Daily PM Prep - April, 25

Preparation for Closing Session

MARKET CONDITIONS

SPY - As expected market continued it´s up movement, breaking up the consolidation. The range extension is now confirmed. Don´t expect the market to break above the highs today and hold. A lot of volume would be necessary for that to happen. Some consolidation is desirable. The break of the up trend line could suggest a consolidation or that the market will retrace, respecting the range. If we break below 158.25 and the trend line, a more bearish sign comes in, but not today.
Bias: Neutral Bullish
Accuracy:

PM Stock Selection Sheet download - My stop loss for the day was hit. Will not be trading afternoon.
Updated at 14:00

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk. 2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The afternoon sheet will be updated between 13:00 and 14:00

Daily AM Prep - April, 25

Preparation for Morning Session

MARKET CONDITIONS

World Markets News: Asian markets finished mixed as of the most recent closing prices.European markets are mixed. Initial Jobless Claims to be released before market opens.

Economic Calendar

SPY - After yesterday consolidation, we expect the market to continue the up trend. The up trend line should provide support for this movement. There are some resistance to take out, but the 159.75 is a target for this move. When this happens our range will shift. If the trend line up is broken it will be an alert that prices will move lower or consolidate. If we break below 157.50 then our bias will change to bearish.
Bias: Bullish
Accuracy: 100%

AM Stock Selection Sheet download - Lots of names today. Set the alerts and do not rush and most important do not try to trade all of them.
Updated at 8:30

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00

Trade Review - JNPR - April, 24

Stock Selection Information

UPDATE: BMO Capital Markets Lowers PT on Juniper Networks on In-Line Results
Had it´s earning´s released yesterday after the market close. The reaction to that was the stock trading lower.

Watch List Reason - Earning yesterday after the market opened

Pre-Market Volume - >15%

Trading Plan - Shor the stock below 16.00 support area

Management

Entry Setup used: Open Range Break Down

Trading Comments

Tape reading skills - Seller identified at 16.10 and buyer identified at 15.95. When buyer dropped, I hit the bids adding to the position.
Big buyer was also identified at 15.91 which caused me to close half of my position.

Evaluation

The trade was well executed, but I could´ve load up with 300 when it lost the 15.94.
Also could´ve waited it to reach my target to close the core position at 15.75 and not 15.82 as I did. Just need to correct these things to improve my trading.

Daily PM Prep - April, 24

Preparation for Closing Session

MARKET CONDITIONS

SPY - Market is in a sideways movement above 157.25 suggesting that it is holding this level. The up trend line should also work as a support to this up move. As long we are above 157.25 the bias is bullish and since it consolidating now, neutral bullish. If we go below 157.25 bias will change to bearish. The break of this consolidation is too happen today afternoon, most likely tomorrow.
Bias: Neutral Bullish
Accuracy: 100% - market closed near the trend line. Did not do much in the afternoon.

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Updated at 13:30

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Daily AM Prep - April, 24

Preparation for Morning Session

MARKET CONDITIONS

World Markets News: Asian markets closed sharply higher today with shares in Japan leading the region. European markets are higher today with shares in France leading the region. Core Durable Goods Orders (MoM) to be released before market opens.

Economic Calendar

SPY - Market has closed above the 157.25 on a stronger movement than expected. This meas the buyer are still present and the fail break high is likely to be a range expansion. The prior range was 157.25 | 153.75. The range extension is likely to be 159.25 | 153.75. When it broke above this range, longer time buyers where in control. When it fails the break, long term sellers rejected the prices, since it was a strong move. This range extension actually means a change of control from Intermediate to Long term control. For today we expect the market to respect the trend line and test the upper part of the range new range. This will help to delimit the upper part of the newer range.

Bias: Bullish
Accuracy: 80% as market is holding above 157.25 is likely to confirm the range extension.

AM Stock Selection Sheet download - a lot of names today. Main ideas are checked, but will be going to charts to find more good ones.

Updated at 8:30

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00

Trade Review - COH - April, 23

Stock Selection Information

UPDATE: Coach Posts Upbeat FQ3 Profit

More on Coach's (COH) Q1: Sales in North America rose 7% Y/Y to $792M led by the direct-to-consumer channel while international sales increased 6% to $382M. A big focus on the Men's business appears to be paying off for the retailer with sales on track to double to over $600M this year. The company raises its annual dividend payout by $0.15 to $1.35 per share. (PR)

Coach (COH): FQ3 EPS of $0.84 beats by $0.03. Revenue of $1.19B (+7% Y/Y) in-line. (PR)

Watch List Reason - Earnings before the open today

Pre-Market Volume - > than 10%

Trading Plan - Go long above 56.00

Management

Entry Setup used: Support on the 56.00 level (pre-market range with good volume)

Trading Comments

It was clear that there was a buying pressure when watching the tape. Could see the offers getting taken faster. I saw a catalyst that drove the first up move above 56.00 when a big buyer came in.

