Three Black Crows flying over S&P 500

February 24, 2011

Extremely bearish pattern THREE BLACK CROWS has formed on S&P500 futures. Long positions should be watched closely as this pattern suggests more weakness ahead.

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US 10 Year Treasury yield – big range trading ahead

February 23, 2011

US Treasury yield seems to be caught in trading range 4%-3% as you see yield diverging and 200 MDA is flat which makes range trading more favorable is weeks ahead.


Cotton – Ascending triangle target reached

February 22, 2011


S&P500 – 12 WEEK UPTREND IS BROKEN

February 22, 2011

12 WEEKS UPTREND OF S&P500 IS FINALLY BROKEN AS THIS WEEK LOW IS LOWER THAN PREVIOUS WEEK ONE. WE ARE IN CORRECTION MODE OR MAYBE SOMETHING MORE. HOW LONG IT IS GONNA TAKE I DO NOT KNOW.


Sayonara Japan – CNBC.com

February 17, 2011

Sayonara Japan – CNBC.com.


Jesse Livermore’s trading rules

February 16, 2011

Lesson Number One: Cut your losses quickly.

As soon as a trade is contemplated, a trader must know at what point in time he’ll be proven wrong and exit a position. If a trader doesn’t know his exit before he takes the entry, he might as well go to the racetrack or casino where at least the odds can be quantified.

Lesson Number Two: Confirm your judgment before going all in.

Livermore was famous for throwing out a small position and waiting for his thesis to be confirmed. Once the stock was traveling in the direction he desired, Livermore would pile on rapidly to maximize the returns.

There are several ways to buy more in a winning position — pyramiding up, buying in thirds at predetermined prices, being 100% in no more than 5% above the initial entry — but the take home is to buy in the direction of your winning trade –  never when it goes against you.

Lesson Number Three: Watch leading stocks for the best action.

Livermore knew that trending issues were where the big money would be made, and to fight this reality was a loser’s game.

Lesson Number Four: Let profits ride until price action dictates otherwise.

“It never was my thinking that made the big money for me. It always was my sitting.”

One method that satisfies the desire for profit and subdues the fear of a losing trade is to take one half of your profit off at a predetermined level, put a stop at breakeven on the rest, and let it play out without micromanaging the position.

Lesson Number Five: Buy all-time new highs.

The psychological merits of buying all-time or 52-week highs are immense and shouldn’t be discounted as a part of your overall strategy.

Lesson Number Six: Use pivot points to determine trends.

When going long, traders are continually looking for confirmation by assessing the strength of a move. Higher highs and higher lows are a solid indicator that a current uptrend is merely taking a slight pause, and the odds of higher prices are in their favor. These same pivot points are integral to drawing support and resistance lines to give traders their line in the sand. Taken together, trend lines and pivot points can enlighten a trader to a change in momentum, which may change the character of a trade.

Lesson Number Seven: Control your emotions.

Our goal as traders should be to also make a critical yet honest assessment of the areas we can improve so the bottom line will support our claims of truly being seasoned traders. Adhering to the time-tested rules of Jesse Livermore would be a great start for anyone.

 


February 16, 2011

Kyle Bass Feb 14