Taking profits out of FSPTX before the Cliff

Taking profits out of this FSPTX 401K trade before the market goes over the cliff along with the reputation of the Republican party.

It was tracking up my blue dotted trendline nicely, but I've decided to minimize exposure right now.

It's quicker to buy back in if you are wrong, than wait for it to come back. It's also easier psychologically to deal with kicking yourself for being cautious, than kicking yourself for two months while the market recovers.

FSCSX Dividends 5.6% in under 30 days

Got a shock today yesterday I thought some of the end of year viciousness in the stock market had had wiped out my perfect technical entry into FSCSX ... but no, just 5.63% dividend getting paid and the stock readjusting. Whew. Should read those prospectuses more closely. I've held this less than a month on this trade, so must have unwittingly bought just before the dividend record date...

Now it just needs to follow my blue trend line back up to $94.

Previous FSCSX posts:

Buying back into FSCSX after pullback

Sell FSCSX - 3rd profitable trade this year

Re-entering FSCSX after two profitable trades

Buying back into FSCSX after pullback

I sold FSCS at $90.98 back in September. Time to get in again after the election jitters. Target is around $90 - $92 within next 90 days.

The Next Stage of America's Rise to Energy Dominance

The Next Stage of America's Rise to Energy Dominance By Porter Stansberry Wednesday, November 28, 2012

An incredible shift in the global energy markets is going on right now… and it's about to make the United States the world's most important producer of oil and natural gas. Most people don't realize it, of course. Americans are used to thinking of our country as dependent on shaky, hostile nations for our energy needs. That's changing… fast. Advanced technologies, notably hydraulic fracturing and horizontal drilling, have opened vast domestic resources. Longtime DailyWealth readers should be familiar with this trend… we've been covering it for years. (You can read more here and here.) But it's safe to say that despite the huge new supplies… I'm bullish on natural gas. In April, just as natural gas was hitting its most recent lows, I told my Investment Advisory readers … Sooner or later, the price of natural gas will rebound sharply… and not just because it always has in the past. What will propel natural gas prices over the medium term (say, five years) is an economic truism: It's impossible for a surplus of energy to exist for long. As prices fall, more and more uses for natural gas will appear. At some price, natural gas becomes competitive with other forms of energy… The big problem with the natural gas markets isn't that there's too much gas. You really can't have too much energy. People will always consume it, if it's cheap enough. The real problem with the natural gas markets is there's no global distribution. To understand my argument, you need to understand why and how natural gas will become a global fuel, with a consistent global price – just like oil. The prices for liquefied natural gas (LNG) are determined by long-term supply contracts. Little gas is available on the spot market (the market for immediately available gas). And currently, the prices on these long-term contracts are highly variable. In the U.S., natural gas sells for around $3 per thousand cubic feet (mcf). In Europe, it goes for around $11 per mcf. And in Asia, it sells for approximately $17. These price discrepancies present a huge opportunity for investors … In the U.S., gas production has jumped 20% in the past five years. The International Energy Agency (IEA) reports that last year, the U.S. was the world's second-largest producer behind Russia. The difference in production volumes between the two was a minuscule 3.8%. Last year, Russia produced 677 billion cubic meters (bcm) of natural gas, 20% of the world's total supply. The U.S. produced 651 bcm, 19.2% of world production. Russia exported about 29% of its production, which made it the No. 1 exporter. You might expect that, as the world's No. 2 producer, only a fraction behind top dog Russia, the U.S. would also be among the world's largest exporters. But we're not. The tiny Arab nation of Qatar – with 2 million people, its population is roughly the size of Houston – claims the title of No. 2 global exporter, behind Russia. It produces about 151 bcm a year. That's about 4.5% of the world's annual total… but it ships out nearly all of it – 119 bcm. And resource-rich Australia is ramping up natural gas production for export. Experts say Australia will surpass Qatar in exports by 2017. Even though the U.S. is producing a huge surplus of natural gas, we export essentially none of it. U.S. producers want to export their product to higher-paying markets… But right now, the U.S. has no operating export facility. Cheniere Energy, a company I recommended last July in my Investment Advisory, will be the first. It's constructing a huge LNG export terminal in Louisiana. It expects to start operating in 2015. The company has already signed a 20-year supply agreement with the Spanish natural gas infrastructure and utility company Gas Natural. The Spanish company agreed to buy 3.5 million metric tons of LNG annually… beginning in 2017. Chenier also struck a 20-year deal with the United Kingdom's oil and gas company BG Group. And other customers that are lined up include the Indian gas transmission and marketing company GAIL India Ltd and the Korea Gas Corp. But Cheniere is not the only opportunity out there. This abundance of natural gas is one of the biggest economic trends of my lifetime. And the world needs a lot more LNG infrastructure. Things like LNG export terminals, LNG tankers, and storage-and-distribution facilities. According to an estimate by trade group Interstate Natural Gas Association, North American industries need to invest $6 billion-$10 billion per year to maintain the storage network capable of handling the growth in production. I've pointed out this opportunity to you before. In April, I wrote:  Fortunes will be made as entrepreneurs and investors build the ships and pipelines necessary to take advantage of the higher price of LNG across the world's markets. It's not going to happen overnight… but years down the road, there will eventually be a large, global distribution system for natural gas. Prices around the world will converge. And those holding the best distributions assets will make a fortune. While the surplus of natural gas in the U.S. has most people bearish on the sector, I'm bullish. I know it's impossible for a surplus of energy to exist for long. I know billions will be spent making natural gas a global fuel… with a global price. And I know it will be a boon to companies that transport or are preparing to transport LNG. Good investing, Porter Stansberry P.S. My staff and I have performed an enormous amount of research on this trend. We've identified the companies that are small today… and will become enormous in five years (enriching shareholders along the way). But there's a shocking aspect to our research… one that involves Barack Obama. You can see all of the details here, for yourself. No matter if you're a Democrat or a Republican, you'll probably be surprised at what is around the corner…

