Answer Checking Time Plus Coffee Filter 105
Freeus, you are to be complimented! You're doing very, very well!
Here are your replies bolded and my responses:italicized
#7: Resistance 1: is it just under $96 near Support 1?
No, ma'am, it is higher than that. Remember, Upward Price Movement CREATED Price Resistance 2, simply by the fact QCOM didn't continue to go higher. Therefore, Resistance 1 would by necessity need to be somewhere near our previously determined Resistance 2 at the $198ish level.
So while you got the direction CORRECT (under Resistance 2), you went down TOO far.
Look at your Visual Aid---Squint at Marking S-2. Just below that are a bunch of little spikey-hairdo vertical sticks. It is my opinion that those horizontal tops of those spikey-hairdo vertical bars = RESISTANCE 1 is just under $164, say at $153ish. So, THAT is where I'd draw a horizontal price resistance line and call it Resistance 1
HINT: In Drawing Support and Resistance Bands: the more "tops of sticks" a horizontal line touches, the more "VALID" that line is, which, in this case is price RESISTANCE. That is another way of saying those stick "tops" are a Rally Price where a flurry of buying activity in a QCOM stock rally failed to penetrate and CLOSE ABOVE 2 out of 3 periods of time, in this example: WEEKS.
#8: Very significant, very bearish price is going down to Support 2. BINGO! YOU NAILED IT, GAL!!!
If one penetrates Support 1 on a closing basis, especially if it is two closes below--out of 3 consecutive periods--- THAT is a SERIOUS SELL Signal.
#8-A: again, I think $164 BINGO! YOU NAILED ANOTHER ONE!!!
The 67-R fanline/trendline highest price intersection is $164!
#8-B: I think $150 SQUINT/DRAW this 45-R bullish fanline/trendline again, please.
The highest price intersection with 45-R is a SECOND TEST of $164 area. See it now?
#8-C: I am feeling stupider and stupider ...$140. Freeus, You're on a EXCELLENT roll here, Gal!!
The highest price intersection with 22-R is approximately $132ish. You said $140...what's $8 between friends!!!<g>
I believe we heard from someone on the porch today who shared with us that they sold out of QCOM at $132. I rejoice with them, as that was THEIR trigger point to sell and they followed through.
I don't remember WHY they picked $132 to sell at, but IT worked and they have been spared an additional 50% haircut plus "Sleepless in Seattle" type nights.
How could I have held on and even bought some leaps?
I don't know, except you can legitimately claim ignorance for your mesmerized inaction back then, Freeus. Nobody had illustrated this stuff to you, remember?
#9 Initiate short sale in a falling market when 22-R is reached[penetrated.] BINGO!!!! NAILED ANOTHER ONE!!! Now, let's do the math, ok?
$198ish is the top.
22-R = $140ish.
~~~~~~~~~~~~~~
Difference=$58 or roughly 29% loss from the high $198 point.
The point is this, Freeus: YOU Get to Calmly, unemotionally, and with time to spare CHOOSE:
IFFFFFFFF
---67-R is your SELL trigger point ($198 minus $164=$34 or 17% haircut);
---45-R is your SELL trigger point ($198 minus $164=$34 or 17% haircut) ---Lookie, you got a second shot at $164...funny how it worked out that way, yes?--, with no additional cost except lost opportunity costs and stress costs);
---22-R is your SELL trigger point ($198 minus $140ish=$54 or 29%).
#10 MANY weeks. 6-8 it looks like; there was no rush.
BINGO, NAILED 'ER AGAIN, GAL! YOU'RE HOT!!!!
When one uses weekly charts to spot KEY CLUES such as Degree of Entropy moves shaping up --in advance,-- or even SPOTS ONE OF THOSE 87-R's IN Bullmarket HINDSIGHT one still "normally" has plenty of cogitation time to observe and, formulate:
an exit or a sell strategy,
write calls,
or buy puts,
or WHATEVER ___________ strategy,
and subsequently discipline themselves to get out of the way of a falling market.
Then evaluation, with banked profits in your case, based upon your GOALS/DREAMS OF GRANDEUR financed by banked profits or whatever is the agenda of the day, is your luxurious pursuit.
