The Downside Of Stop On The Close Only

We were stopped out of our position in FINL today with a loss of just over 21%.

This is one of the downfalls of using a stop on the close only as from time to time the loss
you take may be larger than the protective stop that was set.

This type of action however is more the exception than the rule and it is why I still continue
to use the stop on the close technique. There are many more times that this technique has turned a losing position into a winner, but from time to time you will get stuck, as was the case with FINL.

This is simply one of the risks that you take when using this type of protective stop.

Obviously if this makes you uncomfortable then the best thing to do would be to set your stop a bit wider to compensate for intra-day fluctuation.

20% In 7 Days Account

NEW ADDITIONS TO THE 20% IN 7 DAYS TRADING ACCOUNT

Moving Up The BlogElites Rankings

The Blog has broken into the Top 5 with BlogElites and I wish to thank all of you for your votes.

Please keep up the voting each day that you visit the blog and let's see if we can take over the #1 spot.

Remember, simply click on the BlogElites Icon, then Click Enter and Vote and go to the Trend Analysis LLC listing. Click on the link to vote and you will be brought back to the blog after your vote.

Equity Market Comment 12/27/2007

The action today was a bit more than I had anticipated, but it is about to either confirm or deny the intermediate term scenario.

There is a real possibility that the entire short term correction I was anticipating was either completed or almost completed. While there remains risk all the way down to 1468, there are some strong indications that the 1475 level should hold.

The market is going to let us know very shortly whether or not it wants to continue the rally off the 1436 low point. Seasonally we remain in a strong period and this should serve to put a floor under the market.

In a nutshell, while the market got hit with some selling today we still remain in a buy weakness mode.

PIVOT POINTS - AN IMPORTANT TOOL FOR INTERMEDIATE TERM TRADERS AS WELL

BELOW IS THE 1 MINUTE CHART OF THE PIVOT POINTS APPLIED TO THE S&P 500.

INTERMEDIATE TERM TRADERS WOULD BE LOOKING AT NOT JUST THE DAILY PIVOT POINTS BUT THE WEEKLY AND MONTHLY PIVOT POINTS AS WELL.

I WILL BE STARTING A SERIES ON PIVOT POINT TRADING FOR INTERMEDIATE AND LONGER TERM TRADERS.

THIS SERIES WILL REVIEW THE INTERMEDIATE TERM PIVOT POINTS EVERY FEW DAYS OR AS NEEDED.

PLEASE REMEMBER TO CLICK ON THE BLOGELITES ICON AND CAST YOUR VOTE!!

Equity Market Comment 12/26/2007

The premise of buying weakness seems to be working very well, especially on the day trading side. The early morning weakness led to a pretty good level to purchase long positions and then ride the market back to slightly positive.

Currently we may be fairly close to a short term high point although there still remains potential all the way up to 1515 to 1521 before a short term correction is put into place.

I will begin to take some of the short term profits off the table as we work our way towards the short term upside. The market remains in a positive seasonal pattern over the next two days so higher prices remain the highest probability. These prices however will come with more effort and not the sharp rally days we have seen recently.

These reductions I will be making in equities are for short term traders only. Intermediate term traders can use the potential corrective weakness as a platform to increase their exposure to equities.

The market on an intermediate term basis remains poised to have a very sizable rally for the month of January and part of February.

The wedge on the 5 minute chart will give us an indication as to the next short term move in prices. There is also a shorter term pattern forming as well and this is illustrated on the above chart.

Daily Equity Market Comment 12/25/07

While I do not anticipate the momentum of prices to continue as strongly as it has the last two days prices the trend over the short term is up.

The next 3 days have a very high probability of higher prices and if I am correct then the remaining days of the month should continue to rally. I also am looking for a very sharp upward January as well.

We have some good returns on the aggressive 20% in 7 days and some so-so numbers on the aggressive short term trading portfolio.

Equity Market Comment 12-23-2007

Friday had some very strong momentum and seems to add credence to the scenario of the intermediate term low being in place and a potential powerhouse rally underway.

The put/call ratio on Friday needs to be thrown out the window because of option expiration.

Momentum is in the early stages of turning up so there is some real confirmation of higher prices here. We also have the day before Christmas having an astounding probability of a rally day when the previous 2 days were up as well.

We remain in the buy weakness mode and will shortly be bumping our equity allocation up.

Take a look to the Aggressive Equity Account and the 20% in 7 Days account for some pretty good hits.

As a side not, I will be phasing out the commodity section of this blog and make it an equity only blog. I will be putting together a separate commodity oriented blog over the holidays.

I will not be day trading tomorrow, but I will be back at it on Dec. 26.

I wish everybody a VERY MERRY CHRISTMAS and remember that this is a time of reflection and change.