Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (82622)	11/2/2023 1:25:28 PM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 97958

I don't remember when you played it. Whenever you post a play, I add it to a watchlist made just for that purpose. I use the list to get a quick feel for how speculative the day is going to be. Early each session, I pull it up and then gauge how the day will likely trade. You said in the past you exited most of the tickers in my list but I leave them on there because they are still useful for my purpose. It's the equivalent of Bloomberg's most shorted list the way I use it. I'm not saying there isn't short term money to be made in crap stocks or penny stocks. More power to you. My posts are for the lurkers out there to provide balance. There's probably hundreds of inexperienced newbies and or just people looking for a quick easy score. Since exits aren't always posted, they can get stuck holding the bag when these crap stocks resume their downtrends which the majority have done. Your green/red line system could be used for more established, positive money flow companies too. Of course those don't jump 15% in a day. It really wasn't a surprise that this stuff was up today. LABU was on my lower channel line 2 days ago and had a buy signal. When it confirmed yesterday and started moving, I knew the crud was going to follow soon.

To: Sun Tzu who wrote (82622)	11/2/2023 3:58:12 PM
From: Sun Tzu	2 Recommendations Recommended By Lee Lichterman III sixty2nds Read Replies (1) \| Respond to of 97958

Trade case study - Toyota TM Here's my TM trade, which nobody can claim is a penny stock. Elements of the trade: (1) Toyota is a major company and one that PMs would feel comfortable bidding on. In uncertain times, nobody wants to be known as the idiot who bet on some microcap. That can lead to getting fired. (2) The UAW walkout meant that Toyota could have increased sales and capitalize on the Big-3's pain. (3) Going against the above was the deteriorating, but still good macro picture. So I decided that doesn't matter for my timeframe. It would certainly matter for longer timeframes. Understanding the chart: (4) The first green vertical bar is where I bought TM. The main trend is the blue line and it is going up. TM showed strength at the trend. It even went above the two short term trends in one quick move, which is always a positive. (5) Very important - understanding the timing indicators at the bottom - The top one is the daily RSI. It is mildly moving up, which is what you want. A nice steady pace. The two bottom ones are longer term modified RSI and longer term context sensitive RSI. They are both oversold, which is inducive to big bounces. (6) The thing to understand about context sensitive RSI is that your main signal is it crossing the midline, then everything else that you'd look for in the RSI. In addition to the bigger context above, the trade was triggered by it (yellow panel) crossing above midline. (7) The purchase price was 165. The stoploss was at the short term trend (black line) which was slightly below the low of the day before (as it should be). It was at 161. (8) You made the plan - let it ride. Don't mess it up because of a small pullback. The exit was the red vertical bar. Almost everything I said above reversed at that point. Namely: (1) All RSI metrics were overbought, so it was vulnerable to sharp pullbacks. Little risk of not being able to get back in if I changed my mind. (2) It fell below 2 moving averages - again the reverse of the buy conditions. (3) The context sensitive RSI crossed below the midline. From entry, 165 to exit ~192, it was a 16% gain in very short time on fairly low risk situation. Now if the bigger picture had looked different and the red line was flat, this would have been the perfect setup to short the stock. But the redline is rising and it is not wise to go against that trend, unless you have exceptionally good reasons. Even then, it is still best not to do it. 2nd green line - Pretty much a return to the conditions mentioned in the first purchase. Reread that section and see how pretty much everything I said applies to this one too. But the real lesson is that I did not pull the trigger because it was right before Toyota reporting their earnings and the market sentiment was very negative. Even companies that had been beating their numbers were falling and on top of that the UAW walkout was resolved. So I didn't buy and you can see what happened. And that is another important lesson. One can be systemic about the trade or be discretional. A hybrid model, like I do, has its own challenges. At times like this, I remind myself that there are always other opportunities.