Back to Top

A bounce is developing

Posted on 2/25/2011


NRF: Norhstar Realty Finance Corp


As expected the market made an attempt at a bounce. Many stocks started bouncing back in pre market. However a bout of selling sent them down. But as usual late buyng in second half the day ensured a unchanged or positive finish on Indexes.
At this stage there will be lot of support/pullback buyers and the mean reversion kind of traders. You saw their action on number of stocks that snapped back from the 2 day selling. We are likely to continue to see that. The RSI2 kind of short term trades will work for the nimble traders.
The geo political worries will continue to dominate the day to day action and a more likely scenario today is more attempt at bounce.
Some of the recent Episodic Pivots have quickly snapped back from their 1 or 2 day pullbacks and offer good opportunities. The earnings lead breakouts continue to dominate the action. The high Trend Intensity plays with linear action will continue to be my primary focus till we get another 300 plus day to the downside.
NRF is a good example of that kind of play. It was a earnings play. It was also in Trend Intensity scan and Episodic Pivots scan.

Go where the oil is

Posted on 2/24/2011
BDCO: Blue Dolphin Energy
 COG: Cabot Oil and Gas
 DBLE: Double eagle petroleum
 EOG: Eog Resources
 MXC: Mexco Energy Copr
 PDO: Pyramid Oil
 ROYL: Royale Energy


An external event has resulted in market undergoing a rapid pullback in last couple of days.
Prior to the pullback the market was in extreme bullish breadth phase. Secondary indicators were at extreme. Absent the geo political troubles the market might have taken a different route. Extremely positive breadth typically results in blowout kind of moves with number of stocks going in to extreme bullish phase and many stocks making spectacular 2to 5 day move. That process got aborted due to the Libya trouble.
At this stage we have seen only one 300 plus day to the downside. A real correction will have more selling. Absent that this market phase might result in yet another shakeout move.
A clear sector trend has emerged due to the Libya trouble. The energy sector has found a bid as oil prices have spiked sharply. The oil and gas stock move based on underlying price of oil and they will continue to move as long as oil prices remain elevated. As always during such sector move some of the most speculative small cap stocks will make bigger moves than the well established player. You saw lot of those moves yesterday.
While it might be tempting to get excessively bearish at this stage, it would be prudent to keep your mind open to all scenarios. Such geo political events can often resolve quickly.
This is also the time to start looking at which stocks are holding up comparatively well and which are having orderly pullback/correction. They will be the first to lead in any rally phase. Many of the recent EP will have such pullbacks and in some weeks start their rally.
Such correction phases are ideal opportunities for mean reversion traders and support traders. Those kind of methods should work well in current phase. Especially the RSI2 method.
Overall it will be a volatile market. And the focus should be on sector that is working.

Stocks down 10% plus in a month

Posted on 2/23/2011
Stocks above 10 down 10% in a month:


ACOR
ACTG
AFOP
AKAM
ALGT
AOL
ARM
BAP
CCME
CEDC
CHBT
CSC
CSCO
CTCM
CTRN
CTRP
DAKT
DANG
DDIC
DLB
EJ
ENOC
EXPE
F
FBR
FMER
FXCM
GHL
GNK
GOL
HGG
HMIN
HXM
IGT
ISIL
LNCE
MBI
MDC
MIPS
MMI
MNTA
MWW
MYGN
NILE
NKTR
NXTM
OMX
OSTK
OVTI
PHI
PNK
PUDA
PWRD
QPSA
ROVI
RSH
RST
SCOK
SWIR
SWM
TAM
TCK
TGI
TPCG
TSRA
TX
TZOO
UCTT
UEPS
WHX
WMS
WX
XRS

Teflon coated market will be tested today

Posted on 2/22/2011
There has been a persistent bid in this market for many months. Any small pullback has buyers stepping in.
In light of that the weakness today will be interesting. It is coming after a mini blowout. The secondary indicators on MM were at extreme so market had extreme momentum. Such phases result in pullbacks in small time frame. We will see if that happens by end of the day.

