Focus List Video: QID

At the top of my focus list is QID, which is an ETF that is a leveraged Nasdaq short. Take a look at today's video to see how I plan to trade it.



http://revver.com/watch/498261/flv/affiliate/93676/qid-stock-trade-setup-11-25-07/

Today's Trades: GROW, MVIS, QID, EWZ, HOKU

I sold 600 shares of EWZ at $51.80 (entry at $50.43) for an $822 gain (+2.7%). I suspect that it will retest support at $50, which could provide another entry.

I sold 1000 shares of HOKU at $6.44 (entry at $6.11) for a $660 gain (+5.4%). There is not enough volume to think this price will hold. As with EWZ, I will re-buy on a pullback if it is on low volume.

I bought 400 shares of QID at $51.85. Take note of the stochastic indicator in the chart below. QID has rewarded buys after stochastics move out of extremely oversold territory.

I bought 1000 shares of MVIS at $4.04. This one is straight out of last night's watchlist notes. I like the low volume pullback to the previous highs. What's tricky here is stop placement. Should I use a tight stop at the previous highs ($3.95), at the high volume breakout (3.8) or the 50 day moving average ($3.50)? I'll probably go with $3.80. I move back down to the moving average would put the stock back in an ugly trading range, and I ain't got that kinda time.

I bought 300 shares of GROW at $29.96. Last night I wrote that I was waiting for a deeper pullback, but decided to enter on a test of gap/breakout support. This stock is extremely volatile, and there is another support area at $28, so I decided to use a wide stop. To make up for the stop, I went with a smaller than normal position size.



Along with the positions I entered today, I am also holding TZOO and HES.

Trades and Vanity Performance Stats

I sold 1000 shares of QID at an average price of $53.86 (entry at $55.50) for a $1640 loss (-2.9%).

I covered 200 shares of AAPL at $92.05 (short at $90.10) for a $395 loss (-2.1%).

I covered 500 shares of STLD at $41.08 (short at $39.08) for a $1000 loss (-5.1%).

I sold 200 shares of VLO at $61.87 (entry at $60.24) for a $326 gain (+2.7%).

I bought 500 shares of CELG at $53.24.

I bought 1000 shares of VDSI at $17.67.

I bought 1000 shares of SMSI at $15.96.

I hope to detail the three current trades tomorrow with charts.

When I got home I was feeling depressed about the today's losses. One of my trading buddies helped put things in perspective by telling me to take a look at all of the trades I had made leading up to today. So I did :) I've compiled some vanity stats to help pick me up.

Since the February 27 sell off, I have made 24 trades (excluding the three trades I made today that I am still holding). Here is how I did:

• Win Rate: 71% (17/24)
• Total Gains: $13,962
• Average Gain: $821
• 
  
• Loss Rate: 29% (7/24)
• Total Losses: $4,029
• Average Loss: $575
• 
  
• Total Gross Profits: $9,933
• Profit After Commissions: $9,597

In 23 days, I made $9,597 as a part-time trader. Meanwhile, I made $5600 as a full-time worker. Trading Rocks!

Okay, I feel better now. Feel free to curse and throw tomatoes at the screen in disgust over my vane behavior.

To review all of my trades, go to the "Trade" label below.

Trade Updates: QID, VLO, HAL, LEH, STLD, AAPL

I was stopped out of my 350 share position of HAL at $30.44 for a $388 loss (-3.7%).

I sold 350 shares LEH at $72.71 for a $231 gain (.9%). The total gain for the 700 share position was $696 (+1.4%). I was hoping for a bigger gain, and decided to bail on the trade because I think the bounce might be over.

I bought 500 shares of QID at $54.46. I've been waiting for QID to near support. Let's see if it holds.

Along with the QID position above, I am also long 200 shares of VLO, 500 more shares of QID, short 200 shares AAPL and short 500 shares STLD.

