Daily Archives: August 14, 2010

Weekly Sector Report | 08.13.10 (by Leisa)

By -

(Note: Please click on all images to make larger)

It was an ugly week in the market with the Total Stock Market Index down by 4.2%–Ugly if you are a bull.  It was a fantastic week for the bears.  Telecommunications was the sector down the least.  As you might guess, the search for yield is on again, and some telecommuncation issues are staid dividend payers.

Though outside the scope of this post, past dividends do not always equal current dividends.  Make sure that you conduct reasonable due diligence to evaluate the quality and ability of continuance of dividends.

One of my long-time blog friends, MarkM, pointed out that preferred shares were a superb performer.  Here's a chart of PFF.


Here are the sectors with the highest relative volume. You can view the entire table here.

ZBB and DYN were the two biggest contributors to this sector's relative volume performance.


Here are the sectors with the highest short interest.  You can view the entire table here

If you wish to scroll through all of the sector charts and drill down for greater detail, you can do so by following THIS LINK.

Get’r done (by Greg)

By -

A lot of people come here to slope wanting to learn about trading.  The information shared can be tantalizing.  New traders search and search for that holy grail for trading.  So what is it?  From experience, I can tell you the answer lies within, and is right between your ears.  You're thinking come on that's a cop out.  Actually it's not a cop out.  

Every traders journey towards success is unique.  For me, the individual who I learned the most from is a guy who uses the user name Peachin.  While I never observed exactly how he traded, what I did learn is the importance for having a feel for the interplay of price and volume. 

If you want to become a good trader, my suggestion, is for you to study the patterns that develop on a chart, and pay close attention to the interplay of price vs volume.  You have to watch a live chart to see that interplay.  That is the number one thing you need to understand in order to gain an insight as to where price will head next.  

Now that you are focused on the only thing that pays as far as trading is concerned, you need to identify what sequence of events: Chart pattern, price and volume interaction, which results in what kind of outcome.  This takes time and dedication.  But here's the deal.  If you are focused on these elements eventually you will identify a sequence where in you identify an outcome that happens better then 50/50.  This is called a trade setup.  The next thing you need to do, is identify the rules to use to optimize your trading outcome when you've identified this particular sequence of price pattern, and volume interplay.  You should also have an expected target in mind, and scale point identified before entering the trade.  I'd suggest you consider both hard and soft stops for the setups you identify.

My best setups when entered correctly will actually give you about a 1/2 point profit even on a blown trade.  

The thing about finding your own setups, is that you're in control, and you devise the way they should be played, and you own and accept the outcome.  The other thing that's nice about a setup trading style, is that when the sequence occurs, you pull the trigger, and you play it according to your pre-established rules.  Those rules you establish are your safety net.  Stick to them, and emotion is removed from the trade. 

My final thought, is if you use the hard stop and soft stop approach, considering adding as price probes near your hard stop.  I generally enter a small position under my setup criteria, and then if the trade is acting as expected and price probes hard against my trade, I will often scale up hard.  I like to use a set loss amount maximum.  If I can enter within a point of my hard stop, then I'll load double what I would 2 points away from my hard stop point.  The thing is the risk reward is more favorable the closer to my hard stop I can achieve an entry.  Anyway, you can manage the trade anyway you want, but follow what ever plan you have in place.

I think that get's across what I wanted to share this beautiful day.

Best of luck out there.

Greg