Last month I did a post about my short position in AGO. I've held on to that position, and it's falling again today (which is nice, in light of the market being otherwise up across the board). I think this security has plenty of room left to fall.
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
I happened across this clip that is NSFW but, for those who can tolerate blue language, must be viewed. A choice excerpt: "Fortunately for whining snotface, the party goes with a bang: she enters looking every inch the cosseted flesh-waste she is, and her and her irritating scumbag friends party on into the night, dancing, shrieking, acting like pillocks, and generally making you feel like getting down on your knees and praying for a nuclear holocaust."
My Anglophilia just got taken up another notch.
As we all know AAPL is an incredibly important stock in terms of its investor following and its index weighting. If any stock today can give us insight into the market's animal spirits, AAPL would be the one.
I'm going to blog about AAPL in two parts … the first one is just an analysis of the trading of AAPL on Friday based on the 5-min chart. Nothing more, nothing less … just looking at how you should have traded AAPL on Friday without any bias from higher time frames.
The reason I think reviewing a day's trading set-ups as being important is that these methods/set-ups repeat. Not only for AAPL or the SPY, but in all stocks/ETF's. If you don't believe me, go back and look at my SPY trading analysis … you'll see the same thing over and over. Again, its all about becoming a better fisherman.
My Part II blog will be a more in-depth analysis of AAPL on higher time frames. Included will be some analysis of what to look for in signals or signs in the days ahead. This will be a part of my weekly newsletter which goes out on Sunday evening (make sure you sign up for it!!).
So, let's get started:
It's been a very quiet day for me. I took profits on a few shorts, got stopped out of a few others, and decided to balance things out by going long these symbols:
The Russell (shown below with the black line) has pulled far, far ahead of the S&P 500 (in blue), just like it did last Spring. I'm positioned for this gap to close in the coming weeks, since most of my positions remain on the short side and in smaller caps.
I received an interesting piece of mail this week. If you invest/trade the markets long enough, you’ll get these sort of mailings fairly regularly.
It was an invitation to participate in a class action lawsuit over something Apple did between 2001 and 2005. I don’t really know or care what they were sued over, but Apple settled – and the cash is now available to be claimed. Essentially, if you bought shares of Apple during that time you might be entitled to some portion of a settlement. I did a search of my trading records, and sure enough – there it was. I’d bought AAPL on 11 Oct 2005 and sold on 18 Oct 2005: a quick 4% gain. However, as I reviewed more of the legal mumbo-jumbo, it became clear that my take on the lawsuit settlement would amount to $0.07 (estimated) per share. Bottom line – not worth my time to even fill out the class action paperwork. The 4% I made on the trade four years ago far exceeded any reimbursement that I would receive from this settlement.
The interesting thing was realizing that the price I paid for AAPL at that time was $50.59 per share. Wow, wouldn’t it be nice to have kept those shares? My unrealized gain today would be 646%! That’s not really” go-crazy-retire-to-Fiji money”, but it’s well over 100% gain annualized… Why did I sell at that time? Probably a stop, could have been an itchy trigger finger with a desire to book gains – really I don’t remember. When I look at the chart from 2005, it’s really a facepalm moment.
This has been an introspective moment over the weekend, as it’s caused me to question some of my approach to trading the markets. I assess that I do above average at picking what to buy, and I’m usually pretty good on when to buy also – but my timing on when to sell has had some sucktastic moments. I’ve experimented with putting trailing stops on everything – only to be whipsawed out of stocks that continued up-up-and-away. I’ve bought uptrending stocks that then paused and/or retraced just after I buy – so I sold (locking in a loss) only to find them explode upward the next week. I’m starting to think that I need to slow down my timeline a little; step back from every wiggle of the chart and let my trading positions work for me.
I’ve believed for a long time that “buy and hold” is a steaming load of crap. There are a plethora of market indicators that clearly show market trend, and it’s foolish to go long in a bear market or short in a bull market. My favorite indicators for trend are the market breadth and bullish percents (which as of this writing still show a bull market). These work well and consistently. My issue seems to be finding my rhythm for when to take profits or cut losses, and I’m open to ideas on how to improve my game. I don’t care to hear the Warren Buffet answer (who has said his time horizon is to never sell), but I feel there’s gotta be a better system for when to sell.
By the way – going back to the question of buy and hold AAPL from Oct 2005 – I don’t think that would have been a good idea at all. There were a couple of clearly defined downtrends the first half of 2006 and most of 2008. I think any reasonable trader wouldn’t sit on his hands through that bleeding. Certainly I couldn’t have, considering the market breadth and bullish percents clearly showed defensive situations during that timeframe. What do you think?
The week saw the broad market index decline 1.05%. Only two sectors, media (+1.3%) and utilities (+.42%), were positive. Here is the weekly profile on the sectors (click all images for enhanced viewing):
For the subsectors, here is a graphic of the top/bottom performers. GE led the Diversified Industrials with a 4.9% change for the week:
This week short interest changes were reported. Familiar sectors are still on the top 10 list. I am also including for you the top absolute % changes in short interest so that you can see where the bears are increasing their holdings.
As is usual, I have prepared for you a chart book. I have a lagniappe for you! I included chart thumbnails for the 148 subsectors as well as the 24 sectors (in addition to the detailed weekly/daily charts). Sometimes the bird's eye view helps build perspective. You can find the chart book here.
And finally, I will close with the chart of the total stock market index–both daily and weekly. First the daily, then the weekly.
The weekly chart (2nd chart) shows no damage to the trend lines, and the daily chart is showing some bumping against its trend lines. (Note that a 13 EMA on a weekly chart is a 13 week EMA, while on a daily chart it is a 13 day EMA). I hope you find this information and the weekly chart book download helpful to your due diligence efforts.