The Student Loan Ranger

FTSE bear flag just now, looking for support area around 3850 again. Descending triangle forming here on the 15min too - starting from about October 8th - check the 30min 4 weeker.

Actually here's the chart:

Today has been another great day for simple technical analysis. Here is X, the ascending wedge has really followed through and I am surprised to see it at these levels, as my initial exit target was $37.50 - X is now at even fresher 52 week lows at £35.70.

I really like the brand image of X, shame I don't really need much steel. Steels and metals are really struggling now that China hasn't been on BBC News for about a month.. were the Olympics this year or what?


The best part of this chart, for me at least, is the re-test of the ascending wedge support line as resistance right at a double top and 200EMA press. That is the ultimate short signal in my opinion.

Market has sold again today with little relative strength in the stocks I'm watching. BAC has been pretty bad most of the day, and AKS looks very interesting right at this second. It's not selling off as much as X, but it has just dropped from it's 3 week ascending triangle formation and I am ideally looking for $12 as best entry.

Here's a peek at MON which I have been getting chartable with today too. I think it was Oscar of 'Live with Oscar' fame, who coined the phrase "If you see a double top - Sell a double top!". This is especially true in MON, which consistently sells a double top with gusto.

On a side note: I'm quite getting into the CMC charting package now, it's actually alright. But don't tell them I said that.

Update 20:41:
What a sell off we've had here. Markets getting absolutely creamed. FTSE is down like 200 points from close which will definately make the papers tomorrow.

X, MON, UAUA, VLO the big losers on the small list I've been watching. AKS fell out the trend line about an hour ago and has been slammed for about $1.50 already.

There is only one way to trade today - Short.

Until today I haven't really spent much time watching charts during the trading day for a few weeks. Mainly because I haven't been trading but mostly because the pork chop was supermarket quality. Anyway I was watching charts to aid my bro whose account continues to defy 9.81m/s2.

Anyway I have started to do my TA off the 15minute charts. They are a lot less stressful and seem to respond better to analysis than 5 minute charts and even dailies in some cases (due to the volatility).

Anyway pulled a few trades out the bag today that were pretty easy. It would no be easy if there was money in them of course, but you wouldn't have had much draw down in these anyway. The BAC trade is a work in progress as it is showing some relative strength this afternoon.



Update 17:00:

• Target 1 on BAC reached at $24.2, new target on trendline cira $23.6
• X dropped off ascending wedge, looking to take out $42.5, $40 with bottom at $37.75
• AKS failing 50ema, looking for $13 before trendline around $12
• FTSE has hit channel trend for 5th time today

Market is selling folks.

Update post champions league game:
There was a decent rally for a while into the last half hour where some interesting things from a technical perspective happened.

First off AKS found a shorter term trendline not far below the 50EMA where it bounced again into the $15 resistance range to form a double top before closing just shy of $14. Interestingly there the 30min chart held the 50ema a lot better. I continue to be bullish on AKS in the medium term but be wary of a short term drop, as it will probably support at the ascending triangle trend line.

X had some nice movement after it dropped out of the bearish ascending wedge formation. After finding some support at thr mentioned $42.50 area, it ralled with the market and moved to the 200ema and prior wedge support line (now resistance of course), giving a great re-entry to short. X sold off $3 into close after that short signal.

Performance of the day goes to the FTSE 15 minute chart, which has held the same declining channel all day and continues to do so as we speak. It has been very clean all day and has given multiple short signals as explained in this chart:

In total with those trades a trader on their game could have traded for about 400 points up until right now. Even a slow trader being timid realistically could have slow-played for 200 points today on the FTSE with relatively low risk setups.

Also some analysis on BAC:

BAC hit target 1 today and was 10 cents off target 2. Looking at it now you can see a clear ascending triangle forming, as well as a potential ascending channel upon breakout of that formation. However BAC is hard work to trade therefore it would be wise to trade the retracement rather than the breakout.

I keep wondering how the people at CMC are still in business when they continue to regress as a business. Take their new charts as another example of how to not entice business from regular traders. These charts are a total waste of time, absolutely useless.