Evaluation

Must not double down. I had justifications to it, but still is a trade mistake. The only good thing about this is that I had my risk under control. Even know I was doubling down I followed the position to see if it was within my risk parameters.
Did a good job in adding into the other positions, Including the last add that got me stopped out of the position and broke the up trend. If the stock were to continue in the up trend I would´ve have a great and strong position. Besides the trade was already in the positive side. The target would´ve been the top of the pre-market range.

Daily PM Prep - April, 23

Preparation for Closing Session

MARKET CONDITIONS

SPY - Stronger move than expected, which is good for buyers. The range extension is possible. A close above 157.25 would be a confirmation of this extension.The bias will only change today if the up trend is broken. Since it has made a strong up move, some sideways action is possible. If we close back below 157.25 than we wait til tomorrow´s open to re-evaluate the overall market picture.
Bias: Bullish
Accuracy: 80% - fake new about a bomb in the White House caused an explosive move down and the market was acting carefully after that. Less liquidity after the fact.

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Updated at 12:30

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Daily AM Prep - April, 23

Preparation for Morning Session

MARKET CONDITIONS

World Markets News: Asian markets finished broadly lower today with shares in China leading the region. European markets are broadly higher today with shares in France leading the region. Core Retail Sales in Canada and New Home Sales in the US to be released before market opens.

Economic Calendar

SPY - Market is trading in range. Europe is up and Asia is down, hard to pick a side, so the mostly like is to go nowhere and trade around the point of control. It may try to make a new high, going to test the top of the range at 157.25, where sellers should appear. If we test the high of the fail break at 159.50, we could have a range extension (unlikely). Yesterday low should hold prices on the way down, but if it doesn´t as the up trend is broken a stronger leg to the bottom of the range at 153.75 or even lower could happen.
Bias: Neutral.
Accuracy: 50% Market is holding above 157.25. This move was stronger than expected.

AM Stock Selection Sheet download
Updated at 8:30

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00

Talking about Value - The auction process - Part II

This is the continuation of the following article: Talking about Value - The auction process - Part I. Make sure you start there.

If you recall, we use an average of the closing prices to determine the reference value from our auction. Most of you will think: " I´ve seen this before, same concept as the moving average I use in my trading". Not quite the same. Take a look at the picture below and we will talk about.

So what we did in our example was to use an average of prices to find the reference point, but in fact, value is determined by price x time x volume. The longer time stay at a certain price and the more volume is done at that price, the closer value will be to that price. We´ve come up with that conclusion in our previous articles.

You will now be introduced to Market Profile. What it does is to organize the information obtained by the auction process in a way that we can understand and measure price x time x volume. Once data is organized this way, a normal distribution of prices structure appears. The fun part is, you can apply the same concepts of a normal distribution into this data to make sense of it.

By using the normal distribution, you can define what is value. I use 70% of it´ss area because this is the default parameter used when Market Profile was created. This is why you don´t need to know the reasons of different plays have to buy something to determine value. You determine value by watching what prices they are willing to pay and organizing it in a way you can understand it.

It is now easier to see when prices are expensive or cheap, in relation to value. You probably asking yourself: why the heck is this information useful? Remember what a good deal is? To buy something that is lower than it´s current value (cheap) or to sell something higher (expensive) and buy it back when it comes back to value?

Preparation for Closing Session

MARKET CONDITIONS

SPY - The down trend line is no longer relevant. Market is back in a range mode. Small up trend inside a range is forming. It is trading around the Point of Control (POC) and likely to do that for the rest of the day as no economic news to be released today. A new high maybe formed, but at that level some selling will take price down. If the low of the day is taking out, we become bearish. A stronger bullish bias will take over if we break above 156.50 and hold, but that is unlikely.

Bias: Neutral Bullish
Accuracy: 75% market made a new high and held there. Did not do much more than this.

