Day Trading Blog

This day trading blog posts nearly every day and reviews charts and trades from that day's trading session.

May 22, 2010, A 10400 bottom? Yeah, right.

5-22-10

I did something stupid in my last blog. I tried to predict where the market would find a bottom, before it actually hit the bottom. We dropped through the support area of 10400 without hesitation this past week. And even though 10100 was a line of support on Friday - and even though this is a 23% Fibonacci Retracement from the bull peak - I no longer believe we've seen the bottom.

Oh, sure, we could go up a little from here. And then we could go back down again. So, I won't be drawing another line in the sand and saying the market has to stop here. The market tends to make a fool of such predictions. But, at this point, I'd be surprised if we stop at the 23% Fib line. At the same time, I'm not one of those red-faced, loud commentators who says we're going below 9000 either. We'll see. The important thing isn't knowing the bottom before we get there, but trading carefully in the interim.

Careful trading.

May 14, 2010, The Meandering Middle

5-14-10, 2:30 PM, ET

Have you heard the one about the stock market guru who kept sending out weekly emails saying "the market is going down...short, short, short". Well, eventually he was right.

I don't know where we're headed right now in the market. For a few days, the market looked as though it would shake off last week's crash/correction. But the last two days gives us pause.

I know that traders need some sense of direction though. So here's my hunch based on what I see right now. I think the Dow will trade within the range of 10400 to 11000 for possibly another month.

Of course, as soon as I say that, I have to make a disclaimer. Since our market is now an international market, with companies inextricably connected with the economics of other countries, I'm assuming there are no new earth-shattering revelations in the next few weeks. We've had enough of those for a while. So, barring that, I think we will muddle on in this middle area for another month. Careful selection of stocks therefore is important, as always.

We'll see if I'm right.

Hope your trading is going well.

Apr 13, 2010, Chat Room Opening

Tuesday, 5:20 PM, ET

Well, the cat's out of the bag.

As you may have heard, the chat room that I lead each day is going to open up this week for new members. It is scheduled to open on Thursday morning and close on Friday evening. This is the first time in four months that we've allowed new members.

Today's link will take you to some of the testimonials from some of the members. Very humbling. But, I thought you might want to hear from some actual members.

So, click on the link in today's blog. Then, if you're interested, jump on board Thursday morning.

See you there.

Click for more info

Apr 2, 2010, I've Been a Little Busy

April 2, 2010

I feel bad when I look back at this blog. It's like a neglected pet or something...sitting there just begging for attention. But, I've been a little busy lately.

The MorningHoursTrading chat room is currently the place where I share most of my input into trading stocks. The members there are doing well. And one of the great things about that room is that members share so much and help each other become profitable. (It's a whole lot better than trying to trade solo.) Besides calling out 3-5 trades each morning, I create charts to help members learn more about trading. So, I've been a little busy.

But I've also been busy with a new project. I'm writing the content now and that's all I can tell you. But, I'm very excited about it. Wish I could tell you more...but, not yet.

In case you're not subscribed to my ezine, then you may not have noticed that I dropped the price to my video course by $100. That's over 3-hours of video, multiple pdfs, etc. - all designed to help you become a better trader by using technical analysis. You can click on the link in today's blog posting to see the details about the video & pdf course.

So, thanks for your patience. Hope your trading is going well.

Permalink -- click for full blog post "I've Been a Little Busy"

Mar 13, 2010, Trading the Afternoon Market

The video course, Trading the Afternoon Market, teaches traders how to see stock charts, using technical indicators and contextual trading.

Permalink -- click for full blog post "Trading the Afternoon Market"

Feb 25, 2010, 4% Gains

2-25-10, 5:35 PM, ET

Just a quick note to follow up on yesterday's blog. I mentioned the three trades that qualified as short term shorts yesterday. And I gave the price at which they qualified as shorts. Each of those trades ended up with about 4% gains apiece, as the market gapped down this morning. Not bad for 1 day gains held overnight.