They have done quite a few things that really irritate me as a trader and a chartist:

1. They have re branded their charting to match the look of their spreadbetting adverts.
2. They have eliminated third party charting, which is crucial when dealing with a bookmaker. That now means they can wobble the charts in whichever direction they desire.
3. You cannot go back further than 4 days on a 5 minute chart!
4. You cannot save your technical analysis on the charts.
5. Despite a button to open up a ticket, you still cannot deal from the charts.
6. The charts take way too long to load, it used to be 1 second it's now about 10
   
7. You cannot create multiple candlestick panes on each window with different indicators.
8. The charts are clearly based on some diabolical PDF display algorithm.
9. WHO CARES WHAT THE CHARTS LOOK LIKE?

Anyway, I suppose it makes sense to CMC. The more novices they draw in through their spreadbetting platform, the more money they will make. Newer traders will see a sleek looking platform and think that, "Yus! I am a total city boy now, check me out!"

It's the move away from the third party (IT-Finance) that really bothers me though, especially given CMCs history of horrific execution and information at critical times during a trade. This now gives them free reign to manipulate all the data they want to. CMC are not a broker, they are a bookmaker - And bookies always win.

That's on top of them saying that their indices don't exactly mirror the real indices as they include what they call "fair value". Which basically means if you do a heap of TA and identify a key area around a big number and go in big, they will stop you out for a loss without your realising that in fact you did get it right, but their real values are off by 4-8 points.

One last thing, they got that guy.. what's his name. He was in Cold Feet and the Yellow Pages adverts. Jim something, he does their web adverts and narrates their training DVDs for the spreadbetting. How ridiculous is that? I mean, I've never met the guy, but I'm pretty sure he is not an elite trader. They're just using his Irish/You,know,what,he,is,almost,likeable,enough,to,be,my,friend,in,London to reel in cash rich punters with nothing else to do during their mid life crisis.

Market rallied as anticipated.

However, anyone who thinks that a recession is over based on some weekend news is mistaken. There will be some good recoveries, but it will be a long time until the markets make a higher high re:long term chart.

'Normal' service is still not resumed, ie everything up 10%. I guess that has become the norm these days.

Anyone who shorted the double top on the weekly chart of the all time S&P is a genius. I was looking at the chart last night, and never before has the market really failed to make a higher high, nor has it double topped so blatantly. It was the easiest move in the world to short the market and its constituents in October 2007. How many people actually did it and continue to hold their shorts though?

Probably whoever is still controlling the spiral.

Anyway, I've actually started to enjoy watching all these companies get annihilated lately. It's good to flush the crap out the system every now and again. When the market comes around, there will be a lot of money back in the system through investors and traders on all levels. When that happens (realistically a long time away) there will be some excellent trading.

Also like to give a shout out to my brother who pulled out some sensational trades on the FTSE and recovered from his 'Trader Death' last week.

Chart wise MON is still a buy if it gets to $70 again. It's holding up quite well today despite the selling however it continues the recent trend of lower highs. SUN was a good example of a gap recovery this morning, as it dropped below what I considered long term support around $23.4 before rallying to $26. It too has failed to retest the highs intra-day.

RIG is probably the most interesting on a technical level, as $65 represents some serious former resistance, and the price bounced nicely off this in the last hour.

The trendline on the 5min chart on X continues to hold from the highs on September 2nd. This is a highly tradable stock.

There are too many macroeconomics involved with these stocks at the moment though.

Update 18:50:
Check this out -

It's relentless.

Here's the heatmap for the past few days, there is a significant difference the past 2 days where we have actually seen a scattering of green amongst some sectors. A few stocks are hovering at their most recent low levels, and despite a large amount of 52 week lows even today, there has to be some kind of bounce soon.

Rally on Monday anyone?

End of day update:
I've never seen capitulation selling so don't know what it looks like - but surely that was the start of it this afternoon with a follow through tomorrow for a rally tomorrow afternoon or Monday morning.

More selling.

Only thing catching my eye today on a technical level is SUN which has strong historical resistance and therefore support at the $23.40 area. It moved slightly off this just now to $24. It's hard to anticipate a rally in SUN given the market, but a significant breach of this could provide a good short on a re-test.

In saying that, I was looking at AMD at $4.04 on Monday as long term support, and that held nicely an opened up at $5.4 on Tuesday before a strong pullback.