PM Stock Selection Sheet download - slow day today. Not much going on.
Updated at 13:35

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Daily AM Prep - April, 22

Preparation for Morning Session

MARKET CONDITIONS

World Markets News: Asian markets finished mixed as of the most recent closing prices. European markets are broadly higher today with shares in Germany leading the region. Existing Home Sales is to be released before the market opens.

Economic Calendar

SPY - Prices are gaping up breaking the down trend line. Still the volume is too low to determined if this is a movement to trust. Germany is up, but so far it is just a sign markets may stay into the range. Reference level into the morning are 156.75 and the zone between 155.50 / 155.00. If we hold above 155.50/155.00 the overall bias is Neutral Bullish, as this range is likely to be respected. If we go back below this level, this trend line break is a fake and sellers take control again. Above 157.25 we become bullish.
Bias: Neutral Bullish
Accuracy: 80% - bias as a little off, but the reading was fine.

AM Stock Selection Sheet download
Updated at 9:20

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00

Talking about Value - The auction process - Part I

Now we continue talking about the idea of value. We already know the building blocks: PRICE, TIME and VOLUME and different players explained in the previous article: Talking about Value - The Players. Let´s starting putting things together using the Market Profile and Auction Market Theory.

Just keep in mind that this should be just a good introduction to the subject and not the complete theory. You should dive into this topic using the following books:

J. Peter Steidlmayer - Steidlmayer on Markets:Trading with Market Profile
James F. Dalton - Mind over Markets Power Trading With Market Generated Information
James F. Dalton - Markets in Profile

If you decide to read just one, stick to "Mind over Markets", cause it is the best one of them. This was my bible for to study the subject. I read it twice and really study it´s concept simple because it made sense. Enough propaganda, let´s start the content!!!

The stock market is organized as an auction market, meaning the buyers will enter competitive bids and sellers will enter competitive offers at the same time. The price a stock is traded represents the highest price that a buyer is willing to pay and the lowest price that a seller is willing to sell at. Matching bids and offers are then paired together and the orders are executed.

The best way to understand how value is formed is using a simple auction example. This time we will auction a painting, instead of our usual Ipad. By using the paint example I make it harder to determine it´s value. Since the artist is fictitious you will have no reference to start with.

Stock Selection Information

Stock had it´s earning released yesterday.

Watch List Reason - ybefore (earnings yesterday before the market opened - 2nd day)

Pre-Market Volume - N/A

Trading Plan - Long > 58.50

Management

Entry Setup used: Support trade

Trading Comments

The offers could not hold below 58.50 and it could not trade much below this level. Latter my tape reading skills help to identify the 58.54 as a support level were a buyer held the bid. Below that level was my stop.
CCI divergence aid to confirm a potential support and the entry and also a place to take some profits.

Evaluation

The trade was perfectly executed. My best trade of the day. I also manage to add to the position at the right timing. Since the market was in a more sideways day, I took the profits close to the 58.75 level. If the market was moving (either way) I´d probably have held the position a little longer.
My failure: when it got back to that level again the offers were quickly taken and there was another entry possible with the same strategy, but I did not take it.

Daily PM Prep - April, 19

Preparation for Closing Session

MARKET CONDITIONS

SPY - Not much has changed from the morning analisys. Same levels and reference point (so does the bias) As expected we are trading in the bottom part of the bigger range. The POC at 155.50 was a resistance to the up move. Market is sideways today and I do not expect it to do anything else. Taking profits at the targets is a wise choice in this type of market.
Bias: Neutral
Accuracy:

PM Stock Selection Sheet download - I am limiting myself to trade only 20 stocks, but I put the complete list.
Updated at 13:45

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Daily AM Prep - April, 19

Preparation for Morning Session

MARKET CONDITIONS

World Markets News: Asian markets finished broadly higher today with shares in Hong Kong leading the region. European markets are broadly higher today. No important economic number to be released today.

Economic Calendar

SPY - Prices are trading between the bottom of the range - 153.75 - and the POC - 155.50. The POC may become a strong resistance to prices as the down trend get close. The confluence of the two zones is our main reference to turn from bearish to bullish on a longer time frame. Since today is Friday and there are no important economic number to be release the more likely scenario it for the market to stay inside the bottom part of the range. If prices go below 153.50 and start to hold there, we change our bias to bearish.
Bias: Neutral
Accuracy: 85% Market is sideways today. Took profits at the targets. Will probably stay that way all day today.

