections: 22
Total Win%: 68.18%
Total Loss%: 31.82%
Average Profit: 5.63%
Average Loss: -5.44%
Largest Gain: 18.95%
Largest Loss: -15.29%

So, how did this election year compare?

The S&P 500 moved 3.86% from its October close and the DJ-30 has moved 3.99% accordingly.

The S&P 500 just about nailed its average profit of 3.85%. The DJ-30 missed its average profit of 5.63% by 1.64%. Overall, not a bad year for the study.

I hope all is well for everyone this New Year's Day. That you're home safe and recovering well from the New Year's Eve festivities. And hopefully, not too tired and stressed from the bowl games (especially if you're team lost!). What is up with my Aggies?!?

Friday, December 31, 2004

Happy New Year!

I'm busy with my research on the big trends for the upcoming years. It's taking longer than I thought with the research...so please forgive me for not getting it to you before this year is up. I hope to have the first part of the article posted this Sunday. Kinda open year 2005 with a bang. We'll see.

TraderMike posted his 2005 prediction for the market...here. But, I'm still waiting for his 2005 resolution(s). :)

My prediction? I tend to agree with Michael. How the heck can anybody know what's going to happen in a year? And if they did...would anybody believe them?

I think the best thing one can do in gearing up for a new year is determine what major trends took place in the prior year. Better yet...what major trends have been taking place for the past few years. Trends continue until they don't. The likelyhood of the start of a new year being the end of a major trend is very small. Large trends takes months and sometimes years to unwind. So, identify the major trends and gear yourself towards them.

The next best thing to do for a new year is evaluate what you did right and wrong in the previous year. And of course, do more of what you did right and less of what you did wrong.

Here's the major thing I did wrong in 2004. Second guess my systems. Selling out my system positions, letting my sidebet overcome my entire portfolio was a stroke of idiocy. But, it taught me a lesson. A lesson I've been needing to learn. Trust my systems.

The major thing I did right? Realizing I made a mistake in selling out my system positions and buying all of them back, at higher prices to boot. Did that hurt? Yes! But, it taught me something. Don't compound a mistake you made by sticking with that mistake to the bloody end. Cut your losses and move on.

So, enjoy the New Year everyone. I hope you have a Happy, Safe, and Prosperous One!

See ya in 2005!

Daily System Updates

Current open system positions:
  • 1 QQQQ (BBLower) long with current profit of +1.52%;
  • 1 QQQQ (Tii100Low) long with current profit of +1.04%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Wednesday, December 29, 2004

Something about Nothing

Good news! I've purchased the Roady 2 XM Satellite Radio. I'll test it out and let you know the results in the coming weeks.

Stopped by Barnes & Noble...
  • Bought the latest copy of Active Trader magazine. Looks like there's an interview with James Altucher. Should be interesting.

  • Read the latest issue of Technical Analysis of Stocks & Commodities magazine showcases a mechanical penny stock system. My PennyLag system shares some of the core premises with their system. Especially, the part about volatility being a useful tool for the mechanical systems trader. Funny, how we use different tools to identify the same concepts.

  • Running Money looks like a good read. About a hedge fund manager's perils through Wall Street. Might have to add that to my reading wishlist.
Plans for New Year's Eve? Have any New Year's resolutions worthy of mentioning? What trends do you expect to continue or begin in 2005? Let me know.

Daily System Updates

Current open system positions:
  • 1 QQQQ (BBLower) long with current profit of +1.60%;
  • 1 QQQQ (Tii100Low) long with current profit of +1.11%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Tuesday, December 28, 2004

The Variant Perception

Another fund manager after Bill Miller's record. I like the fact that Schier operates his fund from Topeka, Kansas. Read here.

The majority of my equity is in my mechanical systems. A small portion (5%) is reserved for what I call "side bets". These side bets are used to satisfy my trader side. Satisfying my trader side allows me to patiently ride my systems ups and downs. Well, at least sometimes. Ha! My current side bet was placed on GSH a few weeks ago.

I've been thinking that in addition to my side bets...further diversification is warranted. Except for the PennyLag system...most of my stock positions are in mid caps and small caps exhibiting the tight-riser effect. Tight-risers are stocks in extremely strong uptrends with low volatility. Part of this idea was obtained from Gary Smith in the book, "How I trade for a living". Granted Smith used mutual funds and I'm using stocks...but the idea is nevertheless the same.

So, the majority of my money is in the same type of stock and strategy. To combat this effect, I've been paying attention to mutual fund managers and newsletter authors with great records and strategies much different from my own. My hope is to allocate a small portion of my equity to a few of these investors...allowing me to participate in other opportunities in the marketplace...and at the same time smoothing out my equity curve a bit.

I'm still in the process of finding great funds and in particular great fund managers. As well, as newsletter authors similar to the post I wrote yesterday.

This is why Jim Schier interests me being from Topeka, Kansas. I like investors who are out of the so-called Wall Street grapevine. As Doug Kass often opines...I'm looking for the variant perception.

Daily System Updates

Current open system positions:
  • 1 QQQQ (BBLower) long with current profit of +0.99%;
  • 1 QQQQ (Tii100Low) long with current profit of +1.47%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Monday, December 27, 2004

Late night Readings

  • Ed Yardeni's 2005 predictions. To put it simply, he's bullish on the US Markets. He's a believer in growth stocks and buzzword plays such as RFID and anti-virus companies. Also recommends coal companies...similar to Tobin Smith's mention on Bulls & Bears this past weekend. Check out his 2004 predictions...the recommendation to stay away from pharma was spot on.

  • Big Bonuses on Wall Street? How are the high-end retailers doing?

  • Silver is the new white? If so, could this bring more demand to the shiny metal?

  • Satellite radio? Yes, I'm seriously thinking about getting one. I live in a rural area and the lack of choice and quality on my commute to and from work is spurring this decision. It seems all the buzz is with Sirius. But, after my product research...it seems XM Satellite has the better product. Plus, it's cheaper. And I believe the XM Satellite Roady 2 is the only one offering customized stocks lists. Hey, after I saw that...I knew I had to have one.

  • Top performing newsletters of 2004 and their stock picks. The Turnaround Letter and BI Research are the ones sounding most interesting to me. Read here.

  • Alan Farley proposes his trader's resolutions for 2005. He's dead on with the weekly trading.

  • Interview with Darren Clifford. I like how he treats each trade as an independent business. The trading pairs strategy has given me some interesting system ideas to test.

Daily System Updates

Current open system positions:
  • 1 QQQQ (BBLower) long with current profit of +0.03%;
  • 1 QQQQ (Tii100Low) long with current profit of +0.51%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.