Margin Call Averted...For Now

It just doesn't get much closer than that! I had a scheduled margin call today with Think or Swim @3pm. I was told I could either A:) add funds to bring the account to positive, B:) liquidate positions to bring the account to positive, or C:) Take market action (trade) to bring my account to positive. By holding all my positions, I essentially chose option C. If today hadn't have been the tank it turned out to be, I my friends would have been SOL (and no, that's not a ticker symbol). Behold LULU, the main reason for the margin call (and what kept me from being liquidated today):

I'll see this trade through, but what a waste of time- not to mention missed opportunities like DFR (a stock that actually meets my strategy's criteria). Do I think LULU is headed back down? Yes. Do I think my initial resistance 'guess' could end up being support (thus making it difficult to cover for a profit)? Yes. Have I learned my lesson? Which one? Um...Yes. YES!! UNCLE!

Praying for discipline,

Evan

ps- PALM was up today (lovely- can the PRE phone just come out already so people can 'sell the news'). FAZ is rocking again, now that people are realizing the banks and financial sector may still be in trouble (big surprise).

I Love M&M's with Downtrending Heads

There were many great morning spikes to take advantage of today, provided you a: waited for the spike to top off and b: were patient enough to ride out the downtrend and/or 'M' shape (also known as a 'Double Top'). M&M's are not only one of the best inventions when it comes to candy (btw- have you tried the incredible new Premiums line?), but a nice technical indicator on a stock chart. One of my trades today, though currently going against me while holding, relieved my stress by revealing the 'M' pattern on more than one occassion. The tell tale chart below is of LULU, a stock I was initially notified about on Stack Your Cream's site (not sure the meaning of that site's title, but it definitely gets a laugh when you say it randomly/sternly to someone:) When viewing this chart, it's important to remember that the timeframe was intraday (and pretty much only good for scalping- which is great if you're not subject to the PDT Rule). You'll see in this post about PALM, though, that the pattern works on multiple timeframes. Anyway, here's the chart:

For info on 'Ms', check this site out. Peace,

Evan

Missed Money Is...

I know 99% of my readers know the ending of this saying ("Better than lost money"), but given my trades on JAVA today- I'm still apt to kick myself over missed money. JAVA is a stock I know all too well (unfortunately- having been a longtime bagholder last year before developing my strategy). When the rumor mill started working over time, saying that IBM wanted to buy Sun Microsystems (JAVA), the stock popped after hours like a misguided missle. This first chart is compliments of Stocktwits.com (If you haven't joined- it's a great Twitter-like tool used for stocks):

I can't tell you how I knew JAVA was going to see $7.85 today (that wouldn't help anyone learn a thing). I'll just say when I was scanning with Think or Swim for big % gainers, and JAVA showed up, I was immediately short-minded. I also knew, since this trade wasn't a perfect fit for my strategy, that I would have to let the price action/technicals decide JAVA'a fate for me. Since I'm home to watch the markets today, I decided to short and watch. Below is the chart showing my intitial entry, fearful cover, second entry (wanted blood!), and final cover for an overall profit (which you'll see could have been much higher):

BTW- as I'm typing this, JAVA is back at $8. You gotta be quick in this market, able to take small profits, and move on when a daytrade doesn't work out how you thought.

7pm Update- JAVA surged above $9

Any of you pirates have some cool trades?

Evan

PALM Reading (Part 2)

History repeats itself. We've always heard that, it's been documented countless times in various scenarios, and recessions come and go (this will certainly not be our last). In that light, I've decided to post a 5 year chart on PALM, showing a bit of that 'repeating':

Were the 'smile' curves necessary? Not really;) If this is a precursor of things to come (as price action/technicals will determine), PALM is most likely headed toward the $5 level.

If you're interested in professionals' opinions on technical analysis, I highly suggest you check out these videos by Brian Shannon. I'd like to thank Charlie G. for his blog (it's where I first saw a Brian Shannon video).

We Shall See,

Evan

ps- I was fiddlin' around with Blogger to see if there were any cool, new gadgets to put down the side of my page. I came across the 'plane landing' game- ridiculously hard! See if you can beat my score of 6 (fyi, I don't get paid if you play)

Watching Paint Dry

In case you're wondering, I'm still short 300 Shares of MAXY (and still have my GTC order to cover 200 shares at 7.90). It is down trending nicely (even if it's slooooow). There are a couple 'bearish' technical indicators that look promising at this point. I wouldn't even know where to begin to try and explain technical analysis on this blog (and don't have the time or the energy), so I'll just use links to the terms I'm referring to and charts to better illustrate my theories ('theories' meaning that I welcome other opinions). Below is a chart taken from Yahoo! Finance and given the once-over in Microsoft Paint. I've only added black lines to show the first bearish indicator of 'down trending' (when a stock makes lower highs and lower lows). The second indicator is MACD. You'll notice, if you click here and read the Wikipedia definition, that when the MACD goes below zero, it is a bearish signal. This seems to be about to happen to MAXY even though the price has held it's ground.



GERN is my next target, thanks to TIM for bringing this stock to my attention. Stem cell stocks are 'in play' right now (meaning this sector is pretty much en fuego, being both volatile in price action and volume). It reminds my of the late '90s tech boom, when every company (penny stock or not) associated with the Internet was blowing up (as detailed in Timothy Syke's book- An American Hedge Fund). Thanks to the new Obama Nation (abomination?), stem cell research has been given the green light. I would love to see a true 'Supernova' (see last year's stocks PDO and MXC for supernova-type price action) come out of this new 'gold rush'.

Happy prospecting,

Evan