Most of my work has been related to gap stocks, playing the gap with day trading. But, one of the things that I've been studying lately is something I call short term swings. These are not long swing trades that go on for weeks. It all depends on how quickly the target profits are hit as to when to exit the trade. And 4% in one day is better than average. So, you take those gains as gifts.

If you're interested in learning more about this short term system, then be sure you're signed up for my ezine. When I get everything ready, that's the group I'll mention it to first.

Hope you had good day.

Feb 25, 2010, Swing Trading

2-24-10, 8:00 PM, ET

The market recouped most of yesterday's sell-off today. Some of the best gains were by finding heavily shorted stocks and playing the explosive rebound as traders rushed to cash in their profits. You can look at two auto parts companies as examples, DAN and DAI.

To follow up with my blog post from yesterday. I gave you five possible short term short trades, if the market continued to pull back. Well the market didn't pull back today. But 3 of the 5 stocks did qualify as short trades anyway. KLAC qualified at 29.30...LRCX qualified at 34.20...NTAP qualified at 30.30. The trick, as always, is knowing when to take some of your profits and when to let those trades run on for larger gains.

I won't give you new trades every day. But, just for fun, I'll give you five possible shorts and five possible longs for tomorrow. These are short term plays... from a few hours to a few days...but the key is knowing when to enter the trade for the direction shown.

So, if you want to play along...the five short term bulls are: BBT F FIS FRX NDAQ. The five short term bears are: GRMN AMT DHI FCX NEM.

Have fun.

Feb 24, 2010, Will the Pull Back Continue?

2-23-10, 8:15 PM, ET

Today's announcement (that consumer sentiment fell to its lowest level in 10 months) was not received very well by the market. And it put a fragile two-week recovery into question.

Some of the more experienced people whom I listen to say the downtrend will continue. And they point to the 50 and 200 SMA (Simple Moving Averages) for the major indices as proof.

No predictions from me for whole markets. There will be a lot of quarterly reports and government reports issued in the next few days. And we'll see what develops.

But here are a few stocks that might be worth watching, if the downtrend continues. These are short term short trade possibilities. I won't go into the details here of how to trade them. But, they might be worth watching.

Here they are: AMAT, KLAC, LRCX, NTAP, & RIMM.

Hope your trading is going well.

Feb 18, 2010, QLD

2-18-10, 6:00 PM, ET

I exited my multi-day swing trade on QLD this afternoon. Turns out that was probably a bit of lucky timing. With the Fed raising its discount rate (announced after market today), most of our bullish ETFs will probably struggle tomorrow morning. QLD has already given back all of today's gain in the after-market session.

But holding ETFs longer than a day is always a risky strategy. Guess some traders will learn that lesson the hard way tomorrow morning.

Hope your trading is going well.

Feb 16, 2010, Short Covering

2-16-10, 4:45 PM, ET

I thoroughly enjoy the explosive power of short covering. It has been happening lately on a variety of stocks, as the market continues to rally off its recent lows.

A great example today can be found in SEED. As great as the bullish ETFs performed today (see FAS), it's difficult to beat a short covering rally. Take a look at SEED in this afternoon's session and you'll see it.

Feb 8, 2010, Shorting the Advance

2-8-10, 5:00 PM, ET

I posted a Twitter chart on RL this afternoon. Perhaps you saw it.

I identified RL this weekend as a possible short term short trade, after my scanner picked up some key Ickimoku crossover patterns. So, when price advanced to the top of the one hour Bollinger Band this morning, I knew it was a good set up.

The pull-back had already begun by the time I posted the Tweet. But it continued lower as the market pulled back in the afternoon session.

Hope you had a good trading day.

Jan 23, 2010, New Tools at FSC

1-23-10

Some of you have discovered the free charts over at www.freestockcharts.com. If you haven't visited it yet, then I'd encourage you to check it out. It still has some shortcomings, such as delayed data on thinly traded stocks. But, it also offers some great trading tools.