What the money manager should be doing:
Not buying!!!!! This chart is broken!
Checking news, checking general market conditions, seriously consider selling the stock and
either going short or staying on the sidelines.
BINGO!!!! You've Pulled an A on this set of Klatches, Freeus!
You continue: And here---at $66-- Same thing?
Well, Freeus, that IS the question for you now that you have made the decision to hang on to this point.
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Coffee Filter 105
DIRECTED OBSERVATIONS AND ACTIVITIES
Looking at your Visual Aid: http://www.cmc.net/~hyppo/qwkly.jpg
Number 11:
First of all, how close are you, TONIGHT to SUPPORT 2? Write your answer here:_________________
Number 11-A:
What is the risk/reward ratio of the remaining downside to SUPPORT 2 vs. a return rally to say the 200 Day Moving Average at $99 ish? Write your answer here:____________________
Number 11-B:
So what IS your plan should SUPPORT 2 be penetrated? Write your answer here:________________
Number 11-C:
What is the likelihood you'll have time to make that decision to buy more QCOM or sell out? Write your answer here:______________
Number 11-D:
Rank in the order of your best guess, the time you will have to make your best choice for YOUR risk tolerance level and YOUR risk/reward assessment?
A: Hours?
B: Days?
C: Weeks?
Write your "fastest finger "Who Wants to Be A Millionaire? "order of answers here:__, ____, ___.
Just a few more things to suggest using our Coffee Filter Wedgie for (at least suggestions suitable to use in polite company anyhow<ggg>) before we shift to a more give and take discussion --shortly I hope.
Would you now take your Coffee Filter Wedgie and write in Highlighter or whatever, the world "BULL" on the frontside?
Now, flip it over and let's remake our creases real quickly, and mark the backside as follows: "BEAR"
The 0 Point Marking should now be "upper left" and away from your chest. That horizontal axis, however is STILL Time and should marked that way on this flip side.
The lefthand axis extended downward from 0 toward your chest should still be marked PRICE.
Your arc degree numbers should be backwards now: Upper right of the arc should now say 90
the middle distance between the 90 and the crease should say: 67
the middle crease of the arc should read: 45
the 1/8th arc should say: 22
and a little sliver of space just before true vertical down axis should read 3
Now, place your BEAR 0 MARKING point at the intersection of RESISTANCE 2 at Visual Aid Marking 8 and the vertical extension we drew earlier, up through the top of your Visual Aid:
Now "squint/peer" through your Coffee Filter Wedgie at the price action underneath at Marking S-2 (S-2= my shorthand for "Second Sell" in a market reversal after a Degree of Entropy Identification which became First Sell aka Marking 8).
Number 12:
Using your eyeball squint technique only, what angle of descent arc do you observe Marking S-2 to be? Write your answer here:_______________
Number 12-B:
Same Coffee Filter Wedgie Placement, squinting only: what angle of descent arc do you observe Marking S-3 to be? Write your answer here: ___________
Number 12-C:
Is Marking S-3 steeper, about the same, less steep angle of descent than Marking S-2?? Write your answer here:______________
Assignment:
Go to SI's QCOM chart hyperlink.
Set the periods of time pull down menu by highlighting WEEKLY as your click choice, for as long a period of time as it will permit. Hit enter, and update our Visual Aid to NOW include this past Friday's continued angle of descent.
Number 13:
Placing your Coffee Filter Wedgie BEAR Side 0 point at the first downside touching of horizontal line now known as Support 1, and including Friday's weekly market action data...
Can you visualize a possible a DEGREE OF ENTROPY BLOW OFF to the downside that might be setting up a "BUY" opportunity in QCOM at or near $54ish???
Write your answer here:____________
Now, before we leave Coffee Filter Wedgie Klatches, let me suggest one more "polite" thing to do to your Visual Aid thingies<ggg>...(write on them what changed fundamentally to make the various gyrations higher or lower in the margins of your printout. Then 3 hole punch it and put it into a notebook for future reference when you ask yourself what was going on in QCOM as this story continues to develop.)