AM Stock Selection Sheet download
Updated at 8:20

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00

Trade Review - EBAY - April, 18

Stock Selection Information

Ebay had it´s earnings released yesterday after the market closed

Watch List Reason - Earnings yesterdays after the close (yafter)

Pre-Market Volume - 5%

Trading Plan - Support @ 54.25 || Resistance @ 55.00 - play it on the short side

Management

Entry Setup used: Open Range Break Down | Resistance | Consolidation at Resistance

Trading Comments

First trade based on momentum. There was a lot of weakness in the tape. As soon as the bids started to get hit by the sellers, I hit my trade. Waited for a strong momentum to move prices down.
Second trade was a frustration when the platform did not take my offer. Still, I followed the price movement.
Third trade was easy money after the buyer that was holding prices dropped the bids. I could´ve been more aggressive with the position.

Evaluation

First trade was perfectly executed. Took profits and when it fail to continue the down move, the position was closed.
Second trade was a frustration when the platform did not take my offer. Still, I followed the price movement. Added experience, which is very good.
The last trades were really good ones. It took a while to develop, but once it did it was great. I should´ve added to this position and the final target was for it to return to VWAP (value). I am getting better at this type of trade, but still need to work on it.

Daily PM Prep - April, 18

Preparation for Closing Session

MARKET CONDITIONS

SPY - Try to break down below the 154.25 level identified in the morning preparation, but did not hold below. It´s a bit far away from it´s down trend line. Need a lot of volume to break down at this level. A consolidation close to 154.25 / 154.75 would help if this scenario was setting up. The other possibility and the one mostly likely after this fail to break down, is the market to go into an up auction an test the down trend and the 156.25 level at the same time, were the sellers will pressure prices down again. A bullish bias only if the down trend is broken.

Bias: Neutral Bearish but Up Auction
Accuracy: 75%. The up action happen on the day after, but it did not break down.

PM Stock Selection Sheet download - I am limiting my list to follow down to 15 stocks, that´s why the list has levels for only 15 stocks.
Updated at 14:05

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Daily AM Prep - April, 18

Preparation for Morning Session

MARKET CONDITIONS

World Markets News: Asian markets finished mixed as of the most recent closing prices. European markets are higher today. Initial Jobless Claims to be released today before the market opens.

Economic Calendar

SPY - Market is gaping up today, following the world markets. Trading is occurring inside a smaller range between 156.50 and 154.50 and around the POC of the larger range at 155.55. There is a strong trend line down that could hold prices, but it still far way. If prices go below 154.25 and start to hold the bias will change to bearish. There is also a weaker trend up, but in order to have a bullish bias the longer trend down must be broken. The most likely scenario is prices trading around the POC til the down trend gets closer.
Bias: Neutral
Accuracy: 80% Prices were below 154.25 but did not hold below.

AM Stock Selection Sheet download
Updated at 7:30

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00

Trade Review - YHOO - April, 17

Stock Selection Information

UPDATE: Jefferies Raises PT on Yahoo! on Mixed 1Q13 Results
UPDATE: Credit Suisse Raises PT on Yahoo! on Mixed 1Q13 Results

UPDATE: Topeka Capital Markets Lowers PT on Yahoo! Following 1Q13 Earnings Report

UPDATE: Bank of America Upgrades Yahoo! to Buy on Weaker Revenue Trends, Good Asset Value

Earnings release yesterday after the market closed.

Watch List Reason - Earnings after the close yesterday

Pre-Market Volume - 17.80%

Trading Plan - Trade the extremes of pre-market range.

Management

Entry Setup used: Fail to break above pre-market high.

Trading Comments

Bids were being clear on the way down. Sellers took control after it failed to break above. As it came close to pre-market range low buyers step back in and we closed the position.

Evaluation

It was not a great trade because I did not followed my plan, but it was a good trade. I took half of the position as it was moving in my favor. A big buyer appeared on the bid, but he got taken really fast, meaning sellers were in control. The correct exit would be on the bottom of the range.
I got a bad print when I tried to get out. Could´ve considered switching the position.

Daily PM Prep - April, 17

Prep for Closing Session

MARKET CONDITIONS

SPY - The chart today is a bit far away so we can keep the big picture in mind. During the morning market stayed inside the smaller range between 156.50 and 154.00. It has come down but I do not think it will go any further today. Some consolidation around the 154.00 level before breaking down. If we go below 154.00 and hold this level, then the bias will change to very bearish. Trading around the POC at 155.50 would be a more neutral situation suggesting that we will stay in this range for a little longer.
Bias: Neutral to Bearish
Accuracy: 80% - Market stayed inside the range as expected.