They announced a bunch of new indicators today. One of the ones worth mentioning is called "Volume at Price" and it does basically what it says it does. It shows positive and negative volume direction at various price levels. And it's available on their drop down menu for indicators.

If you've never used this indicator, then today's link will take you to a good overview. (It's called "Price by Volume" in the article.)

Click for more info

Jan 16, 2010, Losing Trade Exit Strategies

Holding a losing trade can cost you more than money. Here's one way to get out of your situation.

Permalink -- click for full blog post "Losing Trade Exit Strategies"

Jan 8, 2010, Exiting the Trade

1-8-10, 4:30 PM, ET

To think that every trade is a perfect, money making trade is a foolish thought. No one is that good. But, unfortunately, many beginning day traders have this expectation.

The end result: beginners lose a lot of money in the market because they don't know how to graciously bow out of a trade. Often, a trade will allow you a graceful, break-even exit - if you will only take it.

Today's link will take you a four-part series of articles I wrote called "Exiting the Trade". There is a link at the bottom of each page to go to the next article.

I posted several charts on twitter today. You can look in the "About Bob" section for my twitter link. Follow me. It's free. I showed two examples using the Ichimoku Cloud indicator. Interesting stuff.

Have a great weekend.

Permalink -- click for full blog post "Exiting the Trade"

Jan 4, 2010, Day Trading Tutorials

Day trading tutorials - over 30 articles to help you learn how to start day trading.

Permalink -- click for full blog post "Day Trading Tutorials"

Dec 31, 2009, An Afternoon of Shorts

12-31-09, 4:30 PM, ET

Well, the last two days of the year revealed a little profit taking. Especially susceptible were stocks that have enjoyed a nice, long run-up in price. For example, DDS and BKH have both enjoyed an almost uninterupted climb this month. So, it stands to reason that traders would take some of that profit off the table at year end. Both stocks made for great shorts over the past two days.

If you'd like more information about how to short stocks, then you can click on the link in today's blog for a recent play-by-play short example.

Hope you had a good trading year. And I hope this site has helped to make it a successful one for you.

Happy New Year!

Permalink -- click for full blog post "An Afternoon of Shorts"

Dec 27, 2009, How to short stocks

Learn to short stocks. Follow my step-by-step analysis as I determine when to short a stock and when to cover.

Permalink -- click for full blog post "How to short stocks"

Dec 27, 2009, Exiting the Trade, Part IV

This is the fourth part of a series on exit strategies for day traders.

Permalink -- click for full blog post "Exiting the Trade, Part IV"

Dec 27, 2009, Exiting the Trade, Part III

This is the third part of a series on exit strategies for day traders.

Permalink -- click for full blog post "Exiting the Trade, Part III"

Dec 27, 2009, Exiting the Trade, Part II

This is the second part of a series on exit strategies for day traders.

Permalink -- click for full blog post "Exiting the Trade, Part II"

Dec 27, 2009, Exiting the Trade

This is the first part of a series on exit strategies for day traders.

Permalink -- click for full blog post "Exiting the Trade"

Dec 8, 2009, BRCM "fills the gap"

12-8-09, 4:30 PM, ET

BRCM provided a good lesson today.

One of the things you watch for, when playing gap downs, is the point of resistance. How far will the stock recover after having gapped down? One of those places is when the stock "fills the gap", or goes back to the previous day's closing price.

While a stock does not have to stop at that point, it is often a point where traders take their profits. So, when they take profits, the stock falls back down.

This happened today with BRCM, just after noon. The stock filled the gap, with the strength indicators maxed out, and then it fell back. For those who are following me on Twitter, I sent the chart out around 1:00 or so.

So, while this point of resistance doesn't happen every time, it is something to watch.

Hope you had a good day of trading.

Dec 7, 2009, Ahhh...computers

12-7-09, 5:00 PM, ET

I think most of us probably have a love/hate relationship with computers. They are wonderful when they work properly, and terrible when they fail us.

I'm sure most of you have vivid memories of a computer crashing when you've got an open trade, a grandson turning the off button, or whatever.

