StockFetcher Forums · General Discussion · Do your DD<< 1 2 3 4 >>Post Follow-up
EWZuber
1,373 posts
msg #29141
Ignore EWZuber
10/7/2003 7:03:28 PM

Joe, you be sure and let me know next time you see a stock about to gap up like LOOK gapped down. I'll give you 50% of the proceeds.


JoeGrossinger
165 posts
msg #29142
Ignore JoeGrossinger
10/7/2003 7:21:40 PM

It's not a matter of a gap. The gap has nothing to do with it.
It's a matter of the chart being negative and unless you were short there was no reason to be in it.
A negative chart always has a chance to gap down, just as a positive chart has a chance to gap up.
You ought not be long in a negative chart.
Count the number of days LOOK was below the 20 DMA before the gap and ask yourself why you were in that stock and why you were surprised by the down gap.

Count the number of days LOOK was riding the lower Bollinger Band (20) and ask yourself what you saw in it and why you remained long.

It's not a matter of me being right and you being wrong.
I have lost more than enough money to take no joy in anyone getting worked over by the market.

It's a matter of knowing why you bought the stock and why you were in it yesterday when all indications were negative.
That is what it's all about.



jthehut
124 posts
msg #29143
Ignore jthehut
10/7/2003 8:50:32 PM

Zuber:
I get my support/resistance info off stockta.com
are their info accurate to use (not meaning are the numbers right, but are their numbers the right ones to use AND useful), and if not, where do you get support/res. info?
thx,
M aka jabba-the-hut
PS Picking bottoms is tough to do, but usually I'm trading in an "up" day on a stock that has had a "down-trend" ie 3 or sometimes more days of down-ward pressure (AREN'T I RIGHT, PEOPLE-IN-THE-KNOW?!?!?)


keithray
13 posts
msg #29144
Ignore keithray
10/7/2003 8:57:26 PM

Yes, I am new to this forum. Just thought I would 'wade' into the debate between Joe and Zuber.

With a quick glance at a 6 month chart, you can see that big gap down in early May, roughly speaking, the stock lost 40% of its value. And, then, there is another big down move in mid-August, where this stock lost over 1 point...and it was only a $4 stock. For anyone thinking of taking a long term position in this stock, that should have made them think twice. Yes, there is long term support at the 50 day MA. But, from a shorter term perspective, when looking at a one month chart, you will see that the stock is in a downtrend. Then, 8 days before the disaster, the stock had a day when it lost about 16% of its value. After that it consolidated for 4 days, and then started moving downward again. The fact that the stock had consolidated and then went down, should have been a warning flag to anyone, contemplating buying this stock.

A case can be made, when looking at a long term chart, that the stock might have been a good buy. But, the 40% gap down in early May and that other 1 point day loss, should have given anyone some hesitancy about buying this stock for the long term. For someone contemplating buying the stock for the short term, the 4 day consolidation, followed by 2 down days, should have been enough to cause them to rethink that buy. The last day before the disaster the stock moved upward on increased volume. Looking at the longer term charts, it would make some sense to consider this stock buyable. Zuber is right about this. But, it is the shorter term charts, for a short term trader, that are so troubling. Joe is right...the stock is in a downtrend. And, from a short term perspective, doesn't look like a good buy. If you are a short term swing trader, holding for a few days to a week, then the stock doesn't look promising at all. And, for a long term trader, those big gaps looks hazardous to one's wealth.

I have not intended to be critical of Zuber or his buying the stock. I tend to agree with Joe that before a disaster strikes in a stock that there are usually some warning signs. This stock exibited some warning signs. Of course, there will be times when there is no warning and no way to avoid a disaster in a stock. But, in the vast majority of cases, I believe the charts will give you a warning.




webviper
34 posts
msg #29147
Ignore webviper
10/7/2003 9:24:47 PM

I am new to the board but those 2 stocks i wouldn't have touched but everyone
has their thing put them in my trend software bcon has fairly decent day cycles
and u caught it in a GAP up DAY but look was flat as a pancake and had
been in a steady down down trend. (Flat scares me because they break either way
same way with bollinger band squeezes)

my travels on the net have been far and long looking for a decent stock picking
site and I think SF is above average for the flexability it gives. if u trade
a down trending stock u will most likely be in trouble at some point linear
regression is great for this if u dont have a trend software. trade off the bounces of the lower lr line in and uptrend.

