Interesting from Janet yellen

Yellen’s speech this morning said that the fed is basically not believing the hype of inflation readings in recent quarters and that they may be overblown. 

She said the fed will proceed cautiously in changing rates which probably means no rate hike for April.

She also said the fed has tools to protect economy in case there is a recession and put QE back on the table as a possibility

Markets reacted well to the news and an hour later are up about 1%. We’ll have to see volume confirms the move.

Now that people have lower expectations for interest rate hikes, the dollar should continue to fall and unwind which could help out materials and gold. Maybe look to get more long those in the next few days.

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Buying pre-earnings on a pocket pivot

Ok, I’ve learned two lessons so far on buying these types of entries:

  1. from EFOI: don’t buy it if the price has been wedging up with volume falling, AND/OR if the candle before earnings finishes in the bottom half of its range.
  2. From GIII: only build a small position before earnings comes out, half or less of what you would normally buy. GIII’s pattern looked good and the PP day was solid looking. In fact the day before was another solid looking PP day. However, price still gapped down heavily after the earnings release.

Got destroyed on EFOI

Yesterday before the close I bought EFOI and TROX before the bell. Here are the circumstances under which i bought them:

  1. I was feeling nervous because of OCLR gapdown, pulling money out of citi to put into stocks.
  2. I hadn’t meditated in 3 days
  3. I was in a state of aversion to the feelings i was feeling and the dread i was feeling about not being able to perform in bed (later dispelled :D)
  4. I was rushed to buy because i only had 10 minutes before the closing bell and didn’t do perhaps all the research and thought process i should have before buying.
  5. Stock details:
  6. EFOI was in a beautiful looking pattern at first glance. big runup with 8 days of tight closes above the 200 day, well above the 50 day, and right at the rising 10 day.
  7. It was also a pocket pivot day when i saw it. HOWEVER, THE CANDLE WAS GREEN BUT CLOSED BELOW THE HALFWAY POINT OF THE RANGE!
  8. ALSO, THE LAST 8 TIGHT CANDLES WERE WEDGING UP EVER SO SLIGHTLY.
  9. I also didn’t check when the earnings date was, it was the next morning.
  10. I should have also taken clues from the after hours activity where price sold down to 12.25 from 13.20 closing price.
  11. I read the earnings transcript from november and the company seemed to be growing at a stellar pace. I thought it was a home run. Turns out, the expectations were too high and earnings missed by 26% on military budget making standstill which has since resolved but will show up more in the next two quarters. OUCH!
  12. Was down to 9.50 when i checked prebell. closing now at 7.75

Big down day for Oclaro and Glencore 

I woke up today pretty tired from stock research the night before til 1:30. I was anxious. I was also nervous about depositing another 4K check of borrowed money into my bank account for stocks. Then I checked on my positions and to my surprise, OCLR was down big at the open gapping down 15%. The good thing is I didn’t panic or feel the urge to sell immediately. The stock was sitting on its 50 dma and the gap support from its previous earnings.

I did some research and found that the reason was because One of oclr’s customers ZTE was being sanctioned by Us commerce department and could no longer buy parts from the US including OCLR. This represents about 10% of oclr’s revs and it changed its guidance to the bottom of the range. 

Glencore was also down sharply as it hit resistance at the 200dma. This was much more expected with the entire commodities sector going bananas over the last week. 

Either way both stocks are still acting correctly and haven’t violated their moving averages yet. I will continue to stick to the sell rules and not deviate from them unless I see something really extreme happening.

Other positions were down today too except for MITK which was up 10% at one point to close up 6%.

The market weighed on my psyche today. During my lunch session I could feel a wave of doubt and dread moving into my body. Thoughts that maybe I’m making a mistake by risking the borrowed money and maybe trading is not for me. This also compounded what I had been feeling as a result of my reduced sensitivity and inability to stay hard during sex the last couple times. On top of that I haven’t had a long meditation session in 3 days.

To restate my intentions. I will stay present in the market and watch my thoughts and emotions and recognize them as such. I will stick to my buy and sell rules.

Oil and Gas surges

Ok, I feel like i was resisting so hard. seadrill and chk are exploding upward. like 400%+ in the last week. And i felt at the time like it was time. I know i got that “feeling” just like i did with glencore. I think it was because of everything that was happening:

  1. the breaking out of oil and gas stocks from bases
  2. OPEC and russia talking
  3. People still expecting (including myself) prices to keep going down.

And heres the thing. At this point, prices still might come back down, I don’t know for sure yet. But this move has been monstrous and i feel like i’ve missed it.

Oh well, trade on. Trade by your rules.

http://www.forbes.com/sites/bryanrich/2016/03/03/is-the-boj-quietly-intervening-in-oilcommodities/#643428c36056

This article is a good reflection of my thoughts. Perhaps this IS the time to load up on metals and commodity stocks (Basic Materials is needed as an engine to spur real growth in the global economy at this point in time)

Metals tariff and rallies

Us imposed a 266% tariff on Chinese steel  products and lesser amounts on other countries. SLX AKS CLF rally hugely after the fact. They’ve already been trending upward. This may be the breakout move I’ve been looking for for years. We’ll see if volume and further action confirms.