I am not a computer geek...at all. I use them. I depend on them. And it is very frustrating when they fail.

We had some technical difficulties with the chat rooms this morning. I really don't know much more than that. But I know some of our members read this blog, so I thought I would at least empathize with you. All I know is that they are being fixed.

The good news is that it wasn't a real exciting morning in the market anyway. My best play was a short of BARE, in which I made 3% - even though I should have made more than that.

I was also holding a short term short on HCP. And it tumbled nicely when the market showed some afternoon nervousness.

Anyway, hopefully the server will be repaired soon. Sorry for the inconvenience. But I hope you had a good day of trading anyway.

Dec 3, 2009, FAS/FAZ

12-3-09, 6:00 PM, ET

If you want to see what happened to the market today, take a look at the charts for FAS and FAZ. They depict the turmoil in the financial sector today.

FAS, after moving up to $79 again, fell roughly 10% after that. Just one more good reason to treat this ETF as a day trade, not a long term hold.

Hope you had a good one.

Dec 1, 2009, NLST - long and short

12-1-09, 4:30 PM, ET

Played NLST both long and short today, going for 8% in both directions, with 5.35 and 5.82 being the boundaries.

You might think this is unusual. But it's not. While most traders stop looking at a stock once they've played it, the same stock can present multiple opportunities. In the case of NLST, it ran up to the Fib line, showed clear resistance when the strength indicators maxed out, and then retreated back to that original entry position.

Some stocks will present multiple plays in the same direction. This allows you maximize the short term play, take profits, and re-enter the trade from a new entry point.

Posted a Twitter chart today of AIG, for those who are following me on Twitter. (Don't worry, I don't post when I'm brushing my teeth. Just good info.) You might have to use the vertical scroll bars at the bottom of the chart to see the circled entry.

Hope you had a good day of trading.

Nov 30, 2009, The Long and Short of It

11-30-09 4:30 PM, ET

A nice way to end up the month. Two of our chat room trades had over 12% potential profit each. AIG was a short early in the day after an analyst downgrade and some other bad business news. A 13% short profit potential there.

SEED showed support at the Fibonacci line and ended up with a 12% gain on the long side.

So, one short and one long, both on the same day.

Hope you had a good day of trading.

Nov 24, 2009, Swing Short

11-24-09, 4:30 PM, ET

I haven't had the chance to write in the blog much lately. I've been busy testing some new criteria for doing very short term swing shorts. This is where you short the stock one day and cover within the next day or two. And the results, so far, are very good. You can take a look at CYBX, JST, & CMFO, with an average gain of 4% in just one day. Not bad. Swing shorts allow traders (who do not have the equity qualification for day trading) to still trade and make good gains.

Sometimes, of course, brokers aren't very good at allowing shorts. SEED was an example of this today. Not all brokers had stock available to short, even though it made over 10% profit in just one day.

But, if you're going to trade stocks for a living, then you need to be able to short stocks. You don't want your broker trying to filter your trades. So, if you're having trouble with your broker, you might have to experiment a bit and find one that works with you. Yes, it's a hassle to change trading accounts. But it might be worth the change. You can also have money with several brokers. Just an idea.

Hope you had a good day of trading.

Nov 19, 2009, Diamonds in the Rough

11-19-09, 5:00 PM, ET

A rough day for the market. But a great day for trading.

On the day trading long side, TSL was our best play in the chat room. After a terrific quarterly report and getting blasted by the market's early pounding, this was a diamond in the rough. Ended the day with a possible 8% gain.

On the swing trading short side, I identified the shipping sector yesterday as ready to pull back. Their one-day swing short average: 8.5%. (Check out GNK, FRO, EGLE, and DSX).

Hope you had a good day.

Nov 18, 2009, Curb Your Enthusiasm

11-18-09, 4:30 PM, ET

I've never watched the TV show by that name. But the phrase seems particularly applicable to stock trading.

