The Novice Bear

I’m off to New Orleans for a conference. 

Its Arrmegedon everywhere, but we’ll see if the market cares about Arrmegedon at these lows.

Here are some buys I made recently.  The breakouts look like they are holding.  I only put on half positions and will add as the market strengthens. 

I noticed on StockBee that Pradeep has given his all clear for the market.  I completely agree and, even thought the S&P 500 still looks flat, the internals of the market continue to get stronger.

For more explanation about the plot below, check out this link. 

While the market was falling apart I picked up some shares of CSCO as it completed a perfected TD Sequential countdown.  The entry point was very close to the stop-loss so I didn’t worry too much.  (That is what is so cool about the TD Sequential and Combo, they have well defined risk)  The trade didn’t work out and I was stopped out for a small loss. 

The other day I pointed out that CSCO finished another TD Sequential just as an analyst upgraded the stock.  After the post pop sell-off occured I couldn’t help but pick up some July CSCO in-the-money calls for 3.50.  Thanks to better market conditions, I’m sitting on some big gains right now with those calls being priced at 4.80.  The really cool thing is that I expect to see CSCO’s price to reach 27.50, which would mean a call price of around 5.80. 

I’ve been playing around with WordPress and I’m thinking about moving over permanently. Go check it out and tell me what you think.

http://novicebear.wordpress.com/

Blocks 3.0 offers the zig-zag swing indicator but doesn’t allow you to look into the code. I was interested in this because I’m trying to reproduce Jan Arp’s Trender.

What I did was to translate a piece of EasyCode into VB.net from “New Trading System and Methods”.

First thing to do is to create a new code block. Then, insert the Kswing code (found at the bottom of the page).

Now create the block diagram given in the white box and off you go. Change the integer number to change the sensitivity of the swing points.

The market internals continue to heal even though the indexes flatline. Keep a lookout for those new leaders.

The Lake Michigan shore has beautiful ice formations this time of year. The clear area in the picture is solid ice. The tide pushes the ice up onto the shoreline and creates amazing features.

Click on the piture for more detail.

This is my wife Becky.

It is always hard to time trades based on sentiment, but since I’m bullish (at least for the next few months), I thought I might back up my position with a look at the AAII sentiment survey. The red plot is the 10 week adjacent average for the AAII bull-bear spread, plotted along with the weekly close of the S&P 500. I think it is pretty amazing that the difference between the bulls and bears (with the bears outnumbering the bulls) is greater than the lows of 2002 and 2003. They say that sentiment indicators do not work unless they are reading extreme levels. If this isn’t extreme, I don’t know what is.