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Thursday, January 24, 2013

Rotten Apple

1/24 - SCTY 16.08 Half, now I have full position
1/24 - IBB 144.51
IBB - biotechnology ETF.
Building a bull flag, challenging last years high.
Not sure if this is a good spot to buy, it can correct to 140-142 and still look good. If that happens - this bull flag on daily chart will most likely morph into something else.
Watching 1st hour.
IBB sold off at open every day since 1/10 without exception. Change in this behavior will be a major tell

This rotten AAPL reported yesterday after close, and collapsed by 10% AH on pretty big volume.
I generally don't trade earnings and I haven't traded AAPL in a long time, but I really wanted to buy it yesterday thinking that it already fallen alot and bad news should be discounted by now. Guess not.

Also from yesterday:
ES open interest suddenly jumped to 2.9mil cars.
I maintain the view, that increase in open interest means an increased demand for shorts. I cannot believe this! People getting short into this non-stop ramp, or I am completely wrong on this "open interest" premise? I understand that correction of few percent will come sooner or later, but to make a short trade over past 2 days would require knowledge and skills I do not possess.
I haven't seen Mole's famous PF chart. Must be in sub-only section...
How long it can go on? I have 1600ish. Too high? Mole's 5 point PF target is 1690 and keeps growing !
This shit should be illegal, but it works
Until it doesn't
These two MA I have... they will cross again...someday...
Molecool pointed out:
 "Well, I checked a year ago and the P&F then was suggesting 1500+. So never forget that these are LONG term charts. A lot can happen in between."
I replied:
 Thats true.
My PF also had target of 1482, but then my MA's crossed and that would be an exit right before tax-day. ''Would" - because I did not use this chart back then. It became a part of my system last summer, thanks to you btw.
Point-and-figure charts from yesterday and rally in the beginning of last year :

Convictscott writes:
           ''The thing is that it is part of human bias to want to "get it right" and pick tops. It gives our ego a stroke. So for that (and other) reason the counter trend setups subjectively nearly always LOOK MUCH BETTER than the higher probability with trend setups.
It is extremely rare for a major top not to be retested. You should never get short a higher timeframe trend until this happens.''
Couldn't say it any better myself

Pearls of Wisdom of Jesse Livermore's fame:

"The game taught me the game. And it didn’t spare me rod while teaching."
"It sounds very easy to say that all you have to do is to watch the tape, establish your resistance points and be ready to trade along the line of least resistance as soon as you have determined it.
But in actual practice a man has to guard against many things, and most of all against himself – that is, against human nature."
"The game does not change and neither does human nature."

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