Leading a chat room of 200 people is not easy sometimes - especially with many new members on board. It takes time for new members to get acclimated to a new environment. There is much to learn for everyone.

But one of the things that can help is to take the emotions down a notch.

Emotional trading may feed the need for stimulus. But it seldom works in your favor. More analysis and less emotion is usually best. But the management of money can bring out all sorts of emotions in folks, with the two biggest being fear and greed of course. Throw in a good dose of ego, the fear of failure, and the desire to win and you've got a powerful cocktail.

So, just a suggestion, but if you find your emotions playing too large a part in your trading, then exit your trades and go for a walk. Cool off a bit. The market will still be here when you get back. And maybe you'll be a little bit calmer.

Other than that, I might suggest using less equity on your trades. Somehow, using less money can also help lower the emotional involvement.

Hope your trading is going well. I posted two more trades on twitter today. You can use the parallel vertical bars at the bottom of the chart to scroll back to the time mentioned in the message.

Nov 11, 2009, Stocks on Twitter

11-11-09, 4:30 PM, ET

Another fun day today. One of my best plays was GNK. My entry was 22.06, after the stock gapped up, which is always a little risky. But, my reasoning was that it would continue to ride the strength of the forward looking comments from FedEx. GNK went on for about a 7.6% possible profit - if you held long enough.

In the afternoon, ADBE made a nice recovery. I put a chart on twitter this afternoon for that one. You can click on the link in today's blog to see my twitter page. From there, just click on the left portion of the link in today's entry. You can then use the vertical bars at the bottom left of the chart to widen the time frame of the chart. Drag it out to around noon and you'll see my circles.

You can also sign up to follow me on Twitter (for free) and see charts like this as I post them.

Hope you had a good day of trading.

Click for more info

Nov 9, 2009, Asset Allocation for Day Trading

11-9-09, 4:30 PM, ET

What impressed me the most today was the fact that we did not sell off at the end of the day. Not only was it a very bullish day, but traders did not sell off at the last minute. This shows a lot of confidence in the future of the economy and in the market itself.

In case you're not signed up for my ezine, then today's blog includes a link to a new web page on asset allocation. Yeah, I know. Not a real exciting topic. But it's one I get asked a lot so I figured I'd go ahead and address it.

Hope you had a good day.

Permalink -- click for full blog post "Asset Allocation for Day Trading"

Nov 7, 2009, Asset Allocation Part I

Determining asset allocation for your day trading activities? Part I.

Permalink -- click for full blog post "Asset Allocation Part I"

Nov 7, 2009, Asset Allocation Part II

Determining asset allocation for your day trading activities? Part II.

Permalink -- click for full blog post "Asset Allocation Part II"

Nov 6, 2009, Surprised

11-06-09, 4:30 PM, ET

I was surprised this morning. Watching the pre-market trading, I thought it might get ugly today as the market digested the employment numbers. But it bounced back abruptly, showing a lot more resilience than I expected.

It's a good reminder: trade the charts, not the news. Never assume that you know how the market will react to some bit of news. Even the market's reaction to a quarterly report is difficult. IGT gapped up on a bad report. PRX fell down after a good report. Go figure.

Hope you had a good day of trading and enjoy your weekend.

Nov 5, 2009, Shooting Fish in a Barrel

11-5-09, 5:00 PM, ET

I don't know if that's a Southern expression or not..."shooting fish in a barrel". I've never shot a fish in my life. The idea, of course, is "it doesn't get much easier than this". And, on a good day, day trading can feel sort of like that.

Of the four trades in the chat room this morning, all of them hit their target with a combined possible profit of about 12% - depending on your exit strategy. Of course, it always seems a bit easier to trade when the market is in a rally. Even so, HURN provided a nice short for about 3% profit.

In case you want to try out the chat room (just hang out for a week and make some money if you want to), then I've provided a link in today's blog. We've opened it up for just a few days. So, this is your opportunity.

Hope you had a good day of trading.

Click for more info

Nov 4, 2009, When the sidelines are...