AGNC post dividend depression: Buying Opportunity!

So, AGNC pays out $1.25 in dividends. But the stock slumps $2.50. Sounds like a buying opportunity and post dividend depression.

I'll take the $1 bounce in the next 10 days, rather than waiting 3 months for the next $1.25 dividend

Lets see how it plays out.

Sell FSCSX - 3rd profitable trade this year

Fidelity Investment's FSCSX Software and Computer fund has been my favorite fund of 2012.

Trade 1 back in January: 2.7% in 6 days (1% commission if less than 30 days, but 2.7% in a mutual fund in 6 days - lock in the profit!)
Trade 2 in February as the trend continued: 5.9%
Trade 3 in April to September, riding out the summer slump but still 4% profit.

13% total, and my money is looking for other opportunities with three months more in the year.

This fund is commission free if you keep it more than 30days, so makes an ideal fund for 401K trading. Why exit now? It's my 401K, so my goal is to see the balance go up ever month, not go up and down as the market wanders around in weak economy and a presidential election coming up.

Technicals show a pullback is in order. Candles are penetrating the upper bollinger band which indicates tension to the downside, and a likely snap back in price.  Blue line on MACD is sailing above volume bars, meaning the trend is still up but has weakened. RSI went over 90, then dipped sharply back. The rally in January was different technically - the bars stayed within the bollinger band, and RSI climber over 90 and stayed there, meaning a much more stable rally. Check back in two weeks to see if my interpretation is correct.

Future of this rally is uncertain. Sold FSDPX 4.5% profit

With RSI-5 (changed my RSI from 7 period to 5, seems a little more aligned to MACD and price) hitting 93 twice in the last month, I think this rally is over. MACD, price, volume, bollinger band penetration, all indicate the trend has come to an end.

I could be wrong, but as this is a trade in my 401K, and the entry point wasn't that great I was glad to make 4.5% over a volatile summer.

Dividend Capture on TWO. Why wait for dividends?

Royalty Fund Research

www.awincomefund.ca

AW-UN.To.TSX

Dividend Capture with TWO 7.6% in 60 trading days

Real Estate REITs are often touted as having excellent annual dividend returns. However, from my observation better gains can be had from timing the fluctuations caused by these companies paying out a large amount of their income. Search my trades on CPLP and AGNC for similar plays on high dividend stocks.

Why wait for a whole year to get a 14% return, when you can get nearly half that in only 8 weeks? This Two Harbours (TWO) trade had  a trading gain of 3.8% plus a quarterly dividend of nearly 4%, bringing the total profit to 7.6% in 60 trading days.

This  play worked out reasonably, although if I had waited another couple of weeks the return would have been higher as it kept climbing.

