QQQQ

[metro]

Well you may do fine shorting as it is near top band but not really overbought if you look at RSI and MACD. Many like to short break outs but in a bull market it is risky. The break outs this week are hot and heavy but not euphoric. If we get a pullback then another rally that can bring in the shorts - well when and if they give up and go long we van have a spurt that may be ok to short. I say - it may work out but to short when the market making all time highs uses money that could have gone into the stock taking off on the up side.

After 4 big days we will likely see a rest soon though Mondays at least usually start with a gap up.


The chart below does not move very much % so not much money per $ amount used either log or short but show this chart to folks and ask if they would go short or long.

[shawFund]

Long obvious wins this week. QQQQ gained 5% in 4 days and breaks out today with record volume.

[shawFund]

I would like to see an higher open on QQQQ, above $42, and then a close below $41.70, completely engulfing yesterday's white candle.

Completely misjudged the market.

I did not take any short position.

For the 3StocksOnFire portfolio, all longs won (2 so far), all shorts lost (5).
If we are fully invested this week for long, I believe that the potfolio may gain 5% this week.

Actually many stocks gained 20-30% during the last 4 days.

GOOG, SNDK, RMBS, ... just name a few.

May be next week, the market will take some rest. it is usually the case if the first week ups big after new year, the second week will be flat or down.

With earning season kicking in soon, the market will focus more on company's earnings and the earnings will be good, quite good in general.

Look at what happened today. TTWO warned yesterday and the stock went up quite big.

The US equity market did not give much return to long term investors in last 4 years.

DJ lost 1% in 2005. Actually, DJ did not give any return from the begining of 2000 to today  (6 years, no return).

[Lucas Scott]

The QQQQ gave its shorts the one-finger salute this week

David, I am glad you are flexible with your market strategy. You give your trades a little time to be right, but if they're wrong you usually accept it and move on.  That is a very hard thing for many traders to do!

There's a guy named Serven who ran an options trading group last summer. He was very bearish on the markets in May as the markets were coming off a bottom. He was inflexible through the summer, convinced he was smarter than the markets and that the markets would come around to his way of thinking, so he kept buying puts. By August his portfolio was down 80%. By September the site was gone.  By October the domain name was available for purchase ROFLMAO!!

[netfishmademerich]

There's a guy named Serven who ran an options trading group last summer. .... By September the site was gone.  By October the domain name was available for purchase ROFLMAO!!

ROTFLMAO BRAWAWAWAWA!!!  Tooo funny!

That's why options are dangerous and stops should always be used IMO.

[shawFund]

If I am not wrong, the purpose of our service is to identify momentum stocks (up or down) and try to get returns which can beat the market by a wide margin.

But two recent selections SPY and QQQQ are SP500 & NASDAQ index-bounded stocks.

They are not momentum type of stocks at all. 

It may be better if we can bet some sector index stocks such as gold sector index,
oil sector index, etc.

If we bet right, we may achieve much better return.

For example, OIL sector return last year is 40%, much better than NASDAQ and DJ.

But the best is to identify individual stocks with momentum.

Also I would like to suggest:

Can we reset our portfolio back to $100,000 begining from 01/01/2006?
This will allow us to count our 2006 return.

Let us start over again to play a new game.

[willey]

Hi folks,

From Ed Downs of SignalWatch.com...( a Dow guru that I respect )

<<Today's penetration of the upper boundary of the large narrowing trading range seen in the 60 minute and daily charts is a significant bullish development. However, a true bullish resolution to the long term consolidation pattern seen in the daily and weekly charts will not be achieved until the Dow can definitive strike above 10,960. Strength above 10,960 will result in 4 1/2 year highs and likely trigger a new long term bullish advance.

However, should the 10,960 resistance level remain intact, we may experience a sharp retracement back into the long-term consolidation range. Weakness beneath 10,830 will likely trigger a profound capitulation to re-test the 10,700 fulcrum support level seen in the daily charts. Weakness beneath 10,700 will mark a bearish resolution of the long term consolidation range seen in the weekly chart and could be the catalyst for a decline toward 10,400. >>

So, very short term, beware of possible whipsaws as the market penetrates 11,000, falls back & struggles briefly with direction...for those that think the NAZ would not be affected, you might want to re-think that notion...since so many short term traders are here, this goes doubly for them.

all JMHO...( but, what do I know?...)

willey

[owen654321]

Everybody here knows that trying to enter at the exact bottom of a falling stock frequently leads to bad things happening.

Conversely, trying to sell short at the exact top of a rising stock also frequently leads to bad things happening.

Why not wait for a trend to develop?