11-4-09, 6:00 PM, ET

Sometimes, the sidelines are the best place to be. That's my feeling about trying to trade during Fed announcement afternoons. The market can be so volatile during that time. So I sat out the afternoon session. You never know how the market will react.

Today, after a brief endorsement at 2:15, the market sold off and erased virtually all of the morning rally. And after trading on hope in the morning, the market turned to fear and uncertainty in the afternoon. If you were holding some shorts or some bearish ETFs (FAZ), then it was a great opportunity.

The morning session was somewhat easier. But, even there, I was happy to make several short term 1% plays.

That's the great thing about day trading. You can choose when to play the game.

Our MorningHoursTrading chat room opens up for two days starting tomorrow morning. If you've been wanting to get in, then this is your opportunity. You can click on the link in today's blog to get in tomorrow morning.

Hope you had a good day of trading.

Click for more info

Nov 3, 2009, Pushing Off 9700

11-3-09, 4:30 PM, ET

For three days now, the market has used the line at 9700 as a line of support. I mentioned, in yesterday's blog, that the market might be finding some support. And today's action sort of confirms it. But I will see stronger evidence once we stay above 9825.

Another good day in the chat room. Our entry of GNW at 9.84 and BEXP at 9.54 both produced possible profits in the 9-10% range...for those who could hold on that long.

It just seems to be part of our problem as day traders. We have had the rug pulled out from under us so many times that we tend to take profits too early. One way to avoid this is by using larger time windows for our charts. You can also use moving average crossovers and multiple exits. All of these strategies can help you manage the trade for larger profits.

Hope you had a good day of trading.

Nov 2, 2009, Finding Support?

11-02-09 5:00 PM, ET

After following the downward market spiral that started around September 16th, the market may be trying to find some support here. Too early to tell for sure. But we've had some good economic news lately, and that has reassured investors that maybe it's okay to buy stocks again.

FAS has lost a lot of ground during that time. And it looked like it might sink further today, after Jon Greenlee announced that banks are at risk with commercial loans. (I think we knew that already. But having a Fed official say it sounds a little more ominous.)

But FAS rose back up later in the afternoon and the daily charts for FAS also make me think that stocks are ready to rise again.

We'll see. In the meantime, plenty of day trading opportunity. NTES made a nice 4% long play in the morning, and PALM fell back for a 7% short play in the afternoon.

Hope you had a good day of trading.

Oct 29, 2009, A Perfect Storm

10-29-09, 5:30 PM, ET

Today was the perfect storm. Combine good GDP data, with good employment data, throw in some good quarterly reports, and let it come on the heels of a lot of short selling, and you end up with a rally like the one you saw today. Kind of makes you forget about the tough days we've had over the past week.

The "pretty play of the day" was MED for me. A possible gain of 10% on the heels of their excellent quarterly report and several days of short selling. AVP was another pretty trade too. And let's not even mention FAS. Some very sweet, money making plays today. Now we'll see what's next.

Hope you make lots of money.

Oct 28, 2009, The Power of Fear

10-28-09, 4:30 PM, ET

Though the market declined again today, there was ample trading opportunity...even on the long side. All four trades in the chat room hit their targets. And two of the longs, COCO & UIS, created potential profits of up to 6%.

But you have to be careful trading long in a market like this. Shorts are the easiest trade of all. And for several days now you could just jump on the ETF bear band wagon and ride it to very nice profits (i.e. BGZ and FAZ).

Just goes to show the power of fear. That's what causes a sell-off like the one we've seen in the past week. But, at some point, the market will level off, the short players will have to cover their shorts, and we'll have a huge rally. Just don't know when that will be. The DOW pierced the September high line I've been watching. The S&P had already done that. Where we'll go from here is anyone's guess. But, earnings reports and government reports could offer us more guidance tomorrow.

Hope you had a good trading day.

Oct 27, 2009, It Ain't Always Easy

10-27-09, 7:30 PM, ET

Thought I'd use a little bit of my southern slang to express myself. "It ain't always easy." I'm talking about trading, of course. And sometimes, it just feels like work.

