Trader’s Narrative

Today Charles from the Kirk Report hosted a chat with Jason Goepfert. Here is an excerpt in case you missed it:

Yesterday’s bad start didn’t do much to tell us about what the rest of the month may hold. It wasn’t a great sign, but the last three times the S&P lost 2% on the first day of a month, the rest of the month gave returns of +14.2%, +15.7% and +3.2%….

Yesterday, columnist Mark Hulbert penned a piece highlighting October’s penchant for high volatility…

But here’s the thing…when the S&P showed a positive return over the prior month, then the average daily change in October was only +0.60%. When the prior month was negative, then the average daily change in October was +1.24%. This is an enormous difference - the average October day after a bad September was more than twice as volatile as when it followed a positive September.

Seems to me that we could be in for less volatility than normal due to the tame market over the past couple of months, and yesterday didn’t change that.

The chat was opened up to questions:

So, stepping back a bit, in your “big picture” sentiment analysis, do you have any perspective on where we might be within it right now?

Hmm, I would say somewhere near “denial” and “returning confidence”. There are a lot of arguments on both sides, which all seem cogent, but based purely on how I view sentiment, we’re not yet at an optimistic extreme, but we’re well off the “aversion” levels too.

And regarding the tip off for the end of this rally:

The biggest test for me is always how the market reacts to short-term overbought/oversold extremes. Every time we’ve hit short-term oversold since March, the market has recovered very well. Now we’ve seen a pattern of lower highs and lower lows for the second time (early July was the first), and we’ve short-term oversold. If we can’t rally from conditions like this, it is a definite warning sign that there is eager selling pressure.

Jason also featured these two disparate charts which answer just how much speculative activity we are seeing and in what form:
Continue reading ‘Today’s Chat With Jason Goepfert & Charles Kirk’

Would you be interested in peering over the shoulder of a profitable trader? one who has taken a $100,000 account and in less than three months grown it to $1.6 million? would you like to see and analyze every trade they made?

Just head over to Zack’s $100,000 Challenge and take a look at the current top contestant’s trades. He is hyper active… a scalper really. Whatever he’s doing is working! “Java J” is trouncing the rest with a current $1 million lead on second place!

You may not want to emulate his style (once you find it among the confetti that is his blotter) but you’ll definitely come away with atleast one or two insights. I’ve only glanced at a few of Java J’s trades. From those I see he only trades very volatile and active stocks: ACAD, BVSN, SPDE, and the like. From the sheer number of trades and their close proximity in time, he must be using a 1 minute or tick charts or maybe he’s not using charts at all but ‘reading the tape’ old school. The gains he has made are even more impressive when you notice that he pays on average $50 roundtrip! His must be a very high probability setup to achieve results above the transaction cost.

Unlike other trading contests, the prize in this one is not won by the highest equity but a combination of performance and blogging. So be sure to check out the top performers blog.

You might also be interested in this series posts by the Chairman, analyzing the trades of Charles Kirk, of The Kirk Report.

Yet another way to peer over the shoulder of a successful trader is to check out Tony Oz’s The Stock Trader: How I Make A Living Trading Stocks:

After having received an exciting challenge from the founders of the International Online Trading Expo, Tim Bourquin and Jim Sugarman, Tony planned to hold nothing back, providing all the decisive details of each trade, including the thoughts, strategies, surprises, and problems, and how he dealt with the momentby- moment challenges the Market presented him.

Such a book had never been attempted before. No trader has ever put their reputation on the line with this kind of honesty. It’s easy to search through past trades and present the best ones. But no trader has come forth in advance with the candor to say, “For the next four weeks, I will reveal my every move, for better or worse, entries and exits, winners and losers, with all my profits and losses.”