Tuesday, March 17, 2009

Whats working?

I wanted to share some thoughts and notes I have been making to myself lately.  Specifically what has been working and what I am focusing on:

  • For my trading I have been having better luck with names that are having "different" days as opposed to high beta names that are "crowded."

    • special names lately: CEPH today, Education stocks, MCK & CAH last week
    • high beta/crowded names that have been hard: AAPL, MET, GS, BAC, PRU, etc...

  • Extra focus on timing - it has not been enough for me to trade the right names (above)...I have to have better than usual timing. 

    • Getting long CEPH today or getting short education stocks yesterday only worked with great timing. 

  • I have been focusing on $TICK.  I have been following Dr. Steenbarger's blog, specifically references to VWAP and $TICK.  The $TICK with a 10 period moving average is one decent indicator of the type of day we are having.  Notice in the picture below that the thin green line (the 10 period moving average) hovered around zero for most of the day - one indication of a range/slower market. 

    • Again this emphasizes that I need to focus more on timing and name specific trades


  • Lastly "chasing" has not worked.  For example on the open today the steel names and solars were very weak for the first few minutes.  After that it did not pay to pile in short to those sectors.  This morning I did not make a prediction they were not going lower.  But I did look at my notes and say that 1) chasing has not worked, 2) chasing early in day has not worked, and 3) timing is so important.  So I laid off these names only to reevaluate them later and decide they were not good shorts.  It did not seem like good odds to push my chips in.   I posted FSLR and the SLX (steel sector etf) charts below.