PM Stock Selection Sheet download - Not fully focused on trading this afternoon. Based on my journal observations, I identified that I was having trouble choosing what side (buyers / sellers) to trade with into the afternoon. Will be working on a strategy to pre-defined that.

Updated at 14:20

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Daily AM Prep - April, 17

Prep for Morning Session

MARKET CONDITIONS

World Markets News: Asian markets finished mixed. European markets are broadly lower today with shares in Germany off the most. With no big economy number to be release today, Germany market as the strong economy is significant.

Economic Calendar

SPY - Market is gaping down following the world markets. The first scenario we should consider it the smaller range between 154.50 and 157.25. If we stay inside this range there will be more of a neutral day, trading around the POC of the bigger range. This move would have a bearish sentiment to it after the fail break. The second possibility is the break down of 154.50 leading to a sell off and panic. Price will find support at 151.00 or around 149.00s. The third and least expected is the break of 157.50. This would be seen as a bullish sign and we need to re-evaluate if this happens.
Bias: Neutral to Bearish
Accuracy: 100% Market did the expected trading around the smaller range as expected.

AM Stock Selection Sheet download - Today the list seems clear. The levels were easier to identify. Good opportunities today.
Updated at 7:35

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00

Talking about Value - The Players

Previous articles we talk about the building blocks: PRICE, VOLUME and TIME. These are the elements you should understand if you want to become a real trader. I strongly suggest you read them before continuing reading. They are more important them indicators, support and resistance, technical analysis. All these topics derived from the building blocks.

In order to keep a line of thought, we will work with the same examples used in those articles. This is another reason for you to read them (if you are still not convinced).

Let´s get to it! We determined that the value of the Ipad is U$400, but that value is not absolute. The reason we say that is because value is based on perception and different people have different perceptions of value. Now we will add attributes to our U$400 Ipad or our buyer and think about this "perception" stuff.

Imagine our buyer is an Apple freak, a collector. Suppose the Ipad we are trying to sell belonged to Steve Jobs. Would it be fair to say, that due to it´s uniqueness, the value should be a lot more than U$400? How much do you think the collector would pay for an Ipad like that? For now, we will say it is worth U$5,000.

But if our buyer is just a normal user, that wants a tablet to navigate the Internet and play games. For him, the U$400 bucks would be a fair value and he could not care less if it belong to Steve Jobs or not.

For a non-Apple fan to buy the same Ipad, the value would have to be even lower. This would be the only way he would to be attracted, a great deal. Remember that price is an advertising mechanism. Just to have a number let´s say U$300.

To add another variable to the equation, we´ll have a retailer, willing to sell the Ipad in return for a profit. Do you recall what a trader is? No, than you should read this: Being a Trader, what does it mean? . For the retailer, that will buy many Ipads to sell in his store, the value is likely to be lower than, cause this is the only way he can make a profit, so if he buyer 100 Ipads, Apple will give him a discount, and value would be U$350. In a way he will charge U$415 in his store.

Here is our Players Summary:

Collector - U$5,000
Normal User - U$400
Non-Apple Fan - U$300
Retailer - U$350

To take note: "Different players have different perception of value". This was an easy conclusion, now the hard ones:

In the stock market all players are at the same spot:

This will make it harder to identify value and...
... it will be even harder to identify the players
All players will be trading with each other, which is actually helpful, but ....
... all players will be fighting for the best deals (prices) since they are all at the same place.

Know the game players:

Your job as a trader is to understand who are you playing against - as a daytrader, for example, you will be fighting other daytraders to get the best price for a long.
And more important, who are you playing with - as a daytrader on a long position you want to play with longer time frame buyer

This are the players I consider in the stock market and their time frame.

Short Term Traders: from Tick chart to 15 minute charts (Daytraders)
Intermediate Term Traders: from 30 minutes to 60 minutes charts (Swing traders)
Long Term Traders: from weekly to monthly charts (Position traders)
Investors: mostly fundamental traders (The Collectors)

The question you probably have now is: how do you determine the value with all these players at the same place, but with different perceptions? The tool to do that is called Market Profile (or Auction Market Theory) which we will talk about in our next article.

Trade Review - C - April, 16

Stock Selection Information

UPDATE: Credit Suisse Raises PT on Citigroup Following 1Q13 Report
Also the stock had an earnings release yesterday.