Being a contrarian trader, or being "ahead of the market" doesn't necessarily mean winning through anticipation and early position entry.... For instance, I remember the market at nosebleed levels during the internet bubble in, when was it... 99?  Most savvy investors knew there was little chance it would hold.  But the market didn't actually begin to plummet until tons of people became convinced that it COULD actually hold those high levels (and didn't want to miss out on the action).  I know a lot of the savvy investors who tried to anticipate the burst of the internet bubble but were too early.  They ended up losing money.  I lost quite a bit myself during those years trying to anticipate by shorting stocks I knew would fall.  Those companies no longer exist, but I still lost money because the share price skyrocketed and I had to cover my short position.  I'm sure I'm not the only one.

I don't see the well-educated investor yet convinced that these levels might hold in this market.  Many people are still betting against a rise, saying these levels cannot be sustained.  It sounds very familiar to me. 

When those same people start becoming convinced that these levels MIGHT BE SUSTAINABLE... that is when it is time to start entering on the short side   While those indications are fast approaching, we are not there yet, in my opinion.

Just my 2 cents... take care, and best of luck trading!

[valueseeker]

http://www.marketwatch.com/news/story.asp?guid=%7B7F7970F1%2D3FE5%2D4A4E%2DB71D%2D88E3204E7ABB%7D&siteid=mktw&dist=

We have heard the good news on the inflation and Fed notes. Whether we can sustain the bull run depends the earnings, and the 4Q report season starts from this coming Monday & lasts till mid Feb. I happen to believe the earnings were good in the 4Q.

[irod]

I agree with resetting the portfolios. They are not representative of our latest returns at all, and it would allow us to track 2006 better.

[netfishmademerich]

I also agree with resetting 3SOF Portfolio returns to 0 precent as of January 1.  New Year, new start.  I hope by the end of the year it will return several folds.

[1reilly]

ShawFund and irod
I agree that the portfolio should be reset. However I do not believe that David should revert to $100,000 dollars. The S&P index and Nasdeq should be reset to 1/1/06 and this years performance for 3StocksonFire should also start 1/1/06. Most services and all Funds price the portfolio to the close of the year. Open positions are priced to the close and for 06 results would assume a new cost basis. David could do this or just finalize his 05 return after he has closed out all positions established in 05. It would be improper to not continue to invest his accummulated cash. David invests a certain % of his assets in each position. We are expected to do the same. Members cash invested all vary but the % per recommendation is to be the same. I think changing the corpus would not reflect David's actual gain or loss and would become an accounting nightmare. However, what I have suggested is a one time pricing event to year end. David could then show annual performance and performance from inception to date. I highly recommend this because people looking at this site will want to see performance for 06 in defined numbers. How are we doing this year is what will motivate us all to stay involved with this site. The S&P started 2006 unchanged for the year and so should we. Let's find a few stocks on fire and get 10 or 20% ahead of the S&P in Jan

[metro]

Yes resetting gives a nice clean slate and since virtually all services go by calender year it will look better to reset now instead of in May. There were killer gains in 2005 so no need to ad to it.

It also shows openness. One site by very popular guy hides his results inside (as he averaged 2.9% each for closed trades) - another shows their audited on front page.

One site does it this way.



The dollar amount is meaningless I suppose, wether it be $200k or $20k the % gain is the important thing and when $ amounts are shown some people think it small and others large but all know how % related to their own personal portfoliojo size.


I personally book all open trades at the end of /start of year as I file taxes on a mark-to-market basis so have to do this. In this way you do not have any wash sales as they do not apply so you can take a gain in a stock one day and a loss the next with no problem. To file for this you can request it now with the IRS (for those that file in the USA) and it will apply for the year starting 2007.

[shawFund]

ShawFund and irod
I agree that the portfolio should be reset. However I do not believe that David should revert to $100,000 dollars. The S&P index and Nasdeq should be reset to 1/1/06 and this years performance for 3StocksonFire should also start 1/1/06. Most services and all Funds price the portfolio to the close of the year. Open positions are priced to the close and for 06 results would assume a new cost basis. David could do this or just finalize his 05 return after he has closed out all positions established in 05. It would be improper to not continue to invest his accummulated cash. David invests a certain % of his assets in each position. We are expected to do the same. Members cash invested all vary but the % per recommendation is to be the same. I think changing the corpus would not reflect David's actual gain or loss and would become an accounting nightmare. However, what I have suggested is a one time pricing event to year end. David could then show annual performance and performance from inception to date. I highly recommend this because people looking at this site will want to see performance for 06 in defined numbers. How are we doing this year is what will motivate us all to stay involved with this site. The S&P started 2006 unchanged for the year and so should we. Let's find a few stocks on fire and get 10 or 20% ahead of the S&P in Jan

I agree.

Just let David keep the current account balance and let it continue growing.

Normally, most portfolios keep two numbers: total return and annual return.

We can have the two numbers counted at the same time. That is, the total return since the portfolio started (April 2005) and monthly and yearly return starting 2006.

Investment is a long time race. Let us make this a long lasting success.

[Terliso]

I also agree resetting the 3SOF portfolio....start a new a journey