Monday, March 27, 2006

Watch list for week of 3-27-06

Still a lot of strong bases as the nasdaq tests the top of its 2006 range. Check 'em out:

Thanks to those who have sent me charts recently in email and in the comments of this blog, they have been high quality. I'm still long a ton of stock, and doing quite well for the year (about 30% gain for 2006 right now). I'd write more tonite, but I'm beat from working on financial market software development earlier today with my sister's boyfriend Brandon.

Monday, March 20, 2006

Watch list for week of 3-20-06

There are still quite a few good looking bases and consolidations out there. The nasdaq still hasn't really broken out to new highs since January, but it looks like it could happen any day now. I'm encouraged by all the bearish headlines on yahoo finance that are calling this rally a false one. I've been long stocks for months and don't see any reason to change that. Consolidations between rallies and walls of worry for climbing are bull items in my book.

I bought GIGM and TRE last Monday, and added to the GIGM position on Friday afternoon as it traded through an upper channel line on good volume.

Here are the results of my market homework software this weekend:

Frank, nice call on $COPPER last week.

Mike from StockMonster, I like your stock coverage as well. It seems like our styles are similar. It is always a pleasure to stop in at your blog.

Monday, March 13, 2006

Watch list for week of 3-13-06

Here's the usual weekend update. This weekend I saw the strongest list of bases that I've seen since December 2005:

My favorite two bases are that nice consolidation on TRE, and the high-tight flag on GIGM's weekly chart. I'll probably be buying these two stocks next week.

For anybody who might be wondering, last week I sold the RURL that I bought due to a break of support. The stock may recover and move higher over the next few months, but I'd rather be in stocks that are being supported at technical price levels.

I spent most of this weekend re-writing my "OhlcTools" java market software project using java 1.5 and junit under the new name "Market Objects". I spent some time last week looking through sourceforge at the open source java projects for modelling financial markets and all of them were either not targetted as an object oriented framework for modelling financial markets, or weren't mature enough for me to want to use.

The new features of java 1.5 solve a lot of the design issues that "OhlcTools" had with object oriented modeling of market data. Here are some examples:

  • Enumerated data type for "trade direction", giving each direction "long" and "short" explicit and meaningful values. Also, no other value can be assigned to the "trade direction" variable, as enforced by java 1.5. In java 1.4 I had to use a boolean value "true" for long and "false" for short to keep it simple, but it was semantically ugly.
  • Lists of OHLC bar data are now strongly typed, so you can no longer stick any arbitrary object into the middle of an OHLC bar series thanks to java 1.5's generics support.

There are a lot of other changes for the better but I won't be going into all of them here. Due to this strategic re-write decision, I have to scrap the tutorial that I spent hours snapping pictures and cropping onto a webpage, but it is for the better. When the "Market Objects" is mature enough, I'll make a new tutorial including an introduction to the Eclipse IDE. It won't be for a while though because I've got to rebuild all my existing tools using the new object oriented framework. I'm very excited about how scalable the project will be due to the extensive unit tests that I've written this time around. I won't have to worry about breaking anything when I want to make a small change, add a new feature, or fix a bug, and other developers will have an easier decision to invest their time into the project because they will be able to verify that the code works according to specification by running the tests and adding some of their own if they choose.

For the past couple of months I have put off re-doing the .css file for the website I'm developing to go along with the open source project "Market Objects", various articles, and other software projects I'm developing. The good news is that the .css works with Internet Explorer, the bad news is that it doesn't work with Firefox. If any web design gurus are interested in contributing to the site by either redo'ing the .css that I've got so that it will also work with firefox, or creating a new .css from scratch, please send me an email.

Sunday, March 05, 2006

Fickle trading

"I’d say the biggest mistake I see from the average reader is that people seem to think a long-term trading approach can fit on top of an itchy day trader’s finger. That takes discipline to learn. And that, for some people, takes a lifetime." -- Bill Cara link

One of the most puzzling paradoxes of trading is that you have to show up every day, but most days your best move is to do nothing.

I don't day trade, but I do look at a lot of time horizons, sometimes as short as 1 minute bars. But I've learned to focus my attention on shorter time horizons only when longer time horizons are at a critical juncture. My trading life became much simpler when just owning a stock was no longer a reason to look at a shorter time horizon than daily bars. I don't even load up the quote streamer until I've made the decision to buy or sell a stock that day based on daily and weekly charts.

It can be more optimal to trade extremely short time horizons, but the benefits of trading very short term don't scale linearly due to transaction costs becoming more difficult to beat. For me, it is important to not have to grind for every dollar. I don't want a full time job from the markets, but I do want to make high returns on my money, so I consistently reform my trading to be in line with these goals.

I start off every campaign in a stock very fickle, weak handed. As a position works for me and I pyramid into a larger position, I become a strong hand; I'm dug in. This blog is titled "fickle trader", which at first seems like it would clash with Bill's statement above, but I'd like to think that I've struck a balance and found the discipline to make it work.

Watch list for week of 3-6-06

This past Friday wasn't such a good day for the nasdaq, I would have liked to see a more positive close on such big volume. However, the big picture is what counts. I've been aggressively long for months now and I haven't seen any reason in the charts to change that yet.

Here are the most interesting consolidating stocks that my market homework software identified this weekend:

My 2005 SBUX bear campaign revisited

My SBUX bear campaign ended in October 2005 when the price closed above the downward sloping upper-channel line on its weekly chart. I won't be shorting it again until it makes a long term lower high the way it did in early 2005.

Unfortunately I can't tell you anything about the fundamentals of SBUX that you don't already know.

Thursday, March 02, 2006

Quote: Bill Cara on cornering the market

"You know what happens when a small group of people try to take control of the capital market, don’t you? A large group of people hand them all the stock they want." -- Bill Cara

I couldn't resist taking a snapshot of this one for the record :D