ParkTwain's Parlor

[spikefader]

Re: the problem is...

If you were long TOT on the day that TOT dipped down, a couple of trading days ago, you wouldn't know what to do and your chart wouldn't have been able to help you. The dip down would have fallen below the channel lines that you would have already drawn up to that point. So what do you do when the price falls below the channel lines?

Anyone ever tell you that you're an argumentative and negative person? Did you actually read what I just wrote about TOT - did you look at the intraday chart? The thing gapped down. I was quite clear about how the trade could have been effectively and profitably traded. Perhaps you were tired when you read it and missed some stuff. But I can assure you, my charts DO help me, and I know EXACTLY what I'm doing. What do I do if price falls below channel lines, well, depending on what the regression channel does will determine what I do. If price falls in such a way that the channel expands then I interpret that as a channel break and I look to tighten stops on a trade, and exit at the top of the next channel, or I'll get stopped out. I think to fully appreciate what I'm saying about the 'expand' bit for the channel, you have to look at how regression channels work. I suspect you have no clue about them and didn't follow the suggestion to check them out at stockcharts.com before throwing your opinion on this thread.

Your charts are a tool for a daytrader, someone who is constantly watching a given stock or the entire market in order to determine which side (short or long) to be on for a given trade.

Not true. My charts are for anyone looking for great entries. As a swing trader, stops may be wider than mine, as you may not be able to look for intraday patterns before you enter, but how is that different than any other time a swing trader who has a full time job opens a trade with a limit order? It's no different. If the stock is fundamentally sound, which this site focuses on, then my charts can be used very effectively by someone who is a little organized, open-minded and patient.

I am more of a chart-based speculator. I will enter a trade looking for a multi-day or several week hold. I want the 15% gain that $MM$ has made so popular on this board. Previous support/resistance points are the key for me, along with the indicators that give a clue whether a given previous resistance point is likely to be superceded in the near future, or whether a recent breakout is likely to hold up as the stock tracks upward.

Sounds pretty similar to the things I think are important, with the exception of target. I don't set a flat 15%, I'll take what the market is saying to take, and if that's 40%, then so be it. If it's 2%, so be it. Perhaps where we differ is our stop mentality. I won't tolerate the large drawdowns that perhaps you would as a swing trader.

[ParkTwain]

not a swing trader

I've been through all the line-drawing and sweating the entry points and all that. I'm not a daytrader, and I'm not a swing trader. I trade breakouts above well-established, long-term (multi-year) resistance points. That's it. If you find the right setup you don't have to sweat the entry point (within a few percentage points is OK in my experience). And in a bull market there are plenty of them. I don't sweat the entries etc because the long-term chart already shows me where the resistance points are/were and thus where the entry region is for a high-probability 15% gain, as the price passes that resistance on significant volume (as determined by the stock's own history).

I don't care what the momentum behavior is on a stock, I won't trade it unless it is about to pass either its all-time high or the first or second major resistance level below its all-time high. I avoid overhead like the plague. I have found that this is the most reliable behavior for any stock, and for me, who doesn't have much time to put into doing trades, this is the most time-efficient setup to look for and to take on.

I take the first 15% because the 2nd 15% is a lot less likely (in a bull market, I can probably find another RELIABLE 15% gainer and get into it before the prior stock makes its second 15% gain), unless we're talking a stock that has made a blue sky breakout. After you've obtained the first 15% you basically have to become a fundamental analyst to know whether to hold, and you have to baby-sit the position with rising stops and start caring about intraday behavior, neither of which I have the time to do as a non-daytrader, at least at this point in my life. So I'm lazy (compared with a daytrader) and certainly time-constrained, I suppose, but I have also figured a decent way to make $$$. I have recently taken a class given by professional traders and spoke to them about my approach, given that I am not a daytrader, and they gave it a thumbs-up. So I'm working with that for now! Good luck to you.

[spikefader]

Re: not a swing trader

"I've been through all the line-drawing and sweating the entry points. If you find the right setup you don't have to sweat the entry point.

So you think it's a a bunch of wasted 'sweating' energy looking for the perfect entry based on the reasoning that if your stock is a good pick, a few percentage points of loss at the start of a trade is nothing to worry about? Well, I guess I should be glad there are people out there like yourself willing to buy when I'm selling and sell when I'm buying, not worried about your trade going in the red simply because your pick has strong fundamentals.

I suspect the reality of the situation is that when a trade goes against you, you sweat as much as anyone else, and perhaps even wonder where you could improve your system or methodology.

Anyway, I still assert that for every trader, a trade that starts in the red is simply the prelude to temptation to step onto the slippery slope of hope as you watch the stock move against you. For undisciplined or 'hopeful' traders, they don't take the loss and move on, but hold and hold and hold til the stock goes to single digits or worse.

In my own positive and encouraging and helpful mindset, I think we all should encourage each other to strive to get perfect entries so we avoid that emotional battle altogether, and we start the trade feeling like a genius, and proud that we traded a plan with acceptably low losses if we are wrong.

In hindsight, I wish you'd had just taken my compliment in my first post, perhaps said thank you, and maybe finished by expressing satisfaction that another trader's TA supports your call.