That may be news to some new traders who've been led to believe that trading is an easy, get-rich-quick game of monopoly. But the last several days of trading have been choppy and dangerous. And, for the novice trader, it can be a difficult time to try and get started.

So here are some suggestions. Limit the number of trades you make. In other words, don't try to make up in quantity what you lack in quality. Second, limit your equity exposure. This means "use less money" on each trade. That way, your losses will be minimized. Third, don't throw away your proven strategies just because you've had a few bad trades. Choppy markets can play havoc with the charts. You can get faked out left and right by stocks that appear to be headed one way and then suddenly change direction.

So, just a few suggestions to help you keep from losing too much money. The good news: tomorrow is a brand new day. Never judge your success by a single day or a single week - good or bad. But always reflect on how you could have done better.

Hope you have a good week of trading.

Oct 23, 2009, Same Pattern, Different Day

10-23-09, 4:45 PM, ET

Dito. That's all I need to say. If you read the last two blog posts, then this one's not much different. FAZ on Wednesday. FAS on Thursday. FAZ on Friday. If the market keeps this up, then you can be rich just playing the ETF S-Curve.

Some chartists are trying to make a big deal out of the market's failure to go higher this week. I don't know if that is merited. It could be just the same old consolidation pattern we've been seeing for months now. Market moves up. Market consolidates after getting paddled back and forth. Market moves higher. I don't know if that will happen this time or not. But I'm not going to hold a bunch of shorts and count on the market selling off. I'll just keep on playing both sides of the street.

Hope you have a good weekend.

Oct 22, 2009, And the mayhem continues...

10-22-09, 5:30 PM, ET

This market just cannot figure out what it wants to do. Up then down. Down then up. Big swings, all in the same day, going nowhere at all. It's like a ping pong ball getting paddled back and forth between two points.

The trick, of course, is to watch the overall market and play along with it. I call it Contextual Trading. And I talk about it in the video course. But one part of it is keeping a chart open (at all times) of the overall market and charting it just as you would any other stock. Doing this, you can use big ETFs (like FAZ yesterday and FAS today) to make huge afternoon profits. (Of course, the market will probably do something different tomorrow.)

I've got to brag a bit here. Out of 14 trades in the chat room this week, 13 of them have hit their targets. Not bad. (About 93% accuracy.)

Hope you had a good day of trading.

Oct 21, 2009, A Schizophrenic Market

10-21-09, 4:30 PM, ET

Probably a lot of people scratching their heads after today's market. "What the heck?"

That's why I'm calling it a schizophrenic market, marked by confusion and disturbing behavior. Or maybe I should just call it the mutliple-personality market.

Anyway you look it...funny that CNBC just commented on the low level of the VIX, and then the market dropped like a stone at 3:00.

So what's going on? My feeling about the morning rocket (see CYMI's 8% gain in just 15 minutes!) is that it was largely fueled by nervous short covering..which begets more short covering, which begets trading long, etc. But, after that rush subsided, there was no one left to prop up the market. And the negative, unsure sentiment that has been brewing for days came back in. And as the market creeped lower, people started bailing...quickly. That's my take on it anyway.

So, we are left with a market below 10,000 of course and a lot of uncertainty.

Works for me. FAZ had a beautiful run in the afternoon session.

Hope you had a good one.

Oct 20, 2009, Slice & Dice

10-20-09, 5:30 PM, ET

Repeat after me: "choppy markets ahead...proceed with caution".

This morning's trading activity was very jumpy. It's easy to see stocks that are getting ready to rise...then suddenly jump back. So, if you're fairly new to trading, realize there are going to be days like this. And proceed with caution.

There are a couple of things you can do. One, use less equity. Especially if you're new to trading. You don't have to use the same amount of equity on every single trade. If the trade is risky, then scale back a little bit. There's no one standing over you saying you've got to be fully invested every second of the day.