Are you an anticipatory or a reactive trader

Posted on 2/18/2011
You have a strategic choice. Either you can anticipate a move or react to a move.
In anticipation you enter ahead of a move hoping the move will continue in the direction of primary trend.
Or in an exhaustion kind of setup you are entering in anticipation of a trend reversal.
Value investor are also anticipation kind of trader. They anticipate that market will recognize the value in the identified stock and that is why the stock will go up.
Reaction kind of traders are breakout traders, trend followers, momentum traders, and growth investors. They react to a breakout or trend change or growth in sales or earnings. They wait for a proof before making trading decision.
In any time frame you can build a strategy based either on anticipation or reaction. A day trader can have a anticipation strategy where he pre identifies opportunities and enters them in anticipation of move. Then there are bulk of traders who are reactive day traders. They react to news, reversals, breakouts or exhaustions.
Both approaches offer opportunities for profitable method building. Once you decide on your basic approach you can find several ways to execute them.


Do you have a process loop

The daily process loop...

Everyday do the same thing in same sequence till you become better at it.

Everyday run the same scans:

Stockbee Trend Intensity Breakout
Stockbee Episodic Pivots
Stockbee Dollar Scan
Stockbee IPO scan
Stockbee Power Scan
Stockbee 4% down scan
Stockbee Power breakdowns
Stockbee Dollar Bearish Scan

Everyday run the scan at same time:

10AM and every 20 minutes after that till market close

Everyday look for a same setup..

A stock that had a up move , then a sideways correction and then a high volume breakout.
image
image

Everyday calculate the position size using the tool..

image
Everyday look for an exit on 3rd or 4th day if stocks goes up 8 to20% by then unless it is a longer term position trade
Do it over and over..
That is process loop.
If you don't like buying breakouts develop process loop for pullback buy.
If you don't like swing trading develop a process loop for position trading
If you do not like momentum trading develop a process loop for non momentum stock trading
If you do not like growth investing develop a process loop for value investing...
If you want to be a day trader develop a process loop.....
Once you develop a process loop, perfect it over many days by eliminating unnecessary steps and tools....
If you don't want to do the hard work involved in developing process loop then go and look for secret and super secret methods that offer stock picking for you.
There are thousands of them in the market and new ones are launched everyday....
If you want to survive for 10 years or more in trading and make millions develop your own process loop....



Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.

How to find stock likely to breakout

Posted on 2/17/2011

Using the narrow ranges on 10, 5 and 1 day scans in Telechart you can scan to find stocks in consolidation phase like KLIC.

10 day narrow range
(100 * (C - C10) / C10) <= 5 AND (100 * (C - C10) / C10) >= ( - 5)
5 day narrow
(100 * (C - C5) / C5) <= 1.5 AND (100 * (C - C5) / C5) >= ( - 1.5)
1 day narrow
(C < C1 * 1.01 AND C > C1 * .99) AND (C < C2 * 1.01 AND C > C2 * .99)
Use standard liquidity condition to eliminate low volume stocks and  Stockbee Trend Intensity  above 105 to focus on only stock with momentum .
You will see some nice emerging setups.