P.S, by definition, you ARE a swing trader.

[ParkTwain]

many definitions of "swing trader" I see

For instance, look at investopedia.com, article by Jason Van Bergen.

Most sites seem to define "swing trader" either as those who are not fundamental investors nor day traders. They define in negative terms (by what you're not) as opposed to what they actually do.

With reference to Van Bergen's article, I am not a swing trader because I don't trade based on a stock's EMA or price channels.

I am doing perhaps a variant of what a "trend trader" using Van Bergen's terms.

I have not read any of the Swing Trading books, because I haven't yet needed them. What they seem to be doing requires a more complex analysis than what I am doing. I have tried to keep my activities pretty simply defined. High probability of outcome is important to me. High probability (>80% predictability) is not as possible when you're dealing with channel-based techniques -- depending on the stock, there's simply too much "noise" in how a given stock will behave day to day. By trading only at breakouts there is only one kind of "noise" to watch for -- the false breakout that jumps above the pivot point then falls back below it. O'Neil How to Make Money... discusses this as do others, such as Jiler's How to Use Charts ... After the breakout is underway, your only concern is how much of a dip can you stomach as the stock's move progresses. On the other hand, by sticking to +15% or so gain discipline (let's say selling 75% of the position at that point), that "dips during uptrend" concern also goes away.

So I've only tried to distill what I have learned into a much simpler approach that produces a high probability result of a certain percentage gain. That is a very desirable approach if it works out.

Today I ordered Marcel Link's "High Probability Trading" from Amazon.com.

http://www.amazon.com/exec/obidos/tg/detail/-/0071381562/qid=1082322025/sr=1-1/ref=sr_1_1/104-6407123-3789511?v=glance&s=books

[ParkTwain]

resistance/support as points of price gravity

Channel trading isn't as high-probability an activity as breakout-oriented trading because in the channel the price activity is most likely taking place between points of major (long-term) resistance/support.

Look at the 1yr to 3yr chart for ZQK. The stock based for most of the 12 months prior to its recent upside breakout. Its gains (19/sh to 23/sh) since then (late Feb 2004) have been very predictable given (1) the overall trend of the market, (2) the long basing activity of ZQK, and (3) the breakout to the upside in late Feb.

This is like trading using the laws of human nature (investors have a memory, and those with a previously losing position in a stock are very happy to get their money back). If a stock has enough strength ("momentum") to surpass a previous high point on good volume, then it is a high-probability prediction in a rising overall market that the stock will continue higher (i.e., there are almost certainly going to be a lot fewer sellers after the stock has surpassed that resistance point). If that previous high point was an all-time high, then you can let it run higher till the cows come home, subject to one's own risk aversion to dips relative to the slope of the uptrend. Of course, the more one might know about the company's earnings prospects going forward will give one a little fundamental context for how sensitive to be to those dips.

[ParkTwain]

Scans from 4/6/2003 -- Breakouts List

(4/19/2003 close) (B = Beta) SPEC = more downside risk


Technicals:
RSI and Wilder's DMI (ADX) figure prominently
http://stockcharts.com/def/servlet/SC.web?c=LECO,uu[h,a]daolyyay[df][pb50!b200][vc60][iUb14!Ll14]&pref=G


"A" List

LECO - (31/sh) (B=0.609) grt earnings rpt 4/16, just passed 8+ yr high, strong pos money flow
REM - (21/sh) (B=0.763) asc triangle at 8+ yr high of 21/sh since 10/2002, RSI uptrend since 12/2003, should ROCKET soon
KERX - (16.50/sh) (B=2.766)* SPEC (pharm), on tear since 1/2004, just reached all-time (3+ yr) high, buyout candidate
CRK - (23.50/sh) (B=0.837) SPEC (jr oil), brkout from 21/sh last 2 days, strong for over 12 mos, 12+ yr high was 15/sh
STTX - (22/sh) (B=0.349) has already made a large climb, just bounced up off 10 yo resis/suppt at 20.50
LGND - (22/sh) (B=1. * now making 10 yr high, RSI uptrend since 10/2003, big incr money flow in 4/2004
APSG - (27/sh) (B=0.14 SPEC (terror sec), just passed 10+ yo high, strong since 12/2003, spike/decay pattern in RSI
AZR - (25.65/sh) (B=0.95 now at 19 yr high of ~26/sh, incr strength since 2/1/2004
ACMR - (29/sh) (B=0.644) just passed 6+ yo high, incr strength since 12/2003, pos money flow, steady vol
SFD - (28/sh) (B=0.786) just passed 13 yr high of ~25/50 in mid 3/2004, sloppy uptrend since 11/2002, recently volatile RSI
HRL - (30/sh) (B=0.139) now making 14 yr high, spent most of 4/2004 at 30/sh, RSI above 50 since 1/15/2004
JBHT - (32/sh) (B=1.293)* brkout in 7/2003 at 20/sh, stalled 9/2003 in channel (25/sh to 29/sh), brkout at 29/sh in early 4/2004
EPIX - (23.50/sh) (B=1.975)* just under 6+ yr high of 27/sh, rangebound chart 7/2003 to 2/2004, in 3/2004 bounced off 20/sh support
GVHR - (28/50/sh) (B=1.284)* about to reach 5+ yr high of ~31.00; recent dip for a buy


"A" List, but Today's Close More Than 15% Above Pivot

ALGN - (23/sh) (B=3.082)* turns up again after 3 mo pause
KFX - (11/sh) (B=0.885) very strong for 13 mos, passed 8 yr high of 8+/sh late 2/2004
TJX - (25/sh) (B=0.842) passed 16+ yr high (22/sh in 4/2002) in 1/2004

[ParkTwain]

Followup on 4/19/04 posting

Results for 5 trading days after 4/19/04 posting

Symbol ... 4/27/04 close ... 4/19/04 close ... intra-period high (% gain)

LECO ... 32.35 ... 30.93 ... 32.89 (+6.3%)
REM ... 22.35 ... 21.35 ... 22.95 (+7.5%)
KERX ... 19.07 ... 16.66 ... 19.86 (+19.2%)
CRK ... 22.30 ... 23.65 ... 23.30 (-1.5%)
STTX ... 21.42 ... 21.95 ... 22.00 (+0.2%)
LGND ... 24.02 ... 22.22 ... 24.91 (+12.1%)
APSG ... 27.05 ... 26.68 ... 27.83 (+4.3%)
AZR ... 26.65 ... 25.65 ... 26.83 (+4.6%)
ACMR ... 28.49 ... 28.82 ... 29.53 (+2.5%)
SFD ... 27.81 ... 27.75 ... 28.00 (+0.9%)
HRL ... 31.20 ... 30.10 ... 31.50 (+4.65%)
JBHT ... 32.98 ... 31.93 ... 33.47 (+4.8%)
EPIX ... 24.40 ... 23.68 ... 25.75 (+8.7%)
GVHR ... 27.02 ... 28.50 ... 29.18 (+2.4%)

Avg intraperiod gain (14 picks) ... 5.475%
(4/19/04 close to 4/27/04 intraperiod high)

S&P 500 ... 1135.53 ... 1135.82 ... 1144.96 (+0.8%)
Nasdaq ... 2032.53 ... 2020.43 ... 2059.08 (+1.9%)
DJI ... 10478.16 ... 10437.85 ... 10570.92 (+1.3%)

[noshadyldy]

Very nice Park. How often do you make new pics? How long are they good for?

Margie

[ParkTwain]

Picks from today's new 52-wk highs list

Now that the overall market has warmed again, these stocks show chart setups that point to a high probability of 15+% gains in the next 2 to 3 weeks:

SONE
EEFT
FLS
EFJI
IDSY
PVN

Here is my preferred chart setting:
http://stockcharts.com/def/servlet/SC.web?c=SONE,uu[h,a]daolyyay[df][pb50!b200][vc60][iUb14!Ll14]&pref=G

Looking for price just passing previous all-time high (EEFT, EFJI) or point of significant previous resistance (IDSY) or entering bottom of range of previous large gap down (SONE, FLS, PVN).

[spikefader]

Re: Picks from today's new 52-wk highs list

Very nice Park. How often do you make new pics? How long are they good for?
Margie

Don't you know it's rude to ignore a lady?

Now that the overall market has warmed again....

So what happened to the previous 14 picks? Glancing at a few, I note some were

[ParkTwain]

as i said tonight

covering the next 2 to 3 weeks, only based on today's chart setup.

I look for a very specific set of ingredients in my setups.

From that post's list, I see that JBHT continued to perform. Most fell flat during the market doldrums, a few are within a few percents of the price at the time of that call.

Retail and casinos, some of the oils, were the place to be in the last 60 days. Good luck to all.

[spikefader]

what, no report of say ....

Avg intraperiod gain (14 picks) ... ????%

After all, you are a swing trader and based on your methods you'd still be holding some/all of these wouldn't you?

[ParkTwain]

why picking a little fight tonight?

No one else to talk with out there?

Maybe I'm a "swing trader" who's been out of the market for several weeks, duh.

STN's been good to me in the meantime.

I'll probably go with EEFT, maybe as early as tomorrow. How 'about about a line-drawing voodoo for the crowd!

[ParkTwain]

make that ...

How about a little line-drawing voodoo for the gathering crowd?

[spikefader]

Re: why picking a little fight tonight?

No one else to talk with out there?
Maybe I'm a "swing trader" who's been out of the market for several weeks, duh.
STN's been good to me in the meantime.
I'll probably go with EEFT, maybe as early as tomorrow. How 'about about a line-drawing voodoo for the crowd!

Sure, I'll give you my opinion on EEFT.....but I don't see any crowd in here Perhaps if you improved your manners ...
As to the rest of your comments, defensive aren't we? I was asking for an update on stocks you had on your 'A' list, and sticking up for a lady who you clearly ignored. Why make a thread and post in it if you don't reply to people? And as your subject title ?? a fight? no one else to talk to?? I ask for a little accountability and you call it a fight and then you presume the reason I'm doing it is I've run out of people to talk to. I'm beginning to think you're Later knucklehead.