The Trading Digest

FSLR will be an exit at the open today in the shorts are long portfolio.

Remember the coded exit is a close above the high of the previous two days. With yesterday being a big up move and the futures up big so far this morning I’ll wait for tomorrow at least to stick in a replacement.

Have a Great Day!

Dave Johnson

We will exit MDRX at the open tomorrow. See how this mechanical stuff works? It closed today above the highs of the previous 2 days. That is the exit. Simple and unemotional. We’ll do that over and over and see what happens.

The new entry will be KWK a pick sent from a reader of the blog. Looks pretty darn nasty.  We’ll add it to the portfolio.

I also wanted to note the huge Naked Close Reversal that occurred at todays low of the day on a 5 minute chart of the SP-500 futures. It is denoted with a close above or below an an obvious breakout point. In this case below. These typically occur on big volume, near psychological woosh points, in areas of obvious stops, and in very rapid trade. In this case it was defended throughout the rest of the day.

Have a Great Night!

Dave Johnson

http://www.slopeofhope.com/2007/07/a-great-day-exc.html

AKAM it is. We have one portfolio slot open.

Watch the bonds. They were earily silent yesterday.

Have a Great Day!

Dave Johnson

Crox will be an exit for tomorrow from our “shorts are longs?” portfolio. It’s closing price today is above the high of the previous 2 days. That’s all that’s needed to trigger the exit, and we will exit at the open tomorrow. For my new long entry we’ll use CAH which I picked up from a post over at the Slope of Hope.

Also in the trading room today it was insane. Too many stragglers, strangers, freaks, nuts and freakazoids you could imagine. It will now be password protected. Regardless of the interruptions I had another great day.
Email me at dayvejohnson@gmail.com if you would like the password.

Have a Great Night!

Dave Johnson

I will be adding CROX and FSLR to our 5 position portfolio. This will bring out number of holdings to 4 out of a possible of 5. Keep the shorting ideas coming. I will need them everyday. The portfolio will reflect todays changes.

Have a Great Day!

Dave Johnson

After such a large down day I will want to add 2 positions to our long only portfolio of 5 potential holdings, derived from other websites’ short recommendations. So do some research and forward me links as well as you own ideas before Monday. Today being down so much should provide plenty of fodder for the ugly ugly chart patterns.

If you don’t wish to leave a comment you can always email me directly at dayvejohnson@gmail.com

This was a good week for intraday trading in the chatroom. In the room I have only been posting my major intraday turn calls. These will trigger on average about twice per day. For those that have been there the past two weeks I think many myths have been dispelled and a good deal of money made on very few trades. In the spreadsheet we used to track live trades you’ll see some 3 and other 4 position trades in the SP500 futures contract. Those positions sizes are my call and it make it easier for new users to scale out like myself. I trade 3 times the base multiple so my take on this very specific setup was around $4400. Not bad for 7 trades.

Again I need you guys to find me short setups and send them along.

Have a Great Night!

Dave Johnson

Anyway I had some good personal submissions for todays short candidate. I saw a couple that had market caps the were a bit small. The one I have settled on is HSY. Man that chart is worse than a chocolate bar on a hot sunny day. Awesome. It will be added to the long portfolio. Remember the exit……

You guys have got to get me links from other sites. User submitted short ideas are good but having hard links is even better for posterity stake.

I received some emails saying this exercise is a sign of bull market mania. Nothing could be further than the truth. I want to show you a system, with specific exit and entry rules. I have tested this system over many many years. It works in bear markets quite well too. The only variable that I am unsure is how the grabbing of others shorting ideas will impact the system. I suspect the performance will be quite good. Maybe we’ll actually outperform the major indexes. This is going to be fun regardless. The exit is one that is so simple, but it is one John and I have found to be extremely powerful when buying those long red bars downward. The component that I want you to watch is exposure. Watch how the system lessens exposure as the market has the inevitable pop up days. Especially when it has 4-5 holdings. As in backtesting you have to choose how much money to allocate and how many holdings this will encompass. 5 holdings in this live test is quite aggressive. But this is purely an educational fun exercise. Let’s see what this little monster does. Get me those links!

Have a Great Day!

Dave Johnson

I have created a public Google Spreadsheet that will list all the trades from our anti-short system.

Thanks to George getting me started with some shorting candidates from Seeking Alpha in the comments of the last post. Our first long from that list is MDRX (lower highs). Remember this is a 5 position portfolio and this is only our first entry - so we will be at 20% exposure (this is important).

I will need lots of yucky charts from the readers. I may need to just use reader submitted ideas if we can’t find enough candidates from other sites. Keep them coming.

I will use the opening price that is published for each entry on both the entry and exit. So now I ask you - what do you think the performance of this system will be?

Have a Great Day!

Dave Johnson

I have for a long time debated with readers, colleagues, and peers over the use of shorting. I at one time I had an open invitation to anyone to give me the parameters or rules of a shorting system for individual stocks that held in the swing timeframe (1-10 days) - that resulted to anything close to solid results. Anyway I have yet to see one.

This led me to an idea. I would like you the readers to send me links from other blogs and mainstream websites that list potential shorting candidates. I will then take these stocks that are setting up as potential shorts and play them to the long side. I will run a little 5 position portfolio just like I did on the old blog. I am working on getting a stocktickr.com portfolio setup so you can follow along.

I think ultimately the concepts that I may prove are a consistent exit is very powerful and the negative pessimism adds potential fuel to the upside. On all of these trades I will use the exit that I have mentioned here frequently - the close above the high of the previous 2 days. For the purposes of this little fun experiment I will focus on stocks with higher market caps. Lets just say Russell 1000 type material for now. I do not want to make this work for me so please this is just for fun with no disrespect to the originator of the shorting idea. Ultimately the trade may work in their favor.

I will need your help. Please Please help me find candidates that are out there. If I don’t have short ideas coming in from you that you see out there I will never be able to keep up with the number of holdings we need. The worse the chart pattern the better. The one rule I will likely add is that I will want a down day before I enter at the market open the following day.

So get out there and get me some really really bad ideas - I mean it c’mon the worst!. Maybe we can have a trade for tomorrow. Just leave a comment on one of the posts or email me directly at dayvejohnson@gmail.com

Have a Great Night!

Dave Johnson