Watch list for week of 6-19-06
at 2006-07-09 19:42:55
I'm convinced that the long-term market trend is down and that we're experiencing the first bear rally. The naz gained almost 3% on Thursday. That's the kind of stuff you see in bear markets. I'm out of almost all long positions, and will be closing the rest out over the next two to four weeks. I'll be shorting opportunistically, but not aggressively yet. Before I show my computer generated watch list, let me point out the two scariest charts and the two best charts I've seen all week:
Scary:
HANS
NTRI
Best:
LBIX
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Criticism of Daytrading Followup
at 2006-07-09 19:42:55
"To play devil's advocate...if your test shows the tide is against daytraders and against investors. Is the tide with those brave souls willing to hold overnight and dump their holdings the next day? Hold short-term? Long-term? What criteria are you using to determine the tide is with if you trade like yourself? Are you adjusting your exits depending on certain conditions? Scaling out? If so, possibly daytraders and investors can and most likely are doing the same. Plus, your test is only showing one instrument. What happens if you choose a different one? What happens if you diversify across several instruments. Or diversify across time? I could go on and on. There are so many ways to skin this cat...that it's very hard to discount one methodology over another." -- Michael Taylor
This is a great subject for writing about because it is hard to pin down all the angles. I can't
Reply to a reader regarding overnight risk during the 2003 bull at 2006-07-09 19:42:55
"About your observation about there being a big premium that daytraders miss by not holding overnight risk. You should take a closer look at your data. Re-run the spreadsheet and this time start from about September 2002. You will see the relationship almost breaks down. Shorting overnight or going long over night yields more or less the same return. Before 2002, the point you made on your blog was quite valid. The interesting question then is why this relationship changed. Presumably, the answer is because most daytraders were eliminated by the bubble bursting." - sc
This is a great observation, but it only shows half of what is going on here. September 2002 was a major market bottom, so let's also look at the results for the person who carried risk through the entire period, September 2002 until present.
- Buying the close and selling the open: $100,000 becomes $100,598.40
- Buying and holding: $1
Watch list for week of 6-26-06, writing contest extended
at 2006-07-09 19:42:55
A small list like this means not too many stocks are consolidating at support.
Due to several requests, I've decided to continue accepting entries for my writing contest for three weeks, so the deadline for submission is Monday, July 17. The prize is a copy of Victo
Watch list for week of 7-3-06
at 2006-07-09 19:42:55
The nasdaq summation index $NASI has turned positive over the last couple of days, so if I had to guess I'd say that short term bias is probably up, but volume will probably be light due to July 4.
I had a relaxing weekend sitting around coding the market modelling software with my cohort Brandon, and IM'ing Michael Taylor. Michael is moving to Missouri! I'm stoked about it.
Brandon and I spent most of Saturday looking at a problem that occurs when generating weekly bars in my model. The problem was manifesting when we were truncating remainders off of the date of the weekly bar when the week was split across two consecutive years. For example: the week of Sunday December 29, 2002 runs into 2003 and is actually the 53'rd week of 2002. I'll be damned if we didn't find a bug
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