Notice in the chart below I timed the sell based on the RSI-7 (bottom chart on the graph) hitting 90. This is a sure sign of a short term pullback in the price. You can see the sharp pullback in the three days after it bounced off the 90 line.

Sold MS - 5.9% in 44 trading days

This was originally planned as a 'MS punished by Facebook IPO Disaster Play'. After MS took a dive due their involvement in the horrendous Facebook IPO (translate: Bankers made a ton of money, small investors took a bath), I calculated that Morgan Stanley was due for a rebound.

However I missed the correct exit point as I was away flying in a paragliding competion (!) so I missed the initial 10% profit point I should have taken on 7/2.

Worked out OK - 5.9% profit including the dividend in a little over a month.

NOG climbing on Positive news 2.5% in 6 Trading days

Week long trade on NOG based on generally positive news  and earnings reports.

Finally...some relief

Finally some relief on my negative positions in NOG and RENN. I'd been holding these positions for months now through the summer, and things are finally looking up with social media stocks recovering.

The crazy world of Pandora

Pandora (P) is really showing schizophrenic volatility right now, with 5% swings every other day. So trading it is speculative opportunism at best...

I think my motto is becoming:
- Dive in if you dare
- Take the money and run when you can

This trade made 5.5% profit in 4 trading days.  I had a hunch that it was time to cash out yesterday morning, and the trade also exceed my 1% profit per trading day rule. Lucky I did,  as it dived over 6% the next day on the strength of the words of wisdom from one analyst, who seem think Songza is now flavor of the month. My quick check of Songza online made me want to stay with Pandora.

My trailing stop trigger point was $11.50, but at the last minute I bailed and reduced it to $11.25. Interesting, it just traded at $11.52 before the dive began on yesterday afternoon, so I would have just got to my trigger point if I had not lost my nerve.

Of course, you can see from the chart that if I had simply left my entry at $8.70 in play, I'd have potentially made much more in the last month.  But the wild volatility would have made the last month nerve-racking indeed. Making clear trades within a single rally leaves you feeling a little bit in control of what you are doing. However after the Facebook debacle, it's debatable whether any social media stocks right now can be traded with any degree of control, or whether the market has any clue how what the valuation of these stocks should really be.

Here's the 1 hour chart so you can see just how volatile P is from day to day.

June 1 2012

Holy crap. This image says it all. DJI losing 2.2% in a single day, 2012 now in negative territory.

On the bright side, I sold my losing HLX position at 'just' a 6% loss yesterday. It's a volatile oil stock, so dropped another 7% today.

Also on the bright side, I'm glad my 401K is 45% cash right now, and am also glad that my decision to never invest in rip-off mutual funds, but instead put all my contributions in cash in my brokerage account. That forces me to actually make a rational decision, rather than just pray and hold as most 401K investors are told to do. As my employers quarterly match went in yesterday, if I had been automatically investing, it would have bought funds at yesterdays price and promptly been decimated the very next day. I estimate 99% of 401K investors automatically cost average into standard funds because they are told to do so by people who simply don't have any better ideas. But in the current economy, I think dollar cost averaging in mutual fund is basically a way to channel money to a mutual fund company rather than your retirement. I only wish I'd liquidated every fund I had back March when I wrote that things were due to a correction.

CHKR Rebounding 4.9% in 3 trading days

A couple of months ago I made a small profit in CHKR during a long uptrend. I could have let them run further, but chose to take the profit from that trade.

Then CHKR went on a huge nosedive, from a high of $30.21, down to $17.37 just some days ago. I re-entered at $18.93 based on classic technical reversal pattern.

• Bounce off multi-day bollinger band penetration (six red candles in a row, all crossing the lower bollinger band)
• EMA-5 (green line) flat
• RSI bottomed out below 10 and climbing
• MAC-D crossing upward (blue line crossing yellow)  under the center line

So far I've been rewarded - CHKR is up 4.91% in 3 trading days. My usual rule of thumb is that if a stock makes more than 1% per trading day, you are better off selling than holding, as you've likely hit a short term spurt, with a pullback will follow.

However, as this is a dividend paying stock, I'm planning to hold for longer, or even increase the position if a trend develops and I can get back in on a pullback.   If the current spurt gets much bigger,  and it looks ready for even sharper pullback, I'll be looking to sell at somewhere near a daily high to maximise use of capital. Short term profits over-rule long term dividends in my trading plan.