The second thing you can do is to use a wider time frame on your charts during choppy times. For example, if you usually use the 5-minute chart, then try using the 10-minute chart. It smoothes things out a bit and can keep you from getting jerked around as much.

The third thing is strategy. But I don't think I need to expand on this one. I talk about it all the time.

Hope you had a good day.

Oct 15, 2009, Ask Bob ...

10-15-09, 6:00 PM, ET

A fun day in the market today. All five trades in the chat room hit their targets, with CETV making up to 6% profit. Of the 10 trades in the past 2 days, only one missed its target - by a penny. Not bad.

As I continue to talk about earnings trades, it also occured to me that some of my readers might have questions they'd like answered. So, here's your opportunity. It doesn't have to be about earnings. But, you can click on today's blog link and go to the bottom of that page to fill out a simple form. Ask a question about trading and I'll see what I can do. I might come up with some short videos.

Hope you had a good day of trading.

Permalink -- click for full blog post "Ask Bob ..."

Oct 14, 2009, Earnings Energy

10-14-09, 4:30 PM, ET

I've been talking about earnings this week. After seeing today's results, you probably think I'm crazy for suggesting that you sell the stock prior to its earnings report. But, the suggestion is meant to keep you from risk. You can never predict the report, nor the market's response to it. But you can trade the charts that lead up to that report.

JPM and INTC, of course, gave a lot of energy to the markets today. For a while there, I wondered if we could cross the 10,000 line or not. But, we finally got there.

Does that mean the market cannot dip back below it? Absolutely not. We take it one day at a time.

Did the market exaggerate the good news? Possibly. But these are two major companies in two major sectors, so the news is very hopeful.

In the chat room today, I did 5 trades and only one missed its target - by a penny. BMTI was the largest, with a 7%+ possible gain. But CBS wasn't far behind with a possible 5% gain.

Hope you had a good one.

Oct 13, 2009, Earnings Calendar Tips

10-13-09, 5:00 PM, ET

As the market continues to digest the earnings reports, here's another tip about how to play them.

Some (not all) stocks rise into their earnings reports. An example from yesterday is JNJ. But the market was not happy with their report this morning, and the stock dropped terribly. Same thing happened with FAST the other day. So, the moral of the story is to ride the stock until the day prior to earnings release date.

Sometimes, a company will have a positive report and the stock will continue to rise. INTC just reported and prices are up about 5% right now. But holding the trade into the report is a risky trade in my view.

Want some more examples? The following companies report tomorrow. Take a look at how they traded today. ADTN JMP LUFK ZEP.

The best short of the day was VNDA - 13% profit, if you could find the shares.

Hope you had a good day.

Oct 12, 2009, The Earnings Play

10-12-09, 5:00 PM, ET

I enjoy watching the list for earnings announcements. You have to watch the technical indicators to know when to buy or sell (as always), but it can create some nice day and swing plays.

Take FAST for example. FAST reported this morning. The stock rose about 10% last week, heading into the earnings announcement. The stock gapped up today, even though the company lost money in the 3rd Quarter. And then the stock dropped for the rest of the day, creating an easy 5% profit as long as you didn't cover too quickly.

So, a 10% swing trade followed by a 5% day trade. Not bad.

I'm mulling over some ideas related to this single strategy. But...no details yet. I'll let you know.

Hope you had a good day of trading.

Oct 9, 2009, Positively Predisposed

10-9-09, 4:30 PM, ET

That's my best explanation of the current market. We are drifting higher because we are positively predisposed. Or, to put it another way, we assume the market's innocence until proven otherwise.

So, until we get some sort of bad news, I assume the market will continue to drift higher. Personally, I pulled out of FAS yesterday, after a multi-day swing up. It ended up slightly higher than my exit today - but not by much.

So we'll see what next week brings us.

As far as day trading in this sort of market, you may not see the big % plays during this period. Grabbing those 1 and 2% gains as they appear is still doing pretty good though.

Hope you had a good week and you enjoy your weekend.