Spike's Scientific Stock Analysis

[spikefader]

Re: SMH

SMH up big today on volume. Getting close to short entry at gap around 33. Why does it always feel like you should be doing the opposite? Going long when you should be short or going short when you should be long. Up big on volume seems like a good thing.

Just looked at it, and yes, another channel short day on the daily. Now is the time to act.

Yes, feelings often get in the way....that's emotion for you. Hard...VERY hard to ignore them. But that's what you've got to do. Block feelings out of it. If you've got a well thought out plan of action, and you're waiting for a condition to be met before you open a position, it's at the execution time that doubt raises it's ugly head. Look at it this way: If your preconditions for the trade still exist, and you've not had a reverse signal or any other warning signal, then your plan is still valid and you can comfortably ignore everything else, including fear, doubt, and every other form of emotion. Plan the trade, and trade the plan. Push the button, and be happy no matter if you prove wrong and are stopped out. Be happy that you've stuck to your plan and were disciplined enough to ignore emotion. Sure, profit is the ultimate goal, but discipline is how you get it.

Now, having said all that, the daily for SMH is a channel short day, so short is still valid. Current prices of 32.70 is a perfect place to enter, looking for a big intraday double top. Just do it. Set your stop where your limits are, and sit back and wait.

Or if you miss the double top, take the SHS neckline break around 32.30, or wait for intraday support level of 32.30 to break, and take a short on the next pop. Best r/r is double top with stop over hod. Next is neckline break, then break of support.

Good luck following the plan!

[yaoyao]

if the daily stop doesn't stop your position, how do you adjust your stop for next trading day? Thanks

[spikefader]

if the daily stop doesn't stop your position, how do you adjust your stop for next trading day? Thanks

I'll usually leave it right there. If my setup is valid, my stop shouldn't get touched. Then I move it to breakeven when the trade gives me a couple points profit.

Occasionaly I'll modify my stop, but only if I see a more technically correct location and as long as the extra risk is marginal.

The good thing about the way I trade is that when I get stopped out, it's only very tiny loss.

[Websman]

Today was a good day indeed. I took my profit on DHB. I put in a limit order and sold at a good point. Now all I have to do is keep a watch on the channels and see if DHB drops to the lower channel. If it does, I may just buy it back and profit all over again.

NUTR....OUCH!!!
You just don't know how glad I am that I didn't buy this one. I hope none of you guys got hurt to bad on it. Spike is right when he says that this is a valuable lesson to be learned.

My emotions told me not to sell DHB because it would surely go up and I would make much more money, but the Vulcan side of me said, "Websman, wake up dude! The chart is not good... Sell now and buy back when the chart is better." DHB may very well continue to climb and I may have made more money, but the chart showed that I had a better chance of losing the profit I already had. I've had that happen on other trades and have learned a lot from them. Yes, I was in love with DHB, but My Vulcan logic enable me to cut DHB lose without feeling guilty. Yes...I may have broke DHB's heart, but I don't care. I have no emotions.

Lesson for today: Don't fall in love with a stock...hmmm, I wonder if that could work with girfriends and wives too?

[carribean_mike]

Spike, Thanks - for the emotions talk. Went short at 32.65. I am putting my stop in at 34.00 on the other side of the gap. Would you put it tighter?

[yaoyao]

Webman, very good point. I started trading since the end of last year, so it's been a rough year for me. The market has been choppy. I found that the hardest thing in trading is to control emotions. I've let a couple of 40-50% of gain turn into 2-3% or even a loss. TASR was my first short. I again let 20% profit turn into even so far. I also panic sold several stocks. Fear and greedy are two dangerous emotions in trading.

Spike, thanks for comments on stops.

[yaoyao]

if the daily stop doesn't stop your position, how do you adjust your stop for next trading day? Thanks

[spikefader]

Today was a good day indeed. I took my profit on DHB. I put in a limit order and sold at a good point. Now all I have to do is keep a watch on the channels and see if DHB drops to the lower channel. If it does, I may just buy it back and profit all over again.

