Posted on the Yahoo FCX Board at 7:41AM yesterday morning:
"FCX currently is BID: 56.61...ASK: 56.70. If that holds up, Target #7, 56.49, from the June 28 Triple Breakout Through Triple Validate d Resistance will get MADE in pre-market (the upside targets have been listed at the upper right on my charts since the breakout)."
I really have to laugh at myself sometimes. The 56.49 target got MADE in both pre-market and regular trading, but without me selling into it, as I planned to do. UGH.
When I saw that opening indication, I didn't place an order in pre-market to sell at 56.49 the 1,000 shares that I was holding. I decided to wait to see if it opened even higher, for a better gain. Right before the open, the indication was BID: 56.50...ASK: 56.52. Fine. I placed my order to sell at the 56.50 bid.
Oops!
I know that it doesn't seem possible that my order, once again, was the exact high for the session and that my order once again DIDN'T get filled, but there you have it. I no longer am "starting to get paranoid." I am totally paranoid now. LOL.
To compound the stupidity of not selling in pre-market, or not placing a market order to sell at the open, I didn't even look at the order status for several minutes into trading, to see if I got filled. I just assumed that I did! As the kids say, "Duh-h-h-h..."
Oh, well. That stupid mistake cost me about $450. I yanked the sell order for 56.50 and sold for much less. Gr-r-r...
We never want to "Revenge Trade," trying to get back at Mean Ol' Ms. Market. She doesn't care, and revenge trading can turn into a much bigger mistake, but we also want to "get over it" and see if there's another opportunity based on something of substance, not based on our emotions.
We knew yesterday morning that the top of the 2011 Falling Wedge came in at 55.704, so when FCX continued to sell off, I put in an order to repurchase my 1,000 shares at 55.71. I got filled, but I didn't like the drop to 55.47. As I said yesterday, we can't expect exactitude from technical analysis, but that move down below 55.704 was a little sloppy for my taste. I sold the shares for about a $350 gain, getting back most of the $450 that I lost on the first sale, due to my own stupidity.
Market Lessons:
1. Sell when the opportunity presents itself (as it did in pre-market).
2. Don't be greedy when a target gets MADE, or is reasonably approximated (I got greedy when I saw the early opening indication that was higher than the target price).
3. Slap yourself upside the head three times when you do something stoooopid, like I did yesterday.
Slap! Slap! SLAP!!! (ouch! ouch! OUCH!!!...that third slap was kinda hard).
I'm flat FCX (no position) going into earnings this morning.
On Monday, after the 40.015 Kumo (Cloud) target got MADE, SLW finished the session on a "possible" Bearish Doji Star hangman. That was followed up with a Bearish Engulfing pattern on Tuesday, suggesting a retest of the 37.20-37.14 neckline breakout (or, top of an Ascending Triangle, if you prefer that).
As we discussed on the upside breakout, Breakaway Gaps, especially out of a pattern, are much more bullish if they DON'T get filled. The purpose of them is not to allow anyone to have the stock at prices below the breakout.
Yesterday's Gap Down selloff got halted at 37.35, just about smack on the 8-day Tenkan-Sen. The Breakaway Gap was not filled. SLW turned higher and staged this upside screamer, a rally of nearly 6%.
Whoa! Quite a comeback!
On a rally like this, the recent low and the recent high (horizontal lines) represent what is called nearby Horizontal Resistance. If the low end of Horizontal Resistance is thick in terms of width, that suggests that the rally might at least take a breather there, or might put in a short-term top due to the number of players who are lined up there and who want to sell near where the stock broke down.
"The thicker the resistance, the greater the resistance is expected to be."
As we can see, there wasn't a lot of price congestion (resistance) at the 38.92 low end of Horizontal Resistance, and SLW rallied right through the band toward its high, at 39.53.
Smokin' rally, but after charging higher nearly 6%, SLW looked due for at least a breather, so I placed an order to short at 39.47, in case it didn't rally all the way to 39.53, and scalped a quick gain of $500. I didn't want to stay real long on a strong rally like that. SLW didn't give back much, and closed near the high of the session.
I didn't have any thoughts of revenge in my mind when I scalped that $500 SLW trade. Honest. It just "happened to be" roughly the same amount that I didn't get on the FCX trade when "they" didn't fill my 56.50 order to sell ;)
2 comments:
Loved following your thinking of FCX, Melf. So interesting to see inside your head :-). On SLW, I like having that daily marked chart and then seeing how simple that 5 min looks. Yesterday, I tried to trade a 5 min chart on SLW with no BB's or indicators . .I cannot tell you how hard that was for me . .I was so distracted by wanting to know where my oscies were . .but I stuck with it and bought at a trendline . .and sold at another . . was not a big trade at all . . then when I put my oscies back on it . .I realized I would have gotten out sooner if I had seen the converged MACD . .so "for me", I am still combining the two . .but so many times I have exited on that MACD just to see it go higher and have the MACD straighten out and the target get made . . which is why I started looking at the way you did it to begin with. Not just giving it a nod of appreciation because it seemed more accurate than what I did . .but because it had more money on the move. I would love to drop everything and have such clear charts and just do the patterns and trendlines . .but I am an old dog trying to learn a new trick . . so one day at a time until I can get some confidence. I don't have enough confidence to drop m oscies :-) This takes practice.
Thank you so much again for sharing your thoughts on my two favorites. Your blog is GREAT.
Mary
Mary,
Boy, I really relate to what you are saying about the oscillators and indicators. Sometimes they can be VERY helpful, but at other times, like you say, I got out of a trade because of something like a negative divergence in an oscillator, when the the stock went much higher after I got out.
Someone once said that oscillators do what they do best: they oscillate! Just because the next high in an oscillator is lower than the last one doesn't mean that a stock isn't going higher. It often just means that the momentum isn't as strong as it was on the first move higher, but the stock STILL is going higher.
That's where the patterns and trendlines have helped me a good deal. If an indicator is showing a negative divergence, for example, but the stock is moving along just fine toward a target, let it alone.
"If it ain't broke...don't fix it."
You don't need to "drop everything" if you find that what you're using is helping you in your decision-making process. Personally, I found that most of them were confusing me and causing indecision, so I got rid of most of them except the MACD, Fibonacci Sequential Measures of Relative Strength (my own concoction), and our delightful Ichimoku ;)
I also kinda like the 13,21 and 34 EMAs on the intraday charts that Scottrade now provides with their new format. Sometimes those "get in gear," in their proper sequence, with the stock forming and getting ready to break out of a pattern. I think I've posted a few of those.
Thanks a lot for your comments and feedback. Have a great day!
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