Watch List Reason - ybefore - 2nd day in play

Pre-Market Volume - 3%

Trading Plan - Sup @ 44.25 | Res @ 46.00 - 60Range

Management

Entry Setup used: Support Fail break | Consolidation near support | Consolidation near support

Trading Comments

First trade - was expecting the market to hold this level and return to the top of the range. As the seller appear, I had to close the position and a short could be in play.
Second trade - The seller start to hold the offer. It was a good entry point. Could´ve added as momentum was in favor fo the trade.
Third trade - There was a buyer holding the 46.15 bid. They never showed the 46.14. He was refreshing and holding ground. First time we saw a 46.14 bid we hit it. It was a great trade.

Evaluation

First trade - it was a good trade with a good risk reward but sellers start to hold. Market was not looking so good. Had to close
Second trade - I close the position at the place I should´ve added. It could have been the trade of the day. Too bad I mad this mistake. Still manage to take some money out of it.
Third trade - Was a good trade. Market was not giving much opportunities and was on strange moves, so I was taking quick profits when I could.

Daily PM Prep - April, 16

Prep for Closing Session

MARKET CONDITIONS

SPY - We expected a more neutral market today and this up move might be getting to it´s end. Prices are very close to strong resistances. If we break above and hold, there is also a down trend line that can hold price. So into the close we expect some sellers to come in the market. If we start to hold above 157.25 then the bias will change as said in the morning prep.
Bias: Neutral to Bearish
Accuracy: 70% market reach the top of the range. This move was stronger than expected. After that is trade aroung that level.

PM Stock Selection Sheet download - I am following only the ones with the levels writen down.
Updated at 13:50

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Daily AM Prep - April, 16

Prep for Morning Session

MARKET CONDITIONS

World Markets News: Asian markets finished mixed. European markets are lower today with shares in Germany off the most. Since Germany is the strong economy in the euro region, this down move is significant. There a lot of things in the economic agenda today:

08:30 - Core CPI (MoM & YoY) and CPI (MoM & YoY)
09:00 - ECB President Draghi Speaks
12:00 - FOMC Member Duke Speaks
15:00 - FOMC Member Yellen Speaks
Economic Calendar

SPY - Gaping up today, but the down move yesterday was significant. As expected the POC of the previous range was the target for the move. Long term sellers took control of the market until we see a formation of an unfair low or buyers stepping back in. Since it was a strong move down yesterday, today the market may consolidate for a while before continue the down move. Still the bias favor the bears. If we go back above 157.25 is the only way we change out bias. On the chart we can see the 2 possible prior ranges that may provide support to the price movement.

Bias: Neutral to Bearish
Accuracy: 80% More of a neutral, and despite the fact market is hold so far, the bias did not change yet.

AM Stock Selection Sheet download - Lots of names today. Greater volume filter was applied to the list. Mining sector was grouped. Possible bounce on every negative stock, but do not be fooled by it.

Updated at 7:30

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00

Daily PM Prep - April, 15

Prep for Closing Session

MARKET CONDITIONS

SPY - Market opened on a strange move. It was trying to move up, but sellers were in control, just dumping. Apparently longer time frame sellers were found. If we close below 157.25 a break up failure will be configured, suggesting sellers took over and we will walking into bearish days this week. For us to have a bullish bias today, price needs to get back above 157.25 and/or the formation of an unfair low.
Prior POC is a very strong target for this down move at 155.50.
Bias: Bearish
Accuracy: 80% - Today´s close suggests a failure on the longer time frame break up. Sellers in control.

PM Stock Selection Sheet download - Big list to choose from, ordered by relative volume (biggest to lowest). Probably will find something to trade among the first 20 names of the list.

Updated at13:15

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Trade Review - C - April, 15

Stock Selection Information

Citigroup (C): Q1 EPS of $1.29 beats by $0.13. Revenue of $20.8B beats by $0.65B. Shares +1.5% AH. (PR). Earning today before market open, put´s the stock in play.

Watch List Reason - Earnings Before the open

Pre-Market Volume - 7.30%

Trading Plan - Sup @ 44.25 | Res @ 45.50 on a 15 minute range

Management

Entry Setup used: Consolidation Fail Break | Support play | Fail break down @ support

Trading Comments

By watching the tape just after the market open, one could see that the buyers were present and trying to hold ground. When the prices are falling but too many green prints, people are paying the offer. It took me 2 stops to get the right side and the right time. When big bids start to appear, get taken and price does not fall, it is a sign the stock will move up.