5.1% profit in ONXX in 7 trading Days

Normally I don't like pharmaceutical companies, with all the rumor and hype cycles about their latest FDA approval sagas. But this chart looked interesting, with a huge selloff after a big rally,  support around $42, and a new uptrend developing.

The chart showed long term rise, and after May's meltdown of the market in general (don't tell me I didn't warn you as far back as March...) I thought ONXX might be an interesting reversal play.

Turns out 5.1% in 7 trading days was a worthwhile trade. It didn't quite reach my 1% per trading day profit goal, but as there were three green daily candles in a row, and it blasted up to through the upper bollinger band, a pull back is overdue already. If this trade had exited a day earlier, so would have put the money straight into Pandora again, and made another 16% profit by Friday after their earnings announcement.

ONXX could go higher, as you can see from the continuation of the rally after I exited (blue dotted line is my trade). However,  I think we are going to see a summer of volatility, so I'd prefer to take profits that match my trading plan, rather than gamble on further gains when the market has no clue idea how it is going to respond to Europe's on-again off-again summer of self destruction.

Pandora delivers 12% in 13 trading days

After gritting my teeth and praying on volatile Pandora (P), the genie came out of the box and delivered a healthy 12% in 13 trading days. This real money trade had an entry at $8.70 and closed at $9.77.

 Pandora got a big boost this week from news that  they announced an 52% increase in listening hours  - maybe from people like me who run Pandora in the background while analyzing stock charts...So this could be the start of a bigger trend. Remember I was was set up to make 40% on Pandora earlier in the year, but got stopped out because of the volatility and was too scared it was going to crash again to get back in.

On this trade my judgement call was that a nearly 1% per day gain is a situation where you want to take profits and then look for a re-entry point back closer to the EMA - shown by the green line on the graph below. I'm using the 5-day EMA because mostly I characterize myself as a swing trader. A longer EMA would have too much lag time, leading to missed entry and exit points.   Another factor in my decision to take profits was that I had no stop loss, trailing stop or profit-taking order on this trade. Pandora's volatility is such that any of these strategies are going to backfire one way or another, so you just have to grit your teeth and trust your daily decision making skills.

My profit on this trade perfectly fit the analysis on SeekingAlpha.com (see article link above) so all credit to their powers of observation "I still see Pandora as a stock for investors who like to play ranges. Look for low points near $8.50 and high points near $9.25 for the time being"

Princess Leia in 3D from Your Smartphone

A small team in HP Labs develops an innovative approach to displaying 3D images

POSTED 30 APRIL 2012

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Key takeaways

• A small team at HP Labs has come up with a technology to project lifelike three-dimensional holograms
• The invention was a massive hit at Tech Con 2012, drawing attention from many sources
• The innovation may make the ability to project holograms from mobile and home devices a reality in the not-too-distant future

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The 3D images look so real, you think you can touch them.
In the not-so-distant future, these images could emanate from your smartphone or big-screen TV, in full color and with cinematic motion. And you won’t need 3D glasses to view them.
When you view the images from different angles, you’ll actually see their different sides—for example, the profiles of a person’s face.
Sound like something out of Star Wars? Well, in this case, the innovation is not taking place “a long time ago in a galaxy far, far away.” It is taking place right now in HP Labs.

Innovation success story

Last summer, a small team of four employees in HP Labs came up with a novel approach for displaying 3D images. Their goal was to project the images using the same LCD display technology that is part of many of today’s electronic devices, from smart phones to big-screen TVs.
To make this work, the team needed to create a special backlight for those devices, allowing them project 64 different perspectives of a scene in various direction of space.
To complete the project, the four technologists used their 20% discretionary time over several months. All researchers in HP Labs are able to spend 20% of their time working on projects or ideas that go beyond the formal projects that comprise HP Labs research agenda.

• David Fattal, a researcher in quantum computing and photonics at HP Labs, came up with the concept and designed the first prototypes
• Zhen Peng, who started on the project as a post-doctoral researcher and was later hired full time, did most of the fabrication and turned an abstract concept into a reality
• Marco Fiorentino, who is currently leading a project on optical interconnects for computing, devoted a lot of his time to build the optics and test the chips
• Jim Brug, a 27-year veteran of HP Labs and expert in displays technology, is creating dynamic 3D images at video rate using this technology

As the project gained momentum, these researchers started spending even more time turning their vision into a reality, and were joined by process engineer Tho Tran, who greatly accelerated the fabrication work.
The 3D research has been a cross-lab effort between the Intelligent Infrastructure Lab and the Mobile and Immersive Experience Lab. The optics development has been under Ray Beausoleil, an HP Fellow and photonics expert. “Ray has been incredibly supportive, and saw the potential and importance of this from the start,” said Fattal.