Emerging markets might be the pilot fish

Posted on 2/10/2011
There was a mini melt up in last 8 trading sessions after the market failed to follow through on a downside after a 400 plus day on 4% breakdowns. Stocks are moving in gaps. There are mini blowouts on some tech stocks. But leadership is narrow. As you can see the number of stocks up 25% in a month is nowhere near wildly bullish level. In a true melt up scenario we would be looking at 300 kind of number on it.
Yesterday was first day where there was some distribution. Some sectors are witnessing rotation out of them and that trend will continue. We are in a rotational kind of market. Retail and consumer stocks are where money has rotated in last 10 days. Money continues to be moving in to large cap stocks.
At this stage we might settle down in to another range or there might be another down move of 300 plus like we have seen in last 1 month. 8 to 10 days mini buying bursts have been followed by 2 to 3 days of distribution.
But because there has been persistent bid in the market downside follow through has been lacking. However individual stock shorts in some sectors that have seen rotation out of them have formed good bearish setups. Any weakness in overall market would have those stocks leading the downside.
On individual stocks on long side in last 2-3 days you would see many gaps and large range move. Typically when you see such gaps in extended market it tends to lead to 2 to 5 days of correction in short time frame. There are many stocks breaking out from extended setups, they go up 2 to 3 days and then dive back in to range. Often they start fading on second day by 11AM or mid day. So for short term swing trades unless you quickly sell in to the strength the gains vanish.
There are some stealth rallies happening on large cap stocks where they are breaking out on less than 4% moves and then going up. In the short run modification of the 4% b/o to 2% for Stockbee Power Breakout is better for catching such low impulse breakouts. Same thing applies on bearish side.
Most important things to watch currently are the Emerging markets and the BRIC markets. They are being taken to the wood shade. The same markets were the leading market after the bottom in 2009. They are the first to top out. Brazil, India, China are already in bearish territory. Watch Russia (RSX) for possible breakdown.
Those markets might be pilot fish.... As always I have one and half foot at exit door currently. Any hint of weakness and I will be out without waiting for confirmation... And I have minimal exposure to market currently... 

High short interest plays

Heavily shorted stocks might offer good swing opportunities in this over heated market.
Above stock has very high short interest . Like this other stocks might make big moves.
One of the ways to find such stocks in Telechart is by setting up a easyscan for high short interest stocks. 
 Just follow the following steps:
Create a easyscan with following criteria.
Common Stocks
Latest short interest = 90 plus rank.
Price % change today>4% (value)

Trading momentum stocks

Posted on 2/06/2011
One of the stockbee members is blogging about his methods to find momentum stocks.

Trading Momentum Stocks

I have been a subscriber to Pradeep Bonde's Stockbee trading site that focuses on momentum trading. It has been a great experience and I have learned a lot. Not only has Mr. Bonde done well with his trade alerts, he has done even better teaching his methods. As he likes to say, don't just try to follow someone's trades, but learn their methodology in terms of the hows and the whys. I would highly recommend his site because you will learn so much and speed up your learning curve on trading momentum.

I have incorporated some of his momentum scans on Telechart with some of my own tweaks. Stockbee tends to buy stocks that have exhibited momentum and have broken out 4% or more on big volume. So it is basically high momentum, rest, break out then buy. more.....

Persistent bid in the market but the leadership is narrowing

Posted on 2/04/2011
There is persistent bid in the market but the leadership is narrowing. The rotation theme continues with new sectors breaking out and many sectors that were doing well topping or correcting.

So laggards are now breaking out. Low priced stocks are working. Speculative stocks are working. Earnings breakouts are working.

Gold stocks after a correction seems to have found a bid.

Unless the market quickly has a breadth thrust we will continue to be in range. A 2 to 4 weeks churn at this level would be constructive scenario. That kind of scenario will mean whipsaw territory.

The other possible scenario is narrowing leadership and over extended setup will result in a 5 to 10% correction at some stage here.

The third scenario is complete melt up with stocks going up like there is no worry.

All three are possible. At this stage evidence suggests the first and second scenario more likely.

Like in a stock one needs to look for a setup same way you need to look for a setup in overall market. Unless you are a day trader, you will find there are setups in market where it is extremely conducive to build concentrated positions and just sit in them. Then there are setups in market where you need to minimize your risk.

Whenever a market has 10% correction and then breaks out on breadth thrust is the time to build concentrated positions and sit tight.

Whenever market goes up 20% plus in few months is not a setup where you build concentrated positions and sit tight on them. Sometime it might work but most often it has a probability of your trading career being terminated.

When a market has 10% plus kind of correction the funds and large speculators are in cash or short. Most stocks at that level are down 25% plus in a quarter. Few stocks during that phase make 25% moves. Those that make those moves can often be counter cyclicals and not necessarily leaders.