PS $46 for a share in X. Unreal. This was $146 not too long ago.

Update 17:55
Normally I would not laugh at the misfortune of other people, but today I had to. I used to love the DTRS chat room, but for the past few months it's just been swamped with idiots who are looking to piggy back his trades. He is a good trader, but the people he attracts are total morons. There are also a couple of regulars who think they rule the roost and preach their elite skills to everybody - but they talk just as much crap and several times a day you can watch their hypocrisy in action as they say one thing and then do the other.

Anyway, RS picked a bottom in F at $2.55. I mean, this is not a market to be calling a bottom in, that's how you lose money. Ford.. they make cars. Global warming, credit crunch, oil prices. $2.55 is a number that seems to be pulled out of thin air, the bottom after all is zero. It's not even a psychological level, nor a technical level.

Instantly, and I mean literally the second he said it, the chat room was flooded with people saying "in Ford at 2.56, 2.55, 2.57 - 2000 shares, $10k worth, 1000 shares". It was unreal - not a single "Are you sure? What's the setup? What's the target? What's the stop? Shouldn't I be shorting GM instead?". Basically all that was said was that if it moved 25 cents, you would make a 9% profit! WOW!

This really irked me for several reasons that are pretty much what I have learned to be the gospel of trading:

1. Never even attempt to pick a bottom
2. Never take a stock tip
3. Plan every trade
   
4. Never enter a trade without a target
5. Never enter a trade without a stop
6. Never enter a trade against the trend
7. Do not be such a greedy pig
8. Do not average down on a losing trade (3 or 4 did this later on)
9. Do not use a blindfold when trading

Anyway, the chart at the time was ridiculous, literally just selling off in one huge down trend with good selling pressure. The stock went sideways at $2.55 for 4 minutes before the averages caught up with it.

When it did 4 minutes later, carnage, after everyone loaded the boat with F at $2.55, F was trading at $2.12 within 240 seconds. That is more or less a 17% loss within 4 minutes. Why on Earth would anyone put that level of risk on themselves if their pre-trade target (which didn't actually exist) was a 9% gain?

There was only one trader who said they took a big hit, and sold out as it passed $2.25. Everybody else held. Everyone held because they are idiots.

Ford bounced a bit back to the $2.4 region, and everyone continues to hold a loser. Even if F goes to $3 or $5, the only winner in my eyes is the guy who put his hand up and accepted he made a mistake, and took the punishment (a loss) in the testicles. Everyone else is simply a fool who really should not be trading.

If $2.55 was "the bottom", then surely if it is passed, it is now "the top".

Rant over!

Any regular visitor here will realise that this is the first post for October, and that September had half the monthly average. I'm kind of sitting out waiting for normality to resume, however this selling just seems relentless.

Basically the market is selling, with a scattering of insane rallies based on absolutely nothing. That is not a safe nor profitable environment to be in having only been in the game for 6-8 months.

Hopefully the dust will settle by the new year, and some kind of slow rebuilding in the markets begins to level the playing field. I'll be back in the game when that happens. I'm a TA trader, and TA just isn't working effectively in this market. There is no point playing such a high risk game when there are no rules.

PS I am ultra chuffed with my comment a few months ago about the market getting worse in the future as it looks to re-test lows. Mind you, it was a complete no brainer comment!

Update 19:30:
Short term bottoms and tops are hopelessly easy to spot when you are not putting money on them. It must be a question of confidence:


These are a few I've flagged today and watch them move. The HD one happened as I drew the line, while the others have mainly been retracements from Mondays gap which I have been waiting for - an easy setup. There are still good moves in the individual stocks, but the reason people are losing, or not trading seems to be:

1. The market could turn any second, if you have the wrong position, you are dead
2. Eagerness to take profits quickly in this market will ruin you, conversely;
3. Not taking them quick enough will ruin you, meaning;
4. Your losses will outweigh your gains with this mindset
5. Fear and Greed as always
6. The more easy trades you miss, the more mistakes you will make

As I speak, RIG and TIE are moving off their respective trendlines and RIG is forming the basis of an ascending triangle. C is holding $16 as it challenges the level for the 4th time in 3 hours. HERO also dropped off as I wrote this, but has since bounced of the support line again. MON is a buy at $70 in my opinion too.