A big hit at Tech Con

Ten months ago, Fattal and his team began by fabricating prototypes of the backlight, which were able to display small, static 3D images.

Image of one-inch 3D display prototype using a red laser.

“Zhen was in the fabrication lab cranking out one new chip after another, working into the night so we could get it right,” recalled Fattal.
The team’s first prototype projected a 3D image that was 4 millimeters in size—about the size of a number on a credit card. The image was of the letter X floating on top of the letter O, and in one color.
Once this prototype worked, the team advanced its chip designs so that the device could project an 8 millimeter image, then a 16 millimeter image.
A few months later, the team built a prototype that could project an image about an inch in size, and they were invited to present it at Tech Con 2012.
Their demonstration was a big hit. “I was very excited to see this demo at Tech Con. There is a lot of creativity and collaboration occurring at the grassroots levels at HP Labs, and it’s great to see their work attract the crowds that it did,” said Chandrakant Patel, an HP senior fellow and the recently appointed interim director of HP Labs.
“This time, the image we displayed was a cube,” recalled Fattal. “One of the people who saw our demo swiped his finger on the chip surface. He thought the cube was actually coming out of the piece of glass.”

Hologram of Princess Leia from the Star Wars movies.

In the future, as the technology evolves, it may be possible to project a vast array of rich images, including video, conceivably making your cell phone something like R2D2 emanating Princess Leia’s urgent message for help.

On the horizon

Currently, the team is working on larger projections. It is also looking to enable motion and all the color outputs in the red-green-blue (RGB) spectrum.
The team is also experimenting by projecting 3D images on transparent substrates instead of the opaque screens common to today’s LED smart phones and TVs.
Transparent substrates could open up an array of new opportunities. For instance, a transparent screen could be placed in the middle of a conference table so that 3D images of people attending a meeting from remote locations would make it look like they are sitting at the table with you.
The above-mentioned displays are envisioned to be manufactured using HP’s award-winning Self-Aligned Imprint Lithography (SAIL) technology for fabricating displays on plastic substrates. This is being developed by the Next-Generation Display project.
In addition, the team is working on building a more refined handheld device to demonstrate the technology to customers and partners. They aim to build a prototype within the next 12 months.

Meeting challenges

In addition to the highly innovative display, a variety of challenges still need to be overcome to provide continuous-view 3D experiences for multiple people without requiring them to wear glasses.
First of all, the display may require many more pixels than you have today in your home devices, such as a 1080p digital TV playing Blu-ray content. This vast amount of information must be carefully captured or created, compressed, transported, stored, processed, and displayed.
Researchers in HP Labs’ Continuous 3D project are addressing these and other related challenges.
“We discovered the physics behind this revolutionary invention only two years ago,” said Ray Beausoleil. “We’re quite confident that we’re way ahead of the rest of the industry. HP owns all of the IP here, so we can control our go-to-market strategy—and this technology can go anywhere.”

3-D Printing Research

Motley Fool 3-D Printing Report

http://www.fool.com/fool/free-report/18/sa-3dprintingaudio-ext-184238.aspx?email=peter.j.hill@hp.com&iid=50129&repeatecap=&vsaid=4657&src=esabfpeml0860008

Switching to Elders Impulse for Main Chart

From ThinkorSwim release notes:

Elder’s Impulse system uses a combination of MACD and EMA trends to analyze the velocity of pricing trends in a security.  In scenarios in which both the EMA and the MACD infer acceleration, the price bars will be shown with a green point.  In cases in which both the EMA and the MACD infer deceleration, or a downtrend, the price bars will show in red.  When the two signals do not show agreement, the price bars will be shown in blue to indicate at least temporary equilibrium between buying and selling pressure.

My Notes

Nice example from AREX weekly chart. You can see the clear red candles where the EMA (green and pink) is supporting the trend indicated by the candles. If you entered in September based on the clear bottoming out of the cycle, and followed the rule that the blue candles show indecision (even with red inside) and signal HOLD. The final sell signal comes with the red candle in mid April.