Even the best of growth stock at that stage will be down 25% or more or would be going sideways. At some stage some of the growth stocks attract buyers and instead of going down they go in wide range or sideways pattern. When the market has positive breadth thrust at that level those stocks start breaking out. If you can at that stage identify the right stock and get in to it and sit tight then you are rewarded. That is what CKbergin is talking about when he says buy 4 positions of 25% each.

When the market keeps going up for some months and when breadth reaches extreme positive territory you have almost every stock up 25% plus in a quarter. Now not many stocks are left to make big move. At that stage whatever is still lagging the market has some reason why it is not being bought during the market advance. At this stage while individual stocks might make big moves overall the big speculators and funds who were buyers at the extreme negative breadth level start distributing stock to willing buyers at those levels. Needless to say there is never a shortage of fools on the street plus low skilled investors always keep entering the market.

While buying at extreme level of breadth negativeness is sudden and there is a stampede to get in to stocks by funds and professionals like CKbergin and his friends , the situation at extremely positive breadth level is very different. Stocks are very silently distributed to bag holders. At some stage once the large funds have done their distribution then the market breaks down.

Practical example of this you will see everyday. Couple of weeks ago I was talking to a member who wanted to build a big position in F , he asked for my advice and I said I would not do it. That time F was forming good sideways pattern and there was lot of coverage of F in media as successful turnaround. I think the CNBC jester was also pumping F. On blogs and Stocktwits many were bullish on the story. And this member bought the position now rest is history.

When was F a buy . When it was at 4 or when it had correction around 10. The story was now so apparent and the people who believed that F is going to further double from here and putting the stock in their IRA as permanent hold are the kind of people Wall Street loves at extreme positive breadth level.

Same story happened on Tata Motors. In 2008 and 2009 I was recommending Tata Motors to all my Indian friends and my relatives and I made my mother in law buy it at distressed level in her portfolio at that level. It was her biggest position at that time.Very few people bought it at that level. Last month I went for a birthday party at a Indian friends place where I had recommended TM two years ago and also last year and then one person after watching it go up so much and reading about it as successful turnaround bought it just before the drop.

Same way I was watching utter bullishness on FFIV few weeks ago as if FFIV is next CSCO and some were putting it as their single best idea for next year. What happened.

This story and cycle has been repeating for more than 100 years on the street. Stocks are accumulated at 10% plus bearish correction level when the retail traders and mom and pop investors are to scared to buy and then they are systematically distributed as market reaches extreme breadth level. The game never changes only the bag holders change.

Breadth based models like Market Monitor, Or CKbergin's timing model based on $BPNYA or Hectors Market Timing models try and identify such extreme levels and get out of market when risk of being bag holder increases. The tactics used in those models might be different but the underlying concept ins same.

At this stage after the August 2010 bottom from which market has rallied 25% plus , all such market breadth based models are showing the same thing. That we peaked at extreme breadth level . Most of these kind of market timing models have good historical track record of getting it right. But there can be exception periods where market does not confirm to the model or market confirms to the model after a lag period.

Life is wonderful when you have not spent time studying these things.Because then your decision making is not influenced by such historical precedent. If you know these things and if you experienced some nasty corrections in your trading life you become cautious and think and act differently. That is why as you age on Wall Street you become more and more risk averse and try and stay ahead of big funds and speculator as far as possible.

This is the kind of background which drives SA on day to day basis.

The objective is always to make lot of money but at the same time avoid drawdown to the minimum. Does the overall market presents compelling setup is always the fundamental question at back of the mind when looking at any profit opportunity.

At this stage my answer is it is not a compelling setup. So I am adjusting tactics and playing small.

Everyone has different risk tolerance and life situation. After having successfully survived this game for last decade today I am extremely risk averse. At slightest hint of risk I take my marbles away and get out of the game. That thinking applies to market as well as individual position. In my experience if a stock does not act right immediately after entry it is unlikely to work. Same way market should confirm a bullish thrust in few days otherwise alarm bells should ring.




Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.