I have watched and run many filters from here and worked on my own
Mika's last filter post is a very good filter (Mika if u read we need to catch
these a little sooner with the filter u had the price calcs in but since SF
is only end of day it might not be feasable ( am looking at 2 day 5min chart in
esignal) I did my mods to your and these are the 10/7 picks WMI,SCLN,00,GMT
any comments welcome (do not trade as i go through alot before i trade them!)


I mostly trade for the day and exit by days end and repeat
here are some of the stocks i made some off of not really looking for massive gains but steady results ( a profit a day keeps the doctor away) LOL

TMR,SONC,IVX,SLR,AGIL,NTBK,CRUS,MCRL,AMCC

any comments welcome






mika
131 posts
msg #29148
Ignore mika
10/7/2003 9:41:35 PM

Zuber,
Add this to your chart settings:
Draw Linear Regression Channel(60,1.5,1)

AND,
have a look here (pun intended) LOL
] http://www.sethi.org/investments/darvas/index.phtml

PS,
that CooKoo sly was aimed at Joe. He's way too serious sometimes. :)

Cheers!


EWZuber
1,373 posts
msg #29154
Ignore EWZuber
10/7/2003 11:06:06 PM

I apologise for the length. Its tedious to discribe a chart.
Joe
I believe you misunderstood where I took the position. I got in just a hair above trendline support. I didn't 'ride it down'. I got in this stock just hours before for a short term trade. Then just a few hours later in after hours the bad news hit.

I don't think that anyone so far has been able to articulate that all indicators were bearish or anything even remotely resembling that assertion.
So as far as I'm concerned Joe you havn't made your argument.
As I will show you my position was not whimsical.

As far as the recent downtrend the stock was in it was due to the fact that the weekly chart stochastics and daily chart stochastics had both become overbought and now had converged in a distribution phase ( or half cycle )and with the two both in distribution it was expected to see this kind of selling.

This is where I would like to address the astute observation by keithray about the consolidation period and the following resumption of the downtrend.

If you look at a daily chart you will see that slow stochastics had tried to cross over and begin a new accumulation phase on about 9/22.
It just couldn't get off the ground and instead of accumulating it ended up looking more like consolidation. Now switch that chart to Weekly periodicity and you will see that the reason for this is because the Weekly chart cycle was still firmly in the distribution phase. These longer term cycles typically have much more influence over a stocks performance than the shorter term stochastic cycles seen on the daily chart.

I have been seeing this very circumstance occurring over and over in the tech market lately and could probably show you hundreds of similar chart patterns right now. This is because most stocks stay in general phase alignment ( + OR - a few weeks ) with the NASDAQ which is just starting to go through the same situation right now. ( call me on this later please )

Just as a quick primer ( no pun intended ) take a look at the 1 year chart for QUIK. A tech high flyer.
Carefully looking at the stochastic waves on the daily chart for the period between 8/6 and 9/2. Notice how they didn't even go into distribution ( did not make a sinusoidal sine wave ) but instead dipped just a tad around 8/26 and began accumulating again?

Thats because Weekly chart stochastics ( a longer term wave ) was the driving force and 'filled in' the daily chart distribution phase of the wave with it's longer term accumulation phase. ( it is easier to see this with 2 charts open )

But now we have a problem for longs. By 9/3 both the Weekly chart stochastics and Daily chart stochastics are overbought and about to both begin distribution.
This convergence of distribution powers drives the stock down very hard. Now the waves that drove it higher together are now driving it down together.

In the time it takes to complete one Weekly chart stochastic half cycle ( or phase ) there will be about 1.5 Daily chart stochastic cycles.

So what happens now? On 9/5 the Daily chart shows an attempt at a fast line cross above the slow line, indicating accumulation is beginning. But what happens here is strangely familiar to what we saw on LOOK. The stock barely has much more than a bump and looks more like a consolidation than an accumulation phase.

Again, why? Just look at the Weekly chart and we see the same situation here with a Weekly chart stochastic cycle in distribution that is muting the daily chart accumulation phase.

NOTICE THIS IS EXACTLY THE INVERSE OF WHAT WE SAW DURING THE ACCULULATION STAGE.
ON 8/26 DISTRIBUTION WAS MUTED AND ON 9/16 ACCUMULATION WAS MUTED.

So the lack of spring you see in the last week or so of the LOOK chart was not a mystery to me, rather I had counted on it.