Chart: Analyzing the Nasdaq Composite

Wow, that was some fakeout we saw today. Once the Nasdaq broke down below 2350 and the recent low, I was sure we were headed for a retest of the 200 day MA. Now I'm not so sure. The Naz (and other indexes), printed quite a powerful candle today on good volume. Take a look at the chart:


At this point, it's a really tough to call technically. We have stochastics that hit the overbought levels on a low volume pullback (bearish) and now looks to be headed to oversold territory. This would suggest that there is more room to go down, possibly to the 200 day MA. However, RSI could be printing a higher high. Another bullish signal is the fact that the Naz printed a "long tailed" candle at a strong resistance point.

I'm going to hold on to my QID (short 2X Q) position for the time being, and may add to it if it drops to the $54-55 range on *light volume*. Volume is the key. If we bounce on light volume, we're probably just setting up for more downside. However, if we bounce on strong volume, we may have just printed a bottom, at least for the time being. Only time will tell.

Another update: QID and HAL

I bought 350 shares of HAL at $31.55.

I bought 500 shares of QID at $56.64.

See the last post for the rest of today's trades.

Trade Update: QID, VLO, AAPL, SSRI, STLD

I sold 1000 shares of QID at $57.21 (entry at an average price of $55.55) for a $1660 gain (+3.0%).

I covered 500 shares of SSRI at $29.79 (entry at $32.24) for a $1225 gain (+8.1%).

Yesterday I went short 500 shares STLD at $39.08.

I am still long 200 shares VLO and short 200 shares of AAPL.

Today's bounce doesn't look like it will hold. I plan to establish more short positions on strength and buy more QID. As I stated before, I'll keep shorting strength and covering weakness until this simple strategy stops working.

Sorry for the late and sparse updates. I've been swamped both at home and work the past few days. I hope to post a ton of charts in the coming days.

Today's Trades: VLO and QID

I covered my 400 share position in VLO at $60.21 (entry at $59.06) for a $460 loss (-1.9%).

I bought 500 shares of QID at $55.23. I now have a 1000 share position in QID. Today's gap up has the look and feel of a "fade the gap" short squeeze type of rally. I doubt we will see a meaninful bounce. On the chance that there will be more strength in the coming days, I am setting a loose stop just under the 50 day MA, around $53. The next thrust down could come any day now, and I'd like to be in position when it happens.

Today's Trade; VLO and QID

I've traded these stocks so much that past few days, they feel like family. I bought 500 shares of QID at $55.86. I've been trading in 1000 share blocks, but I'm not sure that there won't be more of a bounce in the Q's, so I'm keeping the position size small. If we see QID drop down in the $54-55 range, I'll probably buy some more.

I've been trading VLO on the longside, as oil stocks have held up well over the past two weeks. However, today I went short on the big move up because it is moving right into resistance. Take a look at the resistance point on this chart:


I also noted that RSI and stochastics have dropped, creating a short term negative divergence.


I went short 400 shares of VLO at an average price of $59.06. While I never recommend that readers piggyback on my trades, I emphasize this point today. VLO has been acting strong, so this is a risky trade. I would not be surprised if the stock moves up. Therefore, I am using a hard stop above the $60 resistance level and going with a slightly smaller position size.

Trade carefully.

Get Ready to Short the Bounce

Hopefully this bounce can last another day or two. I will use market strength tomorrow to deploy a few short plays. A lot of sectors are setting up the same way, so I'll stick to QID and a few select sectors and stocks. Financials, commodities (not oil), tech and China stocks head my list of short plays off bounces.

I like QID here or if it falls into the $54-55 range.


MS looks good on strenght into resistance. It would require a loose stop above the recent gap level.

Losing My Flow and Today's Trades

I panicked. As I watched QID gap down this morning, I could feel myself losing my flow. All the Zen stuff I write about went out the window. As my highly developed flight reflex kicked in, Mister Self Awareness (that's me) was thinking like a four year old being chased by the boogie man. In the time it would take Bruce Lee to unleash a lightning quick combination of punches and kicks, I had pulled up my trading screen and was ready to click on the "sell" tab.

Then, for some reason, a moment of clarity came over me and I remembered something I had blogged about last month. Before placing a trade, I like to ask myself what an expert or someone I respect would think if he or she was watching me. I then imagined what you would think of me right now. I heard a voice say, "this guy's trading like a coward. I can't believe I read this damn fool." Feeling royally embarrassed, I took a step back and decided to wait for the expected bounce that I like to preach about. Of course, the bounce came, and I was able to unload my position for a small gain, in the process saving myself money and embarrassment. Thanks guys.

I sold 1000 shares of QID at $56.69 (entry at $56.50) for a $190 gain (+.33 gain).

I sold 300 shares of VLO at $57.22 (entry at $55.60) for a $486 gain (+2.9%).

I currently am 100% cash, although that could change soon. I may by QID on weakness.

Tuesday and Off Topic Stuff

There isn't much new to report with regards to my strategy going into Tuesday. I plan to try to unload my QID position into strength, and possibly repurchase on weakness, as I did today. You know the saying: keep striking while the coal is hot. Until this strategy ceases to work, I'll keep at it.

I do think there will be a market bounce, although I can't predict when it is going to come. Ideally it would have already started, but Mr. Market don't play that way. It's taking longer because everybody is looking for it. Once everybody gives up, that's when the bounce will come.

I can't wait for the bounce. I plan to twiddle my thumbs until the bounce reaches resistance levels, and then will deploy some more shorts. Till then . . .

Off topics:

It's too bad UFC is not reported in mainstream sports pages. What Randy Couture did this weekend was nothing short of amazing. At almost 44 years old and coming out of retirement, he won back the heavyweight belt by dominating a man 14 years his junior and who outweighed him by a good sixty pounds.

I was walking on cloud nine after my beloved 49ers signed cornerback Nate Clemons. Ashlie Lelie could be a shrewd pickup as well, if he finally lives up to his unlimted potential.

Heroes might be the best show on television. Tonight's episode was no exception. The Spiderman 3 preview was great as well. I can go on NBC.com to view 7 more minutes of the movie, but I don't want to know too much going into the movie.

Is the way "we" perceive the world reality? A fly's compound eye allows it to detect things we can't. A dog can hear sounds that don't exist, as far as we're concerned. Snakes can "see" heat. Is the world as we see it, or is it just a construct of our perceptions, developed through our evolutionary "needs"? These are the types of questions I find myself asking after reading a collection of essays and biographical infomation on Phillip K. Dick and Richard Dawkins God Delusion.

Yes, I'm keeping up with my New Year resolutions. It's been tough and enjoyable making time to read a book a week. Next up is Rousseau's Dog, by David Edmonds, recounting the antagonism that developed between two great philosophers, Jean-Jacques Rousseau and David Hume.

I watched Hollywoodland this past weekend, starring Adrien Brody and Ben Affleck. Pretty good, although I wish they would have come to a conclusion about George Reeves death. At any rate, I gave in a 4/5 stars on the netflix rating system.

Today's Trade: QID and VLO

I sold 1000 shares of QID at $57.98 (entry at average price of $55.23) for a $2750 gain (+5.0%). Over the weekend I placed a sell limit order at $57.50. My thinking was if the market opened weak, there would be a bounce later in the day where I could re-enter.

Everything went according to plan, and I bought 1000 shares of QID at $56.50.

As you can see from my QID trades over the past few days, I am selling spikes up and buying dips. In market terms, that means shorting into strength in the Nasdaq and covering on weakness.

I also bought 300 shares of VLO at $55.60. Take note of the small position size. The stock is not as strong as it was, but has entered an area of price support.

Today's Trades: VLO and QID

I sold 300 shares of VLO at $57.90 (entry at $56.90) for a $300 gain (+1.7%). I still like the stock, but in this market enviroment I'm going with shorter hold times and quick profits. I reserve the right to re-enter.

I bought another 500 shares of QID at $55.25. I wanted to enter this morning when the stock was trading around $55.65, but decided to place a limit order at $55.25. My thinking was that the bulls would mount a push that would likely fail. Luckily we had some weakness (or strength in the Q's), and I got in at $55.25.

So currently, my only position is 1000 shares of QID (2X short QQQQ).

