WRI (Weingarten Real Estate)

[ptp1600]

I was wondering if this was a good stock to fade to the long side.

I ask because I see the double bottom and MACD divergence; any "pro" opinions?

http://img407.imageshack.us/img407/5030/12769806.png
http://yfrog.com/bb12769806p

[Florida]

Actually, a triple bottom if you look back to November.

But, the trend is down, why trade against the trend?

If you think that you can pick the bottom, well good luck with that. You could trade it long now with a stop at the recent low, if you are willing to risk a 20% loss, but it is not worth it in my analysis, (of course I have been wrong before, but only about 6 or 8 times so far today).

By the way, forget about the MACD, RSI, Stochastic, Bolinger bands, etc. as indicators, they mean nothing.

[Mbrown10012]

This can be a double bottom, but its not completed yet which does not indicate reversal. From my knowledge, a double bottom is only completed when the last rally passes the resistance point. From the last rally, you want to look for abnormal amount of volume all the way to the resistance and then hopefully breaking resistance. It can still retrace after, but the prior resistance should be support.

It can be a double bottom or it can be a continuation trending down. Why would you buy at the current chart though? How much you're looking to gain versus your exit stop?

[Mbrown10012]

By the way, forget about the MACD, RSI, Stochastic, Bolinger bands, etc. as indicators, they mean nothing.


Sometimes they tell the truth, sometimes they don't. They do tell you something, but they might not be telling you the truth.

[ptp1600]

well i just want to get in on the rally to around say 12 - 13 dollars and let it go.

For the person who said RSI and MACD etc dont matter, do you use just averages and trends? What is your method of trading? 'cause I'm always willing to learn something.

[Florida]

well i just want to get in on the rally to around say 12 - 13 dollars and let it go.

For the person who said RSI and MACD etc dont matter, do you use just averages and trends? What is your method of trading? 'cause I'm always willing to learn something.

From where it is now, it is more likely to go back down to the lows before it goes to 12 - 13 dollars. If it were to go up to 12 - 13 dollars, then I would be more interested in trading it to the long side, as the downtrend would have been broken at that point.

Price and trend is all that really matters, volume, but only when at extremes. Everything else is just telling you what the price and trend is already showing you. (full disclosure, I do have a couple of moving averages on my screen, but only to visually indicate at a quick glance, where the price is relative to the trend.)

[Mbrown10012]

Well all the indicators/oscillators are formulated through price/volume anyway. So if you're looking at the indicators, all the numbers are derived from the only thing that matters, PRICE.

[Florida]

Well all the indicators/oscillators are formulated through price/volume anyway. So if you're looking at the indicators, all the numbers are derived from the only thing that matters, PRICE.

Exactly my point. Per your previous post, the indicators may not be telling you the truth, but the price and trend does.

I guess I would have to say that the indicators are telling the truth also, as they indicate only what has actually happened. Where the truth and un-truth comes in is when you depend on interpretations of what the indicators "mean". What does a MACD divergence mean? What does "over-sold" mean, etc.

Why muddy the water with all kinds of indicators, just trade the price and the trend. I have never yet been paid because a stock met a certain criteria based on indicators, but the profit and loss on every trade is dictated by what price I got in, and where I got out. Those price points could not care less what the MACD is saying.

[Bolimomo]

Do whatever works for you.

I love indicators. But I am a descretionary trader not a systematic/mechanical one. I think many new traders tend to rely on the absolute indicator values to place orders. e.g. if 10MA crosses the 30MA upside, and the RSI is >70, I will long. Something like that. I think those kinds of approaches will lose over time. One reason is that the indicator values need to be taken into consideration in the context of the price move.

You can't buy indicators. You can only buy the underlying instrument at X price. That is true. I use indicators as an assistant - to assist me in assessing the strength and weakness of the current price trend, how likely it will continue in one direction or will reverse. Or if the volatility is low (or too high), that I should stay out of the market.

Below is a snapshot of my main dashboard display for those who are interested. It is a confusing mess. I like it that way.

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I monitor the 1-minute chars of the 4 stocks/ETFs I trade day-in/day-out. I like to have a side-by-side comparison between them so that I can trade some relative strength/weakness. (Four symbols: SKF/GS/SPY/AAPL)

I use a modified version of GMMA - modified for day trading. GMMA = Guppy Multiple Moving Averages. GMMA has 2 multiple moving average groups - fast and slow. And I also added the 100MA and 200MA. When I see these moving averages line-up in a race track pattern, I know price is strongly trending (at least for the time being). Especially when price stays with the fast MA group and don't touch the slow MA group. I should go with the trend. When I see price recoils back to the slow MA group, especially around the 40MA to 50MA lines - for the very first time - that's a good place to enter to continue in the price movement direction. When price goes very far from the 200MA, especially in a parabolic fashion, it's a good chance to fade the bubble.

If the day is a range-bound day (like today), the fast and slow MA groups will criss-cross each other many times, as the 100MA, 200MA and 60MA. It is good to fade the extremes and anticpate price goes to the other side.

Overlaid on top of price, I have Bollinger Bands, Keltner Bands and Parabolic SAR. Plus some of my proprietary momentum divergence indicators (the vertical dotted lines). Why? BECAUSE I CAN.

The bottom part:

Volume: straight forward. I do monitor the "heavy volume" line. e.g. GS, 70000 shares per min is heavy volume from experience. This helps me access the momentum of the run.

CCI: As if one CCI is not enough, I overlaid 3 CCIs on the same graph, each with a different periodicity. If the slower CCI moves in tandem with the faster CCI, it tells me that the momentum is strong. Sometime they diverge and I will see a headfake. BECAUSE I CAN.