The basic of all basic questions, of course, is this:
1. WHY DID YOU BUY QCOM IN THE FIRST PLACE?
2. Has that story/reason/Q* business model changed?
Obviously, this VISUAL AID has graphically depicted "something changed" because that nice, solid 22-R ascending Trendline has been moved away from both to the upside, and certainly recently been penetrated to the downside, around the 200 Day Moving Average.
That's the market place's function...to rally and sag in an attempt to reach equilibrium, the hypothetical midpoint in valuation from "someone's" point of view at least...
Remember, Freeus, this is a Combination Time/Price Coffee Filter Wedgie. It is NO accident that the 22-R ascending trendline intersected the $100 price legend on the righthand side, at about the 200 Day Moving Average "arrived" which is ALSO at the $100 price level.
I'll leave it up to others more skilled in math to explain howcum that works out that way, in this instance and over and over and over again. It is called the squaring of price and time, and there are several "thick books" devoted to discussing ad nauseum this observable phenom and its corollaries.
Since:
A) you know the basic reason why you bought the stock,
B) you NOW know where Support 1 and Support 2 is in QCOM
C) you can see for yourself a basically bull market is still intact in QCOM over a 120 week period (roughly 2.3 years' worth of time)
D) you NOW can see for yourself what your risk/reward ratio is for going down to Support 2 versus a rally back to say, Support 1
E) you NOW can see that a blow-off Degree of Entropy movement is potentially setting up for a buy in QCOM shortly, because the angle of BEAR-ARC descent is steeping,
F) you NOW know you have hours? days? weeks? to make your decision to implement YOUR action plan,
......
Do you NOW "feel" you have some independent tools to assess what is going on and to measure yammer and hype against
"QCOM STORY fundamentals" and "descending price action"
to base YOUR $66 decision upon?
Final Assignment:
Please go back above to where we discussed the 67-R, the 45-R and the 22-R price points were, where you wudda/cudda/shudda sold or executed your SELL strategy. Now you don't have to tell the world, but what percentage of those 400% gains you initially lamented losing would you have been able to RETAIN, had you known what you know now?
Write your answers here:_______________
FREEUS,THE ANSWERS TO THESE 3 PRICE POINT/ARC ANGLE QUESTIONS ARE YOUR HIGHEST MOTIVATION for paying attention in the future to basic trendline formation and support resistance formations,
moving your "Coffee Filter Wedgie" around to identify trendlines within existing longer term trends...
and then EXECUTING YOUR ACTION PLAN in a disciplined fashion, at YOUR trigger points, okay???
That is my hope and why I've shared these 2 basic skill sets with you:
---How to construct Trendlines on a longer term chart of historical price action
---How to construct Horizontal Support and Resistance lines on a longer term chart of historical price action.
Plus,
---I've thrown in the truly obvious and unsustainable price movement BELL RINGING decision maker CLUE--obvious in hindsight, AND potentially dead ahead visible also in "foresight" if one knows what to look for that is:
the famous Degree of Entropy.
You still have your stock,
You still have your questions,
and now you have a new Coffee Filter Wedgie with scritchin's on it, and 3/4 of a coffee filter circle laying around somewhere<g>.
But do you NOW have a plan forming? That's what I hope to learn from this sharing with you.
***********
I'm sure open to discussions and comments now, from you or anyone who isn't snoring loudly on this here porch.
Thank y'all for your kindness and courtesy, with special appreciation to Dealer, Eye Doc and those few who have privately expressed your appreciation and support in PM's during these Klatches. This porch is the absolute greatest!
I'll check back, off and on for the rest of the evening, in case I've mudded the waters so badly, I need to restate or clarify something.
Remember, Freeus, you CORRECTLY NAILED those answers, one after one after one, and nailed 'em GOOD!!
Getcher head up, Gal! The lament season is past and the future is dead ahead. Whatcher Plan and will you do differently now?!!!!!???
Porcher-ly yours, you've simply been a lovely LOVELY woman to dialog with, and I feel so very honored to be graced by your time and honest sharing!!!
O "softy" /49r |