My emotions told me not to sell DHB because it would surely go up and I would make much more money, but the Vulcan side of me said, "Websman, wake up dude! The chart is not good... Sell now and buy back when the chart is better." DHB may very well continue to climb and I may have made more money, but the chart showed that I had a better chance of losing the profit I already had. I've had that happen on other trades and have learned a lot from them. Yes, I was in love with DHB, but My Vulcan logic enable me to cut DHB lose without feeling guilty. Yes...I may have broke DHB's heart, but I don't care. I have no emotions.

Great attitude to have. You will surely be successful with such detached emotion!! I was about to tell you to remember not to get mad at me if it defies the TA and goes up from here! Remember, I am often wrong, but when I am, I only get hurt as little as my stop is. There will be better times to be long DHB and we'll jump on it again.

[spikefader]

Spike, Thanks - for the emotions talk. Went short at 32.65. I am putting my stop in at 34.00 on the other side of the gap. Would you put it tighter?

Excellent! That is a great entry you got there.
Me, I would put stop above hod - simply because I like low risk and the other side of the gap is 1.45 points away. But if 1.45 points is within your tolerance, then go for it. But a stop of 32.75 is over hod and only risking 10 pennies. Oh, and my chart shows the gap closes at 34.10, so I'd tuck my stop at 34.15. If it gets hit, the gap resistence just isn't there.

But having said all that, channel action over the next few days will be telling. I note that the channel expands a little from today's candlestick, which says 'caution' to me. So I would stick with a stop at 32.75.

[spikefader]

Webman, very good point. I started trading since the end of last year, so it's been a rough year for me. The market has been choppy. I found that the hardest thing in trading is to control emotions. I've let a couple of 40-50% of gain turn into 2-3% or even a loss. TASR was my first short. I again let 20% profit turn into even so far. I also panic sold several stocks. Fear and greedy are two dangerous emotions in trading.

Spike, thanks for comments on stops.

You're welcome. And you are 1000% correct about emotions. They will kill you. And it's SOOOOOO tough to beat them and remain disciplined, and SOOOO easy to talk yourself into doing anything, like selling in fear or being greedy and watching profit disappear. But it IS POSSIBLE to check your emotions at the door - just takes some practice at smiling despite being stopped out

On TASR, that's the way the cookie crumbles sometimes. Profit disappears on some plays. Accept it and move on. As long as your game plan had that possibility in it, then smile. The market will be generous to you one day, and when it is, you'll snag a nice move.

[Massive]

spike, looking at UPL would you say it's a channel touch or at least getting close to one? I am still very bullish on the oil & gas operations. KCS, VLO, UPL, GI, and EPEX regularly show up after strictly screening stocks (although EPEX's chart looks really weak right now).

[carribean_mike]

It will be interesting to see how SMH plays out. I don't think that I am good enough for .10 stops yet, but I will lower it to nickel over the high from 6 days ago to 33.04. Since I was expecting to risk more - I will be looking to short more shares tomorrow.

[spikefader]

spike, looking at UPL would you say it's a channel touch or at least getting close to one? I am still very bullish on the oil & gas operations. KCS, VLO, UPL, GI, and EPEX regularly show up after strictly screening stocks (although EPEX's chart looks really weak right now).

Hey Massive.
UPL: It's had a nice run. Solid volume by price up to 35, the above 35 volume is dropping. I'd be waiting for the chart to give me a better entry...at least a lower red channel entry.


It's all about timing!

[spikefader]

It will be interesting to see how SMH plays out. I don't think that I am good enough for .10 stops yet, but I will lower it to nickel over the high from 6 days ago to 33.04. Since I was expecting to risk more - I will be looking to short more shares tomorrow.

Yep, it'll be interesting. After hours, I note that the neckline acted as support, and the right shoulder of the SHS was 'taken out', with price trading higher. I see the formation of an ascending triangle, which might be setting up for a bullish breakout. Remember the expanding channel I mentioned and a 'caution'. This is why I like tight stops. The expanding channel could be a prelude to a bullish channel break.

Again, I would feel best with .10 stop, and look for another intraday pattern tomorrow should today's setup fail. Why would I look for another entry if this one failed? Look at the weekly chart below. Plus there has only been an expansion of the daily channel, not a clear channel break yet. Short searching is still valid.




The weekly chart bearish too.

[Massive]

Spike,

You truly are a kind soul. Thanks for taking the time out of the day to cater to people you don't even know. If you're ever in town I'll take you out for a beer.

Thanks for your hard work. I appreciate it.