Stochastics and MACD Histogram: overlaid each other. Why not? Why waste real estate space for each of them if I can put both of them on the same graphing space?

RSI3: It is a modified version of RSI. It takes a 3-period average of the RSI value (I think... I took it from a trading magazine - see... reading magazine does help from time to time). It reduces the zig-zaggyness of a regular RSI.

And of course... I have multiple time-frame versions of the charts on the stocks I trade, each with a similar setup. (I have 16 screens each gives me different charts.) These indicators and price patterns are all fractal. They appear from the lowest time-frame to the highest. When I trade SKF, I look at: 42 tick, 233 tick, 1-min and 5-min.

I do intraday scalping. That's what these charts are for. If you trade "long term", you can adjust some of the parameters.

Now ptp is probably totally confused. All I can say is: do whatever works for you. Indicator or no indicator, single screen or multiple screens, futures or stocks or ETFs or options, if you have develop some methodology that works for you consistently over time, more success than not, then keep using it until it doesn't work any more.

[Florida]

Well, Bolimomo, if the trading ever quits working for you, you can sell the screen shots of your monitor as abstract art!!!

You can actually read my screens, and they tell the same story.

[Mbrown10012]

"All I can say is: do whatever works for you. Indicator or no indicator, single screen or multiple screens, futures or stocks or ETFs or options, if you have develop some methodology that works for you consistently over time, more success than not, then keep using it until it doesn't work any more."

I agree

[ptp1600]

OK, I am a bit confused but I am trying florida's method of simple moving averages.

Florida, tell me what you think. If anyone else wants to chime in they can

I have abandoned WRI, I am now looking at WFT and MYL, as both have shown signs of trending and have pulled back to their averages.
MYL:
http://img12.imageshack.us/img12/689/21897738.png

WFT:

http://img12.imageshack.us/img12/4941/87619023.png


EDIT: Bolimomo, what is the racetrack pattern you mentioned? What does it look like?

[Florida]

OK, I am a bit confused but I am trying florida's method of simple moving averages.

Florida, tell me what you think. If anyone else wants to chime in they can

I have abandoned WRI, I am now looking at WFT and MYL, as both have shown signs of trending and have pulled back to their averages.
MYL:

EDIT: Bolimomo, what is the racetrack pattern you mentioned? What does it look like?


Don't really like either one of them. WFT is not trending, it has been trading in a range for about 5 months, and is close to the range top. MYL is in a nice uptrend, but is approaching the highs from Aug '08 which will be strong resistance. If I were already in MYL, I would stay in it until the trend is broken, but I would not be putting new money in it now.

(If I want to see racetracks, I will go to Daytona or Talladega)

[Bolimomo]

There is really no need to make fun of what other people believe, just because you don't believe it.

Here. This is a naked chart of SPY 1-min on dots this morning. I would like to hear how you trade this.

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[ptp1600]

I see, so you go for trends that are already very well established. I've tried that before but always find myself caught in the breakdown of the trend.
How do you gauge the strength of a trend using only price and averages?

[Florida]

There is really no need to make fun of what other people believe, just because you don't believe it.

Here. This is a naked chart of SPY 1-min on dots this morning. I would like to hear how you trade this.



First off, who daytrades the SPY?

Second, kind of taking it to the extreme with a chart of just dots, BUT, even then, you can see an uptrend beginning to form from about 10:15. Would not trade it long however, as the SPY was still considerably below yesterday's close. When it bumped up against the 200 SMA on the 2 minute chart, and the trend broke to the downside, then it would have been more interesting.

As for real trades, look at DRYS. Have been watching it lately due to the volatility that it has displayed. At about 10:30, it broke above the 200 SMA on the 2 and 5 minute charts at about the same time, and offered an entry based on the candlesticks at $5.15 with a stop at $5.07. Took off half at an arbritrary $5.49 for a 4 plus "R" trade, and let the rest run. Was going to just let it ride the 8 period SMA, but when it got a big run up at shortly after 11:00 with close to double the normal 2 minute volume for the day, I exited the 2nd half at $6 even for a total of almost 7.5 "R"'s in just over half and hour.

Then, on one of your favorites, AAPL, at about 12:45, it was trading below the 8, 20 and 200 SMA, and displaying relative weakness at the time compared to the NASDAQ as a whole. It pulled up and kissed the bottom of the declining 20 SMA on the 5 minute chart, and reversed. Was able to get in the trade short, with a 25 cent stop, and rode it down for a 3 "R" trade in just 10 minutes.

Also had 2 longs on FAS at the open this morning that were positive, and 1 long on FAZ that trailed out at breakeven.

[jmarkd59]

I see, so you go for trends that are already very well established. I've tried that before but always find myself caught in the breakdown of the trend.
How do you gauge the strength of a trend using only price and averages?

Of course, one indication of a uptrend's strength is that the shorter period moving average will track above the longer period moving average, for example, MA10 tracking above the MA20. To enter a trade on an uptrend, you want to wait for price to pull back from the recent high to a level of support. That level of support might be the previous high or a moving average. How to know if the moving average will provide support? Look back down the trend. Has the moving average provided support on previous pullbacks? If so, odds are it will again. Looking at the MYL chart, obviously the MA50 provided support for the pullback on March 3rd. I agree that the August 2008 highs are going to be real resistance. My inclination would be to wait for a pullback to at least the MA20. See if price is supported there, then make an entry. A more conservative approach would be to wait for a pullback to the MA50. Don't be in a hurry. Make the market come to you. Hope this helps.

[Wonder]

Wow!
Reminds me of back in the 60,s