Long Entry = Blue border or red blue border,  either in a consistent rally, or at the bottom of a cycle (the two weeks at the end of  September)
Long Entry = Green border
Long Hold = Red with green border

Long Hold = Blue border
Long Hold = Green border

Long Exit = Red candle after a drop back to the EMA-5

Short Entry = Above EMA-5 where EMA-18 is trending down, red with green border, or red.

Short Hold = Red

Short Hold = Red border
Short Hold = Red with blue border

Short Exit = Blue border three days periods in a row

Confused? Just stare at them for a couple of hours and you'll get it. Jeez, how the hell do color blind people read stock charts?

Grit your teeth and pray. Opening Pandora's box #2

After being stopped out before Pandora went on it's volatile 40% run earlier in the year,  then having the sharp dropoff that I speculated about on Feb 6, I'm trying to open Pandora's box again.

Entry point this time is $8.70. No stop this time.  Using stops with a stock this volatile, just gets you stopped out when just when you need to be gritting your teeth and praying.

Re-entering FSCSX after two profitable trades

In my post on March 18, I identified that bull run was coming to an end and exited the second of these profitable trades in Fidelity Select Software and Computer FSCSX  in my 401K. This is a volatile tech fund but has the advantage of $0 commission if you hold it longer than 30 days. Otherwise the fee is 1%.

If the recovery rally continues, tech funds should be supported by Apple's rebound, so may continue to push higher. I'm not so sure about other sectors...especially with continuing bad news out of Europe.

In my 401K I'm trading longer term, using weekly chart for technical analysis. My re-entry might be a little early, but my philosophy with 401K trades is that they are longer term. If your technical analysis is sound, take the profit early rather than late.  If they don't work out immediately, you are investing for retirement, so patience is in order.

New Think of Swim Charting

New Think or Swim charing functionality release notes. I love the Elders Impulse settings http://mediaserver.thinkorswim.com/notices/Release_032412.html




Swimmers...






When our developers tell us they are looking forward to Spring, we instantly assume they are referring to using the idea of stored mechanical energy in a coiled object to construct more efficient computing methods. After a longer than intended email chain (which explained in detail how the sum of kinetic energy and potential energy does not play a significant role in their theory of instantaneous computation), we discovered that our developers were actually referring to the season. Curious as to why they’re interested in the world outside their labs, let alone excited about it, we questioned why they’re looking forward to Spring. Turns out it had nothing to do with warming weather, green grass, and sunshine. They have been anxiously holding on to a new charting package to deliver! With the addition of SwamiCharts, new thinkscript functionality, and our new Thermo Mode, it’s easy to see why.

On Saturday, March 24th we released version 1814.15. New features include:




SwamiCharts*: thinkorswim charts have undergone a psychedelic experience with the introduction of John F. Ehlers’ new SwamiCharts indicators. SwamiCharts are an easy-to-understand, quick-to-interpret, and entirely consistent type of 3D chart with time on the x-axis (length), lookback period on the y-axis (height), and the indicator value (color) as the third dimension. As an extension of this, we also brought in 12 new proprietary studies written specifically to take advantage of this gradient charting design. . Three different sets of studies, each designed for a different charting and trading styles, all for no cost…groovy.
An ordinary technical indicator line chart shows an indicator at a single fixed lookback period only, a very narrow view. SwamiCharts is a step forward, providing a 3D view of a technical indicator over a wide sequential range of time periods. This type of visualization technology (also used for medical imaging and mapping) is now possible using thinkorswim technology. Every tick on the chart updates an entire array of study values for your analysis, without presenting a wall of text or maze of lines.
This package begins with implementing a number of classic chart indicators, with the enhancements to range and display which the SwamiCharts’ implementation provides.
Classics:
Aroon Indicator
Commodity Channel Index (CCI)
Relative Strength Index (RSI)
Stochastic Oscillator




For illustrative purposes only




We then go one BIG step further, providing all of SwamiCharts’ proprietary indicators in our platform for your use.
Essentials - A core collection of essential technical indicators that improve on the originals by displaying action over a range of parameters so that you can better assess true market action at a glance:
Swami Accumulation/Distribution
Swami Market Mode
Swami Predict
Swami Volume