Evaluation

There was a lot of buying and selling but market was having trouble moving. The fight was very intense and it was not a very easy stock to trade. It was very strange and this could mean a longer time frame change of control (to be confirmed).
The first two trades I try to take advantage of some momentum that did not happen.I had seen the buying preassure, but was a bit off on the timing. After reviewing the tape, I got in because I saw a big buyer coming in the bid. When he dropped I should´ve get out. My first stop would´ve been .45.96 and not 45.91.
Finally on the third try I got it right.
I did a great job reducing the position to control risk and as the position start to work, I added to it. This was a very good strategy and the skill I am working harder to learn.

Daily AM Prep - April, 15

Prep for Morning Session

MARKET CONDITIONS

World Markets News: European markets are broadly lower today with shares in London off the most. Asian markets finished sharply lower today.
Economic Calendar

SPY - Market has broken the range and started to develop value above previous range. As long as we are above 157.25 and holding, the longer time-frame bias is bullish. If start to hold below this level, buyers are no longer in full control and this could be seem as a fail break, leading to a stronger down movement. The down move today was a reflect to the world markets being red. I expect the market to find support around 157.50 / 157.25
Bias: Bullish
Accuracy: 80% - strange move today. Lot´s of buying and selling, but nothing was moving. Could be a longer time frame change of control.

AM Stock Selection Sheet download - Mining sector appears to be in play.
Updated at 8:20

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Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk 2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00.5The afternoon sheet will be updated between 13:00 and 14:00

Building Blocks - Time

The next building block is Time. Previous examples will be used, so I suggest you read the other two articles about this series: Building blocks - Price, Building blocks - Volume.

Most people start trading with the knowledge acquired from reading books or a weekend seminar about technical analysis. The first thing they pay attention is price, the second is volume and the last one is time.I say that because this was how I started. We forget the a chart has to axis price and time, so I believe more time should be spend in this topic. Now I usually give all tree of them the same importance because these are the building blocks of value. How value is formed we will discuss on another series of articles. Now we just want to focus on the role of time. Same way we did with Price and Volume, looking to them individually.

Quick review: Our Ipad value is U$400 and a deal between a buyer and a seller is closed at U$325.

Let´s assume that our Ipad Dealer at Apple Market Place or Apple Store decide to make a discount and offers 10 Ipads for U$10. How long would you think it would take them to sell? Anyone passing by would probably buy, and not just one, probably all ten of them. You can keep one and make a profit on the others, U$50, U$100 or even U$325 as it happen on the last deal, as long as people are willing to pay the offer.

The other scenario, let´s say Apple Store is trying to sell it´s Ipads for U$375 and nobody is buying. We will not analyse why that is happening, but could be another better product in the market, a newer version of the Ipad is to be released or who knows. A couple weeks go buy and no sales, they drop prices again: U$350 and still no buyers. This cycle repeats until the Ipad price is let´s say U$200.

Stock Selection Information

WFC had an earnings release today. Wells Fargo (WFC): Q1 EPS of $0.92 beats by $0.03. Revenue of $21.3B misses by $0.29B. (PR).

More on Wells Fargo (WFC) Q1 earnings: Loan growth of 4.3% Y/Y. Deposit growth of 6.3%. Net interest margin of 3.48%, down 8 bps Q/Q, down 43 bps from last year. $200M (about $0.04 of EPS) released from credit loss reserves. Bank expects continued releases throughout 2013. Mortgage banking income of $2.8B, off 8.9% Y/Y. Tier 1 capital ratio of 10.38%. Book value/share of $28.27. Shares -1.4% premarket. (PR)

Watch List Reason - Before

Pre-Market Volume - 6%

Trading Plan - Inflection @ 36.75. Could´ve played on both sides. If held below 36.74 short it, if holds above, buy it.

Management

Entry Setup used: Open Range @ support failled to break down, consolidation @ support

Trading Comments

A lot of green prints in the stock as it was falling down, meaning buyers were paying the offers when the stock is below a support. This usually means a lot of interest in the stock.
If the stock were to fall and sellers were in control, one would expect a lot of red prints because sellers would be hitting the bids. This is tape reading being put to use.

Evaluation

I traded the stock really well I think. After that first momentum trade, I could´ve bought it again as it was making newer highs, but there was a close resistance and the risk reward was not so god. Must consider this in other stocks when momentum works. Keep it mind that momentum will work untils it stops working.
Second trade I use the "Easy way in" building into a position.
It is important to know that the stock was trading inside it´s daily range formed at the open, meaning I should have a modest target.

Daily PM Prep - April, 12

Prep for Closing Session

MARKET CONDITIONS

SPY - After a strong up move yesterday and world markets coming lower today, selling preassure was predictable. As noted in the morning prep, this movement looks more of a pullback. For this to be a fail break, we need prices to go back below 157.25. The longer it takes to go below this level, the less likely that will happen. The chart is already showing some bullish divergence. Considering we just broke up a range and are in treding up mode, my expectation is the buying preassure to come back. Do not expect the daily range to be broken today to either side.
Bias: Neutral
Accuracy: 100%. The up move expected and the respect for the daily range is great. Bulls still in control.

PM Stock Selection Sheet download - I am only watching half of the list. Already some potential in it.
Updated at 13:45

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Read this before using the information provided in this page:

Educational purpose material only. Use this information at your own risk
Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.
The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.
The morning sheet will be updated between 8:00 and 9:00
The afternoon sheet will be updated between 13:00 and 14:00

Daily AM Prep - April 12

Prep for Morning Session

MARKET CONDITIONS

World Markets News: Asian markets finished lower today with shares in China leading the region. European markets are also lower today, with Germany leading the region. Markets are lower today. Important to notice that China and Germany are leading. The most strong economies leading the down move is very significant. Retail Sales (MoM) /Core Retail Sales (MoM) to be released today before market opens.

Economic Calendar

SPY - Yesterday´s move was very strong and as long we are above 157.25, today´s move is just a pull back. If below 157.25 and holding, buyers would be trapped meaning a potencial strong short (fail break out). Has some resistances to break before getting to 157.25. Depending o how hard these level are broken, we can identify the potential of a stronger short presence.
Bias: Neutral to Bearish
Accuracy: 100% - As expected a pull back to the previous levels.

AM Stock Selection Sheet download - pre-market volume on the stocks are low.
Updated at 08:15

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Read this before using the information provided in this page:

Educational purpose material only. Use this information at your own risk
Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.
The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.
The morning sheet will be updated between 8:00 and 9:00
The afternoon sheet will be updated between 13:00 and 14:00

Trade Review - FSLR - April, 11

Stock Selection Information

The stock had no relevant news today. It was a second day play as it had an important move 3 days ago.

Watch List Reason - 2nd day play

Pre-Market Volume - N/A

Trading Plan - Go long above 36.50

Management

Entry Setup used: Open Drive Flag, Pull back and Consolidation play

Trading Comments

Tape reading helped to enter at a very good price in the pull back and I also could feel the buying preassure in it. People were willing to pay the offer to come in.

Evaluation

The second trade was very well executed, but I had a little trouble building into the position. The fact that I could not get any prints at 37.35 suggested the stock was strong. This is the first time I try building into a position and I like this idea.
You find a level and put the order with a very short stop. If trade start to work, you add another lot on the way up. This way, you have a strong position on the stock if goes in your favor. If not you only losse a few pennies on it.

Building blocks - Volume

The next building block I would like to talk about is Volume. I will continue to develop the idea based on the same example used in the article: Building blocks - Price. If you did not read it, I suggest you do before continuing.

A quick recap: the example suggested that a buyer an a seller concluded a deal of 1 Ipad at a price of U$325. We also have stated that the Ipad´s value is U$400 (determined by Apple) and it was not changed by this deal because there was not enough volume and there was not enough time.

The questions I ask myself now are: Why value was not changed and would is necessary for it to change? To answer this question, we will have to make some assumptions.

Let´s suppose that before that deal was made, Apple had only sold one Ipad for U$400 and we stop time. Now, you decide to buy an Ipad, how much would you expect to pay? I believe the answer to that is "something between U$325 and U$400". Those are the references you would have after 2 deals.

Starting the clock again, but this time, the seller is not an Apple as one would expect. It is our Ipad Dealer at Apple Market Place who has the inventory to sell. His price is U$325 and he sells 1,000,000 Ipad for this price. Now Apple comes into the market with the same Ipad for U$400. I believe Apple would have a hard time trying to sell Ipads in this scenario because the perception of value is U$325 and you would have to be a sucker to pay U$400 instead of U$325. For value to shift back to U$400, the dealer must be out of inventory and Apple has make a lot of deals with the desired price to change the perceived value imposed by the dealer.

We now understand how volume affects price and this is what you should take from this. In order for the value the change, a significant amount of volume must be made at a single price. The more volume has happened at a price, the greater the weight it plays in determine the value.

** Preparation for Closing Session **

** Preparation for Morning Session**

Stock Selection Information

Management

Trading Comments

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