This is my first blog for year 2013, and I wish everyone
A Happy, Healthy, and Prosperous New Year!
Today is Friday, Jan. 11th, 2013, the eighth trading session for the year. We have had huge market rally with all major indexes closing near or at their five-year highs: SPX closed at 1,472, almost unchanged; Nasdaq at 3,125.63, up 3.87; Dow at 13,488.4, up 17.3. A few recent strong sectors were weak seen in industrial, banks, and biotech; some technology stocks had good days led by FB, NFLX, RIMM, and BIDU. Meanwhile, some retailer stocks have showed lackluster action, such as LULU, TIF, M, and VFC. The rotation seems to be running out candidates soon.
WFC pulled back some after reporting its earning, similar to AA‘s post earning price action. To me, it’s somewhat warning sign as they both were sold off on the earning news after big run-ups.
Due to tremendous risk involved with trading during the earning season and option expiration week, please read those golden rules before your stocks report earnings: http://chartpattern.com/10_golden_rules.html
Ironically, if you’re a AAPL trader, its price action doesn’t make you feel that we are in such a bullish market. It might be one of the reasons that some traders including me are inclined to feel less optimistic about this market as AAPL closed at 520, near its four-month low.
Since I pointed out AAPL‘s toppy action on my chart back in Sept., it has been in a strong downtrend; therefore, it has automatically become the stock for me to short the most of time since then. You can see my AAPL daily chart with notes at the bottom of the page.
Just like many AAPL fans, I have tried to find reasons to believe that AAPL could rally with the market. I went to its stores and checked the business there, and I always saw busy crowds, especially the one in the Central Park in NYC during my New Year vacation. Indeed, a few AAPL store pictures I posted on Twitter seemed to have caused some upside moves before it reversed down. (I assume so, so please don’t laugh ;))
A few times when AAPL had a sharp bounce with wild gyration moves, I warned and even posted this proverb: One-day of sunshine doesn’t make it a summer. Gladly, I was told that my AAPL comments have saved some traders from being trapped. However, I also got bashed by a few traders who disagreed with me sometimes. They simply fall in love with the stock despite its bearish action. They ignored such wisdom: “Markets are never wrong, opinions often are.”
I noticed that some well-respected traders don’t post their trades on Twitter, and I thought it is very wise. Not everyone has to trade everyday or day trade. When I used to post entries or exits during the trading hours, I received many replies asking questions about my trades, including basic knowledge for trading. It was very stressful and even opportunity costing because HFT (or High Frequency Trading) dominates trading world and it often causes sharp and fast mores with wild swings on many stocks. To me, nice trading requires good observation with clear thinking!
Now I tend to follow Jesse Livermore‘s wisdom: “I never hesitate to tell a man that I am bullish or bearish. But I don’t tell people to buy or sell any particular stocks.”
There are various trading methods and strategies involved with different trading plans and time frames for traders. Any one of them can work out well as long as traders are skilled with good risk management. I don’t follow others’ trades, so their market views are more important than their entry points or exits. Copying others’ trades eventually leads to failure in trading if not understanding the reasons behind.
I appreciate so many wonderful people on Twitter who have been supportive and encouraging. Sometimes different views on stocks suggested by others have helped me stay objective instead of being stubborn; and also, they have made me feel that it is worth spending time to do well-illustrated charts or write blogs about my market view even though my eyes might hurt after spending long hours on the computer.
In retrospect, it is interesting to recall how I started with Twitter!
In the past two years, I kept hearing about Twitter being mentioned by my favorite characters on CNBC. Last year in March, my sister came to U.S. and lived with me for a few months. I was surprised that my quiet doctor sister enjoyed sharing her pictures and posts passionately on Chinese Twitter – Weibo by SINA. I then realized that Twitter had become such a popular social media place.
I signed up with Twitter in April, 2012, and started sharing my posts. I easily found a few well-known/popular traders to follow. But in the first week, one of them who is well known for his ego blocked me on a day when I posted opposite comments. What? Is this how I got treated by someone when I have just began to tweet? – That harsh experience has taught me that I needed to give new followers or chances before rejecting them. (My suggestion for new Twitter users: pick a favorite avatar for your profile instead of an egghead for credibility purpose.)
I love this motto by William Arthur Ward:
“Before you speak, listen.
Before you write, think.
Before you criticize, wait.
Before you quit, try.”
To me, Twitter is a great place for traders to share and learn from each others, but it’s not for making competition or bashing others in order to gain followers or to prove one’s superiority. Many of us as traders also enjoy sharing our passion in other areas in life, such as food, photos, or sports. But sometimes it’s uneasy to deal with unreasonable trolls on the internet. Today I burst into tears after I tried to put up with someone who kept attacking me as I made bearish comments on AAPL. It was not first time I dealt with it. Finally I had to push the “BLOCK” button, my second time. – Yes, it took me a while to do it for I prefer to be a classy lady who has tough mind with a tender heart. In real life, I never let negativity bother me for too long although I can be sensitive once for a while for being a woman.
I do my best to stay balanced by following Tao De Ting‘s teaching:
“Displaying self-righteousness, one reveals vanity.
Praising the self, one earns no respect.
Exaggerating achievements, one cannot long endure.”
I really enjoy people’s posts which are kind, objective, humorous, entertaining, educational, or informative. I smile every time when I see cute kids’ pictures posted by others. As the number of my followers grows on Twitter, I feel more responsible to bring real value and objective comments to the stream. I believe in treating others the way I want to be treated, and love everyone around me, and people in the world.
“People first, then money.” – Suzie Oman says.
Thanks for reading and understanding, and wishing you best luck on trading! – May Peace, Love, and Prosperity be with us Forever!
Here is my AAPL one-year daily chart with notes at all major turning points: