Sunday, June 24, 2012

Meta-Trader - TC2000 meets the iPad

Welcome back Meta-Traders.

The brothers Worden have done it again and this past week released their flagship TC2000 charting product for the iPad.  It was previously available for iPod touch - as well as the the native PC and Macintosh platforms.  The PC and Mac versions make use of Microsoft Silverlight technology which delivers PC type application performance - but for Web-based applications.  There's no Silverlight for the iPad, so this is a native iPad app.

On first appearance, the product has all the familiar features, charts on the right, columns and watch lists on the left.  Zoom in and out works as expected where you pinch to zoom and in and out, and the chart re-renders within the available space.  To change time frames, use the pull down at the top of the screen.  To change the size of the columns area, or make charts bigger or smaller, just drag the border between the columns and charts with your finger.

The cool thing about this version, and the iPad version is that there's no extra charge.  Just login with your existing TC2000 account and off you go.  It shows you that Worden's first objective is to deliver amazing products and let the financials work out themselves.  Great job Worden brothers and keep it up.  I have been using Worden brothers products since the 1980's and I consider it my primary research tool.   Where else can you take the entire stock market, cut it down to stocks making all time highs today, then rip through each one of the individual charts in just a matter of minutes?

More importantly, the product takes the monstrous amount of data that is the US stock market and allows you to chop, slice and dice it and visualize it nearly any way you like.  Plus throw in real-time streaming intraday charting for about $300 a year - you can't beat it.

World markets breathed a sign of relief past week when people of Greece voted in the moderate party who was in favor of staying in the Euro zone.  But that result was largely factored in from the prior weeks rally and stocks had little left to celebrate.  The above chart of EFA - the iShares MCSI Markets index tells the story.  We had about a 10% rally off the lows set back in early July. Thursday's sell-off took back have of that move (that took 13 days to play out) in a single huge bear elephant candle.  In Fridays action, we gapped up slightly then settled well within the range of Thursday's candle.

As for now, there seems to be a stand off between risk off and risk on.  I am abut 45% in cash, but still well ahead of the S&P 500 for the year.

Forex continued its recently lackluster performance with 2-3% losses in all accounts except for Atipaq Full Portfolio which gained about 2% for the week.

That's all for now, keep your powder dry and have a great week.

Sunday, June 17, 2012

Meta-Trader - How do you feel?

Welcome back Meta-Traders.

How do you feel today?  Or better yet, how do you feel about your investments today?  I ask because its very easy to get caught up in the feeling of whatever's going on in the market that day.

If we get a down day, its easy to find reasons for it.  An ongoing unresolved political situation in Greece, potential collapse of the Euro-Zone, financial contagion caused by the paralyzing inability of politicians and the public to take tough measures to deal with the situation.

And if we have an up day, then maybe its because the world's central banks are standing ready to take whatever steps are necessary to provide sufficient capital to prevent a run on the banks, the equity markets and risk assets in general.  Maybe its because stocks yield so much more than cash and most other fixed income, then of course it makes sense to be in equities.  Point is its easy to find reasons for whatever is happening in the market that day, but don't let that be your guide.

Instead, look at the behavior of your stocks across multiple time frames.  TC2000 makes it very easy to do just that as shown above.  The layout shows the % change for your stock for 1 day, 1 week, 3 months, and 1 year all in one quick and easy view.  Using that type of view, its much easier to ask yourself how you feel about your investments, because the screen is give you a full picture across several time frames.  How about a few examples using the above screen?

ETFC (E*Trade Financial) is down in every time frame from Daily through 1 year.  I don't feel so good about that stock and as a result, I don't own any.   Apple Computer (AAPL) is up a little today, but down from the prior week, up from 1 month ago, down from 3 months ago and up from a year ago.  I would say the picture AAPL is neutral.

Now take a look at Family Dollar (FDO).  Its up on every time frame and just made a breakout to an all-time high this past week.

Taking a look at the chart, its a thing of beauty.  Price bumps up against resistance at about $69-70 a share multiple times and fails every time. Finally stock puts in a Bull Elephant candle on 6/8 and makes its way about 70 but retreats and closes for below 70.  2 days later, stock tries again and gets to about 70.5 then pulls back with a "topping tail bar."  Next day stock gaps up and its off to the races.  I bought some FDO this past week along with some BLV that I posted about last week.

Another way to use this useful tool is to scale yourself in and out of positions.  For example, divide your position size into thirds and devote 1/3 to the weekly time frame, 1/3 to the one-month time frame, and 1/3 to the 1 year time frame. Go long when the stock turns positive for that time frame and exit when the stock turns negative for that time frame.  Using a method like that, you will be never be loaded up long when a stock is heading lower on all time frames. Follow logic like that (or make up your own) and you will out of stocks like ETFC to avoid the big losses and into stocks like FDO to cash in on the big wins.

