Spike's Scientific Stock Analysis

[spikefader]

Good chart Spike. And, you're right. A good lesson.
Those posters on the IBD forums who take delight in this stock dropping, just to stick it to $$MM$$, make me sick.

Yep, it's childish and mean when the intent is just to rub it in and gloat. I don't tolerate that mess.

The chart itself offers a great tutorial on the things to look for when considering exit. And I post it from time to time in this thread because it's one of the earliest charts I ever posted at this site (here). And the intent isn't "I told you so"; but rather to help others see how significant channel busts can lead to significant selling over a lengthy period of time.

In my humble opinion, any stocks (including Mr.Market model-produced picks) that display the significant channel break is one to pass on until it displays significant channel reason to enter it. It just isn't worth the risk.

[spikefader]

Surprise surprise:
VECTOR is back to being very bullish right now and is amost certainly going to close that way. There are some bargains out there this afternoon!

[spikefader]

KCS pattern discussed here http://www.mrmarketishuge.com/showpo...postcount=2761
clearly my 4 count is wrong. Weekly channel turn down now. Perhaps 4 will be in at the completion of this current down or the next one (smaller 12345 down). Worth watching it.

[dmk112]

Bad fortune yaoyao But you did the right thing and despite the stock attempting to make you feel foolish, you deserve a pat on the back. You took a loss and ignored hope or whatever else may have kept you holding it. Even with the rally I still would have done the same. You can only trade what you see ya know. There is no way to predict whether you'll get an uppy after weakness like that. It's luck of the draw. The reason I took it short in the competition was it looked so weak on Friday and definately has potential for lower.

BUT: Channel short today for it, so shorting into this strength is the play. Could that be proven wrong too? Sure - the channel expanding a little, and could be broken take a stop out if you short it, and the setup is a loss. I welcome the losses; since I know 'the losses' are going to force their way in anyway I'll put out the welcome mat, calmly accept the bad 'company' and encourage them to leave early, accept the cost of that party, and plan the next party for the welcome guests who I will encourage to stay long into the wee hours, and pocket as much of the 'good times' before the headache the next day

Trading is just like a party. Great parties last a looooooooong time; poor parties and the guests leave early. Both cost money to throw. But only one will give you 'good times' hehe OK, I've worn that analogy out now.........

Best to you!

Spike, wasn't that a channel long that ocurred a couple of days ago on SNRR?

[dmk112]

MEA, further on MWRK is another channel short at 14.00.

Spike,

In reference to a "channel short" - isn't it always going to happen after a channel long?? I mean when you get a channel long the stock is in a downtrend and reverses off the channel and once it reverses, won't it hit a "channel short" always??

Thanks

[dmk112]

Surprise surprise:
VECTOR is back to being very bullish right now and is amost certainly going to close that way. There are some bargains out there this afternoon!

Spike, was the vector bullish the whole day?? How is that if the market just sunk 30 points on the naz?

Thanks

[spikefader]

Spike, wasn't that a channel long that ocurred a couple of days ago on SNRR?

Yes, thanks for pointing that out. When yaoyao asked the question about SNRR it was the day before that channel long and when the stock was weak, which is why I picked it as a short in the competition. I wasn't watching for channel longs for it at all. But thanks for the question because it's a good one. It begs the question, well why wouldn't yaoyao stay long with it. Well, short answer was his exit (the one I recommended) was BEFORE that new long signal. And yaoyao made his plan and traded it; and for that, he deserves a pat on the back.

Now as far as the channel long on Monday let's look at it. It is expanding, which is caution to longs (I've said this many times in the thread I think). Caution means if you HAD taken it long on Monday (and looking at the intraday action there isn't a good pattern worth trading) you'd either have exited today's intraday SHS neckline break due to the channel short, or you'd still be holding it long because you're prepared to risk what you've made so far in anticipation of a bullish channel break. Right? You've always got the option of targeting the channel or holding for new highs and a bigger % profit target. It's a matter for the holder. But as far as resistance goes, the channel short today is one logical place to exit. Does that make sense?

So had yaoyao held SNRR (despite the weakness and despite the warning; say he had a wide stop or was making the mistake of holding in hope). And say he got the lucky bonus of the good channel long on Monday (there was no guarantee it wasn't going to be a bad huge bearish channel bust on Monday by the way - especially considering there wasn't a good intraday pattern to support the long signal) and say he's still holding in the hope of a bullish channel bust of the last short signal, and price actually rewards him, then what about all that? Well great, he's got a profit. But did he break his trading rules? I don't know about his rules, but he would have broken my rules; rules about trade management and exit reasons.

So a few rules, so what? Rules Smules one might say OK, great. Break all the rules one may want. Get lucky, or get unlucky, let the market decide. But I think rule-breaking is for knuckleheads. In SNRR's case, lucky knuckleheads, but still knuckleheads.

Had it been me in his shoes I would have exited as I suggested. If I was still interested in it and following it, I may have spotted the channel long and reentered if the pattern produced itself. Again, looking at the pattern on Monday, there isn't a good one - no perfect double bottom or triangle worth it. As far as reason to exit and go short today, there's a steep SHS intraday with exit/short price of 15.05ish. The chart is bearish at this moment until the channel is busted.

[spikefader]

Spike,
In reference to a "channel short" - isn't it always going to happen after a channel long?? I mean when you get a channel long the stock is in a downtrend and reverses off the channel and once it reverses, won't it hit a "channel short" always??
Thanks

Nope, not in all cases will you get a channel short after a channel long. Plenty of times the channel will turn up before a channel short occurs. There is no guarantee. Price may come close to it, and meander in such a way that the channel widens each day, and then eventually price pushes it to turn up.

[dmk112]

Nope, not in all cases will you get a channel short after a channel long. Plenty of times the channel will turn up before a channel short occurs. There is no guarantee. Price may come close to it, and meander in such a way that the channel widens each day, and then eventually price pushes it to turn up.

So a channel short is only going to ocurr with a sharp bounce off the channel long??

[dmk112]

If this 1970's support (COMPQ) is broken its going to be a landslide IMO

[spikefader]

Spike, was the vector bullish the whole day?? How is that if the market just sunk 30 points on the naz?

Thanks

Vector is an end of day indicator for me. I read it at the end of each day. While it does change through the day and I look at it, the actually leading bias is determined after regular trading hours. So today it was threatening to change to bearish, but by the end of day the reading was clearly bullish.

As far as what the market did today by selling off despite my bullish Vector I will offer the following:

market forces act in such a way as to produce intraday opportunities to exploit. You can't just think, Vector is bullish, therefore any buy I make at whatever price is going to make money. It just doesn't work that way. Yesterday Vector was bullish and I observed there were bargains out there (previous days selling in the face of a bullish Vector) and by end of day some very nice bullish moves were made, money was made, and by end of day the bargains dried up - prices had moved quickly. Profit-taking wasn't entirely surprising today, but I personally expected a stronger afternoon and think that there are bargains out there again. That could well change tomorrow. I don't want it to, but it may. But the great thing about Vector; it gives you a bias, and you can 'see' when the market is acting in opposition to it, and therefore able to see when it's producing opportunties. Yes, it is incorrect at times, but I like it because at the times it IS correct, it helps me nail the turns.

[spikefader]

So a channel short is only going to ocurr with a sharp bounce off the channel long??

Well it depends. Charts are so different. Look at a few with your question in mind; draw the channels and see how price action affected how the channels acted. See whether sharp bounces lead to channel shorts. I would suggest that you can't just make a blanket statement or conclusion like that. It's more complex and 'depends' on the chart.

[dmk112]

Is Vector some system you designed? I'm really interested how this thing works. I know you mentioned that you can't share

Well, atleast FORD did good today, and ARO was holding up all day and then pulled back in the afternoon.

We need to rally here!!

http://www.rallymonkey.com/oldvideo.php

[dmk112]

Well it depends. Charts are so different. Look at a few with your question in mind; draw the channels and see how price action affected how the channels acted. See whether sharp bounces lead to channel shorts. I would suggest that you can't just make a blanket statement or conclusion like that. It's more complex and 'depends' on the chart.

Yea I did a couple, its amazing how many times it works...very interesting.

Did you pick anything up today spike?

[dmk112]

Ok, lets say you go long on a stock and the channel short is hit but expands, this is generally a good thing, right?