Tomorrow’s Plan:

I wanted to figure out why Keystone did so well this week, and I think I found at least one reason why. This past week, the market had three violent down moves that were short lived (but profitable), and had equally violent reversals. These reversals lasted throughout the day twice, making a very obvious direction of trade. At this point, it would not surprise me if the market slowed down a bit in the coming week. I mean this last week was a great battle between the bulls and the bears, giving both sides an opportunity to profit at different times of the day. Perhaps this battle will slow down before the memorial day weekend, but who knows!

Stats for Friday were very bullish, and on rising volume; the most bullish since the second of August. The market filled the gap down from Tuesday, and at this point, it’s a bit in no man’s land. The VIX and TLT both reversed downwards in a big way, although I assume some of the support they are nearing will hold in the short term. I am biased to the long side because of Friday’s great stats, but I am also aware of the 50 and 20 SMA above the SPY, and the fact that this week will probably fall in volume as the days go on. So either I will be looking for quick scalps in breakouts, or trades I can sit in while it slowly grinds higher on lower volume. One last note, the weekly SPY chart gave a bullish reversal candle right after a bearish reversal candle. Contrary to what you will hear on the news, the market is not signaling bearishness, but indecision, with more weight given to the most recent candle (bullish in this case). Lots of my stocks share this weekly signal, and we will probably see some follow through on it in the first few days of the week.

My Best Ideas:

•GG has been a great trading vehicle this past week, with lots of volume and good opportunity for both scalps and holds. I will continue to watch this stock for both situations, although I am starting to lean towards just scalping it after this ginormous move higher.

•UAUA made a 1-2-3 bottom on its hourly chart, and as long as it stays over 20, I am long biased and looking for trades to take it into the 20 and 50 SMA resistance.

•M is now the weakling in my list, so I will be going to it for shorts, although its in a choppy range. WFC is also a potential short sell, but its volume has been high or this bear flag.

•NTAP and LVS both look strong, especially NTAP with a higher volume breakout above its daily moving averages. JNPR is similar, but less strong, with resistance close overhead.

•I also want to say that with the market as it currently is, we should always be ready for MATD type action (intraday traders chasing momentum and creating a sharp reversal). I am going to stay away from getting locked into one direction Monday morning; I will be booking them if I gotem.

Best of Luck Tomorrow

Today’s Trades:

Today’s Journal Entry: None

Last Note

Lucas

Tomorrow’s Plan:

Resumed Sunday

Today’s Trades:

Today’s Journal Entry: None

Last Note

Sooo I did not really slow down today as I planned. Like Don Miller says, sometimes being okay with sitting on the sidelines just makes good entries pop out at you. I think today I was 7 for 7 profitable trades, and had my largest dollar up day to date. This week will probably go down in the books as one of the most difficult weeks emotionally (one of THOSE weeks). However it was the most profitable. Funny how that works. Many times in the past I have had profits in my pocket, and have given them back because I was not willing to do the work around what winning meant to me. I was satisfied building up expectations from my new “prowess,” and then giving all the money back watching the market kick those expectations in the teeth.

I definitely did a lot of work around those beliefs this week. I made a lot of progress by taking an hour, and sometimes more, after the morning session to meditate, journal, and ask myself hard questions. Sometimes I would come back and feel much more aligned with reality, and other times I would just have other issues to deal with. What is funny is this little voice in my head that creates mental blocks at each milestone. I made some nice trades this morning, and I watched as this voice started encouraging me to go watch movies, play video games, and leave the screen. Each time these mental blocks come up, I have to consciously look at them, sink back into the flow, and open myself to whatever opportunities the market offers. I really do not get to decide what the market gives me, I can only make myself available. Or not. There is nothing wrong with taking yourself out of the flow for awhile.

This was a pivotal week, but I am not resting on my laurels. I am going into next week constantly checking in to see where I am on the cocky-ometer. One thing that concerns me is that Keystone as a firm really cleaned up this week. I mean we did great. Could it be that this was just a great week, and that as the market changes, I will get frustrated and revenge trade all this money back? There are other traders who had their best week at the firm as well. There are still things in my mental map that are trying to give money away with stupid mistakes. I am watching to see if my mind takes any of these things and runs with them down the expectation hole of doom (ha!).