Had this bad news not hit, I still contend that this beginning new Daily chart stochastic accumulation cycle for LOOK would have driven the now oversold Weekly chart cycle back into accumulation just as it always has.

Notice that QUIK bounced up very well today now that the Weekly chart cycle is oversold. Todays action was the catalyst that drove the Weekly chart fast line to cross above the slow line. Indicating a new medium term cycle of accumulation.

Again I expect about 1.5 Daily chart waves to pass in the time it takes 1 /2 cycle of the Weekly chart wave. They are a bit off so these alignments only occur once in a while.

Since their relative phase relationships vary the combined waves become complex and create phase relationships between the two time periods that are not so easily defined.

I wish I could post charts. It would much less wordy.

To webviper

I too like to close my trades at the end of the day just because of things like this, but I have been forced to come up with strategies to hold over night positions.
Since I don't have $25K in my account the NASDAQ and SEC have limited my day trading ( rule 2520 ) to less to 4 times in 5 days. They want to make sure I don't expose myself to too much risk LOL!!!

I will concede to Mikas observation that this stock has a history of radical moves and I should have taken that more into consideration and will in the future.

Good discussion thanks guys.






EWZuber
1,373 posts
msg #29155
Ignore EWZuber
10/7/2003 11:16:46 PM

mika
I checked out that site and if I could I would post a chart and show you the remarkable resemblance between a chart using Darvas Box and a chart using Stochastics w/trendlines.


TheRumpledOne
6,358 posts
msg #29167
Ignore TheRumpledOne
10/8/2003 3:45:44 AM

EWZuber:

You hit Joe G. right between the eyes. You exposed him for what he really is.

Many people on this forum respect what you have to say and have learned from it.

But we have 1 or 2 "know it alls" who can papertrade with the best of 'em. But when it comes to putting their money where their mouth is, they excuse themselves from the competition.

I am just sorry I didn't post my "This may save you some PAIN and $$$$ Filter" on SF the same day (10/4/2003) I posted it on the Yahoo! Muddy Method board but I was in Cabo enjoying life (thanks to trading profits, not paper profits) and just checking emails when I posted it:

Fetcher[show stocks where ema(3) crossed BELOW ema(6) and Average Volume(5)
is above 50000 and volume above 50000 and close above 0.01
]



If you see the stock you want to trade on the list... you may want to
watch it closely... make sure it's green before you enter AND take
your profits quickly.

Of course, change the volume, days and price to suit your trading
range.

Had you "backtested" the filter you would have seen the LOOK 3x6 crossover (downtrend) back in September without a 3x6 crossover (uptrend) to confirm a safe entry. Also one may have wanted to enter closer to the bottom Bollinger Band on the year/week chart.

Don't lose your confidence EWZuber, hang in there, you have the knowledge and skills to trade with the best of them. Many of us have taken a big hit or two. Just dig in and find the next trade and the next...

MAY ALL YOUR FILLS BE COMPLETE.




EWZuber
1,373 posts
msg #29173
Ignore EWZuber
10/8/2003 9:39:43 AM

TheRumpledOne
I appreciate the encouragement.
Everything I have accomplished in life has only been through dogged determination.
I hang in there way past what would have driven any sane person to seek fulfillment elsewhere.
The 3X6 entry is probably safer in some respects but it is a lagging indicator, meaning that it precludes one from taking a position at support. So it's kind of a double edged sword.
Some of the best entries I have ever had were taken dead on support.
LOOK had already bounced up off of the supporting trendline and confirmed it as support.
You may not believe this but I strongly suspect that most of the announcements and press releases given by companies are not randomly placed.
Like a gap up that I predicted on RB for WDC. Didn't know what would fascilitate it but I knew it was a necessarry thing for the stock to go anywhere for a long time and the resistance ( think it was the 25 DMA ) was in a downtrend so it would not suffice as support if broken. A big gap up to new stable support was the only thing that would work.
Well, son of a gun the company came out with a press release the next morning that gapped the stock up above resistance and up to an area where it could find stable support. I have seen these things timed like this more times than I can count.

I suspect that the management at LOOK announced the contract loss where they did to let as many people out as possible and at the lowest price before bouncing up off of support and starting accumulation again.
These people know that if their stock price is going anywhere it is best to disillusion as few as possible.
Might sound far fetched and I wouldn't believe it had I not seen what I have.
Best of fortune.


StockFetcher Forums · General Discussion · Do your DD<< 1 2 3 4 >>Post Follow-up

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