Trade Update: QID, QID (not a typo) and VLO

I sold 1000 shares of QID at $56.55 (entry at $53.82) for a $2730 gain (+4.8 %). To be honest, I probably would have held on if it was not for the fact that I had a limit order in place overnight. So I re-entered a few minutes ago.

I bought 500 shares of QID at $55.21. I still think the market has more downside momentum.

I sold 300 shares of RL at $85.45 (entry at $87.10) for a loss of $495 (-1.8%). So much for retail holding up.

I bought 300 shares of VLO at $56.90. My reasons are two fold. First, as a small hedge agaist my shorts. Second, I like the way oil services stocks have held up. If you look at VLO's chart, it looks like a typical pullback after a runup, which is opposite of the plethora of charts that look downright ugly.



Currently my only positions are QID and VLO. This week, I have incurred $3541 in losses and $5675 gains for a total gain of $2134.

I'm thankful that I made it out alive (so far). However, there should me more tough trading days ahead. It's not the time to take big risks or become complacent.

Trade updates: QID, STLD, GS, VLO, EWZ

Man, I'm kicking myself for getting rid of QID yesterday! Stupid, stupid, stupid! I hate myself right now. I should have let the trade play out until it hit my target or stop. Micro-managing at its worst.

I'm holding on to most of my positions right now, and actually made a few buys. I bought 50 more GS at $208.16 and 300 STLD at $37.55. I also bought 300 shares of VLO at $58.04 and 200 shares of EWZ at $46.55. For now I am holding on to RL.

Note that I am using smaller position sizes. The prudent move right now is to wait this thing out, so if you're going to buy, be very careful. I'm not giving myself much rope on these trades and will clear out my positions if they fall much further.

It will take some time to see whether this is just a hiccup or a new trend. If we get a weak bounce or more weakness in the coming days, it will be a sign to get ready to short.

Today's Trades, Watchlist

I sold all 600 shares of QID at $50.61 (entry at $49.85) for a $456 gain (+1.5%). I exited before hitting my target price. I'm worried that the recent strength in semis could lead to an upward breakout in the Nasdaq.

I bought 100 shares of GS at $214.45. It can be nerve racking buying hard dips in financials. However, this stock, and sector, has persevered through every dip over the past 6 months. I looked at many of the major financial stocks, and of course, GS is the cream of the crop. While all have been buys off dips, only GS has consistently held up at the 20 day MA (mid Bollinger Band). This is a sign of a strong stock in a mean uptrend.


Watchlist Notes:
FFIV: pb 76-77, stop 75
NTEL: overbought. short strength?
AKAM: pb to 50 MA
SSRI: buy pb to 20 MA
AL: HTF
RYI: HTF after BO
VLO: buy pb to 57
EWZ: buy pb to 20 Ma

This watchlist is merely a list of stocks to watch. It is not a buy recommendation. Even if a stock meets parameters listed, other factors may cause me not to trade the stock. For example, a high volume decline to buy target, rather than a low volume pullback.

abbrevations:
pb=pullback
HTF=high tight flag formation
BO=breakout
MA=moving average

Today's Trades: EWZ and QID

I sold 700 shares of EWZ at $49.74 (entry at $48.44) for a $910 gain (+2.7%). I originally entered this trade as more of a long term swing trade. However, I didn't trust the gap up this morning, since it wasn't on tremendous volume. If I can enter again at support within the next few days, I will. Otherwise, I'm happy with the gain and will move on.

I bought 600 shares of QID at $49.85. QID is a leveraged ETF, which is basically the same as double shorting the Nasdaq ETF. As you can see from the chart below, QID is extremely oversold and at a key support area. The ETF has generally been kind to those who enter at this point, as shown by the arrows on the chart. As you can surmise, I am not confident that the Nasdaq is going to breakout to new highs. However, if it does, this is still a low risk trade. I will place a stop at about $48.85, ensuring that I lose no more than one point if things go bad on this trade.


BTW, I like the pullback in high end retail stocks such as RL, TIF and COH. I'm still not ready to enter, but will be watching closely over the next few days.