Have a Great Weekend,

Lucas

Tomorrow’s Plan:

So we definitely got our answer today on whether this bounce has legs or not. It appears that we have more downside to come, although TLT is reaching a point where a consolidation would make sense. August is wrapping up, and the way this market is acting, we should expect anything! Tomorrow is GDP and Big Ben speaking. Also, does anyone else think the VIX is not really acting right lately? It seems to be stunted because we are getting sell offs that should rocket it higher, yet it makes these meager moves. Odd

My Best Ideas:

•Macy’s looks like a good short under 19 and 19.20

•GG is just amazing, I am watching this tomorrow morning for some possible MATD action after its nice trending day today. Gold is a bit tricky though. If any of this bearish sentiment gets relieved, expect GG to deflate quickly.

•LVS is always worth watching, and it has this dark cloud cover candle pattern (if I have that right?) on higher volume. So it may have a date with its 50 SMA tomorrow or next week.

Best of Luck Tomorrow

Today’s Trades:

Today’s Journal Entry:

Last Note

Today brought a lot of things up, and was a lot like Tuesday, emotional experience wise. I had to sit down for a good hour and a half after the morning session and really get to the bottom of my feelings. I had some great questions that came up, like, who are you trying to be here? Most of the struggle I go through, if not all, is about trying to be some body. I want to be a pro trader, I want to be consistent, I want to be successful, I want to be this or that (must have!). Nothing wrong with wanting these things, but I go back to what I learned when I was a kid in how I get those things. Often those tactics are very unsuccessful, and today is just another day that showed me where my thinking does not align with reality.

As far as trading goes, it was pretty much a toss up, ending the day down like 9 bucks. I definitely don’t have a problem anymore with under trading, in fact I wanted to trade very badly all day, with no regards to market environment. I had some pretty poor entries (WFC! M!)), but somehow I didn’t get myself into any really bad spots. My throat is kind of soar, so I am taking it easy tomorrow. I sometimes think that playing poker, and losing, is saving me money in trading. I was uber emotional, I switch over to poker, go on tilt, lose all this money, break down in frustration, and then come back to trading with a clear head! Only costs me a couple bucks, but the same feelings are at stake: “I want to make money my way, I want things my way, this is how I am going to get it, where are my things….raaaggee!” Ha

Lucas

Tomorrow’s Plan:

If the market has an initial down move tomorrow morning, it’s either a direct gift from the trading gods, or something is really wrong with this rally. This afternoon short covering bonanza should have some legs off this incredibly negative sentiment. When the market shows its hand like it did this afternoon, you get tons of information from its follow through. I think the market should rally into the end of the week, even on lower volume if it comes to that. If it does not do that, and starts giving me really nice long entries, as in TOO nice, then there is something very wrong with the bullish hypothesis. Opinions are great to have if you can tell quickly if they are wrong, and deduce market movement from both their confirmation or falsification.

Both VIX and TLT made reversal signals today, TLT on higher volume. Overall volume was about the same as yesterday, but a bit lower. Some stocks made great up moves in the afternoon, while others did rather poorly.

My Best Ideas:

•If I got through my list and look at what did the best this afternoon, I see LVS, ALTR, WFC, and KSS (wow!). These are all decent long candidates, however WFC is on the tail end of a pretty large down move. So WFC is either going to be a fantastic, straight up, “omg I cannot believe this,” long, or a do nothing. KSS had such a reversal today that I will be watching it in the morning for some MATD action.

•UAUA and NTAP were big party poopers in this afternoon rally. UAUA had some good action, but it was within its daily range. If selling comes into the market, I will probably default to looking at NTAP, and then UAUA.

•My main focus tomorrow ill be on LVS, ALTR, and KSS in the morning. I will also be watching WFC, and then UAUA and NTAP last; that is how my focus will be allocated.

