Learn the language of setups

In your trading journey you will have significant breakthroughs once you learn the language of setups. Profitable traders think in setup language while novices think in individual stock term.

In a day you will see several posts by members about individual stocks or emails about individual stocks. If you actively participate in a social media site like Stocktwits, you will see several posts on individual stocks.  Something catches their fancy and or they know about a particular stock and they are enamored by it and want to know whether it is good buy or not. That thinking is not much of help.

Setup selection is key to successful trading. Setup selection allows you to condition your behavior. It allows you to develop your procedural memory. It allows you to automate your thinking. Setup oriented thinking is process based thinking. It is how do I find this kind of stock again and again kind of thinking. It is about ways to catch fish.

When it comes to setup selection your time frame is very critical. A setup that is good for day trader may not be good for swing trader. A swing trading setup may be extended setup for position trader.

Over next 30 days we will look at vast range of setup ideas. Once you get in to details of those setups you will learn the basic building blocks of designing your own setups....

Starting from 1St December there will be extensive discussion of various kinds of setups used by different traders.It will be a month long series of posts and most days multiple posts during the day on the members site. The setup series will give you large number of ideas that you can incorporate in to your trading

Study of setups is key to developing methods. A extensive understanding of setups would give you a life long foundation to design your own trading setups based on your personality and time horizons.

Once the series is over the entire series of posts would be compiled in a separate section in learning areas 

Vehicle selection +setup selection+procedural memory development+self efficacy beliefs+situation awareness+risk management =Profitable trading

Over next few months we will look at each of the factor in detail...


The rally leaders from previous bounce have some stocks holding up well

After 7 to 8 days of back to back negative days a reflex bounce is what we witnessed yesterday.

Will there be "sustained" follow through. The move almost faded before last 5 to 10 minutes of spike at close. We will know in next 48 hours whether the bounce has staying power.

One of the problem for the market might be severely depleted leadership. Some f the leaders that were holding up relatively well a month or so ago are now in bearish camp.

The rally leaders from previous bounce have some stocks holding up well and going sideways.

You can find them using the pcf  100 * C / (C'10/03/11') sideways. Those stocks have potential for further upside if the rally attempt sticks.

Cash is better option in this market  as of now for swing trader.


Significant damage to breadth

In last few weeks there has been significant damage to breadth. There has been negative breadth thrust.

The implication is clear. Any next up leg will need to start with a breadth thrust.

A bounce not supported by significant breadth will be short lived.

If more selling continues then we will have a very good setup on long side. The selling would lead to readings on primary indicator going to extreme and that would be good for a sustained rally.

In the short run after market being down for so many days in a row, a chance of reflex bounce are extremely high. However sentiments paint mixed picture. The Investors Intelligence sentiment is at 47.4% bullish. Which indicates very high bullishness.


Don't think beyond 3-4 days

Range bound action

Don't think beyond 3-4 days is the message of the market. That has been the case for entire year.

Lot of people on short side got excited on 50MA break , but that was a mini trap. Unless you closed your 3 days shorts early, many reversed.

Bounce does not mean start of new bull phase. That will depend on breadth thrust.

More likely weak, low volume bounce for this week.

Volume on Wednesday and Friday will be very low.


Leading horsemen look to be turning

AAPL, CMG, AMZN, GOOG, BIDU, PCLN have been the go to stock in this market for last one year in any rally or correction.

Same old tiered leadership has persisted for months....

In recent days they are under pressure....

The leading horsemen are worth keeping an eye on....


News driven market

The over arching theme in this market is Europe. The daily moves are dictated by who sneezes in Europe currently. But under the hood some nice setups are developing.


A volatile range

A volatile range has formed near the top. essentially market has not gone anywhere in 11 days but the daily moves are big. A convincing break from range is required. 


Watch Europe

Watch Europe

As of now market gyrations are driven by the European soap opera.

But besides that breadth thrust on bearish side is something to be aware of.

Breakouts after breakouts are failing.

More and more growth stocks and stocks with 6 month to a year momentum are breaking down. In most cases breaking down big.

The market will need breadth thrust to come out of this funk.


Follow through or a bounce

Big negative day on breadth. Prior such negative day did not result in follow through. So we may be back to range.


European soap opera continues...

News driven volatility is a day today affair in this market currently. The solution is to manage risk and play small. It is difficult to get fully invested with conviction in this environment. 

In last 4 to 5 days market looked good and breakouts were expanding. And now we have this gap down. 


Breakout of this range will require big breadth thrust

Market is digesting the big bounce. It has settled in small range near top.

Many stocks look like forming first phase of nice sideways setups.

To breakout of this range will require big breadth thrust again...


Two possible scenarios

Market had a sharp bounce in last 24 days. As a result the MM is in confirmed bullish mode.

The number of breakouts continue to expand. in last 2 -3 days some stocks near 52 week high have started to breakout.

Possible scenarios:

1 market goes sideways for sometime before breaking higher

2 market bounce fails.

As of now the day to day action is lead by Europe news. If there is resolution to that problem the first scenario is more likely.

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.


Greek Drama

Greece news drives the short term market action. As of now we will be back to range till it gets resolved. It might be volatile range. This year has seen many such range bound periods. 


Range might form

It was ugly day. But in this market 1000 kind of days are common.

S of now this still is a pullback because breadth is positive. A 2 to 3 weeks of orderly pullback would be ideal. But the market may not offer you that....

We might go back in to range....


Not an orderly pullback

This is not an orderly pullback , if we sell off .

Be careful out there. Let us see how this market reacts to this pullback.

Any huge negative breadth day of 500 plus will be cause for worry.