For illustrative purposes only


Advanced – A set of unique indicators utilizing cutting-edge digital signal processing (DSP) techniques to more clearly detect price turning points, swing peaks and valleys, and trend onsets and conclusions:
Swami Convolution
Swami Laguerre Trend
Swami Relative Performance
Swami SwingWave
Swami Volatility


For illustrative purposes only


Daytrader - A collection of indicators that have been characterized to quickly respond to price fluctuations at intraday time intervals. These indicators can be used over a wide range of intraday intervals from ticks to hours:
Swami Intraday Fisher
Swami Intraday Impulse
Swami Intraday Volume




For illustrative purposes only



Thermo Mode: Charting in three dimensions is too useful not to embrace wholeheartedly. All eligible studies in the thinkorswim charting platform can now be plotted in a 3D display to provide a range of plots for a selected output. This lets you use the chart indicators you know and love in a way you have never before experienced.


This kind of 3D works without the funny glasses. When thermo mode is engaged, a variable in your chosen study can be changed from a single value to a range, adding a whole new level of insight to your analysis by displaying outputs based on color shading.
With several different gradient types available, you can select your preferred display. The range values you select for your variable will then plot the effect of this input’s gradual change on the output of the formula in the study.
A picture is worth a thousand words. thinkorswim’s Thermo Mode packs an amazing amount of data into a compact, easy-to-understand display that is equivalent to using literally dozens of traditional line studies. Even with all this data, the rendering is straightforward and intuitive.




For illustrative purposes only



Trading Hours Only Mode for Futures Charts: With futures’ variable trading schedules, getting a consistent and reliable comparison between products or time frames can be a challenge. To help you rise to the occasion, we have included a new mode for futures charts that will allow you to view price data for futures in a more flexible way.


The choice to “Show Extended Session” can now be applied to futures charts on a Daily Aggregation. When this is inactive, the chart will compile data from the open until that futures product rollover time for its aggregation period.
When “Show Extended Session” is active, a given future’s daily chart is compiled for the entirety of that future’s trading period.
This functionality is expanded for futures on intraday charts as well. When “Show Extended Session” is inactive, intraday aggregations show only the period of time for that future’s intraday session.




For illustrative purposes only



Elder's Impulse Technical Indicator: As if SwamiCharts and Thermo Mode did not provide enough new charting indicators to use, we have also integrated Elder’s Impulse study as a new momentum indicator within the thinkorswim platform.


Elder’s Impulse system uses a combination of MACD and EMA trends to analyze the velocity of pricing trends in a security.
In scenarios in which both the EMA and the MACD infer acceleration, the price bars will be shown with a green point.
In cases in which both the EMA and the MACD infer deceleration, or a downtrend, the price bars will show in red.
When the two signals do not show agreement, the price bars will be shown in blue to indicate at least temporary equilibrium between buying and selling pressure.




For illustrative purposes only



Technical Analysis of Stocks & Commodities Indicators: We are continuing our integration of technical indicators presented in the “Trader’s Tips” section of Technical Analysis of Stocks & Commodities magazine. This release brings us three new and unique technical indicators as pre-built indicators in the thinkorswim platform.


First up is William Erman’s Ermanometry indicator, a cyclical time-based indicator used to infer the projected time of a likely market shift.




For illustrative purposes only
The Inverse Fisher Transform Stochastic Oscillator study shows price trends with a minimum of whipsaw signaling by smoothing its stochastic input with a weighted average input and then adding an inverse Fisher transform formula to further clean the indicator’s signal.




For illustrative purposes only
Get a double dose of momentum analysis with the Reverse Engineering MACD study and the MACD with Prices study. These two studies complement the classic MACD by calculating specific price values associated with MACD levels and the values that would cause the MACD to reverse direction.




For illustrative purposes only

Get ready to sell everything not nailed down

Yesterday's monster jump in the Dow made a lot of investors happy, including me. My 401K made it's biggest ever single day dollar increase from investment returns yesterday.

But gains like this also make me nervous.

The DOW broke through 13,000 with a bang, but look at the weekly and monthly charts below. It's not a sell yet, but with the daily chart on the bollinger band, and RSI indicator over 80 on both the weekly and monthly charts, my assessment is that there is a high probability of another significant summer pullback within the next 3 months.

So, time to take profits and feel good about it, and perhaps consider reinvesting in dividend paying stocks and funds that are less impacted by market swings.

Monthly chart with RSI over 80.

Long term sell signals: Monthly chart within bollinger band, Green EMA 5 (150 day) down.