Best of Luck Tomorrow

Today’s Trades:

Today’s Journal Entry: Janitor Work

I feel a bit like a janitor, constantly cleaning up my own mess on a minute by minute basis. My entire focus on a morning like today is to make sure that I do not take the current feelings I have into my next trade. I made an LVS trade today that was a complete BIKB (But I Knew Better) trade. As soon as I made it, I knew I had fallen for some fleeting momentum. I stuck to my stop which was rather quickly hit, and I felt definite regret after the trade was closed out. I was a bit pissed, I was switching through my list of stocks looking for something to trade, and I generally wanted some revenge to make up for the mistake.

I call myself a janitor because I had to stop, look at my emotional matrix, look at how I was acting, and identify the tendencies I was about to play out (and then clean them up). I wanted a revenge trade, therefore I was more likely to chase momentum, and less likely to see actual people behind the trades I was going to make. I was more likely to just chase extreme tick readings instead of actually discerning the most likely action from the current given price action. I knew from experience that the feelings and attitudes I was feeling were probably shared by MANY traders on the day, and that if I followed the urging of my revenge wielding self, I would probably get chewed up.

So I decided to sit with these feelings for awhile, and just stare at ONE stock for a few minutes (UAUA). While doing this, I noticed a feeling that wanted to switch through my list quickly in fear of missing something. The fear from missing something was around this regret I felt if something happen without me: “Oh if only I had made that trade I would be positive on the day!” I know from experience that sitting still, silent, and attentive will always bring up the most pressing impulses that create trading hell. In this case, it was missing out, revenge trading, and avoiding regret.

I stopped watching UAUA intently (it was perfect for this exercise because it was doing NOTHING), and switched slowly through my list of stocks. I saw ALTR, and a few other stocks making a bottoming pattern. I had that gentle little shove that says to get involved. I did, was patient, and booked a winner at my target not too long later. I saw an opportunity to put on multiple positions in JNPR and LVS as well, but I obviously was not ready for that because I balked. Step by step!

So I am basically a constant janitor, cleaning up the emotional mess that clouds my thinking and perception. The good days are not necessarily the days where I make money, but where the mess I have to move through is relatively small. Today was a better day then yesterday, yet I made more money yesterday.

Make no mistake, moving through these emotions is not a cake walk. The way to deal with an emotion for good is to feel it in its original context. So you feel what it was like to be bullied when you were in 2nd grade, knowing that’s the emotion’s root. If you don’t feel it in its original context, then you default to tricks and tactics like walking, beating pillows for anger, and writing it out. These all work great. They keep you balanced and in the best place to make good judgments.

Last Note

What a day. When I wrote that journal entry, I was not above yesterday in PnL, but that changed in the afternoon. I decided the afternoon offered a ripe opportunity in both LVS and ALTR to try out the multiple positions deal, and it worked wonderfully. They both had great higher volume breakouts, ALTR to new intraday highs and LVS right below its daily highs. I held ALTR through a pullback after its breakout that I am almost positive I would have exited into if I was trading only it. I even brought up a sell order as I thought about it, but I was not going to exit into support.

The action before that 2:30 EST breakout was just so typical of the market. It did everything possible to get me out of my position, and put me on the fence. “On the fence” is not a big winner or big loser, but around a break even with mediocre action, and threatening to go against me. I was saying to myself over and over again, its just anxiety, its just anxiety. I kept my finger off the button, but while saying “I have to do something, I have to do something, I have to do something.” I think I quoted this awhile back, but its a good reminder: “The worst traders are those who feel so much anxiety that they simply have to do something, anything, to relieve it.” I was not going to be that trader, and act against my own best interest.

So another up day, woohoo… I feel a bit like I am setting myself up for a major fall. I have to constantly be on the alert for impulsive behavior. That first LVS trade today is a good example. It is so much easier to be focused, peaceful, patient, and carefree when you are coming off a string off losses. Losses are more debilitating in an obvious way. You cannot move, you cannot believe what has happen, you are angry, sad, and don’t want to do anything. Winners though, they are sneaky in their debilitation. You give trades “just one more nickel” when they start to go against you. I also have a tendency to scalp more and chase momentum, which does not work the majority of the time.

I realized the debilitating nature of these winners, so I have been very very alert to thoughts that allude to my greatness, encourage unhealthy eating habits or laziness, push me to do something because “I have to,” and any boredom or snappiness. Being on constant patrol is a tough job yo.

Lucas