No method is 100% of course and you could follow the above methodology and get whipsawed around and lose money.  And keep in mind a few important things:

  • The short term indicators change the most often and therefore don't give them as much weight as the longer term indicators.
  • The indicators will move from left to right over time so breakouts always start on the daily, then move to the weekly, then the monthly and so on.  And same thing in the way down with losses starting at the left and moving to the right.
  • Know the underlying company, their business, their sector, their competition, their growth rate and price to earnings multiple and earnings dates of course.
  • When all time frames line up, and all the other factors line up, and the stock makes a new all-time high as FDO did, spring into action and take a position.  

Not much positive happened in Forex this past week with every account headed lower.  Let's see what news we get from the election in Greece on Sunday 6/17/2012.

Happy Fathers day to all the dads out there, myself included.  Keep on fighting the good fight and have a great week.

Saturday, June 9, 2012

Meta-Trader - A Money Mega-Trend

Welcome back, Meta-Traders.

"A speculator must always be on the job, or soon he won't have won't have a job to be out of" or thereabouts says Edwin Lefevre in his classic "Reminiscences of a Stock Operator".   And as a speculator we have to have to keep an eye on the mega-trends.  I'm talking about the trends that are so obvious, but they play themselves out so many times for days on end, you tend to over look them. Yet the mega-trends are the most important because they lead to big moves, and the big money is in the big move of course- another Livermore gem.

In this case I'm talking about Interest rates aka the cost of money.  This past week the US 10-year Government Bond yield reached a new all-time low at about 1.59%.  This appears to be a trend that's likely to continue since the Fed should not be raising rates any time soon, or at least until the end of 2014 according to the recent Fed Statement. This week China joined the cheap money party with a surprise rate cut and the first rate cut in two years.

There's nothing like an emergency rate cut from a central bank to get the equity markets rallying.  And rally they did with the US Stock Market having its biggest weekly gain of the year.  But let's get back to my core statement here.  What can we do to position ourselves in favor of lower interest rates ahead?

1) Get out of cash an into more risk assets.  The Dow Jones Industrial Average yields 4.2%, a whole 2.6% or 260 basis points higher than the 10-year government bond.

2) Buy bonds.  The chart above is BLV - The Vanguard Long Term Bond Fund which is just shy of a new all time high, and finding support at the 20-day moving average and well above a rising 50 day average.  Plus its approaching 100 or "par" as they say in the bond business, and that's significant in and of itself in the world of stock trading.  As rates go lower, already issued bonds become more attractive.  So this fund shows a good chance of moving to new all-time highs.  Plus you get a 4% yield while you wait.

3) Don't be in a hurry to re-finance your fixed rate debt.  When I bought my current house back in 1998, my original mortgage was at 6.875%.   About 4 years later, I refinanced to 5.875%.  Then just last year, I refinanced again to 5.125% which is what I'm paying now which is an entire point higher than the going rate now.  Mortgage rates could be going much lower, and given the cost of a refinance, it could pay to wait.

As for Automated Forex Trading, the draw down continues with nearly every system taking a loss for the week.  The biggest loss came from Atipaq Full Portfolio which lost about 4% for the week.  The only gain came from Atinalla #3 which took a profitable buy signal on EUR/USD via Teyacanani.

That's all for now.  Go forth and position yourself to take advantage of the spigot of free money being pumped out by the worlds central banks.

And enjoy your weekend.

Saturday, June 2, 2012

Meta-Trader - Nowhere to hide

Welcome back Meta-Traders.

Things took a turn for the worse in world markets this past week.  A dismal jobs number on Friday seems to have turned opinion over to the reality that the US is following Europe back into recession.  The equity markets reacted sharply with the Dow Jones Industrial average shedding 274 points or about 2.2% wiping out its gain for the year.  The Nasdaq and the S&P didn't fare much better, but are still holding onto gains for the year.  Energy, Health Care, Tech, it didn't matter what stocks you were holding, they all got creamed.   One TV commentator got it right when he remarked there was "Nowhere to hide" for equity investors.

Another interesting tell was the Facebook Initial Public Offering which held so much hope (and hype) for investors.  From the botched trade execution and reporting on opening day, its has been all downhill for Facebook shares which have given up about 30% of their 100 Billion in market cap in just 10 days of trading.  And without a lot of clarity around the ability of Mark Zuckerberg to run the social media empire and turn in the profits, the shares could go quite a bit lower before we find the bottom.

With risk off situation, investors poured back into USD and send EUR/USD to a 2 year low.  This resulted in a positive week for our Forex trading systems.  We had nice gains in Atinalla #3 and Atipaq Full Portfolio.  Atinalla #1 and Atinalla Custom also benefited from short EUR/USD positions.  These gains are encouraging news after a period of drawdown which took my entire Forex portfolio into the red after some encouraging gains in years #1 and #2.

My COATL H1 account has been idle and I need to figure out what to do with it.  Also Sunqu hasn't been trading due to an issue with the DLL that I haven't bothered to fix.  I think I'll spend some time in the world of Asirikuy to see what's going on and maybe I'll get some ideas.

Enjoy your weekend.