NOG 2.5% in 4 trading days

A short and wild ride on a Bakken shale play Northern Oil and Gas (NOG)

Lots of volatility here. I entered to optimistically because there had been three bars within the lower bollinger band after a big selloff. But the day after my entry things went further in the downtrend.  When the third green bar in a row appeared on 3/9,  I got out with a profit at near the days high.

My 'third green candle' rule says that most volatile stocks won't last more than three days without a correction. For these short term swing trades, it might be a little conservative, but the goal with these trades is to make 1% per trading day, not 30% over six months. So every daily candle is significant.

The large green candle on the day this trade was closed is interesting The day started with a very low open because of some overnight trading, then jumped up to levels where I was more than happy to get out of a volatile trade with some profit. As you can see from the daily chart, there was a big sell off the day after I closed with a profit.

ZIP Reversal 5.2% in 8 trading days

Playing the ZIP reversal for 5.2% profit in 8 trading days.

Notice that I have tweaked my EMA settings. The green line is now the 5 period EMA, and the pink is the 13 EMA to provide better timing for entry.  After a string of losses , I'm trading very conservatively at the moment, hence the early profit taking.

Thanks to the Harvard Investment strategy for the insight into which EMA is most accurate for timing market reversals (They use the 200 day EMA on a monthly chart). Go figure how I got to changing my daily chart to the 5 day based on that...

Cloud Computing Research Report

Cloud Computing Research Report From Motly Fool
http://www.fool.com/fool/free-report/15/rbbillgates-audioexternal-67669.aspx?email=peter.j.hill@hp.com&iid=22402&repeatecap=&vsaid=4025&src=irbsittxt0900002

ZIP it up!

Overnight trade in ZIP realized 1.5 % profit.

Pandora's box?

What would you do with a Pandora's box of a stock chart?

Pandora (P), has showed wild volatility since IPO. I was stopped out of my technically perfect entry on 12/20 last month at $10.14, and then was too scared of the volatility,  and missed the wild 40% run.

Yep, a tragedy. That's the psychology of trading.

Now Pandora is on another run, and I'm worried again that it will crash quickly. The problem with a stock like this is that it is almost too volatile to even use stops. Most 'normal' stop loss strategies will get triggered when a stop is jumping up an down by 3-8 % every few days.

RSI is still at 70, so this rally could still go higher, but the risk of a sharp dropoff is considerable.  My broker won't let me sell short this stock, so it's long positions or nothing. I don't think the market really has a clue how to value a company like Pandora.

When should you take profits in an uptrend?

Even though CHKR appears in a consistent uptrend, my trading plan tells me to realize profit if a trade exceeds 1% per trading day. This trade was a profit of 3.3% in three trading days.

What do you think? Follow your plan or let a winner run to the end of the trend?

You can use a trailing stop to let a winner run, but a trailing stop will never get you out at the high. If a stock is moving at more than 1% per day, chances are that you will less than satisfied with the result of a trailing stop

If you use the green line (8 day EMA on this graph) it's a lagging indicator. By the time you've realized the line has peaked, the stock might have pulled back 3-5%. With these decisions, it's all about being comfortable with you trading plan and trading style.

With the sort of swing trades I normally do, when the candles penetrates the upper bollinger band (light brown line) for more than three daily candles, usually a pullback will occur, even if the overall trend continues.

So my rule of thumb for the ideal sell point is the high of the day on the third day when the bollinger band has been penetrated.

I'm following my plan and taking the profit, although I like this trend so will be looking for a re-entry point.

Some trading notes

1% per trading day is beating the market

If a stock goes up by 1%

With a $5000 investment, 1% is a return of $50
With a $10,000 investement 1%

There are many more opportunities available to make 1% in a day, than there are to make 10% in ten days or 100% in 100 days.

The 1% rule means we trade often, and take profits often. The positive psychology of this has a tremendous impact on our confidence.

Don't use trading stops. If you are thinking about using a trading stop, then your intuition is telling you that your want to take profit, and not stay in the game. So go ahead and take the profit, then  reenter the trade with the same stock if it is really still a good opportunity.

6 Things Consistently Successful Traders Have in Common

1. They have a trading plan
2. They have the discipline to follow that trading plan
3. They are able to control their emotions
4. They are able to accept and limit your losses
5. They have commitment
6. They do not 'over-trade'