New Site

Trying out Google’s blogspot for a while.  I’ve repost a few articles there.  So far it seems to be able to do the same plus more.  Knock on wood!  Hopefully I’ll stop relocating my blog.

Go to my new site.

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Anything Is Possible – APKT

Just as I was utterly astonished by SFLY’s price action yesterday, I jokingly tweeted that may be the after hours earnings selloff in APKT could pull the same miracle.  Behold!

APKT was down 15% after hours last night.  After a bullish job number this morning, it was as high as 7.45% during lunch hour.  That’s a rally of 26.85% from the low!!

Money can be made on any stock on any day.  One needs patience, conviction, and most importantly, luck!  There is no need to cut yourself so thin.  Concentrate on a handful of stocks and know it well.

Another lesson learned: don’t trade after hours.  An innocent 50 share token trade can snow ball into a huge loss if not managed with discipline!

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Again, Head & Shoulder Pattern Should Be Tossed

I’ve mentioned it before, but I’ll mention it again.  Head & shoulder pattern is so unreliable that it’s only useful by the pros to manipulate retail traders.

INFN was up 10.4% after hours at 8.05.  Fortunately, this was a story play of mine in my IRA account; if I were trading this stock, I wouldn’t have caught this out of blue rally.  Target 8.50.

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Earnings, They Know the Numbers – Not

Often we hear people say, “they” know the numbers because a stock or the market moved a certain way the day before the event.  It’s mostly not the case.   Even if that is indeed the case, there is no way to play it.  When a stock goes up before the earning, it could be one of two things if we want to attribute the move to be due to the people in the know: they run up the price to dump it because the numbers are bad, or they buy with both hands because they know the numbers are good.  It’s moot.

APKT was up 6% during the day, only to tank over 10% after hours.

INFN, on the other hand, was up 5% during the day and popped another 10% after hours.

GMCR was flat during the day, and jumped 24% after hours.

How about SFLY?  It rallied 6.5% during the day, only to dive 14% after hours, and finished the next session up 7.8% (that’s over 25% move from the after hours low!!!)  Who’d have thunk it?!

Earnings plays are casino plays however you slice it.

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Don’t Chase – There Is Always Another Trade

It’s almost without exception: whenever I entered a trade emotionally without planning, I’d get punished.  Today I kept pondering the prospects of a double top on SPY on the daily chart.  I was away from the streamer for a while and when I came back I saw SPY made new low for the day.  I quickly entered a short position.   And it was practically the low of the day.  I ended up spending the rest of the day fire-fighting to salvage my position.  And that brought up another point: I still have too much ego to admit defeat and take loss.  Fortunately I had other profitable trades today to end the day ($20) in the red.

I’ve got to stay disciplined, and plan the trades and take losses.

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Use Seasonality to Optimize Timing

While technical analysis may be the only tool many traders use to place trades, seasonality can be used to further increase a traders odds.

Source:  http://www.investopedia.com/articles/05/seasonaltrends.asp#axzz1lFpNeb4q

  1. Buy in October. Or September if you have bigger appetite.  September is the weakest month.
  2. Buy on dip before major holidays.  Optimism and patriotism around holidays can cause upward bias.
  3. Sell losers ahead of the crowd in December for capital losses tax write-down.
  4. Buy small caps or big losers at the end of the year in anticipation of the January Effect.
  5. Market tends to be weak in the middle of a month, and strong around the turn of a month due to window dressing and mutual fund activities.  Quarter ends should have even bigger effect.
  6. Sell on Friday and buy on Monday.  Friday is the strongest day while Monday tends to be the weakest day.
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CPST Setup

I held CPST in my IRA account in the 1.20’s since Janurary of 2011.  I exited the majority of my shares at 1.67 and again at 2.00.   I held the remaining 1,500 shares and forgot about it.   Today, Fly surprisingly initiated a position on it for earnings play.  I took a look at the chart.  No wonder: it took out the 8 month neckline today.

The full blown target is 1.75 area.  The first target, though, is my favorite 123% Fib extension target of 1.40.  I’d add on retest of the neckline around 1.30 area.

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