Saturday, December 26, 2015

CBPO - New Highs

Merry Christmas and a Happy New Year to all of my loyal blog readers.

With this post, one of my long-term favorites, China Biologics (CBPO) has decisively broken out to new all-time highs.

Recall that I have been in and out of this stock and took profits at the older 423.2% line at about the 120 level.  For a prior look at the FibLines, see my prior post here.

With this post, CBPO has sold off from the 120 level, then staged a come all the way to the old high at about 125, paused, hesitated, then finally broke out to a new all-time high.

The chart on the top left shows my new interpretation with wave 1 starting at 61.91 on 12/14/2014 and ending at 101.07 on 4/16/2015.

Based on that interpretation, we had a nice deflection off the of 161% line at about 125.24 which found support at the next lower orange line.  Then it moved sideways for a week or so before heading out into new all-time high territory.  Note however that the stock is currently sitting as resistance at the next higher level orange line.  At this point, I will avoid a new long-side entry until we can get a pullback preferably to the 161% line in the 125 area.

This example shows how you can structure longer-term trading decisions around the FibLines:
  • Gives you an overall sense of direction, up in this case
  • Puts the price action into 1 of 4 categories (anywhere between 0, 100, 161.8, 261.8 and 423.6. In this case we have just exceeded 161.8 and waiting for a pullback to the breakout point at the 161.8.
  • Prevents you from entering when the chart look absolutely fantastic which can sometimes be the worst possible time to act. I have made this mistake more than once.
Anyway, this new interpretation will be included in my next release of the FibLines indicator due out in early 2016.

Enjoy your holiday season.

Thursday, December 17, 2015

Fiblines New Look

Welcome back traders.

I am experimenting with some new looks for the Fib Lines indicator and I have settled on what you see to the left.  I changed the color of the secondary lines from green to orange and the 3rd level lines are left unchanged at a dark gray.

The idea here is to follow the visible light spectrum from red (most likely to raise your blood pressure) to less intense.  Orange is a more relaxed version of red, and dark grey fades easily into the background.  For Orange, I used the Color.DARK_ORANGE constant in TOS which seems to pop visually more on the screen than shows in the graphic.

Also, this color scheme seems to fit in nicely with the LBR Paint bars, and the whole combination looks and feels nice, particularly against the black background.  The new color scheme will be included in my next release of the Fib Lines indicator in late 2015 or early 2016.

BTW the chart shown here is ATVI - Activision Blizzard on the NASDAQ which is my single largest stock holding at the moment.   According to TC2000, it has a 5-year earnings growth rate of 28% and a PE of 25 which means its reasonably priced on a fundamental basis.  That plus an all-time high in the shares makes me a buyer.

Happy Holidays and all the best to you and your family.

Saturday, December 5, 2015

Fiblines make music

Welcome back Traders and Wealth Builders.

With this blog post, I am hard at work on my next quarterly release of the Fiblines indicator.  It should be due out in late 2015 or early 2016.

I was surprised to to find that my interpretation for Apple Computer - the single largest capitalization stock out there - was out of date and ready for a refresh.  My new interpretation is shown on the left on a weekly chart.

Updating the levels is a lot of work, but also very gratifying when you find the right interpretation. When you see how prices react to the lines, it just 'clicks'.  It can be likened to art or music, when it works, it feels right on multiple levels.

Here is a few other things I have been up to recently related to the Thinkorswim platform:

- Add time frames for the 39 minute and 78 minute bars.

The reason for this is there are 390 minutes in the trading day and 39 minutes is a multiple as is 78.  And since much of the trading world uses 5, 15 and 60 minute bars, this will give you a leg up on market direction in the intermediate time frames

- Add the LBR paint bars to your charts

This indicator is named after Linda Bradford Rashke a former floor trader and market pro.  I could do an entire blog post on these bars, but they really speak for themselves.  In fact the combination of Fib Lines and LBR Paint bars make your charts a thing of beauty, check it out.

Here's a cool feature of Thinkorswim I just found today.  Bring up TOS on 2 separate computers side by side.  Bring up a chart on one and watch what happens on the other - cool!

Finally (and not related specifically to Thinkorswim) I signed up for BIAS - The Bruce Income Advisory Service from the Simpler Options Web site.   Bruce is a former Hedge Fund Manager and has been managing money professionally for several years.  He aims for 10-20% for year which is a lot less than the 200% plus returns produced by Carter.  But unlike Carter, he tells you everything he does with specific trade parameters and opening and closing values.

BIAS costs $97 per month and I paid for the first month's service with 1 trade on 1 contract lasting less than 10 days.  That trade was not typical and his trades usually last closer to 30 days.  But since I joined, I did my first Butterfly, and my first Calendar both of which were closed this past week at a small profit for that set of trades. But we have some other trades on for December expiry which are looking good.  I feel like I'm finally on right track to growing my wealth using options versus my prior experience which has been hit or miss.  Time will tell.

Finally, you can get my Fib Lines lines indicator for Thinkorswim - while they are still free.  Just send an e-mail to

Thanks for reading and have a great week.