I did not identify the pattern in IBM today until near the Close. This soured my trading results. The pattern in IBM today was to create a support level, hold that level with significant volume, trade higher from this support level, then drop, hold a level lower, and then explosively trade higher. Basically IBM would not explode higher until … Read More
28 Days Later
Today I saw strong evidence that the recent market rally has come to an end. Today was the 28th trading day since the Reversal Day which established the five week run we have seen in the market. I like to jokingly refer to the rally as the “Obama rally” as the constant bashing of Obama on CNBC seemed to coincide … Read More
A Conversation with Yourself
I received an email from a trader who is a superstar at reviewing his work. Below is an email he sent to me this weekend…..I need to slow things down and do exactly this: 1) [keep doing exactly what I’m doing, in preparation, in hard work, in planning trades, sharing ideas, and reviewing work] 2) have more patience so … Read More
Some Interesting Links From the Past Week
From the people who brought you FAZ and FAS, Direxion, has launched triple T-bond ETF’s. It’s currently very thinly traded, but so were FAZ/FAS when they first started. I think these will become increasing more liquid, and will provide equity traders with an opportunity to trade bonds for volatility swings on the release of economic numbers and Fed meetings. Definitely … Read More
A Trade to Increase Your Stop Loss
One of our better traders asked me a follow up question about trading HOG into the Close. As you may remember I blogged about a HOG Trade to Hold from 18.50 to 17.90 into the Close yesterday. This excellent trader struggled with HOG in the AM. He asked about the adjustments that he could have made trading HOG. Let’s discuss. … Read More
Relative Weakness- HOG
Relative Strength is a trade taught on most desks. When you notice the market is weak and a stock cannot go down, this shows relative strength. Conversely when the market is strong and a stock cannot go up, then we conclude it is weak. Today we saw a relative strength play in HOG. Let’s discuss. After 12PM SPY was strong. … Read More
From the Mailbag: Scalping and Stress
I received this email today, which I would like to discuss. Mr. Bellafiore, I enjoy reading your blog. Thanks for sharing your knowledge! I have a question regarding anxiety/stress when reading the tape. I find that this method of trading is much more stressful for me than say, trading patterns off a five-minute chart, primarily because it is faster. How … Read More
Loading Up
One of our better traders stopped into my office today to discuss WFR. He was curious where I started buying into its upmove on in the AM. The conversation shifted to loading up in WFC. We discussed good places to load up in WFC on Thursday. Let’s discuss. Developing traders